Matter of EPDI Associates
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Matter of EPDI Associates
OATH Index No. 1489/04 (Jan. 3, 2007)
[Loft Bd. Dkt. No. LB-0132; 306-320 Dean Street, Brooklyn, N.Y.]
Respondent tenant has standing, as sole remaining IMD protected occupant, to challenge abandonment application for not only his unit but four other units at issue. Abandonment determination can be based on proof of a residential tenant’s voluntary vacatur of a unit even though such vacatur occurs prior to a determination by the Loft Board that a unit is covered. Abandonment applications for three of the five units at issue granted based on proof that the residential tenants voluntarily vacated their units with no intention of returning, even though their departures occurred four to five years before the Loft Board’s coverage determination. Abandonment application as to a fourth unit denied because the protected occupant was a partner in the ownership entity who did not abandon his unit, but instead assigned his ownership rights to his wife, who remains a partner and continues to exercise control over the unit. Abandonment application as to fifth unit denied where owner constructively evicted tenant by failing to maintain a continuous water supply or make other necessary repairs, tenant has maintained a continuous physical presence at the loft by visiting, keeping his possessions there and using it as his address, and tenant has, over an almost fifteen-year period, continued to assert his legal rights in the unit, including appearing and defending here.
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NEW YORK CITY OFFICE OF
ADMINISTRATIVE TRIALS AND HEARINGS
In the Matter of
EPDI ASSOCIATES
Petitioner
- against -
STEPHEN CONLEY
Respondent
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REPORT AND RECOMMENDATION
RAYMOND KRAMER, Administrative Law Judge
This application, brought by EPDI Associates, owner of the interim multiple dwelling at 306-320 Dean Street, Brooklyn, seeks a declaration of abandonment for five units, the first and second floors of 314 Dean Street, the third floor of 314 Dean Street, the third floor of 316 Dean Street, the second floor of 320 Dean Street, and the third floor of 320 Dean Street, pursuant to Article 7-C of the Multiple Dwelling Law and title 29, section 2-10(f) of the Rules of the City of New York (“RCNY”). Hearings were held before me on April 26, 2005, April 27, 2005, July 18, 2005, July 19, 2005, July 20, 2005, August 11, 2005, August 12, 2005 and October 14, 2005. The record closed on January 17, 2006 with the submission of legal briefs. Additional unsolicited legal argument was submitted by petitioner’s counsel by email on February 13, 2006, which this tribunal accepted, and a reply was accepted from respondent’s counsel on February 15, 2006.
Petitioner presented the testimony of Bernard Dillenberger, its managing partner for twenty-six years, and also testimony from subpoenaed representatives of Geico Insurance, Verizon Communications and Consolidated Edison. Respondent Conley testified on his own behalf and also recalled Mr. Dillenberger as a witness on his direct case.
ANALYSIS
Procedural History
The premises at issue, 306-320 Dean Street, in Brooklyn, is roughly a block-long complex of two and three-story buildings of brick and wood joist construction, which contain big open lofts. The complex is owned by petitioner since the late 1970s, and Mr. Dillenberger is petitioner’s managing partner and 82% owner. Currently, every unit in the building complex except respondent Conley’s is being used commercially, with some of the units being used by Mr. Dillenberger for his construction company’s office space and storage. While 306 Dean Street apparently has a separate lot and block number from the other buildings, the buildings share sufficient links and commonalities that the Loft Board determined them to constitute one horizontal interim multiple dwelling for Loft Board purposes in a coverage order issued on January 22, 1987. The Loft Board further determined in that proceeding that the five lofts at issue, which are located within 314-320 Dean Street, were covered by the Loft Law and that there were two protected tenants, respondent Conley and James Hyde, a partner of petitioner. Loft Bd. Order No. 515 (Jan. 22, 1987), aff’d, EPDI Associates v. New York City Loft Bd., Sup. Ct. N.Y. Co. Index No. 40467/88 (Aug. 23, 1994), aff’d, 227 A.D.2d 358, 642 N.Y.S.2d 900 (1st Dep’t 1996). The Board’s order directed petitioner to register the covered units. It is undisputed that the units were not registered until fifteen years later, in 2002. In 1995, petitioner was assessed $8000 in fines for failing to register the units. See Loft Bd. Order No. 1766 (Mar. 23, 1995).
