Opinion
No. 4527/13.
08-01-2014
In the Matter of the Application of Zinaida ALEKSANDROVICH,, Petitioner, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules v. NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION & DEVELOPMENT and Luna Park Housing Corporation, Respondents.
Wening Saltiel LLP, Brooklyn, NY, for Petitioner Meryl Wenig, Esq. Jack Carroll, Esq., Wolfson & Carroll, New York, NY, for Respondent Luna Park. Gabriel Taussig, Esq., Zachary Carter, Corp. Counsel of the City of New York, New York, NY, for Respondent HPD.
Wening Saltiel LLP, Brooklyn, NY, for Petitioner Meryl Wenig, Esq.
Jack Carroll, Esq., Wolfson & Carroll, New York, NY, for Respondent Luna Park.
Gabriel Taussig, Esq., Zachary Carter, Corp. Counsel of the City of New York, New York, NY, for Respondent HPD.
Opinion
ARTHUR M. SCHACK, J.
Petitioner ZINAIDA ALEKSANDROVICH (ZINAIDA), in this CPLR Article 78 proceeding, seeks an order: setting aside the November 14, 2012 determination of respondent NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION & DEVELOPMENT (HPD), rendered by Administrative Hearing Officer (AHO) Frances Lippa, finding that petitioner ZINAIDA did not have succession rights to Apartment 11–J, 2885 West 12th Street, Brooklyn, New York, in the LUNA PARK HOUSING CORPORATION's (LUNA PARK) Mitchell–Lama development; and, finding that petitioner ZINAIDA has succession rights to her brother Boris Pogorelis (BORIS) as tenant/cooperator for the subject premises, pursuant to 28 RCNY § 3–02(p). Respondents HPD and LUNA PARK oppose, claiming that petitioner ZINAIDA failed to prove that she resided with BORIS in the subject apartment for the two years prior to his vacating the subject apartment, pursuant to 28 RCNY § 3–02(p).
The Court, for the reasons to follow, denies ZINAIDA's petition. She failed to prove her entitlement to Mitchell–Lama succession rights, pursuant to 28 RCNY § 3–02(p)(3). Moreover, respondent HPD's decision to deny succession rights to petitioner ZINAIDA was rational and not arbitrary, capricious or an abuse of discretion.
Background
Petitioner ZINAIDA presented the Court with voluminous evidence to demonstrate that both BORIS and ZINAIDA maintained the subject apartment as their primary residence throughout 2005 and 2006. Tenant/cooperator BORIS claims he moved out of the subject apartment in January 2007. He informed respondent LUNA PARK that he was relocating from the subject apartment and forwarded his rights to his sister, petitioner ZINAIDA. Nevertheless, AHO Lippa of HPD determined that petitioner ZINAIDA was not entitled to succession rights. AHO Lippa, in her decision, observed that “to evaluate Zinaida Aleksandrovich's entitlement to succession rights, it is necessary to determine when the tenant [BORIS] vacated the subject apartment. Ms. Aleksandrovich has the burden of proving her entitlement to succession rights, including proving the required co-residency with the tenant.”
It is undisputed that BORIS has been the tenant of record for Apartment 7A, 43–44 Kissena Boulevard, Flushing, New York Queens, a rent stabilized apartment, since 1996. BORIS, in a letter dated February 28, 2012, claims that he and his wife separated in 2004 and she and their children then moved to the Kissena Boulevard apartment, which he leased for them because his wife had poor credit and insufficient income to rent in her name. However, an investigation by LUNA PARK found that BORIS established Consolidated Edison electric service and Time Warner cable television service in the Flushing apartment in his own name, in 1996. Further, the landlord of the Kissena Boulevard apartment filed a judgment against BORIS in Civil Court, Queens County, in April 2002. Despite this, BORIS claimed that he remained in the LUNA PARK subject apartment with his sister ZINAIDA until January 2007, when he reconciled with his wife and then moved to the Queens apartment. BORIS, in a June 4, 2012–letter, acknowledged that “although I had ties to that apartment since 1996, I have always resided at 2885 West 12th Street, 11–J, Brooklyn, New York as my primary place of residence.”
