Opinion
4905/11.
Decided November 21, 2011.
In this Article 78 proceeding petitioner Taxraja Management LLC seeks a judgment vacating sixteen default judgments entered by respondent the New York City Environmental Control Board (ECB), with a mailing date of December 9, 2010, which imposed a fine of $200.00 per violation.
On March 29, 2010, a New York City Department of Sanitation enforcement agent issued Notices of Violation (NOV) numbers 40217693H, 40217694J, 40217695L, 40217696N, 40217697P, and 40217698R to Taxraja Management LLC (Taxraja) for illegally posting a handbill on March 29, 2010, in "Front of 120-05 Atlantic Avenue" in violation of Section 10-119 of the Administrative Code of the City of New York. The same enforcement agent also issued NOVs numbered 40217699Z, 40217700R, 40217701Z, 40217702K, 40217703M and 40217704Y to Taxraja on March 29, 2010 for illegally posting a handbill in "Front of 120-01 97th Avenue," in violation of Section 10-119 of the Administrative Code of the City of New York. Said enforcement agent also issued NOVs numbers 40217705X, 40217706H, 40217707J, and 40217708L to Taxraja for illegally posting a handbill on March 29, 2010 in "Front of 94-06 130th Street," in violation of Section 10-119 of the Administrative Code of the City of New York.
In each of the sixteen NOVs, said enforcement agent, states that "At T/P/O I did observe a poster stating Taxraja associates, llc 119-18 101 ave, richmond hill, ny 11419 tel:718-880-1992 affixed to a NYC lamppost . . . "Each NOV set forth the date of the offense as March 29, 2010; the date and time of the hearing as "6th day of August 2010 08:30 AM in the Manhattan ECB Location"; stated the mail-in penalty of $75.00 and the maximum penalty of $200.00, and warned that "if you do not appear (or pay by mail if permitted) you will be held in default and subject to the maximum penalties permitted by law. Failure to appear or pay a penalty imposed may lead to . . . the possibility of a judgment entered against you in Civil Court."
Petitioner Taxraja claims that it never received these sixteen NOVs. Petitioner asserts that once it received a notice of collection, it contacted the ECB and was advised to file a request to vacate its defaults in responding to the NOVs. Petitioner asserts that it filed sixteen requests to vacate its default, corresponding to each NOV, and that all of these requests were denied by the ECB on the grounds that its records showed that petitioner was served with the NOVs. Petitioner asserts that the evidence in the ECB's records fails to establish that the NOVs were properly served by certified mail, return receipt requested, as required by Section 1049-a of the City Charter, or in accordance with Article 3 of the CPLR. Petitioner claims that its right to due process, cross examination, presentation of evidence, and all other rights essential to a fair hearing have been denied; that the method of service set forth in Section 1049-a(1)(d))(2)(iv) fails to provide reasonable notice, and therefore should be declared ultra vires; and that respondent failed to comply with its own regulations as petitioner did not receive notice of the first scheduled hearing as required by Title 48, Section 3-31(d) of the Rules of the City of New York, and was thus denied the right to a fair hearing.
Taxraja, in support of the petition, has submitted a copy of a "NOTICE OF COLLECTIONS-PAST DUE" from the Department of Finance Collections Division, dated December 4, 2010, pertaining to violation numbers 040217708L, 0402177707J, 0402177706H, 040217705X, 040217704Y and 040217703M. Said notice states, in pertinent part, as follows: "As you have previously been informed, a judgment for your unpaid Environmental Control Board (ECB) fines has been filed against you in the Civil Court of the City of New York. Since that time, our records show that you have still not paid this outstanding debt, which is now past due," and states that the amount due is $3,203.20. Said notice states that "[i]f there are six violations listed, there may be additional violations owed. Please call for more information." Taxraja was directed to make payment immediately and was warned that if the Department of Finance did not hear from the debtor within 15 days, it may be contacted by Finance Collections, the NYC Deputy Sheriff or an outside collections firm, and that the Department of Finance is authorized to seize the debtor's assets and/or garnish its wages.
