Yarbough v. Franco — 95 N.Y.2d 342

Majority

p. 342

[740 NE2d 224, 717 NYS2d 79]

In the Matter of Lola Yarbough, Respondent, v Ruben Franco et al., Appellants.

Argued September 7, 2000;

decided October 26, 2000

p. 343

POINTS OF COUNSEL

Henry Schoenfeld, New York City, Jeffrey Schanback, Steven J. Rappaport, Nancy M. Harnett, Lawrence J. Roth and Rosanne R. Pisem for appellants.

The decision of the Court below undermines the speed, repose and uniformity afforded by the Statute of Limitations for CPLR article 78 proceedings and contravenes long-standing precedent. (Solnick v Whalen, 49 NY2d 224 ; Mundy v Nassau County Civ. Serv. Commn., 44 NY2d 352 ; Matter of Woods v Popolizio, 160 AD2d 400 ; Matter of Simmons v Popolizio, 160 AD2d 368 , 78 NY2d 917 ; Matter of Smith v Popolizio, 160 AD2d 370 , 76 NY2d 712 ; Matter of Davis v Kingsbury, 27 NY2d 567 ; Raykowski v New York City Dept. of Transp., 259 AD2d 367 ; Matter of Caputo v McCall, 249 AD2d 815 , 92 NY2d 806 ; Matter of Rapuzzi v City of New York, 161 AD2d 715 , 76 NY2d 707 ; Matter of City School Dist. v Ambach, 86 AD2d 726 , 56 NY2d 503 .)

Legal Aid Society, Brooklyn (Mimi Rosenberg, Emily Ruben and Stephen Myers of counsel), and Legal Aid Society, New

p. 344

York City (Helaine Barnett of counsel), for respondent.

I. Determinations rendered on default are not appealable. The defaulting party must move to vacate the default and then may appeal an order denying that motion. (Levy v Blue Cross & Blue Shield, 124 AD2d 900 ; Ross Bicycles v Citibank, 134 AD2d 181 ; Commissioner of Labor of State of N. Y. v Eagle Comtronics, 104 AD2d 716 ; Berlin v Schlotthauer, 117 AD2d 768 ; Matter of Evans v Monaghan, 306 NY 312 ; Interboro Mgt. Co. v State Div. of Human Rights, 139 AD2d 697 ; Matter of New York Cent. R. R. Co. v Public Serv. Commn., 238 NY 132 ; Church of St. Paul & St. Andrew v Barwick, 67 NY2d 510 ; Matter of Parent Teacher Assn. of P.S. 124M v Board of Educ., 138 AD2d 108 ; Abbott Labs. v Gardner, 387 US 136 .) II. Requiring parties to move to vacate the administrative default before seeking judicial review is consistent with fundamental principles of administrative law and maintains the proper relationship between courts and administrative agencies. (Matter of Celestial Food Corp. v New York State Liq. Auth., 99 AD2d 25 ; Matter of 230 E. 52nd St. Assocs. v State Div. of Hous. & Community Renewal, 131 AD2d 349 ; Matter of Fanelli v New York City Conciliation & Appeals Bd., 58 NY2d 952 ; Matter of Levine v New York State Liq. Auth., 23 NY2d 863 ; Matter of Civil Serv. Empls. Assn. v Public Empl. Relations Bd., 73 NY2d 796 ; Matter of Klapak v Blum, 65 NY2d 670 ; Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52 ; Matter of Pell v Board of Educ., 34 NY2d 222 ; Young Men’s Christian Assn. v Rochester Pure Waters Dist., 37 NY2d 371 ; Hodel v Virginia Surface Min. & Reclamation Assn., 452 US 264 .) III. An application to vacate a determination made on default is not a motion to reconsider. (Matter of Simmons v Popolizio, 160 AD2d 368 , 78 NY2d 917 ; Matter of Smith v Popolizio, 160 AD2d 370 , 76 NY2d 712 ; Matter of Woods v Popolizio, 160 AD2d 400 ; Matter of New York Cent. R. R. Co. v Public Serv. Commn., 238 NY 132 ; Matter of Johnson v Christian, 114 AD2d 321 ; Matter of Sumpter v New York City Hous. Auth., 260 AD2d 176 ; Matter of Davis v Kingsbury, 27 NY2d 567 ; Matter of De Milio v Borghard, 55 NY2d 216 ; Matter of Karaffa v Simon, 14 AD2d 978 ; Matter of Feller v Wagner, 7 AD2d 126 .)

