Opinion
23006/2017
09-11-2017
2110 Arthur Assets LLC, Petitioner-Landlord, v. Vista Management Corp., Respondent-Tenant, JOHN DOE; JASMINE GONZALEZ, Respondents-Undertenants.
Attorneys for Petitioner: Green & Cohen, P.C. 319 East 91 Street, Prof. Suite New York, New York 10128 (212) 831-4400 Attorneys for Respondent-Undertenant Jasmine Gonzalez: BOOM!Health Legal Services 540 East Fordham Road Bronx, New York 10458 (718) 295-5598
Attorneys for Petitioner: Green & Cohen, P.C. 319 East 91 Street, Prof. Suite New York, New York 10128 (212) 831-4400 Attorneys for Respondent-Undertenant Jasmine Gonzalez: BOOM!Health Legal Services 540 East Fordham Road Bronx, New York 10458 (718) 295-5598 Diane E. Lutwak, J.
It is a "scattered site not-for-profit which provides housing to subtenants," Affidavit in Opposition at ¶ 6. Petitioner explains that Vista Management "was inherited from the last owner, and was in possession of the subject apartment prior to current ownership." Id. at ¶ 6. Petitioner argues that Respondent Gonzalez "is a Sub-Tenant with no contractual privity to the Petitioner," id. at ¶ 13, and therefore is neither a necessary party nor someone who is permitted to raise a claim of breach of the warranty of habitability against Petitioner. The only payments Petitioner has received are checks from Vista Management. Id. at ¶ 14 & Exhibit D thereto.
Petitioner's agent asserts that he did not know who Respondent Gonzalez was until "an unidentified person visited my office on or about May 4, 2017, and claimed to have lived at the subject apartment." Id. at ¶ 7. Petitioner's agent "investigated, and realized that she was the subtenant of the actual tenant, Vista Management," id., and "took down this person's information and advised her to go to Court so she does not get evicted," id. at ¶ 9. Petitioner points out that any claims Respondent Gonzalez has "would best be asserted against the actual tenant of record, Vista Management Corp." Id. at ¶ 18. Petitioner's agent does not respond to Respondent Gonzalez's assertion that it was improper for her to be named as "Jane Doe" given Petitioner's appearance by counsel on February 1, 2017 in the HP Action she filed in December 2016, but asserts that, "Vista Management houses, at least in part, at-risk tenants who's [sic] identities remain anonymous." Id. at ¶ 8. Petitioner argues that, in any event, "dismissal based on failure to join a necessary party should be avoided where possible." Id. at ¶ 21. DISCUSSION
The first prong of Respondent's motion seeks to vacate the Stipulation of June 26, 2017, in which she consented to the substitution of her name for "Jane Doe" in the caption, and, upon such vacatur, to dismiss the Petition for lack of personal jurisdiction and/or failure to properly name a necessary party.
It is axiomatic that stipulations of settlement between parties in pending proceedings are favored by the courts and are "not lightly cast aside." Hallock v State of New York (64 NY2d 224, 230, 474 NE2d 1178, 1180, 485 NYS2d 510, 512 [1984]). See also, e.g., Matter of Galasso (35 NY2d 319, 321, 320 NE2d 618, 361 NYS2d 871 [1974]); 1420 Concourse Corp v Cruz (135 AD2d 371, 521 NYS2d 429 [1st Dep't 1987], app dism'd, 73 NY2d 868, 537 NYS2d 487 [1989]). As explained by the Court of Appeals, "strict enforcement not only serves the interest of efficient dispute resolution but also is essential to the management of court calendars and integrity of the litigation process." Hallock, supra. While the court does have "control over stipulations and power to relieve from the terms thereof the stipulation will not be destroyed without a showing of good cause therefor, such as fraud, collusion, mistake, accident, or some other ground of the same nature." In Re Estate of Frutiger (29 NY2d 143, 149-50, 272 NE2d 543, 324 NYS2d 36 [1971])(quoting Campbell v Bussing(274 AD 893, 82 NYS2d 616 [2nd Dep't 1948]). Where an agreement is incomplete, Matter of Galasso, supra, or the court finds there to be other good cause such that, "it appears that either party has inadvertently, unadvisably or improvidently entered into an agreement which will take the case out of the due and ordinary course of proceeding in the action, and in so doing may work to his prejudice", a court may vacate a stipulation and restore the pre-stipulation status quo "in order to promote justice and prevent wrong," In re Estate of Frutiger (29 NY2d at 150).
