In the Matter of Perlbinder Holdings, LLC, Appellant-Respondent,v.Meenakshi Srinivasan,, et al., Respondents-Appellants.BriefN.Y.February 17, 2016To be Argued by: HOWARD GRUN, ESQ. (Time Requested: 30 Minutes) APL-2014-00270 New York County Clerk’s Index No. 103231/12 Court of Appeals of the State of New York PERLBINDER HOLDINGS, LLC, Appellant-Respondent, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, – against – MEENAKSHI SRINIVASAN, CHAIRPERSON, CHRISTOPHER COLLINS, VICE- CHAIRPERSON, DARA OTTLEY-BROWN, SUSAN M. HINKSON, R.A., and EILEEN MONTANEZ, P.E., COMMISSIONERS, constituting THE BOARD OF STANDARDS AND APPEALS OF THE CITY OF NEW YORK, THE NEW YORK CITY DEPARTMENT OF BUILDINGS, THE NEW YORK CITY ENVIRONMENTAL BOARD and THE CITY OF NEW YORK, Respondents-Appellants. BRIEF FOR APPELLANT-RESPONDENT KAUFMAN FRIEDMAN PLOTNICKI & GRUN, LLP By: HOWARD GRUN, ESQ. Attorneys for Appellant-Respondent 300 East 42nd Street, 8th Floor New York, New York 10017 Tel.: (212) 687-1700 Fax: (212) 687-3179 i TABLE OF CONTENTS Page Table of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii Preliminary Statement and Summary of Argument . . . . . . . . . . . . . . . . . . . 1 Questions Presented . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Statement of Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 POINT I APPELLANT’S VESTED RIGHTS IN CONNECTION WITH THE REPLACEMENT SIGN OBTAINED THROUGH THE GRANT BY DOB OF TWO PERMITS TO CONSTRUCT AND ERECT THE REPLACEMENT SIGN, COMMISSIONER SANTULLI’S APPROVAL OF THE REPLACEMENT SIGN, AND APPELLANT’S EXPENDITURE OF SUBSTANTIAL MONIES IN CONSTRUCTING, ERECTING AND MAINTAINING THE REPLACEMENT SIGN IN GOOD FAITH RELIANCE THEREON, ENTITLES APPELLANT TO MAINTAIN THE REPLACEMENT SIGN AS OF RIGHT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 ii TABLE OF CASES AND OTHER AUTHORITIES CASES PAGE 149 Fifth Ave. Corp. v. Chin, 305 A.D. 2d 194, 759 N.Y.S. 2d 455 (1st Dept. 2003) .......................... 18, 34, 36-37 ABM Builders, Inc. v. Gribetz, 49 Misc. 2d 1053, 269 N.Y. S. 2d 271 (Sup. Ct., Rich. Co. 1966) ......................... 33 Allen v. Board of Education of the Union Free School District, 168 A.D. 2d 403, 563 N.Y.S. 2d 422 (2nd Dept. 1990) ............................................ 24 Arceri v. Town of Islip Zoning Bd. of Appeals, 16 A.D. 3d 411, 791 N.Y.S. 2d 149 (2nd Dept. 2005) .............................................. 37 Armstrong v. United States, 364 U.S. 40, 80 S. Ct. 1563, 4 L. Ed. 2d 1554 (1960) ............................................. 37 Bender v. New York City Health & Hosps. Corp., 38 N.Y. 2d 662, 345 N.E. 2d 561, 382 N.Y.S. 2d 18 (1976)................................... 24 Brennan v. New York City Housing Authority, 72 A.D. 2d 410, 424 N.Y.S. 2d 687 (1st Dept. 1980) .............................................. 25 Bronxville Associates, Inc. v. Brady, 36 N.Y.S. 2d 308 (Sup. Ct. West. Co. 1942) ............................................................. 6 Christian v. County of Ontario, 92 Misc. 2d 51, 399 N.Y.S. 2d 379 (Sup. Ct. Ontario Co. 1977) ............................ 33 Church v. Church, 58 Misc. 2d 753, 296 N.Y.S. 2d 716 (Sup. Ct., West. Co. 1968) ............................ 33 City of Buffalo v. Chadeayne, 134 N.Y. 163, 31 N.E. 443 (1892) ...................................................... 1, 7, 22, 27, 31 City of Little Falls v. Fisk, 24 N.Y.S. 2d 460 (Sup. Ct., Herkimer Co. 1941) ............................................. 28, 30 iii Cymbidium Development Corp. v. Smith, 133 A.D. 2d 605, 519 N.Y.S. 2d 711 (2nd Dept. 1987), leave denied, 70 N.Y. 2d 615, 519 N.E. 2d 622, 524 N.Y.S. 2d 676 (1988) .......... 24 Downey v. Incorporated Village of Ardsley, 152 N.Y.S. 2d 195 (Sup. Ct. West. Co. 1956), aff’d, 3 A.D. 2d 663, 158 ....... 28, 30 Duncan v. Village of Middlefield, 23 Ohio St. 3d 83, 491 N.E. 2d 692 (Sup. Ct. 1986) (dissenting opinion) ................ 6 Fairchild Sons, Inc. v. Rogers, 246 A.D. 555, 282 N.Y.S. 916 (2nd Dept. 1935) ...................................................... 27 Faymor Development Co., Inc. v. Board of Standards and Appeals of the City of New York, 45 N.Y. 2d 560, 383 N.E. 2d 100, 410 N.Y.S. 2d 798 (1978) ................................ 24 Frishman v. Schmidt, 61 N.Y. 2d 823, 462 N.E. 2d 134, 473 N.Y.S. 2d 957 (1984) ................................ 37 G.M.L. Land Corp. v. Foley, 39 Misc. 2d 770, 241 N.Y.S. 2d 510 (Sup. Ct., Kings Co. 1963) ........................... 28 Jaffee v. RCI Corporation, 119 A.D. 2d 8543, 500 N.Y.S. 2d 427 (3rd Dept. 1986) .......................................... 27 Kadin v. Bennett, 163 A.D. 2d 308, 557 N.Y.S. 2d 441 (2nd Dept. 1990) ............................................ 27 Keller v. Haller, 226 A.D. 2d 639, 641 N.Y.S. 2d 380 (2nd Dept. 1996) ............................................ 33 Landmark Colony at Oyster Bay v. Board of Supervisors, 113 A.D. 2d 741, 493 N.Y.S. 2d 340 (2nd Dept. 1985) ............................................ 24 iv Lefrak Forest Hills Corp. v. Galvin, 40 A.D. 2d 211, 338 N.Y.S. 2d 932 (2nd Dept. 1972), aff’d, 32 N.Y. 2d 796, 298 N.E. 2d 685, 345 N.Y.S. 2d 547 (1973), cert den sub nom, Baum v. Lefrak Forest Hills Corp., 414 U.S. 1004, 94 S. Ct. 360, 38 L. Ed. 2d 240 (1973) .................................... 27- 28 Lindell Co. v. Board of Permit Appeals of City and County of San Francisco, 23 Cal. 2d 303, 144 P. 2d 4 (Sup. Ct. 1944) .............................................................. 6 Matter of Hoffman v. Bd. of Zoning & Appeals of the Incorporated Village of Russell Gardens, 155 A.D. 2d 600, 547 N.Y.S. 2d 657 (2nd Dept. 1989), lv. den., 75 N.Y. 2d 708, 554 N.E. 2d 1279, 555 N.Y.S. 2d 691 (1990) ..... 18, 34-35 Merz v. Seaman, 265 A.D. 2d 385, 697 N.Y.S. 2d 290 (2nd Dept. 1999) ............................................ 33 Niagra Recycling, Inc v. Town of Niagra, 83 A.D. 2d 316, 443 N.Y.S. 2d 939 (2nd Dept. 1981) .............................................. 34 Palazzolo v. Rhode Island, 533 U.S. 606, 121 S. Ct. 2448, 150 L. Ed. 2d 592 (2001) ....................................... 37 Pantelidis v. New York Board of Standards and Appeals, 10 Misc. 3d 1077A, 814 N.Y.S. 2d 891 (Sup. Ct. N.Y. Co. 2005), affirmed 43 A.D. 3d 314, 841 N.Y.S. 2d 41 (1st Dept. 2007), affirmed 10 N.Y. 3d 846, 889 N.E. 2d 474, 859 N.Y.S. 2d 597 (2008) ............................................................. 2, 7, 18, 19, 22-24, Parkview Assocs. v. City of N.Y., 71 N.Y. 2d 274, 519 N.E. 2d 1372, 525 N.Y.S. 2d 176 (1988), cert. den., 488 U.S. 801, 109 S. Ct. 30, 102 L. Ed. 2d 9 (1988) .................. 18, 26-27 Penn Central Transportation Company v. City of New York, 438 U.S. 104, 98 S. Ct. 2626, 57 L. Ed. 2d 631 (1978) ........................................... 37 People ex rel. Manhattan Sav. Inst. v. Otis, 90 N. Y. 48 (1882) ................................................................................................... 33 v People ex rel. Ortenberg v. Bales, 224 A.D. 87, 29 N.Y.S. 2d 550 (2nd Dept. 1928), aff’d, 250 N.Y. 598, 166 N.E. 339 (1929) ........................................................ 27, 29 People v. Miller, 304 N.Y. 105, 106 N.E. 2d 34 (1952) ............................................................... 27, 33 Regan v. Council of City of San Mateo, 42 Cal. App. 2d 801, 110 P. 2d 95 (1st Dist. 1941) .................................................... 6 Robitzek Investing Co., Inc. v. Colonial Beacon Oil Co., 265 A.D. 749, 40 N.Y.S. 2d 819 (1st Dept. 1943) ................................................... 27 Roto Realty, Inc. v. Volkman, 49 Misc. 2d 506, 267 N.Y.S. 2d 683 (Sup. Ct. West. Co. 1966) ............................. 28 Rubin v. The Board of Directors of the City of Pasadena, 16 Cal. 2d 199, 104 P. 2d 1041 (Sup. Ct. 1940) ........................................................ 6 Saltser & Weinsier v. McGoldrick, 295 N.Y. 499, 68 N.E. 2d 508 (1946) ...................................................................... 33 Temkin v. Karagheuzoff, 34 N.Y. 2d 324, 313 N.E. 2d 770, 357 N.Y.S. 2d 470 (1974) ................................ 27 Town of Somers v. Camarco, 308 N.Y. 537, 127 N.E. 2d 327 (1955) .................................................................... 33 Toys “R” Us v. Silva, 89 N.Y. 2d 411, 676 N.E. 2d 862, 654 N.Y.S. 2d 100 (1997) ................................ 