Opinion
Index 60790/2019
10-25-2021
Harbor Tech LLC, Petitioner, v. Alfredo Correa, Respondent. Harbor Tech LLC, Petitioner, Benjamin Soto, Respondent. Harbor Tech LLC, Petitioner, v. Benjamin Soto, Respondent.
For Petitioner: Jeffrey Goldman For Respondent: Jack Lester and Anselmo Alegria
Unpublished Opinion
MOTION DECISION
For Petitioner: Jeffrey Goldman
For Respondent: Jack Lester and Anselmo Alegria
HON. JACK STOLLER J.H.C.
Pages numbered
Notice of Motion and Supplemental Affirmation Annexed 1, 2
Notice of Cross-Motion and Supplemental Affirmation and Affidavits Annexed 3, 4, 5, 6
Affirmation In Reply and Opposition 7
Upon the foregoing papers, the Decision and Order on this motion are as follows:
Harbor Tech LLC, the petitioner in these two proceedings ("Petitioner"), commenced these two summary proceedings against Alfredo Correa, the respondent in one of these proceedings ("Respondent Correa"), seeking a money judgment and possession of apartment 206 ("Respondent Correa's apartment") at 14 Verona Street, Brooklyn, New York ("Respondent Correa's building"), and against Benjamin Soto, the respondent in the other one of these proceedings ("Respondent Soto"), seeking a money judgment and possession of apartment 4G ("Respondent Soto's apartment") at 5 Delavan Street, Brooklyn, New York ("Respondent Soto's building"), both on the basis of nonpayment of rent. Respondent Correa and Respondent Soto (collectively, "Respondents") both interposed answers and the Court had commenced with a joint trial of these matters, which were then stayed when Respondents both filed hardship declarations pursuant to a statute regarding evictions during the COVID-19 pandemic. Petitioner now moves to challenge the hardship declarations pursuant to a recently-enacted statute and for the Court to so-order subpoenas. Respondent Correa cross-moves for a stay of this proceeding based upon his application for emergency COVID-19 benefits and Respondents both cross-move to limit Petitioner's recovery in the nonpayment proceeding. The Court resolves these motions by this order.
Background
Joint trial of these two nonpayment proceedings had proceeded on five dates in 2020, the most recent of which was December 3, 2020, and was continued into 2021. Before the Court could continue with the trial, on December 28, 2020, the Governor signed into law the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020, L. 2020, c. 381 ("CEEFPA"). CEEFPA stayed summary proceedings and provided tenants with a mechanism by which they could inform the Court of the effects of the COVID-19 pandemic on them, called a "hardship declaration." Tenants filing a hardship declaration could state that they suffered a financial hardship and/or state that they sustained a medical condition that renders moving to be a health risk. A tenant's filing of a hardship declaration in a matter would stay the proceeding through the date set by statute. Respondents both filed hardship declarations in this matter.
During the pendency of the statutory stay, by an order dated August 12, 2021, the U.S. Supreme Court enjoined the enforcement of this provision of CEEFPA, Chrysafis v. Marks, 2021 U.S. LEXIS 3635, 2021 WL 3560766, finding that CEEFPA denied landlords a hearing challenging a tenant's self-certification of a hardship and that such a denial violated due process. The Legislature responded by enacting a new statute, signed into law on September 2, 2021, L. 2021, c.417 ("the New Statute"), that provides, inter alia, that hardship declarations, both newly-filed and filed pursuant to CEEFPA, effectuate a stay of evictions for the declarants through January 15, 2022, L. 2021, c. 417, Part C, Subpart A, §6(a)(ii), but also that landlords may move to challenge hardship declarations on a showing of good faith. L. 2021, c. 417, Part C, Subpart A, §10(a).
Pursuant to the New Statute, Petitioner moves to challenge Respondents' hardship declarations, supporting its motions with a variety of copies of Respondents' social media posts depicting Respondents engaged in various activities that are inconsistent with the proposition that they have suffered financial hardships. Respondent Soto avers in his affidavit in opposition that the hardship he has experienced results from his former source of income as a party promoter, given that various shutdowns occasioned by the pandemic effectively halted nightlife.
The Legislature separately enacted a statute to distribute funds to pay rent arrears, designated as the COVID-19 Emergency Rental Assistance Program ("ERAP"), codified at L. 2021, c. 56, part BB, amended by L. 2021, c. 417, Part A. Respondent Correa filed an application for ERAP in September of 2021 which is still pending as of this writing.
Respondent Correa's motion for a stay pursuant to his ERAP application
A tenant's application for ERAP benefits stays any pending summary proceeding against that tenant pending a determination of eligibility. L. 2021, c. 417, Part A, §4. By the plain terms of the statute, then, Respondent Correa shows as a prima facie matter that the Court should continue to stay the summary proceeding against him on grounds separate from any question about Respondent Correa's hardship application.
Petitioner argues against the stay, citing in particular Abuelafiya v. Orena, 2021 NY Slip Op. 21247, ¶ 1 (Dist. Ct. Nassau Co.), which found that the automatic stay provisions of ERAP did not address the due process issues raised by the U.S. Supreme Court in Chrysafis, supra, and further held that the ERAP statute inherently confers upon the Court the jurisdiction to determine eligibility for ERAP benefits. However, the Court in Abuelafiya, supra, dealt with facts very different from this case, not the least of which was the Court's finding that the tenants therein were not experiencing housing instability by virtue of the fact that they owned a second house they may relocate to.
