Administrative Law Archives - New York Appellate Digest

Administrative Law, Landlord-Tenant, Municipal Law

NYC LOFT BOARD SHOULD NOT HAVE REJECTED TENANTS’ WITHDRAWAL OF THE LOFT LAW CONVERSION APPLICATION BECAUSE THERE WAS AN ALTERNATIVE WAY TO OBTAIN RENT REGULATION COVERAGE OUTSIDE THE LOFT LAW’S STATUTORY SCHEME (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Renwick, determined the tenants’ request to withdraw the conversion application under the Loft Law should have been granted by the NYC Loft Board:

This article 78 proceeding stems from an application for the legal conversion of certain lofts in New York City from commercial use to residential use pursuant to Article 7-C of the Multiple Dwelling Law (§ 283), commonly known as the Loft Law. Where owners register covered buildings and comply with the Loft Law’s requirements, the Loft Law will deem a building an “interim multiple dwelling (IMD)” (Multiple Dwelling Law § 284[1]), which would allow the owner to collect rent from residential occupants, despite the lack of a residential certificate of occupancy (Multiple Dwelling Law §§ 283, 285, 301). The Loft Law requires landlords to bring converted residences up to code and prevents them from charging tenants for improvements until the issuance of a certificate of occupancy (Multiple Dwelling Law § 284(1)). The Loft Law is administered by the New York City Loft Board (Multiple Dwelling Law § 282). * * *

Here, the petitioner tenant claims, and the Loft Board does not dispute, that there is a separate and independent track for the tenants to obtain rent regulation coverage outside the Loft Law’s statutory scheme. It is undisputed that the four residential occupancies are legal under New York City Zoning applicable to the area where the subject building is located. While the Rent Stabilization Law usually requires buildings to have six or more residential units, adjacent buildings with common facilities, ownership, and management are treated as one integrated unit, thereby constituting a horizontal multiple dwelling for purposes of rent stabilization … . In this case, the subject building is a rear building that adjoins a front building that is already subject to rent stabilization. Given that the buildings share common ownership — a sprinkler system, a plumbing system, and their respective electric meters and mailboxes are at the same location — the rear building appears to be part of a horizontal multiple dwelling that would be subject to rent stabilization once the residential certificate of occupancy is procured by the owner. Matter of Callen v New York City Loft Bd., 2020 NY Slip Op 00368, First Dept 1-16-20

January 16, 2020/0 Comments/by Bruce Freeman

Administrative Law, Environmental Law, Tax Law

ALTHOUGH A HEAT PUMP SYSTEM DRAWS HEAT FROM SOLAR ENERGY STORED IN THE GROUND, IT IS NOT A QUALIFIED SOLAR ENERGY SYSTEM WITHIN THE MEANING OF THE TAX LAW FOR PURPOSES OF ELIGIBILITY FOR A $5000 TAX CREDIT (THIRD DEPT).

The Third Department determined that a heat pump system, although it draws heat from solar energy stored in the ground, is not a qualified solar energy system within the meaning of Tax Law 606 (g-1). Therefore, as the Tax Tribunal found, petitioners were not entitled to a $5000 tax credit for the heat pump system:

… [S]olar energy system equipment is defined as “an arrangement or combination of components utilizing solar radiation, which, when installed in a residence, produces energy designed to provide heating, cooling, hot water or electricity for use in such residence” … . Here, the Tribunal limited the applicability of the tax credit to those systems that “directly” utilize solar radiation, an interpretation which petitioners assert is too narrow, …

… [W]e do not agree with petitioners’ assertion that the plain language of the statute unambiguously includes ground source heat pump systems simply because they utilize solar energy … . As the record reveals, heat harvested by a ground source heat pump system is not, strictly speaking, “solar radiation” since it is being radiated from the ground after being absorbed by the crust. Thus, although a broad reading of the phrase “utilize[es] solar radiation” could certainly include the system at issue, an interpretation excluding indirect utilization of solar energy is not unreasonable. Further, we find that the fact that the system removes heat from indoor air during the warm summer months and moves it to the ground, thereby not utilizing solar radiation, presents another reason to exclude the system from the purview of the tax credit … . Matter of Suozzi v Tax Appeals Trib. of the State of N.Y., 2020 NY Slip Op 00193, Third Dept 1-9-20

January 9, 2020/0 Comments/by Bruce Freeman

Administrative Law, Civil Procedure

CPLR 3122 DOES NOT REQUIRE THE STATE COMPTROLLER TO ACQUIRE PATIENT AUTHORIZATIONS BEFORE SUBMITTING SUBPOENAS FOR MEDICAL RECORDS IN CONNECTION WITH AUDITS OF PRIVATE HEALTHCARE PROVIDERS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Fahey, determined that the Comptroller of the State of New York, in auditing private health care providers, has the power to subpoena medical records without patient authorizations:

