Opinion
L & T 74821/18
12-23-2020
111-50 REALTY CORP., Petitioner, v. Jenny MELGAR, Rafael C. Castellanos, Respondents.
Matthew Rosen, Esq., Horing Welikson Rosen & Digrugillers, P.C., 11 Hillside Avenue, Williston Park, NY 11596, Attorney for Petitioner Allison Cabibbo, Esq., Amee Master, Esq., The Legal Aid Society, 120-46 Queens Boulevard, Kew Gardens, NY 11415, Attorneys for Respondent Jenny Melgar
Matthew Rosen, Esq., Horing Welikson Rosen & Digrugillers, P.C., 11 Hillside Avenue, Williston Park, NY 11596, Attorney for Petitioner
Allison Cabibbo, Esq., Amee Master, Esq., The Legal Aid Society, 120-46 Queens Boulevard, Kew Gardens, NY 11415, Attorneys for Respondent Jenny Melgar
Clinton J. Guthrie, J. The decision and order on Petitioner's motion and Respondent's cross motion (consolidated for determination herein) is as follows.
PROCEDURAL HISTORY
This residential nonpayment proceeding was commenced in November 2018. The Petition alleges that Respondents are the tenants in possession of a cooperative apartment that is not subject to rent regulation. On December 3, 2018, Respondent Jenny Melgar, appearing pro se , entered into a stipulation of settlement (so-ordered by Julie Poley, J.) whereby Petitioner was granted a judgment in the amount of $8,301.00 (representing all rent due through December 31, 2018) and issuance of a warrant of eviction, stayed to December 8, 2018. Execution of the warrant was stayed through May 31, 2019, with monthly payment obligations towards the judgment amount, in addition to monthly rent. The stipulation included a "current rent" provision, which requires that payments first be applied to current rent, and then towards the arrears.
A default judgment and warrant were granted/issued against Rafael C. Castellanos in February 2019. In August 2019, Ms. Melgar filed a pro se order to show cause, seeking to stay execution of the warrant. The order to show cause was granted by a stipulation dated August 20, 2019 (so-ordered by Sergio Jimenez, J.). The stipulation stayed execution of the warrant for respondent to pay $9,351.00, all rent due through August 31, 2019, in monthly increments ending on February 28, 2020. This stipulation also included current rent language.
Due to the COVID-19 pandemic, all evictions were administratively stayed from mid-March 2020 through September 30, 2020. Petitioner now moves, pursuant to DRP-213 (issued by NYC Civil Court Administrative Judge Anthony Cannataro on August 12, 2020), to execute upon the warrants of eviction. Petitioner's motion alleges that Respondent (Ms. Melgar) breached the August 20, 2019 stipulation and owes $18,371.00 through September 30, 2020. Ms. Melgar, now represented by The Legal Aid Society, opposes Petitioner's motion and cross-moves for vacatur of the judgment and dismissal of the proceeding upon the argument that the judgment has been satisfied. The court heard argument on Petitioner's motion and Ms. Melgar's cross motion via Microsoft Teams on December 9, 2020 and reserved decision.
PETITIONER'S MOTION
I. Summary of Motion and Opposition .
Petitioner's motion is made pursuant to DRP-213. DRP-213 was issued in conjunction with Administrative Order (AO) 160A/20, which permits courts to allow evictions to proceed upon first holding a conference to assess the applicability of various COVID-19 laws (federal and state) and prohibitions on evictions then existing. The court deems the argument on Petitioner's motion and Ms. Melgar's cross motion to suffice as a conference for the purposes of AO 160A/20, AO 231/20, and DRP-213. Petitioner's motion includes an affidavit from Chasha Kolodny, Petitioner's agent, which states that Respondents failed to comply with the terms of the December 3, 2018 and August 20, 2019 stipulations and that $18,371.00 was owed through August 31, 2020. A breakdown of rents is also annexed to Petitioner's motion.
AO 160A/20 was partially superseded by AO 231/20, although the conference requirement remains.
