In the Matter of Alicia Echevarria, Appellant,v.Matthew M. Wambua,, et al., Respondents.BriefN.Y.October 21, 2015To be Argued by: KEVIN J. SMITH (Time Requested: 30 Minutes) APL-2014-00260 New York County Clerk's Index No. 103396/12 Otourt of 1\ppeals nf tq.e ~tate of New tork ------~··._ ____ _ In the Matter of the Application of ALICIA ECHEVARRIA, Petitioner-Appellant, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules -against- MATTHEW M. W AMBUA, as Commissioner of the City of New York Department of Housing Preservation and Development, EAST MIDTOWN PLAZA HOUSING COMPANY, MARK ANDERMANIS and SANDRA ANDERMANIS, Respondents-Respondents. BRIEF FOR PETITIONER-APPELLANT Date Completed: December 22, 2014 KEVIN J. SMITH, ESQ. Attorney for Petitioner-Appellant Alicia Echevarria 30 Rockefeller Plaza, 39th Floor New York, New York 10112 Tel.: (212) 634-3052 Fax: (212) 653-8701 TABLE OF CONTENTS PRELIMINARY STATEMENT .............................................................................. 1 PROCEDURAL HISTORY ..................................................................................... 5 STATEMENT OF JURISDICTION ........................................................................ 6 QUESTIONS PRESENTED FOR REVIEW ........................................................... 6 STATEMENT OF FACTS ....................................................................................... 7 ARGUMENT .......................................................................................................... 12 POINT I. THE APRIL 1 ORDER SHOULD BE REVERSED BECAUSE MS. ECHEVARRIA HAS STANDING TO BRING HER ARTICLE 78 PROCEEDING ...................................................................... 12 POINT II. THE FIRST DEPARTMENT'S APRIL 1 ORDER WILL CAUSE A SUBSTANTIAL INJUSTICE THAT SHOULD BE RECTIFIED BY THIS COURT .................................................................. 17 POINT III. THE COURT'S DECISION INSULATES HPD AND COOPERATIVE APARTMENT BOARDS AND THEIR MEMBERS FROM CHALLENGE BASED ON IRRATIONAL, IMPROPER AND ARBITRARY AND CAPRICIOUS CONDUCT, RAISING ISSUES OF PUBLIC IMPORTANCE ....................................... 20 CONCLUSION ....................................................................................................... 22 TABLE OF AUTHORITIES Page(s) Cases Boryszewski v. Brydges 37 N.Y.2d 361 (1975) ......................................................................................... 17, 20,21 Matter of Bradford Cent. School Dist. v. Ambach 56 N.Y.2d 158 (1982) ............................................................................. 19, 20, 21 Matter of Burke v. Sugarman 35 N.Y.2d 39 (1974) ......................................................... 3, 11, 12, 13, 14, 17, 18 Matter of Clark v. Town Board of Clarkstown 28 A.D.2d 553 (2d Dep't 2006) ..................................................................... 15-16 In the Matter of Jerkens Truck & Equipment, Inc. v. City of Yonkers 174 A.D.2d 127 (2d Dep't 1992) .............................................................. 3, 13, 19 Matter of New York State Ass 'n of Community Action Agency Board Members v. Shaffer 119 A.D.2d 871 (3rd Dep't 1986) .......................................... 3, 11, 13, 15, 17, 18 New York State Nurses Assoc. v. Novello 2 N.Y.3d 207 (2004) ............................................................................................. 6 Other Authorities Title 28 of the Rules of the City of New York .......................................................... 7 Rules of the City of New York, Title 28, § 3-02(i)(1) .............................................. 7 Rules of the City of New York, Title 28, §§ 3-02(m)(iv) and (v) ............................. 8 Rules of the City of New York, Title 28, § 3-16(e)(6) .............................................. 