34 Waldman v. New York City Department of Housing Preservation 10 Misc. 3d 1075(A), 814 N.Y.S. 2d 893 (Sup. Ct., N..Y. Co. 2005), aff'd, 36 A.D. 3d 501, 830 N.Y.S. 2d 28 (1st Dept. 2007) ....................................... 24 Woods v. Srinivasan, 34 Misc. 3d 632, 932 N.Y.S.2d 821 (Sup. Ct., Bx. Co. 2011), rev’d,108 A.D. 3d 412, 986 N.Y.S. 2d 80 (1st Dept. 2013), lv. den., 22 N.Y. 3d 859, 4 N.E. 3d 382, 981 N.Y.S. 2d 370 (2014) ....................... 23 vi Zara Realty Holding Corp. v. Srinivasan, 15 Misc. 3d 1133(A), 841 N.Y.S. 2d 824 (Sup. Ct., Qns. Co. 2007) ...................... 27 OTHER AUTHORITIES New York City Charter §666 .......................................................................... 5, 8, 17 Zoning Resolution §52-11 ......................................................................................... 9 Zoning Resolution §52-61 ...................................................... 3, 4, 12, 13, 16, 17, 36 Zoning Resolution §52-83 ................................................................................ 14, 16 Norman Williams, 5 American Planning Law §129.01 (1985) ................................. 7 Note, Administrative Discretion in Zoning, 82 Harv. L. Rev. 668, 673 (1969) .............................................................................. 7 Owens, The Zoning Variance: Reappraisal and Recommendations for Reform of a Much-Maligned Tool, 29 Col. Journal of Environmental Law (2004) .......................................................... 7 1 STATE OF NEW YORK COURT OF APPEALS PERLBINDER HOLDINGS, LLC, Appellant-Respondent, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, -against- MEENAKSHI SRINIVASAN, CHAIRPERSON, CHRISTOPHER COLLINS, VICE– CHAIRPERSON, DARA OTTLEY–BROWN, SUSAN M. HINKSON, R.A., and EILEEN MONTANEZ, P.E., COMMISSIONERS, constituting THE BOARD OF STANDARDS AND APPEALS OF THE CITY OF NEW YORK, THE NEW YORK CITY DEPARTMENT OF BUILDINGS, THE NEW YORK CITY ENVIRONMENTAL CONTROL BOARD and THE CITY OF NEW YORK, Respondents-Appellants. Index No. 103231/2012 BRIEF OF APPELLANT-RESPONDENT PERLBINDER HOLDINGS, LLC Preliminary Statement and Summary of Argument As will be detailed below, this appeal raises for this Court’s determination the interplay between and among a property owner’s long recognized property rights under the “vested rights” doctrine, as set forth by this Court in City of Buffalo v. Chadeayne, 134 N.Y. 163, 31 N.E. 443 (1892), the 2 breadth and viability of a property owner’s related right to rely in good faith on a permit issued by the New York City Department of Buildings (“DOB”) after a ruling by its highest ranking officer approving plans for proposed work, as enunciated by this Court in Pantelidis v. New York Board of Standards and Appeals, 10 Misc. 3d 1077A, 814 N.Y.S. 2d 891 (Sup. Ct. N.Y. Co. 2005), affirmed 43 A.D. 3d 314, 841 N.Y.S. 2d 41 (1st Dept. 2007), affirmed 10 N.Y. 3d 846, 889 N.E. 2d 474, 859 N.Y.S. 2d 597 (2008), and the entitlement asserted by the DOB to ignore such fundamental rights, and revoke the authority it previously granted under the guise of a routine audit of its prior determinations, despite the expenditure by a property owner of hundreds of thousands of dollars in furtherance of the approved work. The answers to these questions will, by necessity, determine whether DOB’s Commissioner is a mere figurehead, whose orders and determinations cannot be relied upon by the thousands of property owners who routinely meet with and rely upon the Commissioner to make substantive decisions affecting their properties, or is a figure of actual authority who plays an integral part in the day to day decision making process of New York City property owners as it affects construction issues in New York City. 3 Specifically, this action involves a DOB “Intent to Revoke Approvals and Permits” dated April 30, 2010 (“Intent to Revoke”) (R. 53) 1, which was issued to Appellant-Respondent Perlbinder Holdings, LLC (“Appellant”). The Intent to Revoke rescinded a permit previously issued to Appellant in 2008. That permit allowed Appellant to install a nonconforming sign on its property to replace one which was removed when the building which stood on Appellant’s property had been demolished. Under New York City’s Zoning Resolution '52-61, grandfathering rights were accorded to Appellant for two years after removal of the original sign to install a nonconforming replacement sign. Appellant acted well within the two year period to erect and install a replacement sign at a cost of some $188,000.00. In that regard, it obtained a DOB permit after all written objections to the replacement sign were satisfied in writing. Most importantly, it obtained a written decision from DOB’s Manhattan Borough Commissioner Santulli permitting the erection and installation of the replacement sign (R. 135). Despite Appellant’s diligence in satisfying all of DOB requirements, and despite Appellant’s reliance on DOB’s permit and its Commissioner’s ruling in spending substantial monies on the replacement sign construction and installation, DOB unilaterally revoked the 1Numbers in parenthesis preceded by “R.” refer to pages from the Record on Appeal filed with this Court by Appellant. 4 permit twenty five months after the original sign had been removed, just one month after Appellant’s grandfathered rights expired. DOB did so under the guise of an “internal audit.” To add insult to injury, DOB then adopted the inequitable “gotcha” position that since the original sign was removed more than two years prior, Zoning Resolution '52-61 no longer allowed Appellant to salvage its non- conforming use rights, leaving it without the present ability to install or maintain a replacement sign as of right because that right had now lapsed. A steady stream of repeat violations (112 in all) (the “ECB Violations”) amounting to over $1 million in potential fines, with interest growing every day, thereafter issued to Appellant (R. 57-73) and remain outstanding. Despite arguing that its good faith reliance on DOB’s permit, the approval Appellant received in writing from DOB’s Manhattan Commissioner, and the expenditure of substantial monies to erect the replacement sign mandated reversal of DOB’s determination, Appellant’s argument was rejected by both BSA (R. 353-363) and, on appeal in the underlying Article 78 Proceeding, by the Lower Court (R. 8-13). On appeal to the Appellate Division, First Department from the Lower Court’s Order, the Appellate Decision issued an initial Decision and Order entered October 29, 2013 (R. 398-400) which reversed the Lower Court Order and 5 held that the revocation of the sign permit was improper because Appellant constructed the replacement sign in good faith reliance upon a 2008 determination by DOB and its Manhattan Borough Building Commissioner. The Appellate Division thus granted Appellant’s Article 78 Petition, allowed it to maintain the replacement sign as of right, and vacated all violations issued against Appellant by DOB. Thereafter, on motion by Respondents-Appellants BSA, DOB, and the City of New York (“Respondents”) for leave to reargue, the Appellate Division granted Respondents’ motion, recalled its initial decision, and issued its Decision and Order dated February 13, 2014 (“Appellate Division’s Order”) (R. 394-397). The Appellate Division Order granted Appellant’s appeal, but only to the extent of deeming Appellant’s underlying appeal to the BSA, from which the Article 78 Petition was commenced, to be an application for a variance under New York City Charter §666 based upon, among other things, Appellant’s good faith. While finding that such good faith existed as a matter of law, it remanded Appellant’s original BSA application to the BSA for further development of the record before that agency so that a determination could be made in connection with such variance application, inclusive of the good faith reliance issue. It further held that a determination of the propriety of the DOB violations was premature. 