| Matter of Riverside Tenants Assn. v New York State Div. ofHous. & Community Renewal |
| 2015 NY Slip Op 08421 [133 AD3d 764] |
| November 18, 2015 |
| Appellate Division, Second Department |
[*1]
| In the Matter of Riverside Tenants Association,Respondent, v New York State Division of Housing and Community Renewal,Respondent-Appellant, and Joralemon Realty NY, LLC, Appellant-Respondent. (Proceeding No. 1.) In the Matter of JoralemonRealty NY, LLC, Appellant-Respondent, v State of New York Division of Housing andCommunity Renewal, Respondent-Appellant. (Proceeding No.2.) |
Cozen O'Connor, New York, N.Y. (Kenneth K. Fisher and Jill L. Mandell ofcounsel), for appellant-respondent.
Gary R. Connor, New York, N.Y. (Maria I. Doti of counsel), forrespondent-appellant in proceeding Nos. 1 and 2.
Collins, Dobkin & Miller LLP, New York, N.Y., for respondent in proceedingNo. 1.
In two related proceedings pursuant to CPLR article 78 to review a determination ofthe Deputy Commissioner of the New York State Division of Housing and CommunityRenewal, dated March 21, 2014, which denied petitions for administrative review andconfirmed a determination of the Rent Administrator dated October 11, 2012, denying, aspremature, the application of Joralemon Realty NY, LLC, pursuant to 9 NYCRR 2522.4(d) to decrease required services, without prejudice to refiling after it obtained thenecessary plans and permits to execute the plan, Joralemon Realty NY, LLC, appealsfrom a judgment of the Supreme Court, Kings County (Bayne, J.), dated December 3,2014, which denied its petition and granted Riverside Tenants Association's petition tothe extent of modifying the determination to deny the application with prejudice, and theNew York State Division of Housing and Community Renewal cross-appeals from thesame judgment.
Ordered that the judgment is modified, on the law, by deleting the provision thereofgranting Riverside Tenants Association's petition to the extent of modifying thedetermination of the Deputy Commissioner of the New York State Division of Housingand Community Renewal to deny the application with prejudice, and by substitutingtherefor a provision [*2]denying Riverside TenantsAssociation's petition and dismissing that proceeding; as so modified, the judgment isaffirmed, with one bill of costs payable by Riverside Tenants Association.
Joralemon Realty NY, LLC (hereinafter the owner), is the owner of a rent-regulatedapartment complex known as the Riverside Apartments, located at the southwest cornerof Joralemon Street and Columbia Place in Brooklyn. In 2008, the owner filed anapplication with the New York State Division of Housing and Community Renewal(hereinafter the DHCR) for permission to modify courtyard services at the complexpursuant to section 2522.4 (e) of the Rent Stabilization Code (9 NYCRR 2522.4 [e]) byconstructing an underground parking garage under the courtyard. Vehicle ingress to andegress from the parking facility would occupy 10% of the courtyard. The RentAdministrator of the New York State Division of Housing and Community Renewaldenied the application, and the DHCR denied the owner's petition for administrativereview, affirming the Rent Administrator's determination that the proposed changeswould result in a decrease in services. The Supreme Court denied the owner's CPLRarticle 78 petition and dismissed the proceeding. On appeal, this Court affirmed,determining that the DHCR's determination that the Rent Administrator did not err infinding that the proposed modification did not constitute an adequate substitute for thecourtyard was rational, and was not arbitrary and capricious (see Matter of Joralemon RealtyNY, LLC v State of N.Y. Div. of Hous. & Community Renewal, 102 AD3d965 [2013]).
Meanwhile, in August 2011, the owner filed a new application with the DHCR forpermission to decrease courtyard services at the complex pursuant to section 2522.4 (d)of the Rent Stabilization Code (9 NYCRR 2522.4 [d]), and for a corresponding reductionin rents. The owner revised its plan to address concerns about traffic traversing the edgeof the courtyard. Under the new plan, vehicle ingress to and egress from the parkingfacility would occupy 3% of the courtyard. The DHCR's Rent Administrator denied theapplication as premature without prejudice to refiling after the owner obtained thenecessary plans and permits to execute the plan. The DHCR denied the petitions foradministrative review filed by the owner and the Riverside Tenants Association(hereinafter the tenants association), affirming the Rent Administrator's determinationthat the application was premature.