Petitioner, as well as respondent, have submitted copies of sixteen letters the ECB sent to Taxraja, corresponding to each NOV, with a mailing date of "this order" of December 9, 2010, stating, in pertinent part, that: "Your request for a new hearing after you failed to appear on your scheduled hearing date is denied because: You claim that you did not receive notice of the ticket. However, our records show that you did get notice. You need to pay $200.00 now. . . . If you do not pay the fine, the city will get a legal judgment against you in the Civil Court. Then the city can take money or property from you to pay the fine."
Raj Rijal, the president of Taxraja states in his affidavit that in April 2010, Taxraja received four NOVs, each dated March 29, 2010 for the illegal posting of handbills, with a fine of $75.00 per violation. He states that these fines were paid by checks dated April 20, 2010, in the amount of $300.00, and that he was thereafter advised that he did not have to appear at the scheduled hearing of June 4, 2010. Mr. Rijal submits copies of said checks, each bearing a notation pertaining to a NOV number. Said NOV numbers do not correspond to any of the sixteen NOVs at issue here. Mr. Rijal states that in October 2010, he received a "notice of collection date mailed October 27, 2010," with a fine of $200.00, for the subject sixteen NOVs; that on November 22, 2010, he mailed the required forms to the ECB requesting a new hearing based upon a default; that on December 8, 2010 he received the Department of Finance's "Notice of Collections-Past Due, dated December 4, 2010; that on December 17, 2010 he personally went to the ECB's office and requested the complete records pertaining to the sixteen NOVs; and that on December 24, 2010 he received the sixteen letters denying his request for a new hearing, along with copies of the NOVs. He states that December 24, 2010 was the first time he actually received the sixteen NOVs.
Sarabjit K. Sawhney, the office manager for Taxraja states in an affidavit that she handles the mail received by Taxraja; that in April 2010, Taxraja received four NOVs for illegal posting of handbills, each with a March 29, 2010 date of violation; and that she informed Mr. Rijal about said NOVs, which he paid. She states that in the end of October 2010, Taxraja received sixteen notices of collection, which had a mailing date of September 27, 2010, and imposed a fine of $200.00, per violation. She states that the Taxraja did not receive the copies of the subject sixteen NOVs until December 24, 2010, following the request made to the ECB for Taxraja's file.
Respondent ECB, in opposition, asserts that it properly denied petitioner's requests to vacate each of the defaults for the sixteen NOVs, as petitioner failed to establish a reasonable basis for its belief that it was not properly served with the subject NOVs. Respondent asserts that the issuing agency, the Department of Sanitation, properly served the subject NOVs, by certified mail, return receipt requested, upon petitioner pursuant to Section 1049-a(d)(2)(iv) of the New York City Charter. It is asserted that as petitioner was properly served with the subject NOVs, it was given notice and an opportunity to be heard, and that its due process rights were not violated. Respondent further asserts that the service provisions of the City Charter comports with procedural due process and is not ultra vires. Respondent thus asserts that its determination denying the petitioner's requests to vacate its default was neither arbitrary nor capricious, nor an abuse of discretion, and has a sound basis in law and the record.
Respondent has submitted copies of the sixteen NOVs, and an affidavit of service from the Department of Sanitation, dated April 6, 2010, which refers to "NOV No. E40217708L" and "15 others," and states that the affiant "being duly sworn and over 18 years of age, on 04-06-2010, caused to be served via certified mail, restricted delivery return receipt requested 16 Notices of Violation to Tax at Raja Management Assoc 11918 101st Ave Richmond Hill NY 11419 by enclosing the Notice of Violation in a post paid envelop in a mailbox regularly maintained and under the exclusive control of the United States Post Office."
