Opinion
Index No. 153241/2024
07-17-2024
WHGA Garvey Housing Development Fund Company, Inc., Petitioner, v. 136 West 129 LLC, Respondent.
Greenberg, Trager, & Herbst, LLP, New York, NY (Matthew Guber of counsel), for petitioner. Suslovich & Klein LLP, Brooklyn, NY (Mark M. Kranz of counsel), for respondent.
Unpublished Opinion
Greenberg, Trager, & Herbst, LLP, New York, NY (Matthew Guber of counsel), for petitioner.
Suslovich & Klein LLP, Brooklyn, NY (Mark M. Kranz of counsel), for respondent.
Gerald Lebovits, J.
This is a special proceeding brought under Real Property Actions and Proceedings Law (RPAPL) 881 by petitioner, WHGA Garvey Housing Development Company, Inc., seeking access to adjoining property owned by respondent, 136 West 129 LLC.
Petitioner owns two properties, 134 and 138 West 129th Street, that are adjacent to respondent's property at 136 West 129th. The proposed installations and protections to respondent's property arise out of petitioner's interior and exterior construction work to both of petitioner's adjacent properties.
On February 23, 2024, petitioner mailed a letter to respondent at 136 West 129th Street. The letter contained a proposed license agreement and notice of intent to commence an RPAPL 881 proceeding. Respondent did not answer the letter.
On April 16, 2024, petitioner served respondent with its RPAPL 881 petition at the 136 West 129th Street address and at 1072 Madison Avenue, Lakewood, New Jersey.
In support of its petition, petitioner submits the affidavit of Craig Puerta, a licensed engineer. In opposition, respondent submits the affidavits of Rachel Kesserman and Mickey Chan, a licensed insurance broker and a licensed engineer, respectively.
The petition is granted as set forth below.
DISCUSSION
I. Whether Petitioner's RPAPL 881 Proceeding is Premature
Under RPAPL 881, an owner that cannot improve its property without entering the premises of an adjoining owner may bring a special proceeding for a license to enter that property if permission to enter the adjoining property has been refused.
Respondent argues that this proceeding is premature because it did not explicitly refuse access to its property before petitioner brought the proceeding. (NYSCEF No. 21 at ¶ 13.) Although respondent did not refuse the access, it did not answer petitioner's proposed negotiations for about two months. Petitioner sent to respondent's property at 136 West 129th Street a proposed license agreement and notice of intent to commence an RPAPL 881 proceeding. (NYSCEF No. 27 at ¶ 43.) Petitioner sent the proposal and notice to the property that will be directly affected by the petitioner's construction. The address is also where respondent directed its property tax bills be sent. (NYSCEF No. 27 at ¶ 43.) Respondent claims that because it pays its taxes online, respondent has no reason to check the mail at the 136 West 129th Street property. (NYSCEF No. 35 at ¶ 19.) Due to respondent's failure to answer petitioner's agreement, petitioner served respondent with the RPAPL 881 petition at respondent's address in Lakewood, New Jersey. Petitioner claims that it made a good-faith effort to begin negotiations with respondent through sending it a copy of the proposed license agreement. (NYSCEF No. 27.)
After petitioner did not receive from respondent an answer to the agreement sent to respondent at 136 West 129th Street, petitioner chose not to send the agreement to respondent's Lakewood address. But denying the petition solely on the ground that it was premature would place on petitioner a prejudicial and undue hardship. Furthermore, after receiving notice of the agreement, and several offers from petitioner to begin negotiations, respondent's attorney stated that he would not negotiate with petitioner until petitioner pays respondent's professional fees incurred thus far. (NYSCEF No. 31.)
II. The Merits of Petitioner's Request for an RPAPL 881 License
Resolving an RPAPL 881 proceeding is in the court's sound discretion. (See e.g. Matter of Panasia Estate Inc. v 29 W. 19 Condominium, 224 A.D.3d 414, 414 [1st Dept 2024].) The court must apply a reasonableness standard that balances the potential hardship to the applicant if the petition is not granted against the inconvenience to the adjoining owner if it is granted. (Id.) The factors in determining whether to grant a license include the nature and extent of the requested access, the duration of the access, what protections to the adjoining property are needed, the lack of an alternative means to perform the work, the public interest in completing the project, and the measures in place to ensure that the adjoining owner is financially compensated for any damage or inconvenience resulting from the intrusion. (Matter of Queens Coll. Special Projects Fund, Inc. v Newman, 154 A.D.3d 943, 944 [2d Dept 2017].) The statute provides that the court's grant of a license shall be on such terms as justice requires.
