Opposition Brief — 640 Broadway Renaissance Co. v. John Eisner, et al. and 15 Other Cases Consolidated for Purposes of a Joint Appeal

: AR AS

No. 95-959 ; conaagia

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hes Tse were ee

In The

Supreme Court of the United States

-_ 2

October Term, 1995

640 BROADWAY RENAISSANCE CoO..,

Petitioner,

vs.

JOHN EISNER, et al. and 15 Other Cases Consolidated for

Purposes of a Joint Appeal,

Respondents.

On Petition for a Writ of Certiorari to the Supreme Court of

the State of New York, Appellate Division,

First Judicial Department

RESPONDENTS’ BRIEF IN OPPOSITION

DAVID RATNER

Counsel of Record

HARTMAN, ULE, ROSE

& RATNER

Attorneys for Respondents

305 Broadway, Suite 1201

New York, New York 10007

(212) 437-9110

8497

(800) 3 APPEAL « (800) 5 APPEAL « (800) BRIEF 21

Services, inc.

i

QUESTIONS PRESENTED

1. Whether the Court has jurisdiction to grant a writ of

certiorari in this case where petitioner raised no federal question

of any kind in the state court proceedings.

2. Whether the Court ought to grant a writ of certiorari in

light of the fact that all of the constitutional issues raised in the

petition were decided against petitioner in a previous federal

court action entitled 640 Broadway Renaissance Co. v. Cuomo,

740 F. Supp. 1023 (S.D.N.Y. 1990), aff’d, 927 F.2d 593 (1991),

cert. denied, 500 U.S. 933, 111 S. Ct. 2054, 114 L. Ed. 2d 459

(1991).

ii

TABLE OF CONTENTS

Page

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Table of Contents ............ Gavithesaaakiede ii

Table of Citatiogt ......<sscesa babe eee ee ili

Preliminary Stategneih | <.a.0 cc cdeencixcaaeaneieedas ]

Statement Of FOCUS . ssc siacndaunesbbesabebreseaa ]

A. Statutory Background ...6ccssccccssccesens 3

B. Petitioner’s Actions Under the LoftLaw ...... 6

C. The Underlying AGGIE 6 is iss sisSecccdcs 1]

D. The Motions Under Appeal ................. 11

Reasons for Denying the Writ ......cccccccecccsecs 15

I. Petitioner Never Raised Any Federal Question

in the State Court Proceedings. .............. 15

II. All of the Constitutional Issues Raised in the

Petition Have Been Passed Upon by the Federal

Courts, Including the Supreme Court of the

United Sta008. 2 6 kek cavagegareeaeiecauen se 15

III. Petitioner is Mistaken in Claiming That the Loft

Law was Retroactively Applied to Deprive

Petitioner of 4s ROG. cocks cede ceeweasces 16

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Contents

Page

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TABLE OF CITATIONS

Cases Cited:

Baum Residence Corp. v. Van Rosson, 206 Misc. 315,

134N.Y.S.2d 302 (App. Term Ist Dep’t 1954) ..... 17

Carmel vy. Appleton, 122 N.Y.S. 2d 195 (App. Term Ist

EE ee OO eae 17

County Dollar Corp. v. Douglas, 160 A.D. 2d 537, 161

A.D. 2d 370, 556 N.Y.S. 2d 533 (1st Dep’t 1990) ... 18

40 Clinton Street Associates v. Dolgin, 126 Misc. 2d

373, 481 N.Y.S. 2d 960 (Civ. Ct., N.Y. Co. 1984) ... 17

Grossman v. M.K.F. Realty Corp., 155 Misc.2d 841, 590

N.Y.S. 2d 1011 (Sup. Ct., N.Y. Co. 1992) ......... 14

Guarino v. Timares, 196 Misc. 414, 94 N.Y.S. 2d 262

(App. Term 2nd Dep’t 1949), appeal denied, 276A.D.

847, 93 N.Y.S. 2d 734 (2nd Dep’t 1949) .......... 17

Hornfield v. Gaare, 130 A.D. 2d 398, 515 N.Y.S. 2d 258

ET A daivbed-cncesccntenensceessess 17

640 Broadway Renaissance Co. v. Cuomo, 740 F. Supp.

1023 (S.D.N.Y. 1990), aff'd, 927 F.2d 593 (1991),

cert. denied, 500 U.S. 933, 111 S. Ct. 2054, 114 L. Ed.

i Te eeie heya cesses eese eee sacas i, 1,15

iv

Contents

Page

Spring Realty Co. v. New York City Loft Board, 127

Misc. 2d 1090, 487 N.Y.S. 2d 973 (Sup. Ct., N.Y. Co.

