Opinion
04-30-2018
M & T Successor by Merger with Hudson City Savings, Petitioner, v. Diane CARUSO, Arnold Caruso, et al., Respondents.
Woods Oviatt Gilman LLP for Petitioner David Stich, Esq. for Respondents
Woods Oviatt Gilman LLP for Petitioner
David Stich, Esq. for Respondents
Ira S. Clair, J.
Upon the within petition and its exhibits and the argument of counsel placed upon the record in open court and all of the proceedings hereto, it is decided and ordered as follows:
At the return date of this summary proceeding, counsel for each party appeared. Petitioner's counsel argued that petitioner was entitled to a judgment of possession and a warrant of eviction and Respondents' counsel, who had not filed and intended to not file a written answer, indicated to the court that his concern was adherence to the "stipulation" appended to the petition and pointed out a 15 day stay in the execution of a warrant contained therein. The only other discussion arose upon the court's inquiry first to petitioner's counsel and then to respondent's counsel as to whether there was any comment that either had regarding the fact that the notice of petition was issued, not by petitioner's counsel, but by petitioner itself. Neither side had any cogent comment in regard to that observation. There was no other discussion and the court indicated that decision was reserved.
Subsequently, it was confirmed with each counsel that respondents have not yet secured alternate senior citizen housing as discussed below.
The notice of petition, dated January 29, 2018, was issued by M & T Bank, successor by merger with Hudson City Bank, the same entity identified in the caption of the notice of petition as petitioner. The notice of petition does not contain any address to which an answer is to be served despite a demand that an "answer to be made be made at least three days before the return date by serving said answer upon Woods Oviatt Gilman LLP attorneys for the petitioner". Neither the address, nor any other contact information of said counsel, is noted anywhere.
The petition, in addition to being labeled "HOLDOVER PETITION ", indicates in paragraph one that petitioner is the owner of the real property identified therein together with an allegation that same is within the territorial jurisdiction of the court, but with no indication as to whether petitioner is a business entity organized or licensed within New York.
In paragraph two it is alleged that a referee's deed in foreclosure dated April 24, 2017 was conveyed to petitioner and the deed is annexed to the petition as exhibit A.
The petition alleges in paragraph three that respondents are in possession and, in paragraph four that respondents "reside in the premises as former owners and/or occupants of the premises, pursuant to RPAPL 713(5)."
Paragraph five alleges that the premises is respondent's principal residence.
Paragraph six alleges that on July 25, 2017 a notice to quit was served on respondents and that copies of the notices to quit and the affidavits of service of the notices are attached as exhibit B.
Paragraph 7 indicates that by reason of the notice to quit, respondents' right to occupy the premises expired on August 4, 2017.
The petition continues with the allegation of paragraph eight that respondents "entered into an agreement with petitioner, waiving all defenses, counterclaims and set offs for the issuance of a writ of possession and the agreement is attached as exhibit C. Paragraph nine continues, alleging that the agreement provides that "petitioner may ask the court for a writ of possession or other applicable order without further notice to the occupants."
Finally, paragraph 10 alleges that respondents have refused to deliver possession of the premises and "holdover and continue in possession without petitioner's permission."
An examination of exhibit A, shows six pages starting with the 4 page deed including the filed map description of the premises and a cover page. The Westchester County recording and endorsement page is reproduced on two pages to complete exhibit A. There is no County Clerk issued certification of same being a true copy of the deed appended, nor is there an attorney certification pursuant to CPLR 2105 of the document appearing anywhere in exhibit A.
Exhibit B, referred to in the petition as the notice to quit and affidavits of service, also includes the deed independently set forth as Exhibit A and described above. Again, there is no indication that the referee's deed forming part of Exhibit B contains a certification of the copy there of in any form.
In addition, Exhibit B contains several certified mail receipts addressed to respondent, Arnold Caruso, and fictitiously named respondents, John and Jane Doe, and 4 affidavits of service which indicate that the notice to quit was served individually to respondent, Diane Caruso, in her own right and as a person of suitable age and discretion for co-respondent, Arnold Caruso, and said fictitiously named respondents. The affidavits of service are limited to the service of a "10 day notice to quit the premises" without any mention of an exhibition of the referee's deed.