The Comptroller of the State of New York has a constitutional and statutory duty to audit payments of state money, including payments to private companies that provide health care to beneficiaries of a state insurance program. Here, the Comptroller carried out that obligation by means of investigatory subpoenas duces tecum directed to a medical provider, seeking patients’ records. We hold that CPLR 3122 (a) (2) does not require that the Comptroller’s subpoenas be accompanied by written patient authorizations, as the requirements set out in that paragraph apply only to subpoenas duces tecum served after commencement of an action. Matter of Plastic Surgery Group, P.C. v Comptroller of the State of N.Y., 2019 NY Slip Op 08979, CtApp 12-17-19

December 17, 2019/by Bruce Freeman

Administrative Law, Attorneys, Corporation Law, Environmental Law, Municipal Law

AN ATTORNEY, A PRINCIPAL IN THE CORPORATIONS OWNING SEVERAL BUILDINGS, WAS PROPERLY FOUND TO BE IN THE “OUTDOOR ADVERTISING BUSINESS” WITHOUT A LICENSE BECAUSE HE ADVERTISED HIS LAW PRACTICE IN SIGNS ON THE BUILDINGS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Wilson, determined the corporations which owned the buildings were separate from the attorney, a principal in the corporations, who advertised his law office in signs on the buildings. Therefore the attorney was making space available for outdoor advertising to “others” within the meaning of the NYC Administrative Code regulating outdoor advertising. The code requires “outdoor advertising companies” engaged in the :outdoor advertising business” to be licensed. The attorney (Ciafone) was fined for outdoor advertising without a license:

Contrary to the position of the Appellate Division dissent, preserving the distinction between the corporate entities and Mr. Ciafone does not “penalize him for forming corporate entities to own the buildings for tax and liability purposes”… . Myriad statutes and regulations apply to corporations, but not natural persons; those are not “penalties” for creating a corporate legal entity, but consequences of choosing that form of ownership. The New York City Council could rationally conclude that a corporation engaged in the provision of advertising to others, even others who have an ownership interest in the corporation, should be subjected to greater financial disincentives for violating signage laws than natural persons who are advertising themselves. Matter of Franklin St. Realty Corp. v NYC Envtl. Control Bd., 2019 NY Slip Op 08976, CtApp 12-17-19

December 17, 2019/by Bruce Freeman

Administrative Law, Battery, Employment Law, Municipal Law

CITY’S DETERMINATION IT WOULD NOT DEFEND A POLICE OFFICER IN A SUIT ALLEGING THE OFFICER’S USE OF EXCESSIVE FORCE WAS NOT ARBITRARY AND CAPRICIOUS; HIS CONDUCT CONSTITUTED “INTENTIONAL WRONGDOING” WHICH WAS NOT WITHIN THE SCOPE OF HIS EMPLOYMENT (CT APP).

The Court of Appeals, in a brief memorandum decision, over a two-judge dissenting opinion, determined the City of Buffalo’s ruling that petitioner police officer was not entitled to defense and indemnification by the City in an action against the officer alleging use of excessive force. The facts were described in the dissent as follows: “Numerous Buffalo police officers, including Officer Corey Krug, were deployed to keep order at Chippewa Street, a popular location for late-night drunken revelry. In the course of doing his job, a 30-second excerpt of a video filmed by a local TV station crew shows Officer Krug performing his duties with what appears to be excessive force: asking an unarmed young man, Devin Ford, why he returned to the area, throwing him onto the hood of a car, striking him in the leg several times with a baton and stopping only when another officer saw the incident and told him to stop. Criminal charges were filed against Officer Krug for the use of excessive force, and Mr. Ford filed a civil suit against him.” The Court of Appeals upheld the determination that Officer Krug was not acting within the scope of his employment when he dealt with Mr. Ford:

Given the narrow question before us and under the circumstances presented here, we cannot say that the City’s determination was “irrational or arbitrary and capricious”… . Insofar as the record supports the City’s conclusion that petitioner was not “acting within the scope of his public employment” under Buffalo City Code § 35-28 because his conduct constituted “intentional wrongdoing” and violated the City’s rules regarding the use of force, the City’s determination was not “taken without regard to the facts” … . Matter of Krug v City of Buffalo, 2019 NY Slip Op 08546, CtApp 11-26-19

November 26, 2019/by Bruce Freeman

Administrative Law, Employment Law, Human Rights Law

THIS EMPLOYMENT DISCRIMINATION ACTION SHOULD NOT HAVE BEEN DISMISSED WITHOUT A HEARING (THIRD DEPT).

