Court Opinion

ID: 9916536
Source: CourtListenerOpinion
Date Created: 2024-01-10 01:09:28.116633+00
Date Added: 2024-06-11T13:25:37.403188
License: Public Domain

Matter of Windermere Props. LLC v City of New
                          York
               2023 NY Slip Op 34545(U)
                   December 21, 2023
           Supreme Court, New York County
        Docket Number: Index No. 161016/2022
                Judge: Nancy M. Bannon
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
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                       publication.
                                                                                                                     INDEX NO. 161016/2022
  NYSCEF DOC. NO. 27                                                                                           RECEIVED NYSCEF: 12/28/2023

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. NANCY M. BANNON                                            PART                              42
                                                                                      Justice
            ---------------------------------------------------------------------------------X   INDEX NO.          161016/2022
             In the Matter of the Application of
                                                                                                 MOTION DATE         05/10/2023
             WINDERMERE PROPERTIES LLC,
                                                                                                 MOTION SEQ. NO.         001
                                                         Petitioner,

             For a Judgment Pursuant to CPLR article 78

                                                -v–

                                                                                                   DECISION + ORDER ON
             CITY OF NEW YORK, NEW YORK CITY OFFICE OF
             ADMINISTRATIVE TRIALS AND HEARINGS, THE CITY OF                                             MOTION
             NEW YORK ENVIRONMENTAL CONTROL BOARD,
             DEPARTMENT OF SANITATION OF NEW YORK, NYC
             DEPARTMENT OF BUILDINGS

                                                         Respondents.
            ---------------------------------------------------------------------------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 9, 10, 11, 12, 13,
            14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26
            were read on this motion to/for                                            ARTICLE 78 (BODY OR OFFICER)                .

                                                              I.         INTRODUCTION

                      In this proceeding pursuant to CPLR article 78, petitioner Windermere Properties LLC
            appeals the determinations of respondent New York City Office of Administrative Trials and
            Hearings (OATH) denying his motions to vacate default judgments. The petition seeks an order
            annulling and vacating the determinations and directing OATH to grant new hearings or, in the
            alternative, reduce the petitioner’s default penalties. The respondents answer the petition and
            submit the administrative record. The petition is denied.

                                                               II.        BACKGROUND

                      The following facts are undisputed except where indicated. Between 2010 and 2016,
            the petitioner received numerous summonses from various city agencies – the Department of
            Buildings, the Department of Health and Mental Hygiene and the Department of Sanitation - for
            violations relating to dangerous and hazardous conditions on its properties at 400-406 West 57th

             161016/2022 WINDERMERE PROPERTIES LLC vs. CITY OF NEW YORK ET AL                                        Page 1 of 5
             Motion No. 001

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                                                                                                       INDEX NO. 161016/2022
  NYSCEF DOC. NO. 27                                                                           RECEIVED NYSCEF: 12/28/2023

            Street in Manhattan. Some of those summonses at issue in the present proceeding. The
            petitioner failed to appear at scheduled hearings on most of the summonses. After the petitioner
            failed to appear, OATH issued default judgments and imposed default penalties on the
            summonses. In late 2018, the New York City Marshal levied the petitioner’s bank account for
            the default penalties, which were paid in full. No administrative appeal was filed.

                    In December 2020, more than a year after the default judgments and while some
            summonses remained undecided, the petitioner began filing in excess of 40 motions with OATH
            to vacate the default judgments, arguing as an excuse that it had experienced “exceptional
            circumstances” including law office failure and medical issues of counsel who failed to appear at
            the hearings. After the petitioner filed the first tranche of motions and after receiving a decision
            on one of the motions, a denial, he filed several more motions. However, the petitioner
            conceded in some of these motion forms that although he filed prior motions upon learning of
            the many defaults in 2018, he “did not file additional motions as it appeared that such motions
            would be similarly denied given that the basis for the motions is the same.” He vaguely claimed,
            without support, that he subsequently learned that “motions filed by unrelated entities based on
            very similar facts have been granted,” which prompted him to then file the additional motions.

