Red Hook/Gowanus Chamber of Commerce v. New York City Board of Standards & Appeals

49 A.D.3d 749, 853 N.Y.2d 644
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMarch 18, 2008
StatusPublished
Cited by7 cases

This text of 49 A.D.3d 749 (Red Hook/Gowanus Chamber of Commerce v. New York City Board of Standards & Appeals) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Red Hook/Gowanus Chamber of Commerce v. New York City Board of Standards & Appeals, 49 A.D.3d 749, 853 N.Y.2d 644 (N.Y. Ct. App. 2008).

Opinion

[750]*750In September 2002 160 Imlay Real Estate, LLC (hereinafter Imlay), applied to the New York City Board of Standards and Appeals (hereinafter BSA) for a use variance with respect to real property it owns in the Red Hook section of Brooklyn, which is currently improved with a six-story vacant warehouse in an M2-1 zoning district, which permits manufacturing, commercial, and retail uses, but prohibits residential use. Over the course of a public hearing held between March and November 2003, Imlay submitted evidence before BSA demonstrating that since 1999, it had aggressively, but unsuccessfully, marketed the warehouse, in whole and in part, for permissible use to dozens of potential buyers or tenants, and that even if any buyer or tenant had wished to proceed, substantial redesign and upgrading to the warehouse’s physical plant was required to make it [751]*751useful for commercial or industrial tenants. Moreover, Imlay submitted a “dollars and cents” analysis which concluded that a return on equity for as-of-right conforming “manufacturing” use would be 1.56% while the return on equity for a nonconforming residential use would be 11.41%. In a determination dated December 23, 2003 BSA granted Imlay’s application for a use variance. Thirty days later, upon the expiration of the relevant statute of limitations’ period (see Administrative Code of City of NY § 25-207 [a]), the petitioner, Red Hook/Gowanus Chamber of Commerce (hereinafter the Coalition), commenced the instant CPLR article 78 proceeding to annul the determination. The Coalition named as respondents BSA and the City of New York (hereinafter collectively the respondents), but not Imlay. The respondents thereafter moved to dismiss the petition for failing to join a necessary party, Imlay, and while their motion was pending, the Coalition cross-moved for leave to amend the petition to name Imlay as a respondent. In an order dated July 30, 2004, the Supreme Court denied the respondents’ motion and granted the Coalition’s cross motion. While the respondents’ appeal from that order was pending before this Court, the Coalition filed an amended petition which added Imlay as a respondent and, instead of seeking vacatur of BSA’s determination granting the use variance, as it had in the original petition, sought only a judgment remitting the matter to BSA for additional hearings on whether BSA’s determination had been made in accordance with New York City Zoning Resolution § 72-21. By decision and order dated May 9, 2005, this Court reversed the order dated July 30, 2004, finding that the Coalition had not adequately explained its failure to name Imlay as a respondent, and accordingly, CPLR 1001 (b) precluded the Coalition from proceeding in Imlay’s absence (see Matter of Red Hook/ Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 18 AD3d 558 [2005]). Thereafter, the Court of Appeals reversed this Court, finding that although Imlay was a necessary party pursuant to CPLR 1001 (a), remittal to the Supreme Court was necessary to consider whether, pursuant to CPLR 1001 (b), the proceeding could continue in Imlay’s absence (see Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 5 NY3d 452 [2005]).

Upon remittal, Imlay moved to dismiss the proceeding insofar as asserted against it as time-barred since it had not been joined until after expiration of the 30-day statute of limitations (see Administrative Code of City of NY § 25-207 [a]). The respondents then moved for leave to renew their original motion to dismiss the petition for failure to join a necessary party, [752]*752vacate the order granting the Coalition’s cross motion to add Imlay as a respondent, and to dismiss the proceeding. By order dated April 18, 2006, the Supreme Court granted Imlay’s motion, dismissed the proceeding insofar as asserted against Imlay, granted that branch of the respondents’ motion which was for leave to renew their prior motion, and upon renewal, considered the five factors enumerated in CPLR 1001 (b) and concluded that the proceeding could continue against the respondents in Imlay’s absence (see Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 11 Misc 3d 1081[A], 2006 NY Slip Op 50648[U]). In the order and judgment appealed from, the Supreme Court granted the amended petition, vacated the variance, in effect, denied the respondents’ motion to dismiss the proceeding for failure to join a necessary party, and remitted the matter to BSA for the limited purpose of performing an economic analysis projecting the rate of return for individual use groups permitted in the M2-1 zoning district pursuant to New York City Zoning Resolution 72-21 (b). We reverse.

A court may excuse the failure to join a necessary party and allow an action to proceed in the interest of justice upon consideration of five factors enumerated in CPLR 1001 (b): (1) whether the petitioner has another remedy if the action is dismissed for nonjoinder, (2) the prejudice that may accrue from nonjoinder to the respondent or to the nonjoined party, (3) whether and by whom prejudice might have been avoided or may in the future be avoided, (4) the feasibility of a protective provision, and (5) whether an effective judgment may be rendered in the absence of the nonjoined party.

Here, the respondents concede that the first factor weighs in favor of excusing Imlay’s nonjoinder since the Coalition would have no effective remedy by which to challenge the use variance if the proceeding were dismissed for failure to join Imlay (see Matter of 27th St. Block Assn. v Dormitory Auth. of State of N.Y., 302 AD2d 155, 162 [2002]). However, the Supreme Court improvidently exercised its discretion in determining that the remaining four factors also weighed in favor of the proceeding continuing in Imlay’s absence. As to the second factor, Imlay will suffer great prejudice if the matter proceeds in its absence and the variance is vacated, as it was in the order and judgment appealed from. While the respondents seek dismissal of the proceeding, and therefore have overlapping interests with Imlay, ultimately it cannot be guaranteed that the respondents will protect Imlay’s interests, as Imlay, a real estate developer, is concerned with a potential multi-million dollar loss and the [753]*753respondents are concerned with regulatory and administrative issues (see Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 5 NY3d at 457; Matter of Fagelson v McGowan, 301 AD2d 652 [2003]). As to the third factor, the Coalition easily could have avoided the prejudice to Imlay by having timely named Imlay as a respondent, especially since the Coalition had participated in BSA’s public hearing that led to the challenged use variance. Moreover, although Imlay could avoid any prejudice by voluntarily intervening in the action, such a fact is outweighed by the Coalition’s failure to set forth any reasonable excuse for its failure to timely join Imlay as a respondent (see Matter of Cybul v Village of Scarsdale, 17 AD3d 462, 463 [2005]; Matter of East Bayside Homeowners Assn., Inc. v Chin, 12 AD3d 370 [2004]). As to the fourth factor, the Supreme Court vacated the variance and therefore granted even greater relief than the Coalition had sought in its amended petition. Thus, this factor also weighs against proceeding in Imlay’s absence, as under such circumstances, no protective provision is feasible since vacatur of the variance directly affects Imlay’s economic interests.

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Bluebook (online)
49 A.D.3d 749, 853 N.Y.2d 644, Counsel Stack Legal Research, https://law.counselstack.com/opinion/red-hookgowanus-chamber-of-commerce-v-new-york-city-board-of-standards-nyappdiv-2008.