E. 168th St. Assocs. v. Castillo

• Decision Date: 23 May 2018
• Docket Number: 2017,38930
• Citation: 79 N.Y.S.3d 485,60 Misc.3d 774
• Parties: EAST 168TH STREET ASSOCIATES, Petitioner–Landlord, v. Octavia CASTILLO, Respondent–Tenant.
• Court: New York Civil Court

60 Misc.3d 774

79 N.Y.S.3d 485

EAST 168TH STREET ASSOCIATES, Petitioner–Landlord,

v.Octavia CASTILLO, Respondent–Tenant.

38930

2017

Civil Court, City of New York.

Decided May 23, 2018

Hertz, Cherson, Rosenthal, P.C. (Greg Smith, Esq.), For Petitioner

The Legal Aid Society (Fuery Hocking, Esq.), For Respondent

Karen May Bacdayan, J.

Background and Procedural Posture

This is a summary nonpayment proceeding brought by Petitioner against Respondent, a tenant in a federally subsidized housing complex, alleging that Respondent owes $748 for the month of May 2017, $1,705 for June 2017, and $1,705 for July 2017. Petitioner is seeking the market rate rent from Respondent based on its claim that Respondent did not properly recertify her federal subsidy.

A default judgment was entered on September 14, 2017 for Respondent's failure to appear in the proceeding. A marshal's notice of eviction was served on September 26, 2017. Two days later, on September 28, 2017 Respondent filed an Order to Show Cause to vacate the default judgment which was returnable on October 12, 2017. The matter was adjourned that day for Respondent to seek counsel. On November 15, 2017, the Legal Aid Society appeared in the proceeding and submitted a Supplemental Affirmation dated January 2, 2018 in support of Respondent's Order to Show Cause.

The Supplemental Affirmation is supported by Respondent's affidavit dated December 31, 2017, and seeks the following relief: 1) Vacatur of the default judgment on the basis that she was not served with the Rent Demand or the Notice of Petition and Petition; and 2) leave to serve an Answer and compelling Petitioner to accept service of same; and 3) summary judgment dismissing the Petition on Respondent's third affirmative defense because Respondent is a tenant in a federally subsidized Section 8 building, but the Petition fails to disclose the specific Section 8 program and the statutes, regulations, and rules governing the tenancy in violation of RPAPL 741(1) and (4)¹ ; or, in the alternative, 4) summary judgment on the Respondent's fourth affirmative defense dismissing Petitioner's claims for any arrears in excess of Respondent's Section 8 share on the basis that termination of her Section 8 benefits was improper because Petitioner failed to comply with HUD regulations; or, in the alternative 5) staying the execution of the warrant of eviction to enable Respondent to obtain a rent arrears grant from Public Assistance.

Petitioner opposes Respondent's motion on the following bases: 1) Respondent did not seek leave of the court to move the Court for permission to serve a Supplemental Affirmation; 2) the Respondent was properly served with the Notice of Petition and Petition and the matter should be scheduled for a traverse hearing rather than an allegation of denial of service serving as the basis for vacating the default judgment; 3) the Respondent should not be allowed to serve a late Answer because the Petitioner has been prejudiced by her delay in paying arrears; 4) the Petitioner properly pled the Section 8 program and applicable statutes, rules and regulations in the Petition; and 5) the Petitioner followed the requirements of the HUD Handbook and had adequate grounds to terminate Respondent's Section 8 subsidy and charge her market rate rent.

Supplemental Affirmations

Pro se litigants in Housing Court who later retain counsel routinely submit Supplemental Affirmations by counsel to expand upon and better articulate the defenses available to them. While the better practice may be to withdraw the formerly pro se litigant's Order to Show Cause and submit a new motion, Petitioner did not cite any authority for this proposition either in its opposition papers, or at oral argument.

Withdrawing a pro se Order to Show Cause and filing another motion, or seeking leave of the court to submit a supplemental affirmation, is not in the interests of judicial economy and would only cause further delay. In addition, the Court finds the practice of submitting a Supplemental Affirmation to support a pro se Order to Show Cause to be acceptable as it is in the interests of justice. Respondent's attorney's Supplemental Affirmation and Respondent's Affidavit in support of the Supplemental Affirmation are deemed submitted for consideration.

Vacating the Default Judgment

CPLR 5015 (a) (1) allows vacatur based on "excusable default." To demonstrate an excusable default, a party must establish both a reasonable excuse for defaulting and a meritorious defense to the proceeding. What constitutes a reasonable excuse for a default generally lies within the sound discretion of the motion court. ( Chevalier v. 368 E. 148th Street Associates, LLC , 80 A.D.3d 411, 914 N.Y.S.2d 130 [1st Dept. 2011] ; 38 Holding Corp. v. New York , 179 A.D.2d 486, 578 N.Y.S.2d 174 [1st Dept. 1992].) In addition to the grounds set forth in CPLR 5015(a), this court has the discretion to vacate its own judgment for sufficient reason and in the interests of substantial justice. ( Woodson v. Mendon Leasing Corp. , 100 N.Y.2d 62, 68, 760 N.Y.S.2d 727, 790 N.E.2d 1156 [2003].)

