Scott E. Mollen
Scott E. Mollen ()

Landlord-Tenant—Rent Overcharge—Treble Damages—DHCR “Blurred the Distinction Between Being An Independent Neutral Arbitrator and An Advocate”—DHCR Relied On Documents Outside the Record—Deputy Commissioner Did Independent Investigation and Found Old Records—Subsequent Owners Are Liable For Unlawful Actions of Predecessors

THIS DECISION INVOLVED an Article 78 petition commenced by a tenant. The “sole issue is should the overcharge due here be trebled.”

The rent administrator (RA) had found an overcharge in the tenant’s favor of $19,829.76. The RA held the overcharge was “willful” and trebled the total to $59,581.58. The landlord then commenced a petition for administrative review (PAR). The landlord argued that since the statute of limitations barred review beyond four years from the filing of the overcharge complaint, “DHCR could not consider a 1993 rent reduction order (RRO).” The landlord also asserted that it had purchased the building on Aug. 27, 2014, “after the RA’s order of Aug. 8, 2014 and therefore should not be held liable for penalties for willful overcharge.”

The landlord won its PAR with respect to the issue of treble damages. The DHCR Deputy Commissioner (DHCR) had found that the overcharge was not willful and the RA had “used facts and arguments not made by the parties.” DHCR noted that the four year look back argument was addressed by the Court of Appeals in Cintron v. Calogerio, 15 NY3d 347 (2010), “which held that [DHCR] must pierce the four year statute of limitations to give effect to outstanding rent reduction orders in rent overcharges cases.”

DHCR searched agency records and found that a hot water issue seemed to have been resolved on Nov. 24, 1993, pursuant to an agency inspection of that date. DHCR cited evidence that “the prior owner had applied to restore the rent on December 4, 2013, before receiving the RA’s treble damage notice.” DHCR thereafter served the subject apartments with notices asking whether the hot water problem had been addressed. The petitioner had not responded to “a final notice pending default served on July 15, 2014.” A year later, a rent restoration order was issued. The court stated that “[t]hose facts were not part of the arguments” and that rationale was not “followed.”

DHCR criticized the RA for issuing the treble damages award against the former owner before its rent restoration application had been determined. DHCR did not rely on a second rent reduction order, because only the other order was identified and served in the agency’s amended final notice to owner.

DHCR determined that such failure “could not serve as a basis to impose treble damages.” These arguments had not been made by the current owner, who had brought the PAR. Since the arguments had never been made, there had been no response by the tenant. The tenant claimed that “the rationales relied upon by DHCR were legally unsupportable” and that “the Deputy Commissioner’s action in sua sponte substituting entirely new bases for modifying the [RA's] order-without giving [tenant] an opportunity to be heard on them-and its reliance on matters that were outside the record of the underlying docket being reviewed was arbitrary and capricious.” The landlord noted that “the records relied upon by DHCR were no longer obtainable” since they were apparently destroyed in 1999.

The court explained:

The Rent Stabilization Code §2523.4(a)(1) makes it clear that a rent reduction order bars the owner from collecting any future increases until a rent restoration order is issued. Here as noted earlier, the prior owner just applied for this in December of 2013 and it was not granted until April 2015. At oral argument, the above was discussed, but mostly in the context of DHCR’s consideration of new facts based on arguments never made by the owner in its PAR.

DHCR asked the court to remand this controversy, acknowledging how problematic the above was. It wanted a kind of “do over,” but one where the additional new facts could be addressed by all. If that was done, certainly the owner would and should be notified and given a chance to participate. However, petitioner argues that this would be unfair and improper. The exclusive remedy should be, counsel urges, remand but with instructions to annul the Deputy Commissioner’s order and reinstate the RA’s which included the treble damages. Since both sides agreed to a remand, I asked for short letter briefs on what to tell DHCR when I did direct such a transfer.