1985), aff’d, 117 A.D. 2d 1029, 498 N.Y.S. 2d 241

(1st Dep’t 1986), aff’d as modified on other grounds,

69 N.Y. 2d 657, 511 N.Y.S. 2d 830, 503 N.E. 2d 1367

(1986), appealed dismissed for want of a substantial

federal question, 482 U.S.911, 107 S. Ct. 3179, 96L.

et 8 terre rr reer Cre Te ore 1,16

Vlachos v. New York City Loft Board, 118 A.D. 2d 378,

504 N.Y.S. 2d 649 (1st Dep’t 1986) .............. 3

Waters v. Panzella, 100 N.Y.S. 2d 214 (Mun. Ct. Queens

CA BPE Rie Gcditne he bacaeke pesarsieeds cae erues 18

Ying Lung Corp. v. Medrano, 123 Misc. 2d 1074, 475

N.Y.S. 2d 772 (Civ. Ct. N.Y. Co. 1984) ........... 17,18

Statutes Cited:

Multiple Dwelling Law:

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Contents

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Other Authorities Cited:

Loft Board Hardship Regulations § 2-03(a)(2)(i) ..... +

Zoning Resolution § 12-10 .......cccccccccccccces 3

Zoning Resolution § 42-14(D)(1)(b) ............... 2

Zoning Resolution § 74-78 ef seg. .... 6.6... cece eee 2,3

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PRELIMINARY STATEMENT

Respondents submit this brief in opposition to the petition

of 640 Broadway Renaissance Co. fora writ of certiorari. As will

be shown, the petition, which is replete with misstatements of

fact and law, must be denied, because at no stage of the state court

proceedings did petitioner raise any federal questions.

Moreover, the constitutional issues identified in the instant

petition were addressed and rejected by this Court in Spring

Realty Co. v. New York City Loft Board, 127 Misc. 2d 1090, 487

N.Y.S.2d973 (Sup. Ct., N.Y. Co. 1985), aff'd, 117A.D.2d 1029,

498 N.Y.S. 2d 241 (1st Dep’t 1986), aff'd as modified on other

grounds, 69 N.Y. 2d 657,511 N.Y.S. 2d 830, 503 N.E. 2d 1367

(1986), appealed dismissed for want of a substantial federal

question, 482 U.S.911, 107S.Ct. 3179, 96 L. Ed. 2d 668 (1987).

Indeed, petitioner raised the identical issues in a federal court

action which was dismissed on the ground that the Spring Realty

case constituted a binding precedent. See 640 Broadway

Renaissance Co. v. Cuomo, 740F. Supp. 1023 (S.D.N.Y. 1990),

aff'd, 927 F.2d 593 (1991), cert. denied, 500 U.S. 933,111S.Ct.

2054, 114L. Ed. 2d 459 (1991).

STATEMENT OF FACTS

By the instant petition, 640 Broadway Renaissance Co.

seeks review of an order of the Appellate Division, First

Department, of the Supreme Court of the State of New York

which, inter alia, affirmed 16 orders of the Supreme Court, New

York County, granting summary judgment to respondents.

Except for minor factual differences, all of the motions were the

same and involved identical questions of law.

Petitioner, 640 Broadway Renaissance Co., is the fee owner

and landlord of premises known as 640 Broadway, New York,

New York (hereafter, the “Building”). The Building is a nine-

2

story structure containing various commercial units on the

ground floor and twenty residential units on the second through

ninth floors. Temple Smith, Maureen Albert-Eisner, John Eisner,

Robert Rossitor, Leslie Holtan, Loren Calaway, Richard Yoder,

Charles Searles, Kathleen Spicer, Rafael Barrios, Juliet Holland,

Joel Hinman, Hanna Eschel, Brandon Krall, Kenneth Delap,

Nancy Hoffman, Ruth Holloman, Kim Steele, Rina Peleg,

Donna Goodman and Marie-Paule Fauque (the “Respondents”)

were, at the commencement of the lawsuit, all residential tenants

who were determined by the New York City Loft Board to be

entitled to the protections of Article 7-C of the Multiple

Dwelling Law' (hereafter referred to as the “Loft Law”). The

remaining defendants in the underlying action are either former

tenants or occupants of various units in the Building, trade names

under which various tenants have operated businesses or persons

unknown to Respondents.

