147-25 N. Assocs. v. Villanueva
| Docket Number | Index No. L&T 63863/19 |
| Decision Date | 21 June 2023 |
| Citation | 2023 NY Slip Op 50602 (U) |
| Parties | 147-25 Northern Associates LLC, Petitioner-Landlord, v. Omar Villanueva, JANE DOE & JOHN DOE, Respondents-Tenants. |
| Court | New York Civil Court |
Unpublished Opinion
Hal Weiner, Esq. Of Counsel to Sontag & Hyman, P.C. Attorneys for Petitioner
Allison Cabibbo, Esq. The Legal Aid Society, Attorneys for Respondent Omar Villanueva
Cynthia Ramos, Esq., Queens Legal Services, Attorneys for Respondent Jane Doe
Recitation as required by CPLR § 2219(a), of the papers considered in the review of Petitioner's motion for leave to execute on the warrant of eviction (motion sequence 6), and Respondents' cross-motions to vacate their respective stipulations of settlement (motion sequences 7 and 8): NYSCEF Doc. Nos. 21-63.
Upon the foregoing cited papers, the court's decision and order is as follows:
RELEVANT BACKGROUND AND PROCEDURAL HISTORY
147-25 Northern Associates LLC ("Petitioner") commenced this nonpayment proceeding against the tenant of record Omar Villanueva ("Respondent"), his spouse Rosa Guzman who was named as Jane Doe ("Co-Respondent"), and John Doe (collectively "Respondents") by Notice of Petition and Petition on July 12, 2019. The Petition sought $2,649.50 in rent based on a monthly rent of $1,900 and pled that the apartment is subject to the Rent Stabilization Law.
Respondents did not answer the Petition and a default judgment was entered on September 11, 2019. Thereafter, Respondent filed an order to show cause for a stay of execution of the warrant. On the return date of that motion Respondent signed a pro se stipulation of settlement on October 7 2019, agreeing to pay $8,999.50 in arrears owed through October 2019, with an initial payment of $4,000 due in October, and the remainder to be paid in installments over the following ten months. Respondent defaulted on this agreement and filed a second order to show cause, which resulted in an order staying execution of the warrant through November 30, 2023, for payment of $10,124.50 in arrears owed through November 2019. Thereafter, Respondent's spouse Jane Doe a/k/a Rosa Guzman filed an order to show cause on December 10, 2019, stating that her husband was in the hospital and requesting additional time on behalf of the household, a family of six with four minors, to pay the arrears. On December 30, 2019, Queens Legal Services filed a Notice of Appearance for an unspecified "Respondent" and signed a two-attorney stipulation of settlement agreeing to pay $6,174.50 in arrears owed through December 2019 pursuant to a one-year repayment schedule. The top of the agreement stated that Queens Legal Services was appearing for Respondent Omar Villanueva.
This proceeding was paused for much of 2020 due to the global COVID-19 pandemic, which resulted in statewide court shutdowns for much of 2020 beginning in March. Thereafter, on January 2, 2021, Respondent submitted a hardship declaration pursuant to the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 ("CEEFPA), thereby effectuating an automatic stay of the proceeding.
In August 2021, Petitioner moved to restore the matter to the calendar, alleging $31,999.50 in arrears owed through August 2021 after crediting earmarked bi-monthly shelter allowance payments totaling $12,175 since the December 2019 stipulation. The Legal Aid Society filed a Notice of Appearance on August 26, 2021, on behalf of Respondent Villanueva. The parties signed an adjournment stipulation on September 22, 2021 "in contemplation of settlement" adjourning the motion to October 5, 2021. On October 7, 2021, Respondent applied for assistance pursuant to the Emergency Rental Assistance Program ("ERAP"), thereby effectuating a statutory stay of this proceeding pending a determination of eligibility (L. 2021, c. 56, Part BB, Subpart A, § 8, L. 2021, c. 417, Part A, § 4).
On December 21, 2022, Petitioner moved to vacate the ERAP stay and for permission to execute on the warrant of eviction because Respondent's ERAP application was approved and paid on July 18, 2022, for a period of 15 months in the amount of $28,500. Petitioner alleged that after crediting all payments the arrears were now $23,374.50 through November 2022. The motion was ultimately calendared for April 11, 2023, at which time the parties agreed to lift the ERAP stay and otherwise set a briefing schedule for the instant cross-motions.
