Opinion
Index 159153/2019
03-22-2022
536 E. 5TH ST. EQUITIES INC., Petitioner, v. STATE OF NEW YORK DIVISION OF HOUSING AND COMMUNITY RENEWAL OFFICE OF RENT ADMINISTRATION, LAUREN ISAACS Respondent.
Unpublished Opinion
DECISION + ORDER ON MOTION
CAROL EDMEAD, J.S.C.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 76, 77, 78, 79, 80, 81, 82, 83, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 97, 98, 99 were read on this motion to/for ARTICLE 78 (BODY OR OFFICER).
Upon the foregoing documents, it is
ORDERED AND ADJUDGED that the motion pursuant to CPLR of petitioner 536 E. 5th St. Equities Inc. (motion sequence number 002) is granted solely to the extent that the respondent State of New York Division of Housing & Community Renewal, Office of Rent Administration is directed to issue a decision that disposes of the petition for administrative review that bears Docket No. JO410002RP within 90-days of service of a copy of this decision with notice of entry, and that said decision comply with this court's order dated November 16, 2020 in motion sequence number 001, and it is further
ORDERED AND ADJUDGED that the cross motion pursuant to CPLR of the respondent State of New York Division of Housing & Community Renewal, Office of Rent Administration (motion sequence number 002) is denied; and it is further
ORDERED that the Clerk of the Court shall enter judgment accordingly; and it is further
ORDERED that counsel for petitioner shall serve a copy of this order, along with notice of entry, on all parties within ten (10) days.
MEMORANDUM DECISION
In this Article 78 proceeding in which petitioner/landlord 536 E. 5th St. Equities Inc. (landlord) seeks to overturn an order of the respondent State of New York Division of Housing & Community Renewal, Office of Rent Administration (DHCR), landlord now moves to have that order "deemed denied" by virtue of the DHCR's alleged inaction, and for judgment on its amended petition, while the DHCR cross-moves to remit this matter to the agency for further consideration (together, motion sequence number 002). For the following reasons, the motion is granted to the extent set forth below and the cross motion is denied.
FACTS
Landlord is the owner of a residential apartment building located at 536 East 5th Street in the county, city and State of New York (the building). See notice of motion, exhibit E (proposed amended verified petition), ¶ 1. Individually named co-respondent Lauren Paige Isaacs (Isaacs) is the tenant of record of apartment 5 in the building. Id., ¶ 3. On April 4, 2016, Isaacs submitted a request to the DHCR for a determination as to apartment 5's rent-regulated status and correct legal regulated rent. Id., exhibit A. On May 24, 2019, a DHCR rent administrator (RA) issued a decision that found that apartment 5 is subject to the Rent Stabilization Law and Code (RSL & RSC), that its correct legal regulated rent from August 1, 2017 through July 31, 2018 was $989.98 per month, and ordered that the unit's current legal regulated rent be recalculated using that amount as a base rent (the RA's decision). Id., exhibit B. Landlord filed a petition for administrative review (PAR) to challenge the RA's decision on June 18, 2019, and the DHCR Deputy Commissioner's eventually denied that PAR in a decision dated July 9, 2020 (the PAR decision). Id., exhibit D.
Prior to the disposition of its PAR, however, landlord had commenced this Article 78 proceeding on September 23, 2019. See verified petition. On November 12, 2019, the court entered an order that "disposed of the original petition (motion sequence number 001) "with prejudice" pursuant to the terms of a November 5, 2019 stipulation wherein the parties had "settled" this matter but afforded landlord the right to use its Index Number in any subsequent proceedings between them commenced pursuant to an amended petition that landlord might file "after a decision is rendered by [the] DHCR." See NYSCEF document number 32; notice of cross motion, exhibit C. At that time, the majority of court and government functions were suspended as a result of the Covid-19 national pandemic. After they had partially resumed, the DHCR issued the PAR decision on July 9, 2020. Id., exhibit D. Landlord then filed an amended petition under the instant index number on August 11, 2020. See NYSCEF document number 33. The court restored this matter in an interim order dated August 20, 2020. See NYSCEF document number 62 (motion sequence number 001). In response to landlord's amended petition, the DHCR cross-moved on November 4, 2020 to remit this matter to the agency for further proceedings (motion sequence number 001). The court granted the DHCR's cross motion in an order dated November 16, 2020 that found as follows:
"DHCR argues that examination of the administrative record, including the Rent Administrator's Order and the Owner's Verified Petition herein indicate that further review of the instant proceeding by DHCR is warranted. DHCR believes that the contentions raised by the Owner in the Article 78 Petition should be reconsidered and warrant a re-examination of the evidentiary record and the legal issues raised therein and possibly further processing. As an example, during the pendency of the underlying proceeding, the Court of Appeals issued its decision in Regina Metropolitan Co. LLC v DHCR (NY Slip Op 02127) (2020), which Petitioner contends resolves all issues of how a court or agency may review rental history to determine regulatory status and to calculate an overcharge under the circumstances of this proceeding.
