[NYtenants-online] NY Tenants Online 1/17/02
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Thu, 17 Jan 2002 08:20:25 -0500
NYtenants Online/TenantNet 1/17/02
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IN THIS ISSUE ...
1. Housing Workshop: Rights of People With Disabilities
2. Tenant Faces $50,000 Debt for Back Rent (Law Journal)
3. Text: Gilman v. DHCR
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HOUSING WORKSHOP FOR TENANTS AND PROFESSIONAL ADVOCATES
Fair Housing Rights of People With Disabilities
Tuesday, January 29th, 2002, 10:00 a.m.
at Sinergia Parent Center
15 West 65th Street in Manhattan, 6th Floor
Presenters: Harvey Fisher of New York City Commission on Human Rights and
an Attorney Who is Knowledgeable about Fair Housing Issues Facing People
with Disabilities in New York City Housing Authority Projects.
The workshop will provide an overview of Fair Housing Rights of People with
Disabilities. It will also provide information on how to detect and prevent
housing discrimination based on a person's disability. The workshop will
also help the audience better advocate for accommodations such as ramps,
transfers to wheel chair accessible apartments, home modifications
for people with disabilities. Come learn how to advocate for the housing
rights of people with disabilities.
RSVP by calling Maureen Silverman at (212) 678-4700,Ext 304.
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TENANT FACES $50,000 DEBT FOR BACK RENT
New York Law Journal, January 16, 2002
By Tom Perrotta
A Manhattan resident may owe her former landlord almost $50,000 in back
rent, after a divided appellate court Tuesday reinstated a housing agency's
determination in a dispute over the laws governing rent stabilized apartments.
The ruling is another about-face in a long-running case that has been
covered by the media both for its dramatic reversals - the tenant was at
one point awarded a reduced rent and more than $50,000 in treble damages -
and for its illustration of an overburdened city agency unable to dispatch
cases quickly.
On Tuesday, the majority of the Appellate Division, First Department, sided
with the Division of Housing and Community Renewal (DHCR), concluding that
the agency made a valid determination in a rent dispute when it reversed
its own findings from five years earlier based on new evidence.
In 1994, the agency reduced the rent of Anne Gilman, a resident of an
apartment on West 110th Street, to a little more than $1,000 a month and
awarded her $50,000 in overpaid rent. The landlord immediately appealed,
but DHCR delayed in handling the matter.
Finally, in 1999, the agency offered the landlord the chance to submit data
comparing the rent of Ms. Gilman's apartment to similar apartments in the
neighborhood during a four-year period prior to the dispute. The agency
cited Regulation Reform Act of 1997, which limits the examination of rental
history on overcharge complaints to the four years preceding the filing of
the complaint.
The agency soon ruled in favor of the landlord, raising Ms. Gilman's rent
beyond $2,000 a month and determining that she owed her landlord about
$47,000. Ms. Gilman, who had first appealed her rent in 1990, had by that
time been divorced and remarried, living alone in the apartment with her
daughter for much of the time.
In question in Gilman v. New York State Division of Housing and Community
Renewal, 5315, was whether DHCR acted improperly by allowing the landlord,
Marcid Realty Company, to introduce the new evidence.
The majority found that the agency was not incorrect to consider the data,
overturning a lower court ruling from Supreme Court Justice Michael D.
Stallman. "The court should not have substituted its judgment for a
rationally based administrative determination," the majority wrote.
STRONG DISSENT
The dissenting opinion, written by Justice Israel Rubin, sharply disagreed,
saying that the DHCR ruling "offends both well-settled principles of
procedural due process as well as the procedural rules governing the
operation of appellant DHCR." Essentially, the dissent found that the
landlord should have submitted its rent-comparison data during the initial
proceeding, since it was available at the time. "The landlord . . . has
never offered any excuse, much less an adequate excuse, for its failure to
submit this evidence," Justice Rubin wrote.
The dissent also criticized DHCR's attempt to justify its departure from
the rules governing administrative appeals by citing the Rent Regulation
Reform Act of 1997. Calling the statute "irrelevant" for the proceeding at
hand, Justice Rubin said DHCR had pointed to "nothing in the statute that
would permit a landlord to cure a default by submitting evidence for the
first time on administrative appeal."
The majority noted that even Justice Stallman had agreed that the
guidelines of the act gave the landlord the right to submit the new
evidence on appeal. But Justice Stallman concluded that DHCR had lost
jurisdiction over the matter because of administrative delay.