A stipulation settling a nonpayment proceeding should be vacated where the respondent-tenant demonstrates "the existence of substantive defenses that, but for the stipulation executed, would have led to the dismissal of [the] proceeding." Cashmere Realty Corp v Hersi (2005 NY Misc LEXIS 3573, 234 NYLJ 123 [Civ Ct NY Co 2005])(vacating Stipulation of Settlement and dismissing proceeding where respondent, a senior citizen with very limited knowledge of the English language, "entered into the stipulation unaware of any of his legal defenses to the proceeding", including failure to accurately plead the rent regulatory status of the premises; violation of the Williams consent decree applicable to Section 8 voucher-subsidized apartments by failing to notify and obtain permission from that agency prior to commencing the nonpayment proceeding; and failure to make repairs). See also, e.g., 2701 Grand Ass'n LLC v Morel (50 Misc 3d 139[A], 31 NYS3d 924 [Table][App Term 1st Dep't 2016])(in a nonpayment proceeding, vacating stipulation entered into by previously unrepresented tenant where "[t]enants, now represented by counsel, have submitted documentary evidence showing the existence of an arguably meritorious rent overcharge claim"); Tabak Associates, LLC v Vargas (48 Misc 3d 143[A], 20 NYS3d 294 [Table] (App Term 1st Dep't 2015]), and Berto Realty LLC v Thiombiano (45 Misc 3d 129[A], 999 NYS2d 796 [Table] [App Term 1st Dep't 2014])(affirming lower courts' orders vacating stipulations entered into by previously unrepresented tenants, now appearing by counsel, who demonstrated potentially meritorious rent overcharge claims); 2722 8th LLC v Watson (10 Misc 3d 140[A], 814 NYS2d 565 [App Term 1st Dep't 2006])(reversing lower court which had denied tenant's motion to vacate a stipulation where tenant, "now represented by counsel, has submitted documentary evidence which shows the existence of possible defenses to landlord's rent claim" and finding that "the judgment should have been vacated and the stipulation set aside to allow tenant to defend the nonpayment proceeding on the merits"); Striver 140 LLC v Cruz (1 Misc 3d 29, 770 NYS2d 814 [App Term 1st Dep't 2003])(affirming lower court's order "insofar as it vacated the stipulation executed by pro se tenants and permitted them to defend the nonpayment proceeding on the merits" where the tenants had "made a prima facie showing of defenses based upon breach of the warranty of habitability and rent overcharge"); and compare 2345 Crotona Gold v Dross (50 Misc 3d 143[A], 31 NYS3d 924 [App Term 1st Dep't 2016](upholding lower court's denial of tenant's motion to vacate so-ordered stipulations settling a nonpayment proceeding where there was no showing of a potential rent overcharge claim or that "the stipulations were tainted by mistake, fraud, or any other basis for voiding a contract [citations omitted] or that it would be inequitable to hold the parties to their bargain").
The question here is whether vacating the June 26, 2017 stipulation — which did not settle the case; it substituted Respondent Jasmine Gonzalez's name for "Jane Doe" and adjourned the case seven weeks for trial — would promote the principles described above.
Necessary parties are defined in CPLR § 1001 as, "Persons who ought to be parties if complete relief is to be accorded between the parties to the action or who might be inequitably affected by a judgment in the action shall be made plaintiffs or defendants." Proper parties are those whose absence will not prevent the entry of a binding judgment, but whose presence would make an order or judgment more complete. Permissive joinder as defendants under CPLR § 1002(b) is available for those "against whom there is asserted any right to relief jointly, severally, or in the alternative, arising out of the same transaction, occurrence or series of transactions or occurrences ."
In eviction proceedings, undertenants may be "proper parties", whom a landlord may choose to join as additional named parties, but "are not 'necessary' parties whose presence is indispensable to the according of complete relief as between landlord and tenant." Triborough Bridge & Tunnel Auth v Wimpfheimer (165 Misc 2d 584, 633 NYS2d 695 [App Term 1st Dep't 1995]). In Wimpfheimer, the court reversed the lower court's order dismissing the petition in its entirety and reinstated it as against the tenants, with leave to the landlord to renew its motion for summary judgment of possession, while upholding the dismissal as against the subtenants who had not been properly named. The Court in Wimpfheimer, citing 170 West 85th Street Tenants Ass'n v Cruz (173 AD2d, 338, 339-40, 569 NYS2d 706, 707 [1st Dep't 1991]), noted that the landlord, "if so advised, may apply for joinder of the subtenants as additional named parties, so that any warrant obtained in this proceeding will be effective against them." (165 Misc 2d at 586, 633 NYS2d at 697). See also, e.g., First Fed Sav & Loan Assn v Albert C Moore et al (157 Misc 2d 877, 599 NYS2d 410 [Yonkers City Ct 1993])(in post-foreclosure holdover proceeding against tenant and subtenant of cooperative apartment, finding it "axiomatic" that a (1) subtenant's rights "stand and fall with the rights of the paramount lease" and (2) "subtenants are not necessary parties to a summary proceeding and are joined in the proceeding at the discretion of the landlord in order to assure that any warrant which may be issued by the court is effective against the subtenant as well as against the prime tenant," citing New York R Corp v Savoy Assoc (239 AD 504, 268 NYS 181 [1st Dep't 1933]).
