Summary
In 2986 Briggs LLC v. Evans, 74 Misc.3d 1224(A), 2022 WL 853132 (Civ. Ct. Bronx Co. 2022), the Hon. Lutwak, upon reviewing the ERAP statute and its legislative intent determined that the court "does have the authority to lift an ERAP stay in an appropriate case" Id.
Summary of this case from Rutledge Apartments LLC v. RodriguezOpinion
L & T Index No. 308118/21
03-22-2022
2986 BRIGGS LLC, Petitioner-Landlord, v. Robert EVANS; "J. Doe #1"; "J. Doe #2", Respondent(s)-Occupant(s).
Petitioner's Attorney: Jayson Blau, Esq., 171 East 163rd Street, Bronx, New York 10451, JBlauEsq@gmail.com, (347) 329-1146 Respondent's Attorneys: Ashley M. Thomas, Esq., The Legal Aid Society, Bronx Neighborhood Office, 260 East 161st Street, 7th Floor, Bronx, New York 10451, AMThomas@legal-aid.org, (929) 225-3835
Petitioner's Attorney: Jayson Blau, Esq., 171 East 163rd Street, Bronx, New York 10451, JBlauEsq@gmail.com, (347) 329-1146
Respondent's Attorneys: Ashley M. Thomas, Esq., The Legal Aid Society, Bronx Neighborhood Office, 260 East 161st Street, 7th Floor, Bronx, New York 10451, AMThomas@legal-aid.org, (929) 225-3835
Diane E. Lutwak, J.
Recitation, as required by CPLR Rule 2219(a), of the papers considered in determining Petitioner's Motion (seq #2) for an Order Vacating the "ERAP" Stay Under L. 2021, c. 56, Part BB, as amended by L. 2021, c. 417, Part A:
Papers /NYSCEF Doc #
Holdover Petition and Notice of Petition 1-2
"ERAP" Application Confirmation 8
Petitioner's Notice of Motion 16
Attorney's Affirmation in Support of Motion 17
Affidavit of Service of Motion on NYS Attorney General 18
Attorney's Affirmation in Opposition 19
Exhibits A-F in Opposition 20-25
Attorney's Affirmation in Reply 26
Exhibits A-B in Reply 27-28
For the reasons stated below, Petitioner's motion for an order vacating the stay of this proceeding pursuant to L. 2021, c. 56, Part BB, Subpart A, § 8, as amended by L. 2021, c. 417, Part A, § 4, is granted and the matter is set down for a virtual pre-trial conference on April 6, 2022 at 3:15 p.m.
RELEVANT PROCEDURAL HISTORY AND BACKGROUND
This is a "licensee" eviction proceeding commenced against the occupants of the subject Rent Stabilized apartment following the death of the tenant of record, which Petitioner learned of from one of the occupants, Respondent Robert Evans . Shortly after the petition was filed, on August 4, 2021, Respondent filed a "hardship declaration" pursuant to Part A of the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 ("CEEFPA"), on which he checked off boxes "A" and "B" to indicate both that he was experiencing a financial hardship and that vacating the premises and moving into new permanent housing would pose a significant health risk due to the COVID-19 pandemic. Respondent's filing of a hardship declaration stayed the proceeding initially through August 12, 2021, when CEEFPA, Part A was enjoined by the United States Supreme Court in Chrysafis v Marks (––– U.S. ––––, 141 S.Ct. 2482, 210 L.Ed.2d 1006 [2021] ), and then through January 15, 2022, under the CEEFPA successor statute, L. 2021, c. 417, Part C, Subpart A.
While the Petition names Robert Evans, "J. Doe #1" and "J. Doe #2" as Respondents, as Robert Evans is the only one to appear the term "Respondent" hereinafter refers solely to him.
On January 21, 2022 Petitioner filed a motion seeking to restore the case to the court's calendar for trial. Respondent retained counsel who filed notice of Respondent's application to the New York State Office of Temporary and Disability Assistance (OTDA) for the COVID-19 Emergency Rent Assistance Program ("ERAP"), which was "under review". At a virtual appearance on February 7, 2022, Petitioner withdrew its motion and the case was adjourned to March 16, 2022 with a briefing schedule for Petitioner to file a new motion seeking to lift the automatic stay imposed by L. 2021, c. 56, Part BB, Subpart A, § 8, as amended by L. 2021, c. 417, Part A, § 4 ("the ERAP Law").
