Helgason v New York Div. of Hous. &Community Renewal

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Helgason v New York Div. of Hous. & Community Renewal 2008 NY Slip Op 32057(U) July 16, 2008 Supreme Court, New York County Docket Number: 0115750/2007 Judge: Shirley Werner Kornreich Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 712212008 [* 1 ] PAPERS N U M B E R E D Notice of Motion/ Order t o S h o w Cause Answering Affidavits -- Exhibits - Affidavits - Exhibits J ... ~c Replying Affidavits - Yes Cross-Motion: .. . f L l No ? Upon t h e foregoing papers, it is ordered t h a t t h i s rnotion I MCVWN tS DECIDED IN ACCORDAN W U H ACCOMPANYING MEMORAND OfClSlQN AND ORDER. , FILED : JUL 2 2 2008 r/ Dated: . Check one: 9 k lop V'FINAL C h e c k if appropr-iatc DISPOSITION E 0 DO NOI'POST N O N - F I N A L DISPOSITION r] REFERENCE [* 2 ] Petitioner (pro st'), - against- Index No.: 11S7750/07 DECISJON and OKI)I~:R New York Division o f Housing and Comiiiiiiiity I<cnewal Pro se pelitioner Lkrnhard Christian Helgason, a tenant in a rciit-stabilized ~- apartment at 233 E. 89"'St., New York, NY, brings this Article 78 proccccling. He scclts a judgment: 1) repealing the Division of Housing and Clommuiiity Itcnewal's (IIHCR) ordcr granting a Major Capital Improvemciit (MCT) relit increase; 2) compensating hiin for the allcgccl violation ol' his due process, eclual protection ntid free speech rights; 3) ordering Dl ICR to apologize to him; 4) ordering an internal review by DHCR and an cxteriial review of I l l IC'li by both the Governor's and the Attorney General's offices; 5 ) exempting him from M u r e Petitions for Adiiiinistrative Rcvicw (PAR) mid permitting him to approach the DHC'R dircctly; 6) grantiiig tciiants a full 30 days to respond to DHCR ordcl-s, rathcr than 30 days from the mailing date o l a noticc; 7) ordering future lines iinposcd by 1)lICR lo go dircctly to the iii.jurcd party, not I l l ICR; 8) ordcring 111 IclI to create a new, less dcfereritial standard [or evaluatiiig MCI requests; and 9) granting costs and disbursements. Respondent, I l l ICR, opposes. [* 3 ] I. FlIClS On A U ~ L 23, 3006, IS~ Ianiinel Associates, LLC, owiier o l 2 3 3 E. 89 h Street, New York, NY, (Jammcl) filcd an Owner s Application l b r Rent Iiicrcase Based IJpon MCTS. Jar-nnicl applied lbr the rent increase lollowing the completion of pointing and waterproofing 011 the building s roof in 2004, wliicli cost $14,5O8.00. Jammel submitted descriptions of the work done, the agreenicnt bctweeri it and the contractor, proof of checks paid to the contractor and a diagram ol wherc tlic work was done. 1;ollowing Jaminel s application, DI-ICK sen( a September 7, 3006,letter to petitioiicr informing him ol the owner s application for a rent increase. Tlic letter delailed the rcquestcd rent iricreasc per room per month. DHCR il-ivited cornniciits on tllc back 01 the application, and asked that thcy be subniittcd within 30 days ol September 7, The letter also explained that a tenant could use the back of the l orm to request an extension if mort: than 30 days was need.ed. DI-ICIIi inl ormed the tenants of the opportmily to request aii Access to Itccords fbrm so they could review the MCT application in [lie Queens JIFICK ofiice. I ctitioner requested the iiiaxiniitiii estcnsion [or opportunity to review, using [he back oftlie letter. I I C also sent DI I C X a letter detailing why he wanted the cxteiision and requested that DHCR Ict him review tlic rclcvant files at a Manhattan branch ratlicr than tlic Qucciis office. l etitioncr sent both notitjcations lor an extension by certified mail, return rcccjpt requested, on Octobcr 3, 2006. Ihc mail was rcccived and signed for on October 5 , 2006. Petitioner did not receive a response to his request for an extension or his request to access the records li-om a Manhattan location. Instead, 111 ICR sent tlic petitioncr [* 4 ] anolhcr letter, dated October 16, 2006, confirming [hat the MC I renl incwasc was granted and staling thal THER13 WERE N O TENANT RI<SPONSES. 