Appeals from order, Supreme Court, New York County (Emily Jane Goodman, J.), entered January 18, 2011, which, to the extent appealed from as limited by the briefs, denied petitioners' motion for a preliminary injunction and granted the cross motion of respondent New York State Department of Health to dismiss the petition as against it, and from order and judgment (one paper), same court and Justice, entered August 9, 2011, which to the extent appealed from as limited by the briefs, granted the motion of respondent Dormitory Authority of the State of New York for summary judgment declaring that it had the authority to provide financing for the subject construction project, denied petitioners' motion to renew, granted the cross motion of respondent New York City Department of Buildings for summary judgment dismissing the proceeding as against it, and denied petitioners' motion for summary judgment with respect to the applicability of section 24-111(a) of the Zoning Resolution of the City of New York, dismissed, without costs, as moot.
Matter of Matter of Weeks Woodlands Assn., Inc. v Dormitory Auth. of the State of N.Y.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Saxe, J.P., Friedman, Catterson, Freedman, Manzanet-Daniels, JJ.
Petitioners seek to enjoin a construction project to modernize a hospital for disabled children operated by a not-for-profit corporation, based primarily on alleged noncompliance with zoning requirements. Petitioners concede that they did not seek injunctive relief against the project going forward upon their appeal to this Court from Supreme Court's denial of their motion for a preliminary injunction. It now appears that the excavation, foundation walls, steel superstructure, concrete slabs, metal stud frames and duct work are complete. We see no evidence that the work was performed in bad faith, and the work completed could not be readily undone without undue hardship. While we would adopt the dissent's cogent analysis of the zoning issue if we were to reach the merits, in view of petitioners' failure to seek injunctive relief from this Court and the advanced stage of work on the project, we find that the appeal has become moot and therefore must be dismissed (see Matter of Citineighbors Coalition of Historic Carnegie Hill v New York City Landmarks Preserv. Commn., 2 NY3d 727 ; Matter of Dreikausen v Zoning Bd. of Appeals of City of Long Beach, 98 NY2d 165 ; Sutherland v New York City Hous. Dev. Corp., 61 AD3d 479, 479-480 , lv denied 13 NY3d 703 ; William Israel's Farm Coop. v Board of Stds. & Appeals of City of N.Y., 25 AD3d 517 ).
The dissent is mistaken in asserting that the Court of Appeals' decisions in Citineighbors and Dreikausen support the position that this appeal is not moot. At the same time that it recognized that "a race to completion cannot be determinative [of mootness]" (Dreikausen, 98 NY2d at 172), the Court of Appeals identified as the "[c]hief" factor in the mootness inquiry "a challenger's failure to seek preliminary injunctive relief or otherwise preserve the status quo to prevent construction from commencing or continuing during the pendency of the litigation" (id. at 173). In this case, to reiterate, after Supreme Court denied their motion for a preliminary injunction, petitioners sought no injunctive relief from this Court upon the instant appeal.
Indeed, over a year's time, petitioners repeatedly chose not to apply to this Court for injunctive relief to preserve the status quo pending further proceedings [*fn1]. Hence, by August 2011 (five months before this appeal was argued), bonds in the amount of $102,200,000 had been issued to finance the project, approximately $30 million of the bond proceeds had been drawn down, and, according to the main respondents' initial brief, "excavation and foundations [were] complete, the erection of the steel superstructure [was] 70% complete, the installation of the concrete slabs on the basement floor [was] complete and the concrete slabs on the ground floor [were] 50% complete." In light of this history, the dissent would turn the law on its head by penalizing a not-for-profit institution, and the public agencies cooperating with it, for having gone forward with this project in reliance on (1) the issuance of all necessary governmental permits, (2) Supreme Court's denial of all applications for injunctive relief, and (3) petitioners' failure even to seek injunctive relief from this Court. Stated otherwise, it is the position of the dissent that respondents should have imposed an injunction against proceeding with the project on themselves. We disagree.
