Court Opinion

ID: 5758308
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:10:11.089304+00
Date Added: 2024-06-11T08:41:28.581230
License: Public Domain

Acosta, J. (dissenting).
Supreme Court correctly remitted the proceeding to the Division of Housing and Community Renewal (DHCR) for further fact-finding and determination. I therefore respectfully dissent and would affirm. The majority’s insistence that “there is every indication” that DHCR is now seeking to reach a different result has no support in the record, other than a self-serving letter from a landlord. Under the guise of finality, the majority refuses to acknowledge DHCR’s legislatively granted prerogative and duty to develop rent regulations.
The undisputed facts are straightforward. Petitioner commenced this CPLR article 78 proceeding against DHCR, and Supreme Court remanded the matter to DHCR to clarify the standards it uses to determine what constitutes a “demolition,” and whether the owner has the financial ability to complete the project. Chelsea Partners thereafter sought to appeal the order, and DHCR challenged its right to do so. DHCR alternatively moved to affirm the order to the extent it permits DHCR to reconsider and review the issues raised therein. The majority is correct that Chelsea Partners does not have an appeal as of right (see CPLR 5701 [a] [1]; [b] [1]). However, under the circumstances of this case the majority is incorrect to sua sponte grant Chelsea Partners leave to appeal, reverse the order, and dismiss the proceeding without giving DHCR an opportunity to complete its fact-finding and issue a final determination.
On appeal, DHCR concedes that there is no definition of demolition in the Rent Stabilization Law or the Rent Stabilization Code, and that it has heretofore made its determinations on a case-by-case basis. DHCR also concedes that it erroneously did not address the weakness of the evidence presented on the issue of Chelsea Partners’ financial ability to complete the proposed demolition. The remand thus gave DHCR the opportunity it now requests to once and for all create the very standards that courts will scrutinize to determine if its handling of demolition applications has a rational basis.
The remand is also consistent with Rent Stabilization Code (9 NYCRR) § 2527.8, which empowers DHCR to issue a superseding order modifying or revoking any order issued by it where it *36finds “that such order was the result of. . . irregularity in vital matters.” Here, there is an irregularity inasmuch as DHCR lacks a standard for determining demolition applications. DHCR should therefore be encouraged, not chastised, for finally showing an interest in establishing a transparent working standard to guide its endeavors.
This point is underscored by the fact that the Legislature has recognized that certain matters require the expertise of DHCR in the first instance, and thus “has specifically authorized that agency to administer questions relating to rent regulation.” (Davis v Waterside Hous. Co., 274 AD2d 318, 319 [2000], Iv denied 95 NY2d 770 [2000].) “It is clear beyond question that the Legislature intended disputes over a landlord’s right to demolish a regulated building to be adjudicated by the DHCR” (Sohn v Calderon, 78 NY2d 755, 765-766 [1991]) and equally clear that DHCR has the inherent power in the first instance to determine whether an owner has the right under the Rent Stabilization Code to evict rent-regulated tenants and to demolish its building (see generally Matter of Pantelidis v New York City Bd. of Stds. & Appeals, 43 AD3d 314, 317 [2007], affd 10 NY3d 846 [2008] [“Beyond question, judicial deference to administrative authority and expertise is an important principle”]).
Indeed, this very same panel stated in Matter of Porter v New York State Div. of Hous. & Community Renewal (51 AD3d 417, 418 [2008]):
“Rent Stabilization Code (9 NYCRR) § 2527.8 provides that ‘DHCR, on application of either party, or on its own initiative, and upon notice to all parties affected, may issue a superseding order modifying or revoking any order issued by it under this or any previous Code where the DHCR finds that such order was the result of illegality, irregularity in vital matters or fraud.’ The Court of Appeals has confirmed DHCR’s broad powers and authority to alter its prior determinations on remission, and this Court has held that remission for further fact-finding and determination is appropriate where, as here, DHCR concedes an error in the issuance of its determination, and where the determination resulted from an ‘irregularity in vital matters’ ” (citations omitted).
The majority, in citing to Porter, concedes that DHCR has the authority to modify or revoke any order based on irregularity or *37a conceded error. It would therefore be anomalous in this instance to preclude DHCR from doing so. Indeed, as this and the Porter case demonstrate, the lack of a uniform and transparent standard will lead to unnecessary litigation, which will be a drain not only on DHCR and the litigants involved, but on the judiciary as well.
Once DHCR acknowledges that it has failed to provide guidance on an issue arising from the statutes that the Legislature has vested it with authority to administer, and concedes an error in reaching a determination, we should not second-guess its position. This is especially true since we may ultimately pass judgment on the revised decision and its application of a newly developed standard. A landlord’s self-serving allegations should not trump a legislative policy choice to give DHCR the power to recall a nonfinal determination.
I also disagree with the majority that DHCR decided the matter upon a proper factual showing and application of its own regulations and precedent. The majority ignores DHCR’s acknowledgment that the record on Chelsea Partners’ financial ability is “obviously” incomplete. Little weight should be placed on precedent based on a standard devoid of the very elements that would permit us to properly review the administrative determination. DHCR’s decision to grant the application did not point to any specific facts or legal or administrative precedent that guided its decision. Rather, DHCR stated in a conclusory manner that the owner’s plans constituted a demolition and that the owner had the financial ability to complete the project. Without more, there is no guidance as to how DHCR reaches its determinations and whether those determinations are arbitrary and capricious (see generally Matter of Sherwood 34 Assoc. v New York State Div. of Hous. & Community Renewal, 309 AD2d 529, 532 [2003]). It is incongruous to maintain that DHCR decided the matter on a full record when its decision fails to indicate the facts that were considered and to which a transparent, uniform standard was applied.
Judicial deference is of utmost importance where, as here, the agency’s function is aimed at addressing serious social concerns. The Rent Stabilization Law and regulations promulgated thereunder seek to provide safe and affordable housing to residents of New York City in an already crowded market. It is vital that DHCR pursue this through an objective and clear process to ensure that those who are entitled to rent-stabilized housing are not literally left out in the cold. Accordingly, I respectfully dissent'.
*38Gonzalez and Buckley, JJ., concur with Saxe, J.; Mazzarelli, J.P., and Acosta, J., dissent in a separate opinion by Acosta, J.
Order and judgment (one paper), Supreme Court, New York County, entered July 12, 2007, reversed, on the law, without costs, the petition denied, DHCR’s determination permitting respondent Chelsea Partners not to renew petitioner’s rent-stabilized lease confirmed, and the proceeding dismissed.