6 This brief is, therefore, respectfully submitted on behalf of Appellant in support of its appeal to this Court from the Appellate Division’s Order. It is respectfully submitted that the Appellate Division’s Order improperly denied Appellant its entitlement as of right to erect and install the replacement sign, as it ignored Appellant’s vested rights acquired through (i) its good faith reliance on DOB’s permit and the DOB Commissioner’s express written ruling, and (ii) Appellant’s subsequent substantial expenditure of monies in erecting and installing the replacement sign. Indeed, by ignoring such fundamental property rights, and by subjecting Appellant to the vagaries and vicissitudes of an administrative variance process which relies not on the strict application of law or the discretion of judges, but upon the discretion of lay people, the Appellate Division Order leaves Appellant’s fate to a system which has already failed it once, and which has been recognized by this and other jurisdictions, as well as many legal commentators, as “spongy and arbitrary,” rooted in “favor” or “grace” over rights2, as well as 2 See, e.g., Bronxville Associates, Inc. v. Brady, 36 N.Y.S. 2d 308 (Sup. Ct. West. Co. 1942); Regan v. Council of City of San Mateo, 42 Cal. App. 2d 801, 110 P. 2d 95 (1st Dist. 1941); Lindell Co. v. Board of Permit Appeals of City and County of San Francisco, 23 Cal. 2d 303, 144 P. 2d 4 (Sup. Ct. 1944); Rubin v. The Board of Directors of the City of Pasadena, 16 Cal. 2d 199, 104 P. 2d 1041 (Sup. Ct. 1940); Duncan v. Village of Middlefield, 23 Ohio St. 3d 83, 491 N.E. 2d 692 (Sup. Ct. 1986) (dissenting opinion). 7 “undisciplined,” “widely abused” and “arbitrary” to the point “where muddle reigns supreme.”3 QUESTIONS PRESENTED 1. Did the Appellate Division commit reversible error under Pantelidis v. New York Board of Standards and Appeals, 10 Misc. 3d 1077A, 814 N.Y.S. 2d 891 (Sup. Ct. N.Y. Co. 2005), affirmed 43 A.D. 3d 314, 841 N.Y.S. 2d 41 (1st Dept. 2007), affirmed 10 N.Y. 3d 846, 889 N.E. 2d 474, 859 N.Y.S. 2d 597 (2008) and City of Buffalo v. Chadeayne, 134 N.Y. 163, 31 N.E. 443 (1892) by not allowing Appellant to maintain as a matter of right a nonconforming replacement sign erected on its in property pursuant to the vested rights Appellant acquired therein based on its expenditure of substantial monies in constructing and erecting the replacement sign in good faith reliance upon both a permit issued to Appellant by DOB and a 2008 determination by the Manhattan Borough Building Commissioner approving the construction and installation of the replacement sign? The question should be answered in the affirmative. 2. Did the Appellate Division, First Department commit reversible error by granting Appellant=s appeal solely to the extent of deeming Appellant=s 3 See, e.g., Norman Williams, 5 American Planning Law §129.01 (1985); Note, Administrative Discretion in Zoning, 82 Harv. L. Rev. 668, 673 (1969); Owens, The Zoning Variance: Reappraisal and Recommendations for Reform of a Much-Maligned Tool, 29 Col. Journal of Environmental Law (2004). 8 underlying administrative appeal to the New York City Board of Standards and Appeals (ABSA@) to be an application for a variance under New York City Charter §666, and remanding the matter to BSA for further consideration of the so-called “variance application” based upon Appellant=s good faith reliance on the Commissioner=s approval of the replacement sign? The question should be answered in the affirmative. STATEMENT OF FACTS Appellant is the owner of the property located at 663-669 Second Avenue, New York, New York (the “Property”), which consists, in relevant part, of lots 26, 27 and 28 on block 917 (R. 20, 85). The Property is comprised of a series of formerly independent, contiguous tax lots located on the west side of Second Avenue, between East 36th and East 37th Streets. In 1980, DOB issued permit number ES42/80 (R. 35-38) allowing a sign (the “Original Sign”) to be mounted/erected on the side of the building then existing on the Property (“Building”). DOB’s permit included approval for illumination of the Original Sign. The Original Sign was subsequently erected pursuant to said permit, where it remained for approximately 28 years until 2008, along the north-facing wall of the Building approximately 39-53 feet in the air on Lot 28 (R. 24). The 1980 permit specified the dimensions of the Original Sign to 9 be 14 feet high by 48 feet long. Appellant adhered to such restrictions at all times that the Original Sign was placed on the Building, and at no time did the dimensions or location of the Original Sign change (R. 24). Sometime after 1980, the New York City zoning map was amended, changing the zoning for the Property to “C1-9,” thereby making the Original Sign's advertising use non-conforming (R. 24-25). However, pursuant to Zoning Resolution §52-11, the Original Sign was permitted to remain as a legal, non- conforming use/sign. In the Spring of 2008, DOB issued an order requiring that the Building, which was vacant, be demolished (R. 25). Appellant obtained DOB permits for the demolition, and the Building was demolished in or about April 2008 (R. 25). As the Original Sign was affixed to the exterior wall of the Building facing North on East 37th Street, it too was taken down as part of the demolition (R. 25). On June 3, 2008, application number 110179912 was filed with DOB by Appellant seeking a permit to erect a structure on which to install a replacement sign (“Replacement Sign”) (R. 25, 40). The application and plans submitted therewith clearly evidenced that the Replacement Sign measured 14 feet by 48 feet, exactly the same dimensions of the Original Sign. Appellant’s application further reflected the Replacement Sign to be double sided, located a bit further south on 10 the Property, to wit, on lots 26 and 27 of the Property, at a different angle, and lower in height than the Original Sign (R. 25). Thereafter, a companion application number 110301343 (R. 41-47) was filed with the DOB seeking a permit install the Replacement Sign on the structure erected. The application was accompanied by plans reflecting the location of the Replacement Sign, and specifically referring to application number 110179912 (R. 43). The application to erect the structure on which to install the Replacement Sign was granted on June 20, 2008, and a permit was issued on that date by DOB (R. 48). In furtherance of such permit, the structure on which to install the Replacement Sign was promptly erected in the new location identified in Appellant’s application number 110179912, and as approved by DOB (R. 25). With respect to the application to install the Replacement Sign itself (application number 110301343), DOB issued an objection sheet dated August 31, 2008 (R. 49-51). Specifically, objections numbers 13, 14 and 16 spoke to the surface area, location and height of the Replacement Sign. At the request of Edward Lauria, Appellant’s engineer, Manhattan Borough Building Commissioner Santulli, DOB’s highest level Manhattan Borough official, reviewed DOB’s objection sheet including, inter alia, objections 13, 14 and 16. On October 28, 2008, with full knowledge and awareness of the Replacement Sign’s new location 11 in a lower position, as well as its double sided character, Commissioner Santulli vacated DOB’s objections, and he approved the relocation of the double sided Replacement Sign by approximately 27 feet to Lots 26 and 27, as indicated in Appellant’s plans (R. 135). In so doing, Commissioner Santulli expressly found as follows: “OK to accept prior sign as grandfathering of existing non-conforming sign. OK to accept lower sign as no increase in degree of noncompliance.” A permit to install the Replacement Sign was subsequently issued by DOB on December 11, 2008 (the “Installation Permit”) (R. 52). Having followed all procedures required by DOB’s regulatory requirements in connection with the construction and installation of the Replacement Sign, having submitted all required plans and applications as required by DOB, having had each of its applications and plans reviewed by DOB’s top official, to wit, Manhattan Borough Commissioner Santulli, having obtained the approval of Commissioner Santulli to the proposed Replacement Sign, and having obtained two permits from DOB to both erect and install the Replacement Sign and its support structure, Appellant justifiably relied in good faith on all of these factors in expending approximately $188,000.00 to install the Replacement Sign in its present