Lutheran Church In America v. City of New York

• Decision Date: 15 July 1974
• Citation: 316 N.E.2d 305,35 N.Y.2d 121,359 N.Y.S.2d 7
• Parties: , 316 N.E.2d 305 LUTHERAN CHURCH IN AMERICA, Respondent, v. CITY OF NEW YORK et al., Appellants.
• Court: New York Court of Appeals Court of Appeals

Page 7

359 N.Y.S.2d 7

35 N.Y.2d 121, 316 N.E.2d 305

LUTHERAN CHURCH IN AMERICA, Respondent, v. CITY OF NEW YORK et al., Appellants.

Court of Appeals of New York.

July 15, 1974.

Norman Redlich, Corp. Counsel, New York City (Alfred Weinstein and Stanley Buchsbaum, New York City, of counsel), for appellants.

John L. Warden and David M. Olasov, New York City, for respondent.

Michael S. Gruen, William C. Chanler, Bernard Botein, Francis H. Horan, Orison S. Marden, Francis T. P. Plimpton, Whitney North Seymour and Bethuel M. Webster, New York City, for The Municipal Art Society, amicus curiae.

GABRIELLI, Judge.

The question, as we choose to frame it in this case, is whether that part of the New York City Landmarks Preservation Law which purports to give the Landmarks Preservation Commission the authority to infringe upon the free use of individual premises remaining in private ownership is a valid use of the city's police power in cases where an owner organized for charitable purposes demonstrates hardship, economic or otherwise. Present also are procedural issues involving the nature of this action and the scope of judicial review exercised by the courts below.

The statutory scheme can be outlined as follows: By amendment to the New York City Charter and Administrative Code (ch. 8--A) the Landmarks Preservation Commission was created and given the power to designate historic districts and also to designate individual properties as historic landmarks. We are here concerned with the latter aspect. Based on the statutory scheme, designations can be made after notice and a public hearing (Administrative Code of City of New York, ch. 8--A, § 207--2.0, subds. a, c; § 207--12.0), but in determining whether or not to make the contemplated designation 'the commission * * * shall not be confined to consideration of the facts, views, testimony or evidence submitted at such hearing.' (§ 207--12.0, subd. b.) Should the owner of a building which has been designated a landmark desire to alter or demolish it, application may be made to the commission for such permission (§ 207--5.0, subd. a) which quite probably would not be forthcoming in cases where demolition is sought. It is further provided that the owner is expected to realize at least a 6% Return on his property (§ 207--1.0, subd. q) and if he proves economic hardship by the fact of a lesser return the commission is given discretion to ease the hardship by effectuating a real estate tax rebate (§ 207--8.0, subd. c), or the commission is afforded the additional right of producing a buyer or lessee who could profitably utilize the premises without the sought for alteration or demolition (§ 207--8.0, subd. a, par. (2); subd. i); and then, should these remedies prove unrealistic or unobtainable the city, if it desires the preservation of the property enough, is given the power to condemn (§ 207--8.0, subd. g, par. (2)).

Plaintiff, a religious corporation, not subject to the ameliorative provisions of section 207--8.0 just noted, alleged in its complaint that it is the owner of certain land at the corner of Madison Avenue and 37th Street in New York City, improved with a residential building which had been previously converted to use for offices for plaintiff's corporate-religious purposes. The property was purchased in 1942 by plaintiff's predecessor, The United Lutheran Church in America, it having been used since its construction in 1853 until that time as a residence. In November, 1965 the commission designated plaintiff's building a 'landmark', the consequence of which is that by reason of the Landmarks Law plaintiff could not alter or destroy the structure without the commission's approval. The structure involved, not included as a part of any landmark district, is situated in midtown Manhattan surrounded by a variety of structures including modern multistory office, apartment and other commercial structures. It appears undisputed that plaintiff's office space requirements increased to such an extent that, even with the addition of a brick wing in 1958, the building became totally inadequate. In addition, prior to the enactment of the Landmarks Law plaintiff had engaged an architect who had prepared sketches of a new building to be erected upon demolition of the existing building and these sketches had been presented to plaintiff during the summer of 1965.

