Bambeck v. State Div. of Housing and Community Renewal, Office of Rent Admin.

• Decision Date: 18 June 1987
• Citation: 129 A.D.2d 51,517 N.Y.S.2d 130
• Parties: In the Matter of the Application of Dirk H. BAMBECK and Robert J. Lukey, Petitioner-Respondent, For a judgment under Article 78 of the Civil Practice Law and Rules, v. STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, OFFICE OF RENT ADMINISTRATION, Respondent-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 130

517 N.Y.S.2d 130

129 A.D.2d 51

In the Matter of the Application of Dirk H. BAMBECK and Robert J. Lukey, Petitioner-Respondent For a judgment under Article 78 of the Civil Practice Law and Rules, v.STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, OFFICE OF RENT ADMINISTRATION, Respondent-Appellant.

Supreme Court, Appellate Division First Department.

June 18, 1987.

Sheldon D. Melnitsky, New York City, of counsel(Dennis B. Hasher, attorney), for respondent-appellant.

Robert H. Berman, of counsel(Finkelstein, Borah, Schwartz, Altschuler & Goldstein, P.C., New York City, attorneys), for petitioners-respondents.

Before KUPFERMAN, J.P., and ROSS, MILONAS, KASSAL and ELLERIN, JJ.

KASSAL, Justice.

Petitioners are the owners of the subject premises, located at 206-208 East 35th Street, originally constructed in 1857.They took title on October 10, 1980 by a single deed from Luba Realty, Inc., a corporation which had owned the premises since December 29, 1978.During the time Luba held title, petitioners were the principals of that corporation.Originally, the building premises, 25 feet wide and three stories high, were constructed as two-family dwellings, each a triplex with a basement and a separate service and family entrance.The property, which has been in common ownership since 1914, was converted from a two-family house to a rooming house in the 1930's and, in 1952, there was another conversion to an apartment house.Initially subject to rent control, the premises were decontrolled in 1953.At the present time, the building contains eight apartment units, four on each side.

The dispute as to the status of the buildings has been pending for some time and was the subject of a prior appeal, sub nom. Matter of Luba Realty, Inc. v. Joy, 88 A.D.2d 864, 451 N.Y.S.2d 760, when the matter was remanded to respondent's predecessor, the Conciliation and Appeals Board, to determine whether the premises form a horizontal multiple dwelling, consisting of eight apartments.

After considering the submissions by the owners and the tenants on such remand, respondent rendered its determination, setting forth the various factors and concluding that the premises were a single multiple dwelling, subject to the Rent Stabilization Law and the Emergency Tenant Protection Act of 1974.The opinion recited the contentions of the respective parties, including the owners' claim that these were separate buildings, not subject to rent stabilization.

The owners' contentions were that each building had a separate certificate of occupancy; a separate cellar, each with its own entrance; a separate chimney and flue; each building had a separate front stairway entrance, separate front hallways, public halls, interior stairways, mailboxes and bell and buzzer systems; each had separate multiple dwelling registration numbers; and each had separate real estate block and lot numbers recorded at the City Register's office.As a result, the buildings were billed and taxed separately by the City for real estate, water and sewer taxes and had separate municipal inspections and violation reports.While, at one time, there was one heating system, shared by both, each currently has its own individual heating plant.

In contrast, the tenants, including some who had resided in the building for 27 years, claimed that during this time there has been one common boiler for both sides, located in the cellar under No. 208, and one common oil storage tank, located in the cellar under No. 206.There is only one sewer pipe leading from the building to the street, under No. 206, and only one water main leading into the building, located in the cellar under No. 206, which is the source of water for all eight apartments.The tenants pointed to the fact that there was a common cellar which was divided by a weight-bearing wall and which bisected the building, but that there is a door-sized opening in the wall, which makes the cellar accessible from either building.They disputed the owners' claim that there were separate chimneys, arguing that, although there are two chimneys, the rear chimney is for all the eight back-to-back fireplaces in the building, one for each apartment, and the other, in the front, is used for furnace effluence from the common oil burner.The buildings share a common electrical wiring system and a single fuse box, to the extent that when No. 208 had a series of blackouts in 1978, traced to a faulty air conditioner in that building, this also resulted in blackouts in No. 206.For at least the last 25 years, there has been one superintendent and the premises, with a long history of common ownership, has been operated as a single enterprise since 1914.A joint integrated sprinkler system was installed in 1937, at or about the time the building was converted into a rooming house and both sides of the building share the same smoke control system.