The court found that the remand “should be limited to the facts and arguments argued by the parties in the PAR proceeding.” PAR had been decided, “not on a mistake but rather on a decision by the deputy commissioner to independently conduct his own investigation and unearth old records from years before so as to put in question whether the circumstances of the rent reduction order of 1993 still applied. There was no justification for this, particularly when it is the owner’s burden to prove that it did not act willfully in continuing to charge an improper and elevated rent while the RRO was still alive and well. Further, case law makes it clear that subsequent owners are bound by unlawful actions of their predecessors….” Moreover, the current owner was the one who commenced the PAR and “was the one involved in the overcharge proceeding before the RA as well.”

The court held that DHCR’s determination constituted an abuse of discretion and opined that DHCR had “over reached” and in doing so, DHCR “blurred the distinction between being an independent, neutral arbitrator and an advocate. Deciding a case on documents never referred to earlier, is to go outside the record in an improper and unacceptable manner. It is a determination that should be annulled and it is.” Therefore, the court held that DHCR’s decision should be annulled and remanded the matter to DHCR to determine the matter solely on the original documents made at the PAR.

Matter of Peralta v. N.Y. State Division of Housing and Community Renewal, 101248/15, NYLJ 1202773325405, at *1 (Sup., NY, Decided Nov. 10, 2016), Schlesinger, J.

Landlord-Tenant—Court Dismissed Disabled Plaintiffs’ Complaint Alleging Entitlement to Two Parking Spaces—Reasonable Accommodation Claim Under Americans With Disabilities Act and Fair Housing Act—Request For A Parking Space For Disabled Individual May Be A Reasonable Accommodation, But No Precedent Held Request For Two Parking Spaces By Disabled Tenants Of One Apartment Is A Reasonable Accommodation

THE PLAINTIFFS are husband and wife, disabled and over the age of 65. For approximately 13 years, the plaintiffs had paid for and been permitted to use two parking spaces—spaces No. 4 and No. 265.

In January 2016, the landlord advised the plaintiffs that they could no longer use parking space No. 265. The plaintiffs were also advised that they had to remove their personal belongings from the storage area next to parking space No. 4. The plaintiffs then became concerned about both parking spaces. The plaintiff wife asked the landlord to not take away her parking space because she is disabled. The landlord requested medical documentation as to the wife’s disability. The wife asked for an extension of time to submit such documentation. That request was denied. After the subject litigation was commenced, the landlord directed the wife to immediately empty out the storage space next to parking space No. 4.

The complaint asserted “a reasonable accommodation” claim under the Americans with Disabilities Act, (ADA) and the Fair Housing Act (FHA).

The court explained that:

To state a prima facie case for discrimination based on a failure to reasonably accommodate, a plaintiff must demonstrate that: (1) he suffers from a [disability or] handicap as defined by the [statutes]; (2) the defendant knew or reasonably should have known of the plaintiff’s [disability or] handicap; (3) accommodation of the [disability or] handicap may be necessary to afford plaintiff an equal opportunity to use and enjoy the dwelling; and (4) defendants refused to make such accommodation.

The court noted that “whether a requested accommodation is required is ‘highly fact-specific, requiring case-by-case determination’” and “[a]n accommodation is reasonable when it ‘gives the otherwise qualified plaintiff with disabilities meaningful access to the program or services s ought.’”

“Provision of a parking space for a disabled individual has been found to be a reasonable accommodation.” However, the plaintiffs had “not offered” and the court could not find, “any precedent holding that a request for two parking spaces by disabled tenants of one apartment unit is a reasonable accommodation.” The court stated that although “having only one parking space may be less convenient for plaintiffs, the law does not require defendants to provide the best possible accommodation.” Moreover, a landlord need not consider the plaintiffs’ “individual preferences” when choosing “the means of accommodation, ‘so long as the means chosen were reasonable accommodations.’” Courts have held that landlords need not provide disabled individuals “with every accommodation” they request or the accommodation of their choice.

The court found that the plaintiffs “failed to plausibly allege that one parking space…is not sufficient to provide them with ‘meaningful access; to the benefits to which they are entitled.”

