In the Matter of Oscar Cintron v. Judith A. Calogero, as Commissioner of the Division of Housing and Community Renewal of the State of New York
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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
----------------------------------------------------------------No. 150
In the Matter of Oscar Cintron,
Appellant,
v.
Judith A. Calogero, as
Commissioner of the Division of
Housing and Community Renewal of
the State of New York,
Respondent.
Randolph Petsche, for appellant.
Martin B. Schneider, for respondent.
Fifth Avenue Committee; Met Council, Inc., amici
curiae.
CIPARICK, J.:
On this appeal, we are asked to interpret the Rent
Stabilization Law to ascertain the consequences on a current rent
overcharge claim of two rent reduction orders issued prior to,
but in effect during, the four-year period preceding the filing
of an overcharge claim.
We conclude that the Division of Housing
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No. 150
and Community Renewal ("DHCR") should, in calculating any rent
overcharge, honor rent reduction orders that, while issued prior
to the four-year limitations period, remained in effect during
that period.
I.
In 1986, petitioner Oscar Cintron became a tenant of
2975 Decatur Avenue, Apartment 5C, in the Bronx, at an initial
stabilized rent of $348.91 per month.
The following year,
petitioner filed a complaint with DHCR against the building's
then owner, alleging a decrease in services related to, among
other things, the apartment's refrigerator, door lock and fire
escape window.
As a result of the complaint, DHCR issued an
order reducing petitioner's rent "by the percentage of the most
recent guidelines adjustment for the tenant's lease which
commenced before the effective date of the rent reduction order,"
and providing that the owner could not collect any rent increase
until a rent restoration order was issued.
The rent reduction
order did not set a particular level of rent.
According to
petitioner, the 1987 rent reduction order should have resulted in
a reduction of his rent to $326.23 per month.
In 1989, petitioner filed another complaint with DHCR,
alleging a roach infestation of the apartment's stove.
issued another rent reduction order.
DHCR
Despite the 1987 and 1989
rent reduction orders, however, the owner failed to make any
repairs and continued to charge petitioner the unreduced rent.
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No. 150
In 1991, when the current owner purchased the building,
petitioner allegedly advised him of the rent reduction orders.
Although the current owner apparently also failed to make any
repairs, petitioner continued to pay the unreduced rent and
entered into a series of leases requiring him to pay greater
rents.
On December 11, 2003, petitioner filed a complaint
alleging that the rent of $579.99 charged in the lease then in
effect constituted an overcharge based on the current and prior
owners' failure to comply with the 1987 and 1989 rent reduction
orders.
A DHCR Rent Administrator determined that the base date
to be used was the date four years prior to the filing of the
overcharge complaint -- December 11, 1999 -- and established that
the legal regulated rent on the base date was $508.99, which was
the rent charged by the current owner and paid by petitioner on
that date.
Although taking notice of the 1987 and 1989 rent
reduction orders, the Rent Administrator in establishing the
legal stabilized rent calculated the overcharge using the base
date of December 11, 1999.
The Rent Administrator awarded
petitioner a rent refund of $1,008.77, which included interest
but did not include treble damages, and prospectively froze the
rent at the base date level from December 11, 1999 until February
1, 2004.
Effective February 1, 2004, the Rent Administrator
removed the 1987 and 1989 rent reduction orders and restored the
rent to the full amount of $579.99, which included rent
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No. 150
increases.
Petitioner sought administrative review of the Rent
Administrator's order.
DHCR granted the petition for
administrative review to the extent of modifying the order by (1)
reversing the portion of the order that denied treble damages and
(2) awarding treble damages beginning two years prior to the
filing of the overcharge complaint.
DHCR denied the remainder of
petitioner's challenges, concluding that the Rent Administrator
properly limited recovery to the four years preceding the
overcharge complaint and correctly used the base date rent -$508.99 as of December 11, 1999 -- rather than the rent
established by the 1987 and 1989 rent reduction orders in
calculating the overcharge.
Petitioner commenced this CPLR article 78 proceeding
seeking to annul DHCR's order.
Supreme Court denied the petition
and dismissed the proceeding, concluding that DHCR's
determination was not arbitrary or capricious and had a rational
basis.
On petitioner's appeal, the Appellate Division
affirmed, holding:
"The order, finding the base rent date to be
December 11, 1999 (four years prior to the
filing of the overcharge complaint),
establishing the legal base rent as the
amount paid on that date, freezing that rent
until February 1, 2004, during which time
rent reduction orders were extant, and
directing the owner to refund overcharges
collected from the base rent date inclusive
of treble damages, was not arbitrary and
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No. 150
capricious, and had a rational basis" (Matter
of Cintron v Calogero, 59 AD3d 345, 346 [1st
Dept 2009] [citations omitted]).1
Petitioner appealed to this Court by permission of the
Appellate Division, which certified the following question: "Was
the order of this Court, which affirmed the order of the Supreme
Court, properly made?"
