Court Opinion

ID: 5786958
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:01:40.669331+00
Date Added: 2024-06-11T08:42:08.051327
License: Public Domain

Buckley, J.
(dissenting). I would find that the Division of Housing and Community Renewal (DHCR) acted rationally in complying with the legislative intent expressed in the statute of limitations set forth in CPLR 213-a and Rent Stabilization Law (Administrative Code of City of NY) § 26-516 (a).
CPLR 213-a provides:
“An action on a residential rent overcharge shall be commenced within four years of the first overcharge alleged and no determination of an overcharge and no award or calculation of an award of the amount of any overcharge may be based upon an overcharge having occurred more than four years before the action is commenced. This section shall preclude examination of the rental history of the housing accommodation prior to the four-year period immediately preceding the commencement of the action.”
The CPLR thus expressly states that the four-year statute of limitations applies to both an initial determination of whether there was an overcharge and any calculation of the amount of an overcharge. The statute goes even further in specifically declaring that the rental history predating the four-year period shall not be examined.
Similarly, Rent Stabilization Law § 26-516 (a) states:
“Except as to complaints [not pertinent herein], the legal regulated rent for purposes of determining an overcharge, shall be the rent indicated in the an*35nual registration statement filed four years prior to the most recent registration statement, . . . plus in each case any subsequent lawful increases and adjustments. Where the amount of rent set forth in the annual rent registration statement filed four years prior to the most recent registration statement is not challenged within four years of its filing, neither such rent nor service of any registration shall be subject to challenge at any time thereafter. . . .
“(2) Except as provided under clauses [not applicable herein], a complaint under this subdivision shall be filed with [DHCR] within four years of the first overcharge alleged and no determination of an overcharge and no award or calculation of an award of the amount of an overcharge may be based upon an overcharge having occurred more than four years before the complaint is filed. . . . This paragraph shall preclude examination of the rental history of the housing accommodation prior to the four-year period preceding the filing of a complaint pursuant to this subdivision.”
The only basis for finding an overcharge with respect to the subject apartment, as alleged in petitioner’s July 2005 complaint, is an examination of the rental history in 1999, which is beyond the four-year period permitted by the statutes. The statutes specifically prohibit an examination of the rental history more than four years before the complaint for the purpose of finding an overcharge: “no determination of an overcharge . . . may be based upon an overcharge having occurred more than four years before the action is commenced” (CPLR 213-a); “no determination of an overcharge . . . may be based upon an overcharge having occurred more than four years before the complaint is filed” (Rent Stabilization Law § 26-516 [a] [2]). To eliminate any confusion, the Legislature added: “This section shall preclude examination of the rental history of the housing accommodation prior to the four-year period immediately preceding the commencement of the action” (CPLR 213-a; see Rent Stabilization Law § 26-516 [a] [2] [using nearly identical language]). As this Court has previously recognized, that “legislative scheme specifically precluded] examination of the rental history of the housing accommodation prior to the four-year period preceding the filing of the complaint even where the *36prior rental history clearly indicates that an unauthorized rent increase had been imposed” (Matter of Hatanaka v Lynch, 304 AD2d 325, 326 [2003] [citations and internal quotation marks omitted]).
The majority disregards those express legislative statements by using the 1999 rental history to establish that there was an overcharge. The majority’s use of a default formula (the lowest rent charged for a rent-stabilized apartment with the same number of rooms in the same building on the base date) rather than the rental history to calculate the amount of the alleged overcharge does not cure the statutory elision, but merely complies with the second part of the statutes, that “no award or calculation of an award of the amount of any overcharge may be based upon an overcharge having occurred more than four years” before the action is commenced (CPLR 213-a; Rent Stabilization Law § 26-516 [a] [2]).
As justification for ignoring the explicit legislative language, the majority asserts that the statute of limitations was intended to alleviate the burden on honest landlords, not fraudulent ones, in maintaining rent records. However, the same general goal is true of all statutes of limitations: to grant defendants repose from claims that have lain dormant past a certain specified time, at which point evidence may have been lost, memories faded, and witnesses disappeared (see Blanco v American Tel. & Tel. Co., 90 NY2d 757, 773 [1997]). By their very nature, statutes of limitations are bright-line rules that will result in the preclusion of some meritorious claims. The fact that some fraudulent landlords might escape liability is not a valid ground for ignoring the statute of limitations; indeed, even causes of action for fraud are subject to time limitations periods (see CPLR 213 [8]).
Thornton v Baron (5 NY3d 175 [2005]) is not to the contrary. In Thornton, the Court of Appeals reiterated that an apartment’s rental history beyond four years prior to the filing of an overcharge complaint “may not be examined” and that any rent before that four-year period is “of no relevance” (id. at 180). Thus, the Court of Appeals expressly rejected the proposition embraced by the majority, that whenever there are indicia of fraud, DHCR must investigate, no matter how old those indicia are. The Court in Thornton used the default formula to ascertain the correct rent because there were no valid registration statements for the base date. There was no question that the landlord in Thornton had improperly attempted to remove *37multiple apartments from rent stabilization by colluding with the tenants to falsely represent in the leases that the apartments were nonprimary residences, and therefore exempt from rent stabilization, and to obtain consent judgments to that effect. The nonstabilized leases were therefore void ab initio, and the rent registration statements upon which they were based were also a nullity, thus leaving the Court no recourse but to utilize the DHCR default formula. Unlike Thornton, the instant case does not involve an apartment that was improperly taken out of rent stabilization. Thornton is further distinguishable in that the Court of Appeals did not consider the rental history prior to the base date for any purpose, whereas the majority can only establish a rent overcharge by examining the rental history predating the four-year period. Moreover, DHCR’s decision here, to only consider the rental history within the allowable time frame, is consistent with its approach in Thornton-, in contrast to the Court of Appeals, which deferred to the determination of DHCR, the agency with expertise in rent stabilization, the majority would reject DHCR’s decision as arbitrary and irrational.
For the reasons discussed, supra, I would find that DHCR was not arbitrary or capricious in obeying the legislative mandates set forth in CPLR 213-a and Rent Stabilization Law § 26-516 (a).
Andrias, J.P, and Catterson, J., concur with Acosta, J.; Friedman and Buckley, JJ., dissent in a separate opinion by Buckley, J.
Order and judgment (one paper) of the Supreme Court, New York County, entered January 11, 2008, affirmed, without costs.