Opinion
Argued April 28, 1975
Decided July 2, 1975
Appeal from the Appellate Division of the Supreme Court in the Second Judicial Department, ANTHONY M. LIVOTI, J.
Appeal from the Appellate Division of the Supreme Court in the First Judicial Department, PETER A. QUINN, J.
W. Bernard Richland, Corporation Counsel (Milton H. Harris and L. Kevin Sheridan of counsel), for appellants in the first above-entitled proceeding.
Alan C. Levy for respondent in the first above-entitled proceeding. Adrian P. Burke, Corporation Counsel (L. Kevin Sheridan and Joseph I. Lauer of counsel), for appellants-respondents in the second above-entitled proceeding.
Howard G. Kristol and Richard J. Schulman for respondents-appellants in the second above-entitled proceeding.
These two article 78 proceedings are very close on their facts and raise the same legal questions. In each the petitioner is an owner of real property in the City of New York who seeks to alter and convert it for use as a domiciliary care facility for adults pursuant to the New York State Hospital Code. Both applied for and were granted building permits from the city for the necessary alterations. After each had expended or undertaken large obligations for the necessary work so authorized, the permits were suspended by the city's Department of Buildings' Borough Superintendent, presumably on the basis of the adoption by the city's Board of Estimate of a so-called "stop-gap" resolution which directed the suspension of all such permits. The "stop-gap" resolution was the one later to be ruled invalid in Matter of Temkin v Karagheuzoff ( 34 N.Y.2d 324).
In the Bayswater case, Special Term's judgment directed the reinstatement of the building permit nunc pro tunc and granted petitioner 28 days of construction time in which to vest its rights, that period being arrived at on the basis of the time elapsed between the date of revocation and the date of a later valid (not the "stop-gap") resolution controlling construction of health-related facilities. The judgment was unanimously affirmed by order of the Appellate Division, Second Judicial Department ( 45 A.D.2d 955).
In the Lee case, after Special Term had dismissed the petition on its merits, the Appellate Division, First Judicial Department ( 45 A.D.2d 836), unanimously reversed and ordered the entry of judgment reinstating the permit "for a period of time equal to that during which [it] was unlawfully revoked" "in order that they may complete such construction as may be necessary to satisfy the zoning ordinance of New York City as it existed immediately prior" to the enactment of the valid resolution.
The city now appeals from both orders. Lee cross-appeals because the Appellate Division did not order the immediate vesting of its rights. For the reasons which follow, we believe the order of each Appellate Division should be affirmed. As to the cross appeal, since the Appellate Division granted Lee the full relief sought in his petition, he is not a party aggrieved and may not appeal (CPLR 5511).
The zoning uses for which the permits were granted were for "health related facilities as defined in the New York State Hospital Code, and domiciliary care facilities for adults under the jurisdiction of the New York State Board of Social Welfare each of which have secured certification by the appropriate governmental agency". (New York City Zoning Resolution, § 22-13, as amd March 8, 1973.) Bayswater's permit was issued on November 7, 1973, Lee's on November 20, 1973. At the time each was issued, and earlier when it had been applied for, the city knew that certifications by "the appropriate [State] agency" (the State Department of Health in Bayswater; the State Board of Social Welfare in Lee) had not yet been secured. However, in Bayswater's case, written approval was in fact granted formally by the State on November 29, 1973, the very date the city permit was revoked, and in Lee's case written State approval was transmitted on March 8, 1974, a date before this proceeding was heard at Special Term. A number of factors give strong support to our view that failure to receive prior certification was a mere irregularity subsequently cured as to each of these permittees.
Compliance with technical or procedural matters may be regarded as a curable irregularity (see Schultze v Wilson, 54 N.J. Super. 309; Gordon v Board of Appeals of City of Schenectady, 131 Misc. 346; 1 Anderson, New York Zoning Law and Practice [2d ed], § 6.10; cf. Soviero v Amato, 71 N.Y.S.2d 101).
