Scott v. Christian
| Decision Date | 12 December 1977 |
| Citation | 60 A.D.2d 117,399 N.Y.S.2d 893 |
| Parties | Julian SCOTT, Appellant, v. Joseph J. CHRISTIAN, as Chairman of the New York City Housing Authority, Respondent. |
| Court | New York Supreme Court — Appellate Division |
John C. Gray, Jr., Brooklyn Legal Services Corp. B, Brooklyn (Barbara A. Ziony, Brooklyn, of counsel), for appellant.
Donald Schatz, New York City (Joyce Lazoff, New York City, of counsel), for respondent.
Before COHALAN, J. P., and DAMIANI, HAWKINS and MOLLEN, JJ.
The petitioner, a tenant in a public housing project, appeals from that portion of a judgment which dismissed his CPLR article 78 proceeding, whereby he sought review of a determination of the respondent, Chairman of the New York City Housing Authority (Housing Authority), which increased his rent and assessed a charge for arrears in rent. Petitioner has occupied an apartment in a public housing project, the Raymond B. Ingersoll Houses, maintained and operated by the Housing Authority. The increase in rent is based upon the discovery by the Housing Authority that the tenant's daught and son-in-law had been occupying the demised premises while the latter had been gainfully employed, earning some $11,000 per annum. The tenant had been on welfare during this time. The lease and the Housing Authority's rules and regulations require the tenant to submit annual income statements of the family's income. The Housing Authority first became aware of the increased occupancy and the family's income when the daughter and son-in-law applied for an apartment in a public housing project. Upon increasing the rent, petitioner was advised that the rent would be further adjusted upon his submitting evidence that the additional occupants had been residing elsewhere.
Special Term, in our opinion, correctly held petitioner's reliance upon Escalera v. New York City Housing Auth., 2 Cir., 425 F.2d 853 to be misplaced. Escalera merely mandates, in instances not requiring a "full-fledged adversary hearing", that a tenant be given an opportunity to rebut the evidence. A hearing so limited as to accord an opportunity to rebut, however, need not be provided where the increased rent demanded results from a tenant concealing his financial resources, or from increased occupancy. There is a marked distinction between a rent increase imposed so as to recoup damages to the freehold resulting from a tenant's abuse of the apartment in violation of the terms of his lease and the Housing Authority's rules and regulations, as against an increase based upon a fraud practiced upon that landlord by the tenant concealing available income. The rents fixed by the Housing Authority are, of course, geared to the tenant's financial resources. The obligation to so adjust rents is imposed upon the Housing Authority by statute.
Any doubts as to the holding in Escalera are resolved by reference to a subsequent decision of the United States Court of Appeals for the Second Circuit, Burr v. New Rochelle Municipal Housing Auth., 479 F.2d 1165. There the tenants objected to an "across-the-board service charge or rent increase". In modifying the order of the District Court, which had directed a formal adversary hearing, the Court of Appeals held that it sufficed if the tenants were merely given an opportunity for oral presentation of their objections. Interestingly, that court expounded at some length upon the possible consequences of expanding a simple rent dispute into a cause celebre with the full panoply of administrative adversary hearings and ineluctable subsequent judicial review. Granted that in Burr all the tenants of the project were necessarily involved; nevertheless, that court noted (p. 1168) that
To reverse the judgment would open the floodgates to article 78 proceedings and subsequent appeals, predictably in hundreds of instances in which the Housing Authority has ordered individual increases because of a tenant's failure to inform the Housing Authority of a significant change in economic circumstances. All that is necessary, under Burr, is that the notice of the proposed rent increase be served (479 F.2d at p. 1170). Surely a ruling juridically sufficient for scores of tenants should suffice for an individual tenant.
The tenant herein has indeed been accorded an opportunity to rebut the charges made by the Housing Authority irrespective of whether a formal or informal hearing was had. On behalf of the tenant, there were proffered rent receipts purportedly establishing that the tenant's daughter and son-in-law had been residing elsewhere. It developed, however, that the receipts covered other periods and for a limited period of only several weeks. The rent adjustment sought is for a two-year period during which the tenant's daughter and son-in-law were occupying the apartment and the son-in-law enjoyed an income, as aforesaid, of some $11,000 per annum.
This court previously had occasion to consider the consequences of a tenant's failure to report true income. In Matter of Newton v. Municipal Housing Auth., 47 A.D.2d 522, 363 N.Y.S.2d 28, we dismissed a petition "based on findings that petitioner, inter alia, did not report certain income received during her tenancy in the premises."
The consequences inherent in affirming transcend the immediate issue. A note entitled "Procedural Due Process in Government-Subsidized Housing" (86 Harv.L.Rev. 880, 891), although concerned primarily with housing financed by the Federal Housing Administration, discusses whether the tenant rights in these matters are constitutionally protected. It observes that there are three factors involved:
The article notes further consequences (p. 892):
There is yet another intriguing facet to this litigation. The judgment dismissing the article 78 proceeding was entered on December 30, 1976. However, there is an antecedent summary proceeding pending which has been stayed pending the determination of this appeal. Thus, a summary proceeding for nonpayment of rent, by dint of petitioner's attorney's efforts, has been shorn of its summary character. The very issue now posed, i. e., the lawful amount of rent claimed to be due, could have been raised in the Civil Court, for it is a sine qua non in summary proceedings, if the defense is pleaded, that the landlord is put to its proof that the rent asserted is the lawful rent.
We note several of the observations set forth in the dissent. Initially, we have not suggested to petitioner an "alternative remedy" of a defense in a summary proceeding. Indeed, that proceeding preceded the instant article 78 proceeding and is still pending. It has been stayed abiding the resolution of this proceeding. Thus, there is available to the tenant an opportunity before a court of law not an administrative hearing officer to challenge the lawfulness of the rent alleged to be due.
Implicit in the dissent is the contention that the majority is denying petitioner an opportunity to rebut; and hence, that we are foreclosing the right to due process. Petitioner's daughter and son-in-law submitted receipts purportedly establishing their residence elsewhere, but the receipts covered other periods. Indeed, when petitioner's counsel displayed a lease as evidence that they had established a new residence, respondent reduced the rent. The tenant has had ample opportunity to marshal and present his evidence. The informality of the occasion is not tantamount to denying opportunity or leave.
In our view, there is no justification for finding that "sharp specific issues of fact exist". On the contrary, the very record reflects only adroit maneuvers bereft of legal substance to enmesh the Housing Authority in inextricable procedural snags. The statistics we quoted were derived from Burr (supra ). Surely, to note in this novel case that the Housing Authority operates some 188 housing projects, containing 155,160 apartments, occupied by approximately 600,000 persons, is to illustrate the magnitude of the basic issue and the realities. As Mr. Justice OLIVER WENDELL HOLMES observed in Moyer v. Peabody, 212 U.S. 78, 84, 29 S.Ct. 235, 236, 53 L.Ed. 410:
Lastly, the dissent postulates the existence of a common thread in Escalera, 425 F.2d 853, supra and Burr, 479 F.2d 1165, supra. We find none. Escalera involved the eviction of a tenant for damages to the freehold. At bar, the tenant was under an affirmative obligation to report his income and increased occupancy...
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