7 -ii- PRELIMINARY STATEMENT Petitioner-Appellant Alicia Echevarria ("Ms. Echevarria") respectfully submits this Brief in support of her appeal from the Appellate Division, First Department April1, 2014 Decision and Order ("April1 Order") dismissing her petition brought pursuant to New York CPLR Article 78 because she allegedly did not have standing to challenge a New York City administrative agency decision that the agency has admitted was arbitrary and capricious and in violation of its rules and regulations and harmed Ms. Echevarria. This Court should reverse the April 1 Order because Ms. Echevarria has standing to commence and pursue her Article 78 proceeding against Respondents- Respondents. First, under this Court's and Second and Third Department, Appellate Division, precedent Ms. Echevarria has standing because she was, in fact, harmed by the legally improper and arbitrary and capricious administrative decision. Further, the April1 Order denying Ms. Echevarria standing would cause a substantial injustice in that Ms. Echevarria would be precluded from challenging the actions of the very parties which precluded her ability to apply to the administrative agency for the four-bedroom apartment that is at the heart of this proceeding. Moreover, the April1 Order insulated a government agency and one of its regulated cooperative boards and their board member from challenge for improper conduct and possible self-dealing, where the person who was awarded the subject four-bedroom apartment is a board member of the cooperative apartment complex. The administrative agency, Respondent-Respondent City of New York Department of Housing Preservation and Development ("HPD") has admitted that it improperly waived the occupancy requirements for the four- bedroom apartment for a board member of Respondent-Respondent East Midtown Plaza Housing Company ("EMP"), the Mitchell-Lama cooperative apartment complex that HPD regulates. Ms. Echevarria, the only other shareholder/cooperator who expressed interest in the same four-bedroom apartment, was excluded from the process by HPD' s admittedly improper conduct and EMP's conduct. The Supreme Court, New York County (Peter J. Moulton, J.) properly held that Ms. Echevarria had standing to challenge HPD' s improper waiver and remanded the matter to HPD to annul HPD' s earlier improper decision to award the four-bedroom apartment to EMP board member Mark Andermanis and Sandra Andermanis ("Andermanises"). On appeal by EMP and the Andermanises, the Appellate Division's Aprill Order held, however, that Ms. Echevarria did not have standing to bring this Article 78 proceeding because she did not submit an application for the subject four-bedroom apartment. The Appellate Division also held that Ms. Echevarria could not show injury because, on remand, HPD has stated that it was going to -2- rescind the approval of the four-bedroom apartment to the Andermanises and conduct an external search for applicants meeting the six-person occupancy requirement, and, therefore, Ms. Echevarria is not eligible for the four-bedroom apartment. This Court should reverse the April 1 Order because Ms. Echevarria has standing to challenge HPD's improper, arbitrary and capricious administrative decision. Like this Court's decision in Matter of Burke v. Sugarman, 35 N.Y.2d 39 (1974), Ms. Echevarria was eligible to transfer to the subject four bedroom apartment but, instead, HPD and/or EMP manipulated the three-bedroom apartment waiting list and awarded the apartment to the Andermanises who were after Ms. Echevarria on that waiting list. The factual circumstances arising in the Second Department, Appellate Division decision in In the Matter of Jerkens Truck & Equipment, Inc. v. City of Yonkers, 174 A.D.2d 127, 131 (2d Dep't 1992), and the Third Department, Appellate Division decision in Matter of New York State Ass 'n of Community Action Agency Board Members v. Shaffer, 119 A.D.2d 871, 874-875 (3rd Dep't 1986) are also similar to the circumstances presented here. In contrast to the April1 Order, however, the courts in those cases held that standing existed. This Court should also hold that Ms. Echevarria has standing to challenge the April 1 Order. -3- This Court should reverse the Aprill Order also because, as the only other shareholder of EMP who sought to apply for the four-bedroom apartment and that HPD admits should have been granted the apartment, Ms. Echevarria was precluded from doing so by HPD's, EMP's and the Andermanises' conduct. In that light, Ms. Echevarria has standing to sue because, as a shareholder of EMP, she has an interest in the fairness of the process and is the only party in a position to raise issues of public interest which otherwise might not be brought to light. To preclude review by a court by ruling that Ms. Echevarria did not have standing unless she could show she would have been awarded the apartment but for the admitted impropriety by the very same parties that precluded her ability to apply for the apartment, would insulate the process from judicial review. Such a result is inconsistent