Initially it is clear from its legislative history that the reference to certification in the amendment to section 22-13 was not of great moment. It was entirely absent from the City Planning Commission's report on legislative purpose which accompanied its enactment. The stated purpose was to more precisely distinguish among health care facilities, domiciliary care facilities for adults, and nursing homes, all of which had previously been lumped together as uses permitted "as of right" in residential areas. The incorporation of the language referring to State certification appears to have been purely incidental to draftsmanship.
This also accords with Zoning Resolution 22-13's practical construction by those charged with its enforcement, both before and after the amendment. And, consistently with the uniform practice of his department, the city's Superintendent of Buildings in charge of Queens, the borough where the Lee facility was to be located, on August 23, 1973 expressly advised Lee that no other governmental approval was required as a condition precedent to obtaining a valid city permit. Petitioners' reliance on that official assurance, and on the practice which it accurately described, accorded with the principle that "the use of contemporary and practical interpretation makes for certainty in the law and justifies reliance upon the conduct of public officials". (2A Sutherland, Statutes and Statutory Construction [Sands 4th ed], § 49.03, p 233; see McKinney's Cons Laws of NY, Book 1, Statutes, § 128, p 265.)
Indeed, though it is unnecessary for us to reach that question here, the practicalities hardly leave us free from doubt whether it would be correct to construe the State certification phrase as a condition precedent altogether. This is especially so since zoning ordinances, being in derogation of common-law rights, are to be read narrowly and their ambiguities resolved in favor of property owners. (Matter of Glenel Realty Corp. v Worthington, 4 A.D.2d 702; cf. People v Ryan, 274 N.Y. 149; Matter of H.P.V.T. Corp. v McGuire, 58 Misc.2d 159.)
The State certification was for the use rather than the construction of the facility. Permission for the latter would not necessarily mandate the former. Normally a building permit precedes the start of an alteration; the issuance of a local certificate of occupancy, attesting to its satisfactory completion, would ordinarily come after the work was done. Only then would the health care facility be in condition to meet the requirements for State certification. Also, a builder who applied for an alteration permit did not necessarily have to be the operator of the contemplated domiciliary facility. So it was possible, in fact made sense, for a builder to withhold closing his contemplated purchase of the property and the leasing thereof to a contemplated operator until a permit had issued. That is not hypothetical; it is what Lee actually did without any State problem. The proposed operator, not the owner, would then be the one to file an application with the appropriate agency for the State certification. Under these circumstances, it is not surprising that in actual practice the expected order of things had been to obtain a building permit first and State certification thereafter.
A close reading of the statutes and rules regulating the State board supports the pragmatism of such an order of things. In order to obtain final written approval of the State board, an operator must demonstrate "that the buildings * * * comply with applicable law and rules of the board" (Executive Law, § 758, subd 3, par [c]). An application and a set of architectural plans must be submitted to the board, which then commences a review thereof, applying the standards set forth in section 758 of the Executive Law, and Parts 20 and 21 of title 18 of the Official Compilation of Codes, Rules and Regulations of the State of New York. Part 20 of the board's regulations requires that all domiciliary care facilities contain certain safety features, including automatic smoke detection equipment on each floor and adequate numbers of fire extinguishers, nightlights and handrails in the hallways. (18 N.Y.CRR 20.2 [b].) Part 21 requires certain comfort features, such as adequate lighting, ventilation, toilet facilities, heating capacity and dining facilities. (18 N.Y.CRR 21.5.) All these must be satisfactory before certification, except that, in the case of facilities in the City of New York, the city's Building Department's approval of their satisfactory installation (pursuant to local permit) is substituted as the basis for State board certification. That is pursuant to section 20.2 (c), which provides that all domiciliary care facilities are to be constructed in conformity with the State Building Construction Code, save for those in New York City, which are to conform to the New York City Building Code (Local Laws, 1968, No. 76).