On the basis of these facts the complaint spells out five causes of action. ¹ The remedy sought on the basis of any or all of those causes of action is a judgment declaring the subject designation void either because the Landmarks Law is void on its face, or void as applied to plaintiff.

In response to these causes of action, the answer submitted by the city and the commission states generally a lack of knowledge or information sufficient to form a belief concerning most of plaintiff's factual allegations. Then, as a 'defense', it is alleged that the subject property is zoned residential; that an exhaustive study was made of the subject building which had been the home of J. P. Morgan, Jr.; that a public hearing was held on the question in September, 1965 notice of which was received by plaintiff which, in fact, appeared through counsel who spoke against the designation; and that the commission, after considering all the evidence, found, that the property has importance 'because it was the residence of J. P. Morgan, Jr. during the first half of the twentieth century, that the house is significant as an early example of Anglo-Italiante architecture, that it is one of the few free standing Brownstones remaining in the City, that it displays an impressive amount of fine architectural detail and that it is a handsome building of great dignity.' It was finally alleged that plaintiff's complaint, rather than starting an action, really commenced a proceeding against a public body which was untimely by reason of the four-month time limitation in CPLR 217. Despite this allegation and without benefit of a counterclaim, defendants then sought judgment declaring the constitutionality of the Landmarks Law generally and this designation in particular.

A brief procedural history is in order. Special Term ruled that the four-month time limitation applicable to article 78 proceedings barred this declaratory judgment action. The Appellate Division, First Department, reversed and denied the motion on the ground that plaintiff nowhere in its complaint sought a review of the commission's factual determination but, rather, confined its attack to the constitutional aspects of the designation; and that because of this the remedy of declaratory judgment was perfectly appropriate. The court also stated, Inter alia: 'Where an administrative act is attacked on the basis that the body acted without power and its decision is void, the remedy of a declaratory judgment is not foreclosed by the circumstances that a hearing was had, that a determination was made and that a proceeding was available to the party affected to review such determination. The exercise of a power which offends against the Constitution may be attacked at any time.' (27 A.D.2d 237, 239, 278 N.Y.S.2d 1, 3.)

On remand a hearing was held at Trial Term at which both parties simply expanded on the themes set up in the pleadings. Plaintiff's evidence was confined to the nature of its work, its space requirements, the inadequacies of the existing space, its plans to rebuild, and the impact of the designation on all of this. The only inroad made upon plaintiff's position in these respects was that it was shown that the premises were not zoned for the contemplated office building; a point we deem irrelevant to the issues before us. At the outset of defendants' case counsel for defendants commenced proof on the question whether the designation was reasonable in light of the building's history and design. Plaintiff's counsel complained that the reasonableness of the designation was not in issue since this was an action to test the commission's power to make the designation. This objection was overruled whereupon the defense produced a quantity of evidence tending to support the reason why the Morgan house was designated a landmark, i.e., because of the illustriousness of the families who lived there (before Morgan, Jr., the Phelps-Dodges) and because the house provided the only remaining example of the free standing Brownstone typical of the era. None of defendants' witnesses, however, testified that this house was an architectural masterpiece, nor was there any evidence that any significant historical event ever took place therein.

The court, in apparent disregard of the intermediate Appellate Division ruling that this was a declaratory judgment action based solely on questions of constitutional law, perpetuated the course opened up during the trial when he allowed defendants to produce evidence justifying the designation, by holding that it was uhnecessary to deal with the constitutional questions since he found the designation unjustified as a factual matter. He added that it stretched credibility to believe that this much altered structure contributed toward the character, business, government or culture of the city and ruled the designation to be without any reasonable basis.

On reappeal, the Appellate Division affirmed by a divided court, but held unanimously that the substantial evidence test applied. The dissenter also stated that the constitutional issues had been decided against the plaintiff by the court's holding in Matter of Trustees of Sailors' Snug Harbor v. Platt, 29 A.D.2d 376, 288 N.Y.S.2d 314. While the majority agreed that the substantial evidence test applied, they found that there was no substantial evidence to support the commission's determination. It was also noted by the majority that 'this action was converted by defendant Commission's own conduct of the case from a declaratory judgment action, addressed to the constitutionality of...