LAVANANT v. STATE DHCR
148 A.D.2d 185 (1989)
In the Matter of Robert Lavanant et al., Appellants, v. State Division of Housing and Community Renewal et al., Respondents
Appellate Division of the Supreme Court of the State of New York, First Department.
July 20, 1989
Richard Hartzman of counsel ( Dennis B. Hasher, attorney), for respondents.
MURPHY, P. J., SULLIVAN, KASSAL and ELLERIN, JJ., concur.
Petitioner landlords Robert and Suzanne Lavanant appeal from a judgment of the Supreme Court, New York County, which dismissed their petition seeking review of a determination by respondent State Division of Housing and Community Renewal (the Division) granting treble damages to a tenant on rent overcharges collected by petitioners after April 1, 1984.
The issue here is whether the respondent Division properly imposed treble damages upon petitioner landlords pursuant to title 26 of the Administrative Code of the City of New York upon a finding of a rent overcharge where the complaint was filed by the tenant prior to April 1, 1984, the effective date of section YY51-6.0.5 (now § 26-516) of said code. Petitioners do not challenge the Division's determination that their tenant was in fact overcharged both before and after April 1, 1984.
Petitioners are the owners of an apartment building at 228
On February 3, 1987, some five years after the initial complaint, the District Rent Administrator issued an order finding that since December 15, 1979 the tenant had been overcharged in rent by $1,645.47 and in security deposits by $22.27, and directing a refund of the overcharges with interest.
On February 11, 1987 the tenant filed a "Petition for Administrative Review", claiming that the District Rent Administrator's order should be modified to award him treble damages pursuant to the Rent Stabilization Law (Administrative Code) § YY51-6.0.5 (now § 26-516) since petitioners had not established by a preponderance of the evidence that the overcharges were not willful. Petitioners responded, claiming, inter alia, that the tenant's complaint was filed prior to April 1, 1984, the effective date of section YY51-6.0.5; that they had not received notice of the possible imposition of treble damages; and that their responsiveness to the original complaint,
Based upon these submissions and a review of the entire record, the Division, on June 26, 1987, issued an order directing treble damages as to the post-April 1, 1984 overcharge of $696.81, stating in part:
Thereafter, the Lavanants commenced a proceeding pursuant to CPLR article 78 to vacate the Division's award of treble damages. In the judgment appealed from, the IAS court denied the petition, finding that the Division's determination had a rational basis and that treble damages may be awarded to a tenant for overcharges accruing on or after April 1, 1984 even though the tenant's complaint was filed prior to that date. The court also noted that willfulness is "knowing", not necessarily malicious, conduct and that since the petitioners failed to supply the Division with "any evidence whatsoever on the issue" of willfulness, there was no need to hold a hearing.
This appeal followed.
Petitioners' assertion that the Division lacks the statutory authority to impose treble damages upon them because their tenant's complaint was filed prior to April 1, 1984, the effective date of section YY51-6.0.5 of the Administrative Code (now § 26-516), is without merit. (Matter of Cenpark Realty Co. v State Div. of Hous. & Community Renewal, 131 A.D.2d 980 [1st Dept 1987], lv denied 70 N.Y.2d 609.) In Cenpark, the State Division of Housing and Community Renewal determined that a tenant had been overcharged and directed a refund, including treble damages for the period after April 1, 1984. Although informed that she could file a petition for administrative review of the said order, the landlord failed to do so. Instead, she sought relief by means of a CPLR article 78 proceeding in the Supreme Court. That court denied relief for failure to exhaust administrative remedies and this court affirmed.
Section 26-516 (a) of the Administrative Code provides that a landlord who has been found by the Division to have collected rent overcharges "shall be liable to the tenant for a penalty equal to three times the amount of such overcharge." However, "if the owner establishes by a preponderance of the evidence that the overcharge was not willful", the penalty is to be assessed at only the amount of the overcharge plus interest. Moreover, section 26-516 (a) (2) proscribes the award of treble damages "based upon an overcharge having occurred more than two years before the complaint is filed or * * * which occurred prior to April first, nineteen hundred eighty-four."