An abandonment hearing on these units was originally held before this tribunal on January 9, 2002. Matter of EPDI Associates, OATH Index No. 600/02 (Jan. 9, 2002), aff’d, Loft Bd. Order No. 2714 (Mar. 14, 2002), remanded, Conley v. New York City Loft Bd., Sup. Ct. N.Y. Co. Index No. 113879/02 (Dec. 9, 2002). Tenants did not submit a response or appear to contest the application, and a default proceeding was conducted. The abandonment application was granted primarily on the testimony of Mr. Dillenberger alone, supported by certain affidavits and other documentation.
Thereafter, respondent Conley learned of the proceedings when a nonpayment “business” eviction petition and notice was posted on his loft unit door in May 2002, and he brought an Article 78 proceeding requesting that the abandonment finding be set aside because he was not properly served with notice of the hearing. The Loft Board joined his petition to vacate the abandonment finding because, under 29 RCNY § 2-05(f), an owner who has not complied with registration requirements can not bring an application before the Board. The Supreme Court agreed that, as EPDI had not registered the units as ordered to do so in 1987 and again in 1995, the Loft Board should not have permitted it to file the abandonment application as to any of the units. Conley v. New York City Loft Bd., Sup. Ct. N.Y. Co. Index No. 113879/02 (Dec. 9, 2002) (see ALJ Ex. 1). The court also found that respondent Conley was not properly served with notice of the hearing because he did not have a secure place to receive mail at the Dean Street address, his mail being piled on a common stairway. Id. at 6. The proceedings were remanded for a new abandonment hearing as to all five units. The Appellate Division subsequently affirmed the Supreme Court Order and remand, but directed respondent Conley to post the sum of $10,000 as security for costs, which he did. Conley v. New York City Loft Bd., 5 A.D.3d 175, 772 N.Y.S.2d 519 (1st Dep’t 2004); see Resp. Ex. AA.
Petitioner is now back seeking an abandonment finding for all five units at issue. Respondent Conley is the only tenant contesting the application. Respondent Conley has opposed not only a finding of abandonment as to his own unit, but as to the other four units as well.
Standing
As a threshold matter, petitioner argues that respondent Conley does not have standing to challenge the alleged abandonment of any unit besides his own. In support of its argument, petitioner cites to Graziano v. County of Albany, 3 N.Y.3d 475, 787 N.Y.S.2d 689 (2004), where the Court gave the following criteria for determining if a party has standing:
First, a plaintiff must show “injury in fact,” meaning that plaintiff will actually be harmed by the challenged action. As the term itself implies, the injury must be more than conjectural. Second, the injury a plaintiff asserts must fall within the zone of interests or concerns sought to be promoted or protected by the statutory provision under which the agency has acted.
3 N.Y.3d at 479, 787 N.Y.S.2d at 692 (quotation omitted). EPDI argues that respondent Conley cannot show an injury arising from the deregulation of the other units. Specifically, “[i]n the event Conley’s unit is not deregulated the legalization costs for the common areas of the building and Conley’s unit are borne by Conley in the same manner regardless of whether the other units are IMD units or not.” Pet. Brief, at 29 (citing MDL § 286; 29 RCNY § 2-01).
Petitioner also argues that respondent Conley cannot show that the injury he asserts falls within the zone of interests sought to be protected by the Loft Law. Although the Loft Board Regulations require that “all affected parties . . . as are necessary for a final resolution of the claims asserted in the application” be notified of an abandonment application, 29 RCNY § 1-06(a), respondent Conley, as a non-occupant of the other units, is not a necessary party to resolve the issue of the abandonment of the other units, and in any event, is not granted standing by a regulation establishing notice requirements.
Respondent Conley argues to the contrary, that under an earlier Court of Appeals holding in Whalen v. Lefkowitz, 36 N.Y.2d 75, 365 N.Y.S.2d 150 (1975), he has standing because a finding of abandonment of the other units would weaken his bargaining power as a tenant. Respondent Conley also argues that because the prior finding of abandonment of all the units was vacated in its entirety – not just with respect to Conley – the State Supreme Court and the Loft Board both implicitly acknowledged respondent Conley’s standing to challenge the abandonment finding for all units.