See also Administrative Order # AO 34/22 dated January 16, 2022 of New York State Chief Administrative Judge Lawrence K. Marks.
PETITIONER'S MOTION TO LIFT THE ERAP STAY
Petitioner's motion is supported by the affirmation of its attorney, who argues that the ERAP stay should be lifted for two reasons. First, Petitioner argues that the stay imposed by the ERAP Law is an unconstitutional violation of Petitioner's due process rights under the Fifth and Fourteenth Amendments of the United States Constitution, both on its face and as applied to this case, for the same reasons that CEEFPA, Part A was found to be unconstitutional in Chrysafis v Marks . Just as CEEFPA, Part A authorized a stay of an eviction proceeding upon a respondent's self-certification of a COVID-19-related hardship, Petitioner argues, the ERAP Law authorizes a stay of an eviction proceeding upon a respondent's self-certification of eligibility for ERAP by simply filing an application with OTDA. Petitioner argues that ERAP eligibility is irrelevant to this holdover proceeding against someone whose license to reside in the premises expired upon the death of the tenant of record.
Second, alternatively, Petitioner argues that the Court has the authority to find as a matter of fact that a respondent is not eligible for ERAP funding or that a stay would be futile in a particular context, citing to Abuelafiya v Orena (73 Misc 3d 576, 155 N.Y.S.3d 715 [Dist Ct 3rd Dist Suffolk Co 2021] ), and Actie v Gregory (2022 NY Misc LEXIS 582, 2022 WL 534305, 2002 NY Slip Op 501117[U][Civ Ct Kings Co 2/18/22] ). Petitioner argues that the ERAP stay is futile here because regardless of whether Respondent can pay use and occupancy, his license to live in this apartment expired upon the death of the tenant of record and he must vacate.
In opposition, Respondent's attorney argues first that the Court should not consider Petitioner's constitutional argument because the office of the New York State Attorney General (NYSAG) was not properly served. Petitioner's affidavit of service on the NYSAG (NYSCEF Doc. # 18) asserts service by "overnight mail" through the US Postal Service at the Office of the Attorney General, Empire State Plaza, Justice Building, 2nd Floor, Albany, NY 12224. Respondent points to a page of the NYSAG's website, entitled "Notification of Constitutional Challenges to State Law", which provides an address on Liberty Street in Manhattan for service of notices and documents in cases arising in specified counties, including the Bronx, and an address in Albany for cases arising in other specified counties.
Second, Respondent argues that the ERAP Law is clear on its face as to the automatic stay of eviction proceedings upon submission of an ERAP application.
Third, regarding Petitioner's constitutional claim, aside from the notice issue, Respondent argues that New York statutes are presumed constitutional and it is a heavy burden to find otherwise. Respondent asks this Court to follow Harbor Tech LLC v Correa (73 Mis3d 1211[A], 154 N.Y.S.3d 411 [Civ Ct Kings Co 2021] ), in which the Court granted the tenant's motion for a stay under ERAP and distinguished Chrysafis v Marks as raising different issues.
Respondent also cites to a series of other lower court decisions denying requests to vacate ERAP stays, some of which address the Chrysafis issue and some of which do not: Carousel Props v Valle (2022 NY Misc LEXIS 750, 2022 WL 620020, 2022 N.Y. Slip Op. 50168[U][Dist Ct, 6th Dist, Suffolk Co 2/16/22] ); 560-566 Hudson LLC v James David Hillman (L & T # 300446-21 [Civ Ct NY Co, 2/24/2022]); 204 W 55th St, LLC v Mackler (2021 N.Y. Slip Op. 32901[U][ Civ Ct NY Co 12/2/21] ); and 255 Skyline Drive Ventures LLC v Ryant (L & T # 50014-20 [Civ Ct Richmond Co, 10/13/21]).