with this Court's rulings on standing. Moreover, only Mark Andermanis - a member of EMP' s board of directors - was notified of HPD' s waiver of the occupancy requirements and permitted to apply for the four-bedroom apartment, even though Ms. Echevarria expressed interest in the same four-bedroom apartment. By precluding judicial review ofHPD's, EMP's and the Andermanises' conduct, the Aprill Order insulates HPD and cooperative boards and their members from challenge for improper conduct and possible self-dealing. -4- This Court should, therefore, reverse the April 1 Order to hold that Ms. Echevarria has standing to commence and continue this Article 78 proceeding. PROCEDURAL IDSTORY On July 27, 2012, Ms. Echevarria commenced this Article 78 proceeding by timely filing a Notice of Petition and Petition. (R. 21-33; R. 101- 107; 108-115.) 1 In response to EMP' s and Andermanises' motions to dismiss for lack of standing, and HPD's motion to remand Ms. Echevarria's Article 78 proceeding to it to rescind HPD' s earlier approval of the transfer of the subject apartment to the Andermanises because it was improper, arbitrary and capricious, the Supreme Court, County of New York (Moulton, J.) held that Ms. Echevarria had standing to bring the Article 78 proceeding and granted the Petition to the extent of remanding it to HPD. (R. 13-20.) On May 3, 2013, Justice Moulton's Order was entered. (R. 13.) On or about May 7 and 31, 2013, respectively, the Andermanises and EMP filed and served notices of appeal of the Supreme Court's Order. (R. 5-6; 11-12.) On April1, 2014, the First Department entered its Order, that is the subject of the instant appeal to this Court. (R. 135-140.) Within 30 days of the First Department's April1 Order, on April30, 2014, Ms. Echevarria timely served on all parties and filed with the First Department a motion for reargument and leave to appeal to the New York Court of "R. _."references are to the Record on Appeal before this Court. -5- Appeals. On July 10, 2014, the First Department entered an order that denied Ms. Echevarria's motion. On July 11, 2014, Andermanises served the First Department's July 10 order with Notice of Entry. (R. 131-134.) On August 11, 2014, Ms. Echevarria timely served and filed her motion for leave to appeal to this Court. On October 21, 2014, this Court granted Ms. Echevarria's motion for leave to appeal to this Court. (R. 130.) STATEMENT OF JURISDICTION This Court has jurisdiction over the instant appeal. Ms. Echevarria's Article 78 proceeding was commenced in the Supreme Court. (R. 21-33.) The First Department's April1, 2014 Order that is appealed from is a final determination by that court which dismissed Ms. Echevarria's Article 78 petition for lack of standing. (R. 135-140.) It is, therefore, a final determination by the Appellate Division, originating in the Supreme Court, under the N.Y. CPLR § 5602(a). QUESTION PRESENTED FOR REVIEW The question presented for review is whether the April 1 Order incorrectly dismissed, on the law, Ms. Echevarria's petition pursuant to CPLR Article 78 based on lack of standing. -6- STATEMENT OF FACTS Under the New York City regulatory framework for Mitchell-Lama cooperative apartments, the City of New York has implemented rules and regulations governing numerous aspects of those developments and apartments. See, generally, Chapt. 3 of Title 28 of the Rules of the City of New York. Under HPD's rules, "tenant/cooperators currently residing in a [Mitchell-Lama] development whose household composition renders them eligible for a larger or smaller apartment shall be given first priority for an internal transfer .... The housing company shall maintain an internal transfer list by apartment size, listed in chronological order by date of receipt of transfer request." See Rules of the City of New York, Title 28, § 3-02(i)(l). (R. 25-26.) Also under HPD's rules, EMP and its managing agent, Cooper Square Realty, Inc. ("Cooper Square"), are delegated with the responsibility to maintain waiting lists for internal transfers of apartments. See Rules of the City of New York, Title 28, § 3-16(e)(6). EMP and Cooper Square are required to "maintain waiting lists in accordance with HPD rules and utilize such lists in there-rental of vacated apartments or resale of shares in a mutual housing company." /d. (R. 25- 26.) For purposes of allowing cooperators to transfer to larger apartments within EMP, HPD's rules also set forth occupancy standards. For