Branic International Realty Corp., Appellant,v.Phillip Pitt,, Respondent, et al., Respondents.BriefN.Y.August 25, 2015ROSENBERG CALICA & BIRNEY LLP RONALD J, ROSENBERG* ROBERT M. GALIGA WILLIAM J. BIRNEY EDWARD M. ROSS ... LESLEY A. REARDON KENNETH E. ANESER 0 JOHN S. GIULLA JUDAH SERFATY PETER J. WILLIAMS,.. ROBERT J, HOWARD DIANA G, ATTNER JOSHUA M. LIEBMAN* RYAN J. McMAHON* OHAN H. PARK ATTORNEYS AND COUNSELORS AT LAW 1 00 GARDEN GllY PLAZA. SUITE 408 GARDEN CITY. NEW YORK 1 t 530 TELEPHONE (516) 747-7400 FACSIMILE C516) 747-7480 WWW,RCBLAW,GOM May 29, 2015 VIA FEDERAL EXPRESS PRIORITY OVERNIGHT DELIVERY Court of Appeals 20 Eagle Street Albany, New York 12207 Re: Branic International Realty Corp. v. Pitt APL 2015-00105 Honorable Ladies and Gentlemen: KENNETH J. WEINSTEIN RICHARD A. ROSS OF COUNSEL 4 ALSO ADMITTED F'L "ALSO ADMITTED GT O ALSO ADMITTED GT, NJ, DO + ALSO ADMITTED MD * ALSO ADMITTED NJ This firm represents Petitioner-Appellant Branic International Realty Corp. ("Branic"). We respectfully submit this letter in connection with this Court's sua sponte Rule 500.11 review. Enclosed herewith is a check in the amount of $315 pursuant to Rule 500.3, and three copies of the following: (i) the Appellate Division Briefs; (ii) the Court of Appeals Briefs; (iii) all papers submitted to the Appellate Division which led to issuance of the January 6, 2015 order appealed from; and (iv) the Appendix, as well as proof of service on Respondent's counsel. As established below, the Court should allow full briefing of the appeal, or otherwise reverse the January 6, 2015 order of the Appellate Division, First Department because it is contrary to this Court's remittal order. Additionally, the Court should reach the merits of this important case under the settled exception to the mootness doctrine for matters which are likely to recur but evade appellate review involving substantial and novel issues. The Appellate Division'.s vacated and reversed ruling is still being followed by the lower courts, 1 despite this Court's 1 See Crossbay Equities LLC v. Balzano, 47 Misc.3d 1203(A), 2015 WL 1400654 (Civil Ct. N.Y. Cty. March 26, 2015) ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page2 reversal of the Appellate Division's prior order on mootness grounds, and ifit continues to be followed, it will drastically reduce housing available for the homeless, sick, and special needs persons who are provided housing by the City under the Social Services Law, because landlords will no longer be willing to house such persons under agreements with the City of New York for fear that the temporary housing agreements they enter into with the City will not be honored and that the residents will declare themselves to be "permanent tenants" under the Rent Stabilization Law at their choosing. Because of these compelling issues which are likely to recur (and have, in fact, recurred since the Court's November 18, 2014 determination), the Court should not adhere to its prior ruling that the case was moot and did not fall within any mootness exception. Appellate Jurisdiction The appeal in this Court is pursuant to leave to appeal granted by the Appellate Division, First Department by Order dated April 7, 2015. Disclosure Statement Under 22 N.Y.C.R.R. §500.l(f) Pursuant to 22 N.Y.C.R.R. §500.l(f), Branic International Realty Corp. has no parents, subsidiaries, or affiliates. Summary of Case And Procedural History This case concerns, among other things, whether a homeless, sick, or special needs person who is placed in emergency housing by New York City's Human Resources Administration ("HRA") in a private hotel under an HRA contract with the hotel owner, and who has no landlord-tenant relationship with the hotel owner and who does not pay rent to the hotel owner, is nevertheless protected under the Rent Stabilization Law as a "permanent tenant," such that even after HRA determines that the hotel is no longer appropriate for that resident and determines to move him to a more suitable location, the resident can refuse to leave and claim "permanent tenant" status under the Rent Stabilization Law (9 N.Y.C.R.R. 2520.6(d) and U)). In a 2010 order, the Appellate Term reached the rational and correct conclusion in accordance with settled law, finding that Respondent Phillip Pitt ("Pitt") - a special needs person placed by HRA in Branic's private hotel -- was not covered by the Rent Stabilization Law, that he resided in Branic's private hotel {00166555-3) 2 ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page 3 merely as a licensee ofHRA, and that once HRA determined to move him to different emergency housing and he refused to leave ( even though all other persons who were similarly occupying a room in Branic's hotel had all moved per the HRA determination), that Branic was permitted to commence a licensee holdover petition in hqusing court. 