AHO Lippa found BORIS' explanation that he rented the Queens apartment in 2004, not 1996, “clearly false.” She observed that “when confronted with information that connected him to the Queens apartment as early as 1996, Mr. Pogorelis changed his explanation and claimed that he rented the apartment for relatives many years ago.” Moreover, AHO Lippa found that:
Mr. Pogorelis did provide a paper trail of documents connecting him to the subject apartment for the two years that he and Ms. Aleksandrovich claim to have co-resided in the apartment. However, in light of Mr. Pogorelis' status as the tenant of record for the rent stabilized apartment in Queens during those years, his connections to the Queens apartment, and his two very different explanations for how he came to be the tenant of record for the Queens apartment, I do not consider that paper trail to be credible, sufficient and reliable proof of his primary residency in the subject apartment in 2005 and 2006.In order to be granted succession rights Zinaida Aleksandrovich must prove, among other things, that she resided in the subject apartment as her primary residence with the tenant for the two years immediately prior to his vactur of the apartment.
... there is a lack of credible, sufficient and reliable proof that Mr. Pogrelis resided in the subject apartment as his primary residence in 2005 and 2006, and there is no claim that Ms. Aleksandrovich resided in the subject apartment prior to 2005. Thus, there is insufficient credible and reliable proof that Zinaida Aleksandrovich and Boris Pogorelis co-resided in the subject apartment in 2005 and 2006.
I find that Zinaida Aleksandrovich has failed to prove that she resided with the tenant in the subject apartment as her primary residence for the required time period. Therefore, Zinaida Aleksandrovich has failed to prove her entitlement to succession rights to the subject apartment.
Petitioner argues that: HPD's determination was arbitrary and capricious, given that ZINAIDA met her statutory burden of establishing that she maintained the subject apartment as her primary residence and continued to live there, pursuant to 28 RCNY 3–02(p)(3); and, HPD relied upon LUNA PARK's hearsay allegations about BORIS' Queens apartment, resulting from LUNA PARK's investigation without an HPD review of any supporting documentation. However, respondents argue that HPD's determination to deny succession rights to petitioner was rational and reasonable because petitioner presented inconsistent documentary evidence, demonstrating her lack of credibility, and hearsay evidence may be admitted in an administrative proceeding as substantial evidence. Mitchell–Lama Statutory Framework
The New York State Legislature, in 1955, to address the shortage of safe and affordable housing for low and moderate income families, enacted the Limited Profit Housing Companies Act of 1955, known as the Mitchell–Lama Law. This is now codified in Article II of the Private Housing Finance Law [PHFL]. The LUNA PARK development in the Coney Island section of Brooklyn is a Mitchell–Lama co-operative. The Court of Appeals noted, in Schorr v. New York City Department of Housing Preservation and Development (10 NY3d 776, 777 n 1 [2008] ), that:
The Mitchell–Lama Law (Private Housing Finance Law article II) was enacted in 1955 to offer private housing companies the incentive to develop low-and moderate-income housing (see Matter of KSLM–Columbus Apts, Inc., v. New York State Div. of Hous, & Community Renewal, 5 NY3d 303, 308 [2005]. “The program encourages such housing by offering State and municipal assistance to developers in the form of long-term, low-interest government mortgage loans and real estate tax exemptions. In return for these financial benefits, developers agree to regulations concerning rent, profit, disposition of property and tenant selection” (Matter of Columbus Park Corp. v. Department of Hous. Preserv. & Dev. Of City of NY, 80 N.Y.2d 19, 23 [1992] [citations omitted] ).
In exchange for financial assistance to Mitchell–Lama co-operative corporations, Article II of the PHFL sets forth limitations on profits, income limits on tenant/ cooperators and regulations concerning disposition of property and tenant selection. The New York City Charter § 1802(6)(d) grants to HPD supervision of city-aided Limited Profit Housing Companies, created pursuant to Article II of the PHFL. The rules promulgated by HPD to carry out its duties and responsibilities with respect to Mitchell–Lama corporations are in 28 RCNY Chapter 3.
No tenant shall have the right to occupy a Mitchell–Lama apartment without an executed lease or occupancy agreement that has been approved by HPD, pursuant to 28 RCNY § 3–02(n)(1). 28 RCNY § 3–02(l) provides that all occupants of Mitchell–Lama apartments provide annual affidavits verifying their income. Further, 28 RCNY § 3–02(n)(4) requires that the tenant/cooperator of record in a Mitchell–Lama apartment must occupy the apartment as his or her primary residence and subsection iv states that “[t]he tenant/cooperator whose residency is being questioned will be obligated to provide proof that his or her apartment is his or her primary place of residence, including, but not limited to certified New York State income tax returns, utility bills, voter registration data.”
