Aponte v. Beekman
| Decision Date | 24 January 2019 |
| Docket Number | 16-CV-8479 (JPO) |
| Parties | ELIEZER APONTE, ANA GARCIA, and SHANNEL WALKER, Plaintiffs, v. DIEGO BEEKMAN M.H.A. HDFC, VICKI BEEN, as Commissioner of the NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT, and BILL DE BLASIO, as Mayor of the CITY OF NEW YORK Defendants. |
| Court | U.S. District Court — Southern District of New York |
Eliezer Aponte, Ana Garcia, and Shannel Walker (collectively, "Plaintiffs")—three low-income tenants in a Bronx apartment complex—have filed this lawsuit against their landlord, Diego Beekman Mutual Housing Association Housing Development Fund Corp. ("Diego Beekman"), as well as the Commissioner of the New York City Department of Housing Preservation and Development and the Mayor of the City of New York (together, the "City Defendants," and, with Diego Beekman, "Defendants"). Plaintiffs allege that Diego Beekman has been charging them excessive rent, and that the City Defendants have enabled this practice by failing to certify that Plaintiffs are eligible for a rent cap established by a regulatory agreement between Diego Beekman and the City of New York. Plaintiffs seek relief from all Defendants pursuant to 42 U.S.C. § 1983 for alleged violations of the Fourteenth Amendment's Due Process Clause and from Diego Beekman alone under a variety of state-law theories. Diego Beekman and the City Defendants have now moved to dismiss all claims against them. (Dkt. Nos. 43, 50.) For the following reasons, the motions are granted.
The Court draws its factual recitation from the complaint's allegations and, where appropriate, from any documents the complaint incorporates by reference. See Newman & Schwartz v. Asplundh Tree Expert Co., 102 F.3d 660, 662 (2d Cir. 1996).
In February 2003, Diego Beekman purchased a thirty-eight building, 1,219-unit Bronx housing complex (the "Complex") from the United States Department of Housing and Urban Development ("HUD"). Pursuant to the warranty deed that transferred title (the "Deed"), Diego Beekman agreed that until 2033 (1) all of the Complex's units would be dedicated to families with incomes no greater than 115% of the area median income, (2) 75% of the Complex's units would be dedicated to low- and very low-income families, and (3) rents for the low- and very low-income units would not exceed a specified cap.1 (Compl. ¶ 14-15; Dkt. No. 56-1 at 13-14.) The Deed further required Diego Beekman to notify its existing and future tenants about the Deed's terms. (Compl. ¶ 16; Dkt. No. 56-1 at 24.)
Two later agreements placed further limitations on Diego Beekman's administration of the Complex. First, Diego Beekman entered into a June 2006 "HOME Agreement" with the City of New York (the "City"), pursuant to which the City's Department of Housing Preservation and Development ("HPD") agreed to provide Diego Beekman with $13.6 million for the purpose of rehabilitating 321 of the Complex's units. (Compl. ¶ 18; Dkt. No. 56-2 at 9, 20-21.) In exchange, Diego Beekman was required, throughout the rehabilitation period and for at least fiveyears thereafter, to cap the rent for those units and to rent them exclusively to low- and very low-income families.2 (Compl. ¶¶ 19-23; Dkt. No. 56-2 at 8-10.)
Second, in December 2009, Diego Beekman entered a regulatory agreement with the City (the "Regulatory Agreement") in exchange for a tax exemption. (Compl. ¶ 24.) That agreement, which is to remain in effect until 2048, contains a schedule of maximum initial rents applicable to all of the Complex's units and provides that any adjustments to the initial rents must comply with New York City's Rent Stabilization Code, N.Y.C. Admin. Code § 26-512. (Compl. ¶¶ 24, 27; Dkt. No. 56-3 at 10, 86.) Furthermore, for a "Cooperating Tenant"—defined as a tenant who has submitted certain income certifications and other financial documentation—the agreement holds out the possibility of a still lower rent cap, depending on the tenant's income level and whether or not the tenant receives federal housing benefits.3 (Compl. ¶¶ 26-29; Dkt. No. 56-3 at 7, 10-11.) It is HPD's prerogative to determine, based on information provided by Diego Beekman, whether any given tenant is a Cooperating Tenant. (Compl. ¶ 26; Dkt. No. 56-3 at 11.) Finally, where a unit is subject to multiple rent or income restrictions, the Regulatory Agreement provides that the most restrictive condition shall govern. (Compl. ¶ 30; Dkt. No. 56-3 at 11.)
