Katz v. Klehammer

902 F.2d 204, 1990 WL 57488
CourtCourt of Appeals for the Second Circuit
DecidedMay 1, 1990
DocketNo. 516, Docket 89-7715
StatusPublished
Cited by25 cases

This text of 902 F.2d 204 (Katz v. Klehammer) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Katz v. Klehammer, 902 F.2d 204, 1990 WL 57488 (2d Cir. 1990).

Opinion

WINTER, Circuit Judge:

This appeal is from the dismissal of a complaint brought by Harry Katz pro se on behalf of himself and all other stockholders in a cooperative building subsidized by New York City and organized under the New York Private Housing Finance Law (“Housing Law”). Katz charges that the building’s board of directors and the other [206]*206defendants have mismanaged the building in violation of various state laws, regulations and bylaws, and that the city’s failure to supervise the housing development implicates his federal constitutional rights. We affirm the dismissal of the complaint.

BACKGROUND

Katz is a tenant-shareholder in Dayton Towers, a limited-profit housing development organized under the Housing Law and aided financially by the City of New York. Pursuant to the Housing Law, the New York City Department of Housing Preservation and Development has promulgated rules and regulations governing developments such as Dayton Towers.

Katz’s complaint claimed, inter alia, that the defendants had been managing Dayton Towers in violation of state law, city regulations, and cooperative bylaws, and that defendant Klehammer, a New York City official, had threatened him with eviction for complaining about their activities. The complaint alleged that the mismanagement deprived Katz and his fellow stockholders of their property interests without due process, that the threatened eviction violated Katz’s First Amendment rights, and that the defendants’ refusal to allow Katz to see the financial records of the development violated “either a property or liberty interest.” Katz asserts federal jurisdiction under 42 U.S.C. §§ 1983 and 1985(3) (1982 & Supp. Y 1987).

The defendants filed a motion to dismiss the complaint under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. The defendants also asked that the pendent state law claims be dismissed for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1). Katz thereafter amended his complaint to allege that because other housing projects subject to the Housing Law were operated in conformity with state law, the failure to enforce the law with respect to Dayton Towers violated Katz’s right to equal protection. Judge Platt granted both the Rule 12(b)(6) motion and the Rule 12(b)(1) motion. Katz appeals.

DISCUSSION

We apply the familiar standard of review that all allegations in the complaint are viewed in the light most favorable to Katz. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).

We address first the Section 1983 claim. In order to state a cognizable claim under Section 1983, Katz must allege conduct under color of state law that deprived him of rights secured by the Constitution or laws of the United States. See Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1912, 68 L.Ed.2d 420 (1981). Katz’s complaint alleges that the defendants, in “allowing the board to run Dayton in flagrant violation of state law, and allowing and helping defendants Miller and Levy to divert corporate funds through illegal sweetheart deals, ... are unconstitutionally depriving the plaintiff class of stockholders of their property interests without due process.” We assume arguendo that the City’s involvement is sufficient to constitute state action for purposes of Section 1983. We further assume, without deciding, that Katz has alleged the deprivation of a recognized property interest. See Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). See also Lopez v. Henry Phipps Plaza South, Inc., 498 F.2d 937 (2d Cir.1974) (Friendly, J.) (tenant in a nonprofit housing development had an expectation in the renewal of her lease and nonrenewal without a hearing amounted to a deprivation of due process); but cf. Grace Towers Tenants Ass’n v. Grace Housing Development Fund Co., Inc., 538 F.2d 491 (2d Cir.1976) (absent explicit legislative indication or practice giving rise to a legitimate expectation, tenants of federally subsidized housing have no property interest in existing rent levels).

Even with these assumptions, however, Katz’s complaint still fails to assert a valid Section 1983 claim. The mismanagement alleged is explicitly stated to be in violation of state law and is not the “result of some established state procedure.” Parratt, 451 U.S. at 543, 101 S.Ct. at 1917. The complaint alleges merely that the defendants have caused random and unauthorized dep[207]*207rivations of Katz’s property interests. Such allegations are insufficient to state a Section 1983 claim unless there is no adequate state remedy for the random, unauthorized deprivation. See id. at 543-44, 101 S.Ct. at 1916-17.

New York, however, provides an adequate remedy for Katz’s claim. He may bring an Article 78 proceeding, N.Y.Civ. Prac.L. & R. 7801 (McKinney 1981), to enforce state law where “the body or officer failed to perform a duty enjoined upon it by law,” or where “the body or officer proceeded, is proceeding or is about to proceed without or in excess of jurisdiction.” N.Y. Civ.Prac.L. & R. 7803. To the extent that the Housing Law and state and city regulations compel the supervising and other city officials to perform certain acts, Article 78 may thus serve to enforce such requirements when officials fail to fulfill these obligations. See Davis v. Starr, 88 Misc.2d 210, 387 N.Y.S.2d 351 (App.Div.1976); cf. Liotta v. Rent Guidelines Bd. for the City of New York, 547 F.Supp. 800 (S.D.N.Y.1982) (Article 78 provides for review of specific administrative actions). Moreover, to the extent that Katz’s claim sounds in tort or breach of contract, he may bring a common-law cause of action in state court to enforce his rights. Because state law provides a remedy, Katz’s Section 1983 claim fails.

Katz also asserts that the defendants’ refusal to allow him access to the financial records of the development in violation of Private Finance Housing Law § 32-a4 deprived him of “either a property or liberty interest.” Again, however, Katz does not allege that this refusal was the result of anything other than a random, unauthorized act, and the existence of a state remedy in Article 78, see Altschul v. Butterfield Farms, Inc., 40 A.D.2d 654, 336 N.Y.S.2d 618 (1972), satisfies the requirements of due process. See Parratt, 451 U.S. at 544, 101 S.Ct. at 1917.1

Katz’s complaint also asserts that the threatened eviction in response to his complaints violated his First Amendment rights. Katz’s complaint does not allege, however, that Klehammer has the power to evict him or that he, Katz, has been chilled in exercising his rights.

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902 F.2d 204, 1990 WL 57488, Counsel Stack Legal Research, https://law.counselstack.com/opinion/katz-v-klehammer-ca2-1990.