This Article 78 proceeding and a plenary action bearing the caption Les Glass v. Aaron's Construction Corp. and David Almaytah (Sup Court, New York Co., Index No. 603779/09) ("enforcement action") raise an identity of issues and claims and also involve some of the same parties. In each case, the parties have brought motions. In the Article 78 proceeding, there is a petition (motion sequence no. 1) for an order vacating the determination made by respondent Department of Consumer Affairs' ("DCA") Administrative Law Judge Judith Gould ("ALJ Gould"). Respondent Les Glass ("Glass") has brought a preanswer motion to dismiss the petition (motion sequence no. 2). DCA takes no position on Glass's motion to dismiss the petition other than stating that Glass is a necessary party to the Article 78 proceeding. DCA has answered the petition and raised issues of law (CPLR 7804). In the enforcement action (Index No. 603889/09), Glass has brought a motion for summary judgment in lieu of a complaint (motion sequence no. 1). These motions are hereby consolidated for consideration and decision in a single decision/order which will be filed under each index number.

Arguments

Petitioners Aaron's Construction Corp. and David Almatyah ("petitioners") were hired by respondent Glass and his wife to provide home improvement services. In October 2007, after the work was completed, petitioners demanded an additional payment from Glass. Glass refused to pay the money and on November 13, 2007, he filed a complaint with the Department of Consumer Affairs ("DCA"). In the DCA complaint Glass alleged that the work had taken 18 months longer than petitioners had promised him and that it had been performed poorly.

Petitioners answered the DCA complaint on January 2, 2008 and shortly thereafter, on January 16, 2008, petitioners filed a mechanic's lien against the property owned by Glass. Later, on January 28, 2008, petitioners commenced a lien foreclosure action in Supreme Court, County of Queens (Index No. 1938/08) ("lien foreclosure action"). Glass answered the complaint in the lien foreclosure action, asserting counterclaims for restitution of the monies he had paid to petitioners for the renovation work. The lien foreclosure action is still pending.

Following unsuccessful mediation attempts by the DCA, the matter was set down for a hearing before an administrative law judge on October 21, 2008. Petitioners (who now had an attorney) moved to dismiss the DCA complaint on the grounds that the claims in the DCA complaint were identical to their counterclaims in the lien foreclosure action. In the alternative, petitioners sought to have the hearing adjourned. The latter request was granted and the hearing was rescheduled to December 2, 2008.

The December 2, 2008 hearing date was then adjourned, at Glass's request, to to January 27, 2009. For reasons that are unclear, the hearing was again adjourned to March 17, 2009. On that day, both sides appeared before ALJ Gould at which time she told Glass he could not obtain the same relief before the DCA that he was seeking in his counterclaims in the the lien foreclosure action. She adjourned the case to allow Glass to decide how he wanted to proceed. The adjournment was to May 21, 2009.

Following the March 17th conference, petitioner's attorney sent ALJ Gould notifying her [*2]he was withdrawing as counsel and requesting an adjournment on petitioners' behalf so they could get a new lawyer. The application for an adjournment was denied. Later, however, petitioners (then self represented) renewed their request, and the application was granted by ALJ Gould. The case was adjourned from May 21, 2009 to June 10, 2009, but marked as "final" against respondents.

The petitioners hired a new attorney who appeared (without his clients) for the hearing on June 10, 2009. He checked in at 8:30 a.m. and requested an adjournment from a clerk. He was told to wait for ALJ Gould and instructed he could make the application to her directly. The attorney, Jason M. Baxter, Esq., did not wait for the ALJ, but left because he was on an ongoing trial before a Supreme Court judge. At 10:00 a.m., ALJ Gould entered a default judgment against petitioners and proceeded with an Inquest.

On June 16, 2009, petitioners brought a motion to vacate the default entered against them. The excuse provided by Attorney Baxter was that he was actually engaged and could not wait to make a personal application for an adjournment of the hearing. He also stated that the petitioners had a meritorious claim and had not intended to abandon it.