example, a -7- family with two parents and two children of the opposite sex can be eligible for a three bedroom apartment, if such an apartment becomes available, while a family with six persons can be eligible for a four bedroom apartment. See Rules of the City ofNew York, Title 28, §§ 3-02(m)(iv) and (v). (R. 25-26.) In late 2011 or early 2012, EMP distributed a memorandum to cooperators stating, among other things, that a four bedroom apartment - Apt. II located at New York, New York ("Apt. It")- may be available to cooperators for internal transfer from their current apartments, if cooperators met applicable HPD rules' occupancy standards for that size apartment. (R. 2 7.) Ms. Echevarria expressed interest in the four-bedroom apartment to EMP. (R. 27.) HPD and EMP never informed Ms. Echevarria (or any other non- board member shareholder who inquired) that HPD would waive the occupancy standards. (R. 27-29.) Only EMP Board member, Mark Adermanis was notified by EMP that HPD would grant an exception to its occupancy standards for the four bedroom apartment. EMP and HPD permitted the Adermanises to apply for the four bedroom apartment and on April 9, 20 12, HPD approved the Andermanises' transfer to Apt.. (R. 28-29.) After Ms. Echevarria learned that the Andermanises were approved for the occupancy waiver, HPD informed Ms. Echevarria that EMP's three- -8- bedroom apartment waiting list was used in connection with HPD' s decision of which cooperators were eligible for transfer to Apt. II, including evaluating the Andermanises' application for transfer to Apt. •. However, since Ms. Echevarria was chronologically before the Andermanises on the three-bedroom apartment waiting list that was utilized by HPD to assess Ms. Echevarria's and the Adermanises' eligibility for Apt.., EMP and/or HPD manipulated the three- bedroom apartment waiting list to jump the Andermanises ahead of Ms. Echevarria. (R. 29-30, R. 54; see also R. 27.) After Ms. Echevarria commenced this Article 78 proceeding, HPD admitted that it "erred" in granting the Andermanises approval for the occupancy waiver and EMP failed to inform HPD of Ms. Echevarria's expressed interest in the subject four-bedroom apartment. (R. 76-77; see also HPD Appeal Br. at 12.i HPD has also stated that it would have granted approval of the occupancy waiver to Ms. Echevarria. (HPD Appeal Br. at 12.) As the Petition alleges, Ms. Echevarria was harmed by HPD's decision and has an actual stake in the controversy. 2 For example, the Petition alleged, among other things, *** "HPD Appeal Br." refers to the BriefofRespondent Wambua, dated December 2, 2013, submitted on appeal to the First Department. That Brief was submitted to this Court on August 11, 2014 with Ms. Echevarria's motion for leave to appeal. -9- Accordingly, [Ms. Echevarria] was chronologically ahead of the Andermanis ' on the three bedroom apartment waiting list. When HPD evaluated the Andermanis's application for transfer to Apt. ., however, EMP or HPD moved the Andermanis' ahead of [Ms. Echevarria] on that list to make the Andermanis' eligible for Apt. • before [Ms. Echevarria]. HPD's decision to permit the Adermanis' to move ahead of [Ms. Echevarria] on the list was in violation of HPD 's own rules. As a result of HPD' s decision, which was in violation of its own rules, and EMP's manipulation of the three bedroom apartment waiting list, [Ms. Echevarria] has been damaged because she has been excluded from eligibility for transfer to a four bedroom apartment that should not have been approved for transfer to the Andermanis '. *** (R. 28-31.)( emphasis added.) Further, effective January 31, 2014, EMP's board of directors, including Respondent-Respondent Mark Andermanis, approved a "First Sale Capital Assessment," amounting to tens of thousands of dollars, that will be imposed on Ms. Echevarria's purchase of new shares if and when she transfers to a new apartment at EMP. Had she not been passed over for the transfer to Apt .