On April 28, 2023, Respondent and Co-Respondent each moved to vacate their respective stipulations. Respondent argues that the only agreement he ever signed was the pro se agreement in October 2019, without counsel, which improvidently waived claims for rent overcharge. Co-Respondent meanwhile moves to vacate the December 2019 two-attorney stipulation based on office error and otherwise makes a substantively similar rent overcharge claim. Both parties argue that the current rent provisions in the stipulations should be stricken because they impair Respondents' right to assert defenses under the Tenant Safe Harbor Act ("TSHA") for arrears during a period of COVID-19-related financial hardship (L. 2020, c. 127, as amended by L. 2021, c. 417, Part D.). Petitioner opposes both motions, noting that Respondents have made only $3,400 in non-earmarked payments since the December 2019 stipulation and presently owe $37,266.50 in rent through May 2023.
The standard for vacating a stipulation of settlement is well known. In-court agreements facilitate efficient dispute resolution and are not lightly case aside (see Hallock v State of New York (64 N.Y.2d 224, 230 [1984]). Nonetheless, a court retains the discretion to vacate an agreement "if it appears that the stipulation was entered into inadvisedly or that it would be inequitable to hold the parties to it" (In re Frutiger's Estate, 29 N.Y.2d 143, 150 [1971] [internal quotation marks and citations omitted]).
A party's representation by counsel is a significant consideration in determining whether to vacate a stipulation of settlement (see Shalimar Leasing, LP v Medina, 155 N.Y.S.3d 520 [App Term, 2d, 11th & 13th Jud Dists, 2d Dept 2021]). Whereas an agreement signed by an attorney typically will not be invalidated barring "fraud, collusion, mistake or accident" (Hallock at 230 [1984]), or due to the waiver of a fundamental defect resulting in the unnecessary forfeiture of a rent-regulated tenancy or otherwise offending public policy (see, e.g., Matter of 125 Ct. St., LLC v Nicholson, 184 N.Y.S.3d 831 [2d Dept 2023]), the standard is more lax in the context of unrepresented litigants, who generally need only show the waiver of a potentially meritorious substantial defense (see 600 Hylan Assoc. v Polshak (17 Misc.3d 134 [A] [App Term, 2d & 11th Jud Dists, 2d Dept 2007]). In housing court, where proceedings are frequently settled on the first or second appearance without the benefit of counsel, courts regularly vacate pro se stipulations that involve the needless loss of a rent-regulated tenancy (see, e.g., 270 Glenmore Ave., LLC v Blondet, 55 Misc.3d 133 [A] [App Term, 2d, 11th & 13th Jud Dists, 2d Dept 2017]), or the waiver of substantive defenses, such as a colorable claim of rent overcharge (see, e.g., Chauncey Equities, LLC v Murphy, 62 Misc.3d 141 [A] [App Term, 2d, 11th & 13th Jud Dists, 2d Dept 2019]); Samson Mgt., LLC v Cordero, 62 Misc.3d 129 [A][App Term, 9th & 10h Jud Dists, 2d Dept 2018]; 2701 Grand Ass'n LLC v. Morel, 50 Misc.3d 139 (A) [App. Term, 1st Dept. 2016].
Respondent argues he improvidently signed an agreement in October 2019 settling the subject nonpayment proceeding without the benefit of counsel or an interpreter, which he did not request but nonetheless impeded his ability to understand the agreement given his limited English proficiency. As a result, Respondent asserts that he unknowingly waived a colorable claim of rent overcharge. Specifically, he argues that at the time of the settlement the apartment's rent had not been registered with the Division of Housing and Community Renewal ("DHCR") since 2014, a statutory basis for a rent freeze under the Rent Stabilization Law and Code. Moreover, Respondent notes that the leases Petitioner produced through informal discovery reveal that the rents registered with DHCR since 1999 do not correspond with the actual rents charged, and that Petitioner has taken several increases between 2002 and 2009 that would have necessitated over $120,000 in renovations, which are entirely inconsistent with the condition of the apartment and evidence a fraudulent scheme to deregulate the unit. Respondent further argues that enforcement of the stipulation without vacatur or modification will impede Respondent's ability to avail himself of the protections of the TSHA, as the stipulation has a current rent provision, as well as other defenses, including based on the statutory warranty of habitability.
In opposition, Petitioner argues that Respondent's motion is untimely, having been made three and a half years after the initial agreement, that the agreement was not so much a settlement as a stay of execution of the warrant following a default judgment, for which Respondent has not proffered a reasonable excuse for the default under CPLR 5015, that Respondent and/or his unified-in-interest wife appeared through counsel in December 2019 following a third order to show cause seeking a stay of execution to pay the arrears and once again settled this matter with an extension of time to pay. With respect to the alleged overcharge, Petitioner argues that the $1,900 preferential rent that Respondent has paid since the inception...
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