The Building is located on the corner of Broadway and

Bleecker Streets, an area designated under the New York City

Zoning Resolution (the “ZR”) as M1-5B. The Building has a

certificate of occupancy, issued on May 17, 1966, which permits

solely commercial and manufacturing uses. The structure

occupies approximately 5,000 square feet (R-702-5).’

According to ZR § 42-14(D)(1)(b), a building on Broadway —

like the instant premises — with alot coverage exceeding 3,600

square feet in an M1-5B zoning district may be converted to

residential use for joint living-work quarters for artists upon

approval by the City Planning Commission of a special permit

1. Excerpts from that determination are annexed to the petition for a writ

of certiorari (the “Petition”) as Appendix P (pages 83a-106a).

2. References to the record below are indicated by “R” followed by the

appropriate page number.

3

filed pursuant to § 74-782 of the Zoning Resolution.’ On or about

June 3, 1982, Martin R. Fine, on behalf of petitioner, filed such

a special permit application with the New York City Planning

Commission for permission to convert floors two through nine

at 640 Broadway to joint living-working quarters for artists (R-

724-40).

A. Statutery Background

On June 21, 1982, the New York State Legislature enacted

Multiple Dwelling Law (“MDL”) §§ 280-287 (Chapter 349 of

the Laws of 1982) in response to a pressing public emergency

created by the unregulated conversion of loft space in New York

City from commercial to residential use without compliance

with applicable building codes and laws regarding minimum

health and safety standards. See MDL § 280. A succinct

statement of the remedial purposes of the Loft Law is provided

by the Appellate Division of the New York State Supreme Court,

First Department, in Viachos v. New York City Loft Board, 118

A.D. 2d 378, 504 N.Y.S. 2d 649 at 651 (1st Dep’t 1986):

Multiple Dwelling Law article 7-C (Secs.

280-287, the “Loft Conversion Law”) was

enacted (L. 1982, c. 349, sec. 1) to alleviate

the serious housing shortage in New York

City and the dangerous living conditions

3. Under the Zoning Resolution, “joint living-work quarters for artists”

and “special permit” are terms of art. “Joint living-work quarters for artists”,

defined at ZR § 12-10, is a category of dwelling allowed in an otherwise

nonresidential building. A “special permit” is a procedure by which the New

York City Planning Commission may, upon a specified application, permit

conversion to residential use — including, specifically, joint living-work

quarters for artists — in M1-5B zones. The procedures for special permits are

set out at ZR § 74-78 et seq.

4

created in part by the illegal conversion of

commercial and manufacturing loft

buildings to residential use without

compliance with applicable building codes

and laws including local housiug

maintenance standards. The law sought to

prevent the “great hardship” that would

occur if tenants were forced to relocate

because of their uncertain status in these

illegally converted buildings.

To abate this public emergency, the Loft Law requires

subject owners to bring their buildings up to code as class A

multiple dwellings within a specified timetable set out at MDL

§ 284. In an effort to balance the equities between landlords and

tenants, the cost of legalization, initially borne by the owners, is

passed along to protected tenants in the form of rent increases

pursuant to a formula established at MDL § 285(5). Once the

building achieves code compliance, protected units are then

made subject to the Rent Stabilization Law (MDL § 286[3]).

MDL § 285(1) permits an owner to collect rent during the

legalization process, but only on condition that the owner

register the building with the Loft Board and comply with the

legalization timetables of MDL § 284. Owners who might suffer

unjustifiable hardship because of the cost of legalization were

given the opportunity to gain exemption from the Loft Law by

filing a hardship application with the New York City Loft Board

within nine months of establishment of the Loft Board.‘ The Loft

Law defines “unjustifiable hardship” as either an inability to

make a “reasonable return on the owner’s investment” or the

necessity, upon conversion of the building to residential use, for

4. Pursuant to MDL §282, the Mayor of the City of New York was given

90 days from the effective date of the Loft Law to establish the Loft Board.

Consequently, the deadline for the filing of a hardship exemption was set at

June 30, 1983. Loft Board Hardship Regulations § 2-03(a)(2)(i).