"Such a conclusion could only be based upon a showing that delay resulted
from negligence or willful conduct on the agency's part," the majority
wrote of the lower court ruling. The majority said the agency's "heavy
caseload" could be considered a competent explanation for the amount of
time it took DHCR to handle the case, while the dissent pointed out the
economic harm that accrues when administrative delay favors one party.
Justices Joseph P. Sullivan, Richard W. Wallach and David Friedman made up
the majority. Justice Angela M. Mazzarelli concurred with Justice Rubin's
dissent.
Robert E. Levy represented Ms. Gilman, who no longer lives at the apartment
in dispute. Nava Y. Listokin of DHCR's legal department represented DHCR.
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MATTER OF GILMAN V NEW YORK STATE DIV. OF HOUS. & COMMUNITY RENEWAL
Appellate Division, First Department
PLEASE NOTE: This is an unofficial version of the opinion without
footnotes. This opinion is uncorrected and subject to revision before
publication in the Official Reports.
Mazzarelli, J.P., Sullivan, Wallach, Rubin, Friedman, JJ. 5315
In re Application of Anne Gilman, Petitioner-Respondent,
For an Order, etc.,
v
New York State Division of Housing and Community Renewal,
Respondent-Appellant, -and- Marcid Realty Company, Respondent.
Robert E. Levy (for tenant)
Nava Listokin (for DHCR)
Order and judgment (one paper), Supreme Court, New York County (Michael
Stallman, J.), entered July 17, 2000, which granted the petition in this
Article 78 proceeding, vacated a determination of the Deputy Commissioner
of respondent Division of Housing and Community Renewal (DHCR) dated
December 16, 1999, which had modified its Rent Administrator's finding of
excess rent and instead ruled in respondent landlord's favor on the basis
of comparability data previously precluded as unqualified, and remanded the
matter to DHCR for reconsideration, reversed, on the law, without costs,
the petition denied, and the Deputy Commissioner's determination reinstated
and confirmed.
Petitioner moved into a recently decontrolled apartment on Manhattan's
Upper West Side in May 1990, at the newly stabilized rate of $2,075 per
month. On notice of her right to challenge this initially stabilized rent,
petitioner filed a fair market rent appeal (FMRA) with DHCR in June of that
year. The agency failed to notify the landlord of this complaint until May
1992. At this point, the landlord, noting that the rent had already been
adjusted downward to $1,900 in May 1991, requested a FMRA "answering
package" and sought an extension of time to permit it to demonstrate
justification for the initial stabilized rent based upon rent charged for
comparable apartments nearby. After further delay of 21 months, petitioner
brought an Article 78 proceeding to hasten a determination of her fair
market rent. That proceeding was resolved in May 1994 by a stipulated order
that DHCR issue its ruling by July of that year. One result of that order
was that DHCR finally sent the landlord the FMRA answering package with
comparability forms. The landlord thereupon requested a six-month extension
to compile its data, but was ultimately granted only an additional
three-and-a-half months. Before the landlord could submit the data, the
Rent Administrator issued an order, on July 22, 1994, establishing the fair
market rent at $1,011.12 per month, and ruling that the landlord owed
petitioner excess rent of $50,115.40 for the period since May 1990. The
landlord immediately filed a petition for administrative review (PAR),
citing the agency's failure to consider recently submitted evidence of
expenditures for maintenance and improvements, and its refusal to grant
adequate time for the submission of comparability data. Petitioner answered
the PAR, but again the agency delayed in resolving this matter.
Two-and-a-half years later, the Rent Regulation Reform Act (RRRA) of 1997
took effect, limiting examination of rental history on overcharge
complaints to the four years preceding the filing of the complaint (see,
Rent Stabilization Law § 26-516[a]). In June 1999, DHCR finally offered the
landlord the opportunity to submit comparability data, pursuant to the
guidelines of the 1997 enactment. Within three weeks, the landlord
submitted the data; petitioner contested the comparability of the data, and
argued that its submission was far too late. On December 16, 1999, the
Deputy Commissioner finally ruled on the PAR, partially granting it based
on some of the comparables and some of the documented improvement
expenditures. The net result was that the Rent Administrator's award was
wiped out and the initial stabilized rent as of May 1, 1990, was
established at $1,754.64.
