This opinion is uncorrected and subject to revision in the Official Reports. This opinion is not available for publication in any official or unofficial reports, except the New York Law Journal, without approval of the State Reporter or the Committee on Opinions (22 NYCRR 7300.1)
MEMORANDUM
SUPREME COURT : QUEENS COUNTY
CIVIL TERM IAS PART 3
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In the Matter of the Application of
X BY:
Justice John A. Milano
CADILLAC LEASING LIMITED PARTNERSHIP, :
:
Index No. 26050/99
Petitioner,
:
:
Motion Date: February 8, 2000
For a Judgment Under Article 78 of
:
the Civil Practice Law and Rules,
:
Motion Cal. No. 1
:
- against -
:
:
DIVISION OF HOUSING AND COMMUNITY :
RENEWAL,
:
:
Respondent.
X
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In this Article 78 proceeding, petitioner Cadillac Leasing Limited Partnership seeks a judgment vacating the decision of respondent Division of Housing and Community Renewal (hereinafter "DHCR"), dated September 28, 1999, which denied the petition for administrative review and upheld an order denying the owner's application to restore the rent.
Petitioner Cadillac Leasing Limited Partnership is the owner of a rent-stabilized apartment building located at 123-60 83rd Road, Kew Gardens, New York. On March 10, 1995, Howard Seid, the tenant in apartment 12-G in the subject building, filed a complaint with the DHCR alleging that the owner had failed to maintain required services in that there was "leakage from [the living room] ceiling when heavy rain driven by wind against building for several hours. This is the same leak I=ve had -- and complained to DHCR and landlord about -- for 10 years!!" (Emphasis in the original.) Mr. Seid first took occupancy of the subject apartment in August 1985 and his rent was $675.15 a month at the time he filed the complaint. Following notice by the agency, the owner filed an answer on May 31, 1995, asserting that repairs had been completed and attached a copy of a work ticket. The work ticket was dated May 11, 1995 and stated that the leak in the living room ceiling was checked and repaired and noted that the tenant had refused to sign the work ticket. The owner stated that the property manager and the handyman for the building had both checked the May 11, 1995 repairs on May 30, 1995 following a heavy storm on May 29, 1995 and found that the wall was dry and that there was no leak. The owner, therefore, asked that the complaint be dismissed. On June 1, 1995, the DHCR sent a notice to the tenant inquiring as to whether he wished to withdraw his complaint. The tenant, in a response dated June 6, 1995 stated that he had made numerous complaints for the past ten years about the same leak, and that despite the owner's documentation of repair, the leak had never been successfully repaired. The tenant stated that as the leak only occurred under certain weather conditions, he could not tell whether the leak would reoccur as the rainstorm cited by the owner was not the type of storm that resulted in the leak.
The DHCR, following notice to the tenant, conducted an inspection of the subject apartment on September 22, 1995. The agency's inspector noted in his report that the living room ceiling had a leak stain near the window on the left side and that at the time of the inspection, there was no evidence of moisture. The Rent Administrator, in an order dated October 2, 1995 found that there had been a reduction in services based on the inspector's report and reduced the tenant's rent. The owner filed a petition for administrative review of this order on November 3, 1995.
On November 5, 1995 the owner filed an application with the DHCR to restore the rent asserting that the condition had been repaired. The owner submitted a copy of a work ticket dated November 7, 1995, which stated under "Repairs" that the owner had "Painted Living Room ceiling" and the tenant's signature appeared next to this item. On the bottom of the form, entitled "Building Copy,"the "Comments" box contained the following: "Checked/Repaired L/R ceiling leak on left side near window -- found it to be a old yellow stain -- no leak -- area dry." The comments box area was dated November 8, 1995 and contained an illegible signature. The tenant submitted an answer to the owner's application on December 4, 1995, in which he stated that he still had the same leak in the same spot, and that four days after the ceiling had been painted, the leak reoccurred during a heavy wind-driven rainstorm. The tenant further stated that he "never signed a Work Ticket stating that all work was completed to the satisfaction of the tenant. The only thing I signed on that work ticket was that they Painted the Living Room ceiling on 11/7/95. Everything that the owner filled in under the Comments section in their copy of the Work Ticket was not in the document that I signed." (emphasis in the original.) The owner, in a response dated March 6, 1996, stated that the leak had been repaired in May 1995; that it had no knowledge that the leak had reoccurred; that its agents had inspected the premises on May 11 and November 7, 1995 and only found a small yellow stain; and that the walls were dry and no active leak was found. The DHCR, following notice to the tenant, conducted a second inspection on October 4, 1996. The inspector stated in his report that there was "evidence of chipping paint and stains near window on left side. No active leaks A.T.O.I.[at time of inspection]." The Rent Administrator, in a decision and order dated October 30, 1996, found that based on the inspection report and evidence presented, that there were "leaks/stains living room" and denied the owner's application to restore the rent as services had not been restored.