5

displacement of conforming-use commercial tenants. See MDL

§ 285(2).°

In order to identify buildings subject to the Loft Law, the

Legislature established a category of buildings called “interim

multiple dwellings”. The Legislature defined interim multiple

dwellings in § 281 of the MDL as any building or portion of a

building lowated in a city of more than one million persons

which:

(a) at any time was occupied for manufacturing,

commercial or warehouse purposes;

(b) lacks acertificate of occupancy pursuant to § 301 of the

MDL’;

(c) was occupied for residential purposes by three or more

families living independently of one another during the

period April 1, 1980 through December 1, 19817; and

5. At footnote 8 on page 9 of the Petition, petitioner disingenuously

alleges that it was prevented from filing a hardship exemption, because the

New York City Loft Board did not determine the question of coverage of the

building until 1988. In fact, the Loft Law and the New York City Loft Board

Rules and Regulations allow an owner to file a hardship application and

contest coverage at the same time. Moreover, the record is clear that petitioner

was aware of its obligations under the Loft Law well before the Juae 30, 1983

hardship deadline, since it attempted to register the building with the Loft

Board in January, 1983 (R-560-9).

6. Acertificate of occupancy pursuant to MDL § 301 is a certificate

which authorizes residential use of three or more dwellings in a building. -

Because 640 Broadway’s certificate of occupancy allows only commercial

use, the Building “lacks a certificais of...occupancy pursuant to § 301” (MDL

§281[1][ii)), and therefore, qualifies for Loft Law coverage.

7. The purpose of this requirement is to ensure that the Loft Law only

(Cont'd)

6

(d) is located ina zoning area which permits residential use

either as of right, by special permit, administrative

certification or any other means other than a zoning

variance.

The Loft Law is administered by an agency known as the

New York City Loft Board. MDL § 282. Every owner of an

interim multiple dwelling was required to file, within sixty days

of the effective date of the statute, aregistration statement with

the New York City Loft Board setting forth information required

under MDL § 325 (the statute which sets out registration

requirements for multiple dwellings) as well as additional

information as required by regulations promulgated by the Loft

Board. See MDL § 284(2).

B. Petitioner’s Actions Under the Loft Law

Petitioner’s involvement with the Loft Law is achronicle of

deliberate intransigence calculated to frustrate the letter and

purpose of the statute. Petitioner’s actions — and inaction —

reveal not only acallous indifference to Respondents’ rights, but

petitioner’s thorough understanding of the legal obligations

imposed by the Loft Law, coupled with a studied determination

to ignore those obligations.

On or about January 31, 1983, within the applicable time

limit for registration, petitioner filed an application to register

the Building as an interim multiple dwelling with the New York

City Loft Board (R-563-4). According to an attachment to the

Cont’d

sconhis . buildings which had been illegally converted from residential to

commercial use. This is accomplished by restricting coverage to buildings

which were, in fact, occupied by three or more families, but had a certificate

of occupancy which allowed either no residential use (as is the case at 640

Broadway) or residential use by less than three families.

4

application, the application was filed “UNDER PROTESTAND

UNDER DURESS” (R-564).

By letter dated March 7, 1983, the Loft Board notified

petitioner that it was rejecting the registration application as

incomplete, since it did not contain information required by Loft

Board regulations, including the names of each of the general

partners of 640 Broadway Renaissance Co., a 24-hour phone

number for emergency repairs and copies of leases for individual

units in the Building (R-565-6).

In response, Martin R. Fine, on letterhead identifying

himself as petitioner’s attorney*, wrote to the Loft Board, stating,

inter alia, that he did “not believe that you have any right to any

further inform: ‘on other than the name of the owner and the

registered mah.ging agent as previously set forth in the

application” (R-567-8). In addition, Mr. Fine claimed that the

request for copies of all leases in the Building was “an unlawful

and unconstitutional invasion of privacy”. Mr. Fine further

threatened:

IN THE EVENT AN INTERIM MULTIPLE

DWELLING REGISTRATION NUMBER

IS NOT IMMEDIATELY ISSUED, the

undersigned has been instructed to

immediately commence legal proceedings to

require the issuance of said Interim Multiple

Dwelling Registration number as provided

by law.

Counsel to the New York City Loft Board answered Mr. Fine

ina letter dated April 11, 1983, informing him that noregistration

8. This is the same attorney representing 640 Broadway Renaissance

Co. in the instant petition for a wit 6f certiorari.

8

number would be issued for the Building until the requested

information was supplied (R-569). Subsequently, petitioner

took no further action to register the Building (or comply in any

other way with the Loft Law) until August 1991 (R-696).

