| Matter of Highland Hall Apts., LLC v New York State Div. of Hous. &Community Renewal |
| 2009 NY Slip Op 07255 [66 AD3d 678] |
| October 6, 2009 |
| Appellate Division, Second Department |
| In the Matter of Highland Hall Apartments, LLC,Appellant, v New York State Division of Housing and Community Renewal et al.,Respondents. 151 Purchase Street Associates, LLC, ProposedAppellant. |
—[*1] Gary R. Connor, New York, N.Y. (Kathleen Lamar of counsel), for respondent New YorkState Division of Housing and Community Renewal. DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, White Plains, N.Y. (Kevin J.Plunkett, Stefanie A. Bashar, and Kristen Kelley Wilson of counsel), for respondents City ofRye, Robert Jackson, Michael McGuinn, Daniel Kressler, Doug Florin, Emily Florin, AlfredVitiello, Matthew Thomas, Erica Metkiff, Mary Dirugeris, Ann Lodge, and WilliamThoesen.
In a proceeding pursuant to CPLR article 78 in the nature of mandamus to compel therespondent New York State Division of Housing and Community Renewal to render anadministrative determination as to the rent regulatory status of the building known as 151Purchase Street in Rye, in which the petitioner alternatively seeks, pursuant to CPLR 103, ineffect, to deem the petition to be a complaint and the proceeding to be an action for a judgmentdeclaring that a resolution adopted by the City of Rye at a special meeting on February 25, 2006was unconstitutional to the extent that it determined that the building known as 151 PurchaseStreet in Rye was subject to the Emergency Tenant Protection Act of 1974 (ETPA) (McKinney'sUncons Laws of NY § 8621 et seq. [L 1974, ch 576]), or to treat this proceedingas a hybrid proceeding pursuant to CPLR article 78 and action for declaratory relief, thepetitioner Highland Hall Apartments, LLC, and the proposed petitioner,151 Purchase StreetAssociates, LLC, appeal from so much of an order and judgment (one paper) of the SupremeCourt, Westchester County (Bellantoni, J.), entered July 15, 2008, as granted those branches ofthe motion of the respondents City of Rye, Robert Jackson, Michael McGuinn, Daniel Kressler,Doug Florin, Emily Florin, Alfred Vitiello, Matthew Thomas, Erica Metkiff, Mary Dirugeris,Ann Lodge, and William Thoesen which were pursuant to CPLR 3211 (a) (5) to dismiss theproceeding insofar as asserted against them on the grounds that it was time-barred and that thepetitioner lacked standing to bring the proceeding, denied that branch of the cross motion of theproposed petitioner, 151 Purchase Street Associates, LLC, which was to be substituted forHighland Hall Apartments, LLC, as the petitioner, and dismissed the proceeding.[*2]
Ordered that the appeal by the petitioner from so much ofthe order and judgment as denied that branch of the cross motion of the proposed petitionerwhich was to be substituted in the proceeding is dismissed, as the petitioner is not aggrieved bythat portion of the order and judgment (see CPLR 5511); and it is further,
Ordered that the order and judgment is modified, on the law, (1) by deleting the provisionthereof granting that branch of the motion of the respondents City of Rye, Robert Jackson,Michael McGuinn, Daniel Kressler, Doug Florin, Emily Florin, Alfred Vitiello, MatthewThomas, Erica Metkiff, Mary Dirugeris, Ann Lodge, and William Thoesen which was pursuantto CPLR 3211 (a) (5) to dismiss the proceeding insofar as asserted against them as time-barredand substituting therefor a provision denying that branch of the motion, (2) by deleting theprovision thereof denying that branch of the petition which was, in effect, to deem the petition tobe a complaint and the proceeding to be an action for a judgment declaring that the resolutionadopted by the City of Rye at a special meeting on February 25, 2006, is unconstitutional to theextent that it determined that the building known as 151 Purchase Street in Rye was subject tothe Emergency Tenant Protection Act of 1974 (L 1974, ch 576) and substituting therefor aprovision granting that branch of the petition, and (3) by deleting the provision thereof denyingthat branch of the cross motion of the proposed petitioner which was to be substituted forHighland Hall Apartments, LLC, as the petitioner, and substituting therefor a provision grantingthat branch of the cross motion; as so modified, the order and judgment is affirmed insofar asreviewed, the petition is reinstated and converted into a complaint, and the proceeding isconverted into an action for a judgment declaring that the subject resolution is unconstitutionalto the extent that it determined that the building known as 151 Purchase Street in Rye wassubject to the Emergency Tenant Protection Act, and the matter is remitted to the SupremeCourt, Westchester County, for further proceedings on the complaint; and it is further,