Finally, in regard to Exhibit B, the Notice to Quit is also included. The caption of this summary proceeding appears in the upper left of the document and is in all ways identical to the caption of the petition. "NOTICE TO QUIT PROPERTY SOLD AT FORECLOSURE" , the title of the document, appears in bold and all capital letters to the right of the caption. The body indicates that the property has been conveyed by the referee's deed, that same has been delivered to plaintiff and "sent for recording and is exhibited to you as the attached schedule "A". The structure of the document looks very much like the notice of petition or petition and there is no qualification or explanation that a summary proceeding is not presently pending. The notice is dated July 14, 2017 and was subscribed by petitioner in the same manner as the notice of petition herein has been subscribed.
Exhibit C, the agreement referred to in paragraphs eight and nine of the petition, is also structured as a court document with the caption of this summary proceeding appearing the same way as the prior notice to quit and the much later notice of petition and petition herein, and to the right of the caption is the word "Stipulation". It includes provisions whereby the "occupants", the same individuals who are respondents herein, "consent to the personal jurisdiction of the court and waive any and all defenses, counterclaims and setoffs without prejudice to the issuance of a writ of possession" and "agree to seek no further stay of the writ here in". The occupants also agree "to an order awarding possession to the plaintiff , with the issuance of a writ of possession forth with, and the execution of the writ. Appearing in bold capital letters in a font larger than the rest is "THE PLAINTIFF MAY ASK THE COURT FOR A WRIT OF POSSESSION OR OTHER APPLICABLE ORDER WITHOUT FURTHER NOTICE TO OCCUPANT (sic)."
The term "petitioner" is employed in the caption of the stipulation, but "plaintiff" is used in the body of the text when referring to petitioner.
The agreement or Stipulation then provides that "the writ of possession shall be stayed for fifteen (15) days after the occupants receive notification that they have received an apartment at The A Homes for Senior Citizens in Pound Ridge. Occupants agree that they will continue to pay for the utilities of the premises and maintain oil in the fuel tank for heat and domestic hot water. Occupants agree not to damage the premises and they agree they shall be personally liable for any damage caused by the occupants, those claiming possession through the occupants and\or occupants invitees. The agreement goes on to obligate occupants to provide access to the property for marketing purposes or appraisal at reasonable times upon 48 hours advance notice. The agreement expressly states that no landlord-tenant relationship between the parties arises on account of the agreement and that plaintiff shall not be responsible for any repairs or alterations to the premises or for utilities. The agreement contains standard general release language whereby the within respondents release plaintiff and its agents from all liability. The stipulation also provides that a copy may be filed with the court without further notice and that it cannot be changed or modified except by written instrument signed by all parties. The agreement appears to have been executed by respondents on August 21, 2017 and by counsel for respondents who has now appeared and by petitioner and its counsel approximately one week later. DISCUSSION
THE NOTICE OF PETITION
There are several independent issues that arise in the consideration of the instant summary proceeding beginning with the fact that the notice of petition runs afoul of RPAPL 731 (1) which limits the power to issue a notice of petition to an attorney, Judge or the Clerk of the court. It expressly provides that it may not be issued by a party prosecuting the proceeding in person.
The party who signs the notice of petition is the party who issues it and the issuance of a notice of petition by petitioner has been held to be to be a jurisdictional defect. Grove Street Realty, Inc. v. Testa, 100 Misc. 2d 278, 418 N.Y.S.2d 858 (City Court, Peekskill, 1979) , Shamooli v. Mecanik, 31 Misc.3d 1242(A), 2011 WL 2438367 (District Court, Nassau County, 2011) . Further, it cannot be said that counsel for petitioner issued the notice of petition for the reference to counsel set forth in the notice of petition is set forth within the body of the notice of petition without any indication of an address or telephone number and thus the holdings of Doughty Assocs. v. Urban, 2003 N.Y. Slip Op. 51302(U), 2003 WL 22345045 (District Court, Nassau County, 2003) or Parker v. Paton Associates, Inc., 128 Misc. 2d 871, 491 N.Y.S.2d 550 (City Court, Johnstown, 1985) do not apply to salvage the notice of petition here in that in no way can it be concluded that counsel has indorsed the notice. It is thus clear that the notice of petition is jurisdictionally defective.