The owner filed a petition for administrative review ("PAR") with the agency on November 15, 1995. The tenant served an answer to the PAR on November 21, 1995 alleging that the leak complained of is and was a condition that had existed for over ten years; that just four days after the landlord claimed to have repaired the condition, the leak was present; that he had continuously maintained that this chronic condition was never repaired; that he had vehemently refused to acknowledge that the repairs were made despite the landlord's demands that he do so; that a ten-year history of water leaks and stained conditions belied any good faith claims of the landlord of repair; and that there were six prior docket numbers pertaining to water leaks in this apartment. The owner served a response to the tenant's allegations on December 13, 1996, in which it stated that all prior repairs had been made; that it did address the problem when it occurred; and that the leak only occurred during extreme weather conditions and, therefore, was not a chronic condition.
On June 5, 1997, the Deputy Commissioner of the DHCR issued a decision and order denying the first PAR filed by the owner on November 3, 1995. It was determined that the owner had failed to maintain required services, and that to the extent that the owner took corrective action, the repairs were inadequate as confirmed by the second inspection of the premises. The Deputy Commissioner, thus, lifted the stay of the retroactive rent abatement. The Deputy Commissioner noted that the owner had filed an application to restore the rent which was denied on October 30, 1996 and that a PAR concerning that order was pending under another docket number.
In connection with the Rent Administrator's order of October 30, 1996, the owner filed a PAR on November 11, 1996, in which it essentially reasserted the claims made in the rent reduction proceeding. The tenant served an answer on December 6, 1996 and the owner served a reply on April 15, 1997. On May 14, 1997, the Deputy Commissioner issued a decision and order denying the owner's PAR. The Deputy Commissioner specifically found that, based upon the inspector's report, that the living room ceiling was leak stained near the window on the left side and had not been adequately repaired by the owner.
While the owner's PARs in both the rent reduction and rent restoration proceedings were pending the owner filed another application to restore the rent on January 14, 1997, stating that the leak had been repaired. The tenant, in a response dated February 18, 1997, asserted that the leak had not been repaired and that the same leak continued in his living room uninterrupted. On June 11, 1997, the owner submitted a copy of an inspection it had conducted on May 30, 1997, stating that there was no evidence of a leak and that the walls had been freshly painted. The DHCR conducted an inspection of the premises on June 23, 1997 and the inspector found that the "living room ceiling near window on left side has been repaired improperly. Ceiling has water stains and peeling paint. No active leaks at time of inspection." On June 30, 1997, the tenant submitted a response stating that the leak had not been repaired and consequently water continued to leak onto his furniture and furnishings. On June 30, 1997, the Rent Administrator issued an order denying the owner's application for a rent restoration finding that "upon inspection evidence was found of unworkmanlike repair of living room ceiling."
On September 17, 1997, the owner filed a third application to restore the rent, asserting that all repairs had been made, and included a work ticket. The tenant filed a response on October 15, 1997, in which he asserted that the leak was a continuing problem that had not been repaired. The owner, in a reply dated January 8, 1998 insisted that the repairs had been made.
The DHCR conducted an inspection on January 9, 1998 and the inspector found that the "living room ceiling has been repaired improperly. Ceiling is stained and started to peel." On January 20, 1998, the Rent Administrator issued an order denying the owner's application and found that services had not been restored, citing the inspector's findings of January 9, 1998.
On May 8, 1998, the owner filed its fourth application to restore the rent, again asserting that all repairs had been made. On June 26, 1998, the tenant served a reply stating that the owner had failed to correct a condition that had existed for 13 years. The tenant submitted a further answer on June 29, 1998, in which he asserted that painting and plastering over the damage caused by the leak did nothing to repair the problem and only served to cover the evidence of the leak before a DHCR inspection took place. On October 29, 1998 the owner submitted a response asserting that the painting and plastering cured the stain on the ceiling and, therefore, the rent should be restored. The DHCR conducted an inspection of the apartment on December 7, 1998, at which time the inspector found that the "[l]iving room ceiling has been repaired improperly. Evidence of small spots of stains and ceiling started peeling (minor damage) about one (1) sq. ft. No active leak. Area is dry." On January 7, 1999 the Rent Administrator issued an order denying the owner's application to restore the rent.
