Court Opinion

ID: 5863358
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:25:34.349623+00
Date Added: 2024-06-11T08:44:30.324572
License: Public Domain

Silverman and Fein, JJ.,
dissent in a memorandum by Fein, J., as follows: The majority pays homage to the finality of administrative decisions, based upon the proposition that the passage of time has rendered it too late for *782petitioner to obtain a rehearing as to the 1979 decontrol of his apartment. But the very nature of fraud is such as to conceal facts which would otherwise have been brought out in a timely manner. The rent commissioner has recognized as much in independently requesting remand to give him an opportunity to explore the allegations of fraud. This would not be a remand merely to give the rent commissioner an opportunity to change his mind, which would surely be time barred (People ex rel. Finnegan v McBride, 226 NY 252, 259). Rather, its purpose would be to review an order alleged to have been procured by fraud. The rent commissioner undoubtedly has the authority to review a prior order for modification or rescission, where warranted (Administrative Code of City of New York, § Y51-9.0, subd a, par [1]). Such warrant to correct an error exists where the prior order resulted from “illegality, irregularity in vital matters, or fraud.” (People ex rel. Finnegan v McBride, supra, p 259; Matter of D & D Realty Corp. v Coster, 277 App Div 668, 671.) It is beyond question that prior to commencement of this CPLR article 78 proceeding the commissioner would have been within his rights to modify, supersede or revoke his prior order even without a hearing, upon a determination that it had resulted from illegality, irregularity in vital matters or fraud (New York City Rent and Eviction Regulations, § 103). Certainly it was not intended that the commencement of an article 78 proceeding would result in restricting the commissioner’s authority in this area, especially where both the rent commissioner and the article 78 court have agreed that such a review was warranted. The majority relies heavily on the stipulation in Civil Court, by which all matters relating to terms of occupancy and rent were settled. But section 17 of the New York City Rent and Eviction Regulations explicitly voids any agreement by which a tenant might waive the benefit of any provisions of the rent law or regulations. Such waivers would violate the public policy in furtherance of which the law was enacted and the regulations were promulgated (see Estro Chem. Co. v Falk, 303 NY 83). Even a stipulation in open court between landlord and tenant cannot remove from the agency the exclusive right to determine the status and maximum rent of a rent-controlled apartment (Norms Realty Corp. v Rodriguez, 108 Misc 2d 124). The majority also ignores the fact that the same fraud alleged to have been perpetrated against the rent commissioner in obtaining the decontrol order was apparently advanced in the landlord’s dealing with petitioner vis-a-vis the stipulation of settlement. The petition •alleges: “14. The petitioner was unaware of the owners [sic] misrepresentation and nonrepresentation of vital and material facts.” It has long been established that an agreement or settlement may be set aside where it was procured by false and fraudulent representations (Baker v Spencer, 47 NY 562; Deutsch v Roy, 239 App Div 714, affd 269 NY 508). The sanctity of a stipulation in open court presumes an absence of fraud or overreaching (Vranick v Vranick, 41 AD2d 663; Josephs v Josephs, 78 Misc 2d 723, 726-727), which would cast a different light on the agreement. Whether, upon discovery of the fraud, an application should first have been made to the Civil Court to open the settled order is not really important (see Matter of Lugo v McGoldrick, 285 App Div 465, 467). All that matters here is that on remand the rent commissioner will have authority to decide the matter de novo, even on the same set of facts (Matter of Yasser v McGoldrick, 282 App Div 1056, affd 306 NY 924; Matter of Kimmel v Herman, 34 Misc 2d 640). It is well settled that an action based on fraud becomes time barred only after unreasonable delay from the time of discovery of the fraud, and that the question of whether the fraud should reasonably have been discovered sooner is an issue of fact (see Trepuk v Frank, 44 NY2d 723; Music Research v Vanguard Recording Soc., 547 F2d 192). The *783rent commissioner seeks to explore this very issue. We should not interfere. The judgment should be affirmed.