In the Matter of Leslie Brack and Michael Brack
(New York City Loft Board, January 18, 2007)
We represented: Owner/landlord
Marc Rauch, Chairperson:
DECISION and ORDER ORDER
The New York City Loft Board ("Loft Board") accepts the Report and Recommendation of Director of Hearings Martha Cruz dated December 13, 2006.
Leslie Brack and Michael Ashkin ("Tenants"), the occupants of the third floor unit at 103 Broadway, Brooklyn, New York (the "Building"), filed this application seeking reconsideration of Loft Board Order No. 3069 which determined that the third floor unit had been abandoned. The Tenants, pursuant to Title 29 of the Rules of the City of New York ("29 RCNY") § 1-06(i)(3), seek to vacate a default judgment entered against them in this matter on September 6, 2005.
Section 1-06(i)(3) requires a defaulting party to demonstrate that (1) extraordinary circumstances existed causing their failure to timely file an answer, and (2) there is a substantial likelihood of success on the merits of their defense. For the reasons set forth in the Report and Recommendation, the Tenants' contentions fail to meet this standard. Accordingly, the reconsideration application is denied and all of the provisions of Loft Board Order No. 3069 remain in full force and effect.
DATED: January 18, 2007
Members Concurring: Chairperson Rauch, Barowitz, Bolden-Rivera, Delaney, Lusskin, Martinez-Rubio, Shelton
REPORT AND RECOMMENDATION
MARTHA CRUZ, DIRECTOR OF HEARINGS
This application, filed by Leslie Brack and Michael Ashkin, ("Tenants"), the occupants of the third floor unit at 103 Broadway, Brooklyn, New York ("the Building"), seeks reconsideration of Loft Board Order No. 3069 ("the Abandonment Order"). The Abandonment Order determined that the third floor unit had been abandoned by the original Interim Multiple Dwelling ("IMD") occupants.
BACKGROUND
On May 4, 2004, Samuel Stone ("Owner"), the Building's owner, flied an application seeking a finding of abandonment for the third floor unit. The Owner and the occupants of the second and fourth floor units in the building were listed as affected parties. On August 5, 2004, the Loft Board staff served the Tenants with a copy of the application at the Building's address. No answers were received and on October 4, 2004, the case was transferred to the Office of Administrative Trials and Hearings ("OATH") for adjudication.
On November 5, 2004, OATH mailed a second copy of the abandonment application to the Tenants at a business address provided by the Owner and included an instruction directing the Tenants to file an answer by December 6, 2004, if they wished to participate in the proceeding. No answers were received and the Tenants were declared in default. The matter proceeded as an inquest. On April 7, 2005, Administrative Law Judge Donna R. Merris issued a report recommending that the abandonment application be granted.
In accordance with its usual procedures, the Loft Board scheduled an inspection of the third floor unit to determine whether the premises were vacant. However, on July 14, 2005, during the routine inspection, the Loft Board inspector was informed by Michael Ashkin that the premises had not been abandoned and the inspector saw personal belongings in the unit. Based on the inspection results, the Loft Board remanded the matter back to OATH in Loft Board Order No. 29502 ("Remand Order") for further adjudication of the issue whether the premises had been abandoned. The Remand Order was mailed to the Tenants by the Loft Board staff on July 26, 2005, and the Tenants were directed to file an answer to the abandonment application within thirty days of the date of the mailing of the Remand Order. No answer was ever received.
The matter was again referred to OATH and the Tenants were declared in default for a second time by a notice from OATH dated September 6, 2005. Pursuant to 29 RCNY §1-06(i)(2), the notice provided the Tenants with thirty days to file a motion for relief from the default determination. Neither the Loft Board nor OATH received such a motion. The matter proceeded as an inquest again on October 28, 2005.
In a Report and Recommendation dated December 7, 2005, Judge Merris again recommended that the Owner's application for abandonment be granted. Evidence presented at the inquest revealed that Samuel Lomask, the original IMD tenant, died in March 1993 and his son Josh Lomask surrendered the unit to the Owner in December 1993. Judge Merris found that the Tenants had "abandoned their interest in the unit '' by defaulting in the proceeding. On June 15, 2006, the Loft Board issued the Abandonment Order, accepting Judge Merris' findings and recommendation.
On July 25, 2006, the Tenants timely filed the instant application seeking reconsideration of the Abandonment Order and requesting that the default determination be vacated and the case remanded to OATH again based on an alleged denial of due process and material fraud during the course of the abandonment proceeding. The Owner did not file an answer to the instant reconsideration application. A default determination was mailed to the Owner's attorney on August 30, 2006.
ANALYSIS
Pursuant to 29 RCNY §1-06(i)(3), an application for reconsideration in a case where a respondent has failed to move pursuant to 29 RCNY § 1-06(i)(2) for vacatur of a default judgment must establish that 1) extraordinary circumstances existed for the failure to timely file the answer and 2) there is a substantial likelihood of success on the merits of the defense. See, Matter of Formichella, Loft Bd. Order No. 1940 (Mar. 28, 1996). ("[W]here the original determination resulted from a default, the application will only be granted if the aggrieved party establishes extraordinary circumstances for its failure to file an answer and a substantial likelihood of success on the merits"). Here, the Tenants fail to satisfy this standard. Specifically, they fail to demonstrate extraordinary circumstances for their failure to timely file an answer.