1;~olInwing1 1C R s approval of tlic M rent increase, petitioner filcd a PAR on 11 CI November I , 2006, and requested that the ordcr be caticellcd so [he application coiild bc made anew. Along with the I AlC h r m , pctltioiicr attached ;I lcttcl- detailing DHCR s error in ignoring his request for time lo rcvicw tlic MC I application, and he providcd proorol receipt ol.lii\ lcttcr rcquesis. On February 21, 2007, with lhc PAR still unresolved, petitioner lied at1 Article 78 action. Petitioner made many of tlic same requests that lie makes presently. DHCR iiiovcd to dismiss bccause petitioner had not exhausted his administrative remcdics, and ibr fhilurc to state a C ~ I U So~l aclion. Thc court (Kahn, 5.) construcd petilioner s claims as: I ) a mandanius applicalioii seeking review ol thc administrative deterinitiation, and 2) a requcst iior ai1 corder directing DHCR to rule on tlic PAR in a timely fashion. The cow? dccliiicd to rcvicw the adminislrative detcrinination because it was not yet iinali/cd, and granted DI IC R s iiiotioii to dismiss in part. I Iowcver, the court did order DHCR to delermine the PAR within 60 days from service of tlic order. Finally, the court noted that it did not liavc propcr jurisciicrion to detcrminc petiiiuner s actions for comperisatoiy and punitive damages, as such r e l i d m a y only bc granted by the Court of Claims. Petitioner served DHCR with tlic ruling on July 3 1, 2007. Following the judgment, J)I IC li sciit petitioner an adininistralive Gle on August 14, 2007, containing a copy of the MCI application and rclcvaiit dociiinents as well as copies of correspondences betwecn petitioner, DHCR, aiid tlic Supreme Court. Whilc the file did not contain petitioner s origiiial request lor the niaxinium cxtension, it did 3 [* 5 ] contain copies of his correspondences, which inclLided vcritled proof that DHCR receivecl tlic origiiial request. On August 17. 2007, I l l fCR sent a letter to petitioner cncouraging hirn to review the tile and coinmcnt 011 it within 20 days. Pctjtioiw thcn senl DHC. R a Notict: ol Intent to Ikmand JIJ ICli Siibmit to Judicial Notice Which Petitioricr Anlicipates May He Necessary to I<equest of the Court (demand notice) on Scpteiiiber 4, 2007, csprcssing frwtr atioii with the 20-day limit for rcsponse. l etitioner also allcgcd inadequacics in tlic documents provided by the owner in Ihe MCI application, including illegiblc signatures and diagram that wcrc not detailcd enough. This demand iioticc stated that petitioner would give DHCR timc to cure the alleged inadequacies before submitting a 1 actual demand to tlic court. DH( I< did not 1 respond to petitioner s demand notice. Petitioncr also instituted an action with the Court of Claims lor compensatory and punitive damages, as well as other relief. Tlic Court o l Claims granted DHCK s motion to dismiss for lack oI.jurisdictioi1, and petitioner is currcntly appealing that riiliiig. T)T TCR issued an Order and Opinion Denying the PAR on Septernhcr 28, 2007. I heDHCR Clommissioncr aclcnowledged that thc agency mishandled petitioner s request and violatcci his due process rights, but stated that