Ms. Melgar opposes Petitioner's motion, arguing that the judgment was satisfied and that therefore the judgment should be vacated and the proceeding dismissed. These are also the general remedies sought in Ms. Melgar's cross motion. Respondent's argument that the judgment has been satisfied would require that the court disregard the current rent provision in the original judgment stipulation and the stipulation settling Ms. Melgar's August 2019 order to show cause. The breakdown annexed to Petitioner's motion shows payments by Ms. Melgar totaling $38,480.00 since the December 3, 2018 stipulation was executed (which far exceeds the judgment amount and the subsequent stipulation amount added together). However, as both stipulations included current rent provisions, Ms. Melgar did not satisfy either stipulation's terms (requiring payment of arrears and current rent, with all payments first being applied to current rent) in a timely fashion.
Ms. Melgar asserts that with the passage of the Tenant Safe Harbor Act (L. 2020, c. 127) (hereinafter "TSHA"), the enforcement of the current rent provision during the "COVID-19 covered period" as defined by the statute would be contrary to public policy and would deny Ms. Melgar her alleged protections under the TSHA.
II. Tenant Safe Harbor Act Applicability .
The TSHA became law after the approval of Governor Andrew M. Cuomo on June 30, 2020. Passed in response to the COVID-19 pandemic, the TSHA has two primary components. The first prohibits courts from issuing warrants of eviction or judgments of possession against residential tenants or lawful occupants who have "suffered a financial hardship during the COVID-19 covered period for the non-payment of rent that accrues or becomes due during the COVID-19 covered period." See L. 2020, c. 127 [§ 2(1)]. The "COVID-19 covered period" is defined as running from March 7, 2020 through the date of cessation of provisions closing businesses or public accommodations or requiring postponement or cancellation of non-essential gatherings in various Executive Orders issued in response to the COVID-19 pandemic in the county of the residence. With a multitude of Executive Orders restricting businesses, public accommodations, and other non-essential gatherings issued in response to the pandemic still in effect at this time, there is no dispute that the "COVID-19 covered period" has not concluded in Queens County or any other county in the state of New York. The statute, in Section 2(2)(b), includes a list four non-exhaustive factors to be considered in determining whether a tenant or lawful occupant "suffered financial hardship during the COVID-19 covered period," which will be discussed subsequently.
In fact, there is currently a spike in COVID-19 cases in New York. Over 9,000 New Yorkers tested positive for COVID-19 on December 21, 2020 (which also occurred on the fourteen preceding days). See New York State Department of Health COVID-19 Tracker, Daily Totals: Persons Tested and Persons Tested Positive, available at https://covid19tracker.health.ny.gov [last accessed December 22, 2020].
The second primary component of the TSHA is a provision stating that "[a] tenant or lawful occupant may raise financial hardship during the COVID-19 covered period as a defense in a summary proceeding under article 7 of the real property actions and proceedings law." See L. 2020, c. 127 [§ 2(2)(a)]. The statute also includes a final section that makes explicit the lack of any prohibition on the awarding of (money) judgments for rents due and owing to successful petitioners in summary proceedings.
The TSHA does not explicitly address the execution of warrants issued prior to March 7, 2020. However, Executive Order (EO) 202.66, issued by Governor Cuomo on September 29, 2020 (and continued through the present by EO 202.71 and EO 202.78), modifies the TSHA to prevent, "for any residential tenant suffering financial hardship during the COVID-19 state disaster emergency declared by Executive Order 202," the execution or enforcement of any judgment or warrant granted prior to March 7, 2020, through January 1, 2021. Although Ms. Melgar incidentally argues that she would be entitled to the stay of execution of the warrant through January 1, 2021 by way of EO 202.66 (which, it should be noted, Petitioner does not concede), the crux of her argument is that she is also entitled to the more robust protections of the TSHA as applied to rents coming due during the COVID-19 covered period, notwithstanding the fact that a possessory judgment and warrant were granted against her prior to March 7, 2020.