Because of petitioner’s refusal to register the Building with

the Loft Board and otherwise comply with the health and safety

requirements of the Loft Law, various residential tenants of the

Building filed an application on August 6, 1983 with the New

York City Loft Board for a determination that 640 Broadway was

an interim multiple dwelling.® Pursuant to that application, the

agency conducted a 25-day hearing in which the tenants called

27 witnesses and submitted over 250 exhibits (R-524). In its

decision after the hearing (R-522-60), the Loft Board confirmed

that the Building was an interim multiple dwelling subject to all

the requirements of the Loft Law. The Loft Board also

specifically found that petitioner not only knew that the premises

were all along being used for residential purposes, but that

petitioner and its employees actively encouraged Respondents

to live in their lofts:

9. Petitioner makes much of the fact that the Loft Board did not

designate the building as an interim multiple dwelling until 1988. Petitioner

thereby suggests that the onus was on the Loft Board or the tenants to place the

building within the jurisdiction of the Loft Board. The exact opposite is the

case. MDL § 282 clearly defines what buildings are subject to the law, and

MDL § 282 unequivocally requires owners to register their buildings within

60 days of the effective date of the Loft Law. It was petitioner’s obdurate

refusal to perform this obligation which prompted the tenants to apply to the

Loft Board for a determination of Loft Law coverage. The point is not a minor

one, in light of petitioner’s attempt to portray itself as having been foreclosed

from taking advantage of various Loft Law deadlines. The Loft Board's

determination of coverage (R-522-62) makes clear that petitioner was dragged

kicking and screaming down the path of Loft Law compliance. Indeed, to this

day, without explanation or excuse, petitioner has not iegalized the Building

as aclass A multiple dwelling. :

9

Behind the bluster of the owner’s

voluminous constitutional and procedural

challenges to coverage lies the indisputable

fact that the owner’s conduct and statements,

from 1978 when it purchased the building

until at least 1982, expressly recognized the

residential use of the upper eight floors.

During this time, according to the credible

and unrebutted testimony of nearly all the

tenants, the owner was leasing for “lofts” and

even had some tenants (especially Ms.

Eschel) fill out application forms asking

about roommates and pets, hardly items of

concern for a commercial tenancy. At the

same time the owner’s employees were

personally assuring tenants that it was not

only acceptable but preferable for them to

live in the building, going so far as to approve

floor plans for kitchens and bathrooms,

recommend electricians and plumbers, and

help procure homeowner's insurance.'°

(Petition, Appendix P at 99a).

The determination of the New York City Loft Board

establishing that Respondents are statutory tenants was made on

April 28, 1988. Petitioner never appealed the determination, and

10. This is an area in which the petitioner has misled this Court. All of

petitioner's statements in its Petition are carefully constructed to suggest,

without actually stating, that petitioner rented all the units in the Building to

commercial tenants (see, e.g., Petition at 5-6). Nevertheless, what petitioner

omits to inform the Courtis that all 16 Respondents, to petitioner's knowledge,

were residential tenants who made clear that they intended to live in their units.

As the Loft Board found, notwithstanding the form of the leases, petitioner not

only condoned, but encouraged respondents to live in their lofts.

10

the statute of limitations for such an appeal has long since

expired. New York State Civil Practice Law and Rules (“CPLR”)

§ 217.

Notwithstanding the indisputable fact that the Building has

been subject to the Loft Law since June 21, 1982,"' Petitioner

steadfastly refused to register the Building, comply with the

legalization requirements of the Loft Law or even recognize

Respondents as tenants. Although MDL § 284 requires Loft Law

buildings to have been brought up to code as class A multiple

dwellings by June 21, 1985, at the time of the last rents sought in

the underlying action (August, 1992), petitioner had not lifted a

finger to legalize 640 Broadway. In fact, petitioner’s only

legalization action to that time was to take a giant step backward

by withdrawing its 1982 City Planning Commission application

for a special permit to convert the Building to joint living-work

quarters for artists. Petitioner took this stepin July 1985, during

the course of its losing efforts at the Loft Board coverage

hearings. Apparently, as it become clear to petitioner that it

would have to legalize the Building as a class A multiple

dwelling, petitioner withdrew the special permit application in

order to create further impediments to legalization. (See

footnote at R-525 and R-747-9).

Other than the withdrawal of its special permit application,

petitioner did not even claim to have performed a single act in

connection with the legalization of the Building from the date the

Loft Law was enacted (June 21, 1982) through the date of the iast

rents sought in the underlying action (August 31, 1992)."

