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Tuvim v. 10 E. 30 Corp.

32 N.Y.2d 541 Court N.Y. Decision date 1973-06-06 English

Delivered by Chief Judge Ftjld.

Contents

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p. 541
Harry Tuvim et al., Individually and on Behalf of All Tenants in the Building, Known as 150 West 79th Street in the County and City of New York, and All Other Prospective Purchasers under the Said Premises Similarly Situated, Appellant Respondents, v. 10 E. 30 Corp. et al., Respondents-Appellants; Louis J. Lefkowitz, as Attorney-General of the State of New York, Respondent, and Brown, Harris, Stevens, Inc. et al., Defendants.
Argued May 2, 1973;
decided June 6, 1973.
p. 542
Allen H. Weiss and Benjamin Shedler for appellants-respondents.
I. This action was properly commenced in class form and plaintiffs were proper parties. (Adler v. Bonner Realty & Constr. Corp., 62 Misc 2d 710 , 34 A D 2d 1103 ; Gilligan v. Tischman Realty & Constr. Co., 283 App. Div. 157 , 306 N. Y. 974 ; Kovarsky v. Brooklyn Union Gas Co., 279 N. Y. 304 .) II. Plaintiffs’ status as nonpurchasing tenants of the co-operative stock does not bar them from maintaining the proceeding. (People v. Electro Process, 284 App. Div. 833 .) III. Plaintiffs ’ causes were sufficient in law and not subject to a motion for summary judgment. IV. The acceptance of the plan by the Attorney-General was arbitrary, capricious, contrary to law and in excess of his jurisdiction. Plaintiffs’ action to review the acceptance of the plan by the Attorney-General was timely brought. (Matter of Galuppi v. New York State Liq. Auth., 12 A D 2d 987 ; Matter of Camperlengo v. State Liq. Auth., 16 A D 2d 342 .) V. The original plan was not accepted within the prescribed period and was not saved from extinguishment by the revisions which the sponsor called amendments of January 4, 1971. VI. The courts below could not summarily determine that 35% of the tenants had accepted the plan within six months from the date of its filing and hence erred in dismissing plaintiffs ’ third cause of action. VII. Upon the failure to extend plaintiffs ’ time to elect the purchase of the shares allocable to their apartment until after the hearing, Special Term and the Appellate Division committed
p. 543
grevious error, deprived plaintiffs of due process of law and abused its discretion. Because of the silence on this issue plaintiffs have been unfairly and improperly deprived of the opportunity to purchase the shares and may be evicted from their apartments. (Judson v. Frankel, 279 App. Div. 372 ; 150 East 57th St. Assoc, v. Fletcher, 35 A D 2d 947 ; Wienerwald 8th St. v. Third Brevoort Corp., 38 A D 2d 524 .)
Irving Sonnenschein and Sol Rosenbluth for respóndentsappellants.
I. The gravamen of the first cause of action was that the price to the co-operative corporation was excessive and that the statement of price in the plan constituted a misrepresentation of value. It was properly dismissed by the Appellate Division because it presented no relevant issues of fact and failed to state a cause of action. II. The second cause of action which alleged that the amendment to the plan reducing the price and improving the terms constituted a new plan was properly dismissed. III. The third cause of action which alleged that 35% of the tenants did not subscribe to the plan was properly dismissed. IV. The fourth cause of action which sought a determination that the Attorney-General’s acceptance of the plan was contrary to law was properly dismissed by Special Term. V. The fifth cause of action for damages for conspiracy to defraud was properly dismissed by the Appellate Division as legally insufficient. (Meltser v. Klein, 29 A D 2d 548 .) VI. The complaint does not properly set forth a class action and was properly dismissed by the Appellate Division for this additional reason. (Adler v. Bonner Realty & Constr. Corp., 62 Misc 2d 710 , 34 A D 2d 1103 ; Gaynor v. Rockefeller, 15 N Y 2d 120 ; Onofrio v. Playboy Club of N. Y., 15 N Y 2d 740 ; Brenner v. Title Guar. & Trust Co., 276 N. Y. 230 ; Kovarsky v. Brooklyn Union Gas Co., 279 N. Y. 304 .) VII. The affirmative defense of nonjoinder of indispensable parties set forth in respondents’ answer has been established as a matter of law pursuant to CPLIt 1001 and 1003 and requires dismissal of the complaint for this additional reason. (Challette, Inc. v. Town of Brookhaven, 43 Misc 2d 264 .) VIII. The courts below properly refused to consider an extension of appellants’ time to purchase beyond the period fixed by the rent regulations. (First Nat. Stores v. Yellowstone Shopping Center, 21 N Y 2d 630 ; 150 East 57th St. Assoc.
p. 544
v. Fletcher, 35 A D 2d 947 ; Wienerwald 8th St. v. Third Brevoort Corp., 38 A D 2d 524 .)
Louis J. Lefkowitz, Attorney-General (Mortimer Sattler and Samuel A. Hirshowitz of counsel), respondent, pro se.
I. The challenge to the acceptance for filing of the offering plan by the Attorney-General is reviewable by an article 78 proceeding. Accepting this action as such it is barred by OPLB 217. (Schumann v. 250 Tenants Corp., 65 Misc 2d 253 ; Matter of Diocese of Rochester v. Planning Bd. of Town of Brighton, 1 N Y 2d 508 ; Forest Hills Residents Assn. v. New York City Housing Auth., 39 A D 2d 64 , affd. sub nom. Margulis v. Lindsay, 31 N Y 2d 167 .) II. The Attorney-General’s acceptance for filing of the plan in question was not arbitrary or capricious. (Fox v. Sizeland, 170 Misc. 390 ; People v. Bunge Corp., 25 N Y 2d 91 .)

