Brief on Appeal

151 A.D.2d 681, 542 N.Y.S.2d 740

Supreme Court, Appellate Division, Second Department, New York

In the Matter of SADORE LANE MANAGEMENT CORP., Appellant,

June 19, 1989.

Finkelstein, Borah, Schwartz, Altschuler & Goldstein, P.C., New York City (Robert H. Berman and Martin A. Shlufman, of counsel), for appellant.
Dennis B. Hasher, Bronx (Richard Hartzman, of counsel), for respondent State Div. of Housing and Community Renewal.



In a proceeding pursuant to CPLR article 78 to review, inter alia, a determination of the State Division of Housing and Community Renewal, dated September 17, 1987, which denied the petitioner’s application for a rent increase, the petitioner appeals from an order and judgment (one paper) of the Supreme Court, Westchester County (Rubenfeld, J.), dated May 12, 1988, which dismissed the proceeding. 

ORDERED that the order and judgment is affirmed, with costs.

The petitioner, Sadore Lane Management Corporation, contends that the respondent State Division of Housing and Community Renewal (hereinafter DHCR) erroneously determined that there was no reliance by the petitioner on prior DHCR rulings granting applications for rent increases based on the installation of storm windows as a “major capital improvement” (hereinafter MCI) pursuant to 9 NYCRR 2502.4(a). It argues that Operational Bulletin 84-4 (hereinafter OB 84-4), is not binding and that by not giving the petitioner an exception, allegedly pursuant to past practice, the respondent DHCR denied the petitioner due process. The petitioner submits, therefore, that the DHCR’s determination lacks any rational basis in the record or in the law, and thus evidences an abuse of discretion warranting a judicial annulment. The Supreme Court found that the DHCR’s determination that equitable considerations did not warrant application of its previous policy in this case, “has a rational basis in light of the wholly unexplained failure of
petitioner to apply for a rent increase until five years after the installation of the windows”. We agree.

It is a well settled principle of administrative law that the law in effect at the time of an administrative determination is controlling even if it has been amended during the pendency of the proceeding (St. Vincent’s Hospital and Medical Center of N.Y. v. New York State D.H.C.R., 109 A.D.2d 711, 487 N.Y.S.2d 36, affd. 66 N.Y.2d 959, 498 N.Y.S.2d 799, 489 N.E.2d 768). This rule has also been applied to a rent administrator’s written interpretation of the statute it administers, such as OB 84-4 (Ess Pee Bee Realty v. Gabel, 52 Misc.2d 1003, 277 N.Y.S.2d 743, affd. 28 A.D.2d 822, 282 N.Y.S.2d 632). The granting to the petitioner of an MCI rent increase would be precluded by this policy alone.

Furthermore, a court’s reviewing function is limited to a finding that a rational basis supports the agency’s determination, and where such determination has a rational basis in the record, the court cannot substitute its own judgment for that of the agency (see, Bambeck v. DHCR, 129 A.D.2d 51, 54, 517 N.Y.S.2d 130; Mid-State Management Corp. v. New York City Conciliation and Appeals Board, 112 A.D.2d 72, 491 N.Y.S.2d 634). In the instant proceeding, the DHCR adhered to the policy of the agency enunciated in OB 84-4 and explained fully why it did not apply the exception contained therein. There was no unexplained departure from agency policy. Upon the facts and circumstances adduced in the record, it was rational for the DHCR to conclude that there was no equitable basis for granting an MCI rent increase, and this determination should not be disturbed by the court.