Bay Park Two LLC v. Pearson

77 Misc.3d 534

179 N.Y.S.3d 873

BAY PARK TWO-LLC, Petitioner,

v.Tekecia PEARSON, Miguel Pearson, Respondents.

L&T Index No. 82404/19

Civil Court, City of New York, Kings County.

Decided on November 9, 2022

Petitioner Attorney: Gutman, Mintz, Baker & Sonnenfeldt

Respondent Attorney: RiseBoro Community Partnership/Legal Empowerment & Assistance Program

Kimberley Slade, J. Petitioner moves by order to show cause to restore this matter to the court calendar for a conference and to vacate the ERAP stay, and to then allow the previously issued warrant of eviction to execute. Respondent, a Section 8 voucher recipient in this non-payment proceeding opposes the motion.

This proceeding first appeared on the court's calendar on November 13, 2019 when a possessory judgment was entered in the amount of $15,869.00 representing the respondent's share of arrears then due. Shortly thereafter, as the arrears grew, petitioner sought to evict, and this court entered orders staying execution of the warrant to allow respondent, a long-term tenant, further time to pay and to preserve her tenancy. In each of her pre-pandemic applications to stay the warrant respondent represented she was waiting for HRA to pay. (NYSCEF 19, 25) The last pre-pandemic order extended respondent's time to pay through March 23, 2020.

In May of 2020, petitioner sought to restore the matter under the pandemic rules in effect at the time and, following various appearances, the court connected respondent with a legal service provider. Ultimately, the matter settled with respondent's acknowledgement that $31,934.50 was owed through April 2021 and her agreement that this would be paid by June 30, 2021. Respondent again represented that she was seeking arrears from Public Assistance and asserted that she was in the process of recertifying her subsidy with NYCHA section 8. (NYSCEF 43)

No payments were made but shortly after, respondent filed a hardship declaration (NYSCEF 31) and later, an ERAP application (No. UVVH4 — See copy of ERAP status attached to this decision indicating tenant portion is incomplete) each of which stayed this proceeding. This motion then ensued. Petitioner asserts respondent owes approximately thirty months of rent as of June 24th 2022 at a rate of $1,094.00 per month.

Petitioner argues that the stay should not apply to this proceeding as respondent's status as a Section 8 recipient places her within a group or class of people whose applications may never be paid pursuant to both the ERAP statute's own language and guidance provided by the Office of Temporary Disability Insurance's website (OTDA). Additionally, petitioner argues that even if the ERAP policy magically changed and fifteen months of arrears were eligible to be paid, the ERAP monies would not satisfy either the judgment already in place prior to the onset of the pandemic or the additional and subsequently accrued arrears. Consequently, petitioner argues that the matter should be allowed to proceed, in the very least, for the non-ERAP monies. Finally, petitioner argues that not vacating the stay will "unfairly prejudice the Petitioner, who is unjustifiably stayed from seeking arrears that are rightfully owed to it, and which are, indisputably, never going to be paid by ERAP as they exceed the full award amount." (Affirmation in Support, Par. 15)

Respondent asserts that the only forum in which this question may be decided is in Supreme Court via an Article 78 proceeding, that petitioner has not served the New York State Attorney General in this matter, that equitable considerations require that the matter be stayed and that CPLR 3211(a)(10) precludes this court from granting the relief sought as petitioner failed to join the Commissioner of OTDA in this proceeding as a necessary party. Respondent argues in the alternative that since petitioner has not established or asserted respondent's ineligibility for ERAP and has failed to indicate it will waive the monies requested from ERAP to be allowed to proceed, the motion must be denied and the stay remain intact.

