Shabsels v Commissioner of the Div. of Hous. Community Renewal

[*1] Shabsels v Commissioner of Div. of Hous. & Community Renewal 2008 NY Slip Op 52232(U) [21 Misc 3d 1125(A)] [21 Misc 3d 1125(A)] Decided on October 10, 2008 Supreme Court, Kings County Balter, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through November 18, 2008; it will not be published in the printed Official Reports.

Decided on October 10, 2008
Supreme Court, Kings County

Susan Shabsels, Plaintiff,

against

Commissioner of the Division of Housing and Community Renewal, Defendant.



16426/08

Bruce M. Balter, J.

Upon the foregoing papers, the application by petitioner Susan Shabsels for a judgment, pursuant to CPLR Article 78, reversing the April 10, 2008 Order and Opinion of respondent Commissioner of the Division of Housing and Community Renewal (DHCR) is granted and this matter is remanded to DHCR for a hearing in accordance with this decision and order.

This is an Article 78 proceeding commenced by petitioner, the owner of the premises at 189 8th Avenue in Brooklyn. Aram Polster (Polster) is a rent-controlled tenant residing in apartment 4C of the subject building. She resides there with Debra Jan Seltzer (Seltzer), her domestic partner. In the Order and Opinion for which petitioner seeks judicial review, DHCR granted the tenant' s administrative appeal and denied petitioner's application for a 10% rent increase. Petitioner's application was based upon an alleged increase in the number of adult occupants "who are not members of the immediate family of the tenant of record [Polster]."

On or about May 19, 2003, petitioner filed an "Owner's Application for Increase of Maximum Rent (Increased Occupancy)" based upon the occupancy of Polster's apartment by another adult (Seltzer). In response to the application, Polster advised DHCR that she and Seltzer had resided together in the apartment with the landlord's knowledge since 1993 and that she and Seltzer had been involved in a long term stable and loving relationship since then. The tenant pointed out that they had registered as domestic partners with the City of New York in 1993, that they maintained a joint bank account and that they were jointly named on automobile and renter's insurance policies. In reply to the tenant's submissions, petitioner argued that Polster had failed to submit adequate evidence to support her claim that Seltzer [*2]was her domestic partner. On November 19, 2004, the Rent Administrator issued an "Order Denying or Terminating Proceeding" based upon the landlord's failure to prove that the subject apartment was occupied by someone other than an "immediate family member" of Polster. On or about December 24, 2004, petitioner filed a "Petition for Administrative Review" (PAR) in which she faulted DHCR's interpretation of the relationship between Polster and Seltzer. On July 8, 2005, DHCR issued an "Order and Opinion Remanding Proceeding on Appeal" which remanded the proceeding to the Rent Administrator to "more fully investigate the nature and extent of the relationship between the Tenant and the additional occupant . . .". Pursuant to a "Notice of Proceeding to Reconsider Order Pursuant to Remand," dated May 30, 2006, the tenant was requested to submit a response to support her claim that Seltzer was a "family member." The tenant submitted a copy of an Affidavit of Domestic Partnership, an annuity statement, a bank savings account deposit slip, a renter's insurance policy and postcards sent to her and Seltzer. In petitioner's response, she challenged the timing of the filing of the domestic partnership affidavit and argued that Polster had failed to prove a committed financial and familial relationship, given the modest amount contained in the joint bank account and the absence of a health care proxy or will involving Polster and Seltzer. On or about January 4, 2008, the Rent Administrator issued an "Order Pursuant to Remand" modifying the Order of November 19, 2004 and finding that the tenant had failed to substantiate her claim that Seltzer was a member of her immediate family. The tenant then filed a PAR challenging the Rent Administrator's Order of January 4, 2008. In the PAR, the tenant reiterated her position that she and Seltzer shared an emotional and economic commitment and that petitioner had waived collection of the rent increase because petitioner had waited ten years after Seltzer occupied the apartment to file the application for the increase. In response, petitioner dismissed the tenant's documentary submissions as inadequate and asserted that the tenant had waived her right to object to the rent increase because she had paid it for many years prior to the landlord's application. On April 10, 2008, DHCR issued an "Order and Opinion Granting Petition for Administrative Review" in which it was held that, based upon 9 NYCRR § 2204.6, the landlord was not entitled to a rent increase. The Commissioner determined that Polster had submitted sufficient evidence to find that Seltzer was her family member as defined in Section 2204.6. Given their execution in 1993 of an "Affidavit of Domestic Partnership," their cohabitation in the apartment for over 14 years and the provision in Polster's life insurance policy naming Seltzer as her sole beneficiary, the Commissioner found that the tenant had demonstrated their "emotional commitment." Their "economic commitment" was, in the Commissioner's opinion, shown by the existence of their joint banking account, a renter's insurance policy jointly held by them and the designation on a benefits statement issued to Seltzer [*3]by her employer (Credit Suisse) that Polster was her beneficiary and domestic partner.