Plaintiffs contend that Diego Beekman and the City, acting through HPD, have failed to satisfy their obligations under these various agreements. As for Diego Beekman, Plaintiffs maintain that it has failed to notify its tenants of their eligibility for rent caps and that it often setsrents above the permitted maximum. (Compl. ¶¶ 39, 41-42.) And as for the City Defendants, Plaintiffs allege that they have failed to issue the Cooperating Tenant designations that would render qualifying tenants eligible for the special rent caps set out in the Regulatory Agreement. (Compl. ¶ 40; Dkt. No. 54 at 12.)
Plaintiffs, each of whom has lived in the Complex since at least 2010, allege that they are among those who have been injured by these alleged practices. (Compl. ¶¶ 44, 55, 67.) Plaintiffs maintain that they are each eligible for a Cooperating Tenant rent cap under the Regulatory Agreement but that they have never been certified as Cooperating Tenants and that their monthly rents have consistently exceeded that cap. (Compl. ¶¶ 48, 50-52, 59, 61-63, 73, 75-77; Dkt. No. 54 at 12.) In addition, Plaintiffs allege that they have never been notified as to whether they live in units that are subject to the HOME Agreement's additional rent caps. (Compl. ¶¶ 49, 60, 74.) Plaintiffs have been unable to pay rent at the levels Diego Beekman has set, and Diego Beekman has consequently filed non-payment actions—including some that are currently pending—against each Plaintiff in Bronx Housing Court. (Compl. ¶¶ 54, 66, 79.)
On October 31, 2016, with non-payment actions pending against each of them in state housing court, Plaintiffs filed the instant federal suit. (See Compl. ¶¶ 54, 66, 79.) The complaint asserts a single federal cause of action against Defendants, claiming that Defendants' failure to provide notice of the various available rent caps or to certify Plaintiffs' status as Cooperating Tenants violated the Fourteenth Amendment's Due Process Clause, and seeking relief pursuant to 42 U.S.C. § 1983 ("Section 1983"). (Compl. ¶¶ 80-84; Dkt. No. 54 at 12.) In addition, the complaint asserts four causes of action under New York state law against Diego Beekman alone: (1) breach of the Deed, the HOME Agreement, and the Regulatory Agreement, with respect to each of which Plaintiffs are alleged to be third-party beneficiaries (Compl. ¶¶ 85-87); (2) breachof Plaintiffs' leases, which allegedly incorporate the Regulatory Agreement by reference (Compl. ¶¶ 88-92); (3) commission of deceptive business practices in violation of state consumer-protection law, N.Y. Gen. Bus. Law, § 349 (Compl. ¶¶ 93-95); and (4) violation of New York City's Rent Stabilization Code, N.Y.C. Admin. Code § 26-512 (Compl. ¶¶ 96-98).
Diego Beekman and the City Defendants have each separately moved to dismiss the claims against them. (Dkt. Nos. 43, 50.) Defendants contend that Plaintiffs' claims must be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction, and pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a valid claim to relief.4 (Id.) Defendants' motions have been fully briefed (Dkt. Nos. 45, 52, 54-55, 58, 62), and are fit for resolution.
To the extent that Defendants seek to challenge this Court's subject-matter jurisdiction solely on the basis of the allegations in the complaint, Plaintiffs labor under "no evidentiary burden" to establish that the factual predicates to this Court's jurisdiction have been satisfied. Carter v. HealthPort Techs., LLC, 822 F.3d 47, 57 (2d Cir. 2016). Instead, this Court need only look to the complaint and ask whether it "allege[s] facts that affirmatively and plausibly suggest" that jurisdiction is proper. Id. (quoting Amidax Trading Grp. V. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011) (per curiam)). In resolving this question, the Court "accept[s] as true allallegations in the complaint and draw[s] all inferences in [Plaintiffs'] favor." Doe No. 1 v. Putnam Cty., No. 16 Civ. 8191, 2018 WL 4757967, at *4 (S.D.N.Y. Sept. 29, 2018).
But to the extent that Defendants "proffer[] evidence beyond the [complaint]" in order to raise a "fact-based Rule 12(b)(1) motion," Plaintiffs must "come forward with evidence of their own" if Defendants' evidence "'reveal[s] the existence of factual problems' in the assertion of jurisdiction." Carter, 822 F.3d at 57 (quoting Exhange Nat'l Bank of Chi. v. Touche Ross & Co., 544 F.2d 1126, 1131 (2d Cir. 1976)). In this scenario, Plaintiffs carry "the burden of proving by a preponderance of the evidence that [subject-matter jurisdiction] exists." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).
To survive Defendants' Rule 12(b)(6) motions, Plaintiffs' complaint "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In other words, Plaintiffs' "[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 550 U.S. at 555 (citation and footnote omitted).
Both Diego Beekman and the City Defendants move to dismiss the claims against them for...
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