On February 11, 1999, the owner filed a PAR challenging the Rent Administrator's order of January 7, 1999. The owner argued that the Rent Administrator failed to provide it with notice of the inspection or afford it an opportunity to respond to the inspector's report; that it was arbitrary and capricious to base a rent reduction on an inspection that was conducted six months after the application to restore the rent was filed and that any reoccurrence of the condition amounted to a new condition; that the leak condition was not chronic and that the conditions found by the inspector were de minimus in nature under agency policy. The tenant filed a reply to the PAR on March 23, 1999. On September 28, 1998 the Deputy Commissioner of the DHCR issued a decision and order denying the owner's PAR and upholding the Rent Administrator's order of January 7, 1999. The Deputy Commissioner found that:
"Based on the record presented, taking particular note of the inspection report, the Rent Administrator properly concluded that the owner had failed to correct the conditions that gave rise to the rent reduction, and that a rent restoration was not warranted.
To the extent that the owner undertook repairs they were not completed in a workmanlike manner, evident upon inspection. Nor does it appear that the owner addressed the factors causing the conditions to reoccur. Nor are the conditions of the type that normally require periodic maintenance.
The owner's reliance on the Agency policy between 1991 and mid-1994 for building-wide cases, that provided owners notice of decreased building services and an opportunity to make repairs prior to a determination, is misplaced. The policy has never applied to individual apartment complaints. And Brusco merely stated that owners should have been given notice of the 1994 policy change for then pending building-wide complaints that reinstated the policy in effect prior to 1991. Obviously the Agency's practice terminated in 1994, and has no application to the 1998, individual, apartment proceeding below.
The owner also misrepresents the Agency's de minimis (sic) policy, insofar as the owner requests application of building-wide provisions to the individual apartment complaint below. The Agency's policy statement enumerated examples of de minimis (sic) conditions applicable to individual apartment complaints. Neither by analogy, nor by example, nor by extension can the condition found below be deemed to be de minimis (sic)."
While the above PAR was pending, the owner filed a fifth application to restore the rent on March 26, 1999. The owner attached the October 5, 1995 order to its application and alleged that the tenant had unreasonably refused access to the apartment. The owner admitted that access was provided on February 8, 1999 and claimed that access was not provided thereafter. The tenant, in a response dated April 22, 1999, denied the owner's claim of non-access. The tenant stated that he was available on the landlord's designated date of March 19, 1999 and that no one appeared on behalf of the landlord. The owner was provided with a copy of the tenant's response on July 15, 1999. The agency conducted an inspection on August 26, 1999 and found "evidence of work repaired in an unworkmanlike manner, in living room ceiling, found small spots of stains, peeling paint about (one sq. ft.). Note the use of moisture meter not possible. Ceiling too high." Following notice to all parties on September 1, 1999, the owner again insisted that all repairs were made and attached photographs and a work sheet dated September 16, 1999. The tenant first requested that the DHCR delay a decision so that the work performed could be given a proper test. Three days later, on September 20, 1999, the tenant asked that his prior request be disregarded, as the leak had reappeared. The owner, in a response dated November 13, 1999, claimed that its building agent had inspected the premises and had found only de minimus conditions existed. The agency reinspected the premises on November 15, 1999 and "found evidence of peeling paint and cracks, also hairline cracks and leak stains in living room ceiling. Damage area (one sq. ft.) (stains and dry). Note, painting and repairs were done in an (unworkmanlike manner)." On December 3, 1999, the Rent Administrator denied the owner's fifth attempt to restore the rent based upon a complete review of the record and the inspections conducted on August 26, 1999 and November 15, 1999.
Petitioner in the within proceeding seeks a judgment vacating the DHCR's decision and order of September 28, 1999 denying the third PAR on the grounds that it is erroneous as a matter of law and arbitrary and capricious. Petitioner argues that the DHCR was required to give the owner notice of the inspection and provide it with an opportunity to make repairs prior to imposing a rent reduction. It is asserted that the agency has not followed the requirements of the State Administrative Procedure Act with respect to reversing its policy of notification of the inspection report and affording the landlord the opportunity to make repairs if necessary and, therefore, the old policy should still be in effect. Petitioner asserts that following the submission of the rent restoration application on June 11, 1998, it was not informed that there was a dispute as to whether the repairs were made or were effective and, thus, had no reason to know that the leak reoccurred six months later when the DHCR inspected the apartment on December 7, 1998. Petitioner further claims that without the inspection report, it is unable to determine whether the inspection report refers to the original condition upon which the rent reduction was based and if the conditions reported by the inspector actually related to the original conditions. Petitioner thus asserts that the DHCR's failure to provide it with notice of the inspection report and an opportunity to respond before issuing the order violated agency policy. Petitioner further asserts that it was arbitrary and capricious to reduce the rent based upon an inspection conducted six months after the application was filed. Finally, petitioner argues that the conditions reported by the inspector were de minimus and according to the agency's policies were not a basis for continuing the rent reduction.
Respondent, in opposition, asserts that its decision and order of September 28 ,1999 is supported by a rational basis in the law and the record and was neither arbitrary nor capricious.
