Opinion
12403/13
01-15-2016
In the Matter of the Application of Peter Saoulis, Petitioner, For a Judgment Under Article 78 of the Civil Practice Law and Rules, v. New York City Environmental Control Board, Respondent.
The following papers numbered 1 to 9 read on this petition:
Papers Numbered Notice of Petition-Verified Petition-Memo. of Law-Exhibits.........................................1 - 5 Verified Answer-Exhibits-Memo. of Law.................6 - 8 Reply.................................................9 Petitioner, by notice of petition, seeks a judgment of the Court, pursuant to CPLR Article 78 challenging and vacating penalties assessed by the respondent, New York City Environmental Control Board (ECB), against the petitioner in the amount of $132,469.96. Petitioner is the owner of a two family house located at 24-50 38th Street and the owner of a condominium located next door at 24-52 38th Street.
On April 17, 2013, while in the process of closing the sale of his condominium located at 24-52 38th Street, petitioner was advised by Abstracters' Information Services that there was $132.469.96 in outstanding fines assessed in connection with the two-family home located at 24-50 38th Street that were due to the respondent. The Abstracters' Information Service refused to continue with the closing on the condominium until the fines were paid. Petitioner maintains that in order to complete the sale of the condominium the wrongful fines were paid by two checks, one in the sum of $33,323.87 and a second in the sum of $99,146.09.
The Abstracters' Information Service payoff report indicates that there were 13 Sanitation Violations. Petitioner maintains that he never received any notification of these violations.
The Article 78 proceeding was commenced on June 27, 2013 by filing a Notice of Petition and Verified Petition dated June 14, 2013. The City of New York/Corporation Counsel was served with a copy of the Notice of Petition on July 9, 2013. The Article 78 petition was originally returnable on July 9, 2013 and then adjourned pursuant to stipulation of the parties to September 25, 2013 for submission of respondent's answer.
On September 25, 2013, respondent did not provide an answer and the Article 78 was submitted to the Court without opposition. By decision and order dated October 17, 2013, this Court granted the petition and ordered that the fine issued by respondent, New York City Environmental Control Board, and paid by petitioner, Peter Saoulis, on April 17, 2013 in the amount of $132,469.96 be vacated and further directed respondent to return $132,469.96 to petitioner forthwith.
The Corporation Counsel moved on behalf of respondent for an order pursuant to CPLR 5015(a)(1) vacating this Court's order on the ground of excusable default. By order dated April 22, 2014, this Court granted respondent's motion, vacated the prior default judgment, and permitted respondent to serve and file an answer to the petition. Petitioner was permitted to serve and file a reply.
In its answer to the petition, ECB contends that the court lacks subject matter jurisdiction over petitioner's claims because petitioner failed to exhaust his administrative remedies. Respondent contends that petitioner appeared at ECB for five Notices of Violation (NOV) in which a penalty was imposed after a hearing before an ECB Administrative Law Judge (ALJ). Petitioner never appealed any of the adverse decisions issued against him within the time to do so. Respondent claims that while petitioner attempted to administratively appeal three of the decisions issued against him, he failed to do so because he did not pay the penalty or seek waiver of the penalty, or he was otherwise untimely. Thus, petitioner failed to exhaust his administrative remedies regarding the five NOVs for which he appeared at ECB. Regarding the eight NOVs for which defaults were issued against petitioner, petitioner failed to seek vacatur of those defaults in accordance with ECB rules. Thus, petitioner failed to exhaust his administrative remedies regarding the eight NOVs for which defaults were entered.
In reply, petitioner contends that the fines were wrongfully imposed on him because he was never notified of the hearings, ECB conducted the hearings without his presence, and ECB submitted a false transcript.
The NOVs issued against petitioner are set forth as follows:
NOV 040774379L
On February 24, 2010, The New York City Department of Sanitation (DOS) issued petitioner a NOV for non-recyclable Styrofoam packaging improperly placed in a recycling container designated for metal, glass, plastic. DOS posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing before the ECB was scheduled for March 29, 2010. Petitioner failed to appear at the hearing. ECB mailed petitioner a notice of default on April 6, 2010. Petitioner never sought to vacate the default or request a new hearing.
NOV 34905241Z
On March 12, 2011, The Department of Buildings (DOB) issued petitioner a NOV for work without a permit. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for April 26, 2011. The hearing was adjourned twice and then petitioner failed to appear. Petitioner then submitted a Request for a New Hearing After a Failure to Appear. A hearing was rescheduled for August 9, 2011. Petitioner appeared at ECB for the hearing and an ALJ found petitioner guilty and imposed a $800 fine. Petitioner attempted to appeal the ALJ's Decision and Order, but he failed to pay the penalty or request a waiver of payment as required by 48 RCNY 3-73.
