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Matter of Seyfried, OATH Index No. 127/97 (Jan. 3, 1997), Adopted in Part, Loft Bd

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Matter of Seyfried, OATH Index No. 127/97 (Jan. 3, 1997), Adopted in Part, Loft Bd Matter of Seyfried, OATH Index No. 127/97 (Jan. 3, 1997), adopted in part, Loft Bd. Order No. 2083 (Mar. 20, 1997), on remand, Loft Bd. Order No. 2107 (May 22, 1997) Topic(s): 1. Loft Law - diminution of services application - scope of relevance and relief available - particular claims allowed and disallowed before trial 2. Procedural matters - amended petition, counsel as trial witness, discovery sanctions, post-trial motion to add new evidence; severance of claim for further proceedings. 3. On the merits, six of the seven claims tried were sustained. Judge: CF Include in: 29 RCNY §§ 1-06, 2-01, 2-04; 48 RCNY §§ 1-25, 1-33, 1-42, 1-52 Recommended disposition: Grant application in part Discussion of Listed Topics: 1. ALJ concluded that the procedures and remedies described in section 2-04(e) of the Loft Board’s rules apply only to Loft Board-initiated enforcement proceedings, and not to tenant-initiated diminution of services cases. Referring to numerous Loft Board precedents in diminution of services cases, ALJ concluded that the only relief available in tenant-initiated diminution of services cases is a Loft Board order requiring the IMD owner to restore the services found to be diminished. Such an order operates prospectively only, and therefore past problems that have been remedied do not constitute viable diminution of services claims. Instead, the focus is on the present state of services - although past events may be probative of the present state of services. Also based on a review of Loft Board precedents, ALJ concluded that the owner’s willfulness or good faith regarding provision of services is not relevant to a diminution of services claim. Although procedurally distinct, a Loft Board-initiated enforcement claim and a tenant-initiated diminution of services claim are substantively identical. That is, failure to provide either the services enumerated in section 2-04(b) or the services provided for in the general provisions of section 2-04(c) constitutes both a violation in a Loft Board initiated enforcement action and a diminution of services in a tenant-initiated case. Citing precedent from enforcement cases, ALJ held that section 2-04(c) requires provision of services specified in leases, services previously provided even if not specified in leases, and services necessary to the statutory warranty of habitability. Based on this analysis, ALJ disallowed the following claims: a claim that the owner had failed to give notice to tenants of the owner’s need for access to their units as required by section 2-01(g)(1) of the Loft Board rules; a claim that the owner had failed to display its IMD registration as required by section 2-05(b)(13); a claim that the owner had failed to provide tenants with a 24-hour telephone number; a claim that the owner had taken longer to cure Department of Buildings objections to its alteration application than permitted by section 2-01(d)(2)(v) of the Loft Board rules; and a claim that the owner allowed a commercial tenant to operate without required public assembly permits. ALJ allowed the following claims to go to trial under section 2-04(b): inadequate heat, inadequate water pressure, discontinuation of freight elevator service, and inadequate building security. ALJ allowed the following claims to go to trial under section 2-04(c): inadequate maintenance and repair services, excessive noise from a commercial tenant’s premises, and danger posed by hazardous materials in the building. 2. ALJ allowed amendment of the petition to add petitioners and to convert the claim from one alleging harassment to one alleging diminution of services (citing rules and decision). ALJ disallowed petitioners’ request to call respondent’s trial counsel as a witness. Although counsel had knowledge of relevant facts, ALJ concluded upon detailed pre-trial review of petitioners’ and respondent’s cases that petitioners had other sources for the testimony they sought from counsel. Therefore, ALJ declined to require counsel to testify, which would have raised questions about the disqualification of counsel and of his firm. In the end, respondent was represented at trial by an associate of the originally preferred counsel, and ALJ allowed petitioners to re-argue their request to call counsel as a witness, but petitioners declined to do so. ALJ found that respondent’s counsel (the law firm as a whole) had been negligent in failing to respond timely to a discovery request. However, ALJ held that section 1-33(e) provides for discovery sanctions in such circumstances only if a party has failed to comply with an order to compel discovery. Here, as soon as the petitioners moved for an order to compel, the respondent provided the discovery. Therefore, petitioners’ motion for imposition of discovery sanctions was denied. In their post-trial memorandum, petitioners