Brooklyn Legal Services Corp. B, Brooklyn (John C. Gray and Edward Josephson of counsel), for New York City Public Housing Resident Alliance, amicus curiae.

I. The Statute of Limitations period commences after the exhaustion of the last administrative remedy mandated by statute — the determination of the tenant’s request to vacate her default. (Matter of

p. 345

New York Cent. R. R. Co. v Public Serv. Commn., 238 NY 132 ; Matter of Gross v State of New York Pub. Serv. Commn., 195 AD2d 866 ; Matter of Corchado v Popolizio, 171 AD2d 598 ; Matter of Daniels v Popolizio, 171 AD2d 596 ; Lewis v Bendet, 81 AD2d 856 ; Anolick v Travelers Ins. Co., 63 AD2d 665 ; Mark III Assocs. v HEC Eng’g Co., 148 AD2d 990 ; Foglia v Fashion Floors, 79 AD2d 598 ; Matter of Bludson v Popolizio, 166 AD2d 346 ; Matter of Four Seasons Sec. Laws Litig., 502 F2d 834 .) II. The Court below properly held that administrative defaults are not directly appealable by analogy to CPLR 5511. (Flake v Van Wagenen, 54 NY 25 ; Gelston v Hoyt, 13 Johns 561 ; Interboro Mgt. Co. v State Div. of Human Rights, 139 AD2d 697 ; Matter of Evans v Monaghan, 306 NY 312 ; Church of St. Paul & St. Andrew v Barwick, 67 NY2d 510 ; Matter of Essex County v Zagata, 91 NY2d 447 ; Watergate II Apts, v Buffalo Sewer Auth., 46 NY2d 52 ; Escalera v New York City Hous. Auth., 425 F2d 853 ; Escalera v New York City Hous. Auth., 924 F Supp 1323 ; Matter of De Milio v Borghard, 55 NY2d 216 .)

OPINION OF THE COURT

At issue on this appeal is whether the four-month Statute of Limitations for challenging the denial of a tenant’s request to vacate a New York City Housing Authority default determination accrues upon entry of the default or upon denial of the tenant’s request to vacate it. We conclude that the limitations period begins to run from receipt of the denial of the request to vacate the default.

Petitioner Lola Yarbough is a tenant in a low-income housing project owned by respondent New York City Housing Authority. In May 1996, the Authority sought to terminate petitioner’s tenancy, charging her with violating its rules by allowing unauthorized family members to reside with her. After several adjournments, a hearing was scheduled for November 29, 1996. When petitioner failed to appear on that date, the Hearing Officer entered a default determination and sustained the charges. Although the default was entered on December 3, 1996, the Authority did not serve notice of it until on or about April 1, 1997.

Petitioner received the notice on April 7, 1997 and the next day filed a request to vacate the default pursuant to paragraph

p. 346

8 of the Authority’s Termination of Tenancy Procedures,^[1] maintaining that she never received notice of the November 29, 1996 adjournment. Months later, by decision dated June 24, 1997 and sent to petitioner by mail, the Authority denied her request as untimely.

