Court Opinion

ID: 9962530
Source: CourtListenerOpinion
Date Created: 2024-04-23 20:10:07.928768+00
Date Added: 2024-06-11T08:19:00.554252
License: Public Domain

Kwai Hwa Yang v Governor's Off. of Storm Recovery
               2024 NY Slip Op 31349(U)
                     April 17, 2024
           Supreme Court, New York County
        Docket Number: Index No. 160090/2020
                  Judge: Arlene P. Bluth
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
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 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                                     INDEX NO. 160090/2020
  NYSCEF DOC. NO. 34                                                                                           RECEIVED NYSCEF: 04/17/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. ARLENE P. BLUTH                                            PART                              14
                                                                                      Justice
            ---------------------------------------------------------------------------------X   INDEX NO.          160090/2020
                KWAI HWA YANG,
                                                                                                 MOTION DATE        04/17/20241
                                                         Petitioner,
                                                                                                 MOTION SEQ. NO.         001
                                                 -v-
                GOVERNOR'S OFFICE OF STORM RECOVERY, NY
                RISING RECONCILIATION & REPAYMENT UNIT,                                            DECISION + ORDER ON
                HOUSING TRUST FUND CORPORATION                                                           MOTION

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

            The following e-filed documents, listed by NYSCEF document number (Motion 001) 1, 2, 3, 4, 5, 6, 7, 8,
            9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33
            were read on their motion to/for                                                      ARTICLE 78                       .

                      The petition for an order annulling respondents’ determination that petitioner pay back

            monies received from respondents is granted.

            Background

                      Petitioner owns a property in Ronkonkoma that contains three single family

            homes/cottages. She insists that each of these structures were severely damaged due to

            Superstorm Sandy in October 2012. Petitioner applied for aid from the New York Rising

            program to help pay for these repairs and received over $40,000 from respondents. She claims

            that at the time of her application, she was in litigation with the town of Brookhaven about the

            safety of these buildings; petitioner contends that litigation eventually settled without requiring

            her to demolish those structures.

            1
             The Court recognizes that this proceeding has been pending for years, although it was only assigned to the
            undersigned last night. The Court apologizes, on behalf of the Court system, for the lengthy delay in the resolution
            of this proceeding.
                160090/2020 YANG, KWAI HWA vs. GOVERNOR'S OFFICE OF STORM                                            Page 1 of 8
                Motion No. 001

                                                                           1 of 8
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  NYSCEF DOC. NO. 34                                                                                  RECEIVED NYSCEF: 04/17/2024

                      Petitioner alleges that during her case, someone from the town contacted the New York

            Rising program and told respondents that the damage to these homes was not caused by

            Superstorm Sandy. She insists that the town eventually told her that it relied upon an engineering

            report, which noted that the properties were not maintained and were boarded up by the town.

            Petitioner contends that this report was prepared four years after Superstorm Sandy. She

            contends that there is no proof, other than hearsay, to show that the damage to her cottages was

            not caused by Superstorm Sandy and she should not have pay back the money she received from

            respondents.

                      In opposition2, respondents explain that petitioner applied for funding in April 2017.

            They observe that they approved petitioner’s application and that she signed a grant agreement in

            April 2017 and a second agreement in August 2017. Respondents contend that an inspector for

            the Town of Brookhaven inspected the property on June 16, 2016 and found that there were

            significant building code violations and dangerous conditions. They insist that the three

            structures at issue were abandoned. The report concluded that the buildings should be

            “demolished if it cannot be reasonably repaired to remove all the noted violations” (NYSCEF

            Doc. No. 21 at 9).