On July 13, 2009 ALJ Gould issued her decision on the Inquest, sustaining 16 of the 17 charges against the petitioners. She revoked petitioners' home improvement license and directed them to surrender it immediately, subject to fines and/or criminal prosecution if they did not comply with that order. She declared David Almaytah "unfit to hold any license issued by the Deparment" and also imposed fines totaling $5,500 and ordered "restitution to the consumer [Glass] in the amount of $139,261 . . ." The petitioners were found "jointly and severally liable" for those amounts. That decision and order was approved by Deputy Director of Adjudication ("Dennis") and served by DCA on all sides. The decision and order contained instructions on how to file an appeal or bring a motion.

Following the decision and order, on August 4, 2009, petitioners brought an amended motion to vacate the default judgment entered against them. This time Attorney Baxter included a $25 check for processing, as required under the Rules of the City of New York § 6-44 ("RCNY __").

On November 5, 2009, that motion was denied by the Director of Adjudication ("Director Schindler") who wrote that petitioners had "failed to offer a satisfactory excuse for their failure to appear at the hearing..." also stating that Attorney Baxter "had not submitted a written request for an adjournment prior to the hearing date..." but had "appeared without [his clients] at 8:30 a.m. for the hearing scheduled at 9:30 a.m... then left the tribunal at 9:30 a.m. and he did not return, even though he had not been granted an adjournment of the hearing before he left."

Petitioners maintain that DCA abused its discretion by entering a default, proceeding with an Inquest and then denying their motion to vacate the default entered against them. Petitioners also claim that the DCA has no legal authority to order restitution and that they are entitled to a jury trial on the issue of damages. Thus, they claim the decision by the ALJ is void, as a matter of law.

DCA defends the actions of ALJ Gould, pointing out that the hearing was adjourned several times at petitioners' request and they knew it had been marked final against them. Furthermore, they made no attempt to obtain an adjournment before June 10, 2009, as required by DCA rules nor did they personally appear on the day of the hearing ready to proceed without a [*3]lawyer, if necessary. According to DCA, any request for an adjournment has to be in advance (as petitioners had done on prior occasions) otherwise, the attorney should have waited for the ALJ to explain his situation. Since the attorney had been on trial for several days, he should have reasonably anticipated this scheduling conflict well before June 10, 2009.

DCA maintains that petitioner's constitutional arguments are misplaced because the State constitutional right to a trial by jury only applies to cases litigated in a court of law, not to administrative hearings and, in any event, the Seventh Amendment to the U.S. constitution does not apply to the states. They also argue that an administrative agency is not allowed to hold a jury trial, but can only hold hearings.

DCA also points out that when petitioners applied for their license, they agreed to comply with the laws and rules of the DCA and under Title 20 of the Administrative Code of the City of New York ("Admin Code____") which gives DCA broad powers to impose fines, revoke licenses and order restitution.

Glass separately argues that the petition should be dismissed because he was improperly served. Although he admits receiving a copy of the petition which he found taped to the door of his residence, he claims the copy was wet and incomplete. He also claims he did not receive a copy in the mail nor did petitioner make diligent efforts to serve him personally before resorting to substitute service. In support of his motion for summary judgment in lieu of a complaint, Glass argues that the monetary award to him is for a "sum certain" and therefore, meets the requirements of CPLR § 3213 permitting summary adjudication of a claim for the payment of money only.

Petitioners do not deny omitting the $25 fee for the first motion, or that RCNY § 6-44 requires that a motion to vacate be made within 15 days "of the decision . . ." but argue that DCA should have taken the extenuating circumstances of June 10, 2009 into account and decided the motion to vacate before issuing the decision and order on the Inquest. They also contend Glass was served properly, not only at his residence, but also through his lawyer, Rachel Ciccone, Esq., who represents him in this action but sent a letter refusing to accept service on behalf of Glass.