Petitioner thereupon commenced the instant Article 78 proceeding,
challenging the Deputy Commissioner's acceptance of the landlord's
comparability data on the grounds of lateness and qualification. The IAS
court granted the petition and rescinded the Deputy Commissioner's ruling,
citing "the extreme nature of the delay which resulted in gross and unfair
prejudice to petitioner" and concluding that "DHCR was negligent" in
handling this matter in such a protracted manner.
Prevailing rental rates in comparable accommodations constitute one of the
key considerations in determining fair market rent. The evaluation process
depends, in large measure, on the landlord supplying that data. The IAS
court acknowledged that the landlord had a right to submit this data in
conjunction with the guidelines of the RRRA of 1997, but erroneously
concluded that DHCR was ousted of jurisdiction because of administrative
delay. Such a conclusion could only be based upon a showing that delay
resulted from negligence or willful conduct on the agency's part (Matter of
Schutt v New York State Div. of Hous. & Community Renewal, 278 AD2d 58, lv
denied 96 NY2d 715; Matter of Goldman v New York State Div. of Hous. &
Community Renewal, 270 AD2d 169; Matter of LaValle v Scruggs-Leftwich, 133
AD2d 313, 316). This record does not support any finding of neglect.
A party complaining of delay must demonstrate substantial and actual
prejudice by reason of the delay. Prejudice is not presumed by the mere
passage of time, nor by the prospect that petitioner may end up indebted to
her landlord (see, One Three Eight Seven Assoc. v Commissioner of Div. of
Hous. & Community Renewal, 269 AD2d 296).
We further note that any delay here was attributable solely to the
administrative agency, for which a "heavy caseload" (Matter of Jahn v Div.
of Hous. & Community Renewal, 140 AD2d 193) and "lack of resources" (see,
Matter of Harris & Assocs. v deLeon, 84 NY2d 698, 704, citing Matter of
Cortlandt Nursing Home v Axelrod, 66 NY2d 169, 181, cert denied 476 US
1115) can be considered as competent explanations. On the other hand,
respondent landlord, the real party in interest here, was diligent in
moving this proceeding along at every stage. It timely requested the forms
to be able to answer the complaint and submit comparables, and it did
submit those comparables and evidence of financial outlay for improvements
in a timely fashion. (Cf., Matter of Mahoney v New York State Div. of Hous.
& Community Renewal, 283 AD2d 329, involving an "inordinate and highly
prejudicial" 14-year delay, portions of which were attributable to the
landlord.)
The advent and impact of new legislation during the pendency of
administrative consideration was fortuitous, and not the result of
deliberate conduct by any party to this litigation. On this record, the
court should not have substituted its judgment for a rationally based
administrative determination (Matter of Colton v Berman, 21 NY2d 322;
Matter of Mid-State Mgt. Corp. v New York City Conciliation & Appeals Bd.,
112 AD2d 72, 76, affd 66 NY2d 1032).
All concur except Mazzarelli, J.P. and Rubin, J. who dissent in a
memorandum by Rubin, J. as follows:
RUBIN, J. (dissenting)
At issue on this appeal is whether a landlord should be permitted to cure
its default in submitting evidence to an administrative agency by offering
the material for the first time on administrative appeal. Appellant agency
has identified no statutory or regulatory provision that would condone its
receipt of new evidence nearly five full years after issuance of the
determination appealed from.
Appellant, Division of Housing and Community Renewal (DHCR), instead of
passing on the validity of the initial determination made by the District
Rent Administrator, improperly made a de novo determination upon the merits
of respondent tenant's original petition based on newly submitted evidence.
Consideration of this evidence, belatedly solicited by the Commissioner for
the first time on administrative appeal, is without justification and,
thus, the Commissioner's ruling offends both well-settled principles of
procedural due process as well as the procedural rules governing the
operation of appellant DHCR.
There would seem to be little question that basing the determination on
evidence that was not before the District Rent Administrator resulted in
substantial prejudice to the tenant. The administrative order issued in
July 1994 determined that she was entitled to a refund of excess rent in
the amount of $50,115.40. The order deciding the administrative appeal,
ultimately issued by respondent agency in December 1999, determined that
the tenant owed the landlord rent arrears totaling almost $47,000, hardly
an insignificant difference.