                    After OATH granted five of the motions and denied the rest, the petitioner commenced a
            CPLR article 78 proceedings in this court on March 3, 2022, challenging the denials. See
            Windermere Prop. LLC v City of New York, 2023 NY Slip Op 30337[U], Index No. 151908/2022
            (Sup Ct, NY County [Bluth, J.], February 2, 2023). That petition referenced all of the motions,
            including the then pending Subject Motions, on which OATH had not yet issued determinations,
            as well as summonses that had not yet been adjudicated. The petitioner sought from the court
            an order annulling or vacating the denials based on two grounds - (1) OATH was barred from
            denying its motions because it had previously granted similar default motions in regard to its
            own defaults and those by other building owners [and granted a new hearing date], and that (2)
            the default penalties were excessive fines in violation of the Excessive Fines Clause of the
            Eighth Amendment of the U.S. Constitution.1

                    1
                      The petitioner alleges that the original summons totaled $18,900.00 (if paid promptly) and with
            default penalties totaled $110,073.92, and that $200,00.00 was levied by the City Marshal. The petitioner
            does not provide any proof of the levy.

             161016/2022 WINDERMERE PROPERTIES LLC vs. CITY OF NEW YORK ET AL                          Page 2 of 5
             Motion No. 001

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  NYSCEF DOC. NO. 27                                                                       RECEIVED NYSCEF: 12/28/2023

                    For purposes of clarity, and the large number of motions that the petitioner bundled, the
            respondents in that proceeding classified the numerus underlying summonses into groups. The
            summonses underlying the Subject Motions were designated “Group E.” On August 24, 2022,
            while that prior petition was still pending, OATH denied the Subject Motions as it did the prior
            motions. OATH provided as its sole reason for denial that “[t]he summons was paid in full.
            Payment in full is considered an admission and waiver of a hearing.” The petitioner claims that
            it received notice of these denials on September 14, 2022. On December 23, 2022, the
            petitioner commenced the instant Article 78 proceeding regarding the Subject Motions.

                   On January 23, 2023, the petitioner, in its memorandum of law in further support of its
            first petition, noted that it had commenced a second Article 78 proceeding and claimed to
            “withdraw[] that portion of this [first] proceeding regarding the Group E summonses.” In the
            reply affirmation here, the petitioner maintains that it “withdrew those claims regarding the
            [Group E summonses] and the underlying [Subject Motions].” The petitioner filed no notice of
            discontinuance, motion, or stipulation of discontinuance in the first proceeding.

                   By an order dated February 3, 2023, the court (Bluth, J.) denied the petitioner’s petition
            in its entirety. The court ruled (1) that OATH acted rationally in denying the petitioner’s motions
            for vacatur of default judgments on the basis that the petitioner had failed to provide adequate
            details to demonstrate exceptional circumstances warranting vacatur, and (2) that the default
            penalties did not violate the Eighth Amendment.

                   Now, in the instant proceeding, the petitioner asserts the same two grounds and
            arguments in regard to the Subject Motions as were made and rejected in the first proceeding. It
            also now argues that, because the New York City Marshal collected the penalties against the
            petitioner by levying the petitioner’s bank account, such that the petitioner did not voluntarily pay
            them, OATH was factually incorrect in claiming that the petitioner paid the penalties in full.
            Thus, the petitioner argues, OATH relied upon erroneous facts in denying the petitioner’s
            motions and therefore acted arbitrarily and capriciously. See CPLR 7803(3).

                                                   III.    DISCUSSION

                   Where, as here, an administrative determination is made, and there is no requirement of
            a trial-type hearing, that determination must be confirmed unless it is arbitrary and capricious,

             161016/2022 WINDERMERE PROPERTIES LLC vs. CITY OF NEW YORK ET AL                      Page 3 of 5
             Motion No. 001

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  NYSCEF DOC. NO. 27                                                                       RECEIVED NYSCEF: 12/28/2023

            affected by an error of law, or made in violation of lawful procedure. See CPLR 7803(3); Matter
            of Resto v State of N.Y., Dept. of Motor Vehs., 135 AD3d 772 (2nd Dept. 2016); Matter of
            McClave v Port Auth. of N.Y. & N.J., 134 AD3d 435, 435 (1st Dept 2015). A determination is
            arbitrary and capricious where is not rationally based, or has no support in the record (see
            Matter of Gorelik v New York City Dept. of Bldgs., 128 AD3d 624 [1st Dept. 2015]), or where the
            decision-making agency fails to consider all of the factors it is required by statute to consider
            and weigh. See Matter of Kaufman v Incorporated Vil. of Kings Point, 52 AD3d 604 (2nd Dept.
            2008). The court must give deference to an agency’s interpretation of the statutes, rules, and
            regulations governing its own operations. See Matter of Terrace Ct., LLC v New York State Div.
            of Hous. & Comm. Renewal, 18 NY3d 446 (2012); Matter of 60 E. 12th St. Tenants' Assn. v
            New York State Div. of Housing & Comm. Renewal, 134 AD3d 586 (1st Dept. 2015).

