Opinion
052912/2003.
Decided April 27, 2004.
In October 2003, Petitioner commenced this nonpayment proceeding seeking the collection of $17,900.29, due in arrears. Subsequently, Respondent filed for Chapter 7 bankruptcy. Due to the Bankruptcy Court's stay on all proceedings, this matter was marked off calendar.
Petitioner then moved in Bankruptcy Court by order to show cause to lift the bankruptcy stay. By order dated February 27, 2004, the Bankruptcy Court lifted the automatic stay. Based on Said order, Petitioner then moved to restore the instant proceeding to this Court's calendar. In March 2004, Judge Elizabeth S. Strong of the Bankruptcy Court discharged all of Respondent's obligations, including the $17,900.29, due in arrears through October 2003.
On March 29, 2004, this matter was tried before the Court. At trial, Petitioner established its prima facie case, namely that it was the owner of the premises, had a landlord/tenant relationship with the Respondent, that Respondent did not pay any portion of the $17, 900.29, demanded in the petition, but discharged by the Bankruptcy Court, and owed an additional $4878.10 due in post petition arrears. Respondent presented a copy of the discharge order issued by Judge Elizabeth S. Strong of the Bankruptcy Court evidencing that Petitioner could not obtain a money judgment for any arrears covered by the discharge order. Other than this, Respondent presented no defense to this proceeding and did not deny owing the additional arrears.
The issue presented in this proceeding, is whether Petitioner is entitled to a possesory judgment for the $17,900.29 demanded in the petition, as well as a money judgment for all post petition arrears due through March 2004, in the amount of $4878.10. This Court responds in the affirmative to both questions.
Recently, the Appellate Division First Department unanimously ruled that:
"Although a debtor's debt for rental arrears may be personally discharged in bankruptcy, the underlying debt is not extinguished. Hence, the discharge in bankruptcy is not equivalent of payment and does not, under federal bankruptcy law, prevent a landlord from evicting a tenant by reason of nonpayment. The landlord may pursue any remedy to which it is entitled under state law for breach of the tenant's obligation to pay rent, except a remedy against the debtor personally to collect the money due"( Dulac v. Dabrowski, 2004 WL 352123 [N.Y.A.D. 1st Dept.]; (see, also e.g., In Re Robert Dabrowski, 257 BR 394 [S.D. NY 2001]; United States v. Alfano, 34 F.Supp 2d 827, 841 [E.D. NY 1999].)
In Dulac v. Dabrowski, a long, drawn out legal battle before the Division of Housing Community Renewal resulted in an award to Petitioner of $42,000.00. Respondent declared bankruptcy and the rent debt was discharged pursuant to Bankruptcy code § 727(b). Thereafter, a nonpayment proceeding was commenced.
The trial Court in following Stahl Broadway Co., v. Haskins, 180 Misc. 2d 705, 693 NYS2d 398, [App. Term. 1st Dept., 1999]; dismissed the nonpayment proceeding. On appeal, the Appellate Term First Dept. determined that its decision in Stahl Broadway Co., v. Haskins, supra, should not be followed. The Appellate Term, held that even though a bankruptcy discharge shields a debtor from actions to collect the debt, said discharge does not shield the debtor from other remedies available to a creditor. In so holding, the Appellate Term, First Dept. reversed the trial Court and remanded the proceeding.
Respondent, Dabrowski appealed to the Appellate Division which, as stated above, affirmed the Appellate Term. In doing so, the Appellate Division determined that as long as the landlord did not seek payment on the discharged amount, the discharge will not prevent a landlord from evicting the tenant for nonpayment of rent.
This proceeding presents a slightly different fact pattern. In Dulac v. Dabrowski, the debt had been discharged prior to commencement of the nonpayment proceeding. The instant nonpayment proceeding was commenced prior to Respondent's filing for bankruptcy and hence prior to any discharge. After the proceeding was restored, Petitioner's counsel affirmed that he was not seeking a money judgment for the pre-petition arrears, but would be seeking to enforce the obligation.
Accordingly, Petitioner is entitled to a final judgment for all post petition arrears in the amount of $4,878.10. Issuance of the warrant of eviction is stayed five (5) days from the date of service of a copy of this order with notice of entry for payment of said arrears.
However, in addressing the discharged arrears the Court faces a dilemma. While this is a nonpayment proceeding, the relief sought regarding the discharged arrears is more akin to that awarded in a holdover proceeding. Payment may not be sought as the primary goal. Rather, eviction due to Respondent's violation of an obligation of the tenancy, is the relief sought.
In addressing the arrears discharged in the bankruptcy proceeding, the Court must determine whether to treat said arrears pursuant to the nonpayment provisions of the RPAPL or treat said arrears as if the matter was a holdover based upon a violation of an obligation of the tenancy. If the Court determines that the nonpayment provisions are applicable then the Court may provide only five (5) days to pay to avoid eviction. If the Court determines in favor of the latter, then the issue becomes what if any cure period, should be granted to the Respondent?
The Court in Dulac v. Dabrowski, provided little guidance on this issue other than to state that a cause of action may be maintained. No ruling or statement was made as to the ultimate relief and the manner in which it should be carried out
The Appellate Division in Dulac, supra. has determined that, though Respondent may not be required to pay the discharged sum, the obligation to pay rent, still existed and may serve as a basis for eviction. In other words, the obligation of the tenancy remains even after the requirement to pay has been removed.
This Court recognizes that the personal debt no longer exists. Rather, only an obligation of the tenancy remains. While payment of the arrears may be the only method to cure the default, the Court has no power to order payment or to grant a money judgment. In extending the analogy of a tenant's obligation to pay rent as an obligation of the tenancy and therefore a basis for an eviction, in this situation, this Court determines that the cure provisions of RPAPL § 753(4) are applicable.
§ 753(4) of the Real Property Action and Proceeding Laws states:
"In the event that such a proceeding is based upon a claim that the tenant or lessee has breached a provision of the lease, the court shall grant a ten
(10) day stay of issuance of the warrant, during which time the Respondent may correct the breach."
CONCLUSION
As set forth earlier, Petitioner is entitled to a final judgment in the amount of $4878.10. Issuance of warrant of eviction is stayed (5) five days from the date of service of a copy of this order with notice of entry. If Respondent timely pays the possessory money judgment in the amount of $4,878.10 (post petition arrears) issuance of the warrant will be stayed an additional (5) five days for a total of ten (10) days, for Respondent to cure his violation of an obligation of his tenancy by paying $17,900.29 (the discharged arrears).
Both parties may come to Court to retrieve documentation entered into evidence.
This opinion is the court's order and decision.