Turner V. M-Raj 114 Franklin Street, LLC

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Turner v. M-Raj 114 Franklin Street, LLC

OATH Index No. 1787/07 (Oct. 17, 2007), adopted, Loft Bd. Order No. 3419 (Mar. 20, 2008)

Loft owner found to have diminished elevator service. ALJ concluded that fines are not an available relief in tenant-initiated diminution of services cases, a ruling that the Loft Board expressly adopted

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NEW YORK CITY OFFICE OF

ADMINISTRATIVE TRIALS AND HEARINGS

In the Matter of

ALAN TURNER, et. al.,

Petitioners

– against –

M-Raj 114 Franklin Street, LLC,

Respondent

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REPORT AND RECOMMENDATION

TYNIA D. RICHARD, Administrative Law Judge

This diminution of services application was filed pursuant to section 2-04(b)(9) of the Loft Board rules (29 RCNY). Petitioners, tenants of the interim multiple dwelling (“IMD”) 114 Franklin Street in Manhattan (“the building”), allege that elevator service in the building was halted in the summer of 2005, after the Department of Buildings (“DOB”) issued a violation and cease use order, and that while there has been some sporadic work done on the elevator since then, the building is still without working elevator service over one and a half years later.

Petitioners’ current application follows a February 8, 2007, Loft Board-initiated housing maintenance code enforcement proceeding brought against both M-Raj 114 Franklin Street, LLC (“M-Raj”), the respondent in this proceedingand current owner of the building, and Mongelli Enterprises (“Mongelli”), the prior owner of the building, alleging that the lack of elevator service was a violation under 29 RCNY § 2-04(b)(9) (Pet. Ex. 6). On February 26, 2007, Mongelli and M-Raj entered into a stipulation with the Loft Board, whereby it was agreed they would pay a fine and “immediately take all reasonable and necessary steps to restore elevator service” (Pet. Ex. 7). It was decided that the Loft Board would not commence any further enforcement actions relating to the elevator service until at least May 25, 2007 (Pet. Ex. 7). However, on February 9, 2007, Alan Turner, Lisa Giobbi, and Marc Taus, all tenants in the building, filed this diminution of services application, whichon March 20, 2007, was referred by the Loft Boardto OATH for conferencing and a hearing.

On June 29, 2007, the day of the scheduled hearing, respondent reached a settlementwith one of the petitioners, Mark Taus. Trial proceeded on that daywith the remaining petitioners, Alan Turner and Lisa Giobbi. At the hearing, petitioners presented the testimony of Alan Turner. Respondent called John Peachy, an architect retained by the building in 1985 to bring it up to Article 7C compliance; Winston Edwards, the foreman for Upright Elevator, Inc., the contracting companyhired to install the building’s elevator; and Asifa Tirmizi, the wife of one of the members of and an agent for M-Raj. I found the witnesses for both petitioners and respondent to be credible and reliable. At the conclusion of the hearing, petitioners sought the imposition of fines against respondent. Accordingly,I held the record open until July 30, 2007, for the parties to submit memoranda of law as to the availability of fines in diminution of services applications under the Loft Law.

For the reasons stated below, I find that elevator service in the building has been diminished in violation of 29 RCNY § 2-04(b)(9), but that fines are not an authorized remedy in tenant-initiated diminution of services proceedings.

ANALYSIS

114 Franklin Street is a five story residential and commercial building (Turner: Tr. 6). While there is a restaurant on the first floor, the remaining floors are all residential, with petitioners Lisa Giobbiand Alan Turner living on the fourth and fifth floors, respectively, andMark Taus living on the second floor. On January 5, 2007, M-Raj purchased the building from Mongelli. Since March 2007, Shilen Amin, a member of M-Raj, and his wife, Asifa Tirmizi, have lived on the third floor of the building (Turner: Tr. 20; Tirmizi: Tr. 61).