"DHCR concludes that the matter should be remitted for all purposes including permitting DHCR to examine the proceeding in light of the Regina decision cited by Petitioner.
"Accordingly, DHCR requests that the Court remit the matter to it for further consideration and review of the contentions presented in the administrative proceeding and in the Article 78 proceeding.
"While Petitioner opposes DHCRs cross-motion, this Court has power and discretion to remit proceedings to the rent agency, even where one of the parties objects (Schoenstein v McGoldrick, 279 AD 395 (1st Dept 1952), lv. to rearg. and lv. to app. den. 279 AD 906 (1st Dept 1952)."See notice of motion (motion sequence number 002), exhibit A.
The July 9, 2020 PAR decision was based entirely on the administrative record that was before the RA. See notice of motion (motion sequence number 002), exhibit D. It was issued before landlord served its amended petition and did not include any discussion of Matter of Regina Metro. Co., LLC v New York State Div. of Hous. & Community Renewal (35 N.Y.3d 332 [2020]) or any related recent case law. Id., exhibit D. The court's November 16, 2020 decision directed the DHCR to consider the allegations in landlord's amended petition in light of Regina Metropolitan and its progeny. Id. The DHCR has evidently not done so to date.
On December 8, 2021, landlord filed the instant motion requesting the court to "deem denied" the July 9, 2020 PAR decision by virtue of the DHCR's inaction and grant landlord judgment on its amended petition or, in the alternative, (a) grant landlord leave to amend its petition or (b) direct the DHCR to issue a decision within 60 days. See notice of motion (motion sequence number 002). On January 18, 2022, the DHCR cross moved to again have this matter remitted to it for further consideration. See notice of cross motion (motion sequence number 002). This matter is now fully submitted.
DISCUSSION
The court acknowledges that, as of this writing, approximately 16 months have passed since it issued its November 16, 2020 decision remitting this matter to the DHCR, and that the DHCR has not yet completed the review that the court directed in that order. Without specification, landlord argues that "the statutory period in which the DHCR is required to take final action has well expired." See notice of cross motion, Sperber affirmation, ¶ 20. The court notes that NY Uncon Laws § 8632 (9) (c) ("the emergency tenant protection act of nineteen seventy-four") provides that:
"The [DHCR] may, by regulation, provide for administrative review of all orders and determinations issued by it pursuant to this act. Any such regulation shall provide that if a petition for such review is not determined within ninety days after it is filed, it shall be deemed to be denied. However, the [DHCR] may grant one extension not to exceed thirty days with the consent of the party filing such petition; any further extension may only be granted with the consent of all parties to the petition. No proceeding may be brought pursuant to article seventy-eight of the civil practice law and rules to challange any order or determination which is subject to such administrative review unless such review has been sought and either (1) a determination thereon has been made or (2) the ninety-day period provided for determination of the petition for review (or any extension thereof) has expired."NY Uncon Laws § 8632 (9) (c); see also RSC § 2529.11. Appellate Division case law has long held that the DHCR's "failure to comply with the 90-day rule merely permits [a]petition to be 'deemed denied' for purposes of allowing a party to bring a writ of mandamus." Matter of 2421 Realty Co. v New York State Div. of Hous. & Community Renewal, 193 A.D.2d 571, 571 (1st Dept 1993), citing Matter of Dorchester Assocs. v State of N.Y.Division of Housing and Community Renewal, 149 A.D.2d 388 (1st Dept 1989); see also Matter of Kibel v State of N.Y.Div. of Hous. & Community Renewal, 187 A.D.2d 338, 340 (1st Dept 1992), citing Matter of 140 W. 57th St. Corp. v State Div. of Hous. & Community Renewal, 130 A.D.2d 237, 244 (1st Dept 1987). This is because "the mere passage of time does not result in a final determination, or any determination on the merits." Matter of Mott v Division of Hous. & Community Renewal of State of N. Y., 140 A.D.2d 7, 10-11 (2d Dept 1988), citing Matter of 140 W. 57th St. Corp. v State Div. of Hous. & Community Renewal, 130 A.D.2d at 243. As a result, landlord's current request for judgment on its amended petition is improper, and the court denies it.