11. Section 3 of Ch. 349 of L. 1982 provides that the Loft Law shall “take

effect immediately” on June 21, 1982.

12. Petitioner contends at page 4 of the Petition that “it was uncontroverted

that (a) 640 Broadway is not structurally suited to serve as a residential

(Cont'd)

11

C. The Underlying Actions

In 1988, five years after the Loft Law was enacted anathree

years after the building was required to have been fully legalized

as a class A multiple dwelling (see MDL § 284(1)[i)[D)),

Respondents began to withhold their rent in an effort torforce

petitioner to undertake its statutory duty to bring the building up

to code (R-519-20). Nevertheless, it was not until four’years

later, with the commencement of the instant actions in October,

1992, that petitioner took any steps to collect its rent.

In the complaints (R-137-243), petitioner asserted three

causes of action. The first cause of action was for rent “through

and including August 31, 1992” (see, e.g., R-139-40); the second

cause of action was for attorneys’ fees (see, e.g., R-140-1); and

the third cause of action was for “indemnification” based on

Respondents’ activities which, according to petitioner, had the

effect of “subjecting the premises to the provisions of the Loft

Law” (see, e.g., R-141-2).

At about the same time, petitioner also commenced

summary non-payment proceedings against Respondents in the

Housing Part of Civil Court for current rent, beginning with

September, 1992 (R-516, n. 6, R-637).

D. The Motions Under Appeal

By notices dated January 6, 1993 (see, e.g., R-509-10),

Respondents moved pursuant to CPLR Rule 3212 for summary

judgment dismissing the complaints on the ground that MDL

(Cont'd)

‘multiple dwelling’. . .and (b) up to Two Million Dollars ($2,000,000) would

have to be expended to reconstruct this building to convert it into a multiple

dwelling . . .” If these claims are uncontroverted, it was because petitioner

never made any such allegations in the courts below.

12

§ 302(1)(b) barred petitioner from collecting rent during the

periods sought in the instant actions when petitioner was in

violation of its legalization obligations under MDL §§ 284(1)

and 301(1).

In opposition, petitioner argued that amendments to the Loft

Law enacted pursuant to Chapter 227 of the Laws of 1992 were

intended to be retroactively applied such that petitioner could

collect rents for periods when it had defiantly refused to comply

with the Loft Law’s legalization timetable. Petitioner also made

the audacious argument that its own deliberate withdrawal of the

special permit application tolled (and, presumably, to this day

continues to toll) the Loft Law’s original legalization timetable,

so that petitioner has never been out of compliance with its code

compliance obligations." Significantly, Petitioner raised no

federal question of any kind in the motion.

Petitioner also cross-moved for orders (a) striking

Respondents’ answers or, alternatively, vacating the automatic

stay of discovery pursuant to CPLR 3214(b); (b) sanctioning

Respondents for their allegedly willful failure to submit to

disclosure; (c) granting petitioner leave to amend its complaints

to add a cause of action for constructive trust; (d) granting

petitioner leave to amend its replies; and (e) directing

Respondents to pay use and occupancy prospectively during the

course of the action (see, e.g., R-617-8).

The motions and cross-motions were disposed of by

decision dated July 12, 1993, pursuant to which Justice Joan B.

Lobis granted Respondents’ motion for summary judgment and

13. This argument is in marked contrast to petitioner's position here,

where petitioner claims that it did “not want or need” a special permit but was

forced to apply for one under penalties provided by the Loft Law (Petition at

3). In fact, petitioner applied for a special permit before the Loft Law was

enacted and withdrew the application in response to the Loft Law.

ee, ee ee

13

denied petitioner’s cross-motions in all respects (the decision is

annexed as Appendix C to the Petition at 5a-11a). Justice Lobis

determined that there were no triable issues of fact, since it was

clear that petitioner had taken no action to meet its legalization

obligations under the Loft Law until September, 1992, which

was after the last rents claimed in the complaints. Justice Lobis

further recognized the fallacy of petitioner’s argument that the

withdrawal of its own special permit application had relieved

petitioner of the obligation to legalize the building:

Plaintiff’s argument that it was in

compliance with the provisions of the Loft

Law prior to the amendments is rejected.

