Summary
In Hugo, the tenant did not argue that a new tenancy had been created, rather the tenant proffered the common argument that a notice of termination is vitiated by the acceptance of rent during the "window period" between expiration of a notice of termination and commencement of the proceeding.
Summary of this case from BOP MW Residential Mkt. v. Fanyu LinOpinion
Index No. 306628-21
07-22-2022
Yelena K. FEUERMAN, Petitioner, v. Michelle HUGO et al., Respondent.
Novick Edelstein Pomerantz, PC (Marybeth Hotaling, Esq.), for the petitioner Manhattan Legal Services (Ami Shah, Esq.), for the respondent
Novick Edelstein Pomerantz, PC (Marybeth Hotaling, Esq.), for the petitioner
Manhattan Legal Services (Ami Shah, Esq.), for the respondent
Karen May Bacdayan, J. PROCEDURAL HISTORY AND BACKGROUND
This is an expiration of lease holdover in an unregulated premises. Respondent's term was terminated by 90-day notice of non-renewal as of May 14, 2021. (NYSCEF Doc No. 1 at 5.) This proceeding was commenced on September 28, 2022 when petitioner filed the notice of petition and petition to the clerk's office via NYSCEF. (NYSCEF Doc No. 4; ABN Assoc., LLC v. Citizens Advice Bur., Inc. , 27 Misc. 3d 143(A), 910 N.Y.S.2d 760 [A] [2010].)
After the proceeding was commenced, respondent filed a hardship declaration pursuant to the L 2020, c 417, part C, subpart A which had the effect of staying the proceeding until January 15, 2022. Respondent also filed an Emergency Rental Assistance Program application, which had the effect of staying "all proceedings ... pending a determination of eligibility," and this proceeding was administratively stayed by the court upon receiving notice of the application. (L 2021, c 56, part BB, subpart A, § 8, as amended by L 2021, c 417, part A, § 4.) Respondent's application was approved, and petitioner received notice from the Office of Temporary and Disability Assistance ("OTDA") dated January 12, 2022 that funds in the amount of $45,000 would be disbursed to petitioner. (NYSCEF Doc No. 13, petitioner's exhibit A.) The funds were earmarked for the months of September 2020 through September 2021 in the amount of $3,000 for September 2020, and thereafter in the amount of $3,500 per month. (Id. ) It is not disputed that the ERAP checks were thereafter negotiated by petitioner.
As the L 2021, c 417 expired on January 15, 2022 and a determination of eligibility for ERAP had been made and the approved monies received, petitioner moved to restore the case to the calendar, for an inquest against the non-appearing respondents, and for use and occupancy.
The proceeding has since been discontinued as against Jane Doe and John Doe.
Respondent retained an attorney who filed an answer on behalf of respondent, and cross-moved for dismissal of the proceeding based on petitioner's acceptance of ERAP funds. (NYSCEF Doc Nos. 19-25.) Respondent argues that the ERAP statute requires dismissal of this type of holdover proceeding upon acceptance of ERAP funds as said acceptance vitiates the notice of termination and reinstates the tenancy. Respondent's interpretation of the statute is that petitioner may neither commence another proceeding for an expired lease or holdover tenancy for 12 months from acceptance of ERAP funds; nor may petitioner maintain this proceeding. Citing to two recent trial court decisions, respondent states that courts have repeatedly dismissed holdovers such as the one at bar when the landlord accepts ERAP monies during litigation.
Petitioner opposes on the basis that the ERAP statute only precludes an actual eviction (issuance or execution of a warrant) for 12 months from the first receipt of ERAP monies. In reply, respondent submits, over petitioner's objection, a third decision in support of her position issued on May 12, 2022.
Petitioner opposed respondent's submission of this decision to the court as it was filed on the eve of oral argument. As petitioner would have had a duty to call the court's attention to any authority contrary to its position, and as there is no appellate authority on this precise issue, the court accepted the submission in the interests of developing a full record.
Oral argument was held on July 18, 2022. DISCUSSION
The Effect of Petitioner's Acceptance of ERAP Funds During the Pendency of This Proceeding
The consequences to a landlord when it accepts ERAP monies as set forth in L 2021, c 56, part BB, § 9 (2) (d), as amended by L 2021, c 427, part C, subpart A, § 5 are, in relevant part, as follows:
"Acceptance of payment for rent or rental arrears from this program ... shall constitute agreement by the recipient landlord or property owner.... not to evict for reason of expired lease or holdover tenancy any household on behalf of whom rental assistance is received for 12 months after the first rental assistance payment is received (emphasis added)." (Id. at [iv].)