location prior to the end of 2008 (R. 26). Such expenditure and 12 installation work occurred less than one year after the Original Sign was removed as part of the ordered Building demolition. In the Spring of 2010, DOB commenced an audit of its earlier approvals, including the approvals provided by then Commissioner Santulli in connection with Appellant’s applications for the construction and installation of the Replacement Sign and its support structure. In connection with its audit, DOB issued the Intent to Revoke relating to application 110179912 (R. 53). A list of objections relating primarily to the existing zoning district regulations, not the non- conforming nature of the Replacement Sign or its location, was at the core of the Intent to Revoke. The Intent to Revoke was issued twenty five months after the removal of the Original Sign, just after the expiration of the two year period in which grandfathering rights under Zoning Resolution §52-61 would have applied to allow the Replacement sign to stand, either in its place or where the Original Sign stood. Thus, DOB adopted the inequitable position that since the Original Sign was removed more than two years prior, Zoning Resolution §52-61 no longer allowed Appellant to salvage its non-conforming use rights with respect to the Original Sign. The result of this DOB review process was that Appellant could not maintain the Replacement Sign due to the retroactive revocation of the Permit, and could not 13 relocate the Replacement Sign to the location of the Original Sign (if it wanted to do so) because those rights had now lapsed while DOB waited just long enough to perform its so-called internal audit. After review by DOB’s staff, and after interaction between DOB’s staff and Mr. Lauria on Appellant’s behalf, a Decision was issued on July 21, 2010 by DOB Commissioner Colgate (R. 55-56). Ignoring (i) the indisputable approval of the Permit application by DOB’s Borough Commissioner Santulli, (ii) the indisputable action of DOB in subsequently approving and issuing the permits for the construction and installation of the Replacement Sign, and (iii) Appellant’s indisputable good faith reliance on all these actions in expending some $188,000.00 in construction costs, Commissioner Colgate found that the Permit and Commissioner Santulli’s approval were “incorrect,” and that the Replacement Sign was therefore illegal. Taking advantage of Zoning Resolution §52-61, and the fact that two years had lapsed since the Original Sign had been removed during the demolition of the Building, Commissioner Colgate bootstrapped this finding of illegality into a finding that the right to grandfather the non-conforming use of the Original Sign (as allowed by Zoning Resolution §52-61) had lapsed, leaving Appellant with no property rights regarding the Replacement Sign. 14 This Decision was ratified by Deputy Commissioner Amer on August 17, 2010 without further comment (R. 55). The rationale provided by DOB for the Colgate Decision was as follows: “. . . it has already been more than two years since the completion of the demolition, and because the sign was not reconstructed within two years of the date of demolition, in the same location and position per ZR 52- 83 (. . . . . same size, etc.), the non-conforming use is determined to have been discontinued.” (emphasis in original) (R. 56). In rendering the Colgate Decision, DOB actually confirmed that the location and size of the Replacement Sign had been approved by DOB as per application number 110179912, as the plans which were attached to that application had been approved by DOB. DOB, however, claimed that Commissioner Santulli’s approval dated October 28, 2008 was unclear as to the relocation of the Replacement Sign, even though Commissioner Santulli reviewed and approved the plans in the face of DOB’s August 13, 2008 objection sheet as well as the plans showing the Replacement Sign’s location. On or about June 7, 2010, and continuing on a steady basis for some four months, DOB issued to Appellant a steady stream of repeat violations (112 in all) (the “ECB Violations”) on the ground that the Replacement Sign was illegal (R. 58-73). The plethora of repeat ECB Violations for the same alleged offense 15 subjects Appellant to over $1 million in potential fines, with interest growing every day, and with no guarantee that similar additional violations will not be issued going forward. After the Colgate Decision was issued, various public officials, including State Assembly members Brian Kavanagh and Jonathan Bing, State Senator Liz Krueger, City Council Member Daniel Garodnick, and Congresswoman Carolyn Maloney wrote to DOB in support of Appellant, requesting that a meeting be held between representatives of DOB and Appellant to resolve these issues (R. 74, 267-270). Appellant even withdrew its initial appeal of the Colgate Decision to facilitate a meeting with DOB in an attempt to resolve the matter (R. 78-79). However, DOB refused to meet on several occasions (R. 80- 81), compelling Appellant to file its appeal with BSA on June 9, 2011 (R. 84-138). DOB responded to the appeal by submission dated December 6, 2011 (R. 139- 205). An initial BSA hearing was held on December 13, 2011 (R. 206-218). On February 6, 2012 Appellant filed its reply statement (R. 219-296). DOB responded with a statement dated February 22, 2010 (R. 297-299). BSA held another hearing on February 28, 2012 (R. 300-319), strongly urging DOB to reconsider its position. In so doing, BSA Chair Srinivasan, commenting on the 16 issue that Appellant had lost its non-conforming use because of DOB’s delay in performing its audit of the Permit, stated that “[I]t just seems somewhat unfair to have an applicant pay for those consequences” (R. 314). On March 19, 2012 Appellant submitted a summary statement to BSA (R. 320-344), which was followed on April 3, 2012 by an additional statement from DOB (R. 345-346). On April 9, 2012 Appellant submitted a final statement to BSA (R. 347-352). On June 19, 2012, BSA rendered its Resolution denying Appellant’s appeal (R. 353-356). In so doing, BSA (i) agreed with DOB, (ii) found that the Replacement Sign did not meet the requirements of Zoning Resolution §§52-83 and 52-61, (iii) affirmed that Appellant lost its non-conforming use rights to the Original Sign since its use had been discontinued for more than 2 years since the Building was demolished, (iv) declared that the issue of good faith reliance was limited to zoning variance applications, and (v) refused to extend its power to reinstate the Permit, or, pursuant to Zoning Resolution §52-61and New York City Charter §666, toll the time in which the Replacement Sign could have been moved to account for the time period in which Appellant relied in good faith on Commissioner Santulli’s ruling. In response, Appellant filed the underlying Article 78 Petition (R. 16- 34) appealing BSA’s Resolution and seeking various forms of relief as follows: 17 a. Annulling BSA’s Resolution; b. Declaring that BSA is empowered by, inter alia, §666 of the City Charter, to reinstate the DOB permit for the Replacement Sign on the basis of practical difficulties and unnecessary hardship; c. Declaring that Appellant’s right to maintain the Replacement Sign as a nonconforming use was improperly revoked by DOB’s July 21, 2010 order; d. Reinstating the Replacement Sign permit revoked by DOB pursuant to its July 21, 2010 order, and thereby restoring Appellant’s rights to maintain the Replacement Sign at the Property as a non-conforming use; e. Annulling the ECB Violations; f. Alternatively, declaring that (i) Appellant did not lose its non-conforming use right arising from the Original Sign, and (ii) the time available to Appellant under Zoning Resolution §52-61 to replace the nonconforming use was tolled, and continues to be tolled, for all of the time that Appellant relied upon Commissioner Santulli’s approval and the DOB permit, and until such time as a determination is rendered in this proceeding, and (iii) ordering DOB to issue to Appellant a permit to install the Replacement Sign in the location of the Original Sign, with a corresponding order for damages in an amount not less than the amounts expended by Appellant to install and remove the Replacement Sign; g. Awarding Appellant