Opinion
HULT 666-10
06-17-2011
Millenium Hills Housing Development Fund Corp., Petitioner v. Janette Davis, Respondent
Vitale and Levitt, P.C. Paul E. Levitt, Esq. Attorneys for Petitioner Nassau/Suffolk Law Services Committee, Inc. By: Marissa Luchs Kindler, Esq. Attorneys for Respondent
Vitale and Levitt, P.C.
Paul E. Levitt, Esq.
Attorneys for Petitioner
Nassau/Suffolk Law Services
Committee, Inc.
By: Marissa Luchs Kindler, Esq.
Attorneys for Respondent
C. Stephen Hackeling, J.
Pursuant to Order dated May 5, 2011, this Court scheduled a hearing conducted June 2, 2011 to factually determine whether the lease termination decision of a administrative Hearing Officer, appointed by the Town of Huntington Housing Authority as agent for Millenium Hills Housing Development Fund Corp. constitutes governmental or private action. The import of said decision differentiates whether this Court has the authority to conduct a de novo review of the lease termination or whether the respondent must seek said review in the New York State Supreme Court via a CPLR Article 78 petition. The Court reserved decision on the "state action" issue subject to further briefing and allowed the parties to stipulate to the facts of the action concerning the underlying lease termination.
Undisputed Facts
The parties have stipulated to or do not contest the following facts:
(1) The petitioner, Millenium Hills Housing Development Corp. (hereafter "Millenium"), is a not for profit corporation constituted under the New York Public Housing Law.
(2) The respondent, Janette Davis, executed a standard HUD approved subsidized housing lease dated August 8, 2005 to occupy Unit No. 203 at the Millenium Melville housing complex. (Exhibit 4).
(3) Ms. Davis's son plead guilty to 7th degree criminal possession of a controlled substance on January 22, 2009
(4) Town of Huntington Housing Authority (hereafter "the Authority") is a municipal entity created under the New York State Public Housing law for the purpose of implementing the creation, maintenance and finance of low income housing in the Town of Huntington.
(5) The Authority, by its employee Ra-Shime K. Rivers, terminated Ms. Davis's lease with Millenium via notice dated September 30, 2009 as a result of her son's criminal drug possession conviction. The notice advised that Mr. Rivers was acting as an agent for Millenium, and gave Ms. Davis a ten day opportunity to request both an informal and formal grievance hearing which was demanded by Ms. Davis.
(6) A hearing was held January 19, 2010 at the offices of the Authority which resulted in a decision by Hearing Officer (hereafter " H. O.") Eric T. Wingate denying Ms. Davis's grievance and request for lease reinstatement and further housing payment subsidies. The written decision dated January 22, 2010 does not indicate who Mr. Wingate is employed by but is carbon copied to the director of the Authority. See Exhibit C of the respondent's application for de novo review dated January 4, 2011.
(7) Millenium commenced a summary nonpayment proceeding against Ms. Davis in February, 2010 under Index No. HULT 80-10. Millenium did not appear on the return date, and the petition was dismissed as Ms. Davis had paid all her share of the outstanding rent.
(8) Ms. Davis thereafter paid rent for the months of February and March 2010 which was accepted by Millenium.
(9) During April 2010 and thereafter, Millenium refused to accept rent from Ms. Davis.
(10) Ms. Davis again received another letter from the Authority dated April 29, 2010, stating that they were terminating her tenancy, for the same reasons as stated in its September 30, 3009 notice, and offering an opportunity to request a hearing. The grievance hearing was scheduled for June 24, 2010.
(11) Ms. Davis was simultaneously served with a holdover proceeding eviction petition based upon the aforementioned termination decision. However, the return date for this proceeding was the same June 24, 2010 date as respondent's grievance hearing at the Authority.
Millenium subsequently withdrew the summary holdover proceeding as premature.
(12) Thereafter, on or about August 2010 the Authority had Ms. Davis come to their office to recertify her tenancy.
(13) A hearing was ultimately held at the Authority, with respect to the "re-issued" termination notice, on September 10, 2010. Hearing Officer Adam Morelli, via decision dated November 9, 2010, upheld Ms. Davis's lease termination upon the same grounds as determined by H. O. Wingate in his January 22, 2010 decision. This decision is not on any letterhead and does not reflect who he is employed by.