In Cruz, a holdover proceeding against the tenant of record (Nilda Cruz) and an occupant (Freddy "Doe" aka Mosquera) who raised an ultimately unsuccessful succession rights claim as a nontraditional family member under Braschi v Stahl Associates Company (74 NY2d 201, 543 NE2d 49, 544 NYS2d 784 [1989]), the court found that Mosquera had received legally sufficient notice of the proceeding when he was served with a copy of the petition and notice of petition, naming him as "Freddy Doe (Undertenant)".
While subtenants or occupants with viable claims of independent possessory rights may stand on a different footing, see, e.g., 115 Mulberry LLC v Giacobbe, (46 Misc 3d 1229[A], 15 NYS3d 713 [Civ Ct NY Co 2015])(in a nonpayment proceeding, granting post-eviction relief to the respondent-tenant's brother, an unnamed occupant); Acquisition America v Diaz (20 Misc 3d 1127[A], 872 NYS2d 689 [Civ Ct NY Co 2008])(in a nonpayment proceeding, granting a post-judgment hearing to respondent-tenants' son, an unnamed occupant, who presented a "colorably meritorious" claim of succession rights), the more general rule, as explained by the Appellate Division, First Department in Cruz, supra, is that, "The rights of a person whose claim to possession derives from the lessee are subordinate and are extinguished by a judgment of possession in favor of the lessor. Due process requires only that, for the warrant to be effective against a subtenant, licensee or occupant, he be made a party to the proceeding, either by naming him in and serving him with the petition and notice of petition or by joining him as a party during the pendency of the proceeding." 170 West 85th Street Tenants Ass'n v Cruz (173 AD2d at 339-40, 569 NYS2d at 707 [1st Dep't 1991]).
Further, while dismissal for failure to name a necessary party is contemplated by CPLR R 3211(a)(10), the Court of Appeals has held this to be a last resort remedy. In Saratoga County Chamber of Commerce v Pataki (100 NY2d 801, 798 NE 2d 1047, 766 NYS2d 654 [2003]), the Court held that requiring dismissal was appropriate in only two instances: Either to prevent inconsistent judgments in multiple litigations or to prevent a party from being adversely affected absent notice and an opportunity to be heard. Id. See also, e.g., Washington Mut Bank, FA v Hanspal (14 Misc 3d 1217[A], 836 NYS2d 491 [NY Dist Ct, 1st Dist, Nassau Co], aff'd on other grounds, 18 Misc 3d 127[A], 856 NYS2d 27 [App Term 2nd Dep't 2007])(after finding co-tenant to be a necessary party, allowing petitioner the opportunity to add her as a respondent rather than dismissing proceeding). Compare Deutsche Bank Natl Trust Co v Turner, (32 Misc 3d 1202[A], 934 NYS2d 33 [Civ Ct Bx Co 2011])(finding occupant of two-family house sued as "Jane Doe" to be a necessary party and granting her motion to dismiss post-foreclosure holdover proceeding).
Here, no evidence has been presented to support Respondent's claim that she is a "necessary party" to this nonpayment proceeding. It is undisputed that the lease for the premises is between Petitioner and Respondent Vista Management, that Respondent Gonzalez is not named in that lease as a co-tenant and that neither she nor anyone else has ever paid any rent to Petitioner in her name. Respondent is an undertenant, a licensee of Vista Management, with no independent possessory rights. It is certainly troubling and problematic that Respondent does not know who Vista Management is, and apparently was never given basic information about and documentation of her relationship with that entity and her status and limited rights as undertenant in the subject premises; however, this does not change the fact that there is no privity between her and Petitioner.