If the tenancy of a tenant/cooperator terminates, pursuant to 28 RCNY § 3–02(o)(3)(I), no occupant of the apartment has any rights under the lease/occupancy agreement or succession rights, except as set forth in 28 RCNY § 3–02(p), which allows a “family member” to succeed as a lawful tenant/cooperator upon the termination of the tenancy of the tenant/cooperator of record. A sister is defined as a “family member,” pursuant to 28 RCNY § 3–02(p)(2)(ii)(A). The requirements for a family member to be granted Mitchell–Lama succession rights are in 28 RCNY § 3–02(p)(3), which states:
Unless otherwise prohibited by occupancy restrictions based upon income limitations pursuant to federal, state or local law, regulations or other requirements of governmental agencies, if the tenant/cooperator has permanently vacated the apartment, any member of such tenant/cooperator's family, who has resided with the tenant/cooperator in the apartment as a primary residence, as determined by § 3–02(n)(4) of these rules, for a period of not less than two years immediately prior to the tenant/cooperator's permanent vacating of the apartment, and whose name is listed on any income documentation submitted by such tenant/cooperator to the Department or to any other governmental agencies (for example: income affidavits, re-certifications or Section 8 forms), for at least the two consecutive annual reporting periods immediately prior to the tenant/cooperator's permanent vacating of the apartment ... and has appeared on such income documentation for at least the reporting period immediately prior to the permanent vacating of the apartment by the tenant/cooperator ... and the apartment was and continues to be the primary residence of the member of the tenant/cooperator's family that resided with such tenant/cooperator, may request to be named as a tenant/cooperator on the lease and where applicable on the stock certificate ... The burden of proof is on said family member to show use of the apartment as his or her primary residence during the required period to be eligible to succeed to possession. [emphasis added ]
Discussion
As a threshold matter, contrary to petitioner's allegations, “[u]nless otherwise provided by any statute, agencies need not observe the rules of evidence observed by courts.” (State Administrative Procedure Act § 306 [1 ] ). The hearsay report of LUNA PARK's investigation of BORIS' Queens residence was admissible in the HPD hearing because HPD could find it sufficiently relevant and probative to be substantial evidence. “Hearsay evidence is admissible in administrative hearings' (Matter if Scaccia v. Martinez, 9 AD3d 882 883 [4d Dept 2004] ), and if sufficiently relevant and probative may constitute substantial evidence' (People ex rel. Vega v. Smith, 66 N.Y.2d 130, 139 [1985] ). ” (Mastrodonato v. New York State Dept, of Motor Vehicles, Bureau of Consumer and Facility Services, 27 AD3d 1121 [4d Dept 2006] ). Therefore, there is no need to transfer this matter to the Appellate Division for a determination of whether respondent HPD's decision to deny succession rights to petitioner ZINAIDA is supported by “substantial evidence,” pursuant to CPLR § 7803(4). “The mere fact that the petition alleges the lack of substantial evidence supporting the determination is not dispositive, for the question of whether an article 78 proceeding must be transferred to the Appellate Division is one to be decided by [Supreme Court], not by petitioners.” (Bonded Concrete, Inc. v. Town Bd. of Town of Rotterdam, 176 A.D.2d 1137, 1137 [3d Dept 1991], quoting Matter of Save the Pine Bush, Inc. v. Planning Bd. of the City of Albany, 83 A.D.2d 741 [3d Dept 1981] ). (See Cornelius v. City of Oneonta, 71 AD3d 1282 [3d Dept 2011] ). “Here, there is no substantial evidence question as the facts are not in controversy and the only question is whether the agency exercised its authority in an arbitrary and capricious manner. Thus, a transfer to the Appellate Division is not warranted.” (McAtee v. Environmental Control Board, 34 Misc.3d 547, 549 [Sup Ct, Kings County 2011] ).