NOV 34905240R
On March 12, 2011, DOB also issued petitioner a NOV for the illegal conversion of the subject premises from a 1-2 family dwelling to one for greater than 4 families. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for April 26, 2011, adjourned twice, and then petitioner failed to appear. Petitioner then submitted a Request for a New Hearing After a Failure to Appear. A hearing was rescheduled for August 9, 2011. Petitioner appeared at ECB for the hearing and an ALJ found petitioner guilty and imposed a $47,400 fine. Petitioner attempted to appeal the ALJ's Decision and Order, but he again failed to pay the penalty or request a waiver of payment as required by 48 RCNY 3-73.
NOV 34903207X
On May 2, 2011, DOB issued petitioner a NOV for failure to comply with the commissioner's order to file a certificate of correction with the DOB for NOV 34905240R, which was issued on March 12, 2011. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for June 2, 2011, adjourned to September 20, 2011, and then petitioner failed to appear. ECB imposed a $4,000 statutory default penalty and mailed petitioner a notice of default on September 27, 2011. Petitioner never sought to vacate the default or request a new hearing.
NOV 34903911J
On May 12, 2011, DOB issued petitioner a NOV for failure to post a vacate order and scheduled a hearing for June 28, 2011. Petitioner appeared at ECB. The ALJ found petitioner guilty and imposed a $1,600 fine. Although petitioner attempted to appeal the ALJ's decision and order, his application was untimely and he failed to pay the penalty or request a waiver of payment as required by 48 RCNY 3-73.
NOV 34970435H
On July 19, 2011, DOB issued petitioner a NOV for failure to comply with the commissioner's order to file a certificate of correction with the DOB for NOV 34905240R, which was issued on March 12, 2011. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for September 6, 2011. Petitioner failed to appear. ECB imposed a $4,000 statutory default penalty, and mailed petitioner a notice of default on September 13, 2011. Petitioner never sought to vacate the default or request a new hearing. NOV 34970436J
Also on July 19, 2011, DOB issued petitioner a NOV for failure to comply with the commissioner's order to file a certificate of correction with the DOB for NOV 34903911J, which was issued on May 12, 2011. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for September 6, 2011. Petitioner failed to appear. ECB imposed a $4,000 statutory default penalty, and mailed petitioner a notice of default on September 13, 2011. Petitioner never sought to vacate the default or request a new hearing.
NOV 34961326Y
On September 14, 2011, DOB issued petitioner a NOV for failure to comply with the commissioner's order to file a certificate of correction with the DOB for NOV 34905240R, which was issued on March 12, 2011. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for November 1, 2011. Petitioner failed to appear. ECB imposed a $12,000 statutory default penalty, and mailed petitioner a notice of default on November 9, 2011. Petitioner never sought to vacate the default or request a new hearing.
NOV 34970410L
On November 30, 2011, DOB issued petitioner a NOV for failure to comply with the commissioner's order to file a certificate of correction with the DOB for NOV 34905240R, which was issued on March 12, 2011. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for January 17, 2012. Petitioner failed to appear. ECB imposed a $4,000 statutory default penalty, and mailed petitioner a notice of default on January 24, 2012. Petitioner never sought to vacate the default or request a new hearing.
NOV 35049814Y
On May 12, 2012, DOB issued petitioner a NOV for failure to comply with the commissioner's order for NOV 34905241Z, which was issued on March 12, 2011. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for June 6, 2012 and then adjourned to August 28, 2012. Petitioner appeared, the ALJ found him guilty and imposed a $2,000 fine. Petitioner never administratively appealed the ALJ's decision and order.
While it does appear that petitioner is correct in his reply in that the transcript from the hearing held on August 28, 2012 appears to reference deliveries and not building violations, the ALJ's decision and order pertaining to the hearing does reference the correct NOV numbers and hearing.
NOV 35050217Y
On July 21, 2012, DOB issued petitioner a NOV for failure to comply with the commissioner's order for NOV 34905241Z, which was issued on March 12, 2011. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for September 4, 2012 and then adjourned to November 20, 2012. Petitioner failed to appear. ECB imposed a $25,000 statutory default penalty and mailed petitioner a notice of default on November 27, 2012. Petitioner never sought to vacate the default or request a new hearing.
NOV 35050539R
On September 15, 2012, DOB issued petitioner a NOV for failure to comply with the commissioner's order for NOV 34905241Z, which was issued on March 12, 2011. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was held on March 5, 2013. Petitioner appeared, and the ALJ found him guilty and imposed a $12,000 fine. Petitioner never administratively appealed the ALJ's decision and order.