Further, petitioners here alleged, and respondents did not deny, that the city's belated emphasis on State certification was not because it was concerned about the existing practice. Instead, it was a response to political pressure by neighborhood groups who wished the zoning law changed. But that required approval by the City Planning Commission before it could be acted on by the Board of Estimate, a procedure taking more time than the impatience of the sponsors of the proposed change would countenance. The result was resort to the unlawful "stop-gap" resolution adopted posthaste on December 6.
Significantly, even that abortive resolution made no reference to any problem over lack of State certification and it was equally and completely absent from the letter transmitting it for enforcement from the Deputy Mayor of the city to the building commissioner as well. It was the latter, going beyond both the "stop-gap" resolution and the mayoralty transmittal, who, in his enforcing zeal, first resurrected the certification language, which up to then had been treated as dead-letter words. At one fell swoop he applied it indiscriminately to all the approximately 50 permits for such projects which were then in force, making no distinction between those who, in good faith, had made considerable progress in the work authorized by their permits and those who had not. In doing so, he went far beyond the invalid resolution he was purporting to enforce, since it only applied to those where substantial work progress had not taken place, a condition which, if not enlarged upon by the commissioner, would not have required the revocation of the two permits here at all.
Unfortunately, by then, each petitioner, neither of whom had any reasons to expect its permit to be revoked or suspended, was well underway in the work it undertook pursuant to its permit. When the Lee project was halted in its tracks by the revocation, its main building had already been gutted, its roof and sidewalks opened and exposed to the elements and, according to its submission, various obligations undertaken to the tune of at least a million dollars. It had also closed title to and leased the premises involved immediately after the permit was granted. Much of this being easily verifiable, since the work was literally exposed to view and a matter of public record, it is significant that its extensiveness is not seriously denied by the respondents. In Bayswater's case, there are similar claims of amounts expended or obligations incurred totaling about $590,000.
So far as appears from the record, these petitioners have been faultless in their relationship with the city, whether in this transaction or otherwise. Their applications appear to have been completely truthful. We, therefore, consider it irrelevant to concern ourselves here with the transgressions of others, whether in or out of government. It certainly should not prejudice those whose hands are clean and whose conduct is above reproach. No representative of the city, at any level, has, in the course of these litigations, even hinted that those are not the cases here. Accordingly, as in Matter of Temkin v Karagheuzoff ( 34 N.Y.2d 324, supra), each of the unanimous Appellate Divisions was justified in finding that respondents were estopped from barring each of these petitioners from the opportunity to complete the vesting of its respective right to complete construction. Though Temkin did not involve a State certification question, its opinion is equally applicable here when it states (p 329) "the work had been commenced not only with the approval, but with the actual permission of the respondents. As a result of such permission and approval, petitioners had changed their position to their detriment".
Accordingly, the orders appealed from should be affirmed and the cross appeal dismissed.
I concur in the result reached by the majority.
In my view, the city zoning requirement of certification by the appropriate governmental agency (the State Department of Health in Bayswater; the State Board of Social Welfare in Lee) was not a condition precedent to the issuance of the building permit. The zoning resolution does not prescribe any such condition precedent, and in a practical sense so to hold might be to foster an Alphonse and Gaston routine — with city building permit issuance dependent on State agency certification and State agency certification dependent on issuance of a city building permit. Read in one light the regulations of the State Board of Social Welfare now stipulate approval by the city's Building Department as a condition precedent to board certification (18 N.Y.CRR 20.2 [c]).
Precisely speaking the city building permit refers to construction of facilities while State agency certification and zoning restriction refer to use of facilities. It could be argued, both from a practical point of view and as a matter of logic, that satisfaction of construction requirements should antedate conformity to use restrictions. The applicant for permission to construct is not necessarily the applicant for authorization to use; construction will necessarily precede use in point of time; and scrutiny of a use application necessarily involves a much broader scope of inquiry.
