Opinion
No. 100842/2014.
01-22-2016
In the Matter of the Application of Mohamed SHAHBAIN and Mojeeb Shahbain, Petitioners, for a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, v. COMMISSION ON HUMAN RIGHTS ex. rel. Adam DiLEO, Respondent.
The Aboushi Law Firm, PLLC., Tahanie Aboushi, Esq., New York, for Movant. Corporation Counsel of the City of New York, New York, for Respondents.
The Aboushi Law Firm, PLLC., Tahanie Aboushi, Esq., New York, for Movant.
Corporation Counsel of the City of New York, New York, for Respondents.
ALEXANDER W. HUNTER JR., J.
Two separate applications were filed in this matter under motion sequence no. 001 and no. 002. Both applications will be decided herein.
The application by Mohamed Shahbain and Mojeeb Shahbain (collectively, “petitioners”) for an order pursuant to C.P.L.R. Article 78, vacating and aning the May 22, 2014 determination of respondent, the New York City Commission on Human Rights (the “Commission”), which found that the petitioners violated the New York City Human Rights Law (the “HRL”) and ordered them to pay $5,000 in compensatory damages and undergo anti-discrimination training, is granted.
The motion by the Commission to dismiss the petition and enforce the Decision and Order entered on May 22, 2014, is denied.
Petitioner Mohamed Shahbain (“Mohamed”) and his son, Mojeeb Shahbain (“Mojeeb”) own the building located at 451, 11th Street, Brooklyn, New York (the “subject premises”). The subject premises consists of three apartments each respectively located on the first, second, and third floor. Mohamed's daughter, son-in-law and grandchildren reside in the first floor apartment. Mohamed resides in the second floor apartment and the third floor apartment is rented to non-family tenants. It is noted that petitioner Mojeeb resides in Michigan and was not present in New York at the time of the incident. It is also noted that at the time of the incident Mohamed was in Yemen, and during his absence, Abrahim Shahbain (“Abrahim”) handled all of the affairs related to the subject premises.
On June 5, 2012, Adam DiLeo (“Mr.DiLeo”) filed a complaint with the Commission claiming that the petitioners violated the HRL when their agent refused to show him an apartment because a child would be residing there. Specifically, Mr. DiLeo alleged that on February 1, 2012, he appeared at the subject premises to view the third floor apartment which was listed for rent on Craigslist.com. Upon arrival he rang the first floor doorbell, a man whom was later confirmed to be Najmuddin Shahbain (“Najmuddin”), Mohamed's son-in law, answered the door. Mr. DiLeo informed Najmuddin that he was there to see the third floor apartment and confirmed that he was sent by Firas Toun (“Mr.Toun”), the real estate agent in-charge of renting the apartment. As Najmuddin began to let Mr. DiLeo into the subject premises, he allegedly asked him whether he would be living in the apartment alone, and upon learning that Mr. DiLeo would be living in the apartment with his pregnant wife, Najmuddin looked at him and said “No, no babies.” Mr. DiLeo, who is a licensed attorney in New York and New Jersey, informed Najmuddin that it was illegal not to show the apartment because he has a child, to which Najmuddin responded “something about dust” and closed the door in Mr. DiLeo's face. Immediately following his encounter with Najmuddin, Mr. DiLeo phoned and emailed Mr. Toun to notify him of the incident. In his email, he explained what happened and asked Mr. Toun to provide alternate properties in the same price range and area by the end of the day. Mr. Toun advised that he would look into the matter, but he currently did not have any other properties in the same price range or area. Following this exchange, there were no further communications between them.
On December 13, 2013, a hearing was held before Administrative Judge Allesandra F. Zorgniotti. Following the hearing, Judge Zorgniotti issued a Report and Recommendation where she found that the Mr. DiLeo failed to establish that the petitioners violated section 8–107(5) of the HRL. Specifically, she found that Najmuddin did not have apparent, nor express authority to act on behalf of the petitioners. On May 22, 2014, the Commission rejected Judge Zorgniotti's Report and Recommendation and found that the petitioners had discriminated against Mr. DiLeo on the basis of the lawful presence of a child and ordered the petitioners to pay $5,000 in compensatory damages to Mr. DiLeo and undergo anti-discrimination training.