Fourth, Respondent argues that his ERAP application should not be deemed "futile" because while Petitioner "made a blanket statement that they did not wish to accept the funding from ERAP", its petition seeks use and occupancy. Further, if ERAP funds are approved and Petitioner does accept them the ERAP Law protects Respondent from eviction for a year from the date of payment.
On reply, Petitioner points to two undisputed facts which render Respondent's eligibility for ERAP irrelevant to this proceeding: Respondent is not a tenant or leaseholder and Petitioner will not accept any ERAP funds on behalf of Respondent. Regarding the petition's claim for use and occupancy, Petitioner argues that this is a remedy to prevent unjust enrichment, it is not asserted to create a tenancy. As to the cases cited by Respondent, Petitioner argues that they can be distinguished and/or support vacatur of the ERAP stay.
As to service on the NYSAG, Petitioner argues that the website Respondent quotes to is not binding authority, and, in any event, Petitioner followed other guidance it found on that same website. Further, Petitioner provides tracking records for the overnight mailing showing the papers were delivered to the NYSAG's office on March 2, 2022 and asks that, if the Court finds service was deficient, the motion be adjourned for additional service on the NYSAG.
DISCUSSION
As a preliminary matter, the court rejects Respondent's argument that Petitioner's constitutional argument should be rejected due to improper notice to the NYSAG. The relevant statutes, Executive Law § 71 and CPLR § 1012(b), do not require service of the notice at a particular NYSAG office and, accordingly, the information on the agency's website is suggestive, not compulsory. In any event, as discussed below, this Court does not reach the constitutional question Petitioner raises and, accordingly, this is a moot point.
The key questions raised by Petitioner's motion and Respondent's opposition thereto are whether this Court has the authority to vacate an ERAP stay and, if so, whether it should do so on the facts presented in this case. For the following reasons this Court concludes that it does have such authority and that it is appropriate to do so in this case.
The ERAP Law, originally enacted as part of New York State's 2021 Budget Bill, signed by the Governor on April 16, 2021, L. 2021, c. 56, Part BB, established a rent relief program for the distribution of federal funds, to be implemented and administered by OTDA. Certain provisions of the ERAP statute were amended effective September 2, 2021 by the passage of L. 2021, c. 417, Part A. Relevant to the arguments presented in support of and opposition to Petitioner's motion are the following sections of the ERAP Law:
• Restrictions on eviction, L. 2021, c. 56, Part BB, Subpart A, § 8, as amended by L. 2021, c. 417, Part A, § 4: Except as provided in a new section 9-a added by the amendments , in "any pending eviction proceeding" (holdover or nonpayment), "all proceedings shall be stayed pending a determination of eligibility."
• Eligibility (unchanged by the amendments), L. 2021, c. 56, Part BB, Subpart A, § 5: ERAP eligibility standards and priorities are to be established by OTDA, consistent with four itemized criteria including the requirement that a household be found eligible if it is a "tenant or occupant obligated to pay rent in their primary residence in the State of New York including both tenants and occupants of dwelling units".
• Definitions (unchanged by the amendments), L. 2021, c. 56, Part BB, Subpart A, § 2(7):
• "Occupant" has the same meaning as under Real Property Law (RPL) § 235-f which, in turn, defines "occupant" as "a person, other than a tenant or a member of a tenant's immediate family, occupying a premises with the consent of the tenant or tenants."
• "Rent" is as defined under Real Property Actions and Proceedings Law (RPAPL) § 702 which, in turn, defines "rent" as "the monthly or weekly amount charged in consideration for the use and occupation of a dwelling pursuant to a written or oral rental agreement."
A description of the new § 9-a is not included on this list because it applies only where "a tenant intentionally causes significant damage to the property or is persistently and unreasonably engaging in behavior that substantially infringes on the use and enjoyment of other tenants or occupants or causes a substantial safety hazard to others", and Petitioner asserts no facts or legal arguments implicating this section.