this was done neither purposcfdly nor was it covcrcd-up afterward. Thc (.:ommissioner apologized on behalf of DHCR for this error. In addition, tlic (:ommissioner found that, given thc court order to issue a decision in 60 days, the 20-day limit for petitioner s rcvicw was the maximum allowable time for rcvicw because DHCR had to afford the owner a chance lo respond and allow sonic time for n possible rebuttal by petitioner. Finally, the Commissioner noted that the quality of the owiier s submissions Ibr the MCI application were acceptable and in kccping with [* 6 ] I>I IClt s general standards. Following this ruling, petitioner initiated this Article 78 procccding. 11. Ar.gz/me/l/.s Petitioner argucs that because his due process righls wcrc violated in the initial MCI renl increase, liotli tlial delerriiiiiatioti and tlic ciisuing PAR are illegal. Due to tlicir alleged illegality, petitioner urges tlic court to undo those procccdings and rcquire thc owncr to rc-apply f i x the MC: Irent incrcasc. Petitioner conlends that ignoring his requcst for Ihe maximum extension amouiitcd to ;i violation of his due process, frcc speech ancl equal protection rights. Aside from petitioner s pi.occdura1 claims, lie contends that DHCR s standards are inherently wi.just and too def erciitial to owners. I IC alleges that the materials submitted by Jaiiiiiicl in the MCI application lacked detail arid proper assuraiicc as lo thc necessity of the work. As such, pctilioner asserts tlial DHCK could not reasonably conclude that tlic work done was r-cquired and that tlic price paid was appropriate. DHCR acknowlcdges its proccdural deliciencics in the trcatment of petitioner s rcquesl lbr the maxiniuiii extension. Ncverlheless, it argues that thcsc procedural errors have since been corrected by affording petitioricr an opportunity l o comment during tlic PA]<. According to 111 ICR, the maximum opportunity to respond has bcen granted. As for the substantive clcnicnts, DHCR maintains that the owner s application lor tlic MCI ruit iiicrcase rnel DHCR s standards and, tlicrcfore, was adequate. Finally, DHCR argues lhat it docs not have the autliority to review applications to the cxlent pctitioner rcqucsts. DHCR asserts that i t carmot orclcr owners to coiisult tenants before rnakiiig improvemenls; i t can only review applications a l k r tlic iniprovernents have been made. [* 7 ] Eurtlicr, I)I-ICK argues that it has no authority to ;isscss whether the price paid was lair, L)I ICIR maintains that it only has thc power tu allow a rent incrcase in accordance with the arnouiit actually paid by tlic owner. III. C: onclii.sionsof 1,mv A court s role in an Article 78 procccding is to dctcrinine whether the challcnged rational basis or whether it was an arbitrary and capricious administrative conduct had 3 action. Matter of Fcriiclli NLW York C ify ( oiicili(i/io/zLrU A p p e d s Hu , 90 A D . 2d -n T 11. 756, 757 (1 st 13cpt. 1982),@ I SX N.Y.2d 952 ( 1 ClX3). Thc court must Jrrdge the propriety ol an administrative action solely on tlie reasons cited by the agency. Sclzerhyt? v. Wq tw-Fingcr Lukes B d (?jC oop. E ~ L LL%~rvs., N . Y .2d 753, 758 (1991). The C. 77 admiiiistrativc action must be upheld unless it shocks the judicial conscience and, thcrcforc, constitutes an abuse of discretion as a rnattcr of law. Fecrtherslont 17. Frunco, 95 N.Y.2d 550, 554 (2000) Uiidcr tlic Rent Stabilization Law of 1969, $ 26-51 1 (c)(6)(b), an owner o f a building with rent-stabilized units inay apply to DI ICK ror pcriiiission to increase rent j aftcr iiiaking an MCI. Kcnt Stabilization Code