In the Matter of Rywa Wilner v. Beddoe

• Decision Date: 01 August 2011
• Citation: 928 N.Y.S.2d 884,33 Misc.3d 900,2011 N.Y. Slip Op. 21276
• Parties: In the Matter of Rywa WILNER, Petitioner,v.Suzanne A. BEDDOE, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of the Application of Crospo Francisco Gladys, Petitioner,Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of the Application of Palazzdo Realty VII Corp., Petitioner,Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of the Application of Plan B Engineering, Petitioner,Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of Crospo Francisco Gladys, Petitioner,v.Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of Palazzdo Realty VII Corp., Petitioner,v.Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of Plan B Engineering, Petitioner,v.Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.
• Court: New York Supreme Court

33 Misc.3d 900

928 N.Y.S.2d 884

2011 N.Y. Slip Op. 21276

In the Matter of Rywa WILNER, Petitioner,

v.Suzanne A. BEDDOE, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of the Application of Crospo Francisco Gladys, Petitioner,Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of the Application of Palazzdo Realty VII Corp., Petitioner,Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of the Application of Plan B Engineering, Petitioner,Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of Crospo Francisco Gladys, Petitioner,

v.Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of Palazzdo Realty VII Corp., Petitioner,

v.Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.In the Matter of Plan B Engineering, Petitioner,

v.Suzanne A. Beddoe, Chief Administrative Law Judge, NYC Environmental Control Board, NYC Office of Administrative Trials and Hearings; Helaine Balsam, Esq., Legal Director of the Environmental Control Board, Respondents.

Supreme Court, New York County, New York.

Aug. 1, 2011.

Robert Hochman, Cohen Hochman & Allen, NYC, for Petitioners.Michelle Goldberg–Cahn, Assistant Corporation Counsel, NYC, for Respondents.JUDITH J. GISCHE, J.

Each of the four above captioned special proceedings challenges a rule, recently promulgated by the New York City Environmental Control Board (“ECB”), which adopted new procedures for vacating default judgments. The rule, which is codified as Title 48, Section 3–82 of the Rules of the City of New York (“ECB Vacate Default Rule” or “Rule”), became effective April 4, 2010.

By Administrative Order of the Hon. Sherry Klein Heitler, dated November 18, 2010, all cases commenced by petitioners' counsel, Cohen, Hochman and Allen, challenging the ECB Vacate Default Rule, were treated as related matters and transferred to this part. The same order directed that any subsequently commenced challenges filed by the same law firm, albeit on behalf of different client/petitioners, would likewise be considered related proceedings and be assigned to this part.

By stipulation and order, dated February 1, 2011, a coordinating order (“ECB Coordinating Order”) detailing the method by which these related matters would be heard by the court was made. Pertinent to this decision, it was agreed that four test cases would be identified and decided by the court, while the other related petitions were stayed. Any petitioner who was represented by a law firm other than Cohen, Hochman and Allen, but who raises similar legal challenges to the ECB Vacate Default Rule, was notified and given the opportunity to have his/her/its petition treated as a related case under the coordinating order.¹

The four above captioned proceedings represent the test cases identified by counsel pursuant to the ECB Coordinating Order. They are consolidated for consideration and determination in this single decision.

At the outset, the court notes that none of the challenges to the ECB Vacate Default Rule concern the manner in which it was promulgated. Thus, for the purposes of this decision, the court accepts respondents' representations that the rule was promulgated in accordance with the City Administrative Procedure Act (“CAPA”). The challenges considered, instead, relate to the substance of the ECB Vacate Default Rule.

The New ECB Vacate Default Rule

RCNY § 3–82 provides, in full, as follows:

§ 3–82. Request for a New Hearing after a Failure to Appear (Vacating a Default).

(a) A request by a respondent for a new hearing after the respondent did not appear must be made by application to the executive director or his or her designee. The request must be on a form prescribed by the executive director. The request must contain a current mailing address for the named respondent; it must explain how and when the respondent learned of the violation and it must be sworn or certified to under the penalties of perjury. If the request is not made by the named respondent, the request must explain the relationship between the respondent and the person making the request.