Photographs of the building in the record depict a single, uninterrupted wall surface, cornice and molding, with one drainpipe in the center, leading to a drain on the No. 208 side, without any drain on the No. 206 side.Although no engineering reports were submitted in the proceedings before respondent, the tenants claimed that the weight bearing wall which divided the two sides of the building would be insufficient to support either side as an exterior wall and neither side of the building could be razed without undermining the structural integrity of the adjoining half, thereby causing the collapse of the entire building.

Considering all these factors, respondent concluded that the building structure was not being operated as two independent units, constituted a horizontal multiple dwelling, containing six or more units and, therefore, was subject to the Rent Stabilization Law.In doing so, the Commissioner referred to the presence of a common heating plant (furnace and oil source), a single sewer outlet and water main, a common bank of eight gas meters, a single power line leading into the building and a single bank of electric meters for all eight apartments, as well as the fact that the structure, now and in the past, had been operated under a common ownership.The Commissioner also expressly rejected the owners' contention that the only horizontal multiple dwellings subject to rent stabilization were garden-type maisonette dwelling complexes.

In granting the owners' CPLR Article 78 petition, Special Term disagreed, observing, "it clearly appears to this court that the structures are not so interdependent or structurally integrated that future independent sale would be prevented."In our view, in doing so, the court inappropriately substituted its judgment for that of respondent on factual matters which were within respondent's primary jurisdiction to determine.The central issue at Special Term was whether the determination had a rational basis and, although the court may, in the first instance, have decided the issue differently, it could not substitute its own views for those of the agency in the absence of a finding that the administrative determination was arbitrary, capricious or irrational (Matter of Mid-State Management Corp. v. New York City Conciliation and Appeals Board, 112 A.D.2d 72, 491 N.Y.S.2d 634, affd66 N.Y.2d 1032, 499 N.Y.S.2d 398, 489 N.E.2d 1300;Matter of Phelps Management Company v. Gliedman, 86 A.D.2d 540, 446 N.Y.S.2d 72;Matter of Plaza Mgt. Co. v. City Rent Agency, 48 A.D.2d 129, 368 N.Y.S.2d 178, affd.37 N.Y.2d 837, 378 N.Y.S.2d 33, 340 N.E.2d 468).

Over the years, the issue of horizontal multiple dwelling status has been the subject of much litigation, as a result of which certain clearly delineated principles have evolved.In Matter of Love Securities Corp. v. Berman, 38 A.D.2d 169, 170-171, 328 N.Y.S.2d 8, Associate Justice Steuer, in an opinion for this Court, enunciated the controlling rule in terms of judicial review of an administrative determination as follows:

The factors which contribute to determination of such a question are common ownership, management, including supply of services, and common facilities.As usual in such questions, cases present different combinations of those factors and no one factor can be said to be determinative (seeMatter of Coyle v. Gabel, 21 N.Y.2d 808Matter of Castleton Estates v. Abrams, 1 A.D.2d 390Matter of Goldstein v. Gabel, 44 Misc.2d 20 ); although in all probability diversified ownership alone would indicate separate units (Matter of Amorelli v. Berman, 19 N.Y.2d 960 ).Where there are divergent factors which might well lead to different conclusions, the initial decision is for the respondent Rent Administrator, and his determination, unless arbitrary, is final (Matter of Venizelos v. Abrams, 1 A.D.2d 782 ).The presence of the several enumerated factors shows that there is a rational basis for the Administrator's conclusion, and as such it should not be disturbed (Matter of Colton v. Berman, 21 N.Y.2d 322Matter of Mounting & Finishing Co. v. McGoldrick, 294 N.Y. 104 ).(emphasis added)

Similarly, in Matter of Menoudakos v. Berman, 32 A.D.2d 631, 300 N.Y.S.2d 740, affd.25 N.Y.2d 723, 307 N.Y.S.2d 225, 255 N.E.2d 565, we held that the Rent Commissioner's determination was not arbitrary and had a rational basis in concluding that the buildings containing eight apartments were part of an eight-family complex, not four two-family houses, holding (supra at 631-632, 307 N.Y.S.2d 225, 255 N.E.2d 565):

The Rent Commissioner is the arbiter of questions of fact and his determination may not be set aside unless clearly arbitrary.(Matter of Venizelos v. Abrams, 1 A.D.2d 782 The function of the court is exhausted when there is a rational basis for the conclusion reached by the Rent Commissioner.(Matter of Mounting & Finishing Co. v. McGoldrick, 294 N.Y. 104Matter of Colton v. Berman, 21 N.Y.2d 322 In our opinion on this record the Rent and Housing Maintenance Commissioner's finding that the subject...