1. The Nature, Extent, and Duration of the Access
Petitioner seeks access to respondent's property to (1) perform a photographic survey of conditions on respondent's property, (2) install, maintain, and remove rooftop protections on respondent's property, (3) install, maintain, and remove overhead protection and a controlled access zone in which respondent shall not enter during work hours, and (4) access the airspace above respondent's property to install and maintain scaffolding. (NYSCEF No. 1 at ¶ 4.) The proposed installations and protections to respondent's property are in connection with petitioner's interior and exterior construction work to both petitioner's adjacent properties. (NYSCEF No. 1 at ¶ 4.) Petitioner wishes to access respondent's property for six months. (NYSCEF No. 1 at ¶ 4.)
Respondent claims that petitioner's access will cause respondent's backyard to become "a dark cave and totally unsuitable for any use whatsoever." (NYSCEF No. 38 at ¶ 6.) Respondent is concerned that petitioner's access will cause respondent's tenants to vacate its property.
Respondent asks that petitioner perform construction on respondent's property only during the winter months so that respondent's tenants are less likely to vacate. (NYSCEF No. 38 at ¶ 16.) Respondent wants petitioner to perform construction on one of petitioner's two adjacent properties in this upcoming winter and then perform construction on the second adjacent property the following winter. But petitioner will incur too many additional expenses to do so. The construction work would also take longer to perform, negatively affecting both respondent and petitioner.
2. The Needed Protections to Respondent's Property
For petitioner to comply with the New York City Building Code, petitioner must protect adjoining structures. (See New York City Building Code [Administrative Code of NY, title 28, ch 7] § BC 3309 et seq.) The Department of Buildings has approved petitioner's construction plans. (NYSCEF No. 9 at ¶ 29.) And there is no dispute about the need to protect respondent's property.
3. The Lack of an Alternative Means to Perform the Work
In his affidavit on petitioner's behalf, licensed engineer Puerta stated that "the temporary protections proposed are necessary, customary and as unintrusive as reasonably possible." (NYSCEF No. 9 at ¶ 29; No. 34 at ¶ 3.)
Under the Building Code, petitioner must take substantial steps to protect respondent's property. Beyond respondent's request that petitioner's construction be done during consecutive winters, respondent has not shown that a better alternative is available for petitioner to perform its construction.
4. Petitioner's Measures to Ensure Respondent's Financial Compensation
To access respondent's property, petitioner sent respondent a proposed license agreement. The agreement offered respondent (1) a reasonable license fee to use respondent's property, (2) payment of all reasonably accrued professional fees, (3) insurance covering respondent and respondent's property relating to the access, (4) assurances that petitioner will indemnify respondent from any claim that arises out of petitioner's access to respondent's property, (5) copies of both petitioner's site safety plans and construction plans for the work on petitioner's property, and (6) a draft of the agreement. (NYSCEF No. 27 at ¶ 42.)
Respondent argues that petitioner's insurance policy should satisfy concerns expressed by Kesserman in her affidavit. (NYSCEF No. 35 at ¶ 5; No. 38 at ¶ 16.) Petitioner has offered that respondent be named as an additional insured under petitioner's general commercial-liability insurance policy. (NYSCEF No. 6 at ¶ 9.) Petitioner has also offered to indemnify respondent fully from any claim that arises from petitioner's access to respondent's property. (NYSCEF No. 6 at ¶ 10.) Respondent will be financially protected by being named as an additional insured and by petitioner's offer-and obligation-to indemnify respondent. (See e.g. Matter of Queens Theater Owner, LLC v WR Universal, LLC, 192 A.D.3d 690, 691 [2d Dept 2021] [finding that respondent would be financially protected by being named as an additional insured and by petitioner's obligation to indemnify].)
Respondent argues that petitioner should post a bond. (NYSCEF No. 21 at ¶ 8.) Respondent has calculated that the potential rental loss due to petitioner's access could reach $87,600. (NYSCEF No. 35 at ¶ 14.) To secure respondent's compensation for damages, petitioner is ordered to post an $87,600 bond until the project is complete. (See DDG Warren LLC v Assouline Ritz 1, LLC, 138 A.D.3d 539, 540 [1st Dept 2016] [finding that issuing a bond was appropriate to secure respondent's compensation for potential damages].)