Ordered that one bill of costs is awarded to the proposed petitioner payable by therespondents City of Rye, Robert Jackson, Michael McGuinn, Daniel Kressler, Doug Florin,Emily Florin, Alfred Vitiello, Matthew Thomas, Erica Metkiff, Mary Dirugeris, Ann Lodge, andWilliam Thoesen, and one bill of costs is awarded to the respondent New York State Division ofHousing and Community Renewal, payable by the petitioner and the proposed petitioner.
The petitioner Highland Hall Apartments, LLC (hereinafter Highland Hall) is the formerowner of two buildings located at 131 Purchase Street and 151 Purchase Street, respectively, inthe City of Rye. The building located at 131 Purchase Street has approximately 99 housing units,and the building at 151 Purchase Street has 10 housing units. In February 2006 the City adopteda resolution in which it declared that the Emergency Tenant Protection Act of 1974 (L 1974, ch576) applied to the buildings owned by Highland Hall, specifically listed as 131 Purchase Streetand 151 Purchase Street, which it defined together as the "Highland Hall Property."
Subsequently, by letter dated December 2006, Highland Hall requested an administrativedetermination from the New York State Division of Housing and Community Renewal(hereinafter the DHCR) as to the rent regulatory status of the building located at 151 PurchaseStreet. In its request, Highland Hall contended, inter alia, that the resolution was unconstitutionalas applied to the 151 Purchase Street building and that it should not apply to that building sinceit only contained 10 housing units. In May 2007 the DHCR Rent Administrator issued an order(hereinafter the DHCR order) finding that the DHCR lacked jurisdiction to entertain a challengeto the validity of the resolution. In June 2007 Highland Hall filed a petition for administrativereview (hereinafter PAR) of the DHCR order. While the PAR was pending, Highland Hallconveyed the 151 Purchase Street building to the proposed petitioner 151 Purchase StreetAssociates, LLC (hereinafter Associates). In October 2007 the DHCR Deputy Commissionerdetermined that the Rent Administrator had properly concluded that the DHCR did not havejurisdiction to entertain a challenge to the validity of the resolution and denied the PAR.
On or about December 27, 2007 Highland Hall commenced the instant proceeding,requesting, inter alia, as alternative relief, that the proceeding be treated as a hybrid proceedingpursuant to CPLR article 78 to compel the DHCR to render an administrative determination as tothe rent regulatory status of the 151 Purchase Street building and an action for a declaration thatthe [*3]resolution was arbitrary, unreasonable, andunconstitutional to the extent that it determined that the 151 Purchase Street building was subjectto the ETPA. Thereafter, the City and the individually-named respondents (hereinafter thetenants) moved to dismiss the petition on the grounds that Highland Hall lacked standing, thepetition was untimely, and the petition failed to state a cause of action. In response, Associatescross-moved, inter alia, to be substituted for Highland Hall as the petitioner. After hearing oralargument, the Supreme Court granted the motion to dismiss on the grounds that the petition wastime-barred by the four-month statute of limitations applicable to CPLR article 78 proceedingsand that Highland Hall lacked standing, since it did not own the 151 Purchase Street buildingwhen it commenced the proceeding. The court also, inter alia, denied that branch of Associates'cross motion which was to be substituted for Highland Hall as the petitioner, and determined thatit did not have the authority to compel the DHCR to resolve the regulatory status of the 151Purchase Street building since such action was not a ministerial function. Highland Hall andAssociates appeal.
