Matter of Slotkin
OATH Index No. 690/06 (May 29, 2007)
[Loft Bd. Dkt. No. TN-0201; 37 Vestry Street, N.Y., N.Y.]
Tenant initiated non-compliance proceeding; ALJ found owners took all reasonable and necessary action to obtain compliance and recommends dismissal of application. Attorney's motion to withdraw from representation denied where client did not consent and motion was made three days before continued hearing date during protracted litigation.
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NEW YORK CITY OFFICE OF
ADMINISTRATIVE TRIALS AND HEARINGS
In the Matter of
TERISE SLOTKIN AND RICHARD MILLER
Applicants
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REPORT AND RECOMMENDATION
DONNA R. MERRIS, Administrative Law Judge
This application seeks a determination of whether the owner complied with the legalization deadlines set forth in Article 7-C of the Multiple Dwelling Law and title 29, section 2-01 of the Rules of the City of New York ("RCNY"). The application was served upon interested parties by mail on April 7, 2005. Answers were due on May 24, 2005. By letter dated July 22, 2005, Dianne E. Dixon, Executive Director of the Loft Board, vacated the owners’ default in this matter and deemed filed, effective July 15, 2005, the answer attached to the owners' motion to vacate its default. No other answers were received. The matter was referred to this tribunal for conference and hearing on October 11, 2005. Notice of a preliminary conference scheduled for December 1, 2005, was mailed to the affected parties on October 27, 2005. Following the December 1, 2005 conference, counsel for the applicants, by letter dated December 7, 2005, provided the names of additional building occupants who had not received notice of the instant proceeding. Accordingly, a combined notice of conference and notice of hearing was mailed to all known occupants of the premises. An additional preliminary conference was scheduled for January 12, 2006, and hearing dates were set for February 27, 2006, and February 28, 2006. No answers were filed nor were any additional appearances made at the instant proceedings.
At the conference before Judge Salzman on January 12, 2006, counsel for the respondents, Vestry Holding Corporation, was substituted by written consent.
Following the January 12, 2006 conference, Judge Salzman continued to communicate with the parties by electronic mail and by submission of settlement status reports. Conferences were continued until June 27, 2006, where a hearing was scheduled to commence on August 4, 2006. Counsel for both parties continued to work toward settlement and requested that the August 4, 2006, hearing be adjourned in contemplation of settlement. The adjournment was granted and the matter was removed from this tribunal's calendar for thirty days. By letter dated September 5, 2006, Jeffrey Ween, Esq., counsel for the applicants, requested that the matter be restored to the hearing calendar. The hearing was conducted before me on November 16, 2006, and February 6, 2007.[1] The record remained open until February 27, 2007, for the submission of additional documents on behalf of respondent, Vestry Holding Corporation. The record closed on February 27, 2007.
After careful consideration of the testimony and relevant documentary evidence, I find, for the reasons stated below, that the application should be dismissed.
ANALYSIS
This application seeks a finding of non-compliance with the owner's obligations pursuant to Loft Board Order Number 2853 and Multiple Dwelling Law (MDL) § 284.
Specifically, the applicants allege that, pursuant to Order Number 2853 dated March 18, 2004, the Loft Board required the owner to amend its legalization plan based upon the Board's determination that the plan would have unreasonably interfered with the use and occupancy of the applicants' space.[2] The owner was ordered to file amended plans with the Department of Buildings ("DOB") within forty-five days of the mailing of the Loft Board Order and was required to file copies of the amended plans and addendum to the prior narrative statement with the Loft Board within five days of the DOB filing. The applicants argue that the owner has not resubmitted their plan to date.
In addition, the applicants allege that Vestry Holding Corporation has failed to meet any of the deadlines set out in subdivision (iv) of Multiple Dwelling Law section 284 (1) and that the owner has failed to take all reasonable and necessary action to obtain an approved alteration permit and have, therefore, failed to achieve compliance with the standard of safety and fire protection by the May 1, 2002 deadline and failed to obtain a certificate of occupancy as a class A multiple dwelling by May 31, 2002. Finally, the applicants allege that the owner has failed to comply with subdivision (v) of Multiple Dwelling Law section 284 (1) which provides that, if an owner filed an alteration application by September 1, 1999, took all reasonable and necessary action to obtain an approved alteration permit by March 1, 2000, achieves compliance with the standards of safety and fire protection set forth in article seven-B of the MDL by May 1, 2007, or within twelve months from obtaining an approved alteration permit whichever is later, and takes all reasonable and necessary action to obtain a certificate of occupancy as a class A multiple dwelling for the residential portions of the building or structure by May 31, 2007, the owner would be in compliance with the statute. As of the filing of the instant application in April 2005, the owner had not achieved any of the foregoing compliance deadlines.
The applicants request that the Loft Board impose a fine of $1,000.00 for the owner's violation of the March 18, 2004, Loft Board Order and that fines be imposed for the violation of subdivisions (i) through (v) of the Multiple Dwelling Law section 284 (1).