The Third Department, reversing Supreme Court, determined petitioner’s employment discrimination claim should not have been dismissed without a hearing by the State Division of Human Rights (SDHR):

SDHR is free to dismiss a complaint without conducting a formal hearing where it finds no probable cause to conclude that an employer engaged in discriminatory practices, and we will only disturb that determination “if it is arbitrary, capricious or lacks a rational basis” … . Those flaws are present in a determination that stems from “an inadequate or abbreviated investigation” by SDHR … , such as one in which the agency does not afford the complainant “a full and fair opportunity to present evidence on his [or her] behalf and to rebut the evidence presented by the employer” … . Petitioner argues, among other things, that she was deprived of that opportunity when SDHR refused to consider her response to the notes of a one-party conference at which various individuals associated with [the employer] gave their accounts of her tenure with the firm.

We agree. … [T]he determination must be annulled and the matter remitted so that SDHR may conduct an investigation that is “neither abbreviated nor one-sided” and affords petitioner “a full and fair opportunity to . . . rebut the submissions of [the employer] in opposition to her complaint” … . Matter of Hong Wang v New York State Div. of Human Rights, 2019 NY Slip Op 08463, Third Dept 11-21-19

November 21, 2019/by Bruce Freeman

Administrative Law, Landlord-Tenant, Municipal Law

THE LOFT BOARD PROPERLY REJECTED TENANTS’ REQUEST TO WITHDRAW THEIR APPLICATIONS FOR COVERAGE UNDER THE LOFT LAW FOLLOWING A SETTLEMENT AGREEMENT WITH THE LANDLORD; HERE THE LANDLORD HELD COMMERCIAL PROPERTY WHICH INCLUDED THE TENANTS’ RESIDENCES IN THE ABSENCE OF A CERTIFICATE OF OCCUPANCY; THE LANDLORD HAD SETTLED WITH THE TENANTS, AGREEING TO OBTAIN A CERTIFICATE OF OCCUPANCY AND CONVERT THE PROPERTY TO RENT STABILIZED RESIDENCES (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined: (1) the settlement agreement between that landlord and tenants providing that the landlord would take steps to obtain a certificate of occupancy and convert the property into rent stabilized residences should not have been annulled in its entirety; (2) the tenants’ attempt, based on the settlement, to withdraw their applications for coverage of he property under the Loft Law was properly denied. The property in question was commercial property which included residences for which no certificate of occupancy had been issued:

The Loft Law is designed to integrate “uncertain and unregulated residential units, converted from commercial use, into the rent stabilization system in a manner which ensures compliance with the Multiple Dwelling Law and various building codes” … . The Loft Law was created to regulate the conversion of industrial, manufacturing, and commercial space into residential space. It enables an owner to rent space in a building while the structure is undergoing conversion pursuant to building department, fire department, and other regulatory requirements necessary to obtain a certificate of occupancy for a residential building. The work necessary to legalize a building for residential use is subject to specifically prescribed time periods (see Multiple Dwelling Law § 284[1]), and the Loft Board is specifically charged with determining interim multiple dwelling status and other issues of coverage, including coverage applications (see Multiple Dwelling Law § 282).

Here, the Supreme Court should have confirmed the Loft Board’s determination rejecting the tenants’ proposed withdrawal of their coverage applications and remitting the coverage applications … for adjudication. Contrary to the tenants’ contentions, the Loft Board had jurisdiction over the coverage applications (see Multiple Dwelling Law § 282), and the coverage applications did not become moot upon the tenants’ proposed withdrawal with prejudice of the applications. Title 29 of the Rules of the City of New York provides that the Loft Board may review settlement agreements and exercise discretion to reject a proposed settlement and remit matters for further investigation and adjudication (see NY City Loft Board Regulations [29 RCNY] § 1-06[j][5]). There is nothing in that rule that limits the Loft Board’s review of settlement agreements or its authority to re-open and remit a coverage application. Matter of Dom Ben Realty Corp. v New York City Loft Bd., 2019 NY Slip Op 08188, Second Dept 11-13-19

November 13, 2019/by Bruce Freeman

Administrative Law, Landlord-Tenant

CENTURY-OLD ELEVATOR MUST BE REPLACED, DESPITE THE COST AND DESPITE THE APPARENT FACT THAT ONLY ONE OF FOUR TENANTS USED THE ELEVATOR (FIRST DEPT).

