Court Opinion

ID: 5739190
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:38:53.894785+00
Date Added: 2024-06-11T08:41:02.173541
License: Public Domain

Marlow and Kavanagh, JJ.,
dissent in a memorandum by Kavanagh, J., as follows: Because the Division of Housing and Community Renewal (DHCR) has not offered any reasonable explanation to account for why it took almost 17 years to finally decide a tenant’s rent overcharge complaint, and because the impact from that delay has undeniably produced a result that is *432so manifestly unfair to the building’s owner, I must respectfully dissent.1
The relevant facts have been fairly stated by the majority and are not the subject of any meaningful dispute. They lead to one inescapable conclusion: had DHCR promptly processed this matter and rendered a decision within a reasonable period of time after the complaint of overcharge was first filed, it would have undoubtedly confirmed its earlier finding that the rent charged the tenant under this lease was lawful. Because of the unconscionable amount of time it took the agency to process this complaint, the agency felt compelled to apply a statute to this proceeding which was enacted a full decade after the proceeding was commenced, and as a result it reversed its earlier determination and ruled that the rent charged the tenant did not comply with the Rent Stabilization Law. All that had changed between DHCR’s initial finding in favor of the owner and its decision four years later in favor of the tenant, was the enactment of the Rent Regulation Reform Act (RRRA) of 1997 and the application of that statute’s four-year look-back limitation to this proceeding. All of the evidence upon which this decision was based remained the same.
There can be no doubt but that DHCR’s neglect of its administrative responsibilities is the reason why it took so long to decide this matter.2 Its conduct throughout these proceedings from the moment it first received the complaint until it rendered its final decision has been characterized by prolonged and unexplained delays for which it bears full responsibility. In fact, during the 17-year period that this matter has been pending, both the owner and the tenant have been forced on separate oc*433casions to initiate CPLR article 78 proceedings against the agency in an effort to compel it to do what it is otherwise legally obligated to do. In addition, for no apparent reason, the agency served this complaint on the owner no less than three separate times (May 1987, September 1990 and April 1994) and on each occasion, required the owner to file an answer even though the claim contained in the complaint was the same and answers to it were already on file with the agency. Nearly two years after the tenant appealed the Rental Administrator’s initial determination in favor of the owner, DHCR acknowledged by a letter dated August 7, 1991 that it still had not assigned the matter within the agency for appropriate review or determination.3 Finally, more than two years after DHCR asked the court below to return the matter to it for further proceedings on “all pending issues,” the Commissioner on February 25, 2004 issued a final decision in favor of the tenant. Seventeen years to process such a matter is an unconscionable amount of time to do what by law the agency is legally obligated to do, and where that delay has resulted in such a profound prejudice to one of the parties, it should not be sanctioned by this Court in the form of an award to the tenant.
I am well aware that an administrative determination must be upheld if in fact it has a rational basis for the determination (Matter of Arrocha v Board of Educ. of City of N.Y., 93 NY2d 361, 363 [1999]; Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, 230-231 [1974]), and that a “court may not substitute its judgment for that of the [administrative agency] unless the decision ... is arbitrary and unreasonable and constitutes an abuse of discretion” {id. at 232 [internal quotation marks and citation omitted]). Moreover, an agency’s reasonable interpretation of the statutes and regulations it administers is entitled to substantial deference (Matter of Salvati v Eimicke, 72 NY2d 784, 791 [1988]).
It is also recognized that “ ‘[administrative delay will not defeat the agency, absent a showing that the delay was willful or a result of negligence’ ” (Matter of Evans v New York State Div. of Hous. & Community Renewal, 284 AD2d 193 [2001], quoting Matter of Estate of Goldman v New York State Div. of *434Hous. & Community Renewal, 270 AD2d 169, 169 [2000]). If there is a change in the applicable law while a matter is pending before an agency, that law will be applied unless the delay encountered in processing the matter was unreasonable and the result of administrative neglect (id. at 169). However, where the agency is responsible for the delay and it appears that there is no justification for it, preexisting law may be applied (Matter of Amsterdam-Manhattan Assoc. v Joy, 42 NY2d 941, 942 [1977]). This is especially so where a party which has in all respects acted appropriately throughout the proceeding would be severely prejudiced by the change in the law. Here, no one has seriously argued that DHCR did not take too long to decide this matter or that petitioner has not been profoundly prejudiced by the application of the change in the law. It is also beyond question that if this ruling is allowed to stand, it will result in a substantial windfall for the tenant,4 An experienced real estate professional, she agreed to the rent set by the lease presumably because she believed it was a fair figure to pay for this apartment.5 Now she seeks an order which would set the rent for this apartment at a figure less than half of what she agreed to pay in the lease, and significantly less than what was paid in 1981 by the last stabilized tenant to occupy the apartment.6
All of this is to be imposed at the expense of an owner that purchased this building five years after the rent overcharge complaint was filed—and who did not profit nor was in any way involved in the activities of the prior tenant who last occupied the apartment. Petitioner’s good faith belief that the rent it charged the tenant was lawful has never been seriously challenged in this proceeding—in fact, DHCR by not requiring the petitioner to pay treble damages has concluded that any violation of the Rent Stabilization Law by petitioner was neither wilful nor deliberate.7
This finding, simply stated, ought to be reversed. Had the *435agency promptly addressed this matter and processed the rent overcharge complaint within a reasonable period of time, it would have applied the law that existed prior to the enactment of the RRRA of 1997—and confirmed its initial finding that the rent charged this tenant was lawful. Its ultimate determination that a rent overcharge existed is based entirely upon its decision to apply a statute to this proceeding that was enacted long after the proceeding was commenced. And the only reason this provision is at all relevant to this proceeding is because it took DHCR so long to process this matter and decide this complaint. Therefore, Supreme Court should have granted the petition, vacated DHCR’s determination and remanded the matter back to the agency with a direction that the complaint of overcharge be determined in accordance with the law that existed prior to the enactment of the RRRA of 1997.