The Court of Appeals in Pell v. Board of Educ. of Union School District No.1 of the Towns of Scarsdale and Mamaroneck, Westchester County (34 N.Y.2d 222, 231 [1974] ), held “Arbitrary action is without sound basis in reason and is generally taken without regard to the fact.” (Pell at 231). A rational basis exists where the determination is “[supported] by proof sufficient to satisfy a reasonable [person], of all the facts necessary to be proved in order to authorize the determination.” (Ador Realty, LLC v. Division of Housing and Community Renewal, 25 AD3d 128, 139–140 [2d Dept 2005] ), quoting Pell at 231.
A reviewing court will not substitute its judgment for that of the agency unless the agency's determination is arbitrary, capricious, or contrary to law. (See Pell at 231; Matter of Brockport Cent. School Dist. v. New York State & Local Employees' Retirement System, 270 A.D.2d 706, 708 [3d Dept 2000] ). Pursuant to CPLR § 7803(3), the question raised in an Article 78 proceeding is “whether a determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion.” “[I]n reviewing a determination made by an administrative agency ... the court's inquiry is limited to whether the determination is arbitrary and capricious, or without a rational basis in the record and a reasonable basis in law.” (Matter of 508 Realty Assoc., LLC v. New York State Div. of Hous. & Community Renewal, 61 AD3d 753, 754–755 [2d Dept 2009] ). (See Matter of Peckham v. Calogero, 12 NY3d 424, 431 [2009];Matter of Gilman v. New York State Div. of Hous. & Community Renewal, 99 N.Y.2d 144, 149 [2002];Matter of Acevedo v. New York State Div. of Hous. & Community Renewal, 67 AD3d 785, 786 [2d Dept 2009] ; Matter of Dominguez v. Vanamerongen, 56 AD3d 667, 668 [2d Dept 2008] ). “An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts.” (Matter of Peckham, 12 NY3d at 431).
It is well settled that “courts must defer to an administrative agency's rational interpretation of its own regulations in its area of expertise.” (New Surfside Nursing Home, LLC v. Daines, 103 AD3d 637, 639 [2d Dept 2013] ). (See Matter of Peckham at 431; Nazareth Home v. Novello, 7 NY3d 538, 544 [2006];Calenzo v. Shah, 112 AD3d 709, 710 [2d Dept 2013] ; Manko v. New York State Div. of Housing & Community Renewal, 88 AD3d 719, 720 [2d Dept 2011] ). “Moreover, where as here, the judgment of the agency involves factual evaluations in the area of the agency's expertise and is supported by the record, such judgment must be accorded great weight and judicial deference.” (Flacke v. Onondaga Landfill Sys ., 69 N.Y.2d 355, 363 [1987] ). (See Awl Indus., Inc. v. Triborough Bridge & Tunnel Auth., 41 AD3d 141, 142 [1d Dept 2007] ). Further, “[w]here the interpretation of a statute or its application involves knowledge and understanding of underlying operational practices or entails an evaluation of factual data and inferences to be drawn therefrom, the courts regularly defer to the governmental agency charged with the responsibility for administration of the statute.” (Matter of Gruber [New York City Dept. of Personnel—Sweeney], 89 N.Y.2d 225, 231 (1996), quoting Kurcsics v.. Merchants Mut. Ins. Co., 49 N.Y.2d 451, 459 [1980] ). (See Matter of Rodriguez v. Perales, 86 N.Y.2d 361, 367 [1995];Espada 2001 v. New York City Campaign Fin. Bd., 59 AD3d 57, 64 [1d Dept 2008] ; Maggio v. DeBuono, 277 A.D.2d 456, 457 [2d Dept 2000] ; Matter of Herzog v. Joy, 74 A.D.2d 372, 375 [1d Dept 1980], aff'd 53 N.Y.2d 821 [1981] ).
Respondent HPD's determination, in the instant proceeding, to deny succession rights to petitioner ZINAIDA was reasonable, rational and supported by the administrative record. Petitioner ZINAIDA failed to establish that she resided with her brother BORIS, the tenant/cooperator of record, in the subject apartment for the required two-year period, in 2005 and 2006, prior to BORIS' alleged vacature of the apartment in January 2007.