It suffices, however, for present purposes only to hold that State agency certification is not always a condition precedent to issuance of a city building permit; it is not necessary to decide now whether issuance of a building permit should always be a prerequisite to State agency certification. There is no evidence in this record that the former system in which in practice neither requirement was accorded mandatory precedence over the other caused operational difficulties. It may even be said that it would be injudicious for a court, in an area of overlapping cognizance of two governmental units, to assign a categorical priority status to the mandates of one unit over those of the other, particularly in a proceeding to which the other is not a party and in which, therefore, it has had no opportunity to advance administrative or other considerations in favor of no priority at all or of a priority in its favor. The judiciary should be hesitant to lay down absolute rules of practice in areas which are essentially administrative, where two agencies are given concurrent responsibility, in the absence of legislative command or at least until opportunity has been afforded each agency to be heard.
As the majority opinion notes, the records in these cases disclose that it had not been the administrative practice of the city officials charged with responsibility for enforcement of section 22-13 of the Zoning Resolution to require prior State agency certification, either before or after the amendment of March, 1973. It was only in response to public clamor and political pressure, culminating in the adoption of the stopgap resolution which we held unlawful in Matter of Temkin v Karagheuzoff ( 34 N.Y.2d 324), that toward the end of 1973 there was a radical change in administrative attitude and resort was had for the first time to exaction of prior State agency certification.
In my view these building permits were originally legally issued. Accordingly subsequent revocation of each permit was properly annulled and the permit reinstated in the light of the progress made towards alteration of the premises and of the fact that by the expenditure of substantial sums of money each petitioner had changed its position to its detriment (Matter of Temkin v Karagheuzoff, supra).
The orders appealed from in both proceedings should be reversed and the petitions dismissed. The permits issued for nursing home and domiciliary care facilities, and subsequently revoked by the New York City Department of Buildings, were illegal from their inception for lack of prerequisite certifications. Petitioners, therefore, could not have acquired any rights under them, by reliance or otherwise.
An administrative officer or board authorized to issue building permits has only so much power as delegated by the applicable ordinance (see 2 Rathkopf, Law of Zoning and Planning, p 56-1). Where the administrator issues a permit in the absence of jurisdiction or otherwise in contravention of law, his act is ultra vires and no rights vest from reliance on such a permit (pp 56-11 to 56-13; see, e.g., Marcus v Village of Mamaroneck, 283 N.Y. 325, 330-331; Matter of Smalls v Board of Stds. Appeals of City of N.Y., 28 Misc.2d 147, 148, affd 14 A.D.2d 548, affd 11 N.Y.2d 698; cf. Matter of Jayne Estates v Raynor, 22 N.Y.2d 417, 422). Exemplary is the situation where an applicant fails to take the procedural steps necessary to confer jurisdiction on the administrator (see 2 Rathkopf, op. cit., p 56-3, n 3).
Pursuant to section 22-13 of the New York City Zoning Resolution, as amended March 8, 1973, uses permitted "as of right" in residential districts include "[N]ursing homes and health related facilities as defined in the New York State Hospital Code, and domiciliary care facilities for adults under the jurisdiction of the New York State Board of Social Welfare each of which have secured certification by the appropriate governmental agency".
Nothing in this explicit language allows that a permit may be issued on the basis of a certificate merely anticipated or for which application has been made. The approval of the State agencies is a condition precedent to the lawful issuance of the permits. Issuance without such approval would not be a mere irregularity with respect to a power delegated to the administrator, but a complete failure of power to act, with permits void from their inception, and subject to revocation pursuant to section C26-118.7 of the Administrative Code of the City of New York.
In the instant case, it is uncontroverted that at the time the permits were issued, the applicants had not yet obtained certification from the appropriate State agencies, namely, the State Department of Health and the State Board of Social Welfare. The permit for the Bayswater Health Related Facility was issued on November 7, 1973, but the approval of the State Department of Health was not obtained until November 29, 1973. By letter of that very date, the permit had been revoked, and shortly thereafter the Buildings Department was barred from reinstating the permit by a temporary restraining order in a related judicial proceeding, and also by the Board of Estimate's so-called "stop-gap" resolution of December 6, 1973.