• or the Andermanises not jumped the line, Ms. Echevarria would not now be subject to the First Sale Capital Assessment, resulting in her having to pay more money for -10- a new apartment that she otherwise would not have been required to pay. As a result, Ms. Echevarria has demonstrated that she has suffered an injury-in-fact. On July 27,2012, Ms. Echevarria commenced her Article 78 proceeding by timely filing a Notice of Petition and Petition. (R. 21-33.) In response to motions to dismiss by EMP and the Andermanises, and the motion to remand by HPD, the Supreme Court, County ofNew York (Moulton, J.) found that Ms. Echevarria had standing to bring the Article 78 proceeding because she demonstrated she was harmed. That court granted the Petition to the extent of remanding it to HPD so that HPD may annul its previous determination. (R. 18- 19.) As Justice Moulton held, Even if [Ms. Echevarria] was not at the top of the list, [she] is harmed when another tenant family is jumped to the front of the line. Such preferential treatment harms [Ms. Echevarria] because it delays her eventual ascension to the top of the list. For standing purposes, it is sufficient that the award of Apt .• was given to an applicant outside of the chronological order set forth in HPD rules governing waiting lists. (Id., citing Matter of Burke v. Sugarman, 35 N.Y.2d 39, and Matter of New York State Ass 'n of Community Action Agency Board Members v. Shaffer, 119 A.D.2d 871.) On May 3, 2013, the Supreme Court's order was entered. (R. 13.) On or about May 7 and 31,2013, respectively, the Andermanises and EMP filed and served notices of appeal of the lower court's Order. (R. 5-6; 11-12.) On April 1, -11- 2014, the First Department entered its April1 Order dismissing Ms. Echevarria's Petition. (R. 135-140.) ARGUMENT POINT I THE APRIL 1 ORDER SHOULD BE REVERSED BECAUSE MS. ECHEVARRIA HAS STANDING TO BRING HER ARTICLE 78 PROCEEDING The Supreme Court (Moulton, J.) properly relied upon New York Court of Appeals precedent, Matter of Burke v. Sugarman, 35 N.Y.2d 39 (1974), to conclude that Ms. Echevarria had standing to bring this Article 78 proceeding. (R. 18-19.) In Sugarman, persons eligible for appointment off a civil service list were found to have standing to challenge illegal appointments, irrespective of the petitioners' position on the list. 35 N.Y.2d at 44-45. "Eligibles on a civil service list from which a position is to be filled are directly and substantially affected by the failure to comply with the law." Sugarman, 35 N.Y.2d at 44. As the Court of Appeals held in that case, When a civil service examination is given, the public, especially those who sit for that examination, are led to believe that appointment will be made according to law. If appointments are made contrary to law, then an eligible should be allowed to compel lawful appointments so that he may receive consideration if his number is reached. Denying standing to such a person may well assure that his name will never be reached. -12- Id. Further, in Matter of New York State Ass 'n of Community Action Agency Board Members v. Shaffer, the Appellate Division, Third Department found that a local community action organization seeking grant money from New York State had standing to challenge the awarding of grant money to ineligible organizations because that organization was eligible for grant money and had a specific interest in the administrative agency's administration of the program. 119 A.D.2d 871, 874-875 (3rd Dep't 1986). In that case, the organization's eligibility for funding was sufficient to confer standing on the organization. Id. Similarly, in In the Matter of Jerkens Truck & Equipment, Inc. v. City of Yonkers, the Appellate Division, Second Department, held that even though a trucking company could never establish entitlement to a contract with the City of Yonkers, it still had standing to pursue its Article 78 proceeding. 174 A.D.2d 127, 131 (2d Dep't 1992). It found standing existed because the petitioner asserted claims of improprieties in the bidding process, regardless of whether the petitioner may ultimately be awarded the contract. Id. at 133. Here, Ms. Echevarria was on the three-bedroom apartment waiting list that HPD utilized to determine eligibility for the four-bedroom apartment (Apt. .) that ultimately was improperly transferred to the Andermanises. (R. 28-31.) Ms. Echevarria, who was before the Andermanises on the three-bedroom apartment waiting list, was eligible for and, like those petitioners in Matter of -13- Sugarman, Schaffer, and Jerkens, was led to believe that the law would have been followed to permit her to transfer to Apt.. before the Andermanises. (R. 28-31.) The Andermanises, however, jumped in front of the line, through HPD's and EMP's manipulation of the three-bedroom apartment waiting list, in violation of HPD's rules and regulations. (SeeR. 28-31; see also HPD Appeal Br. at 12.) As a