Matter of 20 Fifth Ave. LLC v New York State Div. of Hous. & Community Renewal

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Matter of 20 Fifth Ave. LLC v New York State Div. of Hous. & Community Renewal 2012 NY Slip Op 32446(U) September 20, 2012 Supreme Court, New York County Docket Number: 109920/2011 Judge: Eileen A. Rakower 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. [* 1] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. E'EEN A RAKOWER PART 3 - i - Justice - Index Number : 109920/2011 20 FIFTH AVENUE, LLC INDEX NO. vs. MOTION DATE DIVISION OF HOUSING SEQUENCE NUMBER : 002 MOTION SEQ. NO. RENEWAL The followlng papers, numbered I to Notlcs of MotionlOrder to Show Cause Answerlng Affidavlta , were read on thls motlon tolfor -Affldavits - Exhlblb IW s ) . IW B ) . IW B ) . - Exhlblts Rsplylng Affldavlta Upon the foregolng papers, it Is ordered that thls motlon 1 s I FILED SEP 2 4 2012 Dated: ?/.oh- I . CHECK ONE: ..................................................................... ........................... MOTION CHECK IF APPROPRIATE: ................................................ 2. CHECK AS APPROPRIATE: 3. P I: D S CASE DISPOSED GRANTED SETLE ORDER DO NOT POST DENIED 0 NON-FINAL DISPOSITION 0GRANTED IN PART 0OTHER 0SUBMIT ORDER 0FIDUCIARY APPOINTMENT REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK PRESENT: Hon. E l L E N A. RAKOWER COUNTY PART I 5 Justice In the Matter of the Appllcatlon of 20 FIFTH AVENUE LLC, INDEX NO. 109920-20 1 1 Petitioner, MOTION DATE 2 MOTION SEQ. NO. -v- THE NEW YORK STATE DIVISION OF HOUSING AND MOTION CAL. NO. COMMUNITY RENEWAL, and 20 FIFTH AVENUE TENANTS ASSOCIATION, Rsapondsnts. Stp 2 The following papers, numbered 1 to I Notice of Motlonl Order to Show Answer - Affldavlts 1.3 - Exhiblta Replying Affldavita Cross-Motion: Yes X No Respondent, The New York State Division of Housing and Community Renewal ( DHCR ) brings this motion to renew the decision of this Court dated December 2 1,20 11, pursuant to CPLR $2221(e), because new case law allegedly changes the prior determination. DHCR asserts that subsequent to the prior determination, the Court of Appeals issued a determination in Terrace Court v. DHCR, 18 NY3d 446, 940 NYS2d 549 (2012)) which necessitates that this proceeding be renewed and heard again. This Court issued a Decision and Order dated December 21,201 1 granting the petition of 20 Fifth Avenue, LLC, finding the DHCR s June 30,201 1 Order 1 [* 3] n and Opinion was arbitrary and capricious and contrary to law, and remanding the matter to DHCR for further action. The central issue was whether an MCI rent increase for work done to the exterior of a building was properly granted, temporarily exempting certain apartments, and then, in reconsidering its policies, rescinded. The original MCI application was brought before DHCR in 2001 for the performance of exterior restoration work at the Building at a cost of $547,410.04. Inspections of the building yielded water infiltration into a number of apartments. Originally, the MCI rent increase was approved, but temporarily exempted apartments affected by water infiltration until completion of the repairs to those affected apartments. This order was approved upon a Petition for Administrative Review. The Tenant s Association commenced an Article 78 proceeding challenging that Order of Affirmance, at which time DHCR cross-moved to remit the matter back to the administrative level to review its Order and evaluate [its] policy concerning the granting of MCI rent increase applications where problematic conditions exist in individual apartments and/or common areas, stemming from the MCI work in question. On June 30,20 I 1, DHCR revoked its prior determination, and disallowed the entire exterior restoration work as unworhanlike. The June 30,201 1 determination was the subject of this Court s prior review. This Court noted DHCR precedent, consisting of denying or revoking MCI rent increases pertaining to the individual apartments affected, and not buildingwide, and cited to inter alia, Terrace Court, LLC v. DHCR, 2010 NY Slip Op 9560 (1st Dept. 20 10). This Court found that DHCR failed to evaluate its policy concerning the granting of MCI rent increase applications where problematic conditions existed in individual apartments stemming from the MCI work in question. This Court relied on In re Charles A Field Delivery Sew., 66 NY 2d 5 16 (1 985): [ w h e n an agency determines to alter its prior stated course it must set forth its reasons for doing so. Unless such an explanation is furnished, a reviewing court will be unable to determine whether the agency has changed its prior interpretation of the law for valid reasons, or has simply overlooked or ignored its prior decision ... 2 -- . - . . [* 4] Absent such an explanation, failure to conform to agency precedent will, therefore, require reversal on the law as arbitrary, even though there is in the record substantial evidence to support the determination made Id., at 520. Ultimately, this Court found the revocation Order, which was contrary to its own 2010 Order of Affirmance, to be arbitrary and capricious and contrary to law. Respondent now seeks to renew based on the Court of Appeals affirmance of Terrace Court v. DHCR. CPLR 9222 1(e)(2)provides that a motion for leave to renew, shall be based upon new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination. The Court of Appeals, in affirming Terrace Court, specifically considered whether the [DHCR] is authorized to grant a major capital improvement rent increase while at the same time permanently exempting particular apartments from the obligation to pay additional rent when circumstances warrant. The Court held that DHCR has been granted such authority and, on this record, it was not arbitrary or capricious for DHCR to permanently exempt five apartments. Presumably, the policy DHCR sought to reevaluate when it cross-moved to remit the matter back to the administrative level in 2010, found some validity in the Court of Appeals affirmance of Terrace Court. However, the issue in Terrace Court was not the issue before this Court in its December 2 1,2011 decision. Rather, it was the deficiency in DHCR s record in failing to set forth its reasons for altering its prior stated course that resulted in this Courts finding that the Revocation Order was arbitrary and capricious and contrary to law. Wherefore, it is hereby, ORDERED that DHCR s motion to renew is denied. 3 [* 5] This constitutes the decision and order of the court. All other relief requested is denied. J. S. C. NON-FINAL DISPOSITION 0 REFERENCE 4

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