That the injunction would be vacated with the dismissal of the court proceeding the following February, and the stopgap resolution eventually held unlawful by this court in Matter of Temkin v Karagheuzoff ( 34 N.Y.2d 324), is irrelevant. What is crucial is that the permit was illegal and void when issued, and therefore required to be revoked because void. That the buildings commissioner was subsequently barred from reconsidering the application by legal restraints, some of which were, retrospectively, invalid, is a misfortune that must be borne by the applicant who sought and relied on an illegal permit.
The same is of course true in Matter of Lee. The permit for enlargement and alteration was issued on November 20, 1973, despite the lack of approval by (or even application to) the State Board of Social Welfare, and was therefore properly revoked by letters dated December 11, 1973 and January 14, 1974. Indeed, since the board was not prepared to give its approval until January 23, 1974, after the valid Zoning Resolution of January 10, 1974, it is difficult to understand how petitioners could complain of the illegal stopgap order tying the commissioner's hands in reconsidering the application during December.
Matter of Temkin v Karagheuzoff ( 34 N.Y.2d 324, supra) does not hold otherwise. The permit issued to the applicants in that case was valid and the city never contended otherwise; petitioners had obtained all the necessary approvals from the appropriate State and municipal authorities (id., p 327). Matter of Temkin holds only that the unlawful stopgap resolution could not prevent the petitioners under a valid permit from vesting their rights in the building by completing construction of the foundation (id., pp 328-329).
The petitioners argue that their rights are vested in the permits because of the expenditures that they made in reliance on void permits. Persons may not contend that they were misled or deceived into acting in reliance upon unlawfully-issued permits since they are presumed to know the extent of the issuing officer's authority (see, e.g., Marcus v Village of Mamaroneck, 283 N.Y. 325, 330-331, supra; see, generally, 2 Rathkopf, op. cit., 56-12).
Nor may diaphanous, if not invisible, distinctions be made between preconditional approvals which look to the physical facilities rather than to the functional uses of physical facilities. In either event the municipal ordinance requires advance approval before a permit may be issued and construction started. The State regulations authorizing approvals, on the other hand, do not require that the building permits be first obtained (see Executive Law, § 758; 10 N.Y.CRR Part 710; former 18 NYCRR Parts 20, 21, then in effect; cf. 18 N.Y.CRR 15.3, now in effect).
Behind this rule is an important public policy, and that is to prevent corruption. As was said long ago in Ostrowsky v City of Newark ( 102 NJ Eq 169, 172), and quoted by Rathkopf: "There can be no 'vested rights' under a void permit. To hold otherwise would be to put a premium on dishonesty of city officials charged with the duty of issuing such permits and would open the way for connivance and fraud. The will of the official would then be substituted for the mandate or restriction of the legislative enactment and thus the limitations of zoning acts and ordinances held for naught."
The language of the court in the Ostrowsky case was prescient when applied to the municipal regulation of building construction, and particularly timely when applied to nursing and domiciliary care facilities. These are no areas to lower the guards against corruption and devious manipulation.
Accordingly, the orders of the Appellate Division should be reversed and the petitions dismissed.
Judges WACHTLER and COOKE concur with Judge FUCHSBERG; Judge JONES concurs in result in a separate opinion in which Judge GABRIELLI concurs; Chief Judge BREITEL dissents and votes to reverse in a separate opinion in which Judge JASEN concurs.
In Matter of Bayswater Health Related Facility v Karagheuzoff: Order affirmed, with costs.
In Matter of Lee v Walsh: On petitioners' appeal: Appeal dismissed, without costs.
On respondents' appeal: Order affirmed, with costs.