The underlying administrative proceeding was commenced in June 1990,
challenging the amount of the initial stabilized rent established for
respondent tenant's apartment by Marsid Realty Company, the landlord, which
is not a party to this appeal. No ruling by DHCR was forthcoming until July
22, 1994, when the District Rent Administrator issued the initial
determination in settlement of a CPLR article 78 proceeding, commenced by
the tenant in March 1994, to compel the agency to decide her Fair Market
Rent Appeal. While the matter was originally misconstrued by DHCR as a rent
overcharge proceeding, the tenant's mandamus petition prompted DHCR to send
the landlord notice and forms to expedite the submission of data in
connection with the Fair Market Rent Appeal. Therefore, DHCR cannot contend
that the landlord was unaware of the true nature of the administrative
proceeding as of April 1994, when Marsid Realty received this material. It
is undisputed that the landlord failed to take advantage of the opportunity
to submit evidence of the rent charged for comparable apartments for
consideration by the District Rent Administrator. The landlord's Petition
for Administrative Review (PAR), submitted in August 1994, failed to state
any reason why the necessary data was not supplied to the agency in a
timely manner; nor did the landlord avail itself of this second opportunity
to submit comparability data by including it with its petition seeking
review by the Commissioner.
Unlike a recent purchaser that must attempt to obtain rent records from a
prior owner, the landlord had owned the subject building for some time, and
the requisite information was contained in its own files. Even on this
appeal, DHCR makes no attempt to justify the Commissioner's consideration
of new evidence, received in June 1999, that had not been available to the
District Rent Administrator in making the original administrative
determination some five years earlier.
Where information submitted in connection with a PAR is not shown to have
been previously unobtainable, it cannot be the basis for vacating the
initial determination. Pursuant to § 2529.6 of the Rent Stabilization Code
(RSL) (McKinney's Uncons Laws of NY, Book 65, § 2529.6 [9 NYCRR 2529.6]),
review is
limited to facts or evidence before a Rent Administrator as
raised in the petition. Where the petitioner submits with the
petition certain facts or evidence which he or she establishes
could not reasonably have been offered or included in the
proceeding prior to the issuance of the order being appealed,
the proceeding may be remanded for redetermination to the
Rent Administrator to consider such facts or evidence.
New evidence may not be considered unless the party bringing the petition
seeking administrative review: 1) submits it "with the petition" and 2)
affirmatively establishes that the evidence was unavailable at the time the
original determination was made (Matter of Levine v New York State Div. of
Hous. & Community Renewal, 243 AD2d 373; Matter of Birdoff & Co. v New York
State Div. of Hous. & Community Renewal, 204 AD2d 630, 631; Matter of 985
Fifth Ave. v State Div. of Hous. & Community Renewal, 171 AD2d 572, 575, lv
denied 78 NY2d 861). As we have noted, a court entertaining a proceeding
pursuant to CPLR article 78 is subject to a similar constraint:
Judicial review of the propriety of an administrative
determination is limited to those grounds invoked by the
agency in its determination (Matter of Montauk Improvement
v Proccacino, 41 NY2d 913; see also, Matter of Scherbyn v
Wayne-Finger Lakes Bd. of Coop. Educ. Servs.,77 NY2d
753, 758-759), and "the court may not consider arguments or
evidence not contained in the administrative record" (Brusco
v New York State Div. of Hous. & Community Renewal, 170
AD2d 184, 185, appeal dismissed 77 NY2d 939, citing
Matter of Rozmae Realty v State Div. of Hous. & Community
Renewal, 160 AD2d 343, lv denied 76 NY2d 712; Matter of
Fanelli v New York City Conciliation and Appeals Bd., 90
AD2d 756, 757, affd 58 NY2d 952). (Matter of 72A Realty
Assocs. v New York City Envtl. Control Bd., 275 AD2d 284,
286.)
Appellant DHCR fails to offer any justification for its solicitation,
nearly five years hence, of evidence that was apparently available at the
time the original Fair Market Rent Appeal was heard. Moreover, the
landlord, concededly the real party in interest, has never offered any
excuse, much less an adequate excuse, for its failure to submit this
evidence (Pledge v New York State Div. of Hous. and Community Renewal, 257
AD2d 391, affd 94 NY2d 851). The agency has therefore placed itself in the
unfortunate position of advocating before this Court on behalf of the
landlord in support of the grant of relief from the landlord's default.