On October 31, 1997, petitioner commenced this CPLR article 78 proceeding seeking review of both the December 3, 1996 default determination and the June 24, 1997 denial of her application to vacate the default. In dismissing her petition as time-barred, Supreme Court concluded that petitioner was required to commence the proceeding within four months after the default determination terminating her tenancy, and that petitioner’s application to vacate the default did not extend the limitations period. The Appellate Division modified by annulling the Authority’s June 24, 1997 denial of petitioner’s application to vacate the default and remitting for a hearing on the merits of that application. The Court held, however, that petitioner was not entitled to article 78 review of the December 3, 1996 determination as it was entered upon her default. It further concluded that petitioner’s application to vacate the default was made within a reasonable time, and that the four-month limitations period for article 78 review ran from petitioner’s receipt of the denial of her request to vacate the default. This Court granted the Authority leave to appeal. We now affirm.

An article 78 proceeding must be commenced within four months after the administrative determination to be reviewed becomes “final and binding upon the petitioner” (CPLR 217 ^[1]; New York State Assn. of Counties v Axelrod, 78 NY2d 158 , 165). An administrative determination becomes “final and binding” when the petitioner seeking review has been aggrieved by it (Matter of Carter v State of New York, Executive Dept., Div. of Parole, 95 NY2d 267 ; Matter of Edmead v McGuire, 67 NY2d 714 , 716; Matter of Lubin v Board of Educ., 60 NY2d 974 , 976, rearg denied 61 NY2d 905 , cert denied 469 US 823 ). However, the fact that a determination is final for the purpose of its present execution does not mean it is final for judicial review purposes (cf., Matter of New York Cent. R. R. Co. v Public Serv.

* Paragraph 8 of those procedures provides: “If the tenant fails to answer or appear at the hearing the Hearing Officer shall note the default upon the record and shall make his written decision on the record before him. Upon application of the tenant made within a reasonable time after his default in appearance, the Hearing Officer may, for a good cause shown, open such default and set a new hearing date.”

p. 347

Commn., 238 NY 132 , 135-136). An administrative determination is not final for judicial review purposes if it rests upon an empty record. This is such a case.

Although petitioner’s default here effectively terminated her tenancy, any challenge to that default is unreviewable absent an application to the Authority to vacate it. A request to vacate a default affords the defaulting party an opportunity to develop a factual record setting forth the reasons for the nonappearance and any meritorious defenses that would justify reopening the default (see, Gray v B. R. Trucking Co., 59 NY2d 649 , 650, rearg dismissed 59 NY2d 966 ). To authorize a petitioner to raise these issues for the first time in an article 78 proceeding, as the Authority urges, would deprive the administrative agency of the opportunity “to prepare a record reflective of its ‘expertise and judgment’ ” (Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52 , 57 [quoting Matter of Fisher (Levine), 36 NY2d 146 , 150]; see also, Young Men’s Christian Assn. v Rochester Pure Waters Dist., 37 NY2d 371 , 375).

Moreover, it would render judicial review meaningless. Judicial review of administrative determinations is confined to the “facts and record adduced before the agency” (Matter of Fanelli v New York City Conciliation & Appeals Bd., 90 AD2d 756 , 757, affd for reasons below 58 NY2d 952 ). Without an application to vacate, and the Authority’s subsequent review, a court would have no record upon which to weigh the defaulting party’s excuse and potential defense (see, Matter of Geraldine Rose W., 196 AD2d 313 , 317 [Rosenblatt, J.]). Because no meaningful judicial review lies from the default itself, we hold that the Authority’s denial of petitioner’s application to vacate the default constitutes the final, binding determination from which the four-month Statute of Limitations is measured (see, Interboro Mgt. Co. v State Div. of Human Rights, 139 AD2d 697 , 698; cf., CPLR 5511, 5015).