According to plaintiff, the statutory

timetables originally set forth in the Loft Law

did not take effect until plaintiff obtained a

special permit. Since plaintiff never obtained

a special permit, it claims it has always been

in compliance with the Loft Law. What

plaintiff fails to acknowledge in its argument

is that the only reason plaintiff never

obtained a special permit for the building was

that plaintiff withdrew it application for a

special permit. . .The Loft Law specifically

provides that a landlord “shall take all

reasonable and necessary action to obtain a

certificate of occupancy as aClassA multiple

dwelling” within three years of the effective

date of the Loft Law. Here, plaintiff violated

the foregoing provision of the Loft Law by

_ failing to pursue and actually withdrawing its

application for a special permit.

(Petition, Appendix at 9a).

14

Similarly, Justice Lobis rejected petitioner’s contention that

the 1992 amendments to the Loft Law were intended to be

retroactively applied to allow owners to collect rents during

periods when they were not in compliance with the Loft Law’s

original legalization timetable. On this point, Justice Lobis cited

her own holding in Grossman v. M.K.F. Realty Corp., 155 Misc.

2d 841, 590 N.Y.S. 2d 1011 (Sup. Ct., N.Y. Co. 1992), a case

which, subsequent to the decision in the instant actions, was

affirmed by the Appellate Division, First Department, at 203

A.D. 2d 129, 610 N.Y.S. 2d 247 (1994). In her decision, Justice

Lobis neither discussed, nor resolved, any federal questions.

Orders were entered pursuant to Judge Lobis’ decision on

November 15, 1993 (R-9-56).

Petitioner appealed Judge Lobis’ decision to the Appellate

Division of the Supreme Court of the State of New York. Once

again, petitioner raised no federal questions. That appeal was

decided by an order entered with the Clerk of the Court on

February 7, 1995 (annexed as Appendix B to the Petition at 3a-

4a) affirming the orders of the Court below. In its decision, the

Court neither discussed nor resolved any federal questions.

Petitioner then moved for leave to appeal to the Court of

Appeals. In its motion papers, petitioner, for the first time, raised

a constitutional question, but the question was whether the Loft

Law offended the Constitution of the State of New York, not the

United States Constitution. That motion was denied by order of

the Court of Appeals dated September 7, 1995 (annexed as

Appendix A to the Petition).

15

REASONS FOR DENYING THE WRIT

I.

PETITIONER NEVER RAISED ANY FEDERAL

QUESTION IN THE STATE COURT PROCEEDINGS.

Atnotime did petitioner ever assert any federal question of

any kind during the state court proceedings. Neither at the trial

level, at the Appellate Division, nor at the Court of Appeals, did

petitioner assert any right under the United States Constitution

or under any law of the United States. In addition, none of the

Courts involved passed on any federal question. Consequently,

under 28 U.S.C. § 1257, the Supreme Court of the United States

is without jurisdiction to review the state court judgment in this

case.

Il.

ALL OF THE CONSTITUTIONAL ISSUES RAISED

IN THE PETITION HAVE BEEN PASSED UPON BY THE

FEDERAL COURTS, INCLUDING THE SUPREME

COURT OF THE UNITED STATES.

This is not the first time that petitioner has raised the same

constitutional questions regarding the Loft Law and its

application to the very building at issue in the instant case. In 640

Broadway Renaissance Co. v. Cuomo, 740 F. Supp. 1023 (S.D.

N.Y. 1990), aff’d, 927 F.2d 593 (1991), cert. denied, 500 U.S.

993, 111 S.Ct. 2054, 114L. Ed. 2d 459 (1991), petitioner brought

a federal court action regarding the building located at 640

Broadway, and, inter alia, requested a declaration that the Loft

Law was unconstitutional. In his decision dismissing the

complaint, the District Court Judge painstakingly analyzed all of

the constitutional issues — the exact same constitutional issues

16

presented here — and found that they were insubstantial or had

been rejected by the Supreme Court of the United States in

Spring Realty Co. v. New York City Loft Board, 127 Misc. 2d

1090, 487 N.Y.S. 2d 933 (Sup. Ct., N.Y. Co. 1985), aff’d, 117

A.D. 2d 1029, 498 N.Y.S. 2d 241 (ist Dep’t 1986), aff’d as

modified on other grounds, 69 N.Y.2d 657,511 N.Y.S.2d 830,

503 N.E. 2d 1367 (1986), appealed dismissed for want of a

substantial federal question, 482 U.S.911,107S.Ct.3179, 96L.

Ed. 2d 668 (1987).

Ill.

PETITIONER IS MISTAKEN IN CLAIMING THAT

THE LOFT LAW WAS RETROACTIVELY APPLIED TO

DEPRIVE PETITIONER OF ITS RENTS.