                      Respondents contend that this report did not assert that the damage to the property was

            due to a storm-related event. They argue that Brookhaven ordered that the structures be

            demolished. Respondents allege that they met with petitioner on September 26, 2017 and that

            petitioner claimed she was not able to get a letter “proving storm damage from the Town of

            2
              The Court observes that respondent did not answer or move to dismiss (they simply filed opposition papers),
            although they did include a proposed answer (NYSCEF Doc. No. 28) as part of their papers. The Court will
            therefore consider this proceeding on the merits as a fully briefed proceeding.
                160090/2020 YANG, KWAI HWA vs. GOVERNOR'S OFFICE OF STORM                                      Page 2 of 8
                Motion No. 001

                                                                 2 of 8
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                                                                                                  INDEX NO. 160090/2020
  NYSCEF DOC. NO. 34                                                                      RECEIVED NYSCEF: 04/17/2024

            Brookhaven” and that her “file will be deemed ineligible without a substantial damage letter”

            (NYSCEF Doc. No. 17 at 10).

                   On December 8, 2017, respondents sent petitioner a letter noting that she was ineligible

            for the program because “Our records indicate that the damage to the property for which you

            applied was not caused by any of the qualifying storms (Sandy, Irene, or Lee)” and that she

            needed to “Please provide written evidence that the damage to your property was caused by a

            qualifying storm” (NYSCEF Doc. No. 23). In its opposition, respondents also argue that

            petitioner “failed to file a claim a [sic] homeowner’s insurance” although the aforementioned

            December 2017 letter does not mention insurance at all. They also acknowledge that someone

            from the Town of Brookhaven contacted them and asserted that the damage was not caused by

            Superstorm Sandy.

                    Respondents acknowledge that petitioner submitted a report from an engineer dated May

            15, 2017 that determined that the damage was caused by Sandy but they claim the Court should

            ignore this report as it was not supported with persuasive evidence. They insist that the decision

            to demand that petitioner pay back the funds she received was not irrational and that the report of

            the inspector hired by the Town of Brookhaven shows that the property was in disrepair prior to

            Superstorm Sandy.

                   In reply, petitioner argues that respondents demanded that she return the money based on

            unsupported claims from someone employed by the Town of Brookhaven and so these assertions

            should be disregarded.

            Discussion

                   “It is a long-standing, well-established standard that the judicial review of an

            administrative determination is limited to whether such determination was arbitrary or capricious

             160090/2020 YANG, KWAI HWA vs. GOVERNOR'S OFFICE OF STORM                            Page 3 of 8
             Motion No. 001

                                                          3 of 8
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                                                                                                  INDEX NO. 160090/2020
  NYSCEF DOC. NO. 34                                                                       RECEIVED NYSCEF: 04/17/2024

            or without a rational basis in the administrative record and once it has been determined that an

            agency's conclusion has a sound basis in reason, the judicial function is at an end. Indeed, the

            determination of an agency, acting pursuant to its authority and within the orbit of its expertise,

            is entitled to deference and even if different conclusions could be reached as a result of

            conflicting evidence, a court may not substitute its judgment for that of the agency when the

            agency's determination is supported by the record” (Partnership 92 LP v State Div. of Hous. and

            Community Renewal, 46 AD3d 425, 428-29 [1st Dept 2007], affd 11 NY3d 859 [2008] [internal

            quotations and citations omitted]).

                    The rationality analysis described above requires this Court to consider whether it was

            rational for respondents to demand petitioner pay back the money that they had previously

            granted to her. There is no dispute that petitioner applied for funding, submitted whatever was

            required, and respondents approved that funding. In fact, petitioner executed two grant

            agreements (one in April 2017 and the other in August 2017) with respondents (NYSCEF Doc.

            Nos. 19 and 20). Petitioner ended up receiving over $40,000 from respondents.

                   Respondents then admit that someone from the Town of Brookhaven insisted that the

            damage to this property occurred prior to Superstorm Sandy. However, the Court observes that

            respondents did not conduct their own inspection of the property in 2017 to assess these new

            allegations; rather, it seems they just adopted the Town of Brookhaven’s position. Respondents

            rely heavily on an engineering report that references an inspection from June 2016 (NYSCEF

            Doc. No. 21). This inspection was seemingly conducted on behalf of the town to inspect the

            properties for code violations. There is no reference in this report to Superstorm Sandy nor are

            there any conclusions about whether or not Superstorm Sandy caused any of the damage

            observed. And, of course, this inspection took place years after Sandy.