result, Ms. Echevarria's ascension on the three-bedroom apartment waiting list was and continues to be delayed, causing Ms. Echevarria injury. ( R. 18.) Further, as a result of the delay in her ascension on the three-bedroom apartment waiting list, EMP's board of directors approved a First Sale Capital Assessment, effective January 31, 2014, amounting to tens of thousands of dollars, that will be imposed on Ms. Echevarria's purchase of new shares if and when she transfers to a new apartment at EMP. Had she not been passed over for the transfer to Apt.. or the Andermanises not jumped the line, Ms. Echevarria would not now be subject to the First Sale Capital Assessment, resulting in her having to pay more money for a new apartment that she otherwise would not have been required to pay. These allegations of substantial injury demonstrate that Ms. Echevarria has standing and a stake in the outcome of this Article 78 proceeding. As Justice Moulton correctly held, [Ms. Echevarria] is harmed when another tenant family is jumped to the front of the line. Such preferential treatment harms petitioner because it delays her eventual ascension to the top of the list. For standing purposes, it is sufficient that the award of apartment • was -14- given to an applicant outside of the chronological order set forth in HPD rules governing waiting lists. (R. 18.) Indeed, HPD has admitted that it would have granted approval of the occupancy waiver for the four-bedroom apartment to Ms. Echevarria, rather than the Andermanises, and "erred" in granting the Andermanises approval for the occupancy waiver when EMP failed to inform HPD of Ms. Echevarria's expressed interest in Apt. a (R. 76-77; HPD Appeal Br. at 12.) Thus, it is clear that the procedures used by HPD and EMP were improper and in violation of HPD' s own rules and regulations. (R. 25-31.) Just like the eligible on a civil service list in Matter of Sugarman, if exemptions are granted for transfer to an apartment that is contrary to law, then the other individuals who were eligible, but not selected, for a transfer should be allowed to bring suit to challenge the agency's decision. Matter of Sugarman, 35 N.Y.2d at 44-45. Yet, the April1 Order (116 A.D.3d 418), unlike Justice Moulton's order, failed to follow New York Court of Appeals precedent in Matter of Sugarman. 35 N.Y.2d at 44-45 (1974). Further, contrary to the April1 Order, Matter of Clark v. Town Board of Clarkstown, 28 A.D.2d 553 (2d Dep't 2006) is not dispositive. In that case, a retired policeman challenged the appointment of a new police chief. Unlike the circumstances in the present case, however, the petitioner had not applied nor was -15- he eligible to become police chief and he had not challenged the procedures used in the appointment of the chief. Clark, 28 A.D.2d at 554. Unlike in Clark, Ms. Echevarria was eligible to transfer to Apt. II because she was on the three- bedroom apartment waiting list- used by HPD to select the family ultimately transferred to Apt. Ia- and was before the Andermanises on the waiting list. (R. 28-31.) Thus, she was eligible for transfer to Apt.., was excluded from the process, and therefore, injured. (I d.) Furthermore, Ms. Echevarria has challenged the procedures used to transfer Apt. •. (I d.) Thus, reliance by the Appellate Division on Matter of Clark is misplaced. New York State Assn. of Nurse Anesthetists v. Novello, also relied on for the result in the April! Order, is distinguishable from and inapplicable to the present case. There, this Court held that the association lacked an injury-in-fact because the alleged injury to anesthetists was too speculative for organizational standing because the injury was based on enactment of certain guidelines that had not yet been shown to injure any anesthetists. Novello, 2 N.Y.3d 207, 211-212 (2004). Thus, the April 1 Order is in conflict with this Court's precedent and other Appellate Division authority and it should be reversed. -16- POINT II THE FIRST DEPARTMENT'S APRIL 1 ORDER WILL CAUSE A SUBSTANTIAL INJUSTICE THAT SHOULD BE RECTIFIED BY THIS COURT The April 1 Order held that Ms. Echevarria did not have standing to bring this Article 78 proceeding because she did not submit an application for the subject four-bedroom apartment. (R. 135-140.) The First Department also held that Ms. Echevarria could not show injury because, on remand, HPD has stated that it was going to rescind the approval of the four-bedroom apartment to the