The First Department, reversing Supreme Court, in a full-fledged opinion by Justice Tom, determined the ruling by the NYS Department of Housing and Community Renewal (DHCR) ruling requiring the landlord to provide elevator service was not irrational and must be upheld. The century-old elevator needed replacement at a cost of $150,000. Apparently the building has four tenants, and only one used the elevator. The opinion is comprehensive and cannot be fairly summarized here:

DHCR in its 2017 determination interpreted its own regulations to require that if elevator service was required under the Loft Law, it was also required under the Rent Stabilization Code upon the transition of the building to rent stabilization. This interpretation by DHCR of its own regulations should be upheld to the extent it is rational and not an arbitrary and capricious reliance on the facts of the case … . Certain facts are unclear regarding if and when the elevator broke down, or when the landlord acted on a decision to terminate operations. However … that would seem not to matter under these circumstances. Since elevator service had been provided while the building was regulated as an interim multiple dwelling, that service had to be continued without regard to the economic ramifications. In this sense, the cost to the landlord is not a factor that would displace the regulatory requirements and would not support setting aside the DHCR determination. * * *

… [W]e cannot conclude that DHCR was arbitrary and capricious in its evaluation of the relevant facts or irrational in concluding that in whatever manner elevator service was terminated, that action in the absence of DHCR’s approval was inconsistent with rent stabilization, and that elevator service, as a required service, had to be restored. Matter of Leonard St. Props. Group, Ltd. v New York State Div. of Hous. & Community Renewal, 2019 NY Slip Op 08165, First Dept 11-12-19

November 12, 2019/by Bruce Freeman

Administrative Law, Environmental Law

DEPARTMENT OF ENVIRONMENTAL CONSERVATION’S (DEC’S) RULING ALLOWING SNOWMOBILES TO USE A ROADWAY IN THE ADIRONDACK PARK UPHELD (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, over two dissenting opinions (three judges) held that the determination by the Department of Environmental Conservation (DEC) to allow snowmobiles to use an existing roadway in the Adirondack Park was not irrational and should stand:

Our state’s constitutional commitment to conservation for more than a century has ensured the continued protection of the region’s iconic landscapes while providing extraordinary outdoor recreational experiences to citizens of this state and tourists from around the world. Agencies charged with managing park property must balance, within applicable constitutional, statutory and regulatory constraints, the preeminent interest in maintaining the character of pristine vistas with ensuring appropriate access to remote areas for visitors of varied interests and physical abilities. In this appeal, we review a challenge brought by environmental groups to a determination of the New York State Department of Environmental Conservation (“DEC”) made in consultation with the Adirondack Park Agency (“APA”) that, among other things, permits seasonal snowmobile use on an existing roadway on property recently acquired by the State and added to the Adirondack Forest Preserve. Because we are unpersuaded by petitioners’ contention that the determination either contravenes controlling motor vehicle use restrictions in the Adirondack Park State Land Master Plan (“Master Plan”) and Wild, Scenic and Recreational Rivers System Act (ECL 15-2701 et seq. [“Rivers Act”]) or is otherwise irrational, we affirm the challenged portion of the Appellate Division order. Matter of Adirondack Wild: Friends of the Forest Preserve v New York State Adirondack Park Agency, 2019 NY Slip Op 07520, CtApp 10-22-19

October 22, 2019/by Bruce Freeman

Administrative Law, Civil Procedure, Education-School Law

THE STATE UNIVERSITY OF NY BOARD OF TRUSTEES’ CHARTER SCHOOL COMMITTEE DID NOT HAVE THE AUTHORITY TO CHANGE THE TEACHER CERTIFICATION REQUIREMENTS FOR TEACHERS IN CHARTER SCHOOLS (THIRD DEPT).

The Third Department, after finding the petitioners in one of the two actions had the capacity to sue and standing, determined the State University of New York Board of Trustees’ Charter School Committee (the Committee) did not have the authority to promulgate regulations changing the teacher certification requirements for teachers in certain charter schools:

… [I]t is a basic principle of administrative law that an agency has only “those powers expressly conferred by its authorizing statute, as well as those required by necessary implication” … . Education Law § 355 (2-a) authorizes the Committee, “[n]otwithstanding any other provision of law, rule, or regulation to the contrary, . . . to promulgate regulations with respect to governance, structure and operations of [SUNY-authorized] charter schools.” Respondents assert that the regulations fall within this statutory authorization because teacher licensure pertains to the “operation” of SUNY-authorized charter schools. In analyzing this claim, we need not defer to the Committee’s interpretation of the Education Law, as “the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent” … . * * *

We … conclude that the inclusion of the word “operation” in Education Law § 355 (2-a) does not authorize the Committee to promulgate regulations pertaining to teacher licensure and certification. We further find that the regulations conflict with provisions of the Education Law that authorize the Commissioner to prescribe regulations governing the certification of teachers and that require most teachers in charter schools and pre-kindergartens to be certified in the same manner as other public school teachers … . The Committee therefore exceeded its authority in promulgating the regulations … . Matter of New York State Bd. of Regents v State Univ. of N.Y., 2019 NY Slip Op 07458, Third Dept 10-17-19

October 17, 2019/by Bruce Freeman