In its answer, the owner admits that it has not yet obtained an approved alteration application, achieved compliance with article seven-B of the MDL, or obtained a certificate of occupancy for the building. The answer provides an uncontroverted explanation of the history of the owners' attempts to legalize the building.
An alteration application for this building was first filed with the Loft Board in 1983 following the enactment of the Multiple Dwelling Law in 1982. The statute required compliance with four deadlines: 1) the owner should file an alteration application with the Department of Buildings; 2) the owner should obtain an approved alteration application (permit) from DOB; 3) the owner should achieve compliance with the residential fire and safety standards set out in article seven-B of the MDL; and 4) the owner should obtain a certificate of occupancy from DOB. Initially, the certificate of occupancy for the covered buildings was to be obtained in 1985. Subsequent deadlines have been imposed on the building owners by the legislation. Since 1982, nineteen code compliance timetables have been enacted by the legislature.
As the owner did not meet the compliance deadlines, the Loft Board commenced a proceeding against the owner for failure to legalize the building as required. In February 2002, the owners entered into a stipulation of settlement with the Loft Board. Pursuant to the agreement, the owners were fined a total of $5,000.00 for failure to meet the 1983, 1985, 1992, 1993, 1995, 1996, 1997, 1999, 2000 and 2001 deadlines. See Loft Board Docket No. BV-0587 (Feb. 26, 2002). The owner now argues that it should not be held liable for the 2002 deadlines for reasons beyond its control.
The statutory deadlines for 1999 were: the owner should achieve compliance with article seven-B of the MDL by May 1, 2002; and, obtain a certificate of occupancy by May 31, 2002. According to the owner's response to the instant application, between March 2001 and August 2001, one of the owners was negotiating with the tenants about a possible buyout. An alteration application was subsequently filed with the DOB on March 28, 2002, and filed with the Loft Board on March 29, 2002. The owner served a narrative statement on the tenants on March 26, 2002. The tenants filed an unreasonable interference application regarding the proposed elevator location. The issue was submitted to this tribunal for hearing and the dispute was resolved by a Loft Board Order on March 18, 2004. The Loft Board determined that the proposed elevator location would interfere with the tenants' use of their space. See Loft Board Order No. 2853 (Mar. 18, 2004); adopting Matter of Slotkin, OATH Index No. 741/03 (Nov. 24, 2003). The owners argue that, because it could not proceed on any legalization plan until an order was received from the Loft Board, it was delayed for two years, from March 2002 to March 2004, from proceeding with the legalization process. Thus, the May 2002 deadlines were missed.
From March 2004 until approximately September 2004, the owner again negotiated with the tenants about a buyout or, whether the tenants would purchase their unit and become a part of the owner-corporation. On June 29, 2005, the owners' architect filed amended plans with DOB. The amended narrative statement and plans were served on the tenants on June 30, 2005. Following communication from the Loft Board Director of Legalization on November 3, 2005, the owner submitted a further amended narrative statement and plans to the Loft Board and to the tenants on February 9, 2006.
Section 284, paragraphs (i), (ii), (iii), (iv) and (v) set out the legalization deadlines and, except for the compliance dates, are identical in language. Paragraph (v) has the current deadlines and provides:
An owner of an interim multiple dwelling who has not complied with the requirements of paragraph (i), (ii), (iii) or (iv) of this subdivision by the effective date of this paragraph as provided in chapter eighty-five of the laws of two thousand two shall hereafter be deemed in compliance with this subdivision provided that such owner filed an alteration application by September first, nineteen hundred ninety-nine, took all reasonable and necessary action to obtain an approved alteration permit by March first, two thousand, achieves compliance with the standards of safety and fire protection set forth in article seven-B of this chapter for the residential portions of the building by May first, two thousand [ ] seven or within twelve months from obtaining an approved alteration permit whichever is later, and takes all reasonable and necessary action to obtain a certificate of occupancy as a class A multiple dwelling for the residential portions of the building or structure by May thirty-first, two thousand [ ] seven or within one month from achieving compliance with the aforementioned standards for the residential portions of the building, whichever is later.
Multiple Dwelling Law § 284 (v) (LEXIS 2007).
As noted supra, the Loft Board has previously fined the owners for all missed deadlines prior to the May 2002 compliance dates. See Loft Board Docket No. BV-0587 (Feb. 26, 2002). The Loft Board rules authorize the Board to issue a "civil penalty not to exceed $1,000.00 for each violation." 29 RCNY § 2-01(c)(2). There is nothing in the rule authorizing the imposition of more than one penalty per violation. Matter of Neal, OATH Index Nos. 352/02, 672/03, at 17 (Feb. 4, 2003), aff'd, Loft Bd. Order No. 2787 (Mar. 7, 2003). Accordingly, the instant application for a finding of noncompliance against 37 Vestry Holding Corporation with regard to the deadlines prior to May 2002 is denied.