Respondent argues that petitioner should pay respondent's professional fees incurred resulting from petitioner's access. (NYSCEF No. 38 at ¶ 16.) Because a respondent to an RPAPL 881 petition did not seek out the intrusion and derives no benefit from it, equity requires that respondent should not have to bear any costs resulting from the access. (Matter of Panasia Estate, Inc. v 29 W. 19 Condominium, 204 A.D.3d 33, 37 [1st Dept 2021].) Here, respondent, who has not sought out petitioner's intrusion, has incurred professional fees to retain legal counsel, a licensed engineer, and a licensed insurance broker. (NYSCEF No. 21.)
Although equity requires a court to award a respondent its reasonable expert and attorney fees, a court may exercise its discretion to deny an award of fees incurred unreasonably. (See e.g. Matter of 1643 First LLC v 1645 1st Ave. LLC, 224 A.D.3d 623, 624-625 [1st Dept 2024].) Petitioner argues that respondent unreasonably incurred professional fees to stonewall litigation. (NYSCEF No. 27 at ¶ 102.) But respondent retained legal counsel promptly after receiving notice of petitioner's RPAPL 881 petition. Respondent's legal counsel then hired Kesserman and Chan to look at petitioner's proposed insurance policy and construction plans. Kesserman found reasonable issues in petitioner's insurance policy. (NYSCEF No. 37.) And Chan noted issues in petitioner's construction and safety plans, such as insufficiently provided information. (NYSCEF No. 36.) Respondent reasonably incurred professional fees to ensure its indemnity. Petitioner must reimburse respondent's attorney, engineer, and insurance-broker fees.
Respondent argues that petitioner should pay a license fee to respondent. (NYSCEF No. 38 at ¶ 16.) Courts often grant respondents a license fee, but may properly deny a fee when justice so requires. (See e.g. Matter of Van Dorn Holdings, LLC v 152 W. 58th Owners Corp., 149 A.D.3d 518, 518 [1st Dept 2017].) Petitioner is obligated to indemnify respondent from any damage, post a bond to secure compensation for possible damages to respondent, and pay respondent's professional fees. Justice does not require that respondent be further paid by petitioner through a license fee. Respondent does not bear any costs resulting from the access itself. (See Matter of Spence v Strauss Park Realty, LLC, 211 A.D.3d 446, 447 [1st Dept 2022] [finding that petitioner did not have to pay a license fee because it fronted respondent the cost of repairs]; Matter of Meopta Props. II, LLC v Pacheco, 185 A.D.3d 511, 512 [1st Dept 2020] [finding a license fee unnecessary because petitioner had obtained insurance to protect respondent's property].)
5. The Public Interest in Completing Petitioner's Project
Petitioner is a non-profit organization that provides housing to indigent families in West Harlem. (NYSCEF No. 27 at ¶ 9.) Petitioner's interior and exterior construction work occurring at 134 and 138 West 129th Street are part of a larger capital-improvement project among numerous other affordable housing buildings in West Harlem. (NYSCEF No. 27 at ¶ 9.) There is no dispute as to the public's interest in completing petitioner's project.
Accordingly, it is
ORDERED AND ADJUDGED that petitioner is granted a license to enter onto respondent's property for six months for the purposes identified in ¶ 4 of the petition (appearing at NYSCEF No. 1); and it is further
ORDERED that any renewal of the license shall be sought by motion, which may be brought on by order to show cause; and it is further
ORDERED that petitioner shall indemnify respondent for any damage resulting from petitioner's entry onto respondent's property; and it is further
ORDERED that petitioner shall, within seven days of entry of this order, post a bond for $87,600 to secure respondent's compensation for possible damages due to petitioner's entry onto respondent's property; and it is further
ORDERED that petitioner shall reimburse respondent for its reasonable attorney, engineer, and insurance-broker fees incurred through the date of entry of this order in connection with petitioner's access request and this proceeding, with the amount of those fees to be determined by motion made on notice, supported by appropriate documentation; and it is further
ORDERED that petitioner serve notice of entry on respondent.