Fieger v. Glen Oaks Village, Inc.

206 Misc. 137, 132 N.Y.S.2d 88, 1954 N.Y. Misc. LEXIS 3391
CourtNew York Supreme Court
DecidedJune 1, 1954
StatusPublished
Cited by4 cases

This text of 206 Misc. 137 (Fieger v. Glen Oaks Village, Inc.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fieger v. Glen Oaks Village, Inc., 206 Misc. 137, 132 N.Y.S.2d 88, 1954 N.Y. Misc. LEXIS 3391 (N.Y. Super. Ct. 1954).

Opinion

Pette, J.

Motions by defendants to dismiss the complaint pursuant to subdivisions 1 and 4 of rule 106 of the Buies of Civil Practice upon the grounds that this court has not jurisdiction of the subject of the action and that the complaint fails to state facts sufficient to constitute a cause of action.

The complaint contains five causes of action. In the first cause of action plaintiffs allege that they are tenants and that they are suing on behalf of themselves and ‘ ‘ all other tenants, past and present ’ ’; that during the years 1946 to 1949, the owner, wishing to erect buildings upon land leased from the Land Corporations under leases of more than fifty years, applied [139]*139to Federal Housing Administration (hereinafter referred to as F.H.A.”) for mortgage insurance of about $24,000,000, pursuant to section 608 of the National Housing Act (U. S. Code, tit. 12, § 1743), and the regulations issued thereunder; and that in its applications the owner estimated the total cost of construction at $26,700,000. The Federal Housing Commissioner (hereinafter called the Commissioner ”) issued the mortgage insurance in the sum of $24,000,000 and fixed the maximum rentals which the owner could properly charge, pursuant to his authority under section 608, to regulate and restrict the rents to be charged by a mortgagor under a loan insured by F.H.A.

The complaint then alleges that the “ actual total cost of construction ” proved to be only $20,000,000, which is $6,700,000 less than the cost estimated in the applications for mortgage insurance filed by defendant corporation.

Plaintiffs complain of the failure of the owner to use the $6,700,000, representing the difference between the estimated and the actual cost of construction, to reduce the F.H.A. insured mortgages, and allege that the maximum rents fixed by the Commissioner have been and are excessive in the sum of about $360,000 per annum, since there was a “ direct relationship ” between (1) the maximum rents fixed by the Commissioner and (2) the principal amounts of the mortgages which F.H.A. insured and the ground rentals payable by the owner to the Land Corporations.

The second cause of action is similar in content and makes the additional allegation that the defendants entered into a conspiracy to defraud the tenants of Glen Oaks Village by wilfully and fraudulently and by improper and devious means ’ ’ obtaining excessive appraisals of the land, ‘ ‘ and/or ’ ’ obtaining excessive estimates of the total cost of construction, and/or ” obtaining F.H.A. insured mortgages in excessive amounts.

The third cause of action alleges that said estimates to F.H.A. constituted gross misrepresentations ” and were grossly erroneous.”

The fourth cause of action is similar in content and makes the conclusory charge that the defendants were guilty of “ gross negligence ” in estimating the cost of construction at $26,700,000 in the applications for F.H.A. mortgage insurance.

The fifth cause of action refers to a failure to comply with the drawings and specifications for the buildings estimated to cost $26,700,000 and the construction at the lesser cost of $20,000,000.

[140]*140The prayer for relief, seeks an equitable decree for the repayment by the individual defendants to the owner of the mortgaged premises of the sum of $6,000,000 and interest and directing said owner either to apply the $6,000,000 towards the reduction of the mortgages or to retain the $6,000,000 as a fund to pay principal installments as they become due, and that in the nature of things with the reduction of the mortgages there would follow a revision of the leases and rentals in reduced amounts, for the benefit of the plaintiffs and other tenants.

On a motion such as this, all of the averments of the attacked pleading are taken as true (Latham v. Father Divine, 299 N. Y. 22; Abrams v. Allen, 297 N. Y. 52; Dyer v. Broadway Central Bank, 252 N. Y. 430); but there is no admission of the legal conclusions averred (Cole v. Levy, 212 App. Div. 84). However, the complaint must allege facts not conclusions (Walrath v. Hanover Fire Ins. Co., 216 N. Y. 220). A conclusion without the facts is an immaterial allegation; a conclusion of law is unavailable for any purpose (Greeff v. Equitable Life Assur. Soc., 160 N. Y. 19; Red Robin Stores v. Rose, 274 App. Div. 462).

The prayer for such other and further relief etc.” in the complaint does not determine the sufficiency of the complaint when challenged by a motion to dismiss (Niagara Falls Power Co. v. White, 292 N. Y. 472).

It was incumbent on the plaintiffs to allege facts showing that they had the right to institute this action. A careful study of the complaint herein shows that said pleading is a wordy one, and not a perfect example of what section 241 of the Civil Practice ■ Act demands, i.e., a plain and concise statement of the material facts, without unnecessary repetition, on which the party pleading relies ”.

In my opinion, the complaint is legally insufficient. No facts showing the right to relief by these plaintiffs as against the defendants are pleaded. The tenants have no rights or interests in respect to the mortgages, ground rents or profits earned by their landlord; they are simply contracting parties who must live up to their contracts, as must the landlord, whether the result bring a profit or a loss.

The plaintiffs are complete strangers to the execution and delivery of the mortgages affecting the real property; if any party were aggrieved by the alleged excessive profits in the construction of the improvements it would be the F.H.A. Administrator who is not a party to this action. There is nothing in section 608, or the regulations thereunder which gives tenants any right of action against the landlord; the sole and exclusive [141]*141jurisdiction to regulate, control and enforce the provisions of section 608 is vested in the Commissioner, and the courts of this State have no power to superintend or revise his official acts performed under Acts of Congress. In the performance of his duties as Commissioner, he is not amenable to the statutes and regulations of the State, directly or indirectly. (McCulloch v. State of Maryland, 4 Wheat. [U. S.] 316; Ohio v. Thomas, 173 U. S. 276; Johnson v. Maryland, 254 U. S. 51; Hunt v. United States, 278 U. S. 96; United States v. Mayo, 47 F. Supp. 552, affd. 319 U. S. 441; Penn Dairies v. Milk Control Comm., 318 U. S. 261, 748.)

Pursuant to section 608, the F.H.A. Commissioner issued regulations which forbade mortgagors to charge more than the rents contained in a schedule filed with the Commissioner prior to the opening of the project for rental “ which schedule shall be based upon a maximum average rental fixed prior to the insurance of the mortgage ”. (Code of Fed. Reg., tit. 24, § 280.30, subd. [a]; italics supplied.)

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Related

Federal Housing Commissioner v. Reese
62 Misc. 2d 522 (Civil Court of the City of New York, 1970)
Northridge Cooperative Section No. 1, Inc. v. 32nd Avenue Construction Corp.
286 A.D. 422 (Appellate Division of the Supreme Court of New York, 1955)
Fieger v. Glen Oaks Village, Inc.
285 A.D. 814 (Appellate Division of the Supreme Court of New York, 1955)

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Bluebook (online)
206 Misc. 137, 132 N.Y.S.2d 88, 1954 N.Y. Misc. LEXIS 3391, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fieger-v-glen-oaks-village-inc-nysupct-1954.