The essential facts are not in dispute. Mr. Turner has lived at 114 Franklin Street for approximately the last 25 years (Turner: Tr. 6). Until the last two years, Mr. Turner had access to a manually-operated elevator at all times, every day, without any restrictions imposed by the landlord (Turner: Tr. 6-7). However, the elevator was taken out of service in late June or early July 2005. An August 3, 2005, DOBnotice of violation and hearing issued to Mongelli, then owner of the building, cited problems with the elevator’s top emergency exit cover and hoistway interlocks (Pet. Ex. 1).[1] In particular, the violation noted that the interlocks were either missing or bypassed, andordered that use of the elevatorbe ceased. According to John Peachy,the building’s architect, bringing the elevator to code would have required performing one of two options: either (1) providing fire-proof vestibules outside the elevator or enclosing the elevator entrance, or (2) extending the fire sprinkler system throughout the building (Peachy: Tr. 29). However, both options had significant drawbacks from the owner’s perspective, in that the first would have blocked a substantial portion of light and air in the lofts, and extending the sprinkler system would have cost approximately $100,000 (Peachy: Tr. 29-30). Instead, Mongelli decided to convert the elevator to an automatic passenger elevator.

On March 27, 2006, Mongelli requested Mr. Turner’s acknowledgment that the building would be replacing the existing elevator with a new, automatic passenger elevator and that the replacement would result in a temporary lack of elevator service, and Mr. Turner obliged (Turner: Tr. 11; Resp. Ex. C). Ms. Giobbi also signed an acknowledgment form, but conditioned her acknowledgment on the work commencing on or about November 1, 2005, and being completed by June 1, 2006 (Pet. Ex. 8). On April 11, 2006 and again on April 26, 2006, Mr. Peachy requested a Letter of No Objection from the Loft Board waiving the requirement that there be an amended narrative statement conference before the elevator could be installed (Peachy: Tr. 31; Pet. Exs. 3 & 4). On May 22, 2006, the Loft Board issued the requested Letter of No Objection (Peachy: Tr. 32; Resp. Ex. D). Subsequently, Mr. Peachy made an application to the New York City Landmarks Preservation Commission (“LPC”) for consent to extend the elevator bulkhead above the current roof height (Peachy: Tr. 33). In June 2006, LPC provided verbal approval for the building’s proposed bulkhead configuration, after which time Upright Elevatorordered equipment and began working on dismantling the old elevator and installing the new elevator (Peachy: Tr. 34-35). For reasons not entirely clear at trial, work appears to have been halted at some point.

In early January 2007, respondentpurchased the building from Mongelli and took assignment of Mongelli’s contract with Upright Elevator to install the passenger elevator (Tirmizi: Tr. 62, 73; Resp. Ex. F). Work recommenced in March 2007 (Turner: Tr. 22; Edwards: Tr. 49). Upright Elevator’s job foreman, Winston Edwards,who is part of a three person crew that has been working on the elevator five days a week from 8:00 a.m. to 4:30 p.m. since work resumed (Turner: Tr. 20; Edwards: Tr. 51), explained that when his crew started working on the elevator, he was under the impression that it would take three months from that pointto finish installing it, but unanticipated problems arose (Edwards: Tr. 51, 58). For instance, the elevator shaft walls required additional reinforcement (Edwards: Tr. 51-52) and Upright Elevator was denied access to the tenants’ units on several occasions (Turner: Tr. 20; Edwards: Tr. 54). Because of these developments, Upright Elevator informed respondent that it would take longer to complete the work than had initially been estimated (Edwards: Tr. 58).

In early May 2007, Ms. Tirmizi asked the president of Upright Elevator to give her an estimate as to when the work would be completed (Tirmizi: Tr. 67). He informed her verbally that the work would be done in approximately eight weeks, although he later indicated in a May 24, 2007, letter to Ms. Tirmizi that the work would take another 15 weeks and was scheduled for completion by September 7, 2007 (Tirmizi: Tr. 67; Resp. Ex. I). As of the date of the hearing, Upright Elevator still needed to construct a bulkhead, an enclosure for the elevator frame, elevator doors, and a steel deflector at the top of the shaft, and had to wire the shaft (Edwards: Tr. 53).