In the instant petition, petitioner contends that the April 10, 2008 order was arbitrary and capricious because DHCR, sua sponte, determined that the landlord's delay in seeking a rent increase until ten years after Polster and Seltzer had began living together "may have contributed to the tenant's inability to document more fully her commitment to Ms. Seltzer." Petitioner suggests that Polster and Seltzer are "roommates" and she warns that the lowering by DHCR of the standard of proof necessary to demonstrate a familial relationship will "open the floodgates of litigation so parties with only informal social relationships could seek succession rights." Petitioner faults Polster for failing to submit an affidavit from Seltzer or anyone else corroborating their ongoing relationship or to proffer more extensive documentation to support Polster's claims. Petitioner suggests that, if there was a factual question as to whether the tenant lacked the documentation because of the passage of time, "there should have been a hearing on that issue."

In opposition to the petition, DHCR argues that the tenant submitted sufficient documentation to show that Seltzer was a non-traditional family member within the meaning of 9 NYCRR § 2204.6 (3) (i). DHCR characterizes the filing of the Affidavit of Domestic Partnership in 1993 as "persuasive" and it points out that, while Seltzer and Polster have been living together in the apartment since 1993, petitioner did not file for a rent increase until 2003, thus possibly prejudicing their ability to document their relationship. Since its determination was founded upon a rational basis, DHCR contends that its order of April 10, 2008 should be affirmed.

In her memorandum of law, Polster cites the various factors enumerated in

9 NYCRR § 2204.6 which DHCR may use to assess the bona fides of a "family relationship," such as the longevity of the relationship, the sharing of household expenses, the intermingling of finances, the attendance at family-type activities and the formalization of legal obligations and responsibilities. According to Polster, DHCR "properly construed the regulations in a manner that i[s] entirely consistent with the State and City prohibitions on discrimination based upon sexual orientation." Polster adds that DHCR correctly concluded that the rent increase determination has no bearing on any future question regarding Seltzer's succession rights to the apartment in the event of Polster's death since the issues that would be presented if there were a succession claim would be different than those decided by DHCR in this matter [FN1].

In reply, petitioner argues that DHCR's Order was arbitrary and capricious because it made two conflicting findings: (1) that Seltzer was a non-traditional family [*4]member for rent control purposes and (2) that she was not a non-traditional family member for the purpose of succession. Petitioner also contends that it was irrational for one DHCR Rent Administrator (on January 4, 2008) to find that the tenant's documents failed to substantiate Polster's claim that Seltzer was a member of her immediate family, while four months later (on April 10, 2008) another Rent Administrator "based upon identical evidence [previously] found insufficient, determined that the tenant had met her burden of proof that Seltzer was a non-traditional family member." Petitioner notes that, prior to the second determination, the tenant requested a hearing, but none was held and the tenant allegedly conceded that "there were no additional documents."

In particular, petitioner points out that:

(1)the tenant's affidavit was conclusory;

(2)the tenant's insurance policy was purchased after this proceeding began;

(3)the bank account documents never showed the opening date of the account; and

(4)the tenant's postcards, which were sent by her mother, "had no clues as to the type of relationship that tenant had with Seltzer."

