Opinion
May 15, 1990
Appeal from the Supreme Court, New York County (Jawn A. Sandifer, J.).
Respondent Robert M. Bogan is the lawful rent-stabilized tenant of the subject apartment. The first stabilized tenant upon vacancy decontrol, named Bond, entered into possession under a two-year lease commencing June 16, 1978 and ending May 31, 1980 at a monthly rent of $425. Bond vacated prior to the expiration of the lease. Petitioner, the owner of the building, then entered into a three-year lease with Levin, a relative of one of its principals, to commence February 1, 1980 at a monthly rent of $552.50. Levin, who vacated the apartment on July 31, 1980, never paid rent or a security deposit. Bogan then entered into a one-year lease commencing August 1, 1980 at a monthly rent of $640.90 and filed a complaint of rent overcharge. The District Rent Administrator found no overcharge and Bogan filed a PAR. DHCR granted the petition on the ground that Levin's tenancy should not have been used when calculating Bogan's initial rent and assessed treble damages. The determination was based upon the Rent Stabilization Code and the equities involved, including the fact that Levin had either never occupied the unit or occupied it for only six months, that the increase above the initial legal regulated rent would have been collectible for only the last two months of Levin's tenancy (after expiration of Bond's lease term), and that the Levin lease commenced on the first date the stabilized vacancy allowance increased from 5% to 15%. DHCR further found that petitioner failed to establish that the overcharge was not willful.
Petitioner thereafter commenced this article 78 proceeding. The Supreme Court, in dismissing the petition, held that the determination had a rational basis and that petitioner had failed to sustain its burden of establishing that the actions of the agency were arbitrary and capricious. We agree.
In an article 78 proceeding, the court cannot interfere unless there is no rational basis for the administrative action or the action complained of is arbitrary or capricious (CPLR 7803; Matter of Pell v. Board of Educ., 34 N.Y.2d 222). Courts are not permitted to substitute their judgment for that of the administrative agency where said decision is rationally based on the record (Fresh Meadows Assocs. v. Conciliation Appeals Bd., 88 Misc.2d 1003, affd 55 A.D.2d 559, affd 42 N.Y.2d 925). The petitioner has the burden of establishing that the actions of the agency were arbitrary and capricious (Matter of Bergstein v Board of Educ., 34 N.Y.2d 318). Here, the record supports the finding that petitioner increased the stabilized rent 30% as a result of the Levin tenancy and that the overcharge was willful (Administrative Code of City of New York § YY51-6.0.5 [now renum § 26-516]).
Concur — Rosenberger, J.P., Kassal, Ellerin and Rubin, JJ.