Respondent has also submitted an affidavit of mailing of Notices of Violation, from the Department of Sanitation, dated May 24, 2010, in which the affiant states, in pertinent part that:
"2. ON 5-24-10 I MAILED COPIES OF NOTICES OF VIOLATION SUMMARIZED BY VIOLATION NUMBER ON THE ATTACHED SHEET (BATCH 100521002-NUMBER 100521015) TO EACH RESPONDENT INDICATED ON THE PAGE OF SUCH NOTICES OF VIOLATION AT THE ADDRESS OF THE PREMISES, WHERE THE VIOLATION OCCURRED AS INDICATED ON THE PAGE THEREOF, BY ENCLOSING AND SEALING SUCH COPIES IN POST PAID ENVELOPES PROPERLY ADDRESSED TO SUCH RESPONDENTS AT SUCH ADDRESSES AND DEPOSITING THEM INTO A DEPOSITORY MAINTAINED UNDER THE EXCLUSIVE CONTROL OF THE UNITED STATES POST OFFICE."
"3.I ALSO MAILED COPIES OF SUCH NOTICES TO EACH RESPONDENT INDICATED ON THE PAGE THEREOF AT THE ADDITIONAL ADDRESS(ES) WHICH IS INDICATED ON THE NOTICE ALSO SENT TO ON THE PAGE THEREOF, BY ENCLOSING AND SEALING SUCH COPIES IN POST PAID ENVELOPES PROPERLY ADDRESSED TO SUCH RESPONDENTS AT SUCH ADDRESSES AND DEPOSITING THEM INTO A DEPOSITORY MAINTAINED UNDER THE EXCLUSIVE CONTROL OF THE UNITED STATES POST OFFICE."
The batch detail report is attached to said affidavit and lists the 16 NOVs issued on March 29, 2010 to Taxraja. Respondent has also submitted data entry print outs pertaining to the sixteen NOVS.
An affidavit of daily mailing, from an employee of Fedcap Rehabilitation Services Inc., acting as agents for the ECB, states in pertinent part that the affiant: "SERVED THE ABOVE LISTED ENVIRONMENTAL CONTROL BOARD DECISIONS AND ORDERS AND NOTICES UPON THE RESPONDENT OR HIS REPRESENTATIVE IN EACH PROCEDDING [sic] BY PLACING A COPY OF SAME, ENCLOSED IN A POSTPAID WRAPPER, IN A POST OFFICE STATION REGULARLY MAINTAINED BY THE UNITED POSTAL SERVICE ON 8-12-10." Said affidavit contains a printed page number of 151, and contains the following language: "Mailing Date: 08/11/10 . . . TYPE OF ORDER: STIP ORDER." Attached to said affidavit of mailing are printouts of pages 40 and 41, that list the sixteen NOV numbers in question, along with the name and mailing address of Taxraja management, and contain the following language: "Daily Affidavit of Mailing" "mailing Date: 08/11/10" and "TYPE OF ORDER: Default Order."
Petitioner filed with the ECB sixteen forms entitled "Requests for a New Hearing After a Failure to Appear (Vacating a Default). Each form is dated October 22, 2010; states that Taxraja never received the ticket; that it first learned of the ticket on September 29, 2010 when it received mail in its mailbox on that date; is stamped: "Received ECB 2010 OCT 27, P 12:07" and "NOV-01 '10 PM 03:40"; and has a stamp from an ALJ, identified by number, dated November 16, 2010, with the words "deny" circled and "Reason 3" circled.
Petitioner in its reply, reiterates its claim that City Charter § 1049-a(d)(2)(iv) violates due process. Petitioner further asserts that even assuming that this provision comports with due process, respondent has failed to submit evidence of the postal return receipt requests, and has failed to provide any explanation as to the failure to produce such receipts which were requested by petitioner prior to commencing this proceeding. Petitioner also questions the accuracy of the ECB's data base with respect to its record of mailing.
