Impac Assoc. Co. v. Robinson

• Decision Date: 20 July 2005
• Docket Number: 25257/04.
• Citation: 805 N.Y.S.2d 253,9 Misc.3d 1065,2005 NY Slip Op 25376
• Parties: IMPAC ASSOCIATES REDEVELOPMENT COMPANY, Petitioner, v. SHALLETER ROBINSON, Respondent.
• Court: New York Civil Court

9 Misc.3d 1065

805 N.Y.S.2d 253

2005 NY Slip Op 25376

IMPAC ASSOCIATES REDEVELOPMENT COMPANY, Petitioner, v. SHALLETER ROBINSON, Respondent.

25257/04.

Civil Court of the City of New York, New York County.

July 20, 2005.

Edward Harold King, Brooklyn, for respondent.

Gutman, Mintz, Baker & Sonnenfeld, P.C., New Hyde Park (Joseph Goldsmith of counsel), for petitioner.

OPINION OF THE COURT

RUBEN A. MARTINO, J.

In this breach of the lease holdover proceeding based on alleged fraud in reporting income, respondent moves to dismiss pursuant to CPLR 3211 and for other related relief. The court considered (1) the notice of motion, and (2) the affirmation in opposition. After considering the papers and reviewing the applicable law, the court grants the motion and dismisses the proceeding without prejudice for the reasons below.

The parties agree that the subject premises are subsidized by the Department of Housing and Urban Development (HUD) and are governed by the rules and regulations of HUD (see 42 USC § 1437; 24 CFR part 982). Petitioner claims that respondent knowingly supplied false information regarding income used to determine her rent and assistance payment for 1999 through and including 2003. Petitioner considered this a material noncompliance with the terms of the leasehold and terminated the tenancy by serving a "10 Day Notice to Terminate." This proceeding was then commenced.

Respondent argues that the HUD Handbook, entitled "Occupancy Requirements of Subsidized Multifamily Housing Programs" (4350.3 Rev-1), sets forth the procedures to be used by owners when fraud is suspected. An owner must first investigate suspected fraud and may either confront the tenant with the information or obtain additional information from other persons or agencies for verification (HUD Handbook 4350.3 ¶ 8-17 [C]). Once the investigation is completed, the owner must notify the tenant in writing of the error and identify what information is believed to be incorrect (HUD Handbook 4350.3 ¶ 8-17 [D] [1]). The tenant must have an opportunity, within 10 days, to meet with the owner, discuss the allegations with a designated representative who has not been involved with the review and be provided with a written final decision. (HUD Handbook 4350.3 ¶ 8-17 [D] [2].) Thereafter, if fraud is found, the owner is authorized to terminate the tenancy. (HUD Handbook 4350.3 ¶ 8-17 [G].) Petitioner concedes, as alleged by respondent, that it never sent her the 10-day letter nor offered her a meeting to explain or discuss the charges prior to terminating the tenancy. Petitioner argues that the HUD Handbook is a policy, not a rule, because it was not published in the Federal Register and, therefore, should not be given the effect of law but only accorded considerable weight (see Allied Manor Rd. LLC v Grube, NYLJ, Apr. 20, 2005, at 21, col 1 [Civ Ct, Richmond County]). Petitioner also points out that it believes respondent would not have attended the meeting in any event and has no real defense to the charges. The issue is whether petitioner's failure to follow the pretermination procedures in the HUD Handbook requires dismissal in this case.

The Secretary of HUD has been given broad rule-making power and "may make such rules and regulations as may be necessary to carry out his functions, powers, and duties" (42 USC § 3535 [d]). Courts have held that the HUD Handbook is binding and sets forth the procedures to be followed regarding the ...