IN RE: the Application of Brooklyn Laboratory Charter School

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Supreme Court, New York County, New York.

IN RE: the Application of Brooklyn Laboratory Charter School, Petitioner, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules v. New York City Department of Education, Respondent.

100503/2016

Decided: August 02, 2017

For Petitioner Kody M. Haddox Esq. K & L Gates LLP 599 Lexington Avenue, New York, NY 10022 Susan R. Briggs Esq. Cohen Schneider & O'Neill LLP 275 Madison Avenue, New York, NY 10016 For Respondent Todd A. Krichmar Esq. New York City Law Department 100 Church Street, New York, NY 10007

I. PRIOR ADMINISTRATIVE PROCEEDINGS

Petitioner Brooklyn Laboratory Charter School (BLCS) is a New York State charter middle school in Brooklyn, New York. New York Education Law § 2853(3)(e)(5)(A) requires respondent New York City Department of Education (DOE) to provide a charter school that requests co-location within a New York City public school either a site within a school at no charge or reimbursement for the charter school's ‘actual rental cost‘ incurred in renting an alternate location. Before the 2014-15 school year, BLCS submitted written requests to DOE seeking co-location for BLCS's grades 6-8, which DOE denied. In April 2015, BLCS appealed DOE's denial to the Commissioner of the New York State Department of Education, who found that DOE failed to comply with the Education Law's provisions regarding co-location funding and ordered DOE to pay BLCS rental assistance upon BLCS's submission of evidence of its actual rental costs to DOE.

For BLCS to receive payments, DOE required BLCS to submit documentation of BLCS's lease. BLCS submitted its executed lease, its rental assistance calculation, and correspondence from its landlord acknowledging that the landlord agreed to a rent below the market rate in exchange for BLCS's commitment to make alterations to the leased premises and that the costs of the alterations would be considered additional rent under the lease. BLCS claims that the documentation submitted to DOE showed that BLCS's 2015 rent was $325,000 base rent, plus $50,000 additional rent, and its 2016 rent was $325,000 base rent, plus $375,000 additional rent.

On September 2, 2015, DOE informed BLCS, via telephone, that DOE would reimburse BLCS for its base rent costs only. BLCS and its landlord amended their lease to clarify that BLCS's actual rent cost was defined as its base rent plus its expenditures on required improvement costs. On January 7, 2016, BLCS and its landlord fully executed the lease, and BLCS emailed the amended lease to DOE and requested it to recalculate the rental assistance DOE would pay to BLCS. On January 22, 2016, DOE informed BLCS that it would not change its rental assistance payments based on the amended lease and would consider only the base rent BLCS paid in making the rental assistance calculation.

BLCS now seeks a judgment pursuant to C.P.L.R. Article 78 declaring that DOE's refusal to pay BLCS's actual rental cost according to their lease violated the Education Law and an order compelling DOE to pay BLCS's rental assistance costs based on BLCS's actual rental cost. DOE moves to dismiss the petition because it is barred by the applicable statute of limitations and because it fails to allege a claim for relief. C.P.L.R. § 3211(a)(5) and (7).

II. RESPONDENT'S MOTION TO DISMISS THE PETITION UNDER C.P.L.R. § 3211(a)(5)

Petitioner was required to commence its proceeding pursuant to C.P.L.R. Article 78 within four months after DOE's refusal to calculate and pay rental assistance to BLCS based on it actual rental cost. C.P.L.R. § 217(1); LaSonde v. Seabrook, 89 AD3d 132, 139 (1st Dep't 2011); Moskowitz v. New York City Police Pension Fund, 82 AD3d 473, 473 (1st Dep't 2011); Ruskin Assoc., LLC v. State of NY Div. of Hous. & Community Renewal, 77 AD3d 401, 403 (1st Dep't 2010). DOE's refusal must have been explicit; any ambiguity as to whether DOE was definitively refusing the payments must be resolved against it. Flosar Realty LLC v. New York City Hous. Auth., 127 AD3d 147, 155 (1st Dep't 2015); Fischer v. Roche, 81 AD2d 541, 542 (1st Dep't 1981), aff'd, 54 NY2d 962 (1981). DOE bears the burden to establish its defense based on the statute of limitations. Girozentrale v. Tilton, 149 AD3d 152, 158 (1st Dep't 2017); Lebedev v. Blavatnik, 144 AD3d 24, 28 (1st Dep't 2016); Benn v. Benn, 82 AD3d 548, 548 (1st Dep't 2011).

DOE contends that it notified BLCS September 2, 2015, of DOE's final determination that DOE would use only BLCS's base rent in calculating its actual rental cost, requiring BLCS to file its petition within four months of that date. DOE's statement in its notice September 2, 2015, however, that DOE ‘will now be using the base rent in all calculations‘ does not explicitly notify BLCS that DOE was refusing to include additional rent paid by BLCS as part of BLCS's actual rental cost. V. Pet. Ex. 9. In fact, when DOE received BLCS's submission of the amended lease and request for a new rental assistance cost amount January 7, 2016, DOE did not respond that its previous determination was final, but instead promised that DOE would recalculate and provide BLCS a new amount soon. Id. Exs. 12, 15. The emails between the parties following BLCS's January 2016 submission and request highlight the ambiguity of DOE's refusal in September 2015 and illustrate that neither party considered that earlier correspondence DOE's final refusal.