             160090/2020 YANG, KWAI HWA vs. GOVERNOR'S OFFICE OF STORM                             Page 4 of 8
             Motion No. 001

                                                          4 of 8
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                                                                                                  INDEX NO. 160090/2020
  NYSCEF DOC. NO. 34                                                                      RECEIVED NYSCEF: 04/17/2024

                   And yet, respondents cite this report as proof that Superstorm Sandy did not cause any

            damage to the property. That is a wholly conclusory and irrational position. Moreover,

            respondents (through the affidavit of Mr. Lozito) argue that they relied on photographs from

            2011 through 2014 “which indicated that the Property was not damaged by Superstorm Sandy”

            (NYSCEF Doc. No. 18, ¶ 36). However, there was no citation to these photographs in this

            affidavit and so the Court must assume that they were not included in this record (petitioner

            claims she never saw them). A vague and conclusory reference to photographs from before and

            after Superstorm Sandy does not constitute a basis to find that petitioner should have to repay

            money already distributed by respondents.

                   The Court observes that respondents also requested that petitioner obtain a substantial

            damage letter from the Town of Brookhaven and her failure to do so also justifies its decision to

            demand a refund. However, respondents did not cite any basis for why obtaining this letter was

            suddenly required or even a citation defining such a letter. The Court observes that the failure to

            obtain a substantial damage letter is not mentioned in either of the two grant agreements, in the

            letter demanding the refund or in the denial of petitioner’s first appeal.

                   This phrase is mentioned in a January 2020 appeal decision although, once again, there is

            no citation for what is meant by “substantial damage letter.” A review of the manual for the

            program contains a definition for substantial damage: “Occurs when a property sustains damages

            that equals or exceeds 50 percent of its Fair Market Value (FMV) prior to the event, as

            determined by a local authorized official (e.g., a code officer) and is sent a Substantial Damage

            Letter” (NYSCEF Doc. No. 22 at 53). The letter is mentioned as a requirement for a property to

            be reclassified from a repair award to a reconstruction award (id. at 32) and is also discussed as

            part of a “demonstrable hardship request” (id. at 38). But nowhere in respondents’ papers did it

             160090/2020 YANG, KWAI HWA vs. GOVERNOR'S OFFICE OF STORM                            Page 5 of 8
             Motion No. 001

                                                           5 of 8
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                                                                                                    INDEX NO. 160090/2020
  NYSCEF DOC. NO. 34                                                                        RECEIVED NYSCEF: 04/17/2024

            justify why it required petitioner to obtain a “substantial damage letter” in this situation (after

            they had already awarded petitioner money) and this Court is unable to speculate. Of course,

            given the fact that petitioner was in litigation with the Town of Brookhaven, it raises questions

            about demanding that petitioner obtain such a letter from an adversary in an ongoing dispute.

                   Respondents also emphasize that the Town of Brookhaven issued a violation notice to

            petitioner and boarded up the homes on November 26, 2013 (NYSCEF Doc. No. 10), but that too

            happened more than a year after Superstorm Sandy.

                   It appears respondents did do their own inspection of the property in 2016, before they

            awarded the money, and noted that there was storm debris (NYSCEF Doc. No. 27). Most

            critically this inspection contained an estimate for repairs and stated that “All items not included

            in the estimate are not considered to be storm related” (id. at 2-3). This, of course, means that the

            items that were included as part of the estimate were storm related. So, in 2016, respondents

            clearly believed that the property had been damaged by Superstorm Sandy and generated

            estimates for the needed repairs.