A CPLR article 78 proceeding is the proper vehicle for seeking review of the proceduresfollowed in the adoption of a statute, law, or ordinance (see Matter of Save the Pine Bush vCity of Albany, 70 NY2d 193, 202 [1987]). However, where the substance of the law, "itswisdom and merit" (Matter of Voelckers v Guelli, 58 NY2d 170, 177 [1983]), or itsconstitutionality, is challenged, then the proper procedure is to commence an action for adeclaratory judgment (see New York City Health & Hosps. Corp. v McBarnette, 84NY2d 194 [1994]; P & N TiffanyProps., Inc. v Village of Tuckahoe, 33 AD3d 61, 64 [2006]). Contrary to the SupremeCourt's determination, a declaratory judgment action rather than a proceeding pursuant to CPLRarticle 78 is the proper vehicle for resolving the instant challenge to the resolution (see Matter of Huntington Hills Assoc.,LLC v Town of Huntington, 49 AD3d 647, 648 [2008]; Matter of Jones v Amicone, 27 AD3d465, 470 [2006]]; see also MartinGoldman, LLC v Yonkers Indus. Dev. Agency, 12 AD3d 646, 648 [2004]).Accordingly, the Supreme Court should have determined that insofar as declaratory andinjunctive relief was sought against the City and the tenants, this proceeding is governed by thesix-year catch-all limitations period of CPLR 213 (1) and was timely interposed. Thus, thatbranch of the motion of the City and the tenants which was to dismiss the proceeding astime-barred should have been denied.
Since the proper vehicle to challenge the resolution is a declaratory judgment action, theSupreme Court properly dismissed that branch of the petition which sought relief pursuant toCPLR article 78 in the nature of mandamus against DHCR. The remedy of mandamus isavailable "to compel the performance of a ministerial, nondiscretionary act where there is a clearlegal right to the relief sought" (Matter of Savastano v Prevost, 66 NY2d 47, 50 [1985];see CPLR 7803 [1]; Matter ofBurch v Harper, 54 AD3d 854, 855 [2008]; Matter of Joy Bldrs., Inc. v Ballard, 20 AD3d 534 [2005]).Moreover, the act sought to be compelled must be based upon a "specific statutory authoritymandating performance in a specified manner" (Matter of Peirez v Caso, 72 AD2d 797[1979]). Pursuant to the ETPA, DHCR is designated as the sole administrative agency toadminister the regulation of residential rents as provided in the ETPA after a municipality hasdeclared the existence of a housing emergency (see McKinney's Uncons Laws of NY§ 8628 [a]). However, the ETPA does not provide DHCR with the authority to review thevalidity of or annul a municipality's resolution or declaration implementing the ETPA.
As Highland Hall, in effect, conceded, it lacked standing since it did not own the 151Purchase Street building at the time of commencement of this proceeding. Consequently, thepresent owner of the building, Associates, cross-moved, inter alia, to be substituted as petitionerfor Highland Hall. "[A]n amendment which would shift a claim from a party without standing toanother party who could have asserted that claim in the first instance is proper since such anamendment, by its nature, does not result in surprise or prejudice to the defendants who had priorknowledge of the claim and an opportunity to prepare a proper defense" (JCD Farms vJuul-Nielsen, 300 AD2d 446 [2002]] [internal quotation marks omitted]; see Matter of Shelter Is. Assn. v ZoningBd. of Appeals of Town of Shelter Is., 57 AD3d 907, 908 [2008]; Fulgum v Town of Cortlandt Manor,19 AD3d 444, 446 [2005]). Consequently, the Supreme Court should have granted thatbranch of the cross motion which was for that relief. Rivera, J.P., Skelos, Balkin and Leventhal,JJ., concur.