It is well settled that a court's function in an Article 78 proceeding is "to scrutinize the record and determine whether the decision of the administrative agency [in question] is supported by substantial evidence and not arbitrary and capricious" ( Matter of Marsh v Hanley, 50 AD2d 687); see also Arbuiso v New York City Dept. of Bldgs. , 64 AD3d 520 , 522, citing Matter of Pell v Board of Educ. of Union Free School Dist. No. 1, 34 NY2d 222, 231).
The ECB Vacate Default Rule, set forth in Section 3-82 of the Rules of the City of New York, provides, in full as follows:
"§ 3-82 Request for a New Hearing after a Failure to Appear (Vacating a Default)."
"1.(a) A request by a respondent for a new hearing after the respondent did not appear must be made by application to the executive director or his or her designee. The request must be on a form prescribed by the executive director. The request must contain a current mailing address for the named respondent; it must explain how and when the respondent learned of the violation and it must be sworn or certified to under the penalties of perjury. If the request is not made by the named respondent, the request must explain the relationship between the respondent and the person making the request."
"(b) A request for a new hearing, as described in subdivision (a) of this section, that is received within 45 days of the hearing date upon which the respondent did not appear, shall be granted unless such request is found to be made in bad faith. Such findings shall be made at the discretion of the executive director and shall include, but not be limited to, requesting only to admit the charge(s), repeatedly filing the same request or filing the same request in more than one borough at the same time."
"(c) A request for a new hearing that is received more than 45 days from the date upon which the respondent did not appear must contain, in addition to the information stated in subdivision (a) of this section, appropriate supporting documentation. Such request may be granted and a hearing conducted only if the respondent establishes that a new hearing was requested within one year of the time the respondent learned of the existence of the violation, and that there is a reasonable basis to believe that the respondent (1) did not receive the notice of the violation because the respondent was
(A) not properly served with the violation under article three of the civil practice law and rules, article three of the business corporation law, section 1049-a of the New York City Charter or any other provision relating to service of violations returnable to the Environmental Control Board contained in the New York City Administrative Code or the Rules of the City of New York; or
(B) cited generically, for example, as "Owner" or "Agent," on all copies of the notice of violation sought to be served on the respondent; or (2) was an improper party when the notice of violation was issued. An improper party is a named respondent who is (A) an individual who was deceased or legally incompetent on the hearing date upon which the respondent did not appear; or (B) for a premises related violation, not the owner, agent, lessee, tenant, occupant or person in charge of or in control of the place of occurrence on the date of the offense." "A decision to grant the request for a new hearing under this section shall not be considered a final decision on the issue of whether respondent was properly served or was a proper party on the date of offense." "(d) If a request for a new hearing is granted, the Environmental Control Board shall send a notice to the respondent at the respondent's address stated on the request for a new hearing. If the respondent is deceased or legally incompetent, a notice shall be sent to respondent's representative. Notice shall also be sent to the Petitioner." "(e) No more than one request for a new hearing under this section may be granted with respect to any one notice of violation unless the notice of the new hearing date was not mailed pursuant to subdivision (d) of this section. If the respondent is unable to appear on the hearing date scheduled after a request for a new hearing is granted, respondent may request that the hearing be rescheduled one final time."
"(f) Review of a denial of a request for a new hearing after a failure to appear may be sought pursuant to Article 78 of the New York Civil Practice Law and Rules."
Where, as here, the petitioner did not file its request for a new hearing within 45 days from the date of default, under the ECB Vacate Rule, even a bona fide excuse will be unavailing to vacate the default, unless the original notice of violation was improperly served or the defaulting party was not a proper party in the first instance ( see Matter of Wilner v Beddoe, 2011 NY Slip Op 32118U, 2011 NY Misc Lexis 3831).
Petitioner argues that the notice provisions relating to the service of the NOVs fails to provide adequate procedural due process under the 14th Amendment to the United States Constitution. The touchstones of procedural due process are notice and an opportunity to be heard ( Prue v Hunt, 78 NY2d 364; Toolasprashad v Kelly , 80 AD3d 530 ). The constitutional requirements of procedural due process apply to proceedings before administrative agencies ( Wolfe v Kelly , 79 AD3d 406 ). Duly enacted local laws, rules and regulations, however, are presumed to be constitutional ( Korotun v Incorporated Village of Bayville , 26 AD3d 311 ).
