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Bloomfield 206 Corp. v. City of Hoboken

August 24, 2010


On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3112-07.

Per curiam.


Submitted February 11, 2010

Before Judges Cuff, Payne and Miniman.

Citizens for Retention of Affordable Housing in Hoboken (CRAHH) describes itself as "an unincorporated association of well more than seven persons,*fn1 who have a common personal interest in the retention of affordable housing in Hoboken, and the continued protection of existing Hoboken tenants from hardship and displacement from the City, as currently provided by the Hoboken Rent Control Ordinance." It appeals from orders denying its motion for intervention pursuant to Rules 4:33-1 and -2 in a prerogative writ action instituted on July 15, 2007 by plaintiff, Bloomfield 206 Corporation, against the City of Hoboken, its Mayor, Council, Department of Human Services, and Rent Leveling Board (collectively, the Hoboken defendants), and against tenants, Jay and Gary Rubinstein. It appeals as well from the denial of its motion for reconsideration.


Bloomfield 206 Corporation is a property management company that owns a multi-family property in Hoboken located at 206 Bloomfield Avenue, having acquired title to that property on October 11, 1990. The property is subject to Hoboken's Municipal Rent Control Ordinance. Hoboken Mun. Code §§ 155-1 to -34. The Rubinsteins have been tenants at that location since July 28, 1992, paying an initial monthly rent of $975. In 1993, the Rubinsteins filed a request for a letter of legal rent calculation with respect to their apartment. The Board requested additional information, and it was then disclosed that in 1991, ten years after Hoboken's 1981 Rent Control Ordinance had been enacted, the apartment had been substantially enlarged. Eventually, the Rubinsteins withdrew their request for a legal rent calculation and entered into a settlement with Bloomfield 206 Corp. (Bloomfield 206) that resulted in a reduction of rental payments.

On August 31, 2006, the Rubinsteins again requested a legal rent calculation, and on October 23, 2006, the Board's Division Manager issued a determination fixing the legal rent at $286 per month, not the $648 that the tenants were presently paying. In making this calculation the Division Manager disallowed vacancy decontrol forms filed by Bloomfield 206's predecessor in 1983 and 1984 because the predecessor had not filed an annual registration form in those years. Additionally, the Division Manager did not consider the increased size of the apartment.

Bloomfield 206 appealed the rent determination to the Rent Leveling Board arguing: (1) the unit available in 1992 was substantially different from the unit available in 1981, the base year adopted by the Division Manager, and was not subject to the Rent Control Ordinance's registration requirements; (2) the unit was properly decontrolled and registered by both Bloomfield 206 and its predecessor; (3) Hoboken had failed to properly maintain the rental registration and property files for the unit; (4) the roll-back of rent, premised on a 1981 base rent, was arbitrary, capricious, and unreasonable; (5) the Rubinsteins were equitably estopped from bringing their claims as the result of their prior settlement with Bloomfield 206; (6) N.J.S.A. 2A:14-10 barred refunds or rental credits of more than two years; (7) the six-year statute of limitations set forth in N.J.S.A. 2A:14-1 barred recalculation of rent for more than six years; and (8) the Division Manager violated the Rent Control Ordinance and due process by failing to advise Bloomfield 206 of its right to request a hearing following the Manager's decision. On March 28, 2007, the Board conducted a hearing in the matter, and on May 4, 2007, the Board issued a resolution affirming the Manager's October 23, 2006 determination. Cathy Cardillo, now counsel to CRAHH, represented the Rubinsteins in the administrative proceedings.

Thereafter, on June 15, 2007, Bloomfield 206 filed the present prerogative writ action contesting the Board's authority to issue rent recalculations; challenging Hoboken's enactment and enforcement of its Rent Control Ordinance as an arbitrary and capricious exercise of its police power in violation of 28 U.S.C.A. § 1984; and contending that the unit at issue was essentially newly constructed in 1991 and thus was exempt from the city's rent control regulations. Additionally, Bloomfield 206 sought to void the Board's May 4, 2007 resolution on the ground that vacancy decontrol certifications were properly filed in 1991 and 1992 and that the unit was properly decontrolled in 1983 and 1984 by its predecessor in title; that the Board's enforcement of the Rent Control Ordinance was administratively inconsistent, thereby depriving Bloomfield 206 of fundamental due process; that the Board's action in refusing to consider various registration statements filed for the property was arbitrary, capricious and unreasonable; and that the use of regulatory irregularities occurring prior to Bloomfield 206's ownership constituted an arbitrary and capricious exercise of the Board's police power. Claims based upon equitable estoppel and the bar of the applicable statute of limitations were asserted against the Rubinsteins. Cardillo represented the Rubinsteins in the prerogative writ action until a settlement was reached in late August 2007.