30 Misc.3d 29, 916 N.Y.S.2d 459 (App. Term 1st Dep't 201 O)(Exhibit "A"). After the Appellate Term decision, Pitt voluntarily vacated Branic's hotel but his attorneys nevertheless perfected his appeal from the Appellate Term Order. The Appellate Division determined it would not dismiss the appeal as moot, and found the issues presented were important and likely to evade appellate review. In its April 16, 2013 Order deciding the appeal (the "Appellate Division Order"), the Appellate Division reversed the Appellate Term and held that Pitt was a "permanent tenant" under the Rent Stabilization Law, even though he had no landlord-tenant relationship with Branic. (Exhibit "B") By Order dated November 18, 2014, this Court reversed the Appellate Division Order and remitted for the sole purpose of having the Appellate Division dismiss the proceeding on mootness grounds. 24 N.Y.3d 1005, 997 N.Y.S.2d 111 (2014)(Exhibit "C")(the "November 2014 Reversal Order") The Appellate Division Order had found, inter alia, that the appeal fell within an exception tb the mootness doctrine and decided the appeal. This Court reversed that ruling, finding the appeal was moot by the time it reached the Appellate Division because Pitt had vacated the premises. Apparently because the appeal had been brought up for review via a certified question of the Appellate Division, this Court remitted the case to the Appellate Division with the singular direction that it dismiss this proceeding exclusively on mootness grounds, stating: "The order of the Appellate Division should be reversed, without costs, the matter remitted to the Appellate Division with directions to dismiss the proceeding solely on the ground of mootness, and the certified question not answered as unnecessary." Nevertheless, instead of dismissing the appeal on mootness grounds as this Court ordered, the Appellate Division exceeded the limited scope of the Reversal {00166555-3} 3 ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page 4 Order, and again reversed the Appellate Term Order below "on the law, " and vacated the Appellate Term Order by Order dated January 6, 2015 (the "Order After Remittitur")(Exhibit "D"). However, nowhere in this Court's November 2014 Reversal Order did it direct the Appellate Division to "reverse" the Appellate Term Order, or to do so "on the law," or to vacate the AppellateTerm Order. Indeed, the proceeding was not moot when the Appellate Term Order Was issued in 2010, and thus there was no conceivable basis for once again "reversing" and "vacating" the Appellate Term order, as a matter of law . • Summary of Arguments The Order After Remittitur must be reversed because it is inconsistent with this Court's November 2014 Reversal Order which determined the appeal. As established below, although this Court remitted the case to the Appellate Division with instructions to vacate the Appellate Division Order appealed from, the Order After Remittitur instead purported to reverse the Appellate Term Order "on the . law" - which is the very opposite of what this Court directed, mandating reversal as a matter of law. Additionally, as shown below, this Court should now reach the merits of this important case under the settled mootness exception of matters likely to recur but evade appellate revievV involving substantial and novel-issues: The Appellate Division's vacated ancl reversed ruling is still being followed by the lower courts and its implementation will drastically reduce housing available to the homeless, sick, and special needs community and have a chilling effect because no landlord will want to enter into agreements with the HRA to house such persons for fear that they will all claim "permanent tenant" status despite the fact they are not obligated to pay rent and have no landlord-tenant relationship with the hotel owner. A. The Order After Remittitur Conflicts With This Court's November 2014 Reversal Order And Mistakenly Reversed Arid Vacated The Appellate Term Order Following issuance