If a holdover based on nuisance or objectionable behavior is pending against a respondent whose landlord has accepted ERAP monies, the statute states:
"If the petitioner fails to establish that the tenant intentionally caused significant damage to the property or persistently and unreasonably engaged in such behavior ... [and] if the landlord has accepted payment of rental arrears and agreed not to evict the tenant pursuant to paragraph (d) of subdivision two of section nine of this act, the court shall dismiss the proceeding with prejudice (emphasis added)." (L 2021, c 417, part C, subpart A, § 9-a [5] [ii].)
Regarding the commencement of proceedings when there is a pending ERAP application L 2021, c 56, part BB, § 8, as amended by L 2021, c 417, part C, subpart A, § 4 states, in relevant part:
"Except as provided in section nine-a of this act , eviction proceedings for a holdover or expired lease, or non-payment of rent or utilities that would be eligible for coverage under this program shall not be commenced against a household who has applied for this program or any local program administering federal emergency rental assistance program funds unless or until a determination of ineligibility is made (emphasis added)."
Under the facts and circumstances of this case, nothing in the ERAP statute requires dismissal. Had the legislature intended acceptance of ERAP funds during litigation to require dismissal, or that a proceeding cannot be commenced if a landlord accepts ERAP funds, the legislature could have so specified. Instead, the only instance where the legislature requires dismissal after acceptance of ERAP funds is when the landlord does not sustain its burden in the context of a holdover proceeding based on nuisance. (L 2021, c 417, part C, subpart A, § 9-a [5] [ii]; see also Park Cent. I LLC v. Price , 2022 N.Y. Slip Op. 31909[U], 2022 WL 2334934 [Civ. Ct., Bronx County 2022] ["If the Legislature had intended for non-nuisance proceedings to be dismissed if a petitioner accepts the ERAP funds, it would have explicitly stated so as it did in § 9-A. It did not"].)
The statute further distinguishes between cases not yet commenced, and those where litigation of the proceeding has been stayed, but the stay has been lifted due to acceptance of ERAP funds. As stated above, in the latter procedural posture, a landlord may not "evict" a tenant until 12 months after the first receipt of ERAP funds. (L 2021, c 56, part BB, § 9 [2] [d] [iv], as amended by L 2021, c 427, part C, subpart A, § 5.) In the former posture, when an ERAP application is pending, no proceedings, either nonpayment or holdover, shall be "commenced ... unless or until a determination of eligibility is made" with exception of a nuisance holdover proceeding. (L 2021, c 56, part BB, § 8, as amended by L 2021, c 417, part C, subpart A, § 4.) Again, in neither case is dismissal required; nor is there a bar to continued litigation.
This is not a situation where an application is pending and therefore no proceeding may be commenced. Nor is this a nuisance holdover where a pending ERAP application has been approved and monies accepted, and the landlord cannot prove its case, and the proceeding must be dismissed. This is a pending expiration-of-term holdover proceeding where the stay has been dissolved by the acceptance of ERAP funds, and litigation may continue in the normal course.
This is not an inequitable result, nor is it contrary to the purposes of the statute. ( Park Cent. I LLC v. Price , 2022 N.Y. Slip Op. 31909[U], *4, 2022 WL 2334934 [Civ. Ct., Bronx County 2022] ["Such an arrangement — where Petitioner agrees to accept funds in exchange of Respondent receiving a temporary reprieve from an eviction — furthers the purpose of the statute which seeks to prevent a flood of evictions at a time when the State is seeking to control the effects of a pandemic that has claimed the lives of over one million Americans"].) Here, petitioner received $45,000 that it might not have otherwise received because of the availability of ERAP funds. Respondent received a stay on defending this holdover proceeding for three months from the commencement of the proceeding on September 28, 2022 until the ERAP approval on January 12, 2022. "[P]etitioner may maintain the proceeding but may not actually evict Respondent for twelve months if it is determined it accepted the ERAP payment." ( Id. *3.) The plain language of the statute requires a further stay on "eviction" but not litigation.
Practically speaking, the ERAP stay was extended after approval while petitioner's motion to restore the proceeding to the calendar necessarily wound its way through the court process to be heard on April 6, 2021 by a judge.