(14) H. O. Morelli was appointed a Hearing Officer pursuant to the Town of Huntington Housing Authority resolution dated August 17, 2010.
(15) Millenium commenced this summary holdover eviction proceeding via petition dated December 7, 2010. Ms. Davis's son permanently moved out of Ms. Davis's apartment shortly thereafter.
Issues Presented
The threshold issue presented is whether the Authority's termination of Ms. Davis's lease with Millenium is an action which is reviewable by this Court or whether said review is available only via petition to the Supreme Court pursuant to New York CPLR Article 78? If de novo review by this Court is available; was Millenium's lease termination legally effective?
Discussion
Boiled down to its most basic common denominator; the dispositive issue presented by the parties is whether a housing authority can act as an agent for a private not for profit corporation, for the purpose of effecting a "state action" lease termination? This Court has previously addressed the availability of "de novo review" for Millenium lease terminations and determined that such terminations are not state action, and their tenants are entitled to a full review of the termination process on the merits in the District Court. Millenium Hills Housing Development Fund Corp. v. Patterson, 25 Misc. 3rd 1214 (A) aff'd. 31 Misc 3d 134 (A)(9th & 10th App. Term 2nd Dept. 2011). This stands in stark contrast to the role of this Court if the lease is terminated via "state action" which limits District Court review to finding that "limited due process" was afforded the tenant in the termination process. See, Fuller v. Urstadt, 28 NY2d 315 (NY 1971); Williams v. White Plains Housing Authority, 35 AD2d 2d 965 (N.Y.A.D. 2ND Dept. 1970).
Ordinarily, the relationship between a landlord and tenant is contractual, and any provisions permitting lease termination are enforceable and exercisable by the landlord "at will" and with no explanation required. Vinson v. Greengurgh Housing Authority, 29 AD2d 338 (N.Y.A.D. 2nd Dept. 1968). It is the normal role of this Court, when sitting in its landlord/tenant capacity, to adjudicate whether the lease has been terminated pursuant to its terms. However the Fuller decision established the concept of " limited due process" which limits the landlord/tenant Court's inquiry to only whether the tenant received a written explanation of the lease violation and an opportunity to address same.
Millenium again petitions this Court for a warrant of eviction "on a ministerial basis" and again argues that de novo review is inappropriate as the lease was terminated by decision of Authority/State agents which can only be reviewed by the Supreme Court via a CPLR Article 78 petition. The Court need not conduct an exhaustive examination of this issue as the law in the 9th and 10th Judicial District of the Appellate Division Second Department has been settled.The Appellate Term has already reviewed the Millenium lease termination process utilizing the same termination and Hearing Officer agents (Ra-Shime K. Rivers and Eric T. Wingate) and concluded that "de novo review" by the District Court is appropriate. The afore cited Patterson Appellate Court expressly determined that the District Court may dismiss Millenium's eviction petition if it factually finds that the circumstances of the lease violation are contrary to the Hearing Officer's determination. This is the essence of de novo review.
The Court acknowledges the existence of a plethora of reported Appellate Court cases, most of which involve the New York City Housing Authority, wherein Article 78 proceedings were utilized to contest Authority lease terminations, and that the First Department has determined that an Article 78 proceeding is the appropriate method of challenging an Authority drug related lease termination. See Blackman v. N.Y.C. Housing Authority, 280 AD2d 324 (N.Y.A.D. 1st Dept. 2001). However, these cases appear distinguishable as the Housing Authority therein actually owned the subject apartments. In the present case it is the not for profit corporation Millenium that owns the residence, and who is the leasehold landlord.
The Court notes that the Authority does have the right to terminate its subsidy payments which is only reviewable via Article 78 petition. See Springfield v. Huntington Housing Autrhority, 78 AD3d 718 (N.Y.A.D. 2nd Dept. 2010).