of this Court's November 2014 Reversal Order, the· Appellate Division issued its Order After Remittitur, as follows: "On remittitur from the Court of Appeals ( - NY3d - , 2014 NY Slip Op 07927 [2014]), order[ of] Appellate Teri:n of the Supreme Court, First Department, entered on or about . {00166555-3} 4 ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page 5 December 22, 2010, which, to the extent appealed from as limited by the briefs, reversed an order of the Civil Court, New York County (Gerald Lebovits, J.), entered on or about June 9, 2009, granting respondent's motion for summary judgment dismissing the petition and denying petitioner's motion for summary judgment on its claim for possession, denied respondent's motion, and granted petitioner's motion, unanimously reversed, on the law. without costs, the order of the Appellate Term vacated, and the proceeding dismissed as moot. (Exhibit "D") ( emphasis added) Even though this Court reversed the Appellate Division Order and held that Pitt's appeal to the Appellate Division was moot by the time it got there and should never have been decided, and even though this Court remitted with directions to · dismiss the proceeding as moot, the Appellate Division did not comply with the explicit directive of this Court, and instead reversed the Appellate Term Order "on the law" and _vacated it. However, it was the Appellate Division Order that was reversed by this Court, not the Appellate Term Order. This Court reversed the Appellate Division Order because the appeal was rendered moot almost two years after the Appellate Term Order, but before Pitt's appeal to the Appellate Division was even perfected. However, the Order After Remittitur issued by the Appellate Division violates this Court's directives and instead improperly states that it is the Appellate Term order that is "reversed, on the law, and vacated." The difference between what this Court ordered and what the Appellate Division did is not merely semantic, but substantive, and directly in conflict. Clearly the Appellate Division overlooked and/or misapprehended this Court's reversal of the Appellate Division.and the otherwise limited nature of the November 2014 Reversal Order. A reversal of the. Order After R.emittitur is clearly warranted. See Cunha v. Urias, 112 A.D.3d 923, 978. N.Y.S.2d 296 (2d Dep't 2013)("Upon a remittitur, a court.is 'without power to do anything except to obey the mandate of the higher court")(quoting extensive a,uthority); Barton Realty Corp. v. Mangan, 25 A.D.2d 730, 268 N.Y.S.2d 869 (!st Dep't 1966). {00166555-3) 5 ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page 6 B. This Court Should Now Exercise Its Broad Authority To Recall And Resettle Its November 18, 2014 Reversal Order And Decide The Underlying Case On The Merits Because Of Intervening Circumstances Which Provide Unique And Compelling Groµnds To Apply The Exception To The Mootness Doctrine For Cases Which Are Novel, Are Likely To Reoccur, And Are Of Substantial And Compelling Public Importance Both in connection with this second appeal following remand and independently pursuant to this Court's inherent authority to recall its remittal order (Franklin Bank-Note Co. v. Mackey, 158 N.Y. 683 (1898)), the Court should alter its remittal order by directing that the Appellate Division Order on the appeal is reversed, and that the Appellate Term Order is reinstated. Unless directly reversed, the Appellate Division Order will continue to have the deleterious effect of · interfering with the availability of"emergency housing" for individuals who are homeless, sick, incapacitated, or who have other special needs, and whose urgent housing needs are met by, among other things, having private hotel owners enter into leases with the HR.A to provide such urgent services. Therefore, particularly when it comes to reversal of the Appellate Division Order, the issues are not moot, and fall within the exception to the mootness doctrine for matters of high importance which are likely to recur and evade appellate review. Matter of Hearst Com. v. Clyne, 50 N.Y.2d 707, 715 (1980). · As this Court noted in Hearst, a case falls within the exception to the mootness doctrine where there is "( 1) a likelihood of repetition, either between the parties or among other members of the public; (2) a phenomenon typically evading review; and (3) a showing of significant or important questions not previously