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Bloomfield 206 Corp. v. City of Hoboken

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 24, 2010

BLOOMFIELD 206 CORPORATION, PLAINTIFF-RESPONDENT,
v.
CITY OF HOBOKEN, CITY OF HOBOKEN MUNICIPAL COUNCIL, MAYOR OF THE CITY OF HOBOKEN, CITY OF HOBOKEN, DEPARTMENT OF HUMAN SERVICES, RENT LEVELING BOARD, JAY RUBINSTEIN, GARY RUBINSTEIN, DEFENDANTS. CITIZENS FOR THE RETENTION OF AFFORDABLE HOUSING IN HOBOKEN, APPELLANT.

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

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

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.

I.

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 request for Crespo's tax records.

In response to Cardillo's arguments, counsel for Bloomfield 206 noted the untimely nature of Cardillo's application, particularly in light of the fact that she was aware of the litigation from the outset as the result of her representation of the Rubinsteins in it. Counsel argued further that to permit intervention at this point would likely delay the proceedings, noting that a subpoena had already been served on Crespo to determine what CRAHH was. In this regard, he stated:

First, Ms. Crespo's certification is the only certification [be]for[e] the Court. This doesn't give you any information about CRAHH. All it says is, I'm a sole support of my family, I like my apartment, and I joined CRAHH to preserve affordable housing.

Counsel then argued that rent control in Hoboken was not necessarily about affordable housing, because its applicability had no income limitations. As counsel characterized the matter: "we're really left with a threadbare application made on the eve of trial to come in, into the case." In conclusion, counsel stated:

This is clearly with[in] the sound discretion of your Honor and the reality is counsel on behalf of the City is fully able and has been fully able and advocated on behalf of the City's position in defending this ordinance. And the tenants, while they might be indirect beneficiaries of a rent control ordinance, they can't be indirect beneficiaries of an ordinance that's arbitrary and capricious and unreasonable. And that's what a trial is going to be about, Judge.

It's not about interfering or evicting people from their affordable housing. It's about whether or not the City is properly administering the rent control ordinance.

That's all.

Counsel for Hoboken defended the adequacy of his representation, but otherwise stated he was "abstaining from all the other issues on the matter."

At the conclusion of the argument, the motion judge denied CRAHH's motion for intervention as of right or permissive intervention, finding the motion to have been untimely and, insofar as permissive intervention was concerned, she was "not certain that allowing the intervention would not cause a delay or would not prejudice the adjudication of the rights of the original parties." An order memorializing the judge's decision was signed on May 8, 2009. Thereafter, CRAHH requested a stay of the hearing on the order to show cause to permit CRAHH to file an emergent appeal. On May 11, 2009, the stay was denied, and on the same day emergent relief was also denied.

On June 1, 2009, CRAHH moved for reconsideration of the judge's ruling denying its motion to intervene. On June 4 and 11, prior to a hearing on CRAHH's motion, hearings were held on Bloomfield 206's order to show cause.*fn6 Following the conclusion of those hearings, on June 26, 2009 the motion judge heard and denied CRAHH's reconsideration motion, determining that it did not meet the legal standards for reconsideration set forth in D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990).

On August 13, 2009, CRAHH filed a motion for leave to appeal from the denial of permissive intervention and a notice of appeal from the denial of intervention as of right. Its motion for leave to appeal was granted on September 11, 2009.

Despite her lack of jurisdiction in the matter, see Rule 2:9-1(a), on September 23, 2009 the motion judge issued a written decision denying Bloomfield 206's order to show cause. Bloomfield 206 Corp. v. City of Hoboken, No. HUD-L-3112-07 (Law Div. September 23, 2009) (slip op. at 4-7).