Reasonable Excuse

Respondent, an individual of limited English proficiency (aff of Respondent at 10), states that she did not receive the Rent Demand and the Notice of Petition and Petition herein (aff of respondent at 11 and 12). The warrant of eviction was issued to a Marshal on September 14, 2017 and the notice of eviction was served on September 26, 2017. Respondent moved immediately on September 28, 2017 by Order to Show Cause to vacate the default.

While the affidavits of service appear proper on their face, even if Respondent received actual notice of the proceeding, a default judgment can be vacated where the default was neither willful or intentional. ( Cotter v. Consol. Edison Co. of New York , 99 A.D.2d 738, 738, 472 N.Y.S.2d 384 [1984] ; Clypeta Realty v. Levy , NYLJ Feb. 20, 1991, at 25 col. 1 [App Term 1st Dept.] ["there may have been neglect on the tenant's part which culminated in the entry of a default judgment," but judgment vacated because default not willful]; Horseshoe Realty, LLC v. Meah , 47 Misc. 3d 127(A), 2015 WL 1400554 [App. Term 1st Dept., 2015] [tenant's brief, isolated nonappearance was neither willful nor intentional].)²

The fact that Respondent moved quickly to vacate her default judgment lends credence to the lack of willfulness or intentionality of her default. It also demonstrates her lack of intent to abandon any defenses to the action, as does her requesting counsel on the first return date of her Order to Show Cause.

Meritorious Defenses

Here, Respondent raises numerous potentially meritorious defenses to the proceeding. The defenses are detailed in her attorney's Supplemental Affirmation which is supported by her Affidavit.

To vacate a default judgment, the tenant's defense need not be established as a matter of law, as long as she has made a prima facie showing of her claim. ( Tat Sang Kwong v. Budge–Wood Laundry Serv., Inc. , 97 A.D.2d 691, 468 N.Y.S.2d 110 [1st Dept. 1983] ; C & S Building Materials , 116 A.D.2d 822, 497 N.Y.S.2d 209 [3d Dept. 1986].)

Upon retaining counsel, Respondent articulated her reasonable excuse for her default, and her potentially meritorious defenses. The Court finds that Respondent has articulated viable defenses demonstrable of merit. The third affirmative defense, that Petitioner failed to plead the specific Section 8 program which governs the tenancy, calls into question the sufficiency of the Petition. Numerous courts have held that failure to plead the regulatory status, and/or rules and regulations governing a tenancy require dismissal of a proceeding. ( MSG Pomp Corp. v. Doe , 185 A.D.2d 798, 586 N.Y.S.2d 965 [1st Dept. 1992] ; Villas of Forest Hills Co. v Lumberger , 128 A.D.2d 701, 513 N.Y.S.2d 116 [2nd Dept. 1987] ; Matter of Volunteers of America v. Almonte , 65 A.D.3d 1155, 886 N.Y.S.2d 46 [2d Dep't 2009) ].) The fourth affirmative defense, that Petitioner improperly terminated Respondents Section 8 subsidy and is seeking a rent in excess of what is lawful, calls into question whether Petitioner properly followed the rules and regulations governing Respondent's tenancy.

Public Policy

Vacating the default judgment is also warranted by the strong public policies in this State favoring the resolution of cases on the merits rather than on default. ( Chevalier v. 368 E. 148th Street Associates, LLC , 80 A.D.3d 411, 914 N.Y.S.2d 130 [1st Dept. 2011] ), citing Harcztark v. Drive Variety, Inc. , 21 A.D.3d 876, 876–877, 800 N.Y.S.2d 613 [1st Dept. 2005] ; 38 Holding Corp v. New York , 179 A.D.2d 486, 487, 578 N.Y.S.2d 174 [1st Dept. 1992] ; Picinic v. Seatrain Lines, Inc. , 117 A.D.2d 504, 497 N.Y.S.2d 924 [1st Dept. 1986] ; Cappel v. RKO Stanley Warner Theaters , 61 A.D.2d 936, 403 N.Y.S.2d 31 [1st Dept. 1978] ; Horseshoe Realty v. Meah , 47 Misc. 3d 127(A), 2015 WL 1400554 [App. Term 1st Dept. 2015].

As explained by the Appellate Division, First Department in 38 Holding Corp. v. New York, 179 A.D.2d 486, 487, 578 N.Y.S.2d 174 [1st Dept. 1992] ):

Repeatedly, it has been held that "it is the general policy of the courts to permit actions to be determined by a trial on the merits wherever possible and for that purpose a liberal policy is adopted with respect to opening default judgments in furtherance of justice to [*6]the end that the parties may have their day in court to litigate the issues ...".

Under the circumstances of this case, where the default was not willful or deliberate, Respondent moved quickly to vacate her default, subsequently retained counsel and made a prima facie showing of potentially meritorious defenses, the default judgment should be vacated. This is especially true in light of Petitioner's failure to demonstrate that it would be severely prejudiced by the vacatur. Petitioner states only that Respondent's "current indebtedness through February 2018 is $11,600.00." (Aff of Petitioner at 9.) Petitioner does not...