Since an Article 78 proceeding is a special proceeding it may be summarily determined upon the pleadings, papers, and admissions to the extent that no triable issues of fact are raised (CPLR § 409 [b]; CPLR §§ 7801, 7804 [h]). Thus, much like a motion for summary judgment, the court should decide the issues raised on the papers presented and grant judgment for the prevailing party, unless there is an issue of fact requiring a trial (CPLR § 7804 [h]; York v. McGuire 1984, 99 AD2d 1023 aff'd 63 NY2d 760 [1984]; Battaglia v. Schumer, 60 AD2d 759 [4th Dept 1977]).

Glass is a necessary party to this summary proceeding because, if the petition to annul DCA's determination is granted, then Glass cannot recover the fines and restitution ordered by ALJ Gould, thereby affecting Glass's rights (CPLR § 1001 (see, Nestor v. New York State Div. of Hous. & Community Renewal, 257 AD2d 395 [1st Dept 1999]; also, In re 37 West Realty Company v. New York City Loft Bd., 72 AD3d 406 [1st Dept 2010]). Since Glass contends he was improperly served, and has moved to dismiss the petition based upon improper service, his motion is decided first becasue failure to join a necessary party is grounds alone for the dismissal [*4]of this proceeding (CPLR §§ 1003; 3211 [a][10]; Solid Waste Services, Inc. v. NYC Dept Env Protection, 29 AD3d 318 [1st Dept 2006]).

Glass contends an incomplete copy of the petition was taped to the door of his apartment and that he did not receive a copy in the mail. Petitioners state, however, that Glass answered the door when Attorney Baxter knocked and asked who it was, but then refused to open the door. Attorney Baxter states he is familiar with Glass's voice. These statements are not addressed by Glass, let alone denied by him.

Where a respondent refuses to open the door to accept papers, the papers can be left outside the respondent's door and will constitute valid, personal service (Ellenbogen & Goldstein, P.C. v. Brandes, 215 AD2d 226 [1st Dept 1995]; Patane v. Romeo, 235 AD2d 649 [3rd Dept 1997] lv den 89 NY2d 813 [1997]). Therefore, Attorney Baxter's affidavit of service indicating that Glass was personally served is prima facie evidence of proper service and Glass's conclusory denial does not raise an issue of fact. The mailing that petitioners did was unnecessary, but in any event, Glass's bald denial of receipt of that mailing is insufficient to rebut the presumption that proper mailing occurred (Engel by Engel v. Lighterman, 62 NY2d 943 [1984]; Futterman v. New York State Div. of Housing and Community Renewal, 264 AD2d 593 [1st Dept 1996]). Therefore, Glass's motion to dismiss the petition on the basis of improper service is denied.

Pursuant to Admin Code § 20-104 [d], DCA is authorized to, among other things, hold public and private hearings upon due notice, take testimony and to promulgate, amend and modify the procedures and practices governing those proceedings. DCA is also authorized to revoke any license granted by DCA and impose civil penalties (Admin Code § 20-104 [e]). More broadly, DCA has the power to redress injuries caused to consumers (Admin Code § 20-104 [e][2]) by awarding fines, penalties and damages (Admin Code § 20-401) in an amount "not [to] exceed three times the actual amount of any damages sustained by the owner as a result of such violations."