Nevertheless, is it possible that the defect is waivable and that same has been waived by respondents? When questioned at the return date regarding the fact that petitioner had issued the notice of petition, respondents' counsel clearly indicated that respondents' only concern related to the "stipulation". Matters of subject matter jurisdiction may not be waived, but it is clear that questions of personal jurisdiction may be waived in summary proceedings provided the waiver is knowing and informed. Deutsche Bank v. Dirende, 49 Misc. 3d 1159, 21 N.Y.S.3d 842 (Justice Court., West. Co., 2015) citing Foote v. Adams, 232 App. Div. 60, 63, 248 N.Y.S. 539 (1931), Hernco, LLC v. Hernandez, 46 Misc.3d 137(A), 2015 N.Y. Slip Op. 50062(U), 2015 WL 406823 (App. Term, 2d Dept. 2015) and this rule applies even when it is a party's counsel who enters into an improvident stipulation. Park Props. Assoc., L.P. v. Williams, 38 Misc. 3d 35, 959 N.Y.S.2d 798 (App. Term 2d Dept. 2012).
Subject matter jurisdiction does not turn on the particular facts of a case, but on the type of case. Cerbone v. Cerbone , 104 Misc. 2d 472 , 428 N.Y.S.2d 777 (Civil Court of the City of New York, Bronx Co. 1979) , Pecenik v. Adam, 107 Misc. 2d 488, 435 N.Y.S.2d 256 (Civil Court of the City of New York, Kings Co. 1981) . If the court could consider the case if the defect were not present, then there is subject matter jurisdiction. In this case, if the petition had been issued by counsel, the case could be considered and thus subject matter jurisdiction exists, despite the issuance of the petition by petitioner.
However, even if the defect is one of personal jurisdiction, the particular defect is serious and differs from other personal jurisdiction issues in two respects. First, it is the issuance of the notice of petition which commences the summary proceeding as expressly stated in RPAPL 731 and thus in the absence of a permissible issuance it may logically be concluded that the summary proceeding simply does not exist. If the summary proceeding does not exist, then how can a stipulation will it into being?
Secondly, one must consider the express prohibition of a petitioner issuing the notice of petition. The legislative history of the statute indicates a definite intention of the legislature to specifically prohibit a party from prosecuting the proceeding in person so as to avoid potential abuse by a petitioner in a summary proceeding. Thus, the issuance of a notice of petition in violation of said prohibition is a more serious failure to comply with the personal jurisdictional requirements of a summary proceeding than other such defects in that it necessarily involves an affirmative violation of something expressly prohibited as opposed for instance a failure to satisfy the service requirements of RPAPL 735. It is thus concluded that at the least the possible waiver of the violation of RPAPL 731(1) must be scrutinized not only to be sure that the respondents have knowingly waived the defect, but to also inquire as to whether the goals of the prohibition have been frustrated by petitioner in ignoring the prohibition.
In this case in light of the use of documents designed to appear to be part of a pending summary proceeding when no such case had yet existed, the notice to quit of which was issued by petitioner thus enforcing the appearance that petitioner could issue the latter notice of petition, and which is a form of prohibited abuse by petitioner discussed below, it is concluded that no further examination of whether a knowing waiver exists is necessary because of the frustration of the policy behind said prohibition caused by petitioner. Thus, any waiver of the prohibition upon petitioner issuing the notice of petition here in cannot be upheld and this proceeding must be dismissed.
IMPACT OF THE NOTICE TO VACATE AND STIPULATION CONTAINING THE COURT'S CAPTION AND THE APPEARANCE OF BEING COURT PAPERS
As indicated above, the "notice to quit property sold at foreclosure" appended to the petition as part of Exhibit B and dated July 14, 2017 and the "stipulation" appended to the petition as Exhibit C and signed by respondents on August 21, 2017, both are structured to appear to be documents that are part of this summary proceeding. They each bear the caption of the court exactly matching the latter caption of this proceeding at the outset and in all regards give the impression that this summary proceeding existed at the time of each document despite the fact that months would pass before this summary proceeding would be commenced.