When interpreting a statute, the general rule is that the "unambiguous language of [the] statute is alone determinative" of the legislature's intent. Riley v. County of Broome , 95 N.Y.2d 455, 463, 719 N.Y.S.2d 623, 742 N.E.2d 98 [2000]. Nonetheless, legislative history "may also be relevant and ‘is not to be ignored, even if the words be clear.’ " Id. [quoting McKinney's Cons Laws of NY, Book 1, Statutes § 124, at 252]. Also pertinent are " ‘the history of the times, the circumstances surrounding the statutes passage, and attempted amendments.’ " Id. at 464, 719 N.Y.S.2d 623, 742 N.E.2d 98 [quoting McKinney's Cons Laws of NY, Book 1, Statutes § 124, at 253]. The TSHA unambiguously prohibits the issuance of warrants of eviction and judgments of possession against those tenants or lawful occupants suffering financial hardship during the COVID-19 covered period for the nonpayment of rent accruing or coming due during said period. Ms. Melgar's attorney argues that the statute should apply to individuals in her situation because "our Legislature specifically intended to prevent evictions based on arrears accruing during the pandemic." See Cabibbo Affirmation, ¶ 44. This statement is not elaborated upon with reference to the legislative history or other circumstances surrounding the passage of the TSHA.
The Sponsor Memo of Senator Brad Hoylman states that the purpose of the bill that became the TSHA was "to help keep residential tenants in their homes following the COVID-19 pandemic by allowing only money judgments, and not evictions, for unpaid rent that comes due while restrictions are in place due to COVID-19 on businesses, public accommodations, and nonessential gatherings." See NY Senate Bill S8192B. The aforementioned provision prohibiting the issuance of warrants and possessory judgments addresses the Sponsor's stated purpose. The original version of the bill included several provisions not present in the final version that became law, namely amendments to RPAPL §§ 711 and 747, Real Property Law (RPL) § 223-b, and CPLR § 5231, and the creation of a new section (711-A) of the RPAPL. No provision of the original bill, however, addressed the precise issue of execution upon pre-COVID-era warrants as a result of a default in rents coming due within the COVID-19 covered period.
Available at https://www.nysenate.gov/legislation/bills/2019/s8192/amendment/b [last accessed December 14, 2020].
Available at https://www.nysenate.gov/legislation/bills/2019/s8192/amendment/a [last accessed December 14, 2020].
Of relevance, though, the final version of the law does provide that a tenant may "raise financial hardship during the COVID-19 covered period as a defense in a summary proceeding under article 7 of the real property actions and proceedings law." See L. 2020, c. 127 [§ 2(2)(a)]. The statute does not specify at what stage in a proceeding the defense may be interposed. Nor does the statute state what the appropriate remedy is for a party prevailing on said defense. Nonetheless, the defense provision should not be assumed to be mere surplusage. See
In re Warren A. , 53 A.D.2d 400, 404, 385 N.Y.S.2d 590 [2d Dept. 1976] ["We should not ascribe to the Legislature an intent which renders the language of [a] statute surplusage and without significance."]. The instant motion seeks execution upon the warrants of eviction due to a failure to satisfy the prior stipulations. Since a portion of the rents required to be paid to satisfy those stipulations have accrued during the COVID-19 covered period (via the current rent provisions), Ms. Melgar faces an adverse outcome (i.e. eviction) resulting from nonpayment of COVID-19 covered period rents. The court can discern nothing in the statutory language nor the circumstances surrounding the passage of the TSHA that manifest a legislative intent to prohibit a tenant from raising financial hardship during the COVID-19 covered period as a defense to a motion to execute upon a warrant where COVID-era rents are sought as a condition for satisfying a judgment and vacating a warrant. To hold otherwise would result in an illogical situation where a tenant at imminent risk of eviction would lack recourse to TSHA protections, while a tenant less at risk (i.e. those without judgments and warrants issued against them) would enjoy ample protections under the statute. Accordingly, the court interprets the TSHA to permit tenants to raise financial hardship during the COVID-19 covered period as a defense in the context of a motion to execute upon a pre-March 7, 2020 warrant where rents accruing during the COVID-19 covered period are de facto possessory because of an earlier current rent provision.
