Golden v. Steam Heat, Inc.

• Decision Date: 19 June 1995
• Parties: Howard GOLDEN, etc., et al., Respondents, v. STEAM HEAT, INC., et al., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 375

628 N.Y.S.2d 375

216 A.D.2d 440

Howard GOLDEN, etc., et al., Respondents, v. STEAM HEAT, INC., et al., Appellants.

Supreme Court, Appellate Division Second Department.

June 19, 1995.

Ralph J. Schwarz, Jr., New York City (Richard T. Sinrod and Richard S. Brown, Jr., on the brief), for appellants.

Cullen and Dykman, Brooklyn (F. Peter O'Hara and John J. Fanning, of counsel), for respondents Bear Stearns & Co., Inc., Brooklyn Union Gas Co., Chase Manhattan Bank, N.A., First New York Management Co., and Securities Industry Automation Corp.

Before BALLETTA, J.P., and MILLER, SANTUCCI and FLORIO, JJ.

MEMORANDUM BY THE COURT.

In a proceeding, inter alia, to permanently enjoin the further construction and the opening of an adult entertainment establishment at certain premises, the appeal is from an order of the Supreme Court, Kings County (Dowd, J.), dated May 9, 1995, which granted a motion for a preliminary injunction enjoining the appellants from operating the establishment for a period of 30 days.

ORDERED that the proceeding is converted into an action, with the notice of petition deemed to be the summons and the petition deemed to be the complaint (see, CPLR 103[c]; and it is further,

ORDERED that the order is reversed, on the law, with costs, and the motion is denied.

The defendant Steam Heat, Inc. (hereinafter Steam Heat), began construction of an adult entertainment establishment in Brooklyn in August of 1994. Most, but not all, of the necessary construction permits were issued to Steam Heat prior to November 30, 1994, the effective date of an amendment of the New York City Zoning Resolution establishing a one-year moratorium prohibiting the opening of new adult entertainment establishments (see, NY City Zoning Resolution § 11-113). New York City Zoning Resolution § 11-332 provides that if work is not completed pursuant to construction permits issued for a particular use and the Zoning Resolution is thereafter amended to limit or prohibit that use, the permits automatically lapse, and renewal of the permits may only be obtained by applying to the Board of Standards and Appeals (hereinafter the Board) within 30 days for the Board's determination as to whether the construction was substantially complete and whether renewal of the permits is warranted.

Although Steam Heat never applied for renewal of the permits to the Board, the City of New York Department of Buildings (hereinafter the Department of Buildings) contacted Steam Heat, on its own initiative, and requested that Steam Heat provide evidence of the status of its construction, which had continued after November 30. After reviewing Steam Heat's evidence, the Department of Buildings determined that Steam Heat had completed approximately 75% to 80% of the construction prior to November 30, 1994, and, therefore, it issued the appropriate permits. A temporary certificate of occupancy was issued on April 5, 1995, and Steam Heat opened its doors on April 21, 1995.

The plaintiffs initially appealed the determination of the Department of Buildings to the Board. However, the Board has not yet made a determination. The plaintiffs commenced this action several days after Steam Heat opened for business. Although the Supreme Court granted the plaintiffs' application for a preliminary injunction, this court granted a stay pending Steam Heat's appeal.

Steam Heat contends that the plaintiffs do not have standing to commence an action for an injunction because they failed to allege special damages arising from...