Opinion
Index LT-124-22/CO
04-25-2022
Harmony Mills West, LLC, d/b/a the Lofts at Harmony Mills, Petitioner-Landlord, v. Jennifer Constantine, John Doe and All Others Claiming Possession Thereunder, Respondent-Tenant.
John T. Keenan III, Esq. Albany for Petitioner. Legal Aid Society of Northeastern (Victoria M. Esposito, Esq. of counsel), Albany for Respondent.
John T. Keenan III, Esq. Albany for Petitioner.
Legal Aid Society of Northeastern (Victoria M. Esposito, Esq. of counsel), Albany for Respondent.
Thomas Marcelle, City Court Judge
On or about October 31, 2020, tenant Jennifer Constantine ("tenant") entered into a one-year residential lease with Respondent Lofts at Harmony Mills West LLC ("landlord"). On March 9, 2022, Harmony Mills filed a non-payment proceeding (RPAPL 711 [2]) alleging that the tenant had failed to pay any rent from April 2021-March 2022 (a full year). The return date for the Petition to be heard was March 22. On that date, the tenant informed the court that she had filed an application with the Office of Temporary and Disability Assistance ("OTDA") for rental payments under the Emergency Rental Assistance Program law ("ERAP"), L 2021 ch 56, part BB as amended L 2021 ch 417, part A. Specifically, the tenant filed her application with OTDA on March 21, the day before her court appearance. This filing triggered an automatic statutory stay of eviction proceedings (ERAP § 8). The stay remains in effect until OTDA determines the tenant's eligibility to receive payments under the ERAP program (Id.).
However, there was a problem; by October of 2021, OTDA had exhausted its funding allocation and had no more money to help tenants who filed for rent payments after that date (Hidalgo v New York Office of Temporary and Disability Assistance, [Queens County Sup Ct, Kotler, J., index no. 453931/2021]). Of course, with no money in the program, it was a dead letter-indeed, OTDA closed its portal, preventing tenants from submitting new applications (Id.). Nevertheless, because the legislature had not yet passed the State's budget, the court, in the exercise of its discretion, adjourned the case, to determine how much money the legislature might provide for the ERAP program. Ultimately, the new budget contained 800 million dollars for ERAP.
Later, OTDA was forced to reopen under court order (Hidalgo v New York Office of Temporary and Disability Assistance, [Queens County Sup Ct, Kotler, J., index No. 453931/2021]).
On April 18, the case returned to the court's calendar. Despite OTDA being infused with new funds and notwithstanding ERAP § 8's stay provision, the landlord pressed for a hearing on its eviction petition.
In particular, the landlord argued that due process required the court to conduct a hearing as a prerequisite to any stay. To support it's cause, the landlord advanced three reasons: (1) the tenant was acting in bad faith because although she had not paid any rent for a full year, she failed to apply for ERAP assistance until after the landlord had commenced the eviction proceeding; (2) that the new allocation of funds to the ERAP program was barely sufficient to cover the needs of tenants who had applied for assistance through December of 2021 and thus, the landlord has no hope of receiving payment; and (3) since the tenant is on a fixed income and her income was undisturbed by the pandemic, she was ineligible for payments under ERAP criteria (ERAP § 5 [1] [a] [ii]). In essence, the landlord claimed that the tenant lacked a good faith basis to deploy ERAP's stay provision. Therefore, the landlord demanded a hearing so that the court could determine if the non-payment proceeding should move forward.
The tenant resisted. For several reasons, which are explored below, the tenant argued that under the facts of this case, the court lacks the power to conduct any hearing but rather is required to stay judicial proceedings until OTDA passes on the tenant's application.
The tenant first invokes Chief Administrative Judge Lawrence K. Marks's administrative order AO/34/22 ("AO 34"). The order provides in pertinent part:
"Eviction protections provided by... ERAP... remain fully in effect. Eviction matters where there is a pending ERAP application shall be stayed until a final determination of eligibility for rental assistance is issued by... OTDA.... Landlords shall continue to submit notice of a known ERAP application to the court where the eviction proceeding is pending in accordance with Administrative Order AO/244/21" (emphasis added).
