5th and 106th Street Associates LP v. Hunt

• Decision Date: 07 July 2022
• Docket Number: Index No. LT-054735-19/NY
• Citation: 76 Misc.3d 338,172 N.Y.S.3d 354
• Parties: 5TH AND 106TH STREET ASSOCIATES LP, Petitioner, v. Martha HUNT, Respondent, "Jane Doe" "John Doe", Respondent-undertenants.
• Court: New York Civil Court

76 Misc.3d 338

172 N.Y.S.3d 354

5TH AND 106TH STREET ASSOCIATES LP, Petitioner,

v.Martha HUNT, Respondent, "Jane Doe" "John Doe", Respondent-undertenants.

Index No. LT-054735-19/NY

Civil Court, City of New York, New York County.

Decided on July 7, 2022

Rose & Rose (Paul Coppe, Esq.), for the petitioner

Outerbridge Law Altagracia Pierre-Outerbridge, Esq.), for the respondent-Martha Hunt

Karen May Bacdayan, J.

PROCEDURAL HISTORY AND BACKGROUND

This is a holdover proceeding based on respondent's failure to complete the required annual recertification process for her apartment which is located in a HUD subsidized project-based Section 8 premises. Respondent is a 72-year old retired school teacher who lives alone, and is on a "fixed income." (NYCEF Doc No. 20, Hunt affidavit ¶ 4, NYSCEF Doc No. 31 ¶ 8; NYSCEF Doc No. 46, respondent's attorney's affirmation in opposition at 7.) Respondent contends that she is a rent stabilized tenant who is not subject to the HUD rules and regulations. (NYSCEF Doc No. 19, memorandum of law in support of order to show cause at 4; NYSCEF Doc No. 31 ¶ 4.)

On September 11, 2019, the Hon. Frances Ortiz granted summary judgment in favor of petitioner on its claims holding that "there is no basis in law" to support respondent's argument that she is entitled to a rent stabilized lease. (NYSCEF Doc No. 8 at 4.) The court entered a judgment in favor of petitioner, and stayed issuance of the warrant for 30 days to enable respondent to cure her breach and recertify. (Id. at 4-5.) A warrant issued but execution was stayed due to altered court procedures occasioned by the COVID-19 pandemic, and then due to a stay on the proceedings administratively placed as a result of the respondent having filed a hardship declaration pursuant to the COVID Emergency Eviction and Foreclosure Prevention Act ("CEEFPA".) (L 2021, c 417, part C, subpart A § 4.) When the hardship declaration stay expired, Petitioner filed a motion to execute on the warrant, which motion was granted, after argument on April 26, 2022 by the Hon. Judge Finkelstein.¹ The order stayed execution of the warrant through May 31, 2022. (NYSCEF Doc No. 15.) Thereafter, on May 12, 2022, Outerbridge Law appeared for respondent, and on June 6, 2022 respondent alerted the court that she had filed an Emergency Rental Assistance Program ("ERAP") application which had the effect of further staying this proceeding. (L 2021, c 56, part BB, subpart A, § 8.)

On June 9, 2022, respondent filed a proposed order to show cause with the court. (NYSCEF Doc No. 18.) On June 14, 2022 this court signed the order to show cause but struck respondent's request to reargue the September 11, 2019 decision and judgment of Judge Ortiz, and respondent's request to vacate the April 26, 2022 order of Judge Finkelstein allowing for execution of the warrant. Pursuant to CPLR 5704 (b), respondent appealed this court's striking of the two aforementioned requests for relief to the Appellate Term, and the Appellate Term returned the order to show cause to this court for consideration of the relief that had been stricken. (NYSCEF Doc No. 45 at 1.) Also on June 14, 2022, respondent filed a notice of appeal of the April 26, 2022 order of this court. (NYSEF Doc No.24.)

Petitioner has now cross-moved to vacate the ERAP stay and for sanctions against respondent for filing an ERAP application, and against her attorney for advising respondent, an ineligible individual, to file the ERAP application. Oral argument was held on the record on June 28, 2022 and June 29, 2022.

DISCUSSION

Petitioner's Motion to Vacate the ERAP Stay

Petitioner has moved to vacate the automatic ERAP stay on the following bases: Respondent's application is frivolous and intended only to delay the proceeding; respondent is not income-eligible for ERAP (specifically respondent's reported 2018 income of $143,113 from New York State pension and Social Security is above 120% of the Area Median Income maximum for eligibility in New York County); respondent has been paying what she believes to be her legal monthly rent each month and there is nothing now for ERAP to pay unless respondent believes her rent is higher than $1,255.00 per month; respondent's tenancy has been terminated and so she no longer has an obligation to pay rent; and the application is futile because it she lives in subsidized housing which is a last priority under the statute even if the ERAP program were currently funded. (NYSCEF Doc No. 30 ¶¶ 5 15, 16.)