Petitioners and the dissent fail to come to grips with the fact that petitioners, by failing to seek injunctive relief from this Court upon any of the occasions when they were denied relief by Supreme Court, are themselves complicit in the project's having reached its present advanced stage. Instead, the dissent makes an emotional appeal, essentially accusing us of coming to the aid of those having "the power and the money to proceed with dispatch" (internal quotation marks omitted), as if this matter concerned a for-profit project aimed at enriching private developers at the expense of local homeowners. Putting aside that the status of the proponents of this project has no particular bearing on petitioners' rights, the dissent seems to have lost sight of the fact that the intended beneficiaries of the project are the sick and disabled children served by respondent hospital, a not-for-profit institution. Although the identity of those to be served by the project is also essentially irrelevant to the issues raised on this appeal, we do not think it accurate to characterize these children as persons well-endowed with "power" and "money."[*fn2] We add that the dissent is simply wrong in saying that respondents have acted "with a blatant disregard for [petitioners'] rights." Respondents have at all times acted under color of law, and their construction of the zoning provision in question, while erroneous, certainly falls within the bounds of reason (especially given that the question is apparently one of first impression), and, after all, was accepted by Supreme Court.
The dissent argues that, to avoid mootness, it sufficed for petitioners to seek injunctive relief in Supreme Court, even if they subsequently failed to apply for such relief upon their appeal to this Court. Dreikausen indicates otherwise. In Dreikausen, the Court of Appeals cited with approval Matter of Fallati v Town of Colonie (222 AD2d 811 ), in which the appeal was found moot because (as summarized by the Court of Appeals) "no injunction [was] sought before [the] Appellate Division" (98 NY2d at 173). The petition in Fallati sought, inter alia, "to enjoin [the respondent] from improving or developing [certain] property pending the determination" of the proceeding challenging the compliance of the intended use with zoning rules (222 AD2d at 812-813). The Third Department dismissed the appeal from the dismissal of the petition on the following ground: "Since petitioner did not seek injunctive relief during the pendency of this appeal, we find the controversy herein to be rendered moot" (id. at 813 [emphasis added]). Similarly, in Gabriel v Prime (30 AD3d 955 ), the Third Department dismissed as moot an appeal from a judgment declaring that a contract for the sale of real property had been effectively terminated, where the owner (who sought to avoid the contract) sold the property to a third party after entry of the judgment and "no lis pendens was filed nor a stay issued following Supreme Court's judgment in [the owner's] favor" (id. at 956 [emphasis added]; see also Matter of G.Z.T. Indus. v Planning Bd. of Town of Fallsburg, 245 AD2d 741, 742  [appeal was dismissed as moot because "(d)uring the pendency of this appeal, petitioner took no steps to safeguard its interests by, e.g., seeking to temporarily enjoin the planned construction"] [emphasis added]; Matter of Bytner v City of Albany Bd. of Zoning Appeals, 211 AD2d 1000, 1000  ["this appeal has been rendered moot in view of petitioner's failure to obtain an injunction protecting his interests during the pendency of this appeal"]; cf. Vitiello v City of Yonkers, 255 AD2d 506, 507  [appeal was not moot where, after Supreme Court denied their application for a TRO against construction and governmental permission to proceed with the project was obtained, "the plaintiffs immediately moved in (the Appellate Division) for a preliminary injunction"]). In view of the foregoing authority, we are mystified by the dissent's assertion that we have "fabricate[d]" the requirement that a party seeking to halt construction move for injunctive relief at each stage of the proceeding.[*fn3]
The dissent's position finds no support in Matter of Watch Hill Homeowners Assn. v Town Bd. of Town of Greenburgh (226 AD2d 1031 , lv denied 88 NY2d 811 ), a case that the Court of Appeals distinguished in Dreikausen (98 NY2d at 173). The panel that decided Watch Hill included two justices of the panel that decided Fallati only a few months before and three justices of the panel that decided G.Z.T. Indus. about a year and a half later. Thus, we see little merit in the dissent's suggestion that Watch Hill abrogates or relaxes the requirement that a party seeking to halt construction move for injunctive relief at each level of litigation. Moreover, nowhere in the Watch Hill decision do we find any support for the dissent's assertion that the Court retained jurisdiction of the appeal notwithstanding the petitioners' "failure to repeatedly seek injunctive relief." And, to reiterate, the following year, in G.Z.T. Indus., three of the same justices reaffirmed that an appeal seeking to halt construction may be dismissed as moot where the appellant made no effort to preserve the status quo "during the pendency of [the] appeal" (245 AD2d at 742).[*fn4]