L 2522.4 (Code) establishes criteria lor MClI rent incrcases. Among otlicr things, tlic iniprovemcrit must be dccmed dcprcciable undcr tlic Iiiteriial Revenirc Codc, it must bc intended l - 1 ~ operation, preservation, and tlie inaintenance of tlic structure, atid it iiiusl be an improvement that directly or indirectly beiictlts all tenants. Pointing and waterproofing are explicitly listed in tlie Code as improvements that may merit a rent increase. I hc Code also establishes that m i ad.justinent of regulated rent must consider all factors bearing on the eqiritics involvcd, including liardsliip for ; tciiant and the return o F the aclzicrl cost of h e iniprovciiicnt to the I [* 8 ] owner. (Emphasis added). In keeping with ,S(.~/ierhyn, court must clotci.mirie whether there is a ralional the basis lor Dl ICIi s delermination. SCYd s o Mutter c~f ,S~inckr.s , S i u l ~o f N w Iiwk Uiv. of v. H o w . & C ~ 7 / y/ ~ P ~ ~ C W L I 40 A ,1).3d 440 (1st 13cpt. 2007) (where tcnants chalIcnged / adeq~iacy docunienls in owiicr s MCJ application, court 1i)Lind that only qucstion to of resolve was whether DHClR had rational basis in linding submissions adcqLlate). As such, the court dcfcrs to DHC R s asscssnients 10 petitioner s substantive coriiplaints about thc iiiadcquxy or the MC l application. The application met DI IC. R s standards, and it is not the court s place to sLibsliliitc its own standards. ,See Ansnnirr Rtl,s.id~?nl.s A,s,s ki. v. N o w York S i u / c llil).of Iloius. & C m t y . Reiwwul, 75 N.Y.2d 206: (1989). I elitioncr s claims a s to tlic illcgibilily of signatures aiid vague nature of the documcntation arc not persuasive enough to enable tlic court to substitute its judgment lor DI IC R s expertise. Stlc Howcrr.r~--C cir*ol lknaiiis Ass 17. v, NCW York Ci/y (, onciliatioil cxncl Appeals Ad,64 A.D.2d 546 ( 1 sl Ikpt. 1983), c!ff d 48 N . Y .2d 768 (1 979). There may be cases where further documeiitation by the owner is warranted, but D11C R did not requcst anything more from the owiicx nor did petitioner demonstrate any good reason why DHCR should liavc done so. Mnxwell-K~r~c.s,I). N w York S lrx/e flh. c?j Ho1i,s. R Inc. C. /nty.Kenpwal, 196 A.D.2d 456 (1st Dcpt. 1993). Moreover, 1)HC:R s reluctance to invesligatc whether the work done on .laimiiel s building could have been accomplisbcd for less than tlic $I4,508,OO is rational. I he expense and tiiiie such inquiry would consume is substantial. Any chaiigc in DHCK procedure regarding MCI s or PA11 relief is beyond this court s j urisdiction. West Viillage ASSOL J .. Dit). c?f Hf,I/,V.& C1/71/j/. f ~ C / ? k W ~ !277 A.D.2d 1 1 I ( I V l, 7 st Dept. 2000). [* 9 ] corrcct its niistake, DIiCli fought pctitioner ever step o l t h c w a y in these procccdings. Much of h i s could have been avoided i C DHC R had immcdiately sen1 petitioner ;I copy 01 the adlnlnistralive file upon the liling of his PAR or if DHCK had given petitioner access to the fdcs i n Manhattan While this would havc gone beyond DHCII s dutics to pctitioner, it also would have becri a IiclpCiiI step toward correcling thc problcrn that DHCR crcatcd through its lnishandling of the original extension rcquest. Neverthclcss, DHCR s dctcminations do not shock the $udicial conccicnce. Accordingly, it is (ll<I)EIIh,D and ADJ~JIIGkD the application by petitioner seeking lo vacate that and annul the detcnnination by respondenl, and for other rclicf, is deiiicd and tllc proceeding is dismissed. Thc clcrb shall cnter judgmcnt accordingly. DA I E: July 16, 2008 New York, NY 9

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