In interpreting the ERAP statute, the Court's primary consideration "is to ascertain and give effect to the intention of the Legislature". Riley v County of Broome (95 N.Y.2d 455, 463, 742 N.E.2d 98, 719 N.Y.S.2d 623 [2000] ). The original ERAP statute, enacted as part of the State's 2021 Budget Bill, notes simply that its purpose was to "to establish a COVID-19 emergency rental assistance program". In enacting the amendments effective September 1, 2021, the legislature included a "Legislative Intent" section, L. 2021, c. 417, § 2, much of which addresses the new statute enacted as a substitute for CEEFPA, Part A, which the US Supreme Court in Chrysafis v Marks, supra , enjoined as violative of constitutional due process. As to ERAP, the "Legislative Intent" section states, "To date, technical and administrative challenges, low public awareness of the program, and the slow pace of implementation have hampered the program's effectiveness in covering the cost of rent arrears and providing widespread eviction protection." More generally, the legislature also notes that it "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 evictions would cause to the state's economic recovery, and the deleterious social and public health effects of homelessness and housing instability."
After reviewing the statute and legislative intent, this Court concludes that it does have the authority to lift an ERAP stay in an appropriate case and it is not necessary to reach Petitioner's constitutional claim. As to certain matters, the ERAP Law assigns exclusive authority to OTDA: To establish eligibility standards, set priorities and process ERAP applications. However, the "Restrictions on eviction" section - including the stay provision - adheres to matters outside OTDA's realm; that is, to eviction proceedings pending in the court system with which the administrative agency is not involved. And while the stay language appears absolute, to find it to be so would raise doubts as to the statute's constitutionality, an outcome to be avoided where possible. In re Lorie C (49 N.Y.2d 161, 171, 424 N.Y.S.2d 395, 401, 400 N.E.2d 336, 341 [1980] ).
True, the ERAP Law does not provide a specific mechanism for landlords to challenge a stay, as did the revised "hardship declaration" statute promulgated after the enjoining of CEEFPA, Part A in Chrysafis v Marks , where the US Supreme Court specifically took issue with a statute that allowed a tenant to "self-certif[y] financial hardship" while precluding "a landlord from contesting that certification". Chrysafis held that, "This scheme violates the Court's longstanding teaching that ordinarily ‘no man can be a judge in his own case’ consistent with the Due Process Clause." However, the ERAP Law also does not include any provisions preventing landlords from challenging such a stay in a pending court proceeding and raising whatever cogent legal arguments they may have, including that ERAP funds may be irrelevant to a particular case, or that occupants of a particular residence clearly do not meet one or more of the program's fundamental eligibility criteria. If this Court were to categorically refuse to consider such arguments the same concerns that were implicated in Chrysafis v Marks would arise.
Other courts have acknowledged this problem and explicitly found and exercised their authority to lift a stay without finding the ERAP Law to be unconstitutional based upon the facts and legal arguments presented to them. For example, in Abuelafiya v Orena (73 Misc 3d 576, 155 N.Y.S.3d 715 [Dist Ct 3rd Dist Suffolk Co 2021] ), a nonpayment proceeding, the Court noted its obligation to construe New York State statutes so as to avoid constitutional impairment and determined that "the statute inherently allows" a court to determine a household's ERAP eligibility. The Court found that the tenants were ineligible for ERAP funding as they were not experiencing housing instability — one of ERAP's fundamental criteria, see L. 2021, c. 56, Part BB, Subpart A, § 5(1)(a)(iv) - due to their undisputed ownership of another home and, accordingly, denied them the benefit of the ERAP stay. In Actie v Gregory (2022 NY Misc LEXIS 582, 2022 WL 534305, 2022 NY Slip Op 501117[U][Civ Ct Kings Co 2022]), a holdover proceeding in which the landlord sought to recover possession of an apartment for his own use in a building with four or less apartments, the court vacated the ERAP stay, finding that approval of the pending ERAP application would not result in the preservation or creation of a tenancy for the occupant who remained after the tenant of record moved out. In US Bank Trust, NA v Alston (2022 NY Misc LEXIS 678, 2022 WL 571725, 2022 N.Y. Slip Op. 22051 [Justice Ct, Town of Pleasant Valley, Dutchess Co, 2/24/22] ), the court held that in order to receive the benefits of an ERAP stay of an eviction proceeding a household must be eligible for coverage under the ERAP Law, which includes meeting the criteria of being either a tenant or occupant as defined in RPL § 235-f and having an obligation to pay rent as defined in RPAPL § 702. Finding that the respondents had no obligation to pay rent the Court found them ineligible to benefit from the ERAP Law's stay provision despite their recently filed ERAP application. Most recently, in Kelly v Doe (2022 NY Misc LEXIS 937, 2022 WL 829708, 2022 N.Y. Slip Op. 22077 [Civ Ct Kings Co 2022] ), the Court lifted the ERAP stay in an eviction proceeding brought against squatters, finding that, "To allow someone who clearly has been adjudicated to have no legal rights to the premises to evoke a new stay of the proceedings due to an ERAP application, clearly would lead to an absurd result."