The tenant asserts that AO 34 controls the court. That is, the Office of Court Administration ("OCA") has imposed upon the court a binding interpretation of the ERAP statute. And that the court must unwaveringly adhere to OCA's conclusion that evictions must be stayed without exception upon a tenant's filing of an application with OTDA. Alternatively, AO 34, by its own authority (and independent of any statutory requirements), mandates courts to stay all eviction proceedings where a tenant has a pending ERAP application. These are novel and creative arguments. No court has addressed whether AO 34 places limitations upon it.
An administrative order commands respect. The court concludes, however, that the tenant overreads AO 34. To begin with, the tenant's position is inconsistent with OCA's function. Judiciary Law § 212 grants OCA many powers-none of them judicial in nature. "The functions of the Office of Court Administration, ..., are largely concerned with the staffing and physical operation of the courts, as opposed to adjudicatory functions...." (Quirk v. Evans, 116 Misc.2d 554, 557-558 [New York County Sup Ct 1982]). Indeed, the chief administrator of the courts need not even be a member of the judiciary (Judiciary Law § 210 [3]).
Thus, AO 34's purpose cannot be to demand that judges submit to a statutory interpretation rendered by an administrative agency in a factual void, in a non-adversarial setting and without the benefit of briefing and argument. Moreover, if AO 34 imposes a stay by administrative command, then AO 34 would invade the role of the judiciary. Judges are not puppets to be pulled by administrative strings-nothing in the order suggests such a vast alteration in the judicial system. Rather, the operative part of the order, that part of the order that is administrative in nature, mandates landlords to tell the trial court if the tenant has filed an ERAP application. The order merely imposes a filing requirement. Therefore, AO 34 does not control the outcome of this case.
Next, the tenant acknowledges that some courts have disregarded ERAP § 8's stay provision. The tenant makes a cogent argument that this case is distinguishable. In particular, the tenant maintains that in the previously decided cases the respondents were not protected by ERAP and thus, under those peculiar circumstances contained within those individual cases, a stay was inapplicable (see e.g. 2986 Briggs LLC v Evans, 74 Misc.3d 1224 (A) [Civ Ct, Bronx County 2022] (respondent was not a tenant, but a licensee who was not obligated to pay rent); Kristiansen v Serating, 2022 NY Slip Op 22097 [Suffolk Dist Ct 2022] (maximum ERAP award would not cover entire amount of arrears; stay lifted as to surplus amount only); Actie v Gregory, 74 Misc.3d 1213 (A) [Civ Ct, Kings County 2022] (primary tenant had vacated, respondent was subtenant who had no duty to pay rent to landlord); Karan Realty Assoc. LLC v Perez, 2022 NY Slip Op 22093 [Civ Ct, Queens County 2022] (housing was incident of respondent's former employment and he had no duty to pay rent; respondent had not completed ERAP application); Kelly v Doe No.1, 2022 NY Slip Op 22077 [Civ Ct, Kings County 2022] (respondents had no legal right to possession and thus no obligation to pay rent); Ami v Ronen, 2022 NY Slip Op 22098 [Civ Ct, Kings County 2022] (landlord sought use of property for disabled family member and thus fell under ERAP exception); Papandrea-Zavaglia v Arroyave, 2022 NY Slip Op 22109 [Kings County, 2022] (tenancy had already been terminated and petitioner waived right to arrears).