The owner and the tenants association each commenced proceedings pursuant toCPLR article 78 to review the DHCR's determination. The Supreme Court denied theowner's petition and granted the tenants association's petition to the extent of modifyingthe DHCR's determination to deny the application with prejudice, determining that theapplication was barred by collateral estoppel based on the denial of the 2008 application.The owner appeals, and the DHCR cross-appeals.
The Supreme Court erred in determining that the owner's application to decreaserequired services was barred by the doctrine of collateral estoppel based on the denial ofthe owner's 2008 application to modify services. The 2008 application differed from theinstant proceeding before the DHCR and, thus, the DHCR's determination that thedoctrine of collateral estoppel was inapplicable was correct (see Matter of Dominguez vVanamerongen, 56 AD3d 667, 668 [2008]; Matter of Josato, Inc. vWright, 288 AD2d 384 [2001]; Coliseum Towers Assoc. v County ofNassau, 217 AD2d 387, 392 [1996]).
Judicial review of administrative determinations that were not made after aquasi-judicial hearing is limited to whether the determination was made in violation oflawful procedure, was affected by an error of law, or was arbitrary and capricious or anabuse of discretion (see CPLR 7803 [3]; Matter of Sasso v Osgood, 86NY2d 374, 384 [1995]; Matterof London Leasing Ltd. Partnership v Division of Hous. & CommunityRenewal, 98 AD3d 668, 670 [2012]; Matter of Halperin v City of New Rochelle, 24 AD3d 768,771 [2005]). "The court may not substitute its judgment for that of the DHCR"(Matter of 85 E. Parkway Corp. v New York State Div. of Hous. & CommunityRenewal, 297 AD2d 675, 676 [2002]). "The DHCR's interpretation of the statutesand regulations it administers, if reasonable, must be upheld" (id. at 676).Applications to reduce or modify services are fact-specific, and the DHCR has broaddiscretion in evaluating and interpreting the facts presented to it (see Matter of Lite View, LLC vNew York State Div. of Hous. & Community Renewal, 97 AD3d 105, 108[2012]; Matter of 333 E. 49thAssoc., LP v New York State Div. of Hous. & Community Renewal, Off. of RentAdmin., 40 AD3d 516 [2007], affd 9 NY3d 982 [2007]).
Contrary to the owner's contention, the DHCR's determination that the RentAdministrator did not err in denying the application as premature, without prejudice torefiling after the owner obtained the necessary plans and permits to execute the plan, wasrational, and was not affected by an error of law, arbitrary and capricious, or an abuse ofdiscretion. At the time of the Rent Administrator's determination, the New York CityDepartment of Buildings (hereinafter the DOB) had not approved any plans for theproposed project. The parties' experts disputed whether approvals from other agenciesand environmental review would be required, resulting in modifications to the proposal.It is for the DOB to determine these issues in the first instance, subject to review by theBoard of Standards and Appeals (see NY City Charter §§ 643,645 [b]; Matter of New York Botanical Garden v Board of Stds. & Appeals ofCity of N.Y., 91 NY2d 413, 417-419 [1998]). The informal note by the DOB, reliedupon by the owner, was not a final determination on the issues raised by the tenantsassociation. The DHCR does not have experience or expertise in zoning and permittingissues, and reasonably deferred to the DOB (see Matter of Weinreb Mgt. v New York State Div. of Hous. &Community Renewal, 24 AD3d 269 [2005]; Matter of 780 P.P. Assoc. vState of New York Div. of Hous. & Community Renewal, 290 AD2d 397[2002]), rationally concluding that it could not rule on the owner's application withoutfinal plans for the proposed project. Finally, the DHCR's failure to require approvedplans in other, less complex, matters did not render the determination arbitrary andcapricious, since the DHCR indicated its reasons for departing from normal practice (see Matter of Lantry v State ofNew York, 6 NY3d 49, 58-59 [2005]).
In light of our determination, we need not address the parties' remaining contentions.Dillon, J.P., Chambers, Austin and Sgroi, JJ., concur.