Having made this interpretation, the court must determine whether Ms. Melgar has adequately demonstrated financial hardship during the COVID-19 covered period. Ms. Melgar's affidavit states that she was laid off by the optometry store where she worked due to the COVID-19 pandemic on March 20, 2020 and was out of work until July 2020 (and attaches a letter from her employer to that effect). She also states that she received unemployment benefits during the time that she was out of work, that her benefits were "much less income" than when she was working, and annexes New York State Department of Labor screenshots showing benefits paid from April 12, 2020 through July 5, 2020. Petitioner argues in its reply papers that Ms. Melgar has not met her burden of demonstrating that the four enumerated factors (evidencing financial hardship) in the TSHA exist. Those factors, set out in Section 2(2)(b) of the TSHA, are as follows:
"(i) the tenant's or lawful occupant's income prior to the COVID-19 covered period;
(ii) the tenant or lawful occupant's income during the COVID-19 covered period;
(iii) the tenant or lawful occupant's liquid assets; and
(iv) the tenant or lawful occupant's eligibility for and receipt of cash assistance, supplemental nutrition assistance program, supplemental security income, the New York State disability program, the home energy assistance program, or unemployment insurance or benefits under state or federal law."
The preceding provision of the TSHA states that these factors are to be considered, "among other relevant factors," in determining financial hardship during the COVID-19 covered period. See L. 2020, c. 127 [§ 2(2)(b)]. Petitioner argues that Ms. Melgar has, at most, demonstrated one statutory factor showing financial hardship, namely receipt of state unemployment benefits. Accordingly, since Ms. Melgar has not specified her pre-COVID and COVID-era income, nor her liquid assets, Petitioner asserts that she has not adequately shown financial hardship as required by the statute to invoke its protections. Ms. Melgar's position, as elaborated upon in the cross motion and opposition papers, is that the loss of her job between March 2020 and July 2020 because of the COVID-19 pandemic and receipt of state unemployment benefits from April 2020 through July 2020 is sufficient under the statute to show financial hardship during the COVID-19 covered period.
Petitioner also posits that the letter from Ms. Melgar's employer should be disregarded since it is not in admissible form.
It should be noted that the four enumerated factors of financial hardship during the COVID-19 covered period are non-exhaustive. Moreover, the statutory language does not necessitate the establishment of all four factors to demonstrate financial hardship; rather, the statute requires that the court consider those factors, among other relevant ones, in determining whether financial hardship exists. In New York, "the provision of assistance to the needy is not a matter of legislative grace; rather, it is specifically mandated by our Constitution." Tucker v. Toia , 43 N.Y.2d 1, 7, 400 N.Y.S.2d 728, 371 N.E.2d 449 [1977] ; NY Const. Art. XVII, § 1 ["The aid, care and support for the needy are public concerns and shall be provided by the state and by such of its subdivisions, and in such manner and by such means, as the legislature may from time to time determine."]. In carrying out this constitutional mandate, the legislature has discretion in classifying who is needy but may not "ignore the realities of the needy's plight and the State's affirmative obligation to aid all its needy." Tucker , 43 N.Y.2d at 9, 400 N.Y.S.2d 728, 371 N.E.2d 449 [emphasis added]. Therefore, a narrow construction of financial hardship as used in the TSHA is incompatible with the broad constitutional mandate to support the needy that the legislature must effectuate under Article XVII of the State Constitution.
This mandate is unquestionably relevant in the midst of a global pandemic that has caused thousands of fatalities and substantial economic impacts in New York (especially in New York City). See Dana Rubinstein, ‘We're at War’: New York City Faces a Financial Abyss , NY Times, Sept. 29, 2020, § A at 1 (New York edition).