We reject the Authority’s argument that a motion to vacate a default is nothing more than a motion to reconsider, which does not toll the Statute of Limitations (see, Matter of Simmons v Popolizio, 160 AD2d 368 , affd 78 NY2d 917 ). A motion to reconsider generally seeks the same relief, and advances factual and legal issues that were previously litigated at the administrative level. For that reason, it cannot be used to extend the Statute of Limitations (see, Matter of De Milio v Borghard, 55 NY2d 216 , 220, 222; Matter of Davis v Kingsbury, 30 AD2d 944 , 945, affd for reasons stated 27 NY2d 567 ).

p. 348

In contrast, a motion to vacate a default presents factual questions not previously passed upon by the administrative agency. By seeking to vacate the default, petitioner was simply availing herself of the Authority’s own invitation under its procedures to present new facts supporting her reasons for the default and to proffer a meritorious defense (see, Matter of Davis v Kingsbury, supra, 30 AD2d, at 945 [noting that a second application may toll Statute of Limitations “where a different factual presentation is invited by the authority in question”]; cf., Matter of Koukla, Inc. v New York State Liq. Auth., 37 AD2d 955 , 956). Because petitioner’s application to vacate the default created a “fresh situation,” it cannot be considered a motion to reconsider a prior determination (Matter of Koukla, Inc. v New York State Liq. Auth., supra, 37 AD2d, at 956 ).

Our decision presents no risk of undermining the strong policy favoring efficiency and repose (see, Solnick v Whalen, 49 NY2d 224 , 232). Paragraph 8 of the Authority’s procedures permits a tenant to apply “within a reasonable time after his default in appearance” to open such default. This “reasonable time” limitation guards against unnecessary and dilatory applications. Here, petitioner sought to vacate the default only a day after receiving notice. Having inexplicably waited almost four months to serve its default determination, the Authority cannot now complain that petitioner’s timely request to vacate threatens the policy favoring swift prosecution of administrative determinations. Indeed, this Court has recently recognized the right of a defaulting rent-stabilized tenant to challenge an administrative determination relating to luxury decontrol of an apartment upon a showing that the tenant moved to vacate the default within a reasonable time (see, Matter of Dworman v New York State Div. of Hous. & Community Renewal, 94 NY2d 359 ). Under thesfe circumstances, petitioner’s application to vacate the default presents no risk of circumventing the four-month Statute of Limitations, and the instant article 78 proceeding was not untimely (cf., Matter of De Milio v Borghard, supra, 55 NY2d, at 222 ).

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Kaye and Judges Smith, Levine, Wesley and Rosenblatt concur.

Order affirmed, with costs.