The wife had argued that having a second parking space would permit her to travel for “medical treatments and have independent mobility.” However, the plaintiffs had not explained why one parking space would not permit the plaintiffs to go for medical treatments and have independent mobility and there was no allegation that either of the two parking space were “not properly situated to provide a reasonable accommodation.” The complaint appeared “to be no different from that of any other couple with only one on-site parking space: that it would be an inconvenience for two independent people to have to share a car.”

The plaintiffs had not demonstrated that the landlord’s rules allowed them, or non-disabled tenants to have two parking spaces. The plaintiffs did not show that there was alternative parking available to nondisabled persons that is too far for them to use or that there was “any other ‘correlation between the second parking spot and the amelioration of either of [plaintiffs'] disabilities.” The plaintiffs’ position seemed to be that renters should be asked “to give up spaces ahead of co-op shareholders like themselves….”

The court further reasoned that neither the ADA nor the FHA were intended to elevate plaintiffs above their fellow residents. The law requires only equality, not that a ‘superior advantage’ be given.” Thus, the court held that the plaintiffs had “not plausibly alleged that a second parking space is necessary for their use and enjoyment of their residence.” Therefore, the court did not need to reach the issue of whether “continuing to provide a second parking space would be an undue burden or cause substantial hardship to defendants,” i.e., “no need to engage in further burden-shifting” analysis.

The court also explained that the landlord’s willingness to permit the plaintiffs to use the parking spaces for approximately 13 years did not establish that access to the second spot is a necessary accommodation. Case law held that a “voluntary effort to accommodate [plaintiff] in excess of its legal obligations is admirable. But it does not compel [the landlord] to continue to accommodate [the plaintiff] beyond what the law requires.” The court also rejected the plaintiffs’ retaliation claim based on the loss of their storage unit. The plaintiffs had been told to give up their storage unit two weeks before they had filed their complaint and “individuals may not be sued under the ADA.”

Hildred Temple v. Hudson View Owners, 16-CV-3203, NYLJ 1202773652924, at *1 (SDNY, Decided Nov. 28, 2016), Seibel, J.

Landlord-Tenant—Rent Overcharge—Treble Damages—DHCR “Blurred the Distinction Between Being An Independent Neutral Arbitrator and An Advocate”—DHCR Relied On Documents Outside the Record—Deputy Commissioner Did Independent Investigation and Found Old Records—Subsequent Owners Are Liable For Unlawful Actions of Predecessors

THIS DECISION INVOLVED an Article 78 petition commenced by a tenant. The “sole issue is should the overcharge due here be trebled.”

The rent administrator (RA) had found an overcharge in the tenant’s favor of $19,829.76. The RA held the overcharge was “willful” and trebled the total to $59,581.58. The landlord then commenced a petition for administrative review (PAR). The landlord argued that since the statute of limitations barred review beyond four years from the filing of the overcharge complaint, “DHCR could not consider a 1993 rent reduction order (RRO).” The landlord also asserted that it had purchased the building on Aug. 27, 2014, “after the RA’s order of Aug. 8, 2014 and therefore should not be held liable for penalties for willful overcharge.”

The landlord won its PAR with respect to the issue of treble damages. The DHCR Deputy Commissioner (DHCR) had found that the overcharge was not willful and the RA had “used facts and arguments not made by the parties.” DHCR noted that the four year look back argument was addressed by the Court of Appeals in Cintron v. Calogerio , 15 NY3d 347 ( 2010 ) , “which held that [DHCR] must pierce the four year statute of limitations to give effect to outstanding rent reduction orders in rent overcharges cases.”

DHCR searched agency records and found that a hot water issue seemed to have been resolved on Nov. 24, 1993, pursuant to an agency inspection of that date. DHCR cited evidence that “the prior owner had applied to restore the rent on December 4, 2013, before receiving the RA’s treble damage notice.” DHCR thereafter served the subject apartments with notices asking whether the hot water problem had been addressed. The petitioner had not responded to “a final notice pending default served on July 15, 2014.” A year later, a rent restoration order was issued. The court stated that “[t]hose facts were not part of the arguments” and that rationale was not “followed.”