Additionally, as the result of a stipulation by the parties that the hearing record on the motion could serve as the trial record, the judge simultaneously determined the issues raised by Bloomfield 206 in that latter prerogative writ context. In doing so, the judge noted the Board's reliance, among other decisions, on our unpublished decision in Rosen v. Hoboken Rent Leveling and Stabilization Board, Nos. A-3188-06 and A-3764-06 (App. Div. September 12, 2008). In that case, we affirmed the Board's construction of its Rent Control Ordinance to require that the filing of a rent decontrol certificate and a current registration statement are prerequisites to the grant of a rent decontrol increase. (Id. at 2). However, the judge found the Board's reliance to have been misplaced, noting that the Board in the present matter found that Bloomfield 206's property file did not contain registration statements for the years 1983 and 1984, and as a result, vacancy decontrol certificates for those years could not be considered. Bloomfield 206, supra, (slip op. at 10-11).

In Rosen, we affirmed a similar decision. However, the motion judge noted that Rosen addressed missing statements and/or certificates beginning in 1996 when a different ordinance was in effect. The judge observed:

Plaintiff has argued and provided evidence that the rent control ordinance, as enacted in 1973, did not require landlords to register rent amounts charged, but that in 1981 the ordinance was amended to require a one-time registration and that in 1985, the 1981 ordinance was repealed and rescinded - resulting in the 1985 ordinance being transferred into Chapter 155 of the Hoboken Municipal Code and requiring the filing of annual registration statements, effective October 1, 1985. [Id. at 11.]

As a consequence, Rosen was inapplicable. Ibid. Moreover, noting that Bloomfield 206 acquired the property in 2001, the judge determined that it was "not reasonable to expect Plaintiff to conduct due diligence as to the law regarding registration statements for the years 1983 and 1984, when Plaintiff did not own the building at the time and when the ordinance in effect at that time did not require the filing of an annual registration." Id. at 12-13. As a consequence the judge found "(1) the Board's May 4, 2007 Resolution with respect to Plaintiff is void and that the Board's actions were arbitrary, capricious, and unreasonable, and (2) that the rent control ordinance is unconstitutional as applied to Plaintiff in that the Board's application and carrying-out of the meaning of the ordinance was arbitrary, capricious, and unreasonable." Id. at 13. She therefore remanded the matter to the Board for a determination consistent with her decision. Id. at 15. The judge did not find any other of Bloomfield 206's arguments to be meritorious.

Following receipt of the judge's decision, Bloomfield 206 moved before us for an order of limited remand for the purpose of entry of an order memorializing the judge's decision. We denied that motion on October 30, 2009.

II.

In its initial brief on appeal CRAHH principally argues the merits of its position in opposition to Bloomfield 206's action in lieu of prerogative writs and order to show cause. It argues:

1. CRAHH'S APPLICATION FOR INTERVENTION SHOULD HAVE BEEN TREATED LIBERALLY BY THE TRIAL COURT.

2. FOR 206 TO HAVE PREVAILED ON THE OSC AND CRITICALLY, THE UNDERLYING PREROGATIVE WRIT, IT WAS REQUIRED TO HAVE DEMONSTRATED HARM.

3. EVEN IF 206 COULD HAVE DEMONSTRATED HARM TO MAINTAIN THE OSC AND THE WRIT, IT COULD NOT HAVE SHOWN A "REASONABLE PROBABILITY OF SUCCESS" ON THE MERITS OF ITS PROSPECTIVE VERSUS RETROSPECTIVE APPLICATION OF BINDING PRECEDENT.

4. AND PLAINLY, 206 WAS NOT ENTITLED TO AN EQUITABLE CLAIM OF RELIANCE, WHEN IT WAS AWARE OF THE ORDINANCE REQUIREMENTS AND STILL CHARGED AN UNSUSTAINABLE AND ILLEGAL RENT.