The above line of cases stem from the thoughtful decision in Abuelafiya v Orena, 73 Misc.3d 576 (Suffolk Dist Ct 2021). In Abuelafiya, the court held that "it need not delve into the realm of constitutional propriety as this matter can be decided upon its facts by simply determining that the statute inherently allows for the court to also be allowed to determine eligibility" (Id at 580). This implicit statutory right to a judicial eligibility hearing rests upon the constitutional avoidance canon of statutory construction (Id.). This canon permits a court to construe an ambiguous statute in a non-literal way to avoid reaching a constitutional question (National Federation of Independent Business v Sebelius, 567 U.S. 519, 562 [2012]). Thus, the Abuelafiya court found an implied right to a judicial hearing to avoid any conflict with the Due Process Clause.
As a general matter, this court is not fond of the constitutional avoidance doctrine. While the doctrine has many serious defenders, it is, at its core, just an alluring invitation to judicial mischief. Instead of doing what the judiciary should do, deciding whether the legislature lawfully exercised its power (under a straightforward reading of the statute), judges get to reshape statutes because one interpretation of the law raises in a judge's mind a "serious" constitutional question-an altogether boundless adventure to be sure. Moreover, this ability to recast laws comes with the pleasant side effect of permitting a court to skip the burden of making tough and sometimes uncomfortable constitutional decisions.
Casting aside theoretical concerns over the avoidance canon, the court still has a particularize analytical disagreement with Abuelafiya. Abuelafiya's construction of ERAP § 8 (the stay provision) is implicitly premised upon a finding that the stay provision is ambiguous. Without an ambiguity, the constitutional avoidance canon would be an improper method to create an implied statutory right to a good faith hearing (see Scalia & Garner, Reading Law: The Interpretation of Legal Texts § 38 at 247-248 [1st ed 2012]). Therefore, unless ERAP § 8 is ambiguous, the court cannot ground its decision in the doctrine of constitutional avoidance.
ERAP § 8 is unambiguous: "Except as provided in section nine-a of this act, in any pending eviction proceeding, against a household who has applied or subsequently applies for benefits under this program to cover all or part of the arrears claimed by the petitioner, all proceedings shall be stayed pending a determination of eligibility." The statute is clear-"There is a statutory procedure for making [an eligibility] determination without any provision for the courts to make such determinations" (Carousel Properties v Valle, 74 Misc.3d 1217 (A) at *3 [Suffolk Dist Ct 2022]). The legislature did not insert a judicial good faith hearing as part of ERAP. This choice must be respected. Therefore, what the legislature did not place in the statute, the court will not add-the power to construe is not the power to amend (Sexauer & Lemke v Burke & Sons Co., 228 NY 341 [1920]). Rather, where, as here, a statute is unambiguous, the court must give effect to its plain meaning.
Section nine-a sets out a series of exceptions, none of which are alleged or apply here.
So, if the ERAP statute provides for no judicial process to lift the stay provision, then does the landlord here have a right to a judicial hearing. This brings the court to the core of the case-does ERAP § 8 lack due process for landlords. The origin of due process traces back to the Magna Carta, where the King promised that "No free man shall be stripped of his rights or possessions, ..., except by the lawful judgment of his equals or by the law of the land." Den ex dem. Murray v. Hoboken Land & Imp. Co., 59 U.S. 272, 276 (1855). The Fourteenth Amendment enshrines this right for the people of this nation and Article 1 § 6 of the New York State Constitution for the citizens of this State. Due process, at a minimum, affords a person the opportunity to be heard "at a meaningful time and in a meaningful manner" (Hamdi v. Rumsfeld, 542 U.S. 507, 533 [2004] [internal citations and quotation marks omitted]). Due process, therefore, requires a tripartite inquiry: (1) does an eviction proceeding implicate a landlord's property right; and if so (2) does ERAP § 8 deprive the landlord of that property interest without notice and the opportunity to be heard (i.e., due process); and if so (3) what process is the landlord due.