damages in an amount no less than $188,000 with interest thereon, that being the amount expended by Appellant to erect the Replacement Sign in reliance on the permit issued; and 18 h. Granting Appellant attorney’s fees, costs, disbursements and expenses incurred in connection with this proceeding. DOB filed its answer to the Petition on November 19, 2012 (R. 364- 391). Without taking any argument on the Article 78 proceeding, Justice Lobis issued the Lower Court’s Order on March 7, 2013 (R. 8-13). In so doing, Justice Lobis made no mention of this Court’s Decision in Pantelidis, which supported Appellant’s reliance argument. Justice Lobis also failed to address Appellant’s argument concerning Appellant’s grandfathering rights under the Zoning Resolution, as supported by the Decisions of the First and Second Departments in 149 Fifth Ave. Corp. v. Chin, 305 A.D. 2d 194, 759 N.Y.S. 2d 455 (1st Dept. 2003) and Matter of Hoffman v. Bd. of Zoning & Appeals of the Incorporated Village of Russell Gardens, 155 A.D. 2d 600, 547 N.Y.S. 2d 657 (2nd Dept. 1989), lv. den., 75 N.Y. 2d 708, 554 N.E. 2d 1279, 555 N.Y.S. 2d 691 (1990). Instead, the Lower Court merely found that BSA’s Resolution was not arbitrary or capricious because the Replacement Sign was different from Original Sign. Justice Lobis further held that estoppel could not be used by Appellant to avoid the harsh results of an administrative determination, citing Parkview Assocs. v. City of N.Y., 71 N.Y. 2d 274, 519 N.E. 2d 1372, 525 N.Y.S. 2d 176 (1988), cert. den., 488 U.S. 801, 109 S. Ct. 30, 102 L. Ed. 2d 9 (1988). 19 On appeal to the Appellate Division, First Department from the Lower Court=s Order, the Appellate Decision issued its Decision and Order entered October 29, 2013 which reversed the Lower Court Order (R. 398-400). Citing to Pantelidis v. New York Board of Standards and Appeals, 10 Misc. 3d 1077A, 814 N.Y.S. 2d 891 (Sup. Ct. N.Y. Co. 2005), affirmed 43 A.D. 3d 314, 841 N.Y.S. 2d 41 (1st Dept. 2007), affirmed 10 N.Y. 3d 846, 889 N.E. 2d 474, 859 N.Y.S. 2d 597 (2008), the Appellate Division held that the revocation of the sign permit was improper because Appellant constructed the Replacement Sign in good faith reliance upon a 2008 determination by the Manhattan Borough Building Commissioner that the Replacement Sign was a permissible replacement for the Original Sign that was removed when the Building was previously demolished. The Appellate Division thus granted Appellant=s Article 78 Petition and vacated all violations issued against Appellant by DOB. Thereafter, Respondents moved for leave to reargue and/or for leave to appeal to this Court. Respondents’ motion was chiefly centered on the Appellate Division’s statement at the end of its reliance analysis that “to the extent [Appellant] sought relief [from BSA] based on its good faith reliance B as opposed to the replacement sign’s compliance with the letter of provisions regarding continuing non-conforming use B [Appellant’s] appeal [to BSA] was, in effect, an 20 application for a variance.” Respondents argued that there was a difference between administrative appeals and variance applications, and argued that this Court could not convert Appellant=s administrative appeal into a variance application, and then summarily grant it, without upsetting the entire administrative process. The Appellate Division granted Respondents’ motion seeking reargument, and upon reargument it recalled its October 29, 2013 Decision and issued the Appellate Division Order (R. 394-397). In so doing, the Appellate Division granted Appellant’s appeal only to the extent of deeming Appellant=s underlying appeal to the BSA, from which the Article 78 Petition was commenced, to be an application for a variance under New York City Charter §666 based upon, among other things, Appellant=s good faith reliance. While finding that such good reliance faith existed as a matter of law, it remanded Appellant=s original BSA application to the BSA for further development of the record before that agency so that a determination could be made in connection with such variance application, inclusive of the good faith reliance issue. It further held that a determination of the propriety of the DOB violations was premature. By Order dated October 28, 2014 (R. 393), this Court granted leave to both parties to appeal the Appellate Division’s Order. 21 ARGUMENT POINT I APPELLANT’S VESTED RIGHTS IN CONNECTION WITH THE REPLACEMENT SIGN OBTAINED THROUGH THE GRANT BY DOB OF TWO PERMITS TO CONSTRUCT AND ERECT THE REPLACEMENT SIGN, COMMISSIONER SANTULLI’S APPROVAL OF THE REPLACEMENT SIGN, AND APPELLANT’S EXPENDITURE OF SUBSTANTIAL MONIES IN CONSTRUCTING, ERECTING AND MAINTAINING THE REPLACEMENT SIGN IN GOOD FAITH RELIANCE THEREON, ENTITLES APPELLANT TO MAINTAIN THE REPLACEMENT SIGN AS OF RIGHT It is respectfully submitted that the Appellate Division’s Order misconstrues and misapplies over a century of decisional law which overwhelmingly compels a finding that Appellant is entitled to maintain the Replacement Sign in its place as of right, without having to rely upon obtaining a variance from BSA. The fundamental reason for such a conclusion is rather simple, as it was DOB’s conduct which induced reasonable good faith reliance thereon by Appellant to its detriment, resulting in the acquisition by Appellant of vested rights with respect to the Replacement Sign which simply cannot now be rescinded, revoked, abrogated or taken by governmental fiat under the cloak of an administrative “audit”. In not recognizing this essential conclusion to be drawn under the circumstances presented, the Appellate Division failed to properly consider the 22 import and impact of this Court’s Decisions in Pantelidis v. New York Board of Standards and Appeals, 10 Misc. 3d 1077A, 814 N.Y.S. 2d 891 (Sup. Ct. N.Y. Co. 2005), affirmed 43 A.D. 3d 314, 841 N.Y.S. 2d 41 (1st Dept. 2007), affirmed 10 N.Y. 3d 846, 889 N.E. 2d 474, 859 N.Y.S. 2d 597 (2008), and City of Buffalo v. Chadeayne, 134 N.Y. 163, 31 N.E. 443 (1892), as well as a myriad of decisional law in between. The entire focus of Appellant’s appeal is the abject unfairness of the very administrative system, to which it is again being relegated by the Appellate Division’s Order, that allowed Appellant to spend substantial funds to erect the Replacement Sign in good faith reliance upon (i) approval of its plans by DOB’s Borough Commissioner, it highest ranking officer, and (ii) the subsequent issuance of DOB permits after all objections noted by DOB were addressed by Appellant, only to have the permits revoked just after Appellant’s grand fathered non- conforming rights lapsed. Such an anomaly cannot be sanctioned, and if Pantelidis stands for anything, it stands for the latest affirmation and application by this Court of the “detrimental good faith reliance” doctrine to prevent a miscarriage of justice against property owners who find themselves in the same situation as does Appellant. 23 Indeed, Pantelidis makes no distinction between variance cases and revocation of permit cases in applying the doctrine of good faith detrimental reliance. In Pantelidis, this Court affirmed the lower court’s decision compelling BSA to issue a variance to the petitioner based on the petitioner’s good faith reliance on a permit issued by the Manhattan Borough Commissioner. There, like here, BSA attempted to apply what it construed to be the letter of the law by ignoring the fact that the petitioner had relied in good faith on a DOB permit. In language that could just as easily have been written for this case, Justice Schlesinger’s lower court decision in Pantelidis rejected the BSA/DOB position, and held that in light of the petitioner’s “good faith reliance on a permit, the BSA’s findings are arbitrary and capricious.” Moreover, it is clear that the determination upon which Appellant in this case relied was made by then Borough Commissioner Santulli, the highest Department of Building’s official in Manhattan. The Courts have made it clear that the ruling of such a high ranking DOB official provides a permit applicant with an absolute right to rely on such a ruling, regardless of whether the ruling comes under criticism later by that official’s successor. This principle was reiterated in Woods v. Srinivasan, 