Further, Petitioner did name and serve Ms. Gonzalez as a Respondent-undertenant in this proceeding (albeit as "Jane Doe"), even though it was not required to do so. While she is not a necessary party and her presence is not needed for Petitioner to obtain a judgment of possession and warrant of eviction against the tenant of record, nevertheless, Petitioner followed the advice of the Appellate Division, First Department in 170 West 85th Street Tenants Ass'n v Cruz, supra, and, to ensure "the warrant to be effective against a subtenant, licensee or occupant," named and served "John/Jane Doe" with the petition and notice of petition.
Petitioner's only apparent error was in using "Jane Doe" rather than "Jasmine Gonzalez", a name it should have known and arguably used given that it appeared by counsel to defend against Ms. Gonzalez's HP Action on February 1, 2017, just under two months prior to the date of its predicate rent demand. Certainly, under CPLR § 1024, "A party who is ignorant, in whole or in part of the name or identity of a person who may properly be made a party, may proceed against such person as an unknown party by designating so much of his name and identity as is known." See, e.g., ABKCO Industries, Inc v Lennon (52 AD2d 435, 441, 384 NYS2d 781 [1st Dep't 1976]). However, "John/Jane Doe" designations should not be used where a party has actual knowledge of any part of the other parties' true names or where diligent efforts to ascertain those names have not been made. Deutsche Bank Natl Trust Co v Turner, supra, and cases cited therein. In Wimpfheimer, supra, the Court held that the subtenants whose names and identities were known to the landlord should not have been designated as "Jane Doe" and "John Doe" and upheld the lower court's dismissal of the holdover petition as to them. See also, e.g., See also, e.g., 1234 Broadway LLC v Hsien Hua Ying (50 Misc 3d 140[A], 31 NYS3d 922 [App Term 1st Dep't])(finding it appropriate to dismiss illegal sublet holdover proceeding as against alleged subtenant improperly designated as "John Doe", although reinstating petition as against the tenant and granting landlord's motion for a default judgment against him).
The statement of Petitioner's agent that, upon information and belief, Vista Management is a "scatter site not-for-profit which provides housing to subtenants," Affidavit in Opposition at ¶ 6, some of whom are "at-risk tenants who's [sic] identities remain anonymous", id. at ¶ 8, gives the court pause. As described on the New York City Department of Health's website, "scattered-site housing" is a form of supportive housing that is "a combination of affordable housing and support services designed to help individuals and families use housing as a platform for health and recovery following a period of homelessness, hospitalization or incarceration or for youth aging out of foster care." https://www1.nyc.gov/site/doh/health/health-topics/housing-services-supportive-housing.page. In light of potential privacy concerns, even if a landlord has reason to know the names of the undertenants placed in its building through a "scattered-site housing" program, it may not be unreasonable for a landlord to use "John Doe" and "Jane Doe" instead of the residents' actual names in court papers and predicate notices.
Nevertheless, to vacate the Stipulation and dismiss the Petition as against Ms. Gonzalez — a proper, but not a necessary party — due to Petitioner suing her as "Jane Doe", would be an empty exercise at this juncture. The default judgment against Vista Management would still stand, Wimpfheimer, supra; 1234 Broadway LLC v Hsien Hua Ying, supra, and Petitioner may very well be permitted to amend the Notice of Petition and Petition to add Jasmine Gonzalez and to re-serve the papers on her, Wimpfheimer, supra; Washington Mut Bank, FA v Hanspal, supra. Alternatively, based on the existing default judgment against Vista Management, upon submission of proper papers by a City Marshal, even if the Petition is dismissed against Ms. Gonzalez the court could issue an executable warrant of eviction against Vista Management and "John/Jane Doe". There is no evidence before this court to support Respondent's claim that substituting her name for "Jane Doe" by stipulation took "the case out of the due and ordinary course of proceeding" or requires restoration of the pre-stipulation status quo "in order to promote justice and prevent wrong." In re Estate of Frutiger (29 NY2d at 150).
