Mazelier v. 634 West 135, LLC

Order, Supreme Court, New York County (Rosalyn Richter, J.), entered February 6, 2004, which, to the extent appealed from, denied defendant’s motion to vacate a default judgment against it, reversed, on the law, without costs, the motion granted and the complaint dismissed. The Clerk is directed to enter judgment accordingly. In 2001, plaintiff tenant filed a complaint with the New York State Division of Housing and Community Renewal (DHCR) for rent overcharges. The complaint properly named defendant, 634 [362] West 135, LLC (634 West), and was sent to its listed address, 95 Delancey Street 2nd Floor, New York, NY 10002. There is no proof of record that the complaint was served on any party. On March 22, 2002, the DHCR granted the complaint on default; however the order is addressed to Equity Management, 95 Delancey Street 2nd FI, New York, NY 10002, and Equity Management is denoted as the “Owner” on the DHCR order. At the bottom of the order it states “cc: 634 West 135, LLC” and “Riverside Management.” There is no address listed for either entity. It is uncontested that Equity Management is not the owner. Nor is there any dispute over the fact that 634 West is the actual owner of the building and the proper defendant. Furthermore, there is no evidence in the record that the order was served on any party. Furthermore, it is uncontroverted that defendant 634 West was not a party to the DHCR proceeding overcharge order even though there was a notation on the order that it was copied to 634 West. The overcharge order specified that an administrative appeal known as a petition for administrative review (PAR) could be made within 35 days of the order being issued. In October of 2002, the DHCR issued a certification that no appeal had been taken from this order. In July of 2003, plaintiff signed and notarized the certification and presented it to the Supreme Court for filing and entry of judgment. The Clerk entered judgment against Equity Management, the sole named party on the DHCR order. In August of 2003, Equity Management moved to vacate the judgment entered against it and plaintiff intentionally did not submit opposition. On October 1, 2003, the judgment was vacated. At this juncture there was no controversy pending in Supreme Court and no outstanding judgment relating to the underlying DHCR order. Undaunted by these prerequisites, on November 6, 2003 plaintiff moved by order to show cause under the same index number “to correct a ministerial error by the [DHCR],” to enter judgment against 634 West and to amend the “caption” of this action to name 634 West as defendant in place of Equity Management.1 The motion was served on both Equity Management and 634 West. Inexplicably, plaintiffs order to show cause was granted on default by both entities. The “caption” was amended to substitute appellant, 634 West, for Equity Management, and on December 3, 2003, a money judgment was entered against 634 West. 634 West then moved by order to show cause to vacate the default and the supposed [363] judgment entered against it, and plaintiff cross-moved for relief.2 On February 3, 2004, the court denied both motions. Upon receiving a favorable, albeit defective, order from DHCR, plaintiff had the option of taking an offset against the rent or filing the order as a judgment (Crimmins v Handler & Co., 249 AD2d 89, 91 [1998]; Administrative Code of City of NY § 26-516 [a] [5]).3 Plaintiff chose to file and enter the order as a judgment. However, because the wrong party (Equity Management) was named in the administrative order and, therefore, in the judgment, the enforcement provisions of CPLR article 52 to collect the amount due were not available to plaintiff. While the court’s subsequent vacatur of the judgment against Equity Management was both proper and necessary (since it had no interest in the premises), the court had no authority to simply substitute 634 West as the defendant. The court does not have the power to amend a DHCR order and then order a judgment based on an improper amendment. In doing so, the court deprived defendant of its right to file a PAR and have “its day in court.” As a threshold matter, once the original judgment was vacated against Equity Management, there was no longer a matter or judgment before the court to amend as plaintiffs index number was purchased for the sole purpose of filing and entering the original, albeit erroneous, judgment based upon the DHCR’s order. Indeed, plaintiff could not have maintained a plenary action to recover the rent overcharges pursuant to the DHCR order (see Bowen v East 13th St. Realty Co., 182 Misc 2d 99 [App Term 1999]; Administrative Code of City of NY § 26-516 [a] [5]). As this was not a CPLR article 78 proceeding, there simply was no basis contemplated by the CPLR or statute for judicial intervention to enforce the invalid DHCR order (Crimmins v Handler & Co., 249 AD2d at 91). Moreover, the court incorrectly concluded that DHCR’s order was really rendered against 634 West. Indeed, 634 West was not denoted as the “owner” and was undisputably an entity separate and distinct from Equity Management, which was so listed. It is uncontested that the DHCR order was issued against Equity Management only and that 634 West was not given proper notice of the order against it. Without proper notice of a [364] DHCR order against 634 West, any order is not enforceable against it by way of entry and filing (see Sanford Ave. Realty Co., LLC v Reynoso, 19 AD3d 401 [2005]). There was no legal or equitable basis to enter judgment against 634 West. Accordingly, the judgment against appellant 634 West must be vacated pursuant to CPLR 5015 (a) (4), and the complaint dismissed. Concur—Friedman, J.P., Gonzalez and Catterson, JJ. Footnotes [1] Notably, no proposed amended pleading amending the caption was included in plaintiffs motion. [2] Plaintiff cross-moved for a declaration that 634 West’s building was subject to a judgment lien, that 634 West’s interest in the building was subordinate to plaintiffs lien and for an order directing the sheriff to sell the building. [3] Given the disposition here, we do not reach 634 West’s argument that plaintiff has in fact received a 12-month rent offset.