Elevator service is not a minimum housing service that an owner has an affirmative duty to provide under section 2-04 of the Loft Board’s rules, such as heat or hot water. Instead, the rules require that a landlord “shall not diminish nor permit the diminution of legal freight or passenger elevator service and shall cause said service to be maintained in good working order.” 29RCNY§2-04(b)(9). While section 2-04 does not refer to a specific timeframe, the Loft Board has interpreted that section to forbid diminution of services below those provided on the effective date of the Loft Law, June 21, 1982. See, e.g., Matter of Hennen, OATH Index No. 2323/01, at 9 (Oct. 22, 2002), remanded, Loft Bd. Order No. 2762 (Nov. 19, 2002); Matter of 42 North Moore St., Loft Bd. Order No. 1411, 14 Loft Bd. Rptr. 79, 84-85 (Mar. 3, 1993). In addition, under section 204(c), a landlord also assumes an obligation to continue to provide services that exceedthe services mandated by § 2-04(b) if such additional services were previously provided to the tenant pursuant to mutual agreement. Therefore, under section 204(b)(9), elevator service in place on the effective date of the Loft Law is the minimum that must be provided. However, even if elevator service was not provided on June 21, 1982, but a landlord later agreed to provide elevator service, then section 2-04(c) would apply and such additional elevator service could not be unilaterally discontinued. See, e.g., Matter of 25 Jay Street,OATH Index No. 1210/07, at 6 (July 19, 2007) (finding that even in the absence of proof of a lease, additional elevator serviceprovided by mutual agreement for 20 years withthe knowledge and acquiescence of the owner could not be unilaterally discontinued); Matter of 117-119 Leasing Corp., OATH Index No. 798/07 (Sept. 19, 2007) (requiring landlord to continue to provide passenger elevator service previously provided to tenants by mutual agreement in the narrative statement submitted by the landlord to the Loft Board).

Here, Mr. Turner credibly established that the building’s tenants had access to an elevator at all times since he moved in approximately 25 years ago, up until sometime in 2005, and that such access was with the knowledge and consent of the landlord and given without restrictions. Therefore, even though respondent does appear to be in the process of upgrading the elevator, I find that the present lack of service still constitutes a diminution of services under the Loft Law.

Remedy

Although there was little dispute about the claim that elevator service needed to be restored, there was sharp disagreement over the remedy for such a diminution of services. Petitioners contend that respondent should be fined, and respondent contends that such a fine is not authorized under applicable Loft Board rules. Because of the dispute between the parties as to the availability of remedies, much testimony was elicited during trial for the purposes of establishing the respondent’s state of mind in not currently providing elevator service. However, whether respondent’s failure to provide elevator service is willful or whether respondent is in good faith attempting to rectify the lack of elevator service is not relevant to the questions of liability or remedy here.

In diminution of services claims, as opposed to harassment claims, the state of mind of the IMD owner and its reasons for not providing the required services are largely immaterial. As section 2-04 does not provide a good faith exception, a landlord is not excused from providing a required service simply because its failure to provide it was not intentional or malicious, or because it acted in good faith to try to provide the service. Similarly, if section 204 requires that a service be provided, a tenant does not need to establish that the landlord intentionally or maliciously failed to provide it, nor would additional remedies become available to the tenant if the landlord’s failure to provide the service was willful. Matter of Seyfried, OATH Index No. 127/97, at 9, 40-44 (Jan. 3, 1997), adopted in part, Loft Bd. Order No. 2083 (Mar. 20, 1997), on remand, Loft Bd. Order No. 2107 (May 22, 1997)(finding a diminution of elevator service where construction work had already begun to replace prior broken down elevator).

When there is a violation of the minimum housing standards contained in section 2-04(b), as there is here, either the Loft Board may bring an enforcement proceeding or a tenant may bring a diminution of services proceeding. Matter of Davies, OATH Index No. 126/97, at 8-10 (Aug. 12, 1996), adopted in part, rev’d in part and remanded, Loft Bd. Order No. 2023 (Nov. 21, 1996). The scope of these two types of proceedings are the same, in that an action that constitutes a violation in a Loft Board-initiated enforcement proceeding would also constitute a diminution of services. Seyfried, OATH 127/97, at 6. While the Loft Board previously reached an agreement with respondent that it would not bring any enforcement proceedings until after May 29, 2007, there was no prohibition barring the tenants of the building from bringing a diminution of services proceeding, as they did here.