Next, petitioners contend that the respondents erroneously determined that the overcharge to Peters was "willful", since such overcharge was due to their belief that they were entitled to increases for certain improvements (Code of the Rent Stabilization Association of New York City, Inc. § 20 [C] ), which improvements were eventually disallowed by respondents. However, petitioners' contention is belied by the record. The Division specifically found that the overcharges originated in October 1978 with the first of the aforementioned two prior leases for the apartment and was not due, as claimed by petitioners, to an increase based upon the cost of lumber, a new lock and an air-conditioner charge, added with other allowed improvements at the time of petitioners' lease to Mr. Peters. The origin of the overcharge in 1978 is made obvious by the record; it was carried through subsequent leases and was modified through deductions for allowable improvements, finally leading to an overcharge of $9.80 per month in the first lease to Mr. Peters in December 1979. Petitioners offered no evidence that the overcharges in the prior leases were not willful, nor do they do so now.
Willfulness is "intentionally doing an act and knowing that the act is being done." (Matter of Old Republic Life Ins. Co. v Thacher,
For the first time, in their reply brief before this court, petitioners contend that the prior leases should not have been considered by the Division because the law has changed and no longer requires a landlord to produce a complete rent history. The old law, section 42 (A) of the Code of the Rent Stabilization Association of New York City, Inc., promulgated pursuant to former section YY51-6.0 of the Administrative Code, provided in relevant part as follows: "It shall be the
Under section 26-516 (g) of the Administrative Code of the City of New York, which was the relevant law in effect on February 3, 1987, the date of the Division's order, the petitioners were not required to produce rent records further back than April 1, 1980. In this regard section YY51-6.0.5 (g) (now § 26-516 [g]), effective April 1, 1984, provides: "Any owner who has duly registered a housing accommodation * * * shall not be required to maintain or produce any records relating to rentals of such accommodation for more than four years prior to the most recent registration or annual statement for such accommodation."
In their reply brief the petitioners also rely on Matter of J.R.D. Mgt. Corp. v Eimicke (
Respondents in a supplemental surreply brief filed upon leave by this court argue that, contrary to the holding in Matter of J.R.D. Mgt. Corp. (supra), its application of the law as it existed at the time of the complaint, under these circumstances, was rational, and consistent with both the legislative intent of the Omnibus Housing Act (L 1983, ch 403) and with the established policies of the Division and of its predecessor
We find that the administrative determination that complete rent histories should be required for cases filed prior to April 1, 1984 has a rational basis.
First, the policy appears to be in accord with legislative intent. The Omnibus Housing Act (the Act) which created what is now section 26-516 (g) was enacted on June 30, 1983. The Act established for the first time a four-year limitation on the calculation of rent overcharges and, concomitantly, on the number of years for which rental records were required. The effective date of section 26-516 (g) was delayed until April 1, 1984 in order to enable tenants whose claims for overcharges had accrued more than four years prior to the enactment time to file claims under the existing law. Widespread publicity, including a "Press Advisory of the Attorney-General Robert Abrams" encouraging tenants to file prior to the April 1, 1984 "deadline", resulted in some 30,000 filings.
Prior to that time, the policy of the Conciliation and Appeals Board, adopted August 18, 1982, was to require that all landlords supply a complete rental history. Section 20 of the Omnibus Housing Act provides for the continuation of proceedings by the Division "in the same manner * * * as if conducted and completed by [the] conciliation and appeals board." Similarly, section 19 provides for the continuance of rules and regulations "until duly modified or abrogated by the division". Pursuant to sections 19 and 20, the Conciliation and Appeals Board on February 16, 1984 voted to continue the policy of requiring that complete records to 1974 be produced in connection with all overcharge complaints filed prior to April 1, 1984. This policy finds support in Matter of 61 Jane St. Assocs. v New York City Conciliation & Appeals Bd. (
Thus, respondents requirement that leases dating back to 1974 be provided was rational and finds support in both the law and legislative history of the act.
Second, the interpretation by an administrative agency of the statutes it administers and of its own rules and regulations should be given deference if not unreasonable. (Matter Salvati v Eimicke,
Accordingly, the judgment of the Supreme Court, New York County (Kristin Booth Glen, J.), entered May 2, 1988, should be affirmed, without costs.
Judgment, Supreme Court, New York County, entered on May 2, 1988, unanimously affirmed, without costs and without disbursements. Application granted only to the extent of supplementing record.
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