Due process has two aspects: procedural due process and substantive due process. This case deals with procedural due process-the ability to be heard. Substantive due process, which is not an issue here, is not about the type of hearing required prior to a deprivation; rather, substantive due process questions whether the government has the authority to make the deprivation at all (see Washington v. Glucksberg, 521 U.S. 702, 719 [1997] [concluding that the Due Process Clause "protects individual liberty 'against certain government actions regardless of the fairness of the procedures used to implement them' "] [quoting Daniels v. Williams, 474 U.S. 327, 331 [1986]).
ERAP imposes significant penalties in terms of money for those landlords that opt out of the statutory process. ERAP § 9 cancels all rent arrears that might have been awarded to an eligible tenant under the statute making such arrears uncollectable (ERAP § 9 [2] [c]). This is quite the deterrence for a landlord to refuse to participate. Although, the imposition of such penalties raises Fifth Amendment Takings Clause concerns, Eighth Amendment excessive fine concerns and Contract Clause concerns, these issues are inapplicable here because the landlord has participated and has not refused to accept ERAP payments.
The initial question under a due process analysis is whether an eviction proceeding implicates the landlord's property rights-it does. "The right [of an owner] to exclude [a person from its property] is not a creature of statute and is instead fundamental and inherent in the ownership of real property. The common law crime of trespass would be non-existent if the fundamental right to exclude was dependent upon statute" (Heights Apartments, LLC v. Walz, 2022 WL 1009466, at *5 [8th Cir 2022]). Thus, the court concludes that the landlord has a protected property interest in evicting a tenant.
The next query, and the critical one here, is whether ERAP § 8's stay deprives the landlord of its property interest without due process. At least one court has suggested there is no due process violation imposed by the statutory stay. "The purpose of ERAP is to provide compensation to landlords for past rent. Th[e] burden of the time necessary to make an eligibility determination is outweighed by the financial benefit that ERAP is designed to provide directly to landlords" (Carousel Properties, 74 Misc.3d 1217(A) at *4). This conclusion makes some sense-if the back rent is forth coming, then the landlord loses nothing, it gets what it is owed with but a modicum of delay (see Sosna v Iowa, 419 U.S. 393, 410 [1975] [noting that due process is not offended when "the gravamen of [the] claim is not total deprivation... but only delay"]).
Carousel Properties' decision rests on unsure grounds. ERAP neither guarantees "a financial benefit" to the landlord nor ensures "the time necessary" for a swift determination. In other words, landlords may lose their right to possess their property for a long period and in the end receive nothing. OTDA has no required timetable in which to determine a tenant's eligibility. Indeed, this court continues to stay multiple eviction cases based upon ERAP applications filed by tenants in October of 2021 pending OTDA's determination of eligibility. Thus, these landlords have gone more than six months with neither payment nor possession nor assurance of payment. Moreover, there is grave doubt that OTDA has sufficient funds to pay rental assistance applications made after January, let alone those made in late March as is the case here.
This statement is made based upon the affidavit of Barbara C. Ginn Executive Deputy Commissioner of OTDA submitted in Hidalgo v New York Office of Temporary and Disability Assistance, Queens County Sup Ct, Kotler, J., index No. 453931/2021.
This scenario (long delays and depleted funds) presents a significant risk of erroneous deprivation of a landlord's property right. "The purpose of [due process] is not only to ensure abstract fair play to the individual. Its purpose, more particularly, is to protect his use and possession of property from arbitrary encroachment-to minimize substantively unfair or mistaken deprivations of property" (Fuentes v. Shevin, 407 U.S. 67, 80-81 [1972]). Therefore, the court holds ERAP § 8 deprives the landlord of a property right.
So, the final inquiry arises-what process is due (Goss v. Lopez, 419 U.S. 565, 577 [1975]). "Due process is flexible, ... and it calls for such procedural protections as the particular situation demands" (Jennings v. Rodriguez, 138 S.Ct. 830, 852 [2018]). The landlord needs to be heard at a meaningful time and in a meaningful manner. The meaningful time part is easily resolved-a summary proceeding brought under RPAPL Article 7 offers a fine vehicle for a landlord to be heard timely about any complaints of deprivation.