Because the Appellate Division order is
final, we need not answer the certified question.
II.
Regardless of the forum in which it is commenced, a
rent overcharge claim is subject to a four-year statute of
limitations (see Rent Stabilization Law of 1969 [Administrative
Code of City of NY] § 26-516 [a] [2] [hereinafter "Rent
Stabilization Law"]; CPLR 213-a).2
The Rent Regulation Reform
1
The Appellate Division further held that "DHCR
appropriately limited the amount of rent overcharges recoverable
to the four years prior to the filing of the overcharge
complaint" (59 AD3d at 346). This is not an issue on this appeal
as petitioner has abandoned his claim for rent overcharges in
excess of four years prior to the filing of his rent overcharge
claim with DHCR. Petitioner is merely seeking to have the base
rent date set at an earlier time.
2
Rent Stabilization Law § 26-516 (a) (2) states:
"[A] complaint under this subdivision shall be filed with [DHCR]
within four years of the first overcharge alleged and no
determination of an overcharge and no award or calculation of an
award of the amount of an overcharge may be based upon an
overcharge having occurred more than four years before the
complaint is filed . . . [t]his paragraph shall preclude
examination of the rental history of the housing accommodation
prior to the four-year period preceding the filing of a complaint
pursuant to this subdivision," and
CPLR 213-a states: "An action on a residential rent
overcharge shall be commenced within four years of the first
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No. 150
Act of 1997 ("RRRA") "clarified and reinforced the four-year
statute of limitations applicable to rent overcharge claims . . .
by limiting examination of the rental history of housing
accommodations prior to the four-year period preceding the filing
of an overcharge complaint" (Thornton v Baron, 5 NY3d 175, 180
[2005], citing Matter of Gilman v New York State Div. of Hous. &
Community Renewal, 99 NY2d 144, 149 [2002]; see also Matter of
Grimm v New York State Div. of Hous. and Community Renewal, __
NY3d __ [decided today]).
Notably, the term "rental history" is
not defined in the relevant statutes or in DHCR regulations and
we need not attempt to define it here.
As we have previously
explained, the purpose of the four-year limitations or look-back
period is to "alleviate the burden on honest landlords to retain
rent records indefinitely" (Thornton, 5 NY3d at 181, citing
Matter of Gilman, 99 NY2d at 149; see also Jenkins v Fieldbridge
Assoc., LLC, 65 AD3d 169, 174 [2d Dept 2009], appeal dismissed 13
NY3d 855 [2009]).
Moreover, Rent Stabilization Law § 26-514, which
addresses rent reduction orders, states:
"[A]ny tenant may apply to [DHCR] for a
overcharge alleged and no determination of an overcharge and no
award or calculation of an award of the amount of any overcharge
may be based upon an overcharge having occurred more than four
years before the action is commenced. This section shall
preclude examination of the rental history of the housing
accommodation prior to the four-year period immediately preceding
the commencement of the action."
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reduction in the rent to the level in effect
prior to its most recent adjustment and for
an order requiring services to be maintained
as provided in this section, and [DHCR] shall
so reduce the rent if it is found that the
owner has failed to maintain such services.
The owner shall also be barred from applying
for or collecting any further rent increases.
The restoration of such services shall result
in the prospective elimination of such
sanctions" (emphasis added).
Rent reduction orders thus place a "continuing obligation" upon
an owner to reduce rent until the required services are restored
or repairs are made (Thelma Realty Co. v Harvey, 190 Misc 2d 303,
305-306 [App Term, 2d Dept 2001]; see also Matter of Condo Units
v New York State Div. of Hous. & Community Renewal, 4 AD3d 424,
425 [2d Dept 2004], lv denied 5 NY3d 705 [2005]; Crimmins v
Handler & Co., 249 AD2d 89, 91 [1st Dept 1998]).
Here, it is
alleged that the landlord failed to fulfill his continuing
obligation by willfully flouting DHCR rent reduction orders.
The Rent Stabilization Law and Code are unfortunately
silent as to the effect that a rent reduction order, issued prior
to the four-year limitations period but still in effect during
that period, as is the case here, has on a subsequent overcharge
complaint based on that order.
Petitioner argues that DHCR rent
reduction orders must be considered by DHCR in establishing the
legal stabilized rent for an apartment for the purposes of an
overcharge complaint and that, because the rent reduction orders
here remained in effect -- and imposed a continuing duty on the
landlord to reduce rent -- during the relevant four-year period,
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No. 150
the four-year look-back rule is no bar to considering those
orders for the purposes of calculating the amount by which
petitioner was overcharged (see Thornton, 5 NY3d at 180; see also
Matter of 508 Realty Assocs., LLC v New York State Dept. of Hous.
and Community Renewal, 61 AD3d 753, 755-756 [2d Dept 2009];
Jenkins, 65 AD3d at 173).
DHCR, on the other hand, argues that
its determination is supported by a rational basis and is
consistent with the statute as the legislature intended the fouryear limitations/look-back period to be absolute, prohibiting the
consideration of earlier rent records for the purpose of
calculating a rent overcharge.