This case resembles Richards v. Kaskel ( 32 N Y 2d 524 ) in that the plaintiffs are tenants in a rent-controlled apartment building, located in Manhattan, who have brought a class action seeking a judgment declaring that a plan to co-operate the building never became effective to extinguish their rights as statutory tenants. Thus, in a complaint containing five causes of action, the plaintiffs seek a declaration that the plan is null and void because it failed to comply with the applicable provisions of New York City’s Bent, Eviction and Behabilitation Begulations of the Housing and Development Administration (§ 55, subd. c., par. [3], el. [a]) promulgated under the City Bent and Behabilitation Law (Administrative Code of City of New York, § Y51-1.0 et seq.).[1] There, however, the resemblance between this and the Richards case ends, since, in addition to such relief, the plaintiffs also request damages and a judgment declaring the plan invalid because it was improperly accepted for filing by the Attorney-General under the General Business Law (§ 352-e).

The plan’s sponsor, the defendant Washington Park Urban Benewal Corp., and the other corporate defendants denied the material allegations of the complaint, interposed a counterclaim for damages and, following the plaintiffs’ application for an

1 Richards v. Kaskel ( 32 N Y 2d 524 , supra), we note, involved New York City’s other emergency rent statute — the Rent Stabilization Law of 1969 (Administrative Codé, § X X51-1.0 et seq.).

p. 545
order enjoining consummation of the plan pending trial, moved for summary judgment dismissing the complaint on the ground that it failed to state facts sufficient to make out a cause of action. The Attorney-General, without filing an answer, moved to dismiss the complaint insofar as it affected him on the ground, among others, that a challenge to his acceptance of a co-operative plan under section 352-e of the General Business Law is reviewable only in a proceeding under CPLR article 78 and that the plaintiffs did not institute such a proceeding within the four-month statutory period required by CPLR 217. The plaintiffs thereupon moved to dismiss the answer and counterclaim and for summary judgment insofar as their declaratory judgment causes of action were concerned.

The court at Special Term properly dismissed two of the three causes of action against the sponsor for a declaratory judgment as well as the one against the Attorney-General.[2] On cross appeals by the plaintiffs and the defendants (other than the Attorney-General), the Appellate Division unanimously modified the resulting order by dismissing, as legally insufficient, the remaining two causes of action — one for declaratory relief and the other for damages — as well as the defendants ’ counterclaim ( 38 A D 2d 895 ).

The Appellate Division reached the right result. Quite obviously, the plaintiffs’ cause of action for damages cannot, as the court held, be sustained, since they neither purchased apartments nor expended money in reliance upon anything which the defendants did or said. Moreover, although the plaintiffs — contrary to the statement in the Appellate Division opinion (38 A D 2d, at p. 896) —were entitled to bring a class action challenging the methods by which the sponsor obtained approval of its plan to co-operate their building (see Richards v. Kaskel, 32 N Y 2d 524 , supra), summary judgment was, nevertheless, properly granted dismissing the class action counts for the reason that the plaintiffs failed completely to demonstrate the existence of a triable issue of fact in support of their claim that the

2 In dismissing the cause against the Attorney-General, the court pointed out that an amendment to the plan filed some months after its original acceptance, did not extend the time to challenge that acceptance, since the “ non-conformities [alleged to exist in the original plan] do not in any way relate to the scope or content of the amendment.”

p. 546
sponsor was guilty of misconduct or misrepresentation in its promotion of the plan. This case, then, differs sharply from Richards v. Kashel, since there the purchasing tenants established that the sponsor-landlord had resorted to misrepresentations in order to put its plan across and thereby avoid the strictures of the rent laws designed for their protection.

The order appealed from should be affirmed, without costs.

Judges Burke, Breitel, Jasen, G-abrielli, Jones and Wachtler concur.

Order affirmed.

Cases cited

Statutes and regulations cited