IN RE: Susan Kathryn HEFTI (2024)

Judgment (denominated an order), Supreme Court, New York County (Lisa S. Headley, J.), entered August 28, 2023, (1) denying the petition to vacate or annul an August 2, 2022 determination of respondent New York State Division of Housing and Community Renewal (DHCR), which denied petitioner's petition for administrative review (PAR) and affirmed a determination of the Rent Administrator finding that, among other things, petitioner's landlord did not engage in a fraudulent scheme to deregulate petitioner's apartment;  (2) declining to issue petitioner an overcharge award and treble damages;  and (3) dismissing the proceeding brought pursuant to CPLR article 78, unanimously affirmed, without costs.  Order, same court and Justice, entered on or about October 30, 2023, which, to the extent appealable, denied petitioner's motion for leave to renew unanimously affirmed, without costs.

The court properly concluded that DHCR's determination denying the PAR was not arbitrary and capricious (see Matter of Pell v. Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 N.Y.2d 222, 232, 356 N.Y.S.2d 833, 313 N.E.2d 321 [1974]).  Based on the evidence submitted, DHCR had a rational basis to conclude that the landlord did not engage in a fraudulent scheme to deregulate and for calculating the legal regulated rent in the manner which it did.  Contrary to petitioner's contention, DHCR also had a rational basis for relying on the legal regulated rent set in a 2005 order resulting from the prior tenant's overcharge complaint and declining to look back any further.  In any event, the mere fact of a rent increase in 2001, without more, was insufficient to establish a fraudulent scheme to deregulate (see Hess v. EDR Assets LLC, 217 A.D.3d 542, 543, 191 N.Y.S.3d 386 [1st Dept. 2023]), and we reject petitioner's attempts to collaterally attack the 2005 order in this article 78 proceeding (see Matter of Jemrock Realty Co. v. Roldan, 256 A.D.2d 122, 123, 681 N.Y.S.2d 279 [1st Dept. 1998]).

We also find that petitioner failed to establish that DHCR improvidently exercised its discretion in declining to award costs or attorney fees (see 9 NYCRR 2526.1[d];  Administrative Code of City of N.Y. § 26–516[a][4];  Matter of Waverly Assoc. v. New York State Div. of Hous. & Community Renewal, 12 A.D.3d 272, 275, 785 N.Y.S.2d 67 [1st Dept. 2004]).  Petitioner represented herself in these proceedings, including in filing this petition, there was no finding of fraud, any potential overcharge was minimal, and DHCR did not issue petitioner an overcharge award.  Further, treble damages were properly denied in light of the fact that DHCR concluded that the landlord had not engaged in a fraudulent scheme to deregulate (see Todres v. W7879, LLC, 137 A.D.3d 597, 26 N.Y.S.3d 698 [1st Dept. 2016], lv denied 28 N.Y.3d 910, 2016 WL 7364805, 2016 WL 7364811 [2016]).

As for petitioner's due process arguments, the record establishes that while DHCR did not formally respond to petitioner's request for additional time, DHCR provided petitioner adequate time to secure counsel, submit a response before rendering its determination and an opportunity to be heard in a meaningful manner (see generally Matter of Kaur v. New York State Urban Dev. Corp., 15 N.Y.3d 235, 260, 907 N.Y.S.2d 122, 933 N.E.2d 721 [2010], cert denied 562 U.S. 1108, 131 S.Ct. 822, 178 L.Ed.2d 556 [2010]).  We have also considered and rejected petitioner's arguments about DHCR's alleged procedural deficiencies upon remand.

Finally, the denial of petitioner's motion for leave to reargue is not appealable and, as to the renewal, petitioner failed to establish that the court improvidently exercised its discretion in denying the leave to renew motion (CPLR 2221[e];  see also Matter of Yu Chan Li v. New York City Landmarks Preserv. Commn., 182 A.D.3d 478, 479, 120 N.Y.S.3d 762 [1st Dept. 2020] lv dismissed 36 N.Y.3d 927, 135 N.Y.S.3d 663, 160 N.E.3d 321 [2020]).

We have considered petitioner's remaining arguments and find them unavailing.