On January 2, 2008, Hoboken moved for summary judgment, arguing in part that a regulation authorizing the Board to calculate legal rents was properly enacted, that the Board acted properly in denying vacancy decontrols to Bloomfield 206, and that Hoboken's Rent Control Ordinance and the actions of the Board were not in violation of Bloomfield 206's constitutional rights or otherwise unlawful. On February 19, 2008, the motion was denied by the motion judge, who found a genuine issue of material fact with regard to Bloomfield 206's argument that the Ordinance was unconstitutional as applied. Bloomfield 206 was permitted to conduct discovery of Hoboken's property files to attempt to establish its claim of unconstitutionality.

On April 10, 2009, after two years of discovery, and on the eve of a trial, which the judge scheduled for June 11, 2009, CRAHH, represented by Cardillo, moved to intervene pursuant to Rules 4:33-1 and -2. As support for its motion, CRAHH offered the certification of Martha Crespo, who stated that she was a tenant along with her daughter at 332 Jackson Street, paying rent of $495 per month. Crespo worked four days per week as a medical assistant for a local doctor and provided the sole support for her daughter. Crespo stated additionally:

3. If the Hoboken Rent Control Ordinance was nullified, I would not be able to afford the "market rents," some other landlords already improperly charge, and would be forced to relocate to another less costly area, wherever that may be - which would also mean removing my daughter from school in Hoboken, which she has attended most of her life, and where most of her friends are. This move would be an extreme hardship on both of us.

4. This is why I joined CRAHH - to assist in maintaining affordable housing for persons with families, like myself, in Hoboken. This is also why the Ordinance was enacted by the City Council - and I suggest that it still remains a good public interest purpose, if I am any example.

5. My landlord, and I assume others, are still making a profit with the lower rent control rents, as he has never requested a "hardship increase[]" from the Hoboken Rent Leveling & Stabilization Board. And I understand from counsel for CRAHH, that this landlord has, clearly, never filed for such an increase; yet, he feels that it is "fair" that he should make a greater profit, at my expense and displacement from the City.*fn2

Prior to a hearing on the intervention motion, on April 20, 2009, Bloomfield 206 filed an order to show cause why an injunction should not be entered staying rent calculations by the Rent Leveling Board until such time as Bloomfield 206's constitutional challenge was decided. Interim restraints were denied, and a hearing on the order to show cause was scheduled for May 4, 2009, but in fact was commenced on June 4, 2009.

On May 4, 2009, oral argument was held on the intervention motion. During that argument, Cardillo expressed the need to intervene in the hearing on the order to show cause, asserting that Bloomfield 206 had raised issues of public interest and that she was a zealous tenant advocate, better able to defend against Bloomfield 206's allegations than was the attorney for the Hoboken defendants - a person whom Cardillo characterized as inexperienced in rent control matters. As an example of his lack of preparation and experience, Cardillo noted that the Hoboken defendants' defenses had been stricken for a period of time as the result of their failure to produce discovery, and she stated that she was "concerned now that the City is not even going to get an expert to respond to [counsel for Bloomfield 206's] expert." Nonetheless, Cardillo stated that CRAHH was not seeking to delay the proceedings or to obtain additional discovery. When asked by the judge to tell her "specifically the reasons that you consider you should be allowed to intervene and that I should grant the motion," Cardillo responded:

I believe I've done that, your Honor. This is a public interest group. I've given you citations to several cases, one of which is ACLU of New Jersey v. County of Hudson,*fn3 and particularly City of Newark*fn4 where finding, Citizens affected by a declaration that a law... is unconstitutional have the right to intervene.*fn5

Additionally, Cardillo requested an order quashing a subpoena served by Bloomfield 206 on Crespo, and especially its ...

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