10 West 66th Street Corp. v. New York State Div. of Housing and Community Renewal

• Decision Date: 24 November 1992
• Citation: 184 A.D.2d 143,591 N.Y.S.2d 148
• Parties: In the Matter of the Application of 10 WEST 66TH STREET CORPORATION, Petitioner-Appellant, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, v. NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, and Henry Bolan, Respondents-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 148

591 N.Y.S.2d 148

184 A.D.2d 143

In the Matter of the Application of 10 WEST 66TH STREET CORPORATION, Petitioner-Appellant For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, v. NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL and Henry Bolan, Respondents-Respondents.

Supreme Court, Appellate Division First Department.

Nov. 24, 1992.

Morton H. Rosen, New York City, of counsel (Bruce A. Cholst and Margaret E. Barton, with him on the brief, Rosen & Tierman, attorneys), for petitioner-appellant.

Dennis B. Hasher, New York City, attorney for respondent-respondent New York State Div. of Housing and Community Renewal (Christina S. Ossi, with him on the brief),

Allen H. Brill, New York City, of counsel (Anthony M. Benjamin, with him on the brief, Brill & Meisel, attorneys), for respondent-respondent Henry Bolan.

Before ELLERIN, J.P., and WALLACH, ROSS, KASSAL and RUBIN, JJ.

RUBIN, Justice.

At issue in this proceeding is the right of a shareowner of a cooperative corporation to receive a renewal lease to space for which no shares have been allocated. It is the tenant's claim that this space, designated apartment 2B and described as a "maid's room", comprises part of his residence.

This matter is before us to review a decision of Supreme Court which, pursuant to CPLR Article 78, confirmed the determination of respondent Division of Housing and Community Renewal ("DHCR") reversing a finding by the District Rent Administrator that apartment 2B is not subject to regulation under the Rent Stabilization Law (N.Y. Administrative Code § 26-501 et seq., L.1985, ch. 907 § 1, as amended; formerly § YY51-1.0 et seq.). Presented for review are the propriety of the District Rent Administrator's ruling that apartment 2B, the "maids unit", is not subject to the rent regulation statute, the Commissioner's ruling that DHCR is without authority to act in this controversy and Supreme Court's ruling, inter alia, confirming the Commissioner's determination.

The facts, as stated by Supreme Court, are as follows. Since early 1974, respondent Henry Bolan has resided in apartment 4G. Bolan entered into a lease for apartment 2B with Park Ten Associates (presumably the former owner of the building) for a term beginning October 1, 1980 and ending September 30, 1983. The apartment is described in the certificate of occupancy as a "maid's room" and "consists of one room, a closet, and a bathroom containing a wash basin and a stall shower, but no bathtub; there is no kitchen nor any cooking facilities." The court further observed, "The Offering Plan recites that '[t]here are seven maids' rooms on the second floor of the Building, all of which are presently occupied on a month-to-month basis' ", and "The sponsor did not allocate shares of stock to apartment 2B." On or about May 1, 1981, Bolan exercised the right to purchase the shares allocated to apartment 4G and currently occupies that unit pursuant to a proprietary lease. Upon the expiration of the lease to apartment 2B, the cooperative corporation refused to issue a renewal lease, and Bolan initiated a proceeding before respondent DHCR in response to efforts by the cooperative corporation to recover possession of the unit.

The District Rent Administrator issued a ruling dated March 6, 1987 which states, "The subject unit is not subject to the Rent Stabilization Law and is, therefore, not under the jurisdiction of this Agency. The parties involved are directed to a court of competent jurisdiction to settle this matter." Within a week, respondent Bolan completed a petition for administrative review ("PAR") of the District Rent Administrator's order, contending that "Apartment 2B is an integral part of and essential to my residence at the Building" and that it is "currently subject to the Rent Stabilization Law of 1969 as amended". Therefore, Bolan contends, the cooperative corporation is obligated to issue him a renewal lease.

In deciding the PAR, the Commissioner of DHCR, in a contradictory ruling, stated he "is of the opinion that this petition should be granted in part" but agreed that the agency "is without power to resolve the controversy between the parties." The Commissioner ruled that the District Rent Administrator's determination was erroneous insofar as it found the apartment exempt from the Rent Stabilization Law. The Commissioner concluded that the operative question is whether apartment 2B is occupied by the tenant as his primary residence, an issue which is required to be resolved "by a court of competent jurisdiction". The Commissioner then proceeded to order the cooperative corporation to commence an appropriate action within 60 days or issue a renewal lease to Bolan.