Respondent opposes petitioner's motion and argues that the "ERAP legislation does not provide a mechanism for challenging an ERAP stay." (NYSCEF Doc No. 46, respondent's memorandum of law in support of motion sequence 3 at 1-3.) Respondent's attorney states that respondent is a "tenant" obligated to pay "rent" as defined by the ERAP statute and that respondent has continued to pay, and petitioner has continued to demand, payment of rent. (Id. at 5-7.) Respondent's attorney argues that respondent need not be eligible under all the eligibility criteria and that respondent is specifically eligible under "bullet point three."² (Id. ) Without addressing whether respondent's annual income is still $143,113 per year, respondent's attorney states that petitioner's speculation as to what her income is now as opposed to what it was in 2018 "is tone-deaf to the struggles people on a fixed income are facing." (Id. at 7.) Regarding sanctions, respondent's attorney cites to this court's decision in Park Tower S. Co. LLC v. Simons , for the proposition that an attorney who makes a good faith argument that the automatic stay provisions apply to their client, should not be sanctioned. ( 2022 N.Y. Slip Op. 22192, ––– Misc. 3d ––––, 171 N.Y.S.3d 342 [Civ. Ct., New York County 2022].)

Respondent's Eligibility for ERAP and the Automatic Stay

The court has the authority to consider whether or not to vacate an ERAP stay. (See e.g. Laporte v. Garcia , 75 Misc.3d 557, 168 N.Y.S.3d 794, 2022 N.Y. Slip Op. 22126, *1 [Civ. Ct., Bronx County 2022], citing 2986 Briggs LLC v. Evans , 2022 N.Y. Slip Op. 50215[U], 2022 WL 853132 [Civ. Ct., Bronx County 2022].) Indeed, to find otherwise would raise constitutional issues analogous to those at issue in Chrysafis v. Marks , 594 U.S. ––––, 141 S.Ct. 2482, 210 L.Ed.2d 1006 (2021). In Chrysafis , the Covid Emergency Eviction and Foreclosure Prevention Act ("CEEFPA") was enjoined because it did not allow a landlord to challenge a tenant's self-certified experience of a hardship which resulted in an automatic stay of proceedings. CEEFPA as modified by the L 2021, c 417, passed just three weeks after the decision in Chrysafis , addressed the Supreme Court's due process concerns and allowed for a motion to be made before the court to determine whether the tenant was, in fact, entitled to the continuation of an automatic stay occasioned by the filing of a hardship declaration.

Similarly, in the context of ERAP, the tenant "self-attest[s]" to eligibility for ERAP funding and receives the benefit of an automatic stay on proceedings as a result. (L 2021, c 56, part BB, subpart A, § 6 [6].) Thus, when a landlord challenges the automatic ERAP stay, the court must determine whether the tenant has made a showing that it is so entitled, or risk infringing on petitioner's due process rights.

The facts herein are unlike those in the decisions in which courts have either granted or denied a petitioner's motion to vacate an ERAP stay based on the courts’ varying interpretations of whether the legislature intended the stay to benefit an "occupant," or a "holdover" tenant in an unregulated tenancy, a superintendent in residence only as an incident to their employment, or a person against whom a warrant has already issued. Petitioner's argument is not based on "absurd results" of continuing the stay herein, or the "futility" of finding respondent eligible for the stay because an occupant's eviction in inevitable. Rather, petitioner argues that respondent is not eligible because she receives income in excess of what a single household can earn to be eligible under the statute, and that she has already paid what she claims to be the maximum legal rent for each month that ERAP funds would be dispersed, unless she now agrees that her rent should be higher, which she does not.

The statute sets forth the eligibility factors for ERAP. (L 2021, c 56, part BB, subpart A, § 5 [1] [a] [i] — [iv].) A "household shall be eligible if it:

(i) is a tenant or occupant obligated to pay rent in their primary residence in the state of New York ... provided however that occupants of federal or state funded subsidized public housing authorities or other federal or state funded subsidized housing that limits the household's share of the rent to a set percentage of income shall only be eligible to the extent that funds are remaining after serving all other eligible populations;

(ii) includes an individual who has qualified for unemployment or experienced a reduction in household income, incurred significant costs, or experienced other financial hardship due, directly or indirectly, to the COVID—19 outbreak;

(iii) demonstrates a risk of experiencing homelessness or housing instability; and (emphasis added)

(iv) has a household income at or below 80% of the area median income, adjusted for household size.

Thus far, courts have construed the meaning and intent of the first factor -- whether an application is a "occupant obligated to pay rent" -- with varying results. However, it follows that if courts have the authority to parse whether an applicant is eligible under one factor of the statute, then courts have the authority to analyze eligibility under the other itemized factors. This is especially true here, where the ERAP eligibility factors are not mutually exclusive, contradictory, or stated in the disjunctive. To the contrary, the ERAP eligibility factors are set forth in the conjunctive: A household is eligible for ERAP if (i), (ii), (iii) "....