New York City’s Department of Housing Preservation and Development cannot reconsider its decision to give a four-bedroom subsidized co-op to a family of five, against its normal rules, because the other family challenging the decision has no standing to sue, a state appeals court recently found.

The unanimous Appellate Division, First Department panel ruled in Echevarria v. Wambua, 103396/12, that there was no grounds for a remand, even though the housing agency said it believed it made a mistake. The decision reversed a 2013 decision by Manhattan Acting Supreme Court Justice Peter Moulton granting an Article 78 petition challenging the agency’s decision.

Justices Angela Mazzarelli, John Sweeny, Richard Andrias, Sallie Manzanet-Daniels and Barbara Kapnick joined in the unsigned opinion.

The Article 78 petition was filed by Alicia Echevarria, a shareholder in East Midtown Plaza, a co-op complex in Manhattan managed by the housing department under the state’s Mitchell-Lama affordable housing program. She lives there with her five-member family.

Normally, four-bedroom apartments are reserved for families of six, and three-bedroom apartments for families of five. Families can ask to be put on waiting lists for larger apartments as they become available.

Echevarria alleged that her family got on the waiting list for a three-bedroom apartment after the birth of her third child. When a four-bedroom apartment became available, she alleged, they were told they did not qualify, even though there were no six-member families on a waiting list for a four-bedroom apartment.

Instead, the housing agency gave the apartment to a co-op board member, Mark Andermanis, and his wife, Sandra Andermanis, who also had only three children. It is undisputed that Echevarria was ahead of the Andermanises on the waiting list for a three-bedroom apartment.

Echevarria then filed the Article 78 petition against the agency, alleging that if it was waiving normal occupancy rules, it had to give the apartment to her family, since she was ahead on the waiting list.

The housing agency took a different position from either party. It filed a cross-motion saying that it had concluded it was wrong to waive the occupancy rules. It asked for the matter to be remanded so that it could find a six-person family to take the apartment instead.

Moulton granted the agency’s request, but Echevarria appealed.

The First Department panel said that, whatever the merits of the agency’s decision, Echevarria never had standing to sue because her family was not eligible for the apartment either, and so had not suffered any harm.

“It is undisputed that petitioner, also the head of a five-person household living in a two-bedroom apartment in the building, was not eligible for the four-bedroom apartment at issue due to the same [housing agency] rule, and although she expressed interest, she never actually submitted an application for the apartment,” the panel wrote.

“Moreover, [the agency] has stated that it has since concluded that it did not have the authority to grant an occupancy waiver for the reasons presented here, and that if a remand were granted it would rescind the approval granted to the Andermanises, and would instead conduct an external search for applicants meeting the six-person occupancy requirement,” it added.

“Hence, petitioner remains ineligible for the four-bedroom apartment and cannot show that she has suffered an injury that is personal and distinct from that of the general public, or that she has an actual legal stake in the outcome of this proceeding,” the panel continued. “Accordingly, petitioner did not have standing to initiate this proceeding.”

The decision means that the Andermanises will keep the apartment.

Adam Leitman Bailey, who represents the Andermanises, said he was pleased with the decision.

“Someone without standing cannot bring a proceeding to undo a matter of discretion made by an administrative agency,” he said. “Our clients are happy that this nightmare is finally over and they can enjoy their apartment without being bullied.”

Kevin J. Smith, of counsel at Sheppard, Mullin, Richter & Hampton, who represents Echevarria, could not be reached for comment.

The housing agency was represented by Karen Griffin of the city’s law department. The department did not return a request for comment.

@|Brendan Pierson can be contacted at bpierson@alm.com. Twitter: @brenpiers.