Although petitioners argue that DCA cannot award damages or order restitution because this is a violation of due process, they cite no legal authority for that proposition. DCA's awards of fines, penalties and restitution have been routinely upheld in this department (In re Marin Construction v. Scatliffe et al, 271 AD2d 206 [1st Dept 2000]; see also: V & A Towing v. City of New York, 197 AD2d 386 [1st Dept 1993]); In re Bambino v. NYC Department of Consumer Affairs, 26 Misc 3d 1221[A] [Sup Ct. NY Co. 2010]; In Re Suri Inc. v. Green, 5/27/93 NYLJ p. 29 (col 2) [Sup Ct., NY Co. (Cahn) 1993]). Although the Seventh Amendment to the Constitution of the United States guarantees a jury trial in civil cases, this amendment was not made applicable to the states by the Fourteenth Amendment and consequently does not apply to state proceedings (City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687 [1999]). Furthermore, DCA is not a court of law, but an administrative agency. Under the City Administrative Procedure Act and agency can only hold a hearing, not a trial by jury (NYC Charter § 1046). Therefore, DCA did not, as claimed by petitioners, exceed its authority by issuing a monetary award to Glass (i.e restitution) and this is not a reason to grant the petition, vacating the ALJ's decision/award on that basis.

Petitioners claim that ALJ Gould's decision to proceed with the Inquest and Director Schindler's decision denying their motion to vacate the decision made after the Inquest was [*5]arbitrary and capricious and an abuse of discretion. In order for the court to find that an agency's determination is arbitrary and capricious, it would have to find that the action taken was without sound basis in reason and taken without regard to the facts. The question for the court is generally whether the agency determination has a rational basis (Pell v. Board of Education of Union Free School District No. 1 of Towns of Scarsdale and Mamaroneck, 34 NY2d 222 [1974]). While pure issues of law should be determined by the court, issues concerning the interpretation of a statute or regulation by the agency responsible for its administration should be upheld, if they are not irrational or unreasonable (Madison-Oneide Board of Compaartive Educational Servicesv. Mills, 4 NY3d 51 [2004]); Allstate Ins. Co. v. Libow, 106 AD2d 110 [2nd Dept. 1984] aff'd 65 NY2d 807 [1985]). For the reasons that follow, the court finds that petitioners have not met their burden of showing Director Schindler's denial of their motion was an abuse of discretion.

RCNY § 6-34 sets forth the powers and duties the hearing officer presiding over an administrative hearing has. Such powers include the right to consider and rule upon all procedural and other motions. Also, pursuant to RCNY § 6-43, the hearing officer may enter a default judgment if a party fails to make a timely appearance at a scheduled hearing. Where the defaulting party is the respondent, the hearing officer may conduct an Inquest and prepare a decision and order. The licensee's failure to appear may also result in the revocation of its license and the imposition of a monetary penalty.

Once a decision is made on default, the defaulting party must make a motion that meets the requirement set forth in RCNY § 6-44. The motion must: 1) be made within 15 days of the default decision, 2) contain a statement offering an excuse for the non-appearance and a sworn statement outlining a meritorious defense to the charges alleged in the violation and 3) be accompanied by a check or money order in the amount of $25. Furthermore, if restitution has been ordered, then the movant must deposit the restitution amount ordered with DCA (RCNY § 6-40).

The petitioners' original motion was made prematurely, before ALJ Gould had made her decision on the Inquest. The code does not require that a decision be made on a motion to vacate a default judgment before a decision is made on the Inquest. Furthermore, the motion was not accompanied by the required fee and the statement of petitioners' meritorious defense was incomplete. Nonetheless, when petitioners brought their amended motion (which was still defective), ALJ Gould decided it and explained why it was being denied.

In her decision denying the motion, Director Schindler stated that Attorney Baxter had not appeared for the hearing with his clients. He did not wait for ALJ Gould but left, knowing the had not been adjourned. Attorney Baxter, should have, but failed to seek an adjournment before the day of the hearing.

Taking all the facts into consideration, DCA's determination had a rational basis. The hearing had been marked final, yet the petitioners hired a new lawyer who was not ready to proceed with the hearing. He was involved in an ongoing trial and aware of the possible conflict before June 10, 2009. Petitioners themselves did not appear for the hearing, at day ready to proceed without a lawyer. Furthermore, the amended motion does not set forth a meritorious defense, but simply states that "respondent has a meritorious defense to the allegations presented in the complaint and at no time intended to abandon the action." Since DCA's determination is [*6]supported by a rational basis, it must be sustained, even if the court would have made a different decision. Therefore, Glass's motion for the preanswer dismissal of the petition for failure to state a cause of action and the application by DCA (and the other individually named respondents employed by DCA) is hereby granted.