It is important to note, however, that while the scope of Loft Board enforcement proceedings and tenant-initiated diminution of services proceedings are the same, the available remedies differ. In Seyfried, a group of residential tenants brought a diminution of services application against the owner of an IMD. The tenants alleged 13 separate claims for diminution of services, including a claim that freight elevator service had been diminished. Judge Fraser found that the landlord had diminished six services, including elevator service. While it is unclear whether the tenants in Seyfried sought the imposition of fines, Judge Fraser ultimately concluded that the only relief available in tenant-initiated diminution of services cases is a Loft Board order requiring the building owner to restore the services found to be diminished. Id.at 58. Specifically, Judge Fraser wrote, “remedies upon grant of such applications have been limited to orders requiring that the diminished services be restored. Neither damages nor rent abatements have been awarded, fines have not been levied.” Id.at8. Therefore, the only remedy available in this case is purely prospective: an order that respondent provide the missing elevator service.

Subsequent tenant-initiated diminution of services cases confirm this principle. In Matter of Rebo, OATH Index Nos. 924/03 & 926/03 (Dec. 18, 2003), adopted, Loft Bd. Order No. 2840 (Jan. 15, 2003), tenants of an IMD brought claims for both diminution of services and harassment. While Judge Lewis issued fines based on a finding of harassment, she only directed that “service must be restored” for the diminution of services claim. Id. at 7. Further, I have found noother tenant-initiated diminution of services case in which the Loft Board has awarded fines. Cf., e.g., Matter of 9-01 44th Drive Tenants Assoc., Loft Bd. Order No. 2851 (Mar. 18, 2004) (issuing order that landlord restore freight elevator service); Matter of Reginato, Loft Bd. Order No. 2806 (June 19, 2003) (issuing order that landlord repair leaky roof immediately).

While petitioners argue that section 2-04(e)(1) authorizes the imposition of fines in all cases brought pursuant to section 2-04, this section specifically applies to violations of housing maintenance standards, which are Loft Board-initiated proceedings. Judge Frasier distinguished diminution of services claims in Seyfried, explaining that explicit reference to suchtenant-initiated claims against building owners “is limited to a single sentence in section 2-04(c)”: “There shall be no diminution of services.” Seyfried, OATH 127/97, at 5; 29 RCNY § 2-04(c).

In addition, petitioners assert that diminution of services claimsare meaninglessexercises if the Loft Board cannot levy fines to punish landlords who withhold services. However, the normal context in which diminution of services claims arise is when there is a dispute as to whether tenants are entitled to a particular service, and as such, a finding and order from the Loft Board that such service is required, the standard relief in such cases, is of much value and significance to the tenant. See, e.g., 25 Jay Street Tenants Assoc., OATH 1210/07 (owner claimed tenants not entitled to elevator use because elevator use was illegal and dangerous). Herethe parties do not dispute that petitioners are entitled to elevator service under the Loft Law, and the owner is already in the process of restoring elevator service. Thus, petitioners may feel that this order – that is, an order directing respondent to do what it is already doing – providesthem with only a hollow victory. Nonetheless, it is the only victory I may offer.

FINDINGS AND CONCLUSIONS

1. Respondent’s failure to provide elevator service to petitioners constitutes a diminution of services in violation of section 2-05(b)(9) of the Loft Board rules.

1. Under a tenant-initiated diminution of services claim under 29 RCNY 2-04(b)(9), this tribunal has the authority to order that services be restored but may not recommend fines as provided under 29 RCNY § 2-04(e)(1).

RECOMMENDATION

Accordingly, petitioners’ application for a finding of diminution of services is granted, and I order that elevator service be restored. In addition, as the date by which respondentclaimed that the work on the elevator would be finished, September 7, 2007, has passed, I recommend that the Loft Board’s inspectors visit 114 Franklin Street immediately and issue anew housing maintenance standards violation if it is determined that elevator service is not running at this time.

Tynia D. Richard

Administrative Law Judge

October 17, 2007

SUBMITTED TO:

MARC RAUCH
Chairperson

APPEARANCES:

HARTMAN, ULE, ROSE & RATNER, LLP

Attorneys for Petitioners

BY: DAVID RATNER, ESQ.

BORAH, GOLDSTEIN, ALTSCHULER, NAHINS, & GOIDEL
Attorneys for Respondent
BY: DAVID R. BRODY, ESQ.

[1] An interlock is an electrical or mechanical device that keeps hoist-way doors latched when the elevator is not there. It also turns off an elevator when triggered by a hoist-way door key that has been inserted and turned to open the hoist-way door. See