                   The instant petition is barred by res judicata, as the claims asserted are the same as
            those that were or should have been litigated in the previous CPLR article 78 proceeding. See
            Buechel v Bain, supra. The doctrine of res judicata prohibits a party from re-litigating any claim
            which could have been, or which should have been litigated in a prior proceeding. See Buechel
            v Bain, 275 AD2d 65 (1st Dept. 2001); Klein v Barrios-Paoli, 237 AD2d 165 (1st Dept. 1997).
            That is, “[u]nder res judicata, or claim preclusion, a valid final judgment bars future actions
            between the same parties on the same cause of action.” Parker v Blauvelt Volunteer Fire Co.,
            93 NY2d 343, 347 (1999); see Matter of Reilly v Reid, 45 NY2d 24 (1978). As a general rule,
            New York applies a “transactional approach” to analyzing the doctrine of res judicata, so that
            “once a claim is brought to a final conclusion, all other claims arising out of the same transaction
            or series of transactions are barred, even if based upon different theories or if seeking a
            different remedy.” O’Brien v Syracuse, supra at 357 (1981).

                   The petitioner filed this petition against the same respondents as in the first proceeding
            and makes the same arguments, and one new one. The court’s decision in the first proceeding
            was a “valid final judgment” as to the Subject Motions, despite the petitioner’s belief that it had
            withdrawn so much of the prior petition as concerned the Subject Motions. Parker v Blauvelt
            Volunteer Fire Co., supra; see Matter of Reilly v Reid, supra. The petitioner’s attempt to
            withdraw its claims was ineffective. See CPLR 3217(a), (b); Madison Acquisition Group, LLC v
            7614 Fourth Real Estate Dev., LLC, 134 AD3d 683 (2nd Dept. 2015). Justice Bluth’s decision
            was therefore dispositive as to the Subject Motions. Even if Justice Bluth’s determination was
            not dispositive of the then pending Subject Motions to Vacate, res judicata would still bar this
             161016/2022 WINDERMERE PROPERTIES LLC vs. CITY OF NEW YORK ET AL                      Page 4 of 5
             Motion No. 001

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  NYSCEF DOC. NO. 27                                                                          RECEIVED NYSCEF: 12/28/2023

            petition since it concerns summons and motions that arise from the same “transaction or series
            of transactions” as those that were adjudicated in the first proceeding. See O’Brien v Syracuse,
            supra; Matter of Reilly v Reid, supra at 29. Therefore, as to the second and third causes of
            action here, there is an identity of parties, finality of judgment, and identity of claims, and the
            claims are clearly barred. The first cause of action is also barred, as the petitioner should have
            litigated it in the previous petition. Here, the petitioner claims that OATH acted arbitrarily and
            capriciously in relying on erroneous factual evidence in rendering its determination by finding
            that the penalties were paid. It is true that Justice Bluth did not rule on the merits of this claim,
            as it was not raised in the first proceeding. However, res judicata “encompasses the law of
            merger and bar—it precludes the relitigation of all claims falling within the scope of the
            judgment, regardless of whether or not those claims were in fact litigated.” Paramount Pictures
            Corp. v Allianz Risk Transfer AG, 31 NY3d 64, 72 (2018) (internal quotation marks omitted). As
            such, “claim preclusion may foreclose litigation of a matter that never has been litigated,
            because of a determination that it should have been advanced in an earlier suit.” Id. at 73
            (internal quotation marks omitted) (emphasis added). Here, the petitioner could and should
            have raised this claim in the first proceeding.

                   The court has considered and rejected the petitioner’s remaining contentions.

                                                    IV.    CONCLUSION

                   Accordingly, upon the foregoing papers, it is

                   ORDERED and ADJUDGED that the petition is denied in its entirety, and it is further

                   ORDERED that the Clerk of the court shall enter judgment accordingly.

                   This constitutes the Decision, Order, and Judgment of the court.

                   12/21/2023                                                                              $SIG$
                     DATE
             CHECK ONE:               X   CASE DISPOSED                   NON-FINAL DISPOSITION

                                      X   GRANTED             DENIED      GRANTED IN PART               OTHER

             161016/2022 WINDERMERE PROPERTIES LLC vs. CITY OF NEW YORK ET AL                        Page 5 of 5
             Motion No. 001

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