Standing is a fundamental prerequisite to bringing any action, including one in an administrative forum. A party seeking to participate in a proceeding must possess an actual legal stake in the matter being adjudicated. Matter of 115 West 28th Street Corp, OATH Index No. 1216/99 (Mar. 17, 1999), adopted, Loft Bd. Order No. 2563 (Sept. 26, 2000) (citing Society of Plastics Industry, Inc. v. County of Suffolk, 77 N.Y.2d 761, 772-773, 570 N.Y.S.2d 778, 784 (1991). The Court of Appeals has held that to have standing, a plaintiff must show first, “injury in fact,” and second, that the injury falls within the zone of interests or concerns sought to be promoted or protected by the statutory provision under which the action takes place. Graziano, 3 N.Y.3d 475, 787 N.Y.S.2d 689.
New York courts and the Loft Board have held that standing may hinge on whether the party asserting standing was in actual possession of the unit at the time of the relevant events. The implication here is that if a party does not possess a unit, he cannot suffer any injury of rights connected to that unit. Missry v. Ehlich, 1 Misc. 3d 723, 731, 765 N.Y.S.2d 176, 182 (Civ. Ct. N.Y. Co. 2003) (“[h]aving occupied the unit during the period when petitioners claim compliance, respondent has standing to dispute that claim and the consequences flowing from it”); 19 W. 36th Holding Corp. v. Parker, 193 Misc. 2d 519, 523, 749 N.Y.S.2d 824, 827 (Civ. Ct. N.Y. Co. 2002) (“since respondent was not the tenant in occupancy when the unit was deregulated it appears that he does not have standing to dispute the Loft Board's determination”); Matter of 115 West 28th Street Corp, OATH Index No. 1216/99 (Mar. 17, 1999), adopted, Loft Bd. Order No. 2563 (Sept. 26, 2000); Matter of Drogus, Loft Bd. Order 1937, 16 Loft Bd. Rptr. 139 (Mar. 28, 1996).
Here, although issues exist as to respondent Conley’s alleged abandonment of the unit, he has not been evicted and at all times he has remained the legal tenant of the unit. Clearly, he has standing to challenge the abandonment application with respect to his own unit. The more difficult inquiry is whether respondent Conley will suffer injury in fact if the other units are found to be abandoned, and if any such injury is of the type against which the Loft Law was designed to protect, thus conferring upon him standing to challenge the abandonment claims as to the other units.
In Whalen, the Court of Appeals held that a tenant of a rent controlled unit in a larger apartment complex would suffer injury in fact if the Attorney General were to certify a portion of the units as condominiums:
[A]ccording a condominium status to the quadrant reduces the number and importance of rental tenants, thus diluting their negotiating power as a group and in turn diminishing the strength and significance of each individual tenant, alters profusely the number of fee titleholders of the common interest in the common elements and results in the inevitable disruption that must of necessity follow such an extensive change of operation. Consonant with liberalized attitudes towards standing, petitioner's interest in the reorganization of the complex in which he resides, therefore, is not abstract but personal, real, direct and substantial, conferring standing to challenge the public official's action.
Whalen v. Lefkowitz, 36 N.Y.2d at 77-8, 365 N.Y.S.2d at 152-3 (citations omitted). But, “[w]hile the courts of this State have adopted ‘liberalized attitudes towards standing,’ plaintiffs must still establish a connection between [the landlord’s actions] and some detriment to their interests, economic or otherwise.” Baxter v. Captain Crow Management, Inc., 128 Misc. 2d 254, 261, 487 N.Y.S.2d 997, 1003 (Sup. Ct. N.Y. Co. 1985) (citation omitted) (finding no standing where the existence or nonexistence of an offering plan is immaterial to plaintiff-tenants’ rights).
Loft Board rules do not directly address the issue of standing, and only indirectly touch on the issue in the form of the notice requirements for various proceedings. The Loft Board’s notice rule, which is relatively broad, provides simply that all applications filed with the Board must contain a list of affected parties and must be served on those affected parties by the applicant. 29 RCNY § 1-06(a). The rules further define "affected parties" in the case of an abandonment application to include "the owner and such occupants as are necessary for a final resolution of the claims asserted in the application." Any affected party served with an application has thirty days following service to file an answer to the application. 29 RCNY § 1-06(b). The Loft Board over the years has routinely required owners to list and serve notice on all tenants of a building as affected parties in an abandonment application, which practice was followed by petitioner in this proceeding (ALJ Ex. 1).