DHCR criticized the RA for issuing the treble damages award against the former owner before its rent restoration application had been determined. DHCR did not rely on a second rent reduction order, because only the other order was identified and served in the agency’s amended final notice to owner.

DHCR determined that such failure “could not serve as a basis to impose treble damages.” These arguments had not been made by the current owner, who had brought the PAR. Since the arguments had never been made, there had been no response by the tenant. The tenant claimed that “the rationales relied upon by DHCR were legally unsupportable” and that “the Deputy Commissioner’s action in sua sponte substituting entirely new bases for modifying the [RA's] order-without giving [tenant] an opportunity to be heard on them-and its reliance on matters that were outside the record of the underlying docket being reviewed was arbitrary and capricious.” The landlord noted that “the records relied upon by DHCR were no longer obtainable” since they were apparently destroyed in 1999.

The court explained:

The Rent Stabilization Code §2523.4(a)(1) makes it clear that a rent reduction order bars the owner from collecting any future increases until a rent restoration order is issued. Here as noted earlier, the prior owner just applied for this in December of 2013 and it was not granted until April 2015. At oral argument, the above was discussed, but mostly in the context of DHCR’s consideration of new facts based on arguments never made by the owner in its PAR.

DHCR asked the court to remand this controversy, acknowledging how problematic the above was. It wanted a kind of “do over,” but one where the additional new facts could be addressed by all. If that was done, certainly the owner would and should be notified and given a chance to participate. However, petitioner argues that this would be unfair and improper. The exclusive remedy should be, counsel urges, remand but with instructions to annul the Deputy Commissioner’s order and reinstate the RA’s which included the treble damages. Since both sides agreed to a remand, I asked for short letter briefs on what to tell DHCR when I did direct such a transfer.

The court found that the remand “should be limited to the facts and arguments argued by the parties in the PAR proceeding.” PAR had been decided, “not on a mistake but rather on a decision by the deputy commissioner to independently conduct his own investigation and unearth old records from years before so as to put in question whether the circumstances of the rent reduction order of 1993 still applied. There was no justification for this, particularly when it is the owner’s burden to prove that it did not act willfully in continuing to charge an improper and elevated rent while the RRO was still alive and well. Further, case law makes it clear that subsequent owners are bound by unlawful actions of their predecessors….” Moreover, the current owner was the one who commenced the PAR and “was the one involved in the overcharge proceeding before the RA as well.”

The court held that DHCR’s determination constituted an abuse of discretion and opined that DHCR had “over reached” and in doing so, DHCR “blurred the distinction between being an independent, neutral arbitrator and an advocate. Deciding a case on documents never referred to earlier, is to go outside the record in an improper and unacceptable manner. It is a determination that should be annulled and it is.” Therefore, the court held that DHCR’s decision should be annulled and remanded the matter to DHCR to determine the matter solely on the original documents made at the PAR.

Matter of Peralta v. N.Y. State Division of Housing and Community Renewal, 101248/15, NYLJ 1202773325405, at *1 (Sup., NY, Decided Nov. 10, 2016), Schlesinger, J.

Landlord-Tenant—Court Dismissed Disabled Plaintiffs’ Complaint Alleging Entitlement to Two Parking Spaces—Reasonable Accommodation Claim Under Americans With Disabilities Act and Fair Housing Act—Request For A Parking Space For Disabled Individual May Be A Reasonable Accommodation, But No Precedent Held Request For Two Parking Spaces By Disabled Tenants Of One Apartment Is A Reasonable Accommodation

THE PLAINTIFFS are husband and wife, disabled and over the age of 65. For approximately 13 years, the plaintiffs had paid for and been permitted to use two parking spaces—spaces No. 4 and No. 265.