DHCR attempts to excuse its departure from the rules governing
administrative appeals by invoking the provisions of the Rent Regulation
Reform Act of 1997 (L 1997, ch 116). It intimates, disingenuously, that
because the statute limits consideration of comparability data to the four
years prior to the date of the tenant's complaint challenging the amount of
rent established, the Commissioner was therefore authorized to provide "the
Owner an opportunity, not available before, to submit comparability data,
even on administrative review, which would have to pass muster only under
the four-year rule."
The effect of the statutory amendment is that once four years have passed
after the filing of a rent registration statement without challenge to the
rent provided in that statement, "neither such rent nor service of any
registration shall be subject to challenge at any time thereafter" (L 1997,
ch 116, § 33; Muller v New York State Div. of Hous. & Community Renewal,
263 AD2d 296, 303, lv denied 95 NY2d 763). However, the Statute of
Limitations to be applied to the rental history of the subject apartment
and comparable units was never at issue in these proceedings. Appellant was
spared the exercise of deciding the appropriate time period to apply by the
landlord's failure to submit any rent data to which it might be applicable.
DHCR points to nothing in the statute that would permit a landlord to cure
a default by submitting evidence for the first time on an administrative
appeal. Were the statute to contain such a provision, this Court would have
to consider the due process implications, particularly the obvious
inconsistency with RSL [9 NYCRR] § 2529.6, which addresses this particular
contingency. Significantly, the Legislature has not seen fit to amend the
controlling regulation, which is expressly applicable to the admission of
evidence and which therefore prevails over the provision amended by the
Rent Regulation Reform Act, which has, at best, only general application
(e.g., People v Mobil Oil Corp., 48 NY2d 192, 200 ["a general provision of
a statute applies only where a particular provision does not"]; Matter of
Prospect v Cohalan, 109 AD2d 210, 216, affd 65 NY2d 867 ["specific
provisions of the statute must prevail over the general provisions"]; see,
McKinney's Cons Laws of NY, Book 1, Statutes, § 238). It bears emphasis
that this is not a situation in which the agency proposed to simply apply a
different law to the facts of record (see, Matter of Goldman v New York
State Div. of Hous. & Community Renewal, 270 AD2d 169); rather it is a case
in which the agency solicited altogether novel factual data upon which it
based a de novo determination, the receipt of which it attempts to excuse
by invoking an irrelevant statutory amendment.
For reasons unknown, the landlord avoided submitting contemporaneous rent
records for apartments comparable to the unit occupied by the tenant. The
tenant contends, and appellant does not deny, that the data eventually
submitted to the Commissioner in 1999 consisted of apartments "which,
between 1986-1990, had been vacated by the prior rent-controlled tenant and
which had been initially registered with the agency as a stabilized
apartment unit, i.e., no more than four years prior to Ms. Gilman's
application and one year after it, as provided in the regulation" (see RSL
[9 NYCRR] § 2522.3[e]). Thus, this is the same evidence that should have
been submitted to the District Rent Administrator for inclusion in the
administrative record in 1994.
The mysterious solicitation of evidence in a matter that has apparently
been decided, abandoned or otherwise resolved by the Division of Housing
and Community Renewal is disturbing but not without precedent (see, Matter
of Raynes Assocs. Ltd. Partnership v State Div. of Hous. and Community
Renewal, 142 Misc 2d 90, 92-93 [Rubin, J.]). Nor is this the first time
that a court has pointed out the economic harm that accrues when
administrative delay operates to the peculiar prejudice of one of the
parties (see, Matter of Mahoney v New York State Div. of Hous. & Community
Renewal, 293 AD2d 329; Matter of Bloom v Division of Hous. and Community
Renewal, 138 Misc 2d 523, 529 [Rubin, J.]). In the context of the instant
appeal, it is the landlord that defaulted and the tenant that sought timely
resolution of the proceedings by her resort to the extraordinary remedy of
mandamus. As a matter of equity, the landlord should not benefit from its
default. As a matter of law, appellant has simply not explained why a
determination made upon the facts of record in 1994 should be subject to
administrative review based upon anything other than the record before the
agency, and this Court should not abrogate well-established rules of
administrative review on the insubstantial excuse of administrative expedience.
Accordingly, the order of the Supreme Court, denying the petition, should
be affirmed.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST
DEPARTMENT.
ENTERED: JANUARY 15, 2002
CLERK
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