As noted above, 28 RCNY § 3–02(n)(4) requires that a tenant/cooperator of a Mitchell Lama apartment continue to reside in that apartment as his or her primary place of residence and 28 RCNY § 3–02(n)(4)(iv) requires that “[t]he tenant/cooperator whose residency is being questioned will be obligated to provide proof that his or her apartment is his or her primary place of residence.” Furthermore, the family member seeking succession rights, pursuant to 28 RCNY § 3–02(p)(3) must have “resided with the tenant/cooperator in the apartment as a primary residence, as determined by § 3–02(n)(4) of these rules, for a period of not less than two years immediately prior to the tenant/cooperator's permanent vacating of the apartment” and “the burden of proof is on said family member to show use of the apartment as his or her primary residence during the required period to be eligible to succeed to possession.”
Contrary to petitioner ZINAIDA's contention, HPD properly interpreted and applied 28 RCNY § 3–02(p)(3) in basing petitioner's succession claims on BORIS' primary residency or lack thereof at the subject apartment. In Pietropolo v. New York City Dept. of Housing Preservation and Development (39 AD3d 406 [1d Dept 2007] ), the Court affirmed HPD's denial of succession rights where there was evidence that petitioner's sister, the tenant of record, vacated the subject apartment prior to the date alleged by petitioner, her brother. The Court concluded, at 407, that “to succeed to leasehold rights in this Mitchell—Lama apartment pursuant to 28 RCNY § 3–02(p)(3), petitioner bore the burden of establishing that he resided there with his sister, as a primary residence (see § 3–02[n][4] ), for two years immediately prior to her permanent departure.” In Lumsby v. Donovan (50 AD3d 318 [1d Dept 2008] ), the Court affirmed HPD's denial of succession rights where the tenant of record, the mother, maintained a separate apartment from the one in which her daughter was seeking succession rights. The Court held, at 717, that “the finding that petitioner mother Jean Nelson Lumsby did not maintain the subject apartment as her primary residence for many years is supported by substantial evidence” and “[s]ince the mother was not occupying the apartment during the relevant period, petitioner Collette Lumsby could not establish succession rights through her.”
The administrative record supports AHO Lippa's finding that petitioner ZINAIDA could not establish succession rights through BORIS because of a lack of credible and reliable evidence that BORIS resided in the subject apartment as his primary residence during the relevant co-residency period of 2005 and 2006. BORIS has been the tenant of record since 1996 at a rent stabilized apartment in Queens. Although BORIS provided various documents to support his contention that he primarily resided in the subject apartment, it was rational and reasonable for AHO Lippa to conclude that BORIS' documents were not credible, sufficient or reliable proof of BORIS' primary residence in the subject apartment for the required time period. It was within AHO Lippa's discretion to make this finding, especially when BORIS provided two very different explanations as to how he became the tenant of record of the Queens apartment. First, he explained that he rented the Queens apartment in 2004 to help his estranged wife overcome poor credit and low income. When confronted with LUNA PARK's investigation linking him to the Queens apartment in 1996, he changed his explanation and claimed that he rented the apartment for relatives who immigrated to the United States. Similar to the tenants of record in Pietropolo and Lumsby, there is evidence in the record to support the finding that BORIS did not reside in the subject apartment as his primary residence in the two years prior to his alleged vacature in January 2007.
Therefore, it was reasonable and rational for AHO Lippa to conclude that petitioner ZINAIDA could not have resided with BORIS in the subject apartment in 2005 and 2006, when BORIS did not live there. Thus, petitioner failed to satisfy the co-residency requirement and failed to prove her entitlement to succession rights under 28 RCNY § 3–02(p)(3). HPD's determination to deny succession rights to petitioner ZINAIDA was not arbitrary, capricious or an abuse of discretion.
Conclusion
Accordingly, it is hereby
ORDERED that the petition of ZINAIDA ALEKSANDROVICH to set aside the determination of respondent, NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION & DEVELOPMENT, rendered by Administrative Hearing Officer Frances Lippa, finding that petitioner ZINAIDA ALEKSANDROVICH did not have succession rights to Apartment 11–J, 2885 West 12th Street, Brooklyn, New York, in the LUNA PARK HOUSING CORPORATION's Mitchell–Lama development and finding that ZINAIDA ALEKSANDROVICH is the successor tenant/cooperator to her brother, Boris Pogorelis, for Apartment 11–J, 2885 West 12th Street, Brooklyn, N.Y. 11224, is denied.This constitutes the Decision and Order of the Court.ENTER