34 Misc. 3d 632, 932 N.Y.S.2d 821 (Sup. Ct., Bx. Co. 2011), rev’d,108 A.D. 3d 412, 986 N.Y.S. 2d 80 (1st Dept. 2013), lv. den., 22 N.Y. 3d 24 859, 4 N.E. 3d 382, 981 N.Y.S. 2d 370 (2014) where the lower court recognized this Court’s ruling in Pantelidis, but held that a high level official was not involved in the grant of the permit (which was later revoked) so as to bring the case within the Pantelidis holding. In reversing, the First Department also recognized the “high level official” standard of Pantelidis, but held that the DOB plan examiner was in the best position to assess the propriety of the permit application so as to justify good faith reliance by the petitioner. Pantelidis simply continued applying over a century of decisional law which recognizes that where a property owner changes his or her position by actual construction and/or the expenditure of sums of money in good faith reliance upon the municipality’s action, the “simplistic and obsolescent doctrine” that estoppel may not be invoked against a municipality must be ignored. Faymor Development Co., Inc. v. Board of Standards and Appeals of the City of New York, 45 N.Y. 2d 560, 383 N.E. 2d 100, 410 N.Y.S. 2d 798 (1978); Bender v. New York City Health & Hosps. Corp., 38 N.Y. 2d 662, 345 N.E. 2d 561, 382 N.Y.S. 2d 18 (1976); Allen v. Board of Education of the Union Free School District, 168 A.D. 2d 403, 563 N.Y.S. 2d 422 (2nd Dept. 1990); Cymbidium Development Corp. v. Smith, 133 A.D. 2d 605, 519 N.Y.S. 2d 711 (2nd Dept. 1987), leave denied, 70 N.Y. 2d 615, 519 N.E. 2d 622, 524 N.Y.S. 2d 676 (1988); Landmark Colony at Oyster Bay v. 25 Board of Supervisors, 113 A.D. 2d 741, 493 N.Y.S. 2d 340 (2nd Dept. 1985); Brennan v. New York City Housing Authority, 72 A.D. 2d 410, 424 N.Y.S. 2d 687 (1st Dept. 1980); Waldman v. New York City Department of Housing Preservation and Development, 10 Misc. 3d 1075(A), 814 N.Y.S. 2d 893 (Sup. Ct. N.Y. Co. 2005), aff’d, 36 A.D. 3d 501, 830 N.Y.S. 2d 28 (1st Dept. 2007). As held by the Appellate Division in Brennan v. New York City Housing Authority, supra: “Equitable estoppel is a vital doctrine now more actively invoked than in years past. Courts throughout this State have applied this doctrine under any number of circumstances. (See for example Bender v New York City Health & Hosps. Corp., supra; the doctrine applies to notice of claim; Eden v Board of Trustees of State Univ. of N. Y., 49 AD2d 277, supra; the State has been estopped from asserting claimed lack of capacity to contract with petitioners; Matter of Moritz v Board of Educ., 60 AD2d 161; the board of education has been estopped from denying that teacher is tenured; Matter of 1555 Boston Rd. Corp. v Finance Administrator of City of N. Y., 61 AD2d 187; the City was estopped in area of taxation where manifest injustice is present; also, see, 21 NY Jur, Estoppel § 76.). ‘It is the principle of estoppel that brings flexibility and justice to the law of municipal corporations’ (2 Antieau, Municipal Corporation Law, § 16A.00). Presently the imposition of equitable estoppel will not work a serious injustice nor unduly damage public policy. Its application to these 36 plaintiffs is limited and will prevent a ‘manifest injustice’”. 26 The Lower Court’s reliance on Parkview Associates v. New York, supra, to support its holding was, therefore, misplaced. In Parkview, the DOB revoked a permit issued in error even though the petitioner therein relied on it to its detriment. In upholding DOB’s decision in that case, this Court stated that there was no discretion to issue a building permit that failed to conform with applicable provisions of the law, that it was permissible to revoke a permit that had been issued in error when the conditions were such that the permit should not have been issued, and that estoppel could not be invoked against a municipal agency to prevent it from discharging its statutory duties, including the enforcement of zoning laws. However, of significant import was this Court’s finding that, based on the facts therein, reasonable diligence by the petitioner “[w]ould have readily uncovered for a good-faith inquirer” the DOB’s mistake. In the case at bar, Appellant exercised more than reasonable diligence in laying bare all of the details of its application before DOB and its highest officer in Manhattan. It received and responded to DOB’s objections and inquiries regarding its application, and it obtained the blessing of a sign off from Borough Commissioner Santulli after responding to each DOB objection. It could have done nothing more to verify the legitimacy of the permits issued or to uncover any “error.” As the so-called “error” was not that of a low level DOB employee or 27 clerk which might have triggered a “due diligence” inquiry by Appellant, as in Parkview, but by DOB’s Commissioner, who is its highest authority, the Parkview limitation concerning “obvious” errors has no application to the facts of this case. Under such circumstances. A property owner acquires vested rights which simply cannot be abrogated by the municipality through either a change in zoning laws or a change in mind with respect to the permit previously issued. Temkin v. Karagheuzoff, 34 N.Y. 2d 324, 313 N.E. 2d 770, 357 N.Y.S. 2d 470 (1974); People v. Miller, 304 N.Y. 105, 106 N.E. 2d 34 (1952); City of Buffalo v. Chadeayne, 134 N.Y. 163, 31 N.E. 443 (1892); Kadin v. Bennett, 163 A.D. 2d 308, 557 N.Y.S. 2d 441 (2nd Dept. 1990); Jaffee v. RCI Corporation, 119 A.D. 2d 8543, 500 N.Y.S. 2d 427 (3rd Dept. 1986); Lefrak Forest Hills Corp. v. Galvin, 40 A.D. 2d 211, 338 N.Y.S. 2d 932 (2nd Dept. 1972), aff’d, 32 N.Y. 2d 796, 298 N.E. 2d 685, 345 N.Y.S. 2d 547 (1973), cert den sub nom, Baum v. Lefrak Forest Hills Corp., 414 U.S. 1004, 94 S. Ct. 360, 38 L. Ed. 2d 240 (1973); Robitzek Investing Co., Inc. v. Colonial Beacon Oil Co., 265 A.D. 749, 40 N.Y.S. 2d 819 (1st Dept. 1943); Fairchild Sons, Inc. v. Rogers, 246 A.D. 555, 282 N.Y.S. 916 (2nd Dept. 1935); People ex rel. Ortenberg v. Bales, 224 A.D. 87, 29 N.Y.S. 2d 550 (2nd Dept. 1928), aff’d, 250 N.Y. 598, 166 N.E. 339 (1929); Zara Realty Holding Corp. v. Srinivasan, 15 Misc. 3d 1133(A), 841 N.Y.S. 2d 824 (Sup. Ct., Qns. Co. 2007); 28 Roto Realty, Inc. v. Volkman, 49 Misc. 2d 506, 267 N.Y.S. 2d 683 (Sup. Ct. West. Co. 1966); G.M.L. Land Corp. v. Foley, 39 Misc. 2d 770, 241 N.Y.S. 2d 510 (Sup. Ct., Kings Co. 1963); Downey v. Incorporated Village of Ardsley, 152 N.Y.S. 2d 195 (Sup. Ct. West. Co. 1956), aff’d, 3 A.D. 2d 663, 158 N.Y.S. 2d 306 (2nd Dept. 1957); City of Little Falls v. Fisk, 24 N.Y.S. 2d 460 (Sup. Ct., Herkimer Co. 1941). The Court’s Decision in Lefrak Forest Hills Corp. v. Galvin, supra, is significant. There, the plaintiff had obtained a building permit in 1963 for an apartment complex which, although violative of the Zoning Resolution as it then existed, comported with the prior version of the Zoning Resolution. The permit, however, was authorized under the new version of the Zoning Resolution in cases of major developments which met the standards of the prior Zoning Resolution. Several extensions of the permit were thereafter obtained through 1970 by the plaintiff, which had by then commenced the project and embarked upon substantial construction of the foundation and at least one of the buildings at significant expense. In 1971, however, BSA denied a further extension application by the plaintiff, finding that the plaintiff did not meet the criteria under the Zoning Resolution for further extensions. In reversing BSA’s determination and compelling BSA to issue a permit extension, the Court held as follows: “A vested right to finish a nonconforming building matures when substantial work is performed and obligations are assumed in reliance on a permit legally 29 issued (People ex rel. Ortenberg v. Bales, 224 App. Div. 87, affd. 250 N. Y. 598; Matter of Jayne Estates v. Raynor, 22 N.Y. 2d 417, 422-423; Matter of Glenel Realty Corp. v. Worthington, 4 A.D. 2d 702; Collins v. Magony, 31 A.D. 2d 597). We see nothing in the record that indicates that Lefrak was not behaving in good faith in proceeding as it did under the permits. Indeed, the city authorities gave tacit approval to Lefrak's performance by issuing in August, 1971 amended permits authorizing construction under the plans