Petitioner concedes that "at worst Petitioner is stayed as to the execution of warrant, until January 12, 2023, a year after the ERAP determination was issued." (NYSCEF Doc No. 26, petitioner's attorney's affirmation in reply and opposition ¶ 10.) In reply, respondent argues that "[p]etitioner's acceptance of ERAP funds after alleged termination of a tenancy vitiates said termination, reinstates Respondent's tenancy, and requires dismissal of a holdover proceeding absent specific circumstances contemplated by the legislation in the ERAP statute, such as instances of ongoing nuisance behavior." (NYSCEF Doc No. 31, respondent's attorney's affirmation in reply ¶ 16; NYSCEF Doc No. 22, Pacheco v. Gilkes , exhibit D to respondent's cross-motion.) Respondent's argument that a holdover proceeding should be dismissed upon acceptance of ERAP funds "absent specific circumstances ... such as ... ongoing nuisance behavior" is the reverse of what the legislature prescribed. Holdovers based on nuisance are the only proceedings that must be dismissed if the landlord accepts ERAP funds — such cases are not the exception — and then only if the landlord fails to sustain its burden of showing continuing and persistent objectionable behavior.
Vitiation of the Notice of Termination By Acceptance of ERAP Funds
Respondent does not advance any legal argument regarding why the notice of termination should be vitiated by the acceptance of ERAP funds, except for the three cases respondent cites and respondent's interpretation of the statute, with which the court, choosing to take a plain language approach to the ERAP statute, respectfully disagrees. Nevertheless, the court will address the law regarding vitiation of a notice of termination by the acceptance of rent.
The general rule is that acceptance or retention of rent during the period between the termination of the tenancy and the commencement of the proceeding vitiates the notice of termination and reinstates the tenancy, requiring dismissal of the petition. ( 205 East 78th St. Assocs. v. Cassidy , NYLJ, Sept. 27, 1991 at 21, col 4 [App Term, 1st Dept 1991] aff'd 192 A.D.2d 479, 598 N.Y.S.2d 699 [1st Dept. 1993] ; 184 W. 10th Corp. v. Westcott , 8 Misc 3d 132[A], 2005 WL 1712215 [App. Term., 1st Dept. 2005].)
It is not disputed that petitioner accepted monies earmarked for rent that accrued between the termination of the tenancy and the commencement of the proceeding, to wit: rental arrears earmarked for September 2020 were accepted in the amount of $3,000 and this proceeding was not commenced until September 28, 2020. However, petitioner accepted the ERAP payments in January 2021, well after the commencement of this proceeding. RPAPL 711 (1) states in relevant part:
"The tenant continues in possession of any portion of the premises after the expiration of his term, without the permission of the landlord or, in a case where a new lessee is entitled to possession, without the permission of the new lessee. Acceptance of rent after commencement of the special proceeding upon this ground shall not terminate such proceeding nor effect any award of possession to the landlord or to the new lessee, as the case may be."
Thus, petitioner permissibly accepted the ERAP-approved monies. (Id. )
The three cases cited by respondent in support of the argument that the proceeding must be dismissed are Gurevitch v. Robinson, Civ. Ct., Kings County, February 28, 2022, Stoller J., index no 72639/18, 2022 WL 2200176, Pacheco v. Gilkes , Civ. Ct., Kings County, March 10, 2022, Sheckowitz, J., index no 300063/20, 2022 WL 1243193, and AAMP Holding v Rubenstein et al. , Civ Ct, Richmond County, May 12, 2022, Ofshtein, J., index no 052684/19.
Gurevitch is inapposite here as it involved a post-eviction posture where the landlord had evicted a tenant during the pendency of an ERAP appeal.
In Rubenstein , the landlord had obtained a judgment of possession in February 2019 and moved pursuant to DRP 213 for issuance of a warrant and for permission to execute thereon. In the meantime, the landlord applied for the Landlord Rental Assistance Program ("LRAP"). The LRAP application was approved and the funds were accepted by the landlord. Respondent's attorney cross-moved to dismiss the proceeding on the basis that a landlord who accepts LRAP funds is precluded, like a landlord who accepts ERAP funds, from evicting the beneficiary of the funds for 12 months. On the return date of both motions the landlord defaulted, in that he did not appear, and the court dismissed the proceeding in a short-form order from the bench. As pointed out by petitioner's attorney at oral argument, no further details as to what transpired that day can be gleaned from the decision or from the NYSCEF record.