Even when Courts decline to lift an ERAP stay they often either explicitly or implicitly acknowledge their authority to do so when faced with appropriate facts and equitable considerations. For example, in Harbor Tech LLC v Correa, supra , the Court highlighted the differences between the facts before it and those before the Court in Abuelafiya, supra , and acknowledged that there were some situations in which the statutory criteria for ERAP benefits might be determined through the judicial process. In 255 Skyline Drive Ventures LLC v Ryant (L & T # 50014-20 [Civ Ct Richmond Co, 10/13/21]), the Court did not discuss whether or not it had the authority to examine an ERAP applicant's eligibility but in fact did exactly that, finding that "Respondents clearly had a rental obligation in this case". Even in Carousel Props v Valle (2022 NY Misc LEXIS 750, 2022 WL 620020, 2022 N.Y. Slip Op. 50168[U][Dist Ct, 6th Dist, Suffolk Co 2/16/22] ), where the Court found that "a petitioner may not request a hearing challenging the eligibility of a tenant for ERAP benefits" because there was "a statutory procedure for [determining a tenant's eligibility] without any provision for the courts to make such determinations," it also acknowledged that there was an exception "in the event of a credible allegation of fraud", in which case courts would have "the discretion to determine whether the allegation rises to the level of intentional fraud that would permit the court to proceed with a hearing on the merits of the petition notwithstanding the pendency of the ERAP application," citing Abuelafiya, supra. In another case, not cited by Respondent, Sea Park E LP v Foster (74 Misc 3d 213, 2021 Slip Op 21347 [Civ Ct Kings Co 12/10/21] ), the Court found on the one hand that, "The plain language of the statute clearly indicates that any pending ERAP application stays a proceeding until an eligibility determination is made". However, the Court went on to note that if the facts were different it might have interpreted the ERAP Law differently to prevent "an absurd result".
Here, unlike in Harbor Tech , what is before the Court is not a nonpayment proceeding where a landlord's receipt of a rent arrears payment upon approval of a tenant's ERAP application, "could naturally and foreseeably resolve the nonpayment litigation." Harbor Tech, supra. Rather, this is a licensee proceeding under RPAPL § 713(1) where no showing has been made in either an answer or an affidavit in opposition to the landlord's motion that Respondent is a "tenant or occupant obligated to pay rent". That the petition includes use and occupancy in its prayer for relief is of no moment here where there is no indication of any "written or oral rental agreement," as is required under the RPAPL § 702 definition of "rent", incorporated by reference in the ERAP Law. Compare 255 Skyline Drive Ventures LLC v Ryant, supra (finding, "in light of the particular circumstances of this case" no distinction between "rent" and "use and occupancy").
Further, it is worth noting that lifting the stay in this case does not result in Respondent's immediate eviction. Rather, it allows the case to proceed through the litigation process. As Respondent has not yet filed an answer to the petition what his defenses to this proceeding might be are unknown.
CONCLUSION
For the reasons stated above, and on the facts and circumstances of this case, a sufficient showing has been made to grant Petitioner's motion and lift the ERAP stay. Accordingly, it is hereby ORDERED that the ERAP stay is lifted, this proceeding is restored to the Resolution Part C virtual calendar for a pre-trial conference on April 6, 2022 at 3:00 p.m. This constitutes the Decision and Order of the Court, copies of which are being uploaded on NYSCEF and mailed to the non-appearing Respondents "J. Doe #1" and "J. Doe #2" at the premises.