                   Also justifying the Court’s determination is that petitioner submitted her own engineer’s

            report from May 2017, which concluded that the damage was caused by Superstorm Sandy

            (NYSCEF Doc. No. 4 at 1). Although respondents contend that this determination should be

            ignored, they did not submit their own report to contest or address these findings. Instead, they

            point to the aforementioned 2016 report about building code violations that is entirely silent on

            the impact of Superstorm Sandy on the property.

            Summary

                   The bizarre and unexplained turnabout by respondents compels the Court to grant the

            instant petition. Respondents inspected petitioner’s property in 2016 and noted that there was

             160090/2020 YANG, KWAI HWA vs. GOVERNOR'S OFFICE OF STORM                               Page 6 of 8
             Motion No. 001

                                                           6 of 8
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                                                                                                  INDEX NO. 160090/2020
  NYSCEF DOC. NO. 34                                                                      RECEIVED NYSCEF: 04/17/2024

            storm debris; they later granted petitioner’s application for funding and gave petitioner over

            $40,000. Only after someone from the Town of Brookhaven complained did respondents

            suddenly change positions and demand the money back.

                    But the record does not justify that change. Nothing submitted suggests a rational basis

            to conclude that the damage to petitioner’s property was unrelated to Superstorm Sandy. All of

            the inspections took place after Superstorm Sandy; in fact, the only reference to anything prior to

            the storm (i.e., prior to 2012) are photographs from 2011 to 2014. But these photographs were

            apparently not submitted nor did respondents explain how they justify the conclusion that the

            properties sustained no damage from Sandy.

                    The procedural circumstances justify granting the petition as well. This is not a situation

            in which petitioner’s initial application was denied and petitioner demands the funds in the first

            instance. Here, respondents granted petitioner’s application and now demand the money back.

            Once the money was distributed, more was required from respondents in order to justify that

            about-face. Simply relying upon a “tip” from an employee from the Town of Brookhaven is not

            sufficient.

                    The Court is well aware that the buildings on the property were not in great condition;

            petitioner admitted in an email that there was a judge’s order from 2010 to have tenants vacate

            the property (NYSCEF Doc. No. 6 at 3). But simply because the three cottages may have been

            in some state of disrepair does not mean that they did not suffer any damage from Superstorm

            Sandy. And respondents did not justify the rationality of their conclusion that the damage was

            wholly unrelated to Sandy—they appear to have just adopted the local municipality’s assessment

            without conducting their own independent investigation of these allegations. Nor did they

             160090/2020 YANG, KWAI HWA vs. GOVERNOR'S OFFICE OF STORM                            Page 7 of 8
             Motion No. 001

                                                          7 of 8
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                                                                                                   INDEX NO. 160090/2020
  NYSCEF DOC. NO. 34                                                                         RECEIVED NYSCEF: 04/17/2024

            explain why they gave money to petitioner in the first place despite conducting their own

            evaluation in 2016.

                    Here, respondent went against its own initial judgment and the findings of its own

            inspector after receiving a hearsay “tip” from a litigation adversary of petitioner. And it

            demanded the money back, not by looking into it after receiving the tip, but by abandoning its

            own judgment and just going along with those conclusory and unsupported accusations. That is

            not rational.

                    Accordingly, it is hereby

                    ADJUDGED that the petition is granted and respondents’ determination requiring that

            petitioner pay back the funds she received is vacated and annulled, and petitioner is entitled to

            costs and disbursements upon presentation of proper papers to the County Clerk.

                   4/17/2024                                                            $SIG$
                      DATE                                                      ARLENE P. BLUTH, J.S.C.
             CHECK ONE:               X   CASE DISPOSED                  NON-FINAL DISPOSITION

                                                                                                  □
                                      X   GRANTED             DENIED     GRANTED IN PART              OTHER

             APPLICATION:                 SETTLE ORDER                   SUBMIT ORDER

                                                                                                  □
             CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN     FIDUCIARY APPOINTMENT        REFERENCE

             160090/2020 YANG, KWAI HWA vs. GOVERNOR'S OFFICE OF STORM                             Page 8 of 8
             Motion No. 001

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