Nonetheless, since Ms. Melgar's recourse to the TSHA comes via the "defense" provision, she must demonstrate financial hardship under the statute. See e.g. 1020-45 Realty Corp. v. Melendez , NYLJ, Dec. 22, 2020 [Civ. Ct., Kings County 2020]. Her cross motion/opposition adequately sets forth the defense via her affidavit, employer letter, and unemployment benefit screenshots. However, in the absence of admissible evidence and Petitioner's timely objections to Ms. Melgar's proffered proofs, the court deems it necessary to conduct an evidentiary hearing on Ms. Melgar's defense.
III. Conclusion .
Petitioner has demonstrated its entitlement to execute upon the warrants pursuant to DRP-213. Therefore, Petitioner's motion is granted, subject to the outcome of the hearing on Ms. Melgar's TSHA defense, which shall determine whether and on what terms a stay of execution of the warrant will be granted. In the event that Ms. Melgar establishes her TSHA defense, all rents covered by the defense will be deemed to be non-possessory. Execution of the warrant shall be stayed on an interim basis until an order is rendered on Ms. Melgar's defense. The hearing is scheduled for January 20, 2021 at 2:00 PM. All appearances shall be virtual via Microsoft Teams, in accordance with Chief Administrative Judge Lawrence K. Marks' Memorandum dated November 13, 2020 (entitled Revised Pandemic Procedures in Trial Courts). Counsel shall send any evidentiary stipulations and pre-marked exhibits to the court prior to the hearing.
In addition to the TSHA, the court will also assess the applicability of all other state and federal laws affecting execution of warrants in effect at the time of the outcome of the hearing, as per AO 160A/20 and Sections 1(e) and 1(f) of the Memorandum from Chief Administrative Judge Lawrence K. Marks dated October 9, 2020, which accompanied AO 231/20.
However, the court stresses that any unpaid rents covered by the TSHA defense will still be subject to a monetary judgment, whether in this proceeding or a new proceeding or action. See 1020-45 Realty Corp. , NYLJ, Dec. 22, 2020.
RESPONDENT'S CROSS MOTION
For the reasons set out in the discussion of Petitioner's motion, Respondent's cross motion is granted to the extent that Respondent has stated a defense of financial hardship during the COVID-19 covered period under the TSHA in opposition to Petitioner's motion to execute upon the warrant, and is entitled to a hearing on the defense. The court, however, declines Ms. Melgar's request to vacate or modify the parties' prior stipulations as being against public policy. Generally, "[s]tipulations of settlement are favored by the courts and not lightly cast aside [and] [o]nly where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation." Hallock v. State , 64 N.Y.2d 224, 230, 485 N.Y.S.2d 510, 474 N.E.2d 1178 [1984]. No such bases to invalidate a contract are present here. The Court of Appeals, in In re Estate of Frutiger, 29 N.Y.2d 143, 150, 324 N.Y.S.2d 36, 272 N.E.2d 543 [1971], also recognized that a stipulation may be vacated where it was entered "inadvertently, inadvisably or improvidently" such that it took the case "out of the due and ordinary course of the proceeding in the action, and in doing so doing may work to [the party's] prejudice."
Ms. Melgar makes no claims about the circumstances of entering either of the prior stipulations, nor does she allege that they were entered inadvertently, inadvisably, or improvidently. Instead, she encourages the court to assess the stipulations from the vantage of our COVID-19-affected present. Since the TSHA does not include any language indicating an intent to invalidate contracts between landlords and tenants (and indeed explicitly allows for money judgments for rents due and owing), the court does not read it as a means to invalidate court-approved stipulations that were executed prior to the pandemic.
This situation is distinguishable from the scenario in Megalopolis Property Ass'n v. Buvron , 110 A.D.2d 232, 494 N.Y.S.2d 14 [2d Dept. 1985], where the Appellate Division upheld the retroactive applicability of the New York City Pet Law, which explicitly deemed no-pet clauses in leases waived if not enforced promptly.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.