Procedural due process requirements must be met before any default is actually taken ( In re Bouchard, 29 AD3d 79; Tupaz v Clinton County, New York, 499 F Supp 2d 182; Jaouad v City of New York, 4 F Supp 2d 311). The ECB Vacate Rule, thus, requires that a judgment be vacated where the notice of violation was not properly served in the first place.
The NOVs issued by the Department of Sanitation each allege a violation of Section 10-119 of the Administrative Code of the City of New York. City Charter § 1049-a(d)(2)(a) provides, in pertinent part, that the ECB:
"shall not enter any final decision or order pursuant to the provisions of paragraph one of this subdivision unless the notice of violation shall have been served in the same manner as is prescribed for service of process by article three of the civil practice law and rules or article three of the business corporation law, except that:. . . . (iv) service of a notice of violation of any of the provisions of section 10-119 or 10-120 of the administrative code of the city of New York and over which the environmental control board has jurisdiction, may be made by certified mail, return receipt requested, to the respondent's last known residence or business address, provided that delivery of such notice shall be restricted to the respondent. Service by certified mail shall be deemed complete upon mailing of the notice of violation unless the notice of violation is returned to the sender by the United States postal service for any reason other than refusal of delivery. . . ."
Contrary to petitioner's assertion, the above challenged notice provision set forth City Charter § 1049-a sufficiently comports with procedural due process, as it is reasonably calculated to provide sufficient notice of the violation. Furthermore, service of NOVs on a limited liability company, in the manner provided for in the City Charter is not an ultra vires act.
Helaine Balsam, the ECB's Legal Director, states in an affidavit that Department of Sanitation filed with the ECB the sixteen NOVs along with proof of service on May 24, 2010, and that this was entered into ECB's records on said date. Ms. Balsam, however, does not state whether the ECB also received the postal return receipt cards, or whether these receipts are maintained by the Department of Sanitation. Ordinarily, an affidavit of service is sufficient to establish service. Here, however, the affidavit of service supplied by the Department of Sanitation only specified a single NOV number and referred to "15 others" without identifying the NOVs. This affidavit of service, therefore, on its face is insufficient to establish that the Department of Sanitation complied with the provisions of City Charter § 1049-a.
The Department of Sanitation also provided an affidavit of service of NOVs, by batch numbers to each named respondent, dated May 24, 2010, which states that service was made by regular mail. Although CPLR 312-a permits personal service by mail, the Department of Sanitation's affidavit of service does not state that the NOVs were mailed in accordance with the provisions of this section.
New York City Charter § 1049-a(d)(1)(h) expressly requires that the ECB send a notice of default to a party by first class mail before a judgment can be docketed in the Civil Court of the City of New York. Here, the August 12, 2010 affidavit of daily mailing, contains a "run date" of August 11, 2010, and refers to a "stip order," while the pages which contain references to the sixteen subject NOVs refer to a "default order" and also contain a "run date" of August 11, 2010. Since the actual notice of default which respondent asserts was mailed on August 12, 2010 is not included in the administrative record, the court is unable to determine whether petitioner was properly served with a notice of default with respect to each of the sixteen NOVs.
The court notes, however, that petitioner received a past due collection notice dated December 4, 2010, which states that a default judgment was already entered in Civil Court, prior to its receipt of the December 9, 2010 denials of its requests for a new hearing. These sequence of these events is troublesome, and the ECB offers no explanation as to why a past due collection notice was sent to petitioner prior to informing it of the denial of the requests for a new hearing.
Accordingly, the petition is granted to the extent that the ECB's default judgment against the petitioner and its determinations of December 9, 2010 denying the requests for a new hearing are vacated, and the matter is remanded to the ECB for further proceedings.
Settle judgment.