Drawing all inferences from the petition and its exhibits in BLCS's favor, DOE fails to show that its ambiguous correspondence September 2, 2015, was an explicit refusal to include BLCS's additional rent paid in BLCS's actual rental cost calculation. Therefore the four months limitations period did not begin to run September 2, 2015. Girozentrale v. Tilton, 149 AD3d at 158; Lebedev v. Blavatnik, 144 AD3d at 28; Flosar Realty LLC v. New York City Hous. Auth., 127 AD3d at 155; Benn v. Benn, 82 AD3d at 548. The four months limitations period began, at the earliest, on January 22, 2016, when DOE informed BLCS that DOE would not consider anything beyond BLCS's base rent as actual rental cost, rendering the petition timely.

III. RESPONDENT'S MOTION TO DISMISS THE PETITION UNDER C.P.L.R. § 3211(a)(7)

In evaluating DOE's motion to dismiss the petition under C.P.L.R. § 3211(a)(7), the court must accept BLCS's allegations as true, liberally construe them, and draw all reasonable inferences in its favor. C.P.L.R. § 3211(a)(7); JF Capital Advisors, LLC v. Lightstone Group, LLC, 25 NY3d 759, 764 (2015); Miglino v. Bally Total Fitness of Greater NY, Inc., 20 NY3d 342, 351 (2013); Lawrence v. Graubard Miller, 11 NY3d 588, 595 (2008); Drug Policy Alliance v. New York City Tax Comm'n, 131 AD3d 815, 816 (1st Dep't 2015). When a statute's terms are unambiguous, the court must construe the statute to give effect to the plain meaning of the terms used. Avella v City of New York, __ NY3d __, 2017 WL 2427307, at *5 (June 6, 2017); Raritan Dev. Corp. v. Silva, 91 NY2d 98, 107 (1997); Luongo v. Records Access Officer, Civilian Complaint Review Bd., 150 AD3d 13, 19 (1st Dep't 2017); Myers v. Schneiderman, 140 AD3d 51, 56 (1st Dep't 2016). If a statute does not define a term, the court must construe ‘words of ordinary import 'with their usual and commonly understood meaning.’ ‘ Yaniveth R. v. LTD Realty Co., 27 NY3d 186, 192 (2016); Myers v. Schneiderman, 140 AD3d at 57. See Rosner v. Metropolitan Prop. & Liab. Ins. Co., 96 NY2d 475, 479 (2001). The court may not add to or subtract from an undefined term's definite meaning. Majewski v. Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 (1998); Myers v. Schneiderman, 140 AD3d at 57; UMG Recs, Inc. v. Escape Media Group, Inc., 107 AD3d 51, 57 (1st Dep't 2013).

Education Law § 2853(3)(e)(5)(A) provides that DOE must pay BLCS the ‘actual rental cost of an alternative privately owned site,‘ but does not define ‘actual rental cost.‘ Respondent insists that ‘actual rental cost‘ includes only the base rent BLCS pays and not its additional rent. Neither Education Law § 2853(3)(e)(5)(A) nor any other section of the Education Law, however, defines ‘actual rental cost‘ to mean ‘base rent.‘ Therefore the court must construe each word in the phrase with its ‘usual and commonly understood meaning.‘ Yaniveth R. v. LTD Realty Co., 27 NY3d at 192; Rosner v. Metropolitan Prop. & Liab. Ins. Co., 96 NY2d at 479; Myers v. Schneiderman, 140 AD3d at 57. Giving each word its ordinary import, ‘actual rental cost‘ must mean the costs BLCS actually incurred in renting its facility. To interpret ‘actual rental cost‘ to mean only the base rent petitioner paid and to exclude any additional rent BLCS incurred under the lease require the court to subtract impermissibly from the undefined words' meaning. Majewski v. Broadalbin-Perth Cent. School Dist., 91 NY2d at 583; Myers v. Schneiderman, 140 AD3d at 57; UMG Recs, Inc. v. Escape Media Group, Inc., 107 AD3d at 57. DOE provides no authority supporting DOE's narrowing of the phrase ‘actual rental cost‘ or authority supporting its claim that the additional rent BLCS paid does not fall under the ambit of ‘actual rental cost.‘

Finally, DOE claims that BLCS fails to allege that it actually incurred and paid costs beyond the base rent. Although the amended lease does not expressly state whether the amounts to which it refers in the table of actual rental costs represent amounts BLCS already incurred and paid, the petition alleges that BLCS and its landlord agreed to amend the lease to clarify ‘the 'actual rental cost’ paid by BLCS by adding required tenant improvement costs to the annual base rent.‘ V. Pet. ¶ 49 (emphasis added). This phrase implies that BLCS did in fact incur those costs and make the payments. Because the court, upon DOE's motion to dismiss the petition must resolve all inferences from it in BLCS's favor, this allegation states a viable claim for reimbursement of the actual rental costs BLCS incurred and paid. JF Capital Advisors, LLC v. Lightstone Group, LLC, 25 NY3d at 764; Miglino v. Bally Total Fitness of Greater NY, Inc., 20 NY3d at 351; Nonnon v. City of New York, 9 NY3d 825, 827 (2007); Drug Policy Alliance v. New York City Tax Comm'n, 131 AD3d at 816.

IV. CONCLUSION

For the reasons explained above, the court denies respondent's motion to dismiss the petition. C.P.L.R. § 3211(a)(5) and (7). Respondent shall serve and deliver to Part 34, 80 Centre Street, Room 308, New York County, an answer to the petition within 30 days after service of this order with notice of entry. See C.P.L.R. §§ 3012(a), 3211(f), 7804(c)-(f). Petitioner shall serve and deliver to Part 34 any reply to the answer and a re-notice of the petition within 20 days after service of the answer. C.P.L.R. §§ 3012(a), 7804(c), (d), and (f).

DATED: August 2, 2017

_____________________________

LUCY BILLINGS, J.S.C.

Lucy Billings, J.

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