Petitioner argues that the Loft Law was somehow

retroactively applied to deprive petitioner of its rents at 640

Broadway. Petitioner’s analysis of the law is entirely incorrect.

In fact, the Loft Law was intended to have the opposite effect: to

allow petitioner to collect rent which it otherwise would have

been barred from collecting.

Long before the Loft Law was enacted, and long before

petitioner acquired title to the Building, the New York State

Multiple Dwelling Law prohibited an owner from collecting rent

in a building which contained residential tenants in violation of

the building’s certificate of occupancy. Thus, MDL § 301(1)

provides in relevant part:

No multiple dwelling” shall be occupied in

14. A“multiple dwelling” is defined at MDL § 4 as “adwelling whichis

either rented, leased, let or hired out, to be occupied, or is occupied as the

residence or home of three or more families living independently of each

other”.

Dt ase ce tes retical aati a ace nn

17

whole or in part until the issuance of a

certificate by the department that said

dwelling conforms in all respects to the

requirements of this chapter, to the building

code and rules and to all other applicable law

The penalties for violation of MDL § 301(1) were in

existence for decades before the Loft Law was enacted. Those

penalties are at § 302(1)(b), and to the extent relevant here,

provide:

If any dwelling or structure be occupied in

whole or in part for human habitation in

violation of section three hundred one,

during such unlawful occupation ... [nJo

rent shall be recovered by the owner of such

premises for said period, and no action or

special proceeding shall be maintained

therefor, or for possession of said premises

for non-payment of such rent.

Before and after enactment of the Loft Law, the Courts of

New York State repeatedly applied MDL §§ 301 and 302 to bar

owners who failed to obtain Proper certificates of occupancy

from maintaining any action or proceeding to recover rents from

their tenants. Hornfeld v. Gaare, 130A.D.2d398,515N.Y.S.2d

258 (1st Dep’t 1987); Baum Residence Corp. v. Van Rosson, 206

Misc. 315, 134 N.Y.S. 2d 302 (App. Term Ist Dep’t 1954):

Carmel v. Appleton, 122 N.Y.S. 2d 195 (App. Term Ist Dep’t

1953); Guarino v. Timares, 196 Misc. 414, 94 N.Y.S. 2d 262

(App. Term 2nd Dep’t 1949), appeal denied,,276.A.D. 847, 93

N.Y.S. 2d 734 (2nd Dep’t 1949); 40 Clinton Street Associates v.

Dolgin, 126 Misc. 2d 373, 481 N.Y.S. 24 960 (Civ. Ct. N.Y. Co.

1984); Ying Lung Corp. y. Medrano, 123 Misc. 2d 1074, 475

18

N.Y.S. 2d 772 (Civ. Ct. N.Y. Co. 1984); Waters v. Panzella, 100

N.Y.S. 2d 214 (Mun. Ct. Queens Co. 1950).

The Loft Law, far from preventing petitioner from

collecting rents at 640 Broadway, actually provided petitioner an

opportunity to avoid the penalties of § 302(1)(b). Thus, the Loft

Law at MDL § 285(1) provides:

Notwithstanding the provisions of section

three hundred two or three hundred twenty-

five of this chapter, the owner of an interim

multiple dwelling may recover rent payable

from residential occupants qualified for the

protection of this article on or after April first,

nineteen hundred eighty, and maintain an

action or proceeding for possession of such

premises for non-payment of rent, provided

that he is in compliance with this article.

(Emphasis added).

Thus, as can be seen, the Loft Law enables an owner, who

would otherwise be foreclosed by MDL § 302(1)(b) from

collecting rent, the opportunity tocollect and sue for such rent on

condition thai it abide by the legalization and registration

requirements of the Loft Law. See, e.g., County Dollar Corp. v.

Douglas, 160 A.D. 2d 537, 161 A.D. 2d 370, 556 N.Y.S. 2d 533

(1st Dep’t 1990).

The fact that petitioner could not collect rent in the

underlying action has nothing to do with penalties provided by

the Loft Law, and every thing to do with petitioner’s deliberate

intransigence in taking advantage of the opportunities afforded

by the Loft Law.

19

CONCLUSION

For the foregoing reasons, the writ of certiorari should be

denied.

Respectfully submitted,

DAVID RATNER

Counsel of Record

HARTMAN, ULE, ROSE

& RATNER

Attorneys for Respondents

305 Broadway, Suite 1201

New York, N.Y. 10007

(212) 437-9110