Penal Law 190.50"Unlawful Collection Practices", indicates that a party is guilty of a violation of the class B misdemeanor offense "when, with intent to enforce a claim for judgment for money or property, he knowingly sends, mails or delivers to another person a notice, document or other instrument which has no judicial or official sanction and which in its format or appearance, simulates a summons, complaint, court order or process, or an insignia, seal or printed form of a federal, state or local government or instrumentality thereof, or is otherwise calculated to induce a belief that such notice, document or instrument has a judicial or official sanction".
It is clear that the particular notice to quit issued by petitioner creates the impression that a summary proceeding already existed and that the notice was part of the process in this court. In evidence thereof, it is noted that the notice does not contain the very common and sometimes required indication of the consequence of failing to vacate by the date indicated: that summary proceedings will be commenced to secure possession in the event of a failure to vacate. See GMAC Mtge. Corp. v. Toureau, 15 Misc. 3d 1139(A), 841 N.Y.S.2d 820 (Nassau Dist. Ct., 2007). Assumedly this absence of the common component of a valid 10 day notice comes from the same design goal in creating the impression that the summary proceeding already exists, for to say that a proceeding will be commenced is to negate the impression that it already does. Further, the statute does not indicate that the formatting of such a notice be intentionally or knowingly created with the purpose of increasing leverage in the mind of the respondent, but that the notice itself be knowingly transmitted. Thus, whether petitioner was even aware of the increased impact which the prohibited drafting style of its notice to quit could have, it is clear that the notice is potentially violative of said criminal statute.
In light of the fact that the "stipulation" was executed approximately five weeks after the notice, it is entirely possible that said leverage had the proscribed impact. The language of the stipulation itself is problematic in this light in that the "occupants" consented to the jurisdiction of the court, waived all defenses and agreed not to seek any stays while there was no proceeding in existence in which jurisdiction could be waived, could not have known what defenses may have existed in a later instituted proceeding, nor agreed to seek no stays to any execution of a warrant that did not yet exist. Reference to a "writ of possession" is confusing in that such a writ has nothing to do with a summary proceeding.
In short, the format of the notice to quit and the "stipulation" in creating the impression that they are part of a pending summary proceeding are problematic and prohibited unfair collection practices and thus justify the foregoing conclusion in this case that the issuance of the notice of petition by petitioner cannot be waived.
Moreover, it is concluded that the "stipulation" is not a "stipulation" in that it cannot control a summary proceeding that did not yet exist and has no impact upon this court and thus the consent to jurisdiction, the waiver of defenses, and the agreement to not seek stays are unenforceable as to any later legal proceeding.
THE FAILURE TO ALLEGE A CAUSE OF ACTION PURSUANT TO RPAPL 713 (5)
RPAPL 713 (5) requires that in addition to the service of a 10 day notice to quit in the manner in which a notice of petition is served, that the referee's deed, or a certified copy thereof, must be exhibited to the respondent as a condition precedent to the accrual of a cause of action under said statute. The former exacting requirements regarding the manner in which the exhibition required by the statute could properly be effected have most recently been relaxed by the same branch of the Appellate Term of the Supreme Court, Second Department, that had previously held that exhibition could not be accomplished via the equivalent of nail and mail service which in turn led to decisions that same could not be accomplished by any means of substituted service, Plotch v. Dellis, 60 Misc. 3d 1, 75 N.Y.S.3d 779, 2018 N.Y. Slip Op. 28116, 2018 WL 1863947 (App. Term., 2d, 11th and 13 J.D., 2nd Dept., April 13, 2018) . However, it is clear that this very recent decision still recognizes the statutory requirement that the referee's deed or some version of a certified copy thereof be exhibited. Although the court found that a photocopy of a certified copy satisfied the statute, it is clear that pursuant to the decision a certified copy of the referee's deed in some format must still be exhibited.
While the leap in the court's reasoning from the 1976 amendment of RPAPL 713(5), which expressly only broadened the requirement to exhibit the original referee's deed to allow alternately for the exhibition of a certified copy of the deed, to the conclusion that the amendment also impliedly encompassed the ability to exhibit the deed by means previously held to be insufficient, is obviously less than fully satisfying from the perspective of logic, the holding is nevertheless clear. Further, it does not matter that this court is within the 9th Judicial District as the different districts and departments of the Supreme Court exist only for administrative purposes. The decision is binding upon this court via Stare Decisis, and the fact that the exhibition was accomplished upon one of the key respondents by substituted service is irrelevant.
