Schultz Management v. Board of Standards & Appeals

103 A.D.2d 687, 477 N.Y.S.2d 351, 1984 N.Y. App. Div. LEXIS 19302
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 5, 1984
StatusPublished
Cited by13 cases

This text of 103 A.D.2d 687 (Schultz Management v. 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
Schultz Management v. Board of Standards & Appeals, 103 A.D.2d 687, 477 N.Y.S.2d 351, 1984 N.Y. App. Div. LEXIS 19302 (N.Y. Ct. App. 1984).

Opinions

— Order and judgment, Supreme Court, New York County (Martin Evans, J.), entered September 26, 1983, granting the petition in this CPLR article 78 proceeding which seeks to annul an order of the Board of Standards and Appeals of the City of New York (BSA) that revoked the certificate of occupancy of a building on which petitioners hold mortgages, to the extent of remanding the matter to the BSA for further hearings, is reversed, on the law, without costs, and the petition is dismissed. 11 Because the certificate of occupancy for premises 48-52/56-60 Beach Street was issued as a result of misrepresentations made by the owner’s architect in an application for an alteration permit, the Board of Standards and Appeals, on the application of the Buildings Commissioner and after extensive hearings, revoked the building’s certificate of occupancy. The alteration application represented that the subject premises consisted of two buildings, each with a lot coverage of less than 5,000 square feet and was therefore convertible, as of right, into loft dwellings, in accordance with the applicable zoning regulation. That regulation provides in pertinent part that: — “Within Area B1 and Area B2 loft dwelling and joint living-work quarters for artists shall not be permitted in buildings where the lot coverage exceeds 5,000 square feet.” The premises in fact is one building with a lot coverage of 12,472 square feet. 11 Petitioners, Schultz Management (Schultz) and Samuel Cooper (Cooper), are mortgagees who separately and allegedly in good faith, purportedly in reliance upon the certificate of occupancy, loaned money to Dundee Equity Corp. (Dundee), the owner of the premises, and another. Those loans are secured in part by mortgages on these premises. Parkdale Realty (Parkdale) similarly purported in reliance upon the certificate of occupancy, entered into a joint venture with Dundee, investing $1,000,000 to purchase a one-half interest in the premises, secured by a mortgage in that amount. K Petitioners argue that, pursuant to subdivision 5 of section 301 of the Multiple Dwelling Law, they have an [688]*688irrevocable vested right to the continuance of the certificate of occupancy, because they are persons who relied upon the certificate of occupancy and “in good faith [loaned] money upon the security of a mortgage covering” the premises. Moreover, they contend, due process required that they, as persons with vested interests in the property, be given notice of and an opportunity to be heard at the revocation hearings. Petitioners conclude that since section 645 (subd [b], par [3], cl e) of the New York City Charter does not mandate that notice of the revocation application be given to mortgagees such as themselves, it is unconstitutional. 11 Respondents counter with the argument that subdivision 5 of section 301 of the Multiple Dwelling Law is inapplicable to safeguard the interests of persons such as petitioners, where the revocation of the certificate of occupancy is based upon a violation of a Zoning Resolution, and thus they are not entitled to notice under section 645 (subd [b], par [3], cl e) of the City Charter. Moreover, say respondents, the revocation of the certificate of occupancy does not affect petitioners’ property interest so as to give rise to constitutionally protected due process requirements of notice and an opportunity to be heard, but that in any event, petitioners not only had actual notice of the revocation proceeding, Parkdale and Schultz participated in the hearings by submitting affidavits supporting Dundee in opposing the revocation. 11 Special Term held that because the issue of whether or not petitioners were good-faith mortgagees who relied on the certificate of occupancy in making loans to Dundee was one of the issues to be determined by BSA, it was error to have failed to formally notify them of the hearings. Accordingly, Special Term remanded the matter to BSA for further hearings, with an opportunity to petitioners to submit proof of their good-faith reliance and to fully participate. Special Term’s determination is based upon the conclusion that in the circumstances of this case, subdivision 5 of section 301 of the Multiple Dwelling Law protects those purchasers or mortgagees who in good faith relied upon the certificate of occupancy when obtaining their interest, and that due process requires that they have formal notice of the hearing and an opportunity to establish their good faith. We disagree and dismiss the petition. 11 Subdivision 5 of section 301 of the Multiple Dwelling Law provides: “A certificate * * * may be relied upon by every person who in good faith purchases a multiple dwelling or who in good faith lends money upon the security of a mortgage covering such a dwelling. Whenever any person has so relied upon such certificate, no claim that such dwelling had not, prior to the issuance of such certificate, conformed in all respects to the provisions of this chapter shall be made against such person or against the interest of such person in a multiple dwelling to which such a certificate * * * has been issued.” (Emphasis added.) U Petitioners contend that the issuance of the certificate of occupancy establishes, pursuant to subdivision 1 of section 301, that the “dwelling conforms in all respects to the requirements of this chapter, to the building code and rules and to all other applicable law” and therefore that they are protected from revocation of the certificate of occupancy by subdivision 5 of section 301. This reliance upon subdivision 1 of section 301 is misplaced. Significantly, while subdivision 1 of section 301 prohibits occupancy of a multiple dwelling in the absence of a certificate that the “dwelling conforms in all respects to the requirements of this chapter, to the building code and rules and to all other applicable law”, subdivision 5 of section 301 only protects purchasers and lenders against claims that prior to the issuance of the certificate of occupancy, the dwelling “ha[s] not * * * conformed in all respects to the provisions of this chapter”. (Emphasis added.) Omitted from subdivision 5 of section 301 is the additional language found in subdivision 1 of section 301: “to the building code and rules and to all other applicable law”. 11 It is a basic rule of statutory construction that “where the statutory language is clear and unambiguous, the court should [689]*689construe the statute to give effect to the plain meaning of the words used [citations omitted]” (Eaton v New York City Conciliation & Appeals Bd., 56 NY2d 340, 345). Moreover, where the “statute describes the particular situations in which it is to apply, ‘an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted or excluded’ (McKinney’s Cons Laws of NY, Book 1, Statutes, § 240)” (Patrolmen’s Benevolent Assn. v City of New York, 41 NY2d 205, 208-209; Eaton v New York City Conciliation & Appeals Bd., supra). Thus, in limiting the reference in subdivision 5 of section 301 of the Multiple Dwelling Law to “the provisions of this chapter”, the Legislature cannot be said to have intended to protect the interests of purchasers and lenders in the continuation of the certificate of occupancy where the dwelling in respect to which it was issued does not conform “to all other applicable law” (§301, subd 1), here, the Zoning Resolution. If the Legislature had intended otherwise it could have said so “through appropriately worded legislation”. Here, the revocation is based not upon a failure of the building to conform to the provisions of “this chapter”, the Multiple Dwelling Law, but rather its failure to conform to the Zoning Resolution.

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Bluebook (online)
103 A.D.2d 687, 477 N.Y.S.2d 351, 1984 N.Y. App. Div. LEXIS 19302, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schultz-management-v-board-of-standards-appeals-nyappdiv-1984.