Court Opinion

ID: 5751496
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:58:00.169825+00
Date Added: 2024-06-11T08:41:17.849708
License: Public Domain

McNally, J. (dissenting).
In an article 78 proceeding this appeal is from the dismissal of the petition to review the determination of the City Bent Administrator denying an increase of the maximum rent sought under section 33.5 of the City Bent, Eviction and Behabilitation Begulations to effect a 6% net annual return. On August 27,1959 petitioner made its first application for similar relief to the State Bent 'Commission. In that proceeding the 1959 purchase price was credited and the increase granted thereon.
The instant application for the increase was made August 4, 1961 before the then State Bent Commission. A memorandum of the State Bent Administrator dated November 30, 1961 carries the notation of the approval of the 1959 purchase price of the subject property as the basis. Said memorandum on its face establishes said basis was consequent on the one adopted in the prior proceeding.
On May 1,1962 administration of residential rent control was transferred to the City Bent and Behabilitation Administration. In the light of the city residential rent control law (Administrative Code of City of New York, §' Y51-5.0, subd. g) effective May 1, 1962, the District Bent Director by memorandum dated November 14, 1962 and approved December 12, 1962 established the basis at $410,000, the assessed valuation on the date of filing of the instant application. Said basis is grounded on the finding that the initial tentative basis was consequent on the valuation determined in the prior proceeding and cannot be accepted under the intervening city statute and regulation. The Director found the cash payment <jn the purchase price *213relied on by petitioner to be leas than 20% thereof and the total mortgages to be in excess of the assessed valuation, which factors the Director found served to disqualify the purchase price as the basis for the rent increase sought.
Petitioner’s protest filed January 18, 1963 alleged the Director was precluded from refusing to accept as the basis that which had been determined by the State Administrator in the prior proceeding. The protest was denied .by determination dated August 22, 1963 stating the record had been reviewed de novo and thereon the Administrator affirmed the District Rent Director’s order.
The city rent statute expressly confers discretionary power in the Administrator in respect of the basis for an increase of maximum rent. It provides, in part: ‘ ‘ Such agency may make a determination that the value of the property is an amount different from the assessed valuation” (Administrative Code, § Y51-5.0, subd. g, par. [1], subpar. [a], cl. [1], subcl. [ii]; emphasis supplied). The discretion is not an arbitrary one; its area is defined by statutory criteria. The instant determination is within the permissible statutory area of discretion. (Matter of East 53rd Inc. v. Gabel, 21 A D 2d 647; Matter of Van Cortland Assn. v. Gabel, 21 A D 2d 192; see, also, I. L. F. Y. Co. v. Temporary State Housing Rent Comm., 10 N Y 2d 263, 268.)
Appellant argues respondent is required to explain the departure from the basis determination of the State Administrator in the prior proceeding. This is in the nature of a plea of res judicata. The determination in the prior proceeding would be res judicata were it not for the intervening city statute. (Matter of Evans v. Monaghan, 306 N. Y. 312, 323, and cases cited therein; 1 N. Y. Jur., Administrative Law, §§ 149, 150.)
The record demonstrates that the prior determination was considered and found not to preclude the exercise of the statutory discretion subsequently granted. The intervening statute enables the exercise of discretion not present at the time of the prior determination and the exercise of the statutory discretion is unaffected by the principle of res judicata. (State Farm Ins. Co. v. Duel, 324 U. S. 154, 162; Blair v. Commissioner, 300 U. S. 5, 9; McGillis v. McGillis, 154 N. Y. 532, 543; 2 Freeman, Judgments [5th ed., 1925], § 713, p. 1505.) Moreover, appellant has no vested interest against the change of the statute which afforded the advantage it now seeks to perpetuate. (I. L. F. Y. Co. v. Temporary State Housing Rent Comm., supra, p. 270.)
*214The Local Emergency Housing Rent Control Act (L. 1962, eh. 21) does not aid the petitioner. On the contrary, it affirms the statutory purpose to enable local rent control uncomplicated by prior determinations of the State Administrator. Chapter 21 became effective February 17, 1962. It provides for local rent regulations within a city of a population of one million or more as' of May 1, 1962. Subdivision 6 of section 1 of the statute enables the enactment of local laws as provided in subdivision 5 of Section 1 which expressly states the local laws ‘ * need not be consistent with the provisions of the state emergency housing rent control law or with the rules and regulations of the temporary state housing rent commission thereunder
Until the adoption of a local law, subdivision 6 authorizes the city housing rent agency to adopt rules and regulations which ‘ ‘ need not be consistent with the rules, regulations and orders of the temporary state housing rent commission ”. It is only if no local law has been enacted, and no rules and regulations of the city housing rent agency have been promulgated that the orders and determinations of the Temporary State Housing Rent Commission continue in force.
The pertinent local law here involved became effective May 1,1962 and provides for discretionary power in the City Rent Administrator not vested in the State Administrator at the time the 1959 proceeding was determined. The Local Emergency Housing Rent Control Act makes clear the legislative purpose to enable local rent regulation freed from the necessity of consistency with prior determinations and regulations of the State Rent Administrator.
It is to be noted also that the respondent does not seek a modification or the abrogation of the prior determination of the State Administrator. Contrariwise, the City Rent Administrator is content to continue in force the rents fixed by the State Administrator. What is involved is the "attempt to compel the City Rent Administrator to increase rents on a basis not determined by her and which under the local law, within her discretionary power, she has determined is not a proper basis.
The determination should be confirmed.
Breitel, J. P., Stevens and Steuer, JJ., concur with Rabin, J.; McNally, J., dissents in opinion.
Judgment reversed, on the law, with $50 costs to the appellant, and the matter remanded to the respondent Administrator for further proceedings not inconsistent with the opinion of this court filed herein.