12th & 14th St. Investor v. N.Y.C. Hous. Auth.

Full title: In the Matter of the Application of 12th & 14th STREET INVESTOR, LLC…

Court: SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: Part 55

Date published: Apr 9, 2013

2013 N.Y. Slip Op. 30696 (N.Y. Sup. Ct. 2013)

Opinion

Index No. 103830/12

04-09-2013

In the Matter of the Application of 12th & 14th STREET INVESTOR, LLC Petitioner, For a Judgment Pursuant to Article 78 of the Civil Practice Law & Rules v. THE NEW YORK CITY HOUSING AUTHORITY and JOHN B. RHEA, Respondents.

CYNTHIA S. KERN

DECISION/ORDER

HON. CYNTHIA S. KERN , J.S.C.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion for: ____________

+------------------------------------------------+ ¦Papers ¦Numbered¦ +---------------------------------------+--------¦ ¦Notice of Motion and Affidavits Annexed¦1 ¦ +---------------------------------------+--------¦ ¦Answering Affidavits ¦ ¦ +---------------------------------------+--------¦ ¦Cross-Motion and Affidavits Annexed ¦2 ¦ +---------------------------------------+--------¦ ¦Answering Affidavits to Cross-Motion ¦3 ¦ +---------------------------------------+--------¦ ¦Replying Affidavits ¦4 ¦ +---------------------------------------+--------¦ ¦Exhibits ¦5 ¦ +------------------------------------------------+

Petitioner 12th & 14th Street Investor, LLC commenced the instant proceeding pursuant to Article 78 of the Civil Practice Law and Rules ("CPLR") seeking to challenge respondents New York City Housing Authority ("NYCHA") and John B. Rhea's ("Mr. Rhea") decision to suspend petitioner's Section 8 subsidies and for a writ of mandamus to compel respondents to pay petitioner the unpaid Section 8 rents. Respondents cross-move for an Order dismissing the petition on the ground that it is time-barred. For the reasons set forth below, NYCHA's cross- motion to dismiss the petition is granted and petitioner's petition is dismissed in its entirety.

The relevant facts are as follows. Petitioner is the owner and landlord of the building located at 252 12th Street, Brooklyn, New York (the "building"). At the time petitioner purchased the building, the building housed tenants who held and/or hold Section 8 vouchers pursuant to Section 8 of the United States Housing Act of 1937, which is administered by NYCHA. Petitioner leased Apartment 3A (the "subject apartment") in the building to tenant Elizabeth Valentin (hereinafter the "tenant" or "Ms. Valentin") who held a Section 8 voucher.

The requirements for the Section 8 program are set forth in the regulations promulgated by the United States Department of Housing and Urban Development ("HUD") and codified at 24 C.F.R. 982. Pursuant to 24 C.F.R. §§ 982.305(a)(2), (b)(1)(I) and 982.405(a), NYCHA is required to inspect all apartments before commencing Section 8 assistance, and at least annually thereafter, to ensure that they meet housing quality standards ("HQS") established by HUD. Further, NYCHA "must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner corrects the defect within the period specified by [NYCHA] and [NYCHA] verifies the correction." 24 C.F.R. § 982.404(a)(3) Pursuant to 24 C.F.R. § 982.404, NYCHA must afford petitioner at least 30 days to correct any non-life threatening HQS violation unless NYCHA extends the deadline.

On July 10, 2009, Ms. Valentin's apartment failed an HQS inspection. NYCHA sent an NE-1 notice to petitioner which advised petitioner that NYCHA would suspend the Section 8 subsidy for Ms. Valentin's apartment on August 7, 2009 unless the HQS violations listed were corrected. Specifically, the NE-1 notice stated that

Reinstatement of subsidy will not be considered until the apartment is reinspected to determine if the apartment again complies with HQS...Reinstatement of subsidy will not be considered until we
receive and accept the certification, or until we receive notification of completed repairs from you and we reinspect the apartment to determine that the unit again complies with HQS...You may be entitled to reimbursement for some or all of any subsidy suspension if you can establish, in the judgment of our inspection unit, that the majority of the above violations were caused by the tenant, or that you were delayed in completing repairs of the above violations because the tenant failed to provide access to the apartment.

The NE-1 notice also provided that "[i]f the subsidy is suspended for 180 consecutive days, the HAP Contract automatically terminates and the tenants' voucher for the subject apartment also terminates."

Petitioner failed to respond to the NE-1 notice. Thus, the subsidies for the subject apartment were suspended effective August 31, 2009 and thereafter, the tenant was moved out, effective February 28, 2010, due to the subsidy being suspended for 180 days. In or around June 2012, petitioner filed its notice of claim against NYCHA demanding payment of the subsidies and in or around September 2012, it filed the instant Article 78 proceeding challenging NYCHA's revocation of Section 8 subsidies for the subject apartment.

In the instant action, petitioner's petition must be denied on the ground that it is time-barred. There is a four month statute of limitations to bring an Article 78 proceeding to challenge an administrative determination that is measured from the date the determination becomes final and binding upon the petitioner. See NY CPLR § 217. Agency action is "final and binding upon a petitioner" when the agency has reached a definitive position on the issue that inflicts actual, concrete injury and when the injury inflicted may not be prevented or significantly ameliorated by further administrative action or steps available to the complaining party. Best Payphones, Inc. v. Department of Information, Technology and Communications of City of New York, 5 N.Y.3d 30 (2005).

In this case, it is undisputed that petitioner was not paid subsidies for the subject apartment from September 2009 through January 2012. Therefore, petitioner's time to commence an Article 78 proceeding challenging NYCHA's determination expired in December 2009, four months after NYCHA initially stopped paying subsidies. See Royal Charier Properties, Inc. v. New York City Hous. Auth., Index No. 100189/10 (N.Y. Sup. Ct, July 23, 2010)(holding that a suspension of Section 8 payments triggers the running of the four month statute of limitations).

Petitioner's assertion that this is a "hybrid" Article 78 proceeding and breach of contract action and thus, it should proceed as a breach of contract action, is without merit. Petitioner cannot evade Article 78's requirements, including its statute of limitations, by re-casting its lawsuit as an action for breach of contract rather than as a challenge to NYCHA's administrative determination. In this case, petitioner seeks review of NYCHA's determination to suspend Section 8 subsidy payments to the subject apartment. These claims may only be brought in the form of an Article 78 proceeding and not in an action at law for breach of contract.

Additionally, to the extent petitioner moves for a writ of mandamus to compel, such motion is denied as this can only be a mandamus to review. As the court is called upon to examine the action taken by NYCHA involving the exercise of discretion, namely, whether to suspend subsidy payments and whether the subject apartment's defects have been cured, the nature of this proceeding is one of mandamus to review.

Accordingly, NYCHA's cross-motion to dismiss the petition is granted and the petition is hereby dismissed in its entirety. This constitutes the decision and order of the court.

Enter: ___

J.S.C.