This Court is troubled by the fact that the Authority herein is loaning its decision making "governmental status" to a private entity by volunteering to serve as its agent in a dispute withanother private entity. The grant of "state action/color of law" status appears to violate the "ultra vires" doctrine. A state officer/employee acts "ultra vires" where there is no colorable basis for the exercise of authority. Local 851 Int. Bhd. Of Teamsters v. Thyssen Haniel Logistics, Inc., 90 F Supp. 2d 237, 243 (E.D.NY 2000). See also generally, J.A.J. Liquor Store, Inc. v. New York Liquor Authority, 64 NY2d 504 (NY 1985). "State Action" requires a constitutional/statutory predicate. In the area of public housing, this usually takes the form of a "propriety interest", i.e. the state has an ownership or leasehold interest in the subject property. A perfect example of such an interest is identified in the Court of Appeals Fuller decision; wherein New York created "Mitchell Lama Housing" which was owned by a private limited profit housing corporation. New York State leased and thereafter sublet 20% of the housing units to low income families. 28 NY2d 315 (NY 1971). The Court of Appeals recognized that the state's "leasehold" interest on its 20% of the units was sufficient to constitute "state action" reviewable via Article 78 petition, while 80% of the private units were governed by common law contract and reviewable de novo in the local housing Court. Without such a proprietary interest, the Authority's acts as agents for a private entity would be "ultra vires" and are unauthorized.
The Merits
Ms. Davis advances two defenses to the Millenium eviction petition. The first is that Millenium waived its termination decision and created a new leasehold interest by accepting post termination rent. The second is that the language of the lease does not allow for lease termination for a drug conviction premised only upon possession.
The Court has previously rejected Ms. Davis's "waiver" defense in its decision and order dated May 5, 2011. The authorities cited in that decision are incorporated by reference herein. Inherent in the language of the statutory predicate which grants this Court jurisdiction to entertain "holdover" eviction proceedings is the proposition that the acceptance of the rent after a lease has been terminated by a landlord revives the lease. See New York RPAPL §711 (1). See also, Prizep v. Wadler,, 217 N.Y.S. 2d 746 (N.Y.A.D.1st Dept. App. Term 1961); N.Y.City Housing Authority v. Padamore,140 Misc. 2nd 912 (N.Y.C. Civ. Ct. 1988). However, in this instance the lease termination and hearing officer grievance hearings were held on at least two occasions; i.e. once before acceptance of the February and March rent and once after same on April 29th. No rent was accepted after the April 29th termination and prior to commencement of this action in December. The actions of the Authority/Millenium do not violate Sec 711's express provisions and do not indicate a knowing waiver of the alleged underlying lease violations, or a prior judicial res judicata adjudication.
Ms. Davis's second defense is her assertion that the convoluted definition of "drug related criminal activity" in paragraph 19 of her HUD lease does not encompass "mere possession" of illegal drugs; which is all her son was convicted of. The Court is sympathetic to her contention. However, the subject "drug related criminal activity" language derives from HUD regulations and approved forms and has already been construed by federal and New York State Appellate Court's to allow for eviction from public housing for mere possession of drugs. Dept. of Housing & Urban Development v. Rucker, 535 U.S. 125 (2002); Bradford v. N.Y.C. Housing Authority, 34 AD3d 463 (N.Y.AD2d Dept. 2006).
The tenant in this case also pleaded guilty to criminal possession of a controlled substance in the 7th degree.
Fortunately for the respondent precedent exists which provides that even in the presence of a finding of "drug related criminal activity"; that a HUD subsidized lease may not be terminated without a "substantial inquiry and compelling evidence that evicting a person is necessary". Duryea v. N.Y.C. Housing Authority, 85 AD3d 653 (N.Y.A.D. 1st Dept. 2011). The First Department Appellate Division concluded therein that a minor's first time "possession only" offense is insufficient grounds to trigger clause No.19 so as to evict a long term lease innocent mother. The Court notes that Ms. Davis's offending son has been permanently excluded from the subject premises. As such, it appears that little governmental interest would now be served to evict the innocent mother. Such a circumstance and penalty would "shock" the Court's conscience, and be in contravention of the Duryea Court's dictate.
While not argued by the parties, the Court also notes that the Authority's failure to tender written proof of authority to act as Millenium's agent for lease termination purposes runs contrary to the law and would constitute grounds for dismissal of this petition. See Siegel v. Kentucky Fried Chicken, Inc., 108 AD2d 218 (N.Y.A.D. 2nd Dept. 1985) aff'd. 67 NY2d 792 (NY 1986).
Accordingly, the Court dismisses Millenium's petition subject to reconsideration in the event the respondent's son redomiciles in the subject premises.
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J.D.C.