NOV 35051534M
On February 5, 2013, DOB issued petitioner a NOV for failure to comply with the commissioner's order for NOV 34905241Z, which was issued on March 12, 2011. DOB posted a copy of the NOV to the door at the subject premises and mailed a copy to petitioner at the subject premises. A hearing was scheduled for March 26, 2013. Petitioner failed to appear. ECB imposed a $12,000 statutory default penalty, and mailed petitioner a notice of default on April 2, 2013. Petitioner never sought to vacate the default or request a new hearing.
Where, as here, an administrative agency takes action without an evidentiary hearing, the standard of review is not whether there was substantial evidence in support of the determination (see CPLR 7803[4]), but rather, whether the determination had a rational basis, and was not arbitrary and capricious (see CPLR 7803[3]; Gramando v Putnam County Personnel Dept., 58 AD3d 842 [2d Dept. 2009]; Ball v New York State Dept. of Environmental Conservation, 35 AD3d 732 [2d Dept. 2006]). Moreover, where 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 ( see Matter of Rodriguez v County of Nassau, 80 AD3d 702 [2d Dept. 2011]. The determination of an administrative agency need only have a rational basis (see Matter of Senior Care Servs., Inc. v New York State Dept. of Health, 46 AD3d 962 [3rd Dept. 2007]). "Further, in a proceeding seeking judicial review of administrative action, the court may not substitute its judgment for that of the agency responsible for making the determination" ( Ball v New York State Dept. of Environmental Conservation, 35 AD3d 732 [2d Dept. 2006]); see Gramando v Putnam County Personnel Dept., 58 AD3d 842 [2d Dept. 2009]; Heintz v Brown, 80 NY2d 998 [1992]; Matter of Pell v Board of Educ., 34 NY2d 222 [1974]; Matter of Rogan v Nassau County Civ. Serv. Commn., 91 AD3d 658 [2d Dept. 2012][this Court may not substitute its judgment for that of the agency responsible for making the determination and, as long as the administrative determination is not irrational or arbitrary and capricious, we may not annul it]; Fogelman v New York State Dept. of Environmental Conservation, 74 AD3d 809 [2d Dept. 2010]; Matter of Jennings v Commissioner, N.Y.S. Dept. of Social Servs., 71 AD3d 98 [2d Dept. 2010]).
Here, petitioner attended hearings for NOV numbers 37405240R, 3490524Z, 34909311J, 35049814Y, and 35050539R. Petitioner did not file an administrative appeal of any of these adjudicated NOVs. While he did attempt to appeal three of these adjudicated NOVs, petitioner failed to pay the penalty or seek waiver of the penalty as required by 48 RCNY 3-73. Petitioner, thus, may not seek judicial review of the adjudicated NOVs, as he failed to exhaust his administrative remedies with respect to each adjudicated NOV, and there is no basis in the record to conclude that any exception to the exhaustion of administrative remedies requirement would apply (see Matter of Vataksi v Environmental Control Bd., 107 AD3d 905, 905-906 [2d Dept 2013]; Matter of Sirju-Kar Corp. v City of New York, 64 AD3d 716, 717 [2d Dept 2009]; see generally Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52, 57 [1978]; NYCTL 2009-A Trust v Tsafatinos, 101 AD3d 1092, 1093 [2d Dept 2012]; Matter of Nazir v Charge & Ride, Inc., 95 AD3d 1215, 1216 [2d Dept 2012]; Matter of Laureiro v New York City Dept. of Consumer Affairs, 41 AD3d 717, 719 [2d Dept 2007]).
Petitioner defaulted on the remaining eight NOV numbers 40774379L, 34903207X, 34970435H, 34970436J, 34961326Y, 34970419L, 35050217Y, and 34970410L. Pursuant to 48 RCNY 3-81, ECB is permitted to issue a default in the event that an ECB respondent fails to submit a timely response or otherwise appear at ECB for a hearing. Petitioner failed to seek vacatur in accordance with ECB's rules for vacating a default on all of the above NOVs, even though he knew the procedure as had sought vacaturs and was granted a new hearing for NOV numbers 37405240R and 34905241Z. By failing to vacate the defaults, petitioner failed to exhaust his administrative remedies regarding these eight NOVs.
Petitioner's argument that he never had notice of the NOVs or an opportunity to be heard is insufficient to contest the affidavits of mailing and affidavits of service which respondent has provided each NOV. Moreover, the record reflects that the address where the NOVs were served and the decisions and orders were mailed is 24-50 38th Street, Astoria, New York 11103, which petitioner concedes is his residence.
Accordingly, as petitioner failed to exhaust the administrative remedies and for all of the above stated reasons, it is hereby,
ORDERED, that the petition of Peter Saoulis is denied and the Article 78 petition is dismissed. Dated: January 15, 2016
Long Island City, NY ______________________________
ROBERT J. McDONALD
J.S.C.