The second prong of Respondent's motion asserts that Petitioner's failure to describe its relationship to Vista Management, and Vista Management's relationship to Ms. Gonzalez, warrants dismissal of the Petition for lack of subject matter jurisdiction under CPLR R 3211(a)(2) and failure to state the facts upon which the proceeding is based as required by RPAPL § 741. Respondent argues that RPAPL § 741 and caselaw require Petitioner to "accurately and specifically state Respondent [Vista Management]'s interest in the premises as related to Ms. Gonzalez's sub-tenancy" and "to sufficiently describe the type of contract existing between Petitioner and Respondent-Tenant Vista Management Corp." Affirmation in Support at ¶ 57. Respondent cites to an Appellate Division, Second Department case, Volunteers of America-Greater New York, Inc v Almonte (65 AD3d 1155, 886 NYS2d 46 [2nd Dep't 2009]), which upheld the Appellate Term's reversal of the lower court's post-trial issuance of a judgment of possession in favor of the petitioner-landlord for, inter alia, failure to allege the existence of a contract between the landlord and the City which provided the respondent-occupant with certain potential defenses. In Almonte, "The City of New York owns the building in which the subject premises are located. The Department of Homeless Services (hereinafter DHS) operates the building as a Single Room Occupancy (hereinafter SRO) facility, providing SRO units to 174 homeless adults. The DHS has designated 53 of the units for persons with a history of mental illness. The tenant of the subject premises (hereinafter the tenant), who has been classified as 'persistently mentally ill,' has resided at the subject premises for over 10 years." Further, the contract between DHS and the petitioner in Almonte "designates, among other things, the amount of rent each tenant will pay, when the petitioner is to collect the rent, and how the petitioner is to spend the collected rents." See also, e.g., DiScala v Facilities Dev Corp (180 Misc 2d 355, 691 NYS2d 229 [Civ Ct Richmond Co 1998])(where lease between private landlord and an agency of the State of New York established that the purpose of the agreement was to provide a residential facility for persons with developmental disabilities, holdover proceeding dismissed where landlord failed to name the actual occupants as respondents, neither by name nor by identifying them as "John/Jane Doe").
Respondent asserts no facts to demonstrate that the terms of her occupancy of the premises in any way mirror those at issue in Almonte and DiScala. The building where Respondent resides is privately owned and operated and no evidence has been presented to indicate there to be any special use of the building, or government entwinement with the landlord's operations. Notably, neither Petitioner nor Respondent appears to have any information about what sort of entity Vista Management is, and what contractual relationship it may have with Petitioner or with Respondent Gonzalez, other than it possibly being a provider of "scattered site housing". Petitioner supports its opposition papers with a copy of the most recent Rent Stabilized renewal lease for the premises, which reflects that Vista Management is the sole tenant of record and the sole remitter of rent payments. Respondent submits nothing to dispute these facts, and provides no proof of any contract between Petitioner and Vista Management that might provide her with defenses to this proceeding. Nor does Respondent even provide proof of any rent payments that she herself has made to Petitioner since moving in to the apartment in June 2016 or other basis for a finding of privity between herself and Petitioner.
Accordingly, Respondent's motion to vacate the Stipulation and dismiss the proceeding based on lack of personal and/or subject matter jurisdiction and failure to state the facts upon which the proceeding is based is denied, without prejudice to renewal in the event other relevant facts not presently known are discovered.
Finally, Respondent's motion seeking leave to serve and file an Amended Answer is denied, also without prejudice. As discussed above, Respondent has not stated a basis for either her first proposed affirmative defense (lack of subject matter jurisdiction for failure to state facts regarding the relationship between herself and Vista Management and/or Petitioner and Vista Management) or her second (failure to sue her by name in violation of CPLR §§ 1001(a) and 1024). As for her proposed third affirmative defense and first counterclaim seeking a rent abatement based on breach of the warranty of habitability, Respondent may not raise these claims as she is not the tenant of record and has presented no evidence of an obligation to pay rent to Petitioner. Westway Plaza Assoc v Doe (179 AD2d 408, 410, 578 NYS2d 166 [1st Dep't 1992, mem])(paying rent is a prerequisite to asserting an RPL § 235-b claim for an abatement); Bandler v Battery Park Mgt Co (10 Misc 3d 133[A], 809 NYS2d 480 [App Term 1st Dep't 2005])(former roommate of Rent Stabilized tenant of record had no cause of action against landlord for breach of the warranty of habitability since there was neither a contractual agreement nor landlord-tenant relationship between them). CONCLUSION
As set forth above, Respondent-Undertenant Gonzalez's motion is denied in its entirety, without prejudice. This proceeding is restored to the court's calendar for settlement or trial on October 30, 2017. Any motions must be served and filed by October 6, 2017 and any such motion practice must be completed pursuant to the timetables set forth in the CPLR.
This constitutes the Decision and Order of this Court, copies of which are being provided to the parties' counsel in the courthouse. Dated: September 11, 2017 Bronx, New York _________________________ Diane E. Lutwak, Hsg. Ct. J.