In January 2016, the landlord advised the plaintiffs that they could no longer use parking space No. 265. The plaintiffs were also advised that they had to remove their personal belongings from the storage area next to parking space No. 4. The plaintiffs then became concerned about both parking spaces. The plaintiff wife asked the landlord to not take away her parking space because she is disabled. The landlord requested medical documentation as to the wife’s disability. The wife asked for an extension of time to submit such documentation. That request was denied. After the subject litigation was commenced, the landlord directed the wife to immediately empty out the storage space next to parking space No. 4.

The complaint asserted “a reasonable accommodation” claim under the Americans with Disabilities Act, (ADA) and the Fair Housing Act (FHA).

The court explained that:

To state a prima facie case for discrimination based on a failure to reasonably accommodate, a plaintiff must demonstrate that: (1) he suffers from a [disability or] handicap as defined by the [statutes]; (2) the defendant knew or reasonably should have known of the plaintiff’s [disability or] handicap; (3) accommodation of the [disability or] handicap may be necessary to afford plaintiff an equal opportunity to use and enjoy the dwelling; and (4) defendants refused to make such accommodation.

The court noted that “whether a requested accommodation is required is ‘highly fact-specific, requiring case-by-case determination’” and “[a]n accommodation is reasonable when it ‘gives the otherwise qualified plaintiff with disabilities meaningful access to the program or services s ought.’”

“Provision of a parking space for a disabled individual has been found to be a reasonable accommodation.” However, the plaintiffs had “not offered” and the court could not find, “any precedent holding that a request for two parking spaces by disabled tenants of one apartment unit is a reasonable accommodation.” The court stated that although “having only one parking space may be less convenient for plaintiffs, the law does not require defendants to provide the best possible accommodation.” Moreover, a landlord need not consider the plaintiffs’ “individual preferences” when choosing “the means of accommodation, ‘so long as the means chosen were reasonable accommodations.’” Courts have held that landlords need not provide disabled individuals “with every accommodation” they request or the accommodation of their choice.

The court found that the plaintiffs “failed to plausibly allege that one parking space…is not sufficient to provide them with ‘meaningful access; to the benefits to which they are entitled.”

The wife had argued that having a second parking space would permit her to travel for “medical treatments and have independent mobility.” However, the plaintiffs had not explained why one parking space would not permit the plaintiffs to go for medical treatments and have independent mobility and there was no allegation that either of the two parking space were “not properly situated to provide a reasonable accommodation.” The complaint appeared “to be no different from that of any other couple with only one on-site parking space: that it would be an inconvenience for two independent people to have to share a car.”

The plaintiffs had not demonstrated that the landlord’s rules allowed them, or non-disabled tenants to have two parking spaces. The plaintiffs did not show that there was alternative parking available to nondisabled persons that is too far for them to use or that there was “any other ‘correlation between the second parking spot and the amelioration of either of [plaintiffs'] disabilities.” The plaintiffs’ position seemed to be that renters should be asked “to give up spaces ahead of co-op shareholders like themselves….”

The court further reasoned that neither the ADA nor the FHA were intended to elevate plaintiffs above their fellow residents. The law requires only equality, not that a ‘superior advantage’ be given.” Thus, the court held that the plaintiffs had “not plausibly alleged that a second parking space is necessary for their use and enjoyment of their residence.” Therefore, the court did not need to reach the issue of whether “continuing to provide a second parking space would be an undue burden or cause substantial hardship to defendants,” i.e., “no need to engage in further burden-shifting” analysis.

The court also explained that the landlord’s willingness to permit the plaintiffs to use the parking spaces for approximately 13 years did not establish that access to the second spot is a necessary accommodation. Case law held that a “voluntary effort to accommodate [plaintiff] in excess of its legal obligations is admirable. But it does not compel [the landlord] to continue to accommodate [the plaintiff] beyond what the law requires.” The court also rejected the plaintiffs’ retaliation claim based on the loss of their storage unit. The plaintiffs had been told to give up their storage unit two weeks before they had filed their complaint and “individuals may not be sued under the ADA.”

Hildred Temple v. Hudson View Owners, 16-CV-3203, NYLJ 1202773652924, at *1 (SDNY, Decided Nov. 28, 2016), Seibel, J.