Petitioners now seek to annul the determination of the Commission claiming that the decision was both arbitrary and capricious, not reasonably related to the facts of the case, and is not supported by substantial evidence. Specifically, the petitioners argue that: (1) Najmuddin did not have apparent or express authority to act on the petitioners' behalf; (2) the Commission improperly awarded damages for mental anguish; and (3) the petitioners should not undergo anti-discrimination training.
The Commission opposes the petition in its entirety and in a separate application, move to dismiss the petition and enforce the Decision and Order. In its answer, the Commission asserts that substantial evidence supports its determination that Najmuddin had both actual and apparent authority to act on behalf of the petitioners.
Section 8–107(5)(a)(1) of the New York City Human Rights Law makes it an unlawful discriminatory practice for “the owner or other person having the right to sell, rent or lease or approve the sale, rental or lease of a housing accommodation or any agent or employee thereof” to “refuse to sell, rent, lease, approve the sale, rental or lease or otherwise deny to or withhold from any person or group of persons such a housing accommodation because children are, may be or would be residing with such person or persons.” See, New York City, NY, Code § 8–107. When, as here, the petitioners seek judicial review of an order of the Commission, an Article 78 proceeding cannot be maintained. Maloff v. City Commission on Human Rights, 45 A.D.2d 834 (1974). Section 8–123(f) of the Admin. Code provides that “the jurisdiction of the Supreme Court shall be exclusive and its judgment and order shall be final, subject to review by the Appellate Division of the Supreme Court and the Court of Appeals in the same manner and form and with the same effect as provided for appeals from a judgment in a special proceeding.” Thus, although the instant proceeding involves an issue of substantial evidence, this court has exclusive jurisdiction over the issues in this proceeding and transfer to the Appellate Division is inappropriate. See City of New York Com'n on Human Rights v. Salinas Realty Corp., 183 Misc.2d 897 (Sup Ct 2000) ; Silver Dragon Restaurant v. The City of New York Com'n on Human Rights, 2004 N.Y. Slip Op 30317(U).
It is well settled that in reviewing a determination by the Commission, “this Court may not substitute its own judgment for that of the Commissioner and we must confirm the determination so long as it is based on substantial evidence.” Woehrling v. New York State Div. of Human Rights, 56 AD3d 1304, 1305 (4th Dept.2008). A determination is deemed as being supported by substantial evidence when the proof is “so substantial that from it an inference of the existence of the fact found may be drawn reasonably .” Stork Rest. v. Boland, 282 N.Y. 256, 273 (1940). “Whether an administrative agency determination is shored up by substantial evidence is a question of law to be decided by the courts.” 300 Gramatan Ave. Assoc. v. State Div. of Human Rights, 45 N.Y.2d 176, 181 (1978). It is noted, that “the Commission, not the Administrative Law Judge, bears responsibility for rendering the ultimate factual determinations, and the Commission [is] not to be bound by the report and recommendation of an Administrative Law Judge.” Orlic v. Gatling, 44 AD3d 955, 957 (2nd Dept.2007). Thus, when reviewing the substantiality of the evidence before the administrative agency, this court, “should review the whole record to determine whether there is a rational basis in it for the findings of fact supporting the agency's decision” Id. at 182 ; Matter of Pell v. Board of Educ., 34 N.Y.2d 222, 231.
In the instant action, this court finds that there is insufficient evidence in the record for the Commission to have properly found that Najmuddin was an agent of the petitioners with actual or apparent authority to act on their behalf.
“Agency is the fiduciary relation which results from the manifestation of consent by one person to another.” Deep Blue Ventures, Inc. v. Manfra, Tordella & Brookes, Inc., 6 Misc.3d 727, 732 (Sup Ct 2004) ; See also, Restatement (Second) of Agency § 1(1). “To constitute the [agency] relationship, there must be an agreement, but not necessarily a contract, between the parties; if the agreement results in the factual relationship between them to which are attached the legal consequences of agency, an agency may exist although the parties did not call it agency and did not intend the legal consequences.” Id. However, the creation of an agency relationship alone is insufficient to impose liability onto the principal. “To bind a principal, an agent must have authority, whether apparent, actual or implied.” Warshaw v. Mendelow, 2011 WL 11100990 (N.Y. Sup.) ; See also, Restatement (Second) of Agency § 1. The burden rests with the person dealing with the agent to establish that agency existed. See, Michaels v. Agric. Ins. Co., 38 N.Y.2d 793, 794 (1975) ; Dudley v. Perkins, 235 N.Y. 448, 455 (1923).