The facts in Pacheco v. Gilkes , Civ. Ct., Kings County, March 10, 2022, Sheckowitz, J., index no 300063/20, 2022 WL 1243193, are strikingly similar to the instant proceeding, but the court respectfully disagrees with the Gilkes court holding. In Gilkes , the holdover proceeding was commenced on August 26, 2020. The respondent applied for ERAP and was approved for rent earmarked for the months of October 2020 through October 2021 which represented use and occupancy that had accrued after the commencement of the proceeding. (Id. 300063/20, NYSCEF Doc No. 10, ERAP approval.) Under those facts, based on the foregoing reasoning, this court would not have dismissed the Gilkes proceeding.
Use and Occupancy
This proceeding was first heard in Part A on October 20, 2021 before a court attorney for the sole purpose of connecting respondent with a legal provider only. The proceeding was stayed immediately stayed thereafter because respondent had filed both a hardship declaration and an ERAP application. On January 12, 2022, petitioner received notice that the ERAP application had been approved. The hardship declaration stay expired three days later on January 15, 2022.
By motion returnable February 7, 2022, petitioner moved to restore this proceeding to the court's calendar, and for use and occupancy pursuant to RPAPL 745 (2). That motion was scheduled in the Housing Motion Part ("HMP") once again for the purposes of connecting the unrepresented respondent with counsel and referral to a housing resolution part to be heard by a judge. The proceeding was first heard by a judge on April 6, 2022 in Part F.
RPAPL 745 (2) states in relevant part:
In a summary proceeding upon the second of two adjournments granted solely at the request of the respondent, or, upon the sixtieth day after the first appearance of the parties in court less any days that the proceeding has been adjourned upon the request of the petitioner, counting only days attributable to adjournment requests made solely at the request of the respondent and not counting an initial adjournment requested by a respondent unrepresented by counsel for the purpose of securing counsel, whichever occurs sooner, the court may, upon consideration of the equities, direct that the respondent, upon a motion on notice made by the petitioner, deposit with the court sums of rent or use and occupancy that shall accrue subsequent to the date of the court's order, which may be established without the use of expert testimony.
Contrary to Petitioner's claims, the instant case has not been adjourned 60 days solely at Respondent's request. The first appearance in Part A resulted in an adjournment for respondent to connect with an attorney. The second appearance in the HMP part on March 15, 2022 was also for the purpose of connecting unrepresented respondents with counsel. The court was required to delay the proceeding in an effort to comply with the Universal Access to Counsel Act and to manage calendars during a global pandemic when strict procedures were in place against in-person appearances. These were non-substantive appearances arranged by the court for the sole purpose of connecting unrepresented respondents with counsel. These delays should not be held against respondent.
Manhattan Legal Services appeared for respondent, Michelle Hugo, on October 27, 2021. NYSCEF Doc No. 6. Manhattan Legal Services did not appear for Jane or John Doe although the proceeding was later discontinued as against them on March 15, 2022. NYSCEF Doc No. 18 at 15.
Thereafter the proceeding was automatically and administratively stayed due to the protections provided by two statutes. The court will not hold the ERAP stay against respondent for the reasons cogently argued by respondent's attorney:
"Both the Hardship stay and ERAP stay were statutorily invoked stays promulgated by the legislature in response to the COVID-19 pandemic. Under the COVID-19 Emergency Eviction and Foreclosure Prevention Act, the Court was mandated to stay proceedings where a tenant suffered financial hardship due to the COVID-19 pandemic
or applied for emergency rental assistance. These stays were not solely at the request of Respondent but rather legislated requirements to protect public health. Moreover, Petitioner has ... benefited from these stays. In the instant case, Petitioner has received $45,000 [as a result of the ERAP statute]."
Even if the court determined that 60 days have elapsed since the first substantive court appearance before a judge on April 6, 2022, the motion predates April 6, 2022 by two months, and petitioner's time to move for use and occupancy pursuant to RPAPL 745 (2) begins to run after sixty days or two adjournments from the first court appearance, other than for the purposes of seeking counsel. Thus, petitioner's motion for use and occupancy is procedurally improper and is denied without prejudice.
CONCLUSION
Accordingly, it is
ORDERED that petitioner's motion to restore the case to the calendar and for an inquest against Jane and John Doe is DENIED as moot; and it is further
ORDERED that petitioner's motion for use and occupancy pursuant to RPAPL 745 (2) is DENIED without prejudice; and it is further
ORDERED that respondent's cross-motion is DENIED and the proceeding is not dismissed, nor is litigation further stayed.
This constitutes the decision and order of this court.