submitted by Lefrak. It could hardly be expected either by the board or Lefrak that construction of the project of the size contemplated could be accomplished within the year of the last extension. Once the board had embarked on its decision to approve extensions of the right to continue the project, implicitly it accepted the high probability that the project would require further time for final completion. There is no fixed formula which measures the content of all the circumstances whereby a party is said to possess ‘a vested right’; it is a term, rather, which sums up a judicial determination that the facts of the case render it inequitable that the State impede the individual from taking certain action (cf. Matter of Humble Oil & Refining Co. v. Worthington, 49 Misc. 2d 432, 267 N.Y.S. 2d 794). In our view, Lefrak acquired a vested right to proceed under its permits in the light of the combined force of the prior determinations of the board, upheld by the courts, the expenditures made in reliance on the permits prior to the time Lefrak purchased the property, and the expenditures and the assumption of contractual liabilities made by Lefrak in reliance on the permits subsequent to its purchase of the property.” So too, in People ex rel. Ortenberg v. Bales, supra, the Court held as follows: “When a builder has gone so far under a lawful permit as not alone to enter upon various contracts but actually to make a substantial excavation on the land in reliance 30 upon the permit when there is and can be no dispute about his intention, it would be a harsh rule not only to abrogate his contracts but also to say that he had not gone far enough in the work of construction to constitute a commencement of his work and so deprive him of the right to utilize his land in the lawful manner intended because some change of use had been thereafter promulgated.” The Court in City of Little Falls v. Fisk, supra, which was relied upon by the Court in Downey v. Incorporated Village of Ardsley, supra, which itself was affirmed by the Second Department, made it clear that the revocation of a building permit will not be permitted once a property owner’s rights have vested: “If the owner of real property, having obtained a permit to construct a certain building, has entered upon the actual construction of the building and incurred liabilities for work and material prior to the adoption of a zoning ordinance, he cannot be restrained from continuing and completing the work. The adoption of the ordinance does not ipso facto revoke his permit. Furthermore, if he has received such a permit and has actually begun building operations, the revocation of his permit because of some amendment to the zoning ordinance or a change of mind of the official who issued it will not prevent the completion of the work. The courts readily grant such a person a peremptory mandamus order commanding the official to cancel his revocation of the permit and directing the reissuance thereof. In either case such a person, after entering in good faith upon the construction of a building, acquires a vested right of which he cannot be deprived.” 31 That the inequities of depriving a property owner of his vested rights obtained through detrimental reliance on a municipality’s issuance of a permit is well rooted in New York law is exemplified by this Court’s 120-year old Decision in City of Buffalo v. Chadeayne, supra: “The defendant's buildings are within the fire limits, as prescribed by the ordinance. He therefore had no right to construct them without the permission of the common council. Such permission, as we have seen, was granted on the 11th day of July, 1887, and thereby he acquired the right to proceed with the construction of his buildings, and to possess and enjoy the comforts they might afford. As soon as he had entered upon the construction of the buildings, and incurred liabilities for the work and material, he had a property interest in them. In this right he was entitled to protection. People v. O'Brien, 111 N. Y. 1–62, 18 N. E. Rep. 692; In re Union El. R. of Brooklyn, 112 N. Y. 61–75, 19 N. E. Rep. 664; People v. Otis, 90 N. Y. 48–52; Stuart v. Palmer, 74 N. Y. 183; Detroit v. PlankRoad Co., 43 Mich. 140, 5 N. W. Rep. 275. It is claimed by the appellant that a municipal board may reconsider its action at any time before private vested rights have resulted from such action, and that the defendant could not acquire vested rights as against the police power of the state or municipality. For the purposes of this case we may concede these propositions. As to the first, it appears, as we have seen, that the defendant had entered upon the construction of his buildings, had made contracts, and incurred liabilities thereon, before the common council attempted to reconsider its action giving him a permit to construct of wood. A private property right had, therefore, vested in him prior to the rescission of the resolution. As to the second, his right may be subject to the police power of 32 the state, but the difficulty is that the state has not seen fit to deprive him of such right by the exercise of such power, nor has it delegated the same to the municipality. The state has given to the municipality power to prescribe the limits in which wooden buildings shall not be erected. This pertains to the future, and not to existing wooden buildings. The ordinance to which we have referred provides that no person shall, without permission of the common council, erect any building in whole or in part of wood, within certain limits. This has reference to buildings that shall be erected in the future, and not to existing buildings, or to those erected with the permission of the common council. So that neither the charter nor the ordinance authorizes it to interfere with existing buildings, or those constructed with its permission. There is consequently no power given to the common council to deprive the defendant of any vested property rights in the buildings. If the common council could interfere and rescind its permit after a building is partially constructed, it could also rescind after it was fully completed. It would consequently follow that every person who in the past has constructed wooden buildings with the permission of the common council is now liable to have his permit revoked, and his buildings declared a nuisance, and abated as such. The restrictions authorized by the provisions of the charter under consideration are for the purpose of the prevention and extinguishment of fires. They have no reference to buildings that may become a nuisance by reason of their becoming dangerous to the public. Having in view the purpose for which the provision was enacted, it seems to us clear that it was not intended to give to the common council the power to deprive persons of their buildings which had previously been erected, or of those which should be thereafter erected, in whole or in part, with the permission of the common council . . .” 33 Thus, while the Appellate Division’s Order recognized Appellant’s good faith reliance as a matter of law, it failed to properly recognize the legitimate rights which flowed from such reliance as enunciated by the wealth of decisional law cited above. Appellant should not be required to further submit to the BSA’s jurisdiction and subject itself to the BSA’s discretion as to whether a variance should issue with respect to the nonconforming use of the Replacement Sign. Instead, the Appellate Division should have recognized Appellant’s vested rights which arose from its legitimate and detrimental good faith reliance on the DOB’s permit and the Commissioner’s approval, and it should have applied the well hewn equitable principles outlined above so as to prevent what would be, in essence, a deprivation of Appellant’s fundamental constitutional rights. Town of Somers v. Camarco, 308 N.Y. 537, 127 N.E. 2d 327 (1955); People v. Miller, supra; Saltser & Weinsier v. McGoldrick, 295 N.Y. 499, 68 N.E. 2d 508 (1946); People ex rel. Manhattan Sav. Inst. v. Otis, 90 N. Y. 48 (1882); Merz v. Seaman, 265 A.D. 2d 385, 697 N.Y.S. 2d 290 (2nd Dept. 1999); Keller v. Haller, 226 A.D. 2d 639, 641 N.Y.S. 2d 380 (2nd Dept. 1996); Christian v. County of Ontario, 92 Misc. 2d 51, 399 N.Y.S. 2d 379 (Sup. Ct. Ontario Co. 1977); Church v. Church, 58 Misc. 2d 753, 296 N.Y.S. 2d 716 (Sup. Ct., West. Co. 1968); ABM Builders, Inc. v. Gribetz, 49 Misc. 2d 1053, 269 N.Y. S. 2d 271 (Sup. Ct., Rich. Co. 1966). 