Andermanises and conduct an external search for applicants meeting the six-person occupancy requirement, and, therefore, Ms. Echevarria is not eligible for the four- bedroom apartment. (R. 135-140.) However, the Respondents which have sought to avoid any challenge by Ms. Echevarria are the same exact parties that precluded Ms. Echevarria from applying for the subject four-bedroom apartment and convinced the First Department to now preclude Ms. Echevarria from challenging those parties' actions in court. To permit those same parties to evade review by the court conflicts with this Court's precedent and will cause substantial injustice if permitted to stand. See Matter of Sugarman, 35 N.Y.2d at 45; see also Schaffer, 119 A.D.2d at 875, citing Burke, 35 N.Y.2d at 45, and Boryszewski v. Brydges, 37 N.Y.2d 361, 364 (1975). -17- For example, HPD has admitted in its appeal papers to the First Department that, had it not erred, and EMP did not fail to inform HPD of Ms. Echevarria's expressed interest in the apartment, Ms. Echevarria would have been granted the occupancy waiver that the Andermanises were granted. (HPD Appeal Br. at 12; R. 67-78.) In fact, Ms. Echevarria was never notified by EMP that HPD would waive its occupancy requirements even though she expressed interest to EMP in transferring to the four-bedroom apartment. (R. 27-31.) Yet, only Mark Andermanis- a member of EMP's board of directors- was notified of HPD' s waiver of the occupancy requirements and permitted to apply for the four- bedroom apartment. (R. 27-29.) It is clear, therefore, that HPD's failure to follow a proper process, EMP' s failure to inform HPD of Ms. Echevarria's interest in the apartment, Ms. Echevarria was precluded from applying for the four-bedroom apartment when she should have been permitted to apply. (R. 27-31; see also HPD Appeal Br. at 12.) To allow these Respondents-Respondents to evade judicial review based on the very improper actions that are at issue in Ms. Echevarria's Article 78 proceeding is contrary to this Court's prior holdings and the April1 Order should be reversed. Indeed, as this Court stated in Matter of Sugarman, unless those who are eligible for an appointment or designation may seek judicial review of unlawful appointments or designations, "appointments or designations which may be -18- contrary to law will be effectively insulated from public scrutiny, judicial oversight, and perhaps any review whatsoever." 35 N.Y.2d at 45; see also Matter of Bradford Cent. School Dist. v. Ambach, 56 N.Y.2d 158, 164-165 (1982) and Boryszewski v. Brydges, 37 N.Y.2d 361 (1975); Schaffer, 119 A.D.2d at 875. This Court held in Matter of Sugarman that "generally standing should be expanded rather than contracted." 35 N.Y.2d at 45. The April 1 Order also held that, because HPD was going to rescind the approval of the four-bedroom apartment to the Andermanises and conduct an external search for applicants meeting the six-person occupancy requirement, Ms. Echevarria is not eligible for the four-bedroom apartment and does not have standing. (R. 135-140.) However, HPD's changed position in litigation should not deprive Ms. Echevarria of standing to have commenced and continue this Article 78 proceeding. See, e.g., Jerkens, 174 A.D.2d at 131. Indeed, the April1 Order's reliance on HPD's contention that, ifthere is a remand, HPD will rescind the approval to the Andermanises of the occupancy waiver, and conduct an external search for applicants meeting the six-person occupancy requirement is problematic. (R. 135-140.) According to the April 1 Order, HPD will rescind the approval of the Andermanises occupancy waiver and conduct an external search for applicants meeting the six-person occupancy requirement. (/d.) No evidence exists, however, that HPD has or will rescind the -19- prior improper approval to the Andermanises and conduct an external search for applicants. Since the April 1 Order, nine (9) months have passed and HPD has not sought to rescind the approval. If HPD never takes action, the perverse result will be that the Andermanises can remain improperly in a four-bedroom apartment that they are not permitted to occupy that should have been granted to Ms. Echevarria but, according to the April 1 Order, Ms. Echevarria was not permitted to challenge. Order. As a result, standing exists and this Court should reverse the April 1 POINT III THE APRIL 1 ORDER SHOULD BE REVERSED BECAUSE IT INSULATED HPD, COOPERATIVE APARTMENT