Rule 4:33-1, governing intervention as of right, provides:

Upon timely application anyone shall be permitted to intervene in an action if the applicant claims an interest relating to the property or transaction which is the subject of the action and is so situated that the disposition of the action may as a practical matter impair or impede the ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

We have held:

To intervene as of right under Rule 4:33-1, a movant must

(1) claim "an interest relating to the property or transaction which is the subject of the transaction," (2) show [that the movant] is "so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest," (3) demonstrate that the "[movant's] interest" is not "adequately represented by existing parties," and (4) make a "timely" application to intervene. [Meehan v. K.D. Partners, L.P., 317 N.J. Super. 563, 568 (App. Div. 1998) (quoting Chesterbrooke Ltd. P'ship v. Planning Bd., 237 N.J. Super. 118, 124 (App. Div.), certif. denied, 118 N.J. 234 (1989)).]

The substance of the rule permitting intervention as of right is also ordinarily construed quite liberally. Ibid. Further,

"[a]s the rule is not discretionary, a court must approve an application for intervention as of right if the four criteria are satisfied." Ibid. [ACLU, supra, 352 N.J. Super. at 67.]

Briefly addressing the issue of intervention, CRAHH argues on appeal that intervention would not have delayed the action because CRAHH did not seek discovery. Its aim was solely "to dismiss the OSC, and thereby, the writ, finally ending the protracted litigation." Additionally, CRAHH claimed that Bloomfield 206 tried to change the scope of its litigation to include all landlords by seeking to stay all legal rent calculations until the conclusion of this litigation, and that CRAHH, acting on behalf of a tenant group, had a right to be heard in opposition to the landlords' position. It stressed the public interest in the litigation, and it argued that the judge should have viewed its application with greater liberality.

In response, Bloomfield 206 stresses the untimely nature of CRAHH's application, despite Cardillo's knowledge of and, at an early stage, participation in the litigation and despite Cardillo's alleged representation of CRAHH since 1995.*fn7 Further, Bloomfield 206 argues that CRAHH's interests were adequately represented by counsel for the Hoboken defendants, noting that each of CRAHH's substantive arguments was asserted by counsel for Hoboken in connection with the post-hearing briefing on the order to show cause and trial of the prerogative writ action.*fn8

Further, it notes that the Hoboken defendants had moved for summary judgment, albeit unsuccessfully, that they consistently maintained the constitutionality of the Rent Control Ordinance on its face and as applied, and that they successfully limited discovery sought by Bloomfield 206.

Following our review of the record in this matter in light of existing precedent, we affirm the judge's determination to deny CRAHH's motion for intervention as of right as untimely. "An essential prerequisite to intervention is timeliness, which should be equated with diligence and promptness." Township of Hanover v. Town of Morristown, 118 N.J. Super. 136, 143 (Ch. Div.), aff'd, 121 N.J. Super. 536 (App. Div. 1972), certif. denied, 62 N.J. 427 (1973). In gauging timeliness, the court must consider the purpose for which intervention is sought, Chesterbrooke, supra, 237 N.J. Super. at 125. In that case, we deemed late intervention to be timely when the intervenors, neighboring property owners, sought only the right to appeal from a judge's grant of site plan approval that the planning board voted not to contest further. In contrast, in the present case, CRAHH sought the right to participate in the evidentiary hearing on Bloomfield 206's order to show cause and, if necessary, the trial of its prerogative writ action. While CRAHH professed to require no discovery, it challenged the failure of Hoboken to retain an expert. Moreover, as the result of CRAHH's motion, Bloomfield 206 sought discovery of the nature of CRAHH through a deposition of its member, Crespo. Thus the application had the potential to delay proceedings that had been ongoing for two years and that CRAHH regarded as being unduly prolonged.

Further, it is unclear to us whether CRAHH validly claimed an interest in the transaction at issue in this case and whether a disposition as to its validity would impair CRAHH's ability to protect that interest. In this regard, we note that although its initial pleadings were broader, by the time that trial approached, Bloomfield 206's action was, in essence, a constitutional challenge to the manner in which the Board calculated legal rent, not a challenge to the Rent Control Ordinance itself. In support of its motion, CRAHH placed its reliance on the certification of Crespo. However, in that certification, Crespo did not address the issue of her interest, or CRAHH's interest, in legal rent calculations, but only her interest in the preservation of affordable housing in Hoboken - a far broader concern of undetermined relevance here. We note as well the absence of any specifics as to what CRAHH is - whether it has a formal structure, governing documents, articulated purpose, regular meetings, or any interest coincident with matters at issue in this particular litigation.