Summary Judgment in Lieu of Complaint

Having decided that the decision and order by ALJ Gould dated July 13, 2009 is effective, the court now considers whether Glass is entitled to summary judgment in the enforcement action. A motion for summary judgment in lieu of complaint is available when the "action is based upon an instrument for the payment of money only or upon any judgment" (CPLR � 3213). Summary judgment in lieu of a complaint is proper when: (1) the instrument itself, and (2) proof of non-payment, without more, make out a prima facie cause of action (Seaman-Andwall Corp. v. Wriqht Machine Corm, 31 AD2d 136 [1st Dept. 1968], aff'd 29 NY2d 617 [1971]).

Here, there is no money judgment against petitioners. However, DCA has ordered that petitioners pay Glass the sum $139,261 as repayment of the money he charged them for poorly done work on Glass's home. Although DCA has released the sum of $15,000 from a fund it maintains for consumer/victims, the balance of $124,261 is still due and unpaid by petitioners.

Glass presents a persuasive argument for why, although the DCA's decision and order is not a "judgment" it serves as a predicate basis for Glass's summary judgment motion because it is for a sum certain and only requires the payment of money (see: Maldonado v. Man-Dell Food Stores, Inc., 178 Misc 2d 541 [Civ Ct, NY Co. (Shulman) 1998]). Petitioners have no defense to DCA's order because their petition to set aside the award has now been judicially reviewed and denied; they have no further administrative remedies available to them.

The sole defense raised by petitioners to this summary judgment motion is that any recovery they obtain in the lien foreclosure action will be futile or "void." While the award (if any) in the lien foreclosure action could be less than what DCA has ordered, this does not make it "void." Importantly, petitioners have failed to identify any defenses they would raise in their answer, were the court to deny Glass's motion and order him to serve a complaint. Therefore, Glass's motion for summary judgment in lieu of a complaint is granted and Glass is entitled to a money judgment against petitioners jointly and individually in the amount of $124,261 with interest from July 13, 2009, the date of ALJ Gould's award.

Conclusion

In accordance with the foregoing,

It is hereby

Ordered that respondent Les Glass's motion to dismiss the Article 78 petition (Index No. 100232/10) against him based upon improper service is denied; and it is further

Ordered that the answer of respondents ALJ Judith Gould, Nancy J. Schindler, Bruce M. Dennis and New York City Department of Consumer Affairs, raising issues of law in the Article 78 petition and seeking the dismissal of the petition is granted; and it is further

Ordered, Decreed and Adjudged that the Article 78 petition filed under Index No. 100232/10 is hereby denied in its entirety and this proceeding dismissed; and it is further

Ordered that in the case bearing the caption Les Glass v. Aaron's Construction Corp. and David Almaytah, Supreme Court, New York Co., Index No. 603779/09 (i.e. the "enforcement action"), the motion for Summary Judgment in Lieu of Complaint is granted; and it [*7]is further

Ordered that in the case bearing the caption Les Glass v. Aaron's Construction Corp. and David Almaytah, Supreme Court, New York Co., Index No. 603779/09 (i.e. the "enforcement action"), the Clerk shall enter a money judgment in favor of plaintiff Les Glass, against defendants Aaron's Construction Corp and David Almaytah, jointly and individually, under Index No. 603779/09, in the amount of One Hundred Twenty Four Thousand and Two Hundred Sixty One Dollars ($124,261) with interest from July 13, 2009; and it is further

Ordered that this constitutes the Decision, Order and Judgment of the court.

Dated:New York, New York

October 7, 2010

__________________________

Hon. Judith J. Gische, J.S.C.