However, the petition, in addition to being labeled "Holdover Petition" and thus implying a cause of action pursuant to RPAPL 711(1) as opposed to 713(5) and furthering that implication by reference to and incorporation of what is now styled as an agreement, is devoid of any express allegation that either the original referee's deed or a certified copy thereof was exhibited. There is no express reference to the exhibition at all. Instead, there is an allegation that a copy of the referee's deed is annexed to the petition as Exhibit A and that the notice to quit is attached as Exhibit B which contains the same deed as Exhibit A. A review of Exhibits A and B shows neither a County Clerk's certification, nor that of an attorney. It is clear that any deed that was exhibited was an uncertified copy.
Thus, while the exhibition requirement has been rendered far easier to satisfy by the very recent decision of the Appellate Term, it is still clear that RPAPL 713 (5) cannot be satisfied by the exhibition of an uncertified copy of the referee's deed. There thus is no valid cause of action alleged pursuant to RPAPL 713(5) in this case.
Has the absence of the alleged cause of action been adequately waived by respondents via counsel? Again, such a waiver must be knowing and not improvidently made, Deutsche Bank v. Dirende , supra. The insistence of Respondents' counsel that the court pay attention to the agreement reached in August is not so much a waiver as an implication that the defect is not important thus leading to the final question herein.
THE IMPACT OF THE AGREEMENT
While the "stipulation" is ineffective as a stipulation so as to have any impact upon that which happens in this proceeding, it is clear that it is still an agreement between the parties. Respondents have been granted exclusive possession of the premises until a certain senior citizen housing unit in Pound Ridge becomes available. There is a clear quid pro quo obligation on the part of the respondents to bear the expense of maintaining the premises, to allow inspection, to cooperate in marketing, and in the giving of a general release. There is thus a bargained for benefit and obligation to each party to the agreement. There are no conditions set forth in the agreement other than what has been set forth in this decision, it has not been alleged that the said housing is available and it has been confirmed with counsel for both parties that the senior citizen housing unit is still unavailable.
Regardless of the fact that the agreement expressly states that no landlord-tenant relationship arises, there is no question regardless of what it is called, that the agreement imbues respondents with the present possessory interest exclusive to themselves in the premises contingent upon the fulfillment of the obligations of maintenance and cooperation in allowing access until said particular housing becomes available. The agreement thus demonstrates beyond cavil that the relationship between the parties hereto has progressed beyond that of grantee of a referee in foreclosure and occupant of the premises foreclosed to such that there is no cause of action pursuant to RPAPL 713(5) regardless of how a deed is exhibited. The parties are now in privity of contract and estate and thus only a possible cause of action pursuant to RPAPL 711(1) will exist when the condition subsequent of respondents' right to exclusive possession ends by the availability of the identified senior citizen housing or Respondents' failure to maintain or allow access.
Petitioner has brought the summary proceeding despite the existence of the agreement obviously in the assumption that there is an implied provision in the agreement that there is only a short window of time in which the right to exclusive possession shall continue regardless of whether the senior citizen housing becomes available. Such an assumption is unjustified by the clear letter of the agreement and same obviously must be interpreted in the event of any discrepancy, of which there does not appear to be any, against the draftsman of the agreement, undoubtedly petitioner. William A. White/Tishman E., Inc. v. Stanislava Banko & Surgical Design Corp., 171 A.D.2d 401, 566 N.Y.S.2d 628 (2nd Dept., 1991) There thus appears to be no grounds for a summary proceeding under any theory at present.
CONCLUSION
No cause of action exists pursuant to RPAPL 713(5) both because a certified copy of the referee's deed has not been exhibited and, independently, because the petition and its exhibits shows that it is Respondents who are presently entitled to possession of the subject premises by agreement between the parties. The "stipulation" executed before the institution of the summary proceeding has no effect upon the summary proceeding and is not binding on the court or on the parties in terms of any waiver of any right or defense herein. Independently, the issuance of the notice of petition in violation of RPAPL 731(1) negates this summary proceeding in light of the concomitant collection practices employed in connection with the notice to quit and "stipulation".
It is therefore ORDERED in accordance with the foregoing that this summary proceeding is dismissed with prejudice and costs and disbursements are awarded to Respondents.