Tenants repeatedly failed to participate in the underlying abandonment application. They first failed to file an answer when the application was originally served by the Loft Board. They failed to file an answer a second time when a second copy of the application was served by OATH at the Tenants' business address with the direction that the Tenants file an answer within thirty days. Notwithstanding that by this time, as evidenced by their own correspondence (see below), they were clearly aware of the Loft Board's abandonment proceedings, they failed to file an answer a third time when the Loft Board remanded the application to OATH for further adjudication and directed the Tenants to file an answer within thirty days of the date of mailing of that Remand Order. And for a forth time Tenants failed to participate in the proceedings when, on remand, OATH again mailed notice to the Tenants directing them to file a motion to vacate their default. Thus, despite four attempts to get the Tenants to participate in the abandonment proceeding, no answer was ever filed and no motion to vacate Tenants' default was ever made.
Now Tenants assert that their default is excusable alleging that they never received any of the notices to answer the application. However, correspondence attached to this reconsideration application by the Tenants themselves reveals that they were well aware that the abandonment application was pending as early as December 2004. In an e-mail to the Owner dated December 1, 2004, the Tenants wrote:
I think I mentioned to you that we got another 30-page stack from the loft board requesting that we do something, pronto. We dropped it last time because we didn't want to pay lawyers, but it looks like there is no getting around it now. Anyway, we have 'til 12/7 to negotiate a new lease or contest the petition for abandonment. I think a new lease is cheaper and easier for all. If okay with you, I'll just have our lawyer negotiate it with yours. If we don't hear back from you, we'll assume this is okay. Thanks for the help. Hope everything is well with you and your many ventures. Best Leslie & Mike.
Emphasis added.
The direct reference to the abandonment application and to the December 7, 2004, deadline for filing an answer means that the Tenants received the copy of the application mailed to their business address by OATH, yet they chose to ignore the application and failed to file an answer. Moreover, the statement that "[w]e dropped it last time because we didn't want to pay lawyers" suggests that Tenants also received the copy of the application mailed to them earlier by Loft Board staff and for reasons far from extraordinary, they intentionally failed to submit an answer.
Further, in another e-mail dated December 8, 2004, one day after the December 7, 2004, deadline set by OATH for filing an answer, the Tenants acknowledged that they intentionally defaulted. They state, "We let the deadline for contesting the abandonment application pass (last night) without answer." Thus, not only did Tenants receive copies of the abandonment application, but they also chose not to file an answer to it. Based on these e-mails, Tenants fail to establish a denial of due process. Tenants were on notice of the pending abandonment application and had sufficient time to file an answer. They simply elected not to. Even if the reasons for so doing were based on a belief that they had an agreement with the Owner to renew their lease, Tenants' decision to ignore the pending application was made at their own peril.
Additionally, there was no denial of due process or material fraud related to the Tenants' default in the proceeding subsequent to the issuance of the Remand Order. Although Tenants argue that they did not receive a copy of the Remand Order or a copy of the default notice from OATH and Tenants speculate that someone "tampered" with their mail, this explanation for their continued default fails to rise to the level of "extraordinary circumstances" as required by 29 RCNY § 1-06(i)(3). The uncorroborated assertion that building personnel "tampered" with the mail does not constitute extraordinary circumstances, especially when Tenants had actual knowledge that the proceeding was still pending on July 14, 2005, when they encountered the Loft Board inspector. Even assuming they did have a problem receiving their mail, the appearance of the inspector should have put them on notice that, at a minimum, they needed to provide the Loft Board with an alternate address to ensure that they would receive any future mailings from the Loft Board. But, they did not do this despite having one available, i.e., their lawyer's address. Nor did the Tenants bother to contact the Loft Board to inquire about the status of their case.
Michael Ashkin claims that he did contact the Loft Board, but there are problems with his assertion. He states that he spoke to Executive Director Dianne Dixon in early July 2005 and was told "an order finding abandonment had been issued." Additionally, he claims that Ms. Dixon asked him to submit documentation of the Tenants' continued occupancy and once the material was submitted, she assured him that "everything would probably be okay." But, the board had not yet decided the case.
Indeed, even the Remand Order was not issued until July 21, 2005, so an order did not yet exist in early July 2005. The Abandonment Order was not issued until almost a year later, June 15, 2006, so it is not credible that he would have been told that an order finding that his unit had been abandoned had been issued in early July of 2005.
Moreover, even assuming arguendo that he had been told that an order already had issued in the case, Mr. Ashkin fails to explain why he did not request a copy of that order to see what it said, nor does he explain why, with only an assurance that things would "probably" be okay if he submitted documentation of his continued occupancy, he did not bother to follow-up with the Loft Board to find out whether in fact everything was okay. The Tenants' failure to be involved in the abandonment proceeding was purely within their control. Ms. Brack and Mr. Ashkin, in paragraph 10 of their affidavits submitted in support of this application, actually admit that they received a copy of the proposed order containing the finding of abandonment on June 14, 2006, the day before the Loft Board's meeting to consider the proposed order. Yet, Tenants made no effort to contact the Loft Board to protest, as they now claim in their affidavits, that they had received no prior notice of the proceedings. It appears that they chose to gamble repeatedly that they would be able to work out a deal with their landlord before a Loft Board finding of abandonment became a problem for them. They gambled and they lost. In these circumstances, repeated defaults, despite being given several opportunities to participate, do not constitute the extraordinary circumstances required by 29 RCNY § 1-06(i)(3).
Because Tenants have failed to demonstrate any extraordinary circumstances to excuse their failure to timely file an answer in the underlying abandonment proceeding, there is no need to address the other prong of the standard for vacating a default judgment – a substantial likelihood of success on the merits of the defense.
Based on the foregoing, the reconsideration application should be denied.
RECOMMENDATION