submitted a large volume of new evidence, and respondent objected. Allowing the new evidence from petitioners would require allowing rebuttal from the respondent, undoubtedly requiring additional trial time. During that time, due to the fast-changing circumstances in the IMD, new evidence would develop and be submitted by the parties. Instead, with one exception, ALJ prohibited the new evidence. The one exception was the new evidence concerning the presence of dangerous asbestos in the building. ALJ characterized the petitioners’ trial evidence of a hazardous condition as a “mirage,” but found the post-trial evidence to be more substantial. Based on four factors, ALJ held that the new evidence warranted further proceedings on this claim: the evidence created a substantial prospect that the petitioners could prevail; the claim involved a serious and even potentially life-threatening condition; the petitioners proceeded pro se; and the finality achieved by denying further proceedings would prove illusory, in that tenants who had not joined as petitioners would not likely be bound by a finding against the petitioners on their asbestos claim. Having concluded the case on all of the claims except the asbestos claim, ALJ found no reason to delay disposition of the non-asbestos claims pending further proceedings on the asbestos claim. In particular, the claim of inadequate heat carried some urgency. Therefore, ALJ severed the asbestos claim from the rest of the case and issued the report and recommendation for the rest of the case. ALJ directed that the asbestos claim be deemed to be docketed as of the date of the report and recommendation, and given a new index number. 3. ALJ sustained claims of inadequate heat*, inadequate water pressure, failure to perform necessary maintenance and repairs, discontinuation of freight elevator service**, failure to provide necessary building security, and failure to control the noise level. ALJ stated that the trial evidence did not sustain the claim that hazardous asbestos was present in the building, but, as noted above, ALJ severed that claim and retained jurisdiction over it for further proceedings. * The Loft Board adopted findings of all violations as recommended except for the heat violation - it found that in the absence of temperature readings there was insufficient evidence to establish a violation. **On remand to the Board to set a schedule for restoring elevator service the Board ordered the owner to take all reasonable and necessary steps to restore freight elevator service by October 17, 1997. Loft Bd. Order No. 2107 (May 22, 1997). THE CITY OF NEW YORK OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS In the Matter of REPORT AND JEAN ROMAN SEYFRIED, PETER DAVIES, RECOMMENDATION CHARLES L. MARBURG, JR., LOUISE WHITE, CHARLES W. FURER, JR., LINDA BURGESS and WILLIAM DUNLAP, Index No. 127/97 (TH-0135) Petitioners. 548 Broadway, New York, New York P R E S E N T: CHARLES R. FRASER Administrative Law Judge T O: DAVID KLASFELD Chairman A P P E A R A N C E S : JEAN ROMAN SEYFRIED 548 Broadway, #5F/G New York, New York 10012 - and - PETER DAVIES 548 Broadway, #5A New York, New York 10012 Pro se and representatives for petitioners Marburg, White, Furer, Burgess and Dunlap BELKIN BURDEN WENIG & GOLDMAN, LLP By: Mary F. Donovan, Esq. Attorneys for the Respondent 342 Madison Avenue - 3rd Floor New York, New York 10173 2 This is a diminution of services application, brought by seven residential tenants of the interim multiple dwelling at 548 Broadway, New York, New York, against the owner of that IMD, Salva Realty Corp., pursuant to section 2-04(c) of the Loft Board’s rules (title 29, Rules of the City of New York). The application was referred by the Loft Board to this tribunal for adjudication, and was docketed on July 8, 1996. Following extensive pre-trial proceedings, trial was convened before me on September 24 to 27, 1996, and post-trial briefing was concluded on October 30, 1996. As detailed below, I conclude that Salva improperly diminished services to the petitioners in several respects, and therefore I recommend that the petition, as amended, be granted in part. PROCEDURAL HISTORY A. Pre-Trial Proceedings The original application in the case was filed by Jean Roman Seyfried, one of the tenants at 548 Broadway, on February 14, 1996. Ms. Seyfried’s application, pleaded pro se, alleged harassment by the owner of 548 Broadway, Salva Realty Corp. Salva filed an answer denying the allegations of the application, six residential tenants filed answers supporting the application, and one commercial tenant filed an answer denying the factual allegations underlying a portion of the application. Following referral of the case to this tribunal on July 8, 1996, I scheduled a pre-trial conference for August 8, 1996. I denied two motions by Salva seeking adjournments of the conference, and convened the conference as scheduled. At the conference, I scheduled trial for September 24 to 27, 1996, and I fixed various pre-trial deadlines.
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