Virtually all case law addressing whether an ERAP stay may be vacated starts with the straightforward proposition that Section 8 of subpart A of part BB of chapter 56 of the laws of 2021, as amended by Section 4 of part A of chapter 417 of the laws of 2021 (ERAP) stays both holdover and nonpayment proceedings upon the filing of an ERAP application for all or part of the arrears claimed by a petitioner pending a determination of eligibility. Case law is less straightforward when the question is whether a case must remain stayed upon an application to vacate a specific stay and whether the sole authority to assess an ERAP application is vested with the Commissioner of OTDA. May vacate : Laporte v. Garcia , 75 Misc. 3d 557, 168 N.Y.S.3d 794, Karan Realty Associates v. Perez , 75 Misc. 3d 499, 166 N.Y.S.3d 492 2986 Briggs LLC v. Evans , 74 Misc. 3d 1224(A), 2022 WL 853132, Papandrea-Zavaglia v. Arroyave , 75 Misc.3d 541, 168 N.Y.S.3d 789, Zheng v. Guiseppone , 74 Misc. 3d 1231(A), 165 N.Y.S.3d 274 (Table), Actie v. Gregory , 74 Misc. 3d 1213(A), 2022 WL 534305 ; May vacate and assess eligibility : 5th and 106th Street Associates LP v. Hunt , 76 Misc. 3d 338, 172 N.Y.S.3d 354 and Harmony Mills West, LLC, d/b/a the Lofts at Harmony Mills v. Constantine , 75 Misc. 3d 594, 169 N.Y.S.3d 476, Abuelafiya v. Orena , 73 Misc. 3d 576, 155 N.Y.S.3d 715, 2021 N.Y. Slip Op. 21247 ; May not vacate: Savy Properties 26 Corp. v. James, 76 Misc. 3d 1214(A), 174 N.Y.S.3d 824 (Table), 560-566 Hudson, LLC v. Hillman , 2022 WL 1003480, 2022 N.Y. Slip Op. 30718(U).Currently, there is no appellate guidance on this issue.

On September 1, 2021 the New York State legislature addressed the problems New York State had with its ERAP rollout in Section 2 of the statute where it provided "[t]he legislature is especially cognizant of the ongoing risks posed by residential evictions stemming from non-payment of rent during the height of the public health emergency, and its recovery period, such as the potential to exacerbate the resurgence of Covid-19, the damage significant numbers of eviction would cause the state's economic recovery, and the deleterious social and public health effects of homelessness and housing stability." The law is currently set to expire on September 30, 2025. In part BB, Section 1, Subpart A, Section 5(I) the statute provides that a tenant or occupant is eligible to receive benefits "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." Currently the OTDA website provides:

IMPORTANT NOTE: Applicants from subsidized housing tenants whose rent is limited to a certain percentage of income (including public housing, Section 8 and FHEPS) are not currently able to be paid. State law requires that these applications be paid after all other eligible occupants have been reviewed and paid. Therefore, at this time, none of the subsidized housing applications can be paid regardless of the date their application was submitted. Residents of public housing are urged to contact their public housing authority to determine if their rent can be adjusted retroactively based on a previous change in circumstances, including a reduction in income.

The stated purpose of the legislation per the New York State Senate Introducer's Memorandum in Support, Bill No. 55001 is that "[t]his critical legislation will extend and modify protections necessary to allow New Yorkers to stay in their homes, and provide landlords with funding for unpaid rent for tenants that have experienced financial hardship due to the COVID-19 pandemic."

Once the ERAP application is filed, a stay is triggered "pending a determination of eligibility." id.

However, a court's power and authority to modify, vacate or condition a stay in matters over which it presides is a necessary and integral component of its powers and duties and necessary to the exercise of its judicial functions. In Jones v. Allen , 185 Misc. 2d 443, 712 N.Y.S.2d 306, Supreme Court, Appellate Term, 2nd Dep't. June 27, 2000 the Court, while noting the limited question before it, determined that RPAPL 747-a, which limited a court's discretion in granting a stay "impermissibly interfere[d] with the court's inherent judicial function." (all internal citations omitted).

While the question addressed by the Jones court was limited to a specific statutory prohibition against extending a stay the principles espoused apply equally here. Courts have the ability and obligation to review, modify, vacate, alter or condition stays, whether from their own orders or from statutorily mandated stays, such as those triggered by the filing of an ERAP application. The body of case law addressing CPLR 5519 and 2201 for instance, as well as bankruptcy proceedings and other automatic stays demonstrates this power and authority. Additionally, the numerous lower court decisions addressing this issue implicitly recognize this power.

In an analogous scenario the court in Robo LLC v. Matos , 75 Misc. 3d 1211(A), 168 N.Y.S.3d 676, 2022 N.Y. Slip Op. 50468(U) addressed and denied a request to vacate a stay where the respondent owed arrears that accrued prior to and after the onset of the pandemic,...