. The overcharge complaint was filed by the tenant on May 8, 1987. DHCR issued a decision in favor of the owner eight years later on October 5, 1995. The tenant promptly filed a petition for administrative review (PAR) which was not decided by the agency until four years later on April 1, 1999. Appeals were taken from that determination and DHCR’s request that the matter be referred back to it for further proceedings on “all pending issues” was granted. On February 25, 2004, or almost 17 years after the complaint was first filed, the Deputy Commissioner finally issued the decision that is the subject of this appeal.

. At oral argument for the first time, counsel for DHCR, in a response to a question of the court, stated that there had been some 30,000 cases pending before the agency during this period suggesting that this was the reason for the prolonged delay in processing this matter. At no time in any of the submissions to this Court or in the motion court has the agency ever made that argument or in any way attempted to justify its delay on the grounds that its pending caseload prevented it from more promptly processing the matter. The failure to make that argument precludes the agency from making it now (Matter of Eastern Pork Prods. Co. v New York State Div. of Hous. & Community Renewal, 187 AD2d 320 [1992]).

. While the owner asked for numerous adjournments after the tenant filed for PAR, those adjournments were necessary to reconstruct the rental history of the premises during the time that the petitioner was not in possession. In addition, all of these adjournments predated DHCR’s actual assignment of this matter within the agency for internal review and appeared to have played no part in any of the delays incurred in properly processing this matter.

. In addition to this award, it must be. noted that tenant, as a result of a dispute with petitioner, stopped paying rent in March 1993, and as of July 31, 1996 owed $41,600.00 in back rent.

. The tenant, when she signed the lease, was a property manager employed by the firm that managed this building for the former owner. She also has lectured at NYU on “Techniques And Operation of Property Management.”

. On April 1, 1979, the stabilized rent for this premises was $520.87. Two years later it was increased to $583.30.

. In Matter of Perlbinder v New York City Conciliation & Appeals Bd. (67 NY2d 697 [1986]), DHCR deemed the subtenant the prime tenant based on an illusory tenancy and calculated the proper stabilized rent by applying Rent Guidelines Board guideline orders to increase the rent paid by the previous *435stabilized tenant. It was this method that was utilized to calculate the tenant’s rent in this proceeding.