With regard to the 2002 deadlines, the provisions of the stipulation of settlement the owners’ entered into with the Loft Board in February 2002, preclude a finding of noncompliance if the owner's efforts to complete the legalization process were delayed by, "the pendency of an unreasonable interference proceeding before the Loft Board." Loft Board Docket No. BV-0587, par. 12 (c) (Feb. 26, 2002). The alteration application filed with the Loft Board on March 29, 2002, and narrative statement served on the tenants on March 26, 2002, was disputed by the applicants and an unreasonable interference application was filed. The issue concerning the placement of a passenger elevator in the building was litigated and not resolved until March 2004. Matter of Slotkin, OATH Index No. 741/03 (Nov. 24, 2003), aff'd, Loft Bd. Order No. 2853 (Mar. 18, 2004). The order was mailed to the owners’ counsel on April 1, 2004. Thus, the owners were unable to comply with the May 2002 deadlines.
The remaining deadlines in issue are the May 2005 and May 2006 requirements to achieve article seven-B compliance and to obtain a certificate of occupancy. It is the owners’ burden to show that it took all reasonable and necessary action to obtain an approved alteration permit and achieve compliance by the relevant dates. Here, the uncontroverted evidence establishes that the owners have been working with its architect, the tenants and the Department of Buildings in a concerted effort to legalize the building. The record is replete with communications among the Loft Board, the owners and the tenants concerning issues raised by the tenants and with various filings made by the owners.
Following the Loft Board Order in March/April 2004, the owners, through shareholder Robert Meinken, wrote to the Loft Board asking for clarification of its Order. See Letter to Loft Board from Robert Meinken dated August 12, 2004 (Resp. Ex. CC). According to Mr. Meinken's letter, the owners were confused as to whether they should file the tenants' proposed alternate plan, or whether the owners had the option of filing amended plans with the elevator in a different location while addressing the tenants' concerns (Resp. Ex. CC). The Loft Board did not respond to Mr. Meinken's communication (Tr. 98-99). The owners were also in contact with Robert Tan, the building architect commencing in May 2004 (Tr. 102).
On July 1, 2005, the Loft Board received a communication from the architect, Robert Tan, that drawings and a narrative statement had been provided to the applicants, Ms. Slotkin and Mr. Miller (Resp. Exs. C, E). In addition, a new application was filed with the Department of Buildings (Resp. Ex. D). It was not until September 21, 2005, that the Loft Board notified the tenants that they could file alternate plans for the work affecting the use of their unit (Resp. Ex. F). On October 19, 2005, counsel for the tenants wrote to the Loft Board that, "the amended narrative statement and amended alteration plans are inconsistent with one another and with the alternate plan which the Loft Board directed the owner to file" (Resp. Ex. H). Following further communications, the Loft Board Director of Legalization decided that, because there were issues to be resolved, the forty-five day period for the tenants' filing of alternate plans (from September 21, 2005) was withdrawn and that other issues concerning the heating system, the washer/dryer and the provision of adequate light and air to the units would be addressed by the owners' architect (Resp. Ex. N). Further amended plans were submitted in February 2006 (Resp. Exs. P, Q, R). Issues surrounding the installation of a heating system in the tenants' unit continued through March 2006 (Resp. Ex. S). An amended plan and narrative statement were filed on November 21, 2006 (Resp. Ex. Y).
At the hearing, architect Robert Tan testified that he has been working with the Department of Buildings and the owners to clear up objections on the proposed plans. In addition, the applicants have continued to make objections which the architect and the owners are addressing. As of the instant hearing, the majority of issues had been resolved (Tr. 59-77).
The evidence leads only to the conclusion that the instant owners, 37 Vestry Holding Corporation, have for the past several years, taken reasonable steps to comply with the legalization process. While it has taken considerable time, the owners have been subject to numerous objections from the tenants and have spent much time in negotiations with the tenants concerning each objection raised. Moroever, the interaction with the Loft Board and the Department of Buildings has been time consuming, as well as discussions between the architect for the owners and the architect for the tenants. The indication is that the process has been almost completed.
Accordingly, I find that the owners have taken all reasonable and necessary action to obtain the approved permits in order to satisfy the statutory requirements.
With regard to the application to fine the owners for failure to comply with the time periods set out by the Loft Board in the Order of March 2004, the application must also be denied. The Loft Board rules provide that a finding of unreasonable interference with an occupant's use may result in civil penalties of up to $1,000.00 for each violation. 29 RCNY § 2-01(h). The Loft Board order did not impose a fine for the unreasonable interference having to do with the placement of the proposed service elevator in the building. Moreover, there was no finding of willful interference. In its order, the Loft Board did not provide notice that a failure to comply with the forty-five day period would result in a monetary fine. As noted, the evidence is abundant that the owners proceeded in a reasonable manner, albeit some weeks beyond the forty-five day deadline.
For these reasons, the application should be denied.
FINDINGS AND CONCLUSIONS
1.The owners have taken all reasonable and necessary action to comply with the provisions of the Multiple Dwelling Law legalization deadlines.
2.The Loft Board Order Number 2853 dated March 18, 2004, did not provide for monetary fine(s) if the owners did not comply with the forty-five day filing requirement.