“Actual authority arises from a principal's direct manifestations to the agent. It may be express or implied, but in either case it exists only where the agent may reasonably infer from the words or conduct of the principal that the principal has consented to the agent's performance of a particular act.” In re Parmalat Sec. Litig., 594 F.Supp 2d 444, 451–52 (S.D.NY 2009). There exists no evidence in the record to support a finding that Najmuddin had actual authority to act on the petitioners' behalf. It is clear from the record that Mr. Toun, as the Century 21 agent, was charged with the responsibility of renting the third floor apartment. It is also clear that Abrahim, Mohamed's son, manages all affairs of the subject premises in the petitioners' absence. Thus, Mr. Toun and Abrahim had actual authority to act on the petitioners' behalf. Both testified that Najmuddin had never been responsible for renting the third floor apartment, nor has he ever been entrusted with any aspects of caring for the building. The record also supports a finding that Mohamed normally opened the door to prospective renters and did not delegate that responsibility to any of the tenants of the first floor apartment.
Apparent authority on the other hand, “is dependent on verbal or other acts by a principal which reasonably give an appearance of authority to conduct the transaction.” Greene v. Hellman, 51 N.Y.2d 197, 204 (1980). “Apparent authority will only be found where words or conduct of the principal-not the agent-are communicated to a third party, which give rise to a reasonable belief and appearance that the agent possesses authority to enter into the specific transaction at issue.” Edinburg Volunteer Fire Co., Inc. v. Danko Emergency Equip. Co., 55 AD3d 1108, 1110 (3rd Dept.2008) ; See also, Hallock v. State of New York, 64 N.Y.2d 224, 231 (1984) ; Morgold, Inc. v. ACA Galleries, 283 A.D.2d 407, 408 (2001). Furthermore, “[t]he mere creation of an agency for some purpose does not automatically invest the agent with apparent authority' to bind the principal without limitation.” Ford v. Unity Hosp., 32 N.Y.2d 464, 472 (1973). It is undisputed that: (1) the petitioners were not in New York at the time of the events alleged in Mr. DiLeo's complaint; (2) Mr. Toun directed Mr. DiLeo to visit the apartment unaccompanied by him, and that someone from the first floor apartment would let him into the subject premises; and (3) Abrahim directed Mr. Toun to ring the first floor apartment to gain access to the subject premises.
An agent's power to bind his principal is coextensive with the principal's grant of authority. One who deals with an agent does so at his peril, and must make the necessary effort to discover the actual scope of authority. Upon failure to properly determine the scope of authority, and in the face of damages resulting from an agent's misrepresentations, “apparent authority” is not automatically available to the injured third party to bind the principal. Rather, the existence of “apparent authority” depends upon a factual showing that the third party relied upon the misrepresentations of the agent because of some misleading conduct on the part of the principal-not the agent. Ford, 32 N.Y.2d at 472–73.
Here, the Commission based its decision on the fact that Abrahim testified that Najmuddin had authority to open the door. However, Abrahim, as an agent for the petitioners does not have the authority to grant Najmuddin with this authority. Moreover, no evidence was presented to show that the petitioners participated in any conduct, misleading or otherwise, on which Mr. DiLeo relied, that was sufficient to create apparent authority. The petitioners were not in New York at the time of the alleged incident and there is no evidence in the record that they ever requested or acquiesced to Najmuddin or any other tenant of the first floor apartment to open the door to prospective tenants.
Accordingly, it is hereby
ADJUDGED, the application by the petitioners for an order pursuant to C.P.L.R. Article 78, vacating and aning the May 22, 2014 determination of the Commission, which found that the petitioners violated the HRL and ordered that they pay $5,000 in compensatory damages and undergo anti-discriminatory training, is granted. The motion by the Commission to dismiss the petition and enforce its Decision and Order entered on May 22, 2014, is denied.