passed on, i. e., substantial and novel issues." Subsequent developments, including the fact that lower courts continue to treat the vacated Appellate Division Order as precedent in similar cases, confirm that the issues raised in this case are likely to repeat and typically evade review, and that the case is of a class that should be decided as an exception to the mootness doctrine. Indeed;. this Court's November 18, 2014 Reversal Order has left the matter in a virtual limbo, with even the Appellate Division misconstruing what this Court held and what legal impact it had, as shown above. The current citation for this case is itself bewildering. Branic International Realty Com. v. Pitt, 24 Misc.3d 940, 881 N.Y.S.2d 875 (Civ. Ct. N.Y. Cty. 2009), reversed, 30 Misc.3d 29, 916 {00166555-3) 6 ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page 7 N.Y.S.2d 459 (App. Term 1st Dep't 2010), reversed, 106 A.D.3d 178, 963 N.Y.S.2d 210 (1st Dep't 2013), reversed, 24 N.Y.3d 1005, 997 N.Y.S.2d 111 (2014) . . Oral argument and further briefing may be warranted due to the events subsequent to the Court's original holding, including the fact that at least one lower court has already ruled that notwithstanding this Court's 2014 reversal, the vacated Appellate Division 2013 Order which held that an emergency housing resident· gains "permanent tenant" status if the resident remains in occupancy in a hotel for a sufficient period, should still be followed bythe lower courts. See Crossbay Equities LLC v. Balzano, 47 Misc.3d 1203(A), 2015 WL i400654 (Civil Ct. N.Y. Cty. March 26, 2015).2 Moreover, since 2014, the homeless population in New York City has substantially ballooned, and scores of dilapidated City-run homeless shelters with conditions below acceptable levels for human occupation have continued to operate, making the need for private hotels willing to accept homeless person referrals from HRA all the more necessary. See State Withholds Funds From Some New York City Homeless Shelters, Cuomo Administration Cites Poor Conditions in 16 Shelters, WALL STREET JOURNAL, May 12, 2015 (further indicating that the homeless population substantially increased since 2014). As shown below, if allowed to continue, the impact of the Appellate Division's 2013 ruling will negatively impact the emergency housing program and the homeless, sick, and special needs persons it serves; it will severely dissuade hotel owners from allowing residency by persons in need of emergency housing; it 2 The Court there stated "When presented with the same facts as presented herein, the Appellate Division held that .art occupant of an SRO for mcire than six months is a permanent tenant, as defined in 9 N.Y.C.R.R: §2520.60), and therefore is not subject to eviction on the ground that the occupant is a licensee~ Branic International Realty Corp. v. Pitt, 106 AD3d 178 (1st Dept. 2013), reversed; 24 NY3d 1005 (2014). The Court of Appeals reversed this decision and remitted the matter to the Appellate Division with directions to dismiss the petition solely on the ground of mootness and the certified question not answered as unnecessary. Branic International Realty Corp. v. Pitt, 24 NY3d 1005, 1007 (2014). A reversal and remittur with .directions to dismiss solely on the ground of mootness has the effect of preventing a judgment which is unreviewable as moot from spawning·any legal consequences or precedent. Hearst Corp. v. Clyne, 50 NY2d 707, 718 (1980). Even though the holding of Branic, supra, then, is not binding on this Court, the reasoning of the ruling still informs the Court on the instant matter, which essentially comes down to statutory interpretation." Id. at *2-3. {00166555-3} 7 ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page 8 will encourage h9tel owners to place strict limits on the length of occupancy by such residents; and rnost significantly' will have a chilling effect that will prohibit other building owners from leasing their premises to the City for fear that the temporary housing agreement they enter into will not be honored and that the residents will b.e deemed "permanent teriants" at their choosing. The First Departmenfs 2013 determination, while ostensibly well-meaning, is bad policy even for the homeless, sick and special needs community and bad law which should be directly reversed by this Court.3. · · · The merits of this appeal have already been briefed at length and are before this