At this juncture, several observations are in order. First, if, as the Commissioner determined, the agency lacks power to decide the controversy--because the issue is one of primary residence solely within the province of the court (Rent Stabilization Law § 26-504[a][1][f]--the agency is likewise without authority to direct the parties to take any action. Also, because there is no impediment to the commencement, by the tenant, of a proceeding to obtain a judgment declaring his rights in the subject unit, there is no necessity for the administrative order directing the cooperative corporation to commence an action. Finally, in view of DHCR's determination that it lacks jurisdiction, the agency's conclusions of law are merely advisory and need not be accorded any weight by the court (compare, Matter of Howard v. Wyman, 28 N.Y.2d 434, 438, 322 N.Y.S.2d 683, 271 N.E.2d 528).

The cooperative corporation commenced the instant CPLR Article 78 proceeding to review the administrative determination by respondent DHCR. The notice of petition indicates that petitioner sought to annul and vacate the order of the Commissioner to the extent that it granted respondent Bolan's PAR and directed petitioner to issue a renewal lease to Bolan for apartment 2B. Petitioner argued that, as a matter of law, the maid's room is not subject to the Rent Stabilization Code (9 NYCRR § 2520 et seq.) because it is located in a building owned by a cooperative apartment corporation.

In deciding the matter, however, Supreme Court adopted the rationale stated by the Commissioner that determination of this controversy turns on the issue of primary residence. The court reasoned:

"It is beyond cavil that two non-contiguous apartments may constitute a tenant's primary residence depending upon the intention of the tenant and the use to which the apartment is put (Sharp v. Melendez, 139 A.D.2d 262 [1st Dept.1988], app. den. 73 N.Y.2d 707, [539 N.Y.S.2d 300, 536 N.E.2d 629] [1989], even if the maid's room would not, standing by itself, qualify for a [certificate of occupancy] as a residence [sic] dwelling unit (128 Central Park South Associates v. Cooney, 119 Misc.2d 1045 [Civ.Ct.N.Y.Co., 1983, Lehner, J.]. Here, petitioner has failed to raise any triable issue of fact as to Bolan's intention and use of apartment 2B as his primary residence along with apartment 4G. Moreover, the failure of petitioner to serve a notice of intention to commence a proceeding to recover possession of apartment 2B within the requisite window period of 120-150 days prior to the expiration of the lease based on nonprimary residence precludes the landlord from refusing to renew the lease to apartment 2B on that ground (Golub v. Frank, 65 N.Y.2d 900 [493 N.Y.S.2d 451, 483 N.E.2d 126] [1985]; Crow v. 83rd St. Associates, 68 N.Y.2d 796 [506 N.Y.S.2d 858, 498 N.E.2d 422] [1986]."

Supreme Court dismissed the petition and directed petitioner to renew the lease to apartment 2B "so long as Bolan occupies apartment 4G as his primary residence." In addition, the court awarded respondent Bolan reasonable counsel fees incurred in litigating this matter and in pursuing an administrative remedy before respondent DHCR.

In a proceeding to review the determination of an administrative agency brought pursuant to CPLR 7803(3), inquiry is limited to "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" (including any penalty imposed). The proceeding is a special proceeding (CPLR 7804[a] within the purview of CPLR Article 4. Where no triable issue of fact is raised, a summary determination is appropriate based on the pleadings, papers and admissions in accordance with the standards for granting summary judgment (CPLR 409[b]; Matter of Port of New York Auth. [62 Cortlandt St. Realty Co.], 18 N.Y.2d 250, 273 N.Y.S.2d 337, 219 N.E.2d 797).

It has already been observed that DHCR's conclusion that it lacks authority to determine the controversy between the cooperative corporation and its tenant is entirely correct. The only question directly presented by the petition is whether the determination should be annulled to the extent that it granted, in part, Bolan's PAR and directed the cooperative corporation to issue a renewal lease. Confining the controversy to this issue, its adjudication is axiomatic. Having decided that DHCR has no power to entertain this matter, any order purported to be issued by the Commissioner is ultra vires and should be vacated.

By passing upon the merits of this case, Supreme Court treated the matter as a plenary action, sub silentio converting the proceeding into an action for declaratory judgment (CPLR 103[c]; Matter of Kovarsky v. Housing & Dev. Admin., 31 N.Y.2d 184, 192, 335 N.Y.S.2d 383, 286 N.E.2d 882) and summarily granting judgment in favor of respondent Bolan based upon the record before it (CPLR 3212 [b]. The court employed the same reasoning advanced by the Commissioner--that termination of (or refusal to renew) a lease for space which the tenant contends comprises part of his residence raises the issue of primary residence. The court then concluded that the failure of the cooperative corporation...