BOARDS AND THEIR MEMBERS FROM CHALLENGE EVEN WHEN THEY COMMIT IRRATIONAL, IMPROPER AND ARBITRARY AND CAPRICIOUS CONDUCT The April1 Order insulated HPD and cooperative apartment boards and their members from challenge for improper conduct and possible self-dealing. This Court should reverse that holding based on controlling New York Court of Appeals authority. See Matter of Bradford Cent. School Dist. v. Ambach, 56 N.Y.2d 158, 164-165 (1982) and Boryszewski v. Brydges, 37 N.Y.2d 361 (1975). Ms. Echevarria, as the only other shareholder of EMP who sought to apply for the four-bedroom apartment, but was precluded from doing so by HPD's errors, EMP's failures and the Andermanises' conduct (R. 28-31), she has an interest in -20- the fairness of the process and is the only party in a position to raise issues of public interest that otherwise might not be brought to light. Accordingly, Ms. Echevarria has standing to challenge this decision because no one else would ever challenge this admittedly arbitrary and capricious, irrational decision by HPD and EMP. To preclude review unless Ms. Echevarria could show she would have been awarded the apartment but for the admitted impropriety, would insulate the process from judicial review. Matter of Sugarman, 35 N.Y.2d at 45; Matter of Bradford Cent. School Dist., 56 N.Y.2d at 164-165. Thus, the April1 Order is in conflict with prior New York Court of Appeals decisions and should be reversed. In Matter of Bradford Cent. School Dist. v. Ambach, 56 N.Y.2d 158, 164-165 {1982) and Boryszewski v. Brydges, 37 N.Y.2d 361 (1975), the Court of Appeals held that a "failure to accord[] standing would be in effect to erect an impenetrable barrier to any judicial scrutiny." This Court should not permit the First Department to erect that impenetrable barrier. If Ms. Echevarria did not bring the instant proceeding to challenge HPD's, EMP's and the Andermanises' violation ofHPD's rules and regulations- violations that are admitted by HPD - and precluded Ms. Echevarria from applying for and transferring to Apt. It, no judicial scrutiny of that determination would be available. Clearly, HPD, EMP, and the Andermanises will not (and did not) seek -21- review and, under the reasoning of the April1 Order, no one would ever be permitted to seek review in these circumstances. Indeed, the only reason that HPD admitted it made the improper decision to award Apt. lito the Andermanises and sought a remand is because Ms. Echevarria commenced this Article 78 proceeding to challenge HPD's and EMP's approval ofthe occupancy waiver. (SeeR. 67-78; 94-100.) At no time after the April 9, 2012 approval of the apartment transfer to the Andermanises and the time that Ms. Echevarria commenced this Article 78 proceeding, did EMP, the Andermanises or HPD challenge HPD's improper and arbitrary and capricious decision. In fact, only in response to the Petition did HPD cross-move to remand the matter to the agency to correct its improper decision. (R. 67-78; 94-1 00.) Had Ms. Echevarria not commenced this Article 78 proceeding because she was harmed by HPD's arbitrary and capricious decision, EMP's, HPD's and the Andermanises' actions would have gone unchecked. Accordingly, this Court should reverse the April1 Order and hold that Ms. Echevarria has standing to bring her Article 78 proceeding. CONCLUSION WHEREFORE, for all of these reasons, Ms. Echevarria respectfully requests that the Court reverse the April I Order and hold that Ms. Echevarria has standing to commence and continue the Article 78 proceeding. -22- Dated: New York, New York December 22, 2014 RESPECTFULLYSUBN.UTTED By: 30 Rockefeller Plaza, 39th Floor New York, New York 10112 Telephone: 212-634-3052 Facsimile: 212-655-1752 Attorney for Petitioner-Appellant Alicia Echevarria -23- TO: Clerk of the Court of Appeals Court of Appeals Hall 20 Eagle Street Albany, New York 12207 Andrew W. Gefell, Esq. Abrams Garfinkel Margolis Bergson, LLP 1430 Broadway, 17th Floor New York, New York 10018 Attorneys for Respondent-Respondent East Midtown Plaza Housing Co. Jeffrey R. Metz, Esq. Adam Leitman Bailey, PC 120 Broadway, 17th Floor New York, New York 10271 Attorneys for Respondents-Respondents Mark Andermanis and Sandra Andermanis Karen M. Griffin, Esq. Assistant Corporation Counsel City of New York Law Department 100 Church Street New York, New York 10007 Attorneys for Respondent-Respondent City of New York Department of Housing Preservation and Development -24-