The meaningful manner part of the due process equation is designed to protect against wrongful deprivation of a right. To determine the proper procedures, the court must first identify the link in the ERAP process that could be a source of erroneous loss of the landlord's property right. In this context, the context of a stay of an eviction proceeding, Chrysafis v. Marks, 141 S.Ct. 2482 (2021) goes a long way in identifying the problem: "If a tenant self-certifies financial hardship, [and the law] generally precludes a landlord from contesting that certification and denies the landlord a hearing. [Such a] scheme violates the Due Process Clause."
Self-certification plagues ERAP. For a tenant to be eligible for ERAP rent payments, among other requirements, there must be "an individual in the tenant['s] household [who] qualifies for unemployment or experienced a reduction in household income, or experienced financial hardship due to COVID-19" (ERAP § 5 [1] [a] [ii]). To prove this hardship a tenant's "self-attestation shall be considered to be acceptable documentation" (ERAP § 5 [6]).
Indeed, in this case the tenant's self-attestation of facts has caused the tussle between the parties. The landlord says that the tenant is on a fixed income supplied by the government and that as a result she has not experienced a reduction in household income, nor has experienced financial hardship due to COVID-19. The tenant disagrees. She avers that she had received significant monetary support from her mother. However, this support was ripped from her because her mom had to battle COVID-19 which depleted and diverted resources. The landlord counters by arguing that this claim of lost familial support is based on nothing more than the tenant's say so. Consequently, without an opportunity to see proof and to challenge it, the landlord lacks recourse to determine if the ERAP application is a ruse for a delay or an authentic claim for assistance.
Thus, the court needs to implement a process that protects the landlord from a bad faith delay tactic. To that end, "no better instrument has been devised for arriving at truth than to give a person in jeopardy of serious loss notice of the case against him and opportunity to meet it" (Fuentes, 407 U.S. at 81). Therefore, the ancient principles of notice and opportunity to be heard will guide the court.
As to notice, since the tenant is in possession of the evidence that makes her an eligible recipient of ERAP funds, she must come forward with it. She must produce proof of her eligibility to receive ERAP payments; that is, she must present evidence to show that (1) an individual in the tenant/landlord household qualifies for unemployment or experienced a reduction in household income, or experienced financial hardship due to COVID-19, and (2) the household income is below 80% of median income, and (3) an individual in the household can demonstrate a risk of experiencing homelessness or housing instabilities (ERAP § 5 [1] [a]). This burden of production is not heavy; in a sense it is no more than the information that the tenant has already submitted to OTDA to demonstrate ERAP eligibility-assuming that the information she submitted to ODTA was complete, verifiable and accurate.
Once presented with the evidence, the landlord will have the opportunity to test it by examining the tenant or offering counter proof. Ultimately, because the final decision of eligibility rests with OTDA, the landlord must persuade the court by clear and convincing evidence that the tenant's ERAP application was made in bad faith-that is, made without the realistic possibility that the tenant is eligible for assistance-or there is no realistic possibility that the landlord will receive payment from OTDA. Without a realistic possibility of receiving payments, the ERAP application is nothing more than a delay tactic to keep the landlord from exercising its constitutional right to possession and use of its property (cf Pokoik v. Silsdorf, 40 N.Y.2d 769, 773 [1976]).
One last point needs to be made explicit. The court is not holding that ERAP § 8 is unconstitutional. Rather, it is holding that the landlord has a right to a hearing under the Due Process Clause and that this right is independent of and from ERAP's statutory framework. The landlord has asserted its property right in the context of a RPAPL Article 7 proceeding (Heights Apartments, LLC, 2022 WL 1009466 at *5); and it is in the course of this litigation that a due process hearing is constitutionally required.
Therefore, it is
Ordered that the court will hold a hearing in accordance with this decision on May 5, 2022, at 11:00 a.m.
The forgoing constitutes the Decision and Order of the Court.