Opinion
2015-05-22
ATSIKI REALTY LLC v. Maria MUNOZ, Respondent–Tenant–Respondent. Atsiki Realty LLC, Petitioner–Landlord–Appellant, v. Bienvenida Acevedo, Respondent–Tenant–Respondent. Atsiki Realty LLC, Petitioner–Landlord–Appellant, v. Arcelia Uribe Enrique, Respondent–Tenant–Respondent. Atsiki Realty LLC, Petitioner–Landlord–Appellant, v. Giralda/Angelina Mena, Respondent–Tenant–Respondent. Atsiki Realty LLC, Petitioner–Landlord–Appellant, v. Mariano Andujar, Respondent–Tenant–Respondent. Atsiki Realty LLC, Petitioner–Landlord–Appellant, v. Suhey Flores, Respondent–Tenant–Respondent. Atsiki Realty LLC, Petitioner–Landlord–Appellant, v. Loida Ester Pena, Respondent–Tenant–Respondent. Atsiki Realty LLC, Petitioner–Landlord–Appellant, v. Denise Hiciano, Respondent–Tenant–Respondent. Atsiki Realty LLC, Petitioner–Landlord–Respondent, Pedro Gomez Fermin, Respondent–Tenant–Respondent.
Law Offices of Santo Golino, New York City (Brian W. Shaw of counsel), and Karabelas & Papgianolpoulos, LLP for appellant. Northern Manhattan Improvement Corp. Legal Services, New York City (Kenneth Rosenfeld of counsel), for respondents.
Law Offices of Santo Golino, New York City (Brian W. Shaw of counsel), and Karabelas & Papgianolpoulos, LLP for appellant. Northern Manhattan Improvement Corp. Legal Services, New York City (Kenneth Rosenfeld of counsel), for respondents.
PRESENT: HUNTER, JR., J.P., SHULMAN, LING COHAN, JJ.
PER CURIAM.
Order (Sheldon J. Halprin, J.), dated November 12, 2013, affirmed, with $10 costs.
In a rent reduction order dated February 5, 1993, the New York State Division of Housing and Community Renewal (DHCR) reduced the legal regulated rent on each apartment at issue in these consolidated nonpayment proceedings, on the ground that the prior building owner failed to provide certain required services. The order also prohibited the owner from charging or collecting any rent increases until the DHCR issued a rent restoration order. On May 29, 2013, DHCR denied the petitioner-landlord's application to restore the rents, finding that the conditions cited in the 1993 order had only been “partially corrected.” DHCR's 2013 determination was neither reviewed on administrative appeal nor challenged in a CPLR article 78 proceeding.
*35 We reject landlord's attempt to collaterally attack the 1993 rent reduction order in these 2012 proceedings. A rent reduction order imposes a continuing duty on the owner to charge and collect the reduced legal regulated rent until the DHCR finds that all required services are being provided and a rent restoration order is issued authorizing the owner to charge and collect the actual legal regulated rent ( see Rent Stabilization Law [Administrative Code of City of N.Y.] § 26–514; Rent Stabilization Code [9 NYCRR] § 2523.4[a][1]; Jenkins v. Fieldbridge Assoc., LLC, 65 A.D.3d 169, 877 N.Y.S.2d 375 [2009], lv. dismissed 13 N.Y.3d 855, 891 N.Y.S.2d 688, 920 N.E.2d 92 [2009] ). Administrative determinations are binding on the parties and the courts until either vacated by the issuing agency or set aside upon judicial review ( see Katz 737 Corp. v. Cohen, 104 A.D.3d 144, 148, 957 N.Y.S.2d 295 [2012], lv. denied 21 N.Y.3d 864, 2013 WL 4711225 [2013] ).
In as much as the extant rent reduction order fixed the legal rent that could be charged and collected by landlord, the doctrine of collateral estoppel precludes landlord from relitigating this issue in these proceedings, including under landlord's newly advanced theory—that the rent reduction order was superseded by 1994 order of the New York City Department of Housing Preservation and Development (HPD), which adjusted the legal rent for each apartment at issue pursuant to a Private Housing Finance Law (PHFL) article VIII–A rehabilitation loan ( see Matter of Sun v. Lawlor, 96 A.D.3d 685, 687, 947 N.Y.S.2d 510 [2012]; Matter of D'Alessandro v. New York State Div. of Hous. & Community Renewal, 92 A.D.3d 421, 421–422, 937 N.Y.S.2d 589 [2012] ). Landlord never raised this new argument at DHCR and makes no substantial argument that it did not have a full and fair opportunity to raise the argument before the agency ( see D'Alessandro, 92 A.D.3d at 421, 937 N.Y.S.2d 589). Thus DHCR's rent reduction order is entitled to collateral estoppel effect precluding the relitigation in court—some two decades later—of the same issues determined before DHCR ( see Gersten v. 56 7th Ave. LLC, 88 A.D.3d 189, 201, 928 N.Y.S.2d 515 [2011] ).
We also reject, as did Civil Court, landlord's contention that the HPD order established an “initial rent” that was not subject to the prior rent reduction order. In advancing this argument, landlord relies upon Rent Stabilization Code [9 NYCRR] § 2521.1(d), which provides, inter alia, that “the initial legal regulated rent for a housing accommodation in a multiple dwelling for which a loan is made under the PHFL shall be the initial rent established pursuant to such law.” However, the HPD order at issue did not establish an initial rent and, indeed, it could not. While HPD is required to “establish the initial rent” pursuant to loans made under the auspices of articles VIII, XI and XV of the PHFL ( seePHFL §§ 405[1–c], 576–c[2], 804), where, as here, the loan is made pursuant to PHFL article VIII–A, HPD is only authorized to make “rent adjustments” ( seePHFL § 452[7]; 28 RCNY § 2–04[a][2][i][A] [“rent stabilized units ... will remain stabilized with the rental adjustment added to the then current rent”]; see also RSC § 2522.4 [f] ). Indeed, the HPD order at issue did not establish a “new initial rent,” as contended by landlord, but simply directed an increase or “rental adjustment” of $5 per room to the current regulated rent, as provided by the Private Housing Finance Law and its implementing regulations. Matter of Simon–Hill, Docket # YG–210018–RT (August 9, 2010), heavily relied upon by landlord, is distinguishable, since it involved a rehabilitation loan made to a Housing Development Fund Company under PHFL article XI, pursuant to which HPD established the initial rent.
Nor did landlord otherwise demonstrate the absence of material issues of fact as to tenants' rent overcharge claims. The record now before us raises triable issues as to the amount of rent collected by landlord in excess of that permitted by the rent reduction order during the four-year period preceding the interposition of the rent overcharge claim ( see Scott v. Rockaway Pratt, LLC, 17 N.Y.3d 739, 929 N.Y.S.2d 204, 953 N.E.2d 277 [2011]; Matter of Cintron v. Calogero, 15 N.Y.3d 347, 912 N.Y.S.2d 498, 938 N.E.2d 931 [2010] ).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.