It is well settled that the court's power to review an administrative action is limited to whether the determination was warranted in the record, had a reasonable basis in law and was neither arbitrary nor capricious. (Colton v Berman, 21 NY2d 322; Matter of 36-08 Queens Realty v New York State Div. of Hous. and Community Renewal, 222 AD2d 440.) In the case at bar, the court finds that the DHCR's decision and order of September 28 1999, which affirmed the Rent Administrator's order denying the application to restore the rent on the grounds that there has been a decrease in required services and that the condition complained of was not properly repaired, has a reasonable basis in law, is supported by the record, and is neither arbitrary nor capricious.
It is well settled that "it is for the [DHCR] to determine what constitutes a required service and whether that service has been maintained." (Matter of Sherman v Commissioner, New York State Div. of Hous. and Community Renewal, 210 AD2d 486, 487 quoting Matter of Rubin v Eimicke, 150 AD2d 697, 698; see also, Matter of Oriental Blvd. Co. v New York City Conciliation and Appeals Bd., 92 AD2d 770, 60 NY2d 633.) In making such a determination, the DHCR is entitled to rely upon the report of its inspectors. (See, Matter of Howard-Carol Tenant's Assn. v New York City Conciliation and Appeals Bd., 64 AD2d 546, 48 NY2d 768; Matter of Aguayo v New York State Div. of Hous. and Community Renewal, 150 AD2d 565, 566.)
The DHCR has the authority to deny rent restoration when a condition complained of is left unrepaired or is repaired in less than a workmanlike manner. (See, Matter of Sterling 350 Enterprises v New York State Div. of Hous. and Community Renewal, 259 AD2d 621.) The record herein supports the DHCR's finding that the landlord failed to adequately repair the leak in the tenant's ceiling; that the leak persisted over a fifteen-year period; that landlord made no attempts to locate the source of the problem; and that the landlord only made cosmetic repairs such as painting and plastering. The agency's determination that the leak had either not been fixed or had not been fixed in a workmanlike fashion is fully supported by substantial evidence in the record. Petitioner's claims regarding lack of notice as regards the inspector's report is without merit. Petitioner was served with a copy of the tenant's responses to the restoration proceeding and served a reply. Petitioner, thus, was fully informed of the tenant's assertion that the leak had never been repaired and Petitioner responded to the tenant's assertions prior to the administrative determination. Petitioner was not entitled to be served with the agency's inspection reports and an additional opportunity to remedy the defective condition prior to the issuance of the Rent Administrator's order. (See, Matter of Dayton Seaside Associates No. 2 v New York State Div. of Hous. and Community Renewal, ___ AD2d ___, 2000 NY App Div Lexis 4011 [April 10, 2000]; Matter of Bel Air Leasing Ltd. Partnership v New York State Div. of Housing and Community Renewal, 259 AD2d 542; Matter of Notre Dame Leasing v Division of Hous. and Community Renewal, 251 AD2d 583; Matter of Brusco v State of New York, 239 AD2d 210; Matter of H & H Equities v New York State Division of Hous. and Community Renewal, 235 AD2d 360; Matter of Rubin v Eimicke, 150 AD2d 697, lv denied 75 NY2d 704.) In the case at bar, the application to restore the rent was filed on May 8, 1998, the inspection was conducted on December 7, 1998 and the Rent Administrator's order was not issued until January 7, 1999. Petitioner thus had ample time to correct the leakage which had occurred over an 18-year period. The court further finds that petitioner's unsubstantiated claim that the agency acted in violation of the State Administrative Procedure Act is without merit.
Finally, the court finds that petitioner's claim that the condition found by the inspector was de minimus and, therefore, does not warrant a rent reduction is without merit. The Deputy Commissioner properly determined, based on the evidence in the record, that petitioner failed to properly repair the ceiling and the leak. The purpose and policy of the rent laws is to tie rent increases to the owner's maintenance of services in order to maintain the quality and quantity of housing available to the residents of New York. The DHCR's de minimus policy is consistent with the purpose and policy of the rent laws and with existing case law. (See, Lee v Higgins, 186 AD2d 138; Carol Management Corp. v Commissioner, State of New York Div. of Hous. and Community Renewal, 140 Misc 2d 673; Allerton Associates v Ortiz, 138 Misc 2d 953; see also, Grendier Realty Corp. v State Div. of Hous., 225 AD2d 425.) The failure to properly repair the tenant's ceiling and the leak which has now existed for over 18 years cannot be considered de minimus.
In view of the foregoing, petitioner's request to vacate the Deputy Commissioner's decision and order of September 28, 1999 is denied and the petition is dismissed.
Settle judgment.
Dated: May 9, 2000 ___________________________ Justice John A. Milano