In this matter of statutory construction, where
deference to an agency's interpretation is not required (see e.g.
Roberts v Tishman Speyer Props., L.P., 13 NY3d 270, 285 [2009]),
we find petitioner's argument more persuasive as it best
reconciles and harmonizes the legislative aims of both the fouryear limitations/look-back period as set forth in Rent
Stabilization Law § 26-516 (a) (2) and CPLR 213-a and the
"continuing obligation" of a landlord to reduce rent and make
repairs as per Rent Stabilization Law § 26-514 (see McKinney's
Cons Laws of NY, Book 1, Statutes §§ 95, 96 [in interpreting
statutes, the goal is to further the intent, spirit and purpose
of a statute, to harmonize all parts of a statute to give effect
and meaning to every part]).
Certainly, DHCR can take notice of its own orders and
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No. 150
the rent registrations it maintains to ascertain the rent
established by a rent reduction order without imposing onerous
obligations on landlords.
Moreover, refusing to give effect to a
rent reduction order's direction to roll back rent in cases where
the order remained in effect during the statutory four-year
period would countenance the landlord's failure to restore
required services and thwart the goals of the Legislature in
enacting Rent Stabilization Law § 26-514, namely, to "motivate
owners of rent-stabilized housing accommodations to provide
required services, compensate tenants deprived of those services,
and preserve and maintain the housing stock in New York City"
(Jenkins, 65 AD3d at 173, citing Matter of Hyde Park Assoc. v
Higgins, 191 AD2d 440, 442 [1st Dept 1993]).
In short, rent
reduction orders impose a continuing obligation on a landlord
and, if still in effect during the four-year period, are in fact
part of the rental history which DHCR must consider.
We conclude that the purposes of the relevant statutes
are best served here if DHCR calculates the amount of rent
overcharge by reference to the 1987 and 1989 rent reduction
orders, which remained in effect during the four-year limitations
period and, accordingly, were part of the rental history that the
Rent Stabilization Law permits DHCR to consider.
Accordingly, the order of the Appellate Division should
be reversed, with costs, and the case remitted to Supreme Court
with directions to remand to respondent DHCR for further
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No. 150
The certified
question should not be answered upon the ground that it is
unnecessary.
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Matter of Oscar Cintron v Judith A. Calogero, as Commissioner
No. 150
SMITH, J. (dissenting):
The relevant provisions of the Rent Regulation Reform
Act of 1997 seem as clear to me as they did when I dissented in
Thornton v Baron (5 NY3d 175 [2005]).
"[N]o determination of an
overcharge and no award or calculation of an award of the amount
of an overcharge may be based upon an overcharge having occurred
more than four years before the complaint is filed . . . .
This
paragraph shall preclude examination of the rental history of the
housing accommodation prior to the four-year period preceding the
filing of a complaint pursuant to this subdivision" (Rent
Stabilization Law [RSL] of 1969 [Administrative Code of the City
of NY] § 26-516 [a] [2]; see also id., § 26-516 [a] ["Where the
amount of rent set forth in the annual rent registration
statement filed four years prior to the most recent registration
statement is not challenged within four years of its filing,
neither such rent nor service of any registration shall be
subject to challenge at any time thereafter"]; Rent Stabilization
Code [9 NYCRR] § 2526.1 [a] [2]).
In Thornton, this Court,
unjustifiably I thought, wrote an exception into the statute, and
in this case it writes another one, which I also think
unjustified.
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No. 150
I grant that there is some tension between the command
of the 1997 Reform Act that rental history going back more than
four years may not be considered and the provision of RSL § 26514 that rent reduction orders based on a failure to provide
required services remain in effect until the deficiency in
services is cured.
There is not such a stark conflict, however,
as to justify the majority's choice to let one statute nullify
the other.
DHCR has, it seems to me, found a fair solution by
ordering that, where the non-compliance goes on for more than
four years, the rent is in effect frozen for a rolling four-year
period -- so that the tenant cannot get the advantage of a rent
level more than four years old, but the landlord is never free
from the reduction order's effect.
This works no undue hardship
on the tenant, who need only file a complaint within four years
of being overcharged to avoid any time bar.
It is thus unnecessary to resort to the fiction
embraced by the majority that a rent level existing more than
four years earlier is transformed by the rent reduction order
into a "part of the [more recent] rental history which DHCR must
consider" (majority op at 9).
I would affirm the order of the
Appellate Division.
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No. 150
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Order reversed, with costs, and case remitted to Supreme Court,
Bronx County, with directions to remand to respondent for further
proceedings in accordance with the opinion herein. Certified
question not answered upon the ground that it is unnecessary.
Opinion by Judge Ciparick. Chief Judge Lippman and Judges
Graffeo, Read, Pigott and Jones concur. Judge Smith dissents and
votes to affirm in an opinion.
Decided October 19, 2010
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