Moreover, "[t]he tenant's paltry documentation was highlighted by the Agency's arbitrary presumption that the lack of documentation submitted by the tenant was the Owner's fault." According to petitioner, "[i]t is incredulous to expect the Court to accept that a 15-year long marriage' produced a mere six documents" and, therefore, a hearing should be held at which, among other things, the sworn testimony of Seltzer should be introduced or her absence explained.

"Judicial review of the propriety of any agency determination is limited to the grounds invoked by the agency in making its determination" (Matter of Missionary Sisters of the Sacred Heart v DHCR, 283 AD2d 284, 288 [2001]. The reviewing court "must ascertain whether there is a rational basis for the action in question or whether it is arbitrary and capricious" (Gilman v DHCR, 99 NY2d 144, 149 [2002]).

In an Order dated November 19, 2004, the Rent Administrator found that the landlord had failed to prove that Seltzer was not an immediate family member of Polster. The Rent Administrator's determination was based upon the submission by Polster of her written statement, as well as copies of an Affidavit of Domestic Partnership, an automobile liability insurance policy, a renter's insurance policy and a single bank statement indicating a modest balance. A PAR was subsequently filed by the landlord. By Order dated July 8, 2005, Deputy Commissioner Paul Roldan found that the Rent Administrator's investigation regarding the nature and extent of the relationship between Polster and Seltzer was "inadequate to determine the substantial issues presented" and, therefore, he remanded the matter back to the Rent Administrator to more fully investigate the relationship between the two women "with the possibility of an oral hearing at which the parties and their witnesses may [*5]be examined." Regrettably, in this court's opinion, a hearing was never held; rather, the Rent Administrator sought the submission by the tenant of "documents, evidence and affidavits to support [her] claim that the other person is a family member'." In an answer dated August 11, 2006, Polster submitted a copy of the Affidavit of Domestic Partnership, Seltzer's life insurance policy on which she (Polster) was a beneficiary, two postcards sent to the couple by Polster's mother and automobile and renter's insurance policies from 2006. On or about October 19, 2007, Polster supplemented her submission to DHCR with copies of a statement from Seltzer's employer indicating that Polster was her designated beneficiary. After re-considering the record and the additional evidence, the Rent Administrator found (by order dated January 4, 2008) that the tenant's evidence "failed to substantiate her claim that the alleged occupant is a member of the tenant's immediate family." Following the filing of a PAR by the tenant, which included her request for a hearing, a different Deputy Commissioner found (upon consideration of substantially the same documentation that had been submitted previously to DHCR) that there was "sufficient evidence for the agency to find that Ms. Seltzer is [Polster's] family member." Under these circumstances, the determination of April 10, 2008 was arbitrary and capricious. In overturning a prior Order in favor of the landlord, DHCR relied upon the same evidence considered by the Deputy Commissioner in January 2008 to reach a contrary conclusion, notwithstanding that the tenant had been given the opportunity to produce additional documentation, as well as affidavits. Accordingly, the Order of April 10, 2008 is reversed and this matter is remanded to DHCR so that it may schedule a hearing to determine whether Polster and Seltzer have maintained a close and committed personal relationship since 1993, given the guidelines set forth in 9 NYCRR § 2204.6. In light of the 15 years for which they have undeniably been acquainted and given the time before the hearing is held, the tenant should endeavor to obtain whatever records (dating back as far as 1993) as may be available from banks, insurers, credit card companies, employers and others to support her contentions and to enlist her friends, neighbors and family members to testify at the hearing. As one of the Deputy Commissioners noted, it is both the nature and extent of the tenants' relationship which is at issue and a "mere six documents" (to use petitioner's words) may not suffice [FN2]."

The foregoing constitutes the decision, order and judgment of this court.

E N T E R,

J. S. C. [*6] Footnotes

Footnote 1:In her Order, the Deputy Commissioner noted that "the finding in this proceeding does not mean that Ms. Seltzer would not be required to prove her commitment with the tenant [Polster] should Ms. Seltzer claim succession rights to the apartment at some point in the future."

Footnote 2:Although the decision to do so would be that of the tenant, it would appear to be helpful for her domestic partner to testify at the hearing.