To the extent that CRAHH maintains an interest in this litigation, we are satisfied, as was the motion judge, that it was adequately represented by the Hoboken defendants and their counsel. At no time in this litigation did CRAHH provide support for the proposition that its interests in the underlying litigation were so nuanced or different from those of the Hoboken defendants that separate representation was required. Moreover, although Cardillo claimed that Hoboken's counsel lacked competence in the field of rent control litigation, we find that contention was not adequately supported before the motion judge, nor has it been borne out in subsequent proceedings. See Asbury Park v. Asbury Park Towers, 388 N.J. Super. 1, 8 (App. Div. 2006) (holding that master developer was adequately represented by the condemning authority in valuation proceedings, and therefore did not meet the criteria for intervention as of right pursuant to Rule 4:33-1).

We likewise find no abuse of discretion in the motion judge's determination not to grant permissive intervention pursuant to Rule 4:33-2. See Asbury Park, supra, 388 N.J. Super. at 12 (utilizing abuse of discretion standard). That rule provides:

Upon timely application anyone may be permitted to intervene in an action if the claim or defense and the main action have a question of law or fact in common.... In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

The untimely nature of CRAHH's application and the potential for delay caused by its intervention, discussed previously, are equally relevant to our analysis of the applicability of this rule. We recognize that, in Hoboken, rent control issues are matters of public interest, and that the degree of public interest in an issue is a factor that requires our consideration. See Evesham Twp. Bd. of Adj. v. Evesham Twp., 86 N.J. 295, 299 (1981). Nonetheless, we are satisfied that any interest in this matter was adequately protected by the Hoboken defendants and their counsel, and that intervention would merely have resulted in double-teaming on the defendants' behalf. As we have observed:

There is a significant difference between intervening at an appellate level to advance arguments on behalf of uniquely interested parties, such as occurred in Mt. Laurel Twp. v. Stanley, 185 N.J. 320 (2005) and Casino Reinvestment Dev. Auth. v. Hauck, 162 N.J. 576 (2000) to argue in support of an interpretation of law, and intervening at the trial level as an interested party. [Asbury Park, supra, 388 N.J. Super. at 12 (footnote omitted).]

We thus affirm the motion judge's initial order.

We likewise affirm the judge's denial of reconsideration - a matter that CRAHH does not directly address in its briefs on appeal. As the motion judge recognized, in D'Atria, the court held:

Reconsideration is a matter within the sound discretion of the court, to be exercised in the interest of justice. See Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250 257 (App. Div. 1987); cf. Michel v. Michel, 210 N.J. Super. 218 (Ch[]. Div. 1985). A litigant should not seek reconsideration merely because of dissatisfaction with a decision of the court. Rather, the preferred course to be followed when one is disappointed with a judicial determination is to seek relief by means of either a motion for leave to appeal or, if the order is final, by a notice of appeal. Reconsideration should be utilized only for those cases which fall into that narrow corridor in which either 1) the court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the court either did not consider, or failed to appreciate the significance of probative, competent evidence. [D'Atria, supra, 242 N.J. Super. at 401.]

That standard has not been met here.

We recognize that, by the time that the motion for reconsideration was argued, the hearing on the order to show cause had been completed, and CRAHH sought only leave to file a post-argument brief. However, it has not pointed to any argument that it would have raised that was not addressed by counsel for the Hoboken defendants.

As a final matter, we decline to address CRAHH's additional arguments that do not pertain to the May 8, 2009 and July 21, 2009 orders that are the subjects of this appeal.

Affirmed.


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