(b) A request for a new hearing, as described in subdivision (a) of this section, that is received within 45 days of the hearing date upon which the respondent did not appear, shall be granted unless such request is found to be made in bad faith. Such findings shall be made at the discretion of the executive director and shall include, but not be limited to, requesting only to admit the charge(s), repeatedly filing the same request or filing the same request in more than one borough at the same time.

(c) A request for a new hearing that is received more than 45 days from the date upon which the respondent did not appear must contain, in addition to the information stated in subdivision (a) of this section, appropriate supporting documentation. Such request may be granted and a hearing conducted only if the respondent establishes that a new hearing was requested within one year of the time the respondent learned of the existence of the violation, and that there is a reasonable basis to believe that the respondent

(1) did not receive the notice of the violation because the respondent was

(A) not properly served with the violation under article three of the civil practice law and rules, article three of the business corporation law, section 1049–a of the New York City Charter or any other provision relating to service of violations returnable to the Environmental Control Board contained in the New York City Administrative Code or the Rules of the City of New York; or

(B) cited generically, for example, as “Owner” or “Agent,” on all copies of the notice of violation sought to be served on the respondent; or

(2) was an improper party when the notice of violation was issued. An improper party is a named respondent who is

(A) an individual who was deceased or legally incompetent on the hearing date upon which the respondent did not appear; or

(B) for a premises related violation, not the owner, agent, lessee, tenant, occupant or person in charge of or in control of the place of occurrence on the date of the offense.

A decision to grant the request for a new hearing under this section shall not be considered a final decision on the issue of whether respondent was properly served or was a proper party on the date of offense.

(d) If a request for a new hearing is granted, the Environmental Control Board shall send a notice to the respondent at the respondent's address stated on the request for a new hearing. If the respondent is deceased or legally incompetent, a notice shall be sent to respondent's representative. Notice shall also be sent to the Petitioner.

(e) No more than one request for a new hearing under this section may be granted with respect to any one notice of violation unless the notice of the new hearing date was not mailed pursuant to subdivision (d) of this section. If the respondent is unable to appear on the hearing date scheduled after a request for a new hearing is granted, respondent may request that the hearing be rescheduled one final time.

(f) Review of a denial of a request for a new hearing after a failure to appear may be sought pursuant to Article 78 of the New York Civil Practice Law and Rules.

The Arguments Presented

Identical arguments are raised in each petition. Certain additional arguments are raised by Wilner and Crospo. The petitions allege that the ECB Vacate Default Rule is arbitrary and capricious because: [1] “it ignores Petitioner's excusable default”; [2] “numerous petitioners have not received notice of hearing dates from ECB”; [3] it is contrary to New York State's policy favoring judgments on the merits; [4] it punishes and forces petitioner to pay maximum statutory penalties despite “reasonable, proper and credible explanations for the defaults”; [5] it fails to provide for any circumstance of an excusable default; [6] it violates the right to due process under the federal constitution; [7] ECB's methods are not reasonably calculated to provide any real notice to petitioners; [8] it provides less protection than the New York City Administrative Code; [9] it provides less protection than the Civil Practice Code and Rules (“CPLR”); [10] it is a stricter default rule than is permitted in the civil courts, even though the judgment amounts meet or exceed civil court judgments; [11] it makes no allowance for petitioners who are not personally served with a summons; [12] it fails to achieve the goals stated as the basis for the amendment; [13] it does not indicate whether the application to open a default will be determined by hearing officers, attorneys or clerks; [14] the time frame to vacate the default is measured from the date of the default rather than the date petitioner receives notice of the default; [15] it will “inevitably” lead to greater litigation; [16] the ECB refuses to consider using modern technology to give petitioners notice; [17] it fails to recognize...