Park Tower S. Co. v. Simons
| Citation | 2022 NY Slip Op 22192 |
| Decision Date | 21 June 2022 |
| Docket Number | Index No. 302220/2020 |
| Parties | Park Tower South Company LLC, Petitioner, v. Cody Simons, Respondent, JOHN DOE, JANE DOE Respondent-undertenants. |
| Court | New York Civil Court |
Pelican Management, Inc. (Hal David Wiener, Esq.), fort the petitioner
Vernon & Ginsberg (Yoram Silagy, Esq.), for the respondent-Cody Simons
Recitation as required by CPLR 2219 (a) of the papers considered in review of this motion by NYSCEF Doc No: 10-17 (motion sequence 1), 18- 20 (motion sequence 2 and supporting affidavits), 21-22 (respondent's attorney's affirmation in opposition), 23 (respondent's attorney's memorandum of law in support of opposition) 24 (petitioner's reply affirmation).
This is a licensee holdover proceeding commenced by petitioner against respondents Cody Simons, Jane Doe, and John Doe after the death of the tenant of record in this rent stabilized premises. Cody Simons ("respondent") has appeared by an attorney and interposed an answer asserting a claim of succession rights to the subject premises.
On January 17, 2022, after the expiration of the stay occasioned by respondent's filing of a hardship declaration (L 2021 ch 417, part C, subpart A), petitioner moved for discovery on respondent's succession defense. (NYSCEF Doc No. 10 motion sequence 1.) The court and the parties attempted to settle the discovery dispute, and, because a settlement seemed likely, the court marked the case off-calendar for resolution of the motion, with the caveat that if the parties were not able to reach an agreement, they could request that the motion be placed back on the court's calendar. Before the motion could be settled or re-calendared, respondent's attorney discovered that his client had applied for ERAP, triggering an automatic stay of the proceedings, and the case was placed on the court's administrative stay calendar. (NYSCEF Doc No. 21, respondent's attorney's affirmation ¶ 12; NYSCEF Doc No. 20, petitioner's attorney's affirmation ¶ 10.) The parties dispute who told whom about the ERAP application, id., but this is of no moment to the court. The parties do not dispute that respondent received a provisional approval for ERAP on November 16, 2021. (NYSCEF Doc No. 22, exhibit A of respondent's opposition.)
Petitioner now moves for sanctions against respondent's attorney for frivolous conduct in seeking an automatic stay of the proceedings in a futile attempt to delay litigation of the central issues herein, and vacatur of the ERAP stay on those grounds. (NYSCEF Doc No. 20, motion sequence 2.) Petitioner cites to a spate of recent cases granting a landlord's motion to lift the ERAP stay in licensee holdover proceedings for various reasons including futility of the stay, and the absurd result that would result from a stay. In opposition, Respondent cites to a number of cases which denied a landlord's motion to vacate an ERAP stay in licensee holdover proceedings.
Citing to the website of the agency charged with administering ERAP, the Office of Disability and Temporary Assistance ("OTDA"), respondent also argues that because respondent was provisionally approved for ERAP funds on November 16, 2021, the stay precludes continued litigation for one year after said approval. (NYSCEF Doc No. 22, exhibit A to respondent's attorney's affirmation in opposition; Respondent's memorandum of law at 3.)
The parties do not dispute whether the court has the authority to consider a motion to vacate an ERAP stay. Nor is it disputed that respondent has received a provisional approval for ERAP funds for the reason that the landlord has plainly stated that it will not participate in the program, or accept any ERAP funding. (NYSCEF Doc No. 19 ¶¶ 5-6, affidavit of Franscesa Furkayg.)
Whether or not the stay applies to a licensee who claims succession rights, is not germane to the court's analysis. The only questions before the court are whether sanctions against respondent's attorney are appropriate, and whether a "provisional approval" has the same effect of dissolving the stay as a "determination of eligibility."
For the following reasons, petitioner's motion to vacate the ERAP stay is granted, and that branch of petitioner's motion seeking sanctions is denied.
22 NYCRR 130-1.1 states in relevant part that sanctions are appropriate where an attorney's conduct "is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law," or an attorney's conduct "is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another." (Id. at [c] [1], [2].) In this time of uncertainty and divergent judicial interpretations of a sometimes inscrutable statute, sanctioning respondent's attorney, who has a good faith belief that he is correctly interpreting the statute to continue the stay, is wholly unwarranted. Such is a matter that is appropriately resolved by this motion before the court. Moreover, the ERAP stay is administratively placed by the court. Moving for sanctions against respondent's attorney for honoring the automatic stay is specious at best. Petitioner's motion for sanctions is denied.
Submission of an application for ERAP, has the effect of staying "all proceedings pending a determination of eligibility (emphasis added)." (L 2021, c 56, part BB, subpart A, § 8, as amended by L 2021, c 417, part A § 4.) A provisional approval is issued to a tenant when their eligibility for ERAP has been determined but payment has not been effectuated because the landlord has either implicitly or expressly refused such payment. (L 2021, ch 156, part BB, § 9 [2] [c].)
Disposition of this motion requires an analysis of whether a provisional approval for ERAP funds payable to a landlord who declines to participate in the program, either by completing the application process or refusing to accept funds, has the same effect on the ERAP stay as a determination of eligibility and acceptance of approved funds by the landlord. While the consequences to the landlord are different in each instance, for the following reasons, the court holds that the effect of a provisional approval is the same as a determination of approval in one important aspect: the stay is simply dissolved.
The ERAP statute provides that the Office of Temporary and Disability Assistance ("OTDA") shall undertake reasonable efforts to obtain cooperation of a landlord in the application and approval process using a variety of methods over a period of time, including phone, text, mail, and email. (L 2021, ch 156, part BB, § 9 [2] [b].)
Next, the statute draws a distinction between the consequences of 1) a determination of eligibility for set-aside funds that are not accepted by the landlord (L 2021, ch 156, part BB, § 9 [2] [c]); and 2) a determination of eligibility and acceptance of approved funds. (L 2021, ch 156, part BB, § 9 [2] [d].)
If payment of the approved monies cannot be made but for the landlord's refusal to participate in the program after outreach efforts have failed, the statute provides:
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