Sakraf Properties, Inc. v. Eimicke

139 Misc. 2d 519, 527 N.Y.S.2d 951, 1988 N.Y. Misc. LEXIS 208
CourtNew York Supreme Court
DecidedMarch 22, 1988
StatusPublished

This text of 139 Misc. 2d 519 (Sakraf Properties, Inc. v. Eimicke) 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
Sakraf Properties, Inc. v. Eimicke, 139 Misc. 2d 519, 527 N.Y.S.2d 951, 1988 N.Y. Misc. LEXIS 208 (N.Y. Super. Ct. 1988).

Opinion

[520]*520OPINION OF THE COURT

Helen E. Freedman, J.

The within CPLR article 78 proceedings are consolidated for purposes of disposition. In the first action Sakraf Properties, Inc. (Sakraf or landlord) seeks to annul a determination by respondents Eimicke and Division of Housing and Community Renewal (DHCR) on September 1, 1987 denying landlord’s petition for administrative review (PAR). The PAR upheld the Rent Administrator’s order which had disallowed one vacancy increase and denied compounding of rent guidelines increases in calculating the legal rent and determining overcharges.

In the second proceeding, the Singers, tenant petitioners, seek to annul that portion of DHCR’s September 1, 1987 order which denied their application for treble damages.

The undisputed evidence shows that Geraldine and Steven Singer moved into apartment 2-G in 235 West 70th Street on or about February 1, 1980 pursuant to a two-year lease providing for a monthly rental of $520. Shortly thereafter, they requested a rent history of the apartment from the superintendent. Some time later Louis Farkas, president of Sakraf, showed a prior lease with the name Kawasaki on it to the tenants. On March 30, 1984 the Singers commenced a rent overcharge complaint. Following a request by DHCR to Sakraf to submit rent records to prove the lawfulness of the rent charges, 5 leases were submitted — 4 executed by Masao Kawasaki and 1 by a James Brown. The Kawasaki leases were for the following successive terms and rentals:

September 1, 1973 - August 31,1975 $295.00

September 1, 1975 - August 31, 1977 $295.00

September 1, 1977 - August 31, 1979 $320.75

September 1, 1979 - August 31, 1980 $354.98

The Brown lease was as follows:

December 1, 1979 - November 30, 1981 $417.48

In calculating the Singers’ rent Sakraf allowed for vacancy allowance increases between the Kawasaki and Brown lease and again between the Brown and Singer lease and applied the rent guidelines increases successively. In its October 2, 1986 order the District Rent Administrator found that the landlord had improperly taken two vacancy increases for leases covering the same time period and compounded guidelines increases during the same period of Rent Guidelines [521]*521Board order number 11.1 The order was based in part on an advisory opinion of the Corporation Counsel that an owner could not compound guidelines increases within the same guidelines period. There were some arithmetic errors as well. The owner was directed to roll back the rent to the lawful stabilized amount and make a full refund in the sum of $9,375, including reasonable costs and attorneys’ fees and interest from April 1, 1984.

The landlord then filed a PAR claiming that the Rent Administrator erred in his calculation of the overcharges and in its determination of the legal rent. Sakraf through its president Louis Farkas claimed that it was entitled to vacancy increases of 5% and 15%, respectively, and two rent guidelines increases of 12% for both the Brown and Kawasaki vacancies. He admitted an arithmetic error warranting a refund of $904.02 in overcharges.

The tenants, after contacting attorneys for the first time, filed a response to the PAR in which they asserted that DHCR’s calculations were correct and claimed treble damages, on the ground that the Brown lease was a "fraudulent document fabricated by the landlord to justify unlawful rent increases.”

In support of her treble damage claim Geraldine Singer stated that the only rent lease shown to her in response to her request was that of the Kawasakis, and that when she first saw the apartment and later moved in, the name on the door and mailbox was Kawasaki. She also stated that recent contact with Masao Kawasaki disclosed that he was in possession of the apartment through December 1979, the time of the purported Brown lease. She concluded by requesting additional time to substantiate some of these contentions.

Various documents were submitted to DHCR in March of 1987, including a photocopy of the Kawasaki’s final telephone bill showing telephone calls from apartment 2-G throughout January 1980, and a sworn statement from Masao Kawasaki indicating that he resided in apartment 2-G at 235 West 70th Street, New York, New York, until the end of January 1980 when he moved to Bronxville. An accompanying letter from the Singers’ attorney asserted that having shown that the [522]*522Brown lease was fraudulent, the Singers were entitled to tremble damages.

DHCR issued an order dated September 1, 1987 denying the PAR, affirming the determination of the Rent Administrator as to the overcharges, and rejecting the tenants’ claim for treble damages.2 The Commissioner found that the tenant had submitted no evidence to document its allegations that the Brown lease was fraudulent.

With respect to the landlord’s article 78 proceeding, DHCR contends that its order properly follows the Rent Guidelines Board which has determined that guideline increases may not be compounded during the same guideline period pursuant to the advisory opinion by the Corporation Counsel.

With respect to the article 78 proceeding brought by the Singers, DHCR contends that it was incumbent upon the tenants to file their own PAR and that having failed to do so, they had in effect failed to exhaust their own administrative remedies. DHCR finds it "ludicrous” for the tenants to assume that they can raise their own entirely separate issues in a mere response to the landlord’s PAR. The agency also argues that an administrative appeal is not a de novo proceeding and that it is not the Division’s policy to "punish” a party who seeks administrative review by imposing harsher penalties than the original Administrator’s order had imposed unless the other party files its own PAR. Finally, DHCR claims that it was entirely within the discretion of the District Rent Administrator to find that treble damages were unwarranted under the facts of this case.

The first issue that will be addressed concerns the claim by DHCR that the tenants’ failure to file their own PAR warrants dismissal of the tenants’ article 78 proceeding. That argument strikes this court as "ludicrous”. It is clear that all of the issues raised in this article 78 proceeding were raised in* the extensive papers submitted by the tenants to DHCR as their response to the landlord’s PAR. The decision of the Commissioner specifically addresses the issue in his decision and denies the cross claim by the tenants for treble damages. There is nothing in the statute providing for judicial review of administrative orders which requires the party seeking judicial review to be the same party that brought the PAR. The statute (L 1985, ch 907, § 1) only requires that " 'such review [523]*523has been sought’ ”. (See, Matter of Bloom v Division of Hous. & Community Renewal, 138 Misc 2d 523, 524.)

In this proceeding the tenant did not initially seek administrative review, but when confronted with the landlord’s petition responded in effect with a counterclaim. The tenants then made a full record in the counterclaim for treble damages. At no time did the agency inform the tenants that a separate PAR was required and nothing in the Commissioner’s determination indicated that the tremble damages claim had been rejected because the tenant had not brought a separate proceeding.

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Related

Howard v. Wyman
271 N.E.2d 528 (New York Court of Appeals, 1971)
Metz v. Division of Housing & Community Renewal
113 A.D.2d 758 (Appellate Division of the Supreme Court of New York, 1985)
Bloom v. Division of Housing & Community Renewal
138 Misc. 2d 523 (New York Supreme Court, 1988)

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Bluebook (online)
139 Misc. 2d 519, 527 N.Y.S.2d 951, 1988 N.Y. Misc. LEXIS 208, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sakraf-properties-inc-v-eimicke-nysupct-1988.