34 As stated by the Court in Niagra Recycling, Inc. v. Town of Niagra, 83 A.D. 2d 316, 443 N.Y.S. 2d 939 (2nd Dept. 1981): “While the nonconforming use cases cited by plaintiffs are not precisely in point, the principle underlying such cases applies here: once a holder of a building permit for a nonconforming use enters into construction and incurs substantial liabilities in reliance thereon, he has a vested right in the permit which may not be destroyed by revocation thereof (see City of Buffalo v. Chadeayne, 134 N.Y. 163, 31 N.E. 443, Matter of Clearview Gardens Pool Club v. Foley, 19 A.D.2d 905, affd. 14 N.Y.2d 809, 251 N.Y.S.2D 38, 100 N.E.2d 217). Thus, because the local law if applied to plaintiffs' existing systems could result in a retroactive invalidation of operations theretofore lawfully permitted, it would be confiscatory and, in our opinion, invalid.” Such rulings are consistent with New York State’s public policy concerning the continuation of nonconforming uses. In Toys “R” Us v. Silva, 89 N.Y. 2d 411, 676 N.E. 2d 862, 654 N.Y.S. 2d 100 (1997) this Court pronounced that constitutional concerns and fairness considerations are the foundation for allowing non-conforming uses in every New York jurisdiction to continue. The Appellate Divisions in 149 Fifth Ave. Corp. v. Chin, 305 A.D. 2d 194, 759 N.Y.S. 2d 455 (1st Dept. 2003) and Matter of Hoffman v. Bd. of Zoning & Appeals of the Incorporated Village of Russell Gardens, 155 A.D. 2d 600, 547 N.Y.S. 2d 657 (2nd Dept. 1989), lv. den., 75 N.Y. 2d 708, 554 N.E. 2d 1279, 555 N.Y.S. 2d 691 (1990) likewise elaborated on such public policy considerations, making it clear that the 35 cessation of a non-conforming use in reliance on a validly issued building permit will not serve to eviscerate a property owner’s rights. Specifically, in Matter of Hoffman v. Bd. of Zoning & Appeals of the Incorporated Village of Russell Gardens, supra, a fire destroyed portions of a non- conforming restaurant. As part of their rebuilding efforts, the entire restaurant was shut for over a year, the relevant period for discontinuance in the municipality. While under other circumstances the closure of an entire business would appear to constitute a discontinuance, the Second Department refused to deem that the discontinuance of the restaurant use for more than a year resulted in the cessation of a non-conforming use since the discontinuance was rooted in reliance on a validly issued building permit. While DOB and BSA attempted below to distinguish this case from Hoffman on the basis that the Hoffman premises were located outside of New York City, that the statutory period therein was one year as opposed to two, and that the reason the discontinuance in Hoffman occurred was because of a fire, these distinctions are without substantive meaning or import. If anything, Hoffman stands for the proposition that strongly resonates in this action, to wit, that there can be no discontinuance of a legal non-conforming use where the displacement occurs by reliance on a permit issued by DOB. 36 Similarly, in 149 Fifth Ave. Corp. v. Chin, supra, a non- nonconforming wall sign was removed from a building for twenty seven months, during which time legally required façade work was performed. At the completion of the façade work, the property owner was eventually prohibited from replacing the original sign by DOB and later by BSA. In reversing the administrative determinations, the Court found that under the circumstances, a finding that the Zoning Resolution required or even authorized termination of the sign rights would raise a possible issue of an unconstitutional taking. In so doing, the Court stated as follows: “[a] contrary reading of the subject Zoning Resolution, to permit or, indeed, require the termination of a valuable property interest, even where such termination is triggered solely by the owner’s need temporarily to cease the nonconforming use in order to satisfy a legal mandate, would raise a most serious question as to whether the Zoning Resolution purports to authorize an unconstitutional taking.” At bar, such public policy and factual considerations mandate that Appellant’s property rights with respect to the Original Sign were wrongly eliminated by the rulings in this case. Zoning Resolution §52-61 expressly provides that so long as a legal nonconforming use is resumed within two years of its substantial discontinuance, the right to maintain a nonconforming use is effectively grandfathered and allowed to continue. The Record before this Court 37 firmly establishes that Appellant justifiably relied on DOB’s permit for some sixteen to seventeen months after its installation. After all, Appellant at all times acted after direct and extensive consultation with DOB, in reliance on Commissioner Santulli’s ruling allowing the Replacement Sign to be located in a location other than the precise location of the Original Sign, and after DOB’s specific objections to the Replacement Sign’s location and size, among other things, were resolved. Under the circumstances, and as stated by the Chin Court, depriving Appellant of its vested rights effectively transforms the Zoning Resolution into a confiscatory ordinance. Frishman v. Schmidt, 61 N.Y. 2d 823, 462 N.E. 2d 134, 473 N.Y.S. 2d 957 (1984); Arceri v. Town of Islip Zoning Bd. of Appeals, 16 A.D. 3d 411, 791 N.Y.S. 2d 149 (2nd Dept. 2005). It, therefore, raises the issue of whether an unconstitutional taking has taken place.4 It also effectively divested the DOB Commissioner of power since, by extension of the Appellate Division’s 4 The “Takings Clause” of the Fifth Amendment to the United States Constitution provides that private property shall not “be taken for public use without just compensation.” Made applicable to the states by the Fourteenth Amendment, “the Clause guards against the state’s imposing society’s costs on its citizens when their property is taken and put to public use by the government.” Penn Central Transportation Company v. City of New York, 438 U.S. 104, 98 S. Ct. 2626, 57 L. Ed. 2d 631 (1978); Armstrong v. United States, 364 U.S. 40, 80 S. Ct. 1563, 4 L. Ed. 2d 1554 (1960). As stated by the Court in Penn Central, “a use restriction on real property may constitute a ‘taking’ if not reasonably necessary to the effectuation of a substantial public purpose.” Thus, the Courts look to several factors to determine whether a “taking” has occurred, including “the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations, and the character of the government action.” Palazzolo v. Rhode Island, 533 U.S. 606, 121 S. Ct. 2448, 150 L. Ed. 2d 592 (2001). 38 Order, no property owner can ever rely on any reconsideration or other order issued by the Commissioner, and invest substantial monies in a project, when years later that very permit may be subject to revocation and nullification merely because a new Commissioner finds fault with it. Given the deprivation of Appellant’s property rights and the sweeping negative effect of the Appellate Division’s Order on the Commissioner’s role in New York City property matters, a ruling by this Court as to the applicability of the “vested rights” and “good faith reliance” doctrines in this case so as to affirm Appellant’s as of right entitlement to maintain the Replacement Sign in its current location is desperately needed. CONCLUSION Based upon the foregoing, it is respectfully requested that this Court enter an order (i) granting Appellant's appeal in all respects, (ii) ordering DOB to rescind the Intent to Revoke, (iii) ordering DOB to reinstate the permits for the erection and installation of the Replacement Sign, (iv) declaring the ECB Violations to be null and void and dismissed, (v) awarding Appellant the costs and disbursements of this appeal, and (vi) awarding Appellant such other and further relief as is deemed just and proper. Dated: New York, New York December 18, 2014 By: Respectfully Submitted, Kaufman Friedman Plotnicki & Grun, LLP Attorneys for Appellant-Respondent 300 East 42nd Street- gth Floor New York New York 10017 (2 8 170 Howard Grun, Esq. hgrun@kfpgllp.com 39