Landlord's alternate request for leave "to amend the Amended Petition ... to 'deem denied'" the PAR order decision is unnecessary. Pursuant to the above-cited caselaw, the DHCR's PAR is deemed denied by operation of law (i.e., NY Uncon Laws § 8632 [9] [c]) as a result of the DHCR's failure to render a decision within 90 days. There is no additional legal requirement that a landlord amend its pleadings to request this relief. Therefore, the court denies this request as well.
Landlord's third request, that "this Court should compel the DHCR to issue a decision on this matter within the next sixty (60) days," is in line with the relief described in the above-cited caselaw, since it is appears to constitute a request for an order of mandamus. The court notes that landlord's moving and reply papers failed to discuss the issue of mandamus directly. See notice of motion, Sperber affirmation; Sperber reply affirmation. The court also notes that the DHCR's opposition papers are devoted to the issue of remittitur, but do not discuss the issue of mandamus either. See Rose affirmation in support of cross motion. CPLR 7801 et seq do not specify any time frames to apply to mandamus relief. However, the Appellate Division precedent cited above holds that the goal of mandamus relief is "to direct the agency to render a final determination within a reasonable and definite time period." Matter of Kibel v State of N.Y. Div. of Hous. & Community Renewal, 187 A.D.2d at 340, citing Matter of 140 W. 57th St. Corp. v State Div. of Hous. & Community Renewal, 130 A.D.2d at 244. Here, the court believes that permitting the DHCR an additional 90-day period in which to issue a decision that reconsiders the PAR decision in the manner specified in the court's November 16, 2020 order will afford a "reasonable and definite" resolution. It is unclear whether the DHCR requested any additional submissions from landlord before it could render its final decision, or whether landlord ever complied with any such request. The court admonishes both parties to cooperate in good faith and act in a timely fashion should it be the case that the DHCR does in fact require any additional submissions from landlord. Regardless, however, the court grants landlord's motion to the extent of ordering the DHCR to issue a final determination that reviews its July 9, 2020 PAR decision in the manner directed in the court's November 16, 2020 order within 90-days of service of a copy of this decision with notice of entry.
The court notes that landlord erroneously submitted a second set of opposition papers that were allegedly directed at an application made by Isaacs. See Handel-Harbour affirmation in opposition. However, Isaacs made no submissions in connection with the instant motion. Review of court submissions indicates that Isaacs merely responded to the allegations in landlord's amended petition via a letter dated May 5, 2021. See NYSCEF document number 85. Therefore, the court discounts landlord's purported opposition to that letter as irrelevant to the instant motion.
The court also denies the DHCR's cross motion, since it seeks relief (i.e., remittitur) that the court already granted in its November 16, 2020 order (motion sequence number 001). This matter remains with the DHCR, as it has since that time, with the caveat that the court orders the DHCR to issue a decision resolving it within 90-days of service of a copy of this decision with notice of entry.
DECISION
ACCORDINGLY, for the foregoing reasons it is hereby
ORDERED AND ADJUDGED that the motion pursuant to CPLR of petitioner 536 E. 5th St. Equities Inc. (motion sequence number 002) is granted solely to the extent that the respondent State of New York Division of Housing & Community Renewal, Office of Rent Administration is directed to issue a decision that disposes of the petition for administrative review that bears Docket No. JO410002RP within 90-days of service of a copy of this decision with notice of entry, and that said decision comply with this court's order dated November 16, 2020 in motion sequence number 001, and it is further
ORDERED AND ADJUDGED that the cross motion pursuant to CPLR of the respondent State of New York Division of Housing & Community Renewal, Office of Rent Administration (motion sequence number 002) is denied; and it is further
ORDERED that the Clerk of the Court shall enter judgment accordingly; and it is further ORDERED that counsel for petitioner shall serve a copy of this order, along with notice of entry, on all parties within ten (10) days.