Also misplaced is the dissent's reliance on Matter of Friends of Pine Bush v Planning Bd. of City of Albany (86 AD2d 246 , affd 59 NY2d 849 ), another Third Department decision distinguished in Dreikausen (98 NY2d at 173). Far from supporting the dissent's contention that the present matter is not moot, Pine Bush expressly held that the matter before the Court was moot because the petitioners had not been diligent in seeking injunctive relief against construction activity (see 86 AD2d at 247). Indeed, Pine Bush found that the matter was moot on the ground that the petitioners, after their motion to extend the automatic stay of the respondent's action was denied, took "no further action" to maintain the status quo, and, on their appeal from a subsequent judgment of the trial court "made no motion for a stay pursuant to CPLR 5519" (id.). Because Pine Bush did not direct the cessation of further work on the project, the case does not support the dissent's view that we should order a halt to the ongoing work here. While the Pine Bush Court, rather than dismissing the appeal, addressed the merits after converting the article 78 proceeding to an action for a declaratory judgment (relief not requested by petitioners in this case), it did so on the ground that the issue presented was "likely to recur if not judicially resolved" (id. at 248). In this case, given that both the majority and the dissenters of this panel unanimously express the view that respondents' construction of the applicable zoning provision is erroneous, we do not believe that the issue presented is likely recur. Similarly, given the concurrence of the majority and the dissent on the merits of the zoning issue raised in this case, in the unlikely event that a future dispute were to raise the same issue, we think it still more unlikely that the issue would evade appellate review by reason of the denial at the trial level of a timely application for injunctive relief.
In Dreikausen, the Court of Appeals distinguished both Watch Hill and Pine Bush as cases in which "[c]courts . . . have retained jurisdiction notwithstanding substantial completion in instances where novel issues or public interests such as environmental concerns warrant continuing review" (98 NY2d at 173). In this case, the environmental concerns invoked by petitioners are the increased traffic and the aesthetic cost anticipated to result from the enlargement and expansion of the hospital buildings. In view of the advanced stage the work on the project has reached and petitioners' failure to "d[o] all they could to timely safeguard their interests" (Vitiello, 255 AD2d at 507), the concerns they invoke, while not to be deprecated, must be weighed against the public interest to be served by the upgrading of respondent hospital's antiquated 1950s-era facilities. The latter interest, to reiterate, is the enhancement of the hospital's ability to treat and rehabilitate sick and disabled children. Taking all of the circumstances into account, we find that the interests invoked by petitioners do not warrant retaining jurisdiction of their appeal notwithstanding their failure to take all available steps to protect their own interests.
We disagree with the dissent's suggestion that respondents' proceeding with the modernization of the children's hospital could reasonably be viewed as an instance of "bad faith," notwithstanding that Supreme Court denied petitioners' motion for a preliminary injunction and petitioners then failed even to request such relief upon this appeal. While we agree with the dissent that, on balance, petitioners have the stronger argument on the merits, not even petitioners have suggested that respondents' position on the merits is frivolous or lacking in a good faith basis. If petitioners wished to cast the risk of going forward with the work upon respondents, it was imperative for them at least to seek relief preserving the status quo at each stage of the proceeding, including the appeal to this Court. The Court of Appeals has expressly rejected the argument that a party suing to halt construction need not seek a preliminary injunction if it anticipates that the bonding requirement for such relief will exceed the amount it wishes to provide. In Citineighbors, the petitioners "did not try to enjoin construction during this litigation's pendency, nonfeasance that they chalk up to monetary constraints' and the unlikelihood of success. In short, petitioners simply assumed that Supreme Court would not grant them injunctive relief or, in the alternative, would require an undertaking in an amount more than they could or wanted to give. Under Dreikausen, however, petitioners were required, at a minimum, to seek an injunction in the circumstances presented here. Having pursued a strategy that foisted all financial risks (other than their own legal fees and related expenses) onto the property owner and the developer,petitioners may not expect us to overlook the substantial completion of this construction project" (2 NY3d at 729-730).