Court in the form 'of the Briefs submitted to this Court upon the original appeal (pursuant to Court Rule 500.1 l(f), Branic reserves and reasserts each and every Point made therein). To summarize what is in Branic's briefs on the initial appeal, reversal of the Appellate Division Order is mandated because, inter alia, the agreement between Branic and the City of New York was a lease, making the room occupied by Pitt exempt from the Rent Stabilization Code under 9 N.Y.C.R.R. 2520.1 l(b) as a matter of law. Pitt was a mere licensee of the City, occupying a room paid for by the City, to fulfill the City's statutory obligations to provide emergency housing for the homeless, sick, and other special needs persons. Although Pitt argued the Agreement was not a lease because it is allegedly missing "essential terms," or because Branic allegedly did not surrender exclusive use and possession of the premises to the City, both contentions were demonstrably false as established even by the very language of the Agreement itself. (see Appellant's Brief, Points I-III & Reply Brief, Point I). The Agreement had all the essential terms of a lease, including the area to be leased, the amount of rent to be paid, and the length of the term. Reversal of the 2013 Appellate Division Order is also mandated because even if Pitt's room was not exempt from the Code (which it is), it represents a dangerous departure from well-settled precedent in all the Appellate Divisions, as 3 In the Crossbay Equities case, in response to the argument made by landlord's counsel that the result reached by the Appellate Division in Branic was bad policy because it would permit special needs persons to claim "permanent tenant'' status which in turn would thereby discourage owners from participatinf in programs to shelter such people on a temporary ·basis, Judge Stoller observed that the argument made "intuitive sense" and thatthe result in the Appellate Division Branic decision might be bad policy. {00166555-3) 8 ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page9 well as the Appellate Terms, all of which have consistently and properly recognized that someone claiming to be a "permanent tenant" under the Code must have an agreement with and an obligation to pay rent to the landlord and actually pay rent to such landlord. It also represents a wholesale departure from the plain language of the Code, which expressly makes the definition of"tenant" applicable to the definition of"permanent tenant," and merely imposes the natural (and common law) obligation to pay rent on an individual who wishes to occupy a housing accommodation (see 9 N.Y.C.R.R. 2520.6(d) and G)). See Appellant's Brief, Point I-III; Reply Brief, Point IL Indeed, as Judge Smith observed during oral argument before this Court; there is nothing in the Rent Stabilization Code which suggests that hotel occupants have more rights than occupants of other accommodations, who are protected by the Rent Stabilization Code only if they (or their immediate family) are tenants under a lease with the landlord, and not if they are merely sub-tenants or licensees. See Rent Stabilization Code §2525.6(d)("The tenant, rather than the subtenant, retains: (1) the right to a renewal lease, whether or not the term of the sublease extends beyond the term of the tenant's lease; and (2) the rights and status of a tenant in occupancy with respect to conversion to condominium or cooperative ownership."); Jazilek v. Abart Holdings LLC, 41 A.D.3d 124, 839 N.Y.S.2d 7 (1st Dep't 2007), rev'd on other grounds, 10 N.Y.3d 943, 862 N.Y.S.2d 854 (2008)(where plaintiff was subtenant of rent-stabilized tenant who surrendered possession, subtenant had no legal right to tenancy); Callen v. Callen, 2002 WL 32179000 (Civ. Ct. N.Y. Cty. 2003)(notihg that if premises were subject to rent stabilization, the only party that would benefit would be the "real tenant," not licensees or subtenants occupying the premises). The daim by Respondent's attorney at oral argument that the Code was intended to provide hotel occupants with more protections than those afforded everyone else, finds no support in the RentStabilization Code regulations (see §2520.6), or in any of the "statutory authority" identified in the Code for that section. To the contrary, the only "statutory authority" cited in the notes section of Section 2520.6 which.has any connection to hotels -- other than possibly the unconstitutional