Cases cited

Solnick v. Whalen 49 NY2d 224 N.Y. 1980-01-08 at 232 p. 343, p. 348
Woods v. Popolizio 160 AD2d 400 N.Y. App. Div. 1990-04-12 p. 343, p. 344
Simmons v. Popolizio 160 AD2d 368 N.Y. App. Div. 1990-04-12 p. 343, p. 344, p. 347
Simmons v. Popolizio 78 NY2d 917 N.Y. 1991-06-27 p. 343, p. 344, p. 347
Davis v. Kingsbury 27 NY2d 567 N.Y. 1970-05-28 p. 343, p. 344, p. 347
Raykowski v. New York City Department of Transportation 259 AD2d 367 N.Y. App. Div. 1999-03-18 p. 343
Caputo v. McCall 249 AD2d 815 N.Y. App. Div. 1998-04-23 p. 343
Rapuzzi v. City of New York 161 AD2d 715 N.Y. App. Div. 1990-05-21 p. 343
Levy v. Blue Cross & Blue Shield of Greater New York 124 AD2d 900 N.Y. App. Div. 1986-11-20 p. 344
Evans v. Monaghan 306 NY 312 N.Y. 1954-02-25 p. 344, p. 345
Interboro Management Co. v. State Division of Human Rights 139 AD2d 697 N.Y. App. Div. 1988-04-25 at 698 p. 344, p. 345, p. 347
New York Central Railroad v. Public Service Commission 238 NY 132 N.Y. 1924-05-13 at 135-136 p. 344, p. 345, p. 347
Church of St. Paul & St. Andrew v. Barwick 67 NY2d 510 N.Y. 1986-06-05 p. 344, p. 345
Parent Teacher Ass'n v. Board of Education 138 AD2d 108 N.Y. App. Div. 1988-06-23 p. 344
Abbott Laboratories v. Gardner 387 US 136 SCOTUS 1967-05-22 p. 344
Celestial Food Corp. of Coram, Inc. v. New York State Liquor Authority 99 AD2d 25 N.Y. App. Div. 1984-02-06 p. 344
230 East 52nd Street Associates v. State Division of Housing & Community Renewal 131 AD2d 349 N.Y. App. Div. 1987-06-18 p. 344
Fanelli v. New York City Conciliation & Appeals Board 58 NY2d 952 N.Y. 1983-02-23 p. 344, p. 347
Levine v. New York State Liquor Authority 23 NY2d 863 N.Y. 1969-01-09 p. 344
Civil Service Employees Ass'n v. Public Employment Relations Board 73 NY2d 796 N.Y. 1988-12-01 p. 344
Watergate II Apartments v. Buffalo Sewer Authority 46 NY2d 52 N.Y. 1978-12-06 at 57 p. 344, p. 345, p. 347
Pell v. Board of Education 34 NY2d 222 N.Y. 1974-05-15 p. 344
Young Men's Christian Ass'n v. Rochester Pure Waters District 37 NY2d 371 N.Y. 1975-07-02 at 375 p. 344, p. 347
Hodel v. Virginia Surface Mining & Reclamation Ass'n 452 US 264 SCOTUS 1981-06-15 p. 344
Johnson v. Christian 114 AD2d 321 N.Y. App. Div. 1985-10-22 p. 344
Sumpter v. New York City Housing Authority 260 AD2d 176 N.Y. App. Div. 1999-04-06 p. 344
De Milio v. Borghard 55 NY2d 216 N.Y. 1982-02-23 at 220, 222 p. 344, p. 345, p. 347
Karaffa v. Simon 14 AD2d 978 N.Y. App. Div. 1961-11-22 p. 344
Feller v. Wagner 7 AD2d 126 N.Y. App. Div. 1958-12-18 p. 344
Gross v. State of New York Public Service Commmission 195 AD2d 866 N.Y. App. Div. 1993-07-22 p. 345
Corchado v. Popolizio 171 AD2d 598 N.Y. App. Div. 1991-03-26 p. 345
Daniels v. Popolizio 171 AD2d 596 N.Y. App. Div. 1991-03-26 p. 345
Mark III Associates, Inc. v. HEC Engineering Co. 148 AD2d 990 N.Y. App. Div. 1989-03-10 p. 345
Bludson v. Popolizio 166 AD2d 346 N.Y. App. Div. 1990-10-25 p. 345
Flake v. Van Wagenen 54 NY 25 N.Y. Comm'n App. p. 345
Gelston v. Hoyt 13 Johns 561 N.Y. p. 345
Essex County v. Zagata 91 NY2d 447 N.Y. 1998-04-07 p. 345
New York State Ass'n of Counties v. Axelrod 78 NY2d 158 N.Y. 1991-06-27 at 165 p. 346
Carter v. State of New York 95 NY2d 267 N.Y. 2000-10-17 p. 346
Edmead v. McGuire 67 NY2d 714 N.Y. 1986-02-11 at 716 p. 346
Lubin v. Board of Education 60 NY2d 974 N.Y. 1983-12-01 at 976 p. 346
Gray v. B. R. Trucking Co. 59 NY2d 649 N.Y. 1983-04-28 at 650 p. 347
Entwistle v. Entwistle 59 NY2d 966 N.Y. 1983-06-30 p. 347
In re the Claim of Fisher 36 NY2d 146 N.Y. 1975-02-27 at 150 p. 347
In re Rose W. 196 AD2d 313 N.Y. App. Div. 1994-03-28 at 317 p. 347
Dworman v. New York State Division of Housing & Community Renewal 94 NY2d 359 N.Y. 1999-12-21 p. 348