Finally, while the dissenter states that he "seriously doubt[s] the veracity of the respondents' statements that the structure is virtually completed," we find that respondents have established that, as of the time the appeal was argued, the construction was so far advanced that it could not be undone without undue hardship. Under this standard, the construction need not be "virtually completed" to render the dispute moot (see William Israel's Farm Coop., 25 AD3d at 517 [appeal was dismissed as moot where the petitioner did not seek injunctive relief against the construction and "the new building's superstructure (was) 75% complete"]). That the current stage of the construction is not reflected in the record is irrelevant because "mootness is an issue that can be raised at anytime and, in fact, it is incumbent upon counsel to inform the court of changed circumstances which render a matter moot" (Gabriel v Prime, 30 AD3d at 956 [internal quotation marks, brackets and citation omitted]). All concur except Saxe, J.P. and Catterson, J. who dissent in a memorandum by Catterson, J. as follows: CATTERSON, J. (dissenting)
I must respectfully dissent. In my opinion, by dismissing this appeal as moot and declining to reach the merits of the zoning issue the majority has essentially affirmed an error of law. As set forth more fully below, the error fatally infects the State Environmental Quality Review (hereinafter referred to as "SEQRA") negative declaration issued on the project which is a 90,000-square foot expansion of St. Mary's Hospital in the Weeks Woodlands section of Bayside, Queens.
At best, it is disingenuous of the majority to state that it would adopt the dissent's "cogent analysis" on the zoning issue if it had to reach the merits, but then to take the position that it does not need to do so. At worst, the majority tacitly but knowingly affirms an error of law, namely the erroneous interpretation of New York City Zoning Resolution (hereinafter referred to as "ZR") 24-111(a). This renders the greatest disservice to the petitioners who sought judicial intervention in order to assert their rights against those who, as characterized by the petitioners' counsel at oral argument, have the "power and the money" to proceed with dispatch [*fn5]. In this case, the majority's finding is particularly egregious given that the petitioners' applications for injunctive relief were denied repeatedly by a court that not only ignored the customary analysis appertaining to applications for such relief, but based the denial of the applications solely on its erroneous interpretation of the zoning resolution.
More significantly, the majority's holding ignores the fact that the erroneous interpretation of the zoning resolution infects the SEQRA negative declaration on the project issued by the respondent Dormitory Authority of the State of New York (hereinafter referred to as "DASNY"). Declining to reach the merits of the zoning issue is a total abnegation of this Court's responsibility. See Save Audubon Coalition v. City of New York, 180 A.D.2d 348, 355, 586 N.Y.S.2d 569, 573 (1st Dept. 1992) ("judicial review of a lead agency's SEQRA determination is limited to [...] whether, substantively, the determination was affected by an error of law") (internal quotation marks omitted).
DASNY's negative declaration was based on a finding that the project will not have a "significant adverse effect on the environment" because it "does not involve the introduction of any land uses or new structures that do not conform to or comply with existing zoning." In turn, that unequivocal but totally erroneous statement relied on a simplistic interpretation of ZR 24-111(a) in conjunction with a confirmation by DOB that St. Mary's was permitted a maximum FAR of 1.0. The record reflects that the DOB confirmation was conveyed to DASNY by counsel for St. Mary's. The negative declaration and supplemental report are devoid of any suggestion that DASNY investigated any further, or that it was aware of the DOB's inconsistent posture, as set forth more fully below, on the interpretation of the zoning resolution. Or, indeed that it took the required "long hard look" at environmental issues.
For example, DASNY's report on the adverse impact of increased traffic in the neighborhood stated that there would be no adverse impact because the expansion plans did not include an increase of inpatient beds. As the petitioners correctly point out, "inpatients" do not increase traffic. Instead, the critical inquiry should have been into St. Mary's expansion of outpatient/ambulatory services which are the types of daily services that increase traffic around a hospital. It is small wonder that DASNY's SEQRA review of the $200 million project, which, contrary to taking a "long hard look," was completed within 21 business days, now turns out to be based on an error of law.
The majority blithely dispenses with this SEQRA deficiency by summarizing the petitioners' concerns as "increased traffic and the aesthetic cost." This completely misses the point that the SEQRA negative declaration at issue is based on an acknowledged zoning violation. Yet, the majority overlooks this violation of the law because it views the facility as one for a disadvantaged group. Hence, in my opinion, the ...