provisions in N.Y.C. Administrative Code Title 27, Chapter 2, pertaining tci SRO's generally which mandated that SR.O's be leased out, a provision which this Court invalidated in Seawall Associates v. City of New York, 74 N.Y.2d 92 (1989)- is the provision in N.Y.C. Administrative Code §26- 511 ( c )(11 ), which provides: "A code shall not be adopted hereunder unless it {00166555-3) 9 ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page 10 appears to the division of housing and community renewal that such code ... ( 11) includes provisions which may be peculiarly applicable to hotels including specifically that no owner shall refuse to extend or renew a tenancy for the purpose of preventing a hotel tenant from becoming a permanent tenant." (emphasis added) Thus, the Code itself explicitly confirms that the protections afforded by the Code are for tenants, not licensees or others having no landlord-tenant relationship with the landlord. The need for this Court to now reach these legal issues on the merits as an exception to the mootness doctrine is manifest. I . .·. Additionally, if the current situation is allowed to persist, with the First Department's ruling effectively left on equal footing with the Appellate Term's ruling against Mr. Pitt, and all the lower courts left on notice of the First Department's plainly erroneous conclusion that all emergency housing hotel· occupants are permanent tenants after six months, or even after one day if the resident simply demands a lease after taking occupancy, landlords and operators will.necessarily react in a manner which is again inconsistent with the very social service program under which the City is required to provide temporary housing to the homeless, sick, special needs, and other disenfranchised persons. These direct 1 It is important to· observe that under the Social Services Law, there also exist carefully drawn regulations regarding emergency housing for individuals who are homeless, sick, incapacitated, or who have other special needs under the Social Services Law, and whose urgent housing needs are met by social services agencies pursuant to this comprehensive regulatory scheme - regulations which are incompatible with "permanent tenant" status. See 18 NYCRR 491.4. Under these regulations, emergency housing accommodations must be compatible with the safety, physical health, mental health, and even religious needs of each resident to ensure that compatible residents are housed in safe and appropriate locations for their individual needs and the needs 6fthe other residents. Significantly, a person denied emergency housing by a social services agency or who disagrees with the agency's determination of the type, location, or appropriateness of particular emergency housing, is afforded a "fair hearing" before the New York State Office of Temporary and Disability Assistance, where all of the statutory and regulatory issues surrounding whether the agency is meeting the sociahervices needs of the · resident are adjudicated. 18 N.Y.C.R.R. 358-3.1, et seq. None of this is considered in housing court where issues arising under the. Rent Stabilization Law are litigated. The impact of the Appellate Divfsion's 2013 ruling will negatively impact the emergency housing program and the disenfranchised p·ersons it serves byremoving the social services criteria and benefits residents are required to receive under this statutory scheme. {00166555-3) 10 ROSENBERG CALICA & BIRNEY LLP Court of Appeals May 29, 2015 Page 11 and foreseeable consequences will include hotel landlords: (1) refusing to participate in the programs all together; or (2) refusing to allow emergency residents to stay in the hotel more than a certain number of days and forcing them to continually move to a different location. It is foolhardy to think that hotel owners Will do nothing in response. . ... In short, whethe:r upon this second appeai following remitti r or independently pursuant to this Court's inherent authority to. rec. its remittal order (Franklin Bank-Note Co. v. Mackey,. supra), the First Depart nt's 2013 ruling should be directly reversed by this Court on the mer· s. Dated: Garden City, New York May 29, 2015 RJR/lr Enclosures cc: Martha Weithrrian, Esq. James Provost, Esq. Of counsel: Ronald J. Rosenberg, Esq. Lesley Reardon, Esq. Judah Setfaty, Esq. (via Federal Express Overnight Delivery, with Exhibits, and without Rule 5 00.11 materials) {00166555-3) 11