On the facts of this case, a constitutional challenge to the ERAP stay raises different issues than the automatic stay occasioned by the filing of the hardship declaration in CEEFPA. The U.S. Supreme Court found that a landlord did not have a means to challenge a tenant's unilateral invocation of a stay and that a tenant's effective role as the judge in their own case offended the landlord's due process rights. ERAP, however, is an assistance program that provides benefits to landlords - accrued rent arrears - as well as to tenants. Landlords as well as tenants can file an ERAP application. L. 2021, c. 56, part BB, §6(3), L. 2021, c. 56, part BB, §6(5). If a landlord receives a payment of rent arrears through ERAP, the payment could naturally and foreseeably resolve the nonpayment litigation. Staying or otherwise restricting litigation to resolve a dispute by alternative means does not deny due process. See Woods v. Holy Cross Hosp., 591 F.2d 1164, 1177 (5th Cir. 1979)(due process concerns can accommodate a prerequisite that a medical malpractice plaintiff undergo a mediation panel before commencing a plenary action), Montgomery v. Daniels, 38 N.Y.2d 41, 53 (1975)(the Legislature did not infringe on the due process rights of tort plaintiffs when it foreclosed in part their traditional common-law causes of action in favor of a streamlined no-fault scheme).
Moreover, in the absence of the equities that the facts of Abuelafiya, supra, confronted the Court with, the Legislature directed that the Commissioner of the Office of Temporary and Disability Assistance, not the Courts, establish the procedures to determine ERAP eligibility. L. 2021, c. 56, part BB, §5. At least some of the statutory criteria for ERAP benefits calls for an administrative, not judicial, process to determine, for example, the eligibility of NYCHA or Section 8 tenants for ERAP, which is only "to the extent that funds are remaining after serving all other eligible populations," L. 2021, c. 56, part BB, §5(1)(a)(i), and whether an applicant household resides in a community that was disproportionately impacted by the COVID-19 pandemic in a methodology to be determined by the Commissioner. L. 2021, c. 56, part BB, §5(4)(d).
Accordingly, the precedent set by an ERAP applicant who owns another home that the applicant could move to does not mandate a similar result for Respondent Correa. The Court therefore grants Respondent Correa's motion for a stay of the proceeding as against him. As the proceeding is stayed, all other motions regarding Harbor Tech LLC v. Correa, Index No.60788/2019 (Civ. Ct. Kings Co.), are held in abeyance during the pendency of the stay.
Petitioner's motion for a hearing
The New Statute provides that a petitioner in a summary proceeding "may" make a motion challenging a tenant's hardship declaration "attesting a good faith belief that the respondent has not experienced a hardship and the court shall grant a hearing to determine whether to find the respondent's hardship claim invalid." L. 2021, c. 417, Part C, Subpart A, §10(a)(emphasis added). The legislation actually cites Chrysafis, supra, by name, L. 2021 c. 417, §2, thus demonstrating that the Legislature could not have intended to provide landlords with a meaningless remedy. Accordingly, the Legislature did not require landlords to, for example, show "knowledge" of a tenant's hardship status to obtain a hearing. Rather, landlords only have to show a "belief," albeit one that has a good-faith basis. The social media posts that Petitioner shows are exactly the kind of discreet, specific, non-conclusory facts - and therefore made in good faith - upon which to form a "belief" that Respondent Soto has not suffered a pandemic-related hardship. As the statute provides that the Court "shall" hold a hearing upon such a showing, then, Petitioner proves an entitlement to a hearing. See Sanchez-Tiben v. Washington, 2021 NY Slip Op. 21276 (Civ. Ct. Bronx Co.).
Intuitively, it is the movant who bears the burden of proving its case, a proposition only bolstered by the New Statute as it provides that a tenant gives rise to a rebuttable presumption of a financial hardship upon the filing of a hardship declaration claiming the same, "[u]nless a court determines a tenant's hardship claim...." L. 2021, c. 417, Part C, Subpart A, §9. However, the Legislature enacted the New Statute to address the due process concerns articulated in Chrysafis, supra, and due process means, in part, a hearing provided in a "meaningful manner." Brock v. Roadway Express, Inc., 481 U.S. 252, 261, 107 S.Ct. 1740, 1747 (1987), Proctor v. LeClaire, 846 F.3d 597, 609 (2nd Cir. 2017), LaCorte Elec. Constr. & Maint., Inc. v. Cnty. of Rensselaer, 80 N.Y.2d 232, 237 (1992), Matter of State of NY v. Farnsworth, 75 A.D.3d 14, 20 (4th Dept. 2010). At first blush, a hearing which puts the burden on Petitioner to prove a proposition that is peculiarly within Respondent Soto's knowledge does not seem so "meaningful."
On a case-by-case basis, however, the Court reserves the discretion to determine the sequence of the issues presented in a trial. CPLR §4011. General rules of the order of introducing evidence notwithstanding, an integral part of the trial judge's function is to permit a deviation from such as may be necessary to fit the circumstances of a particular case. Feldsberg v. Nitschke, 49 N.Y.2d 636, 643-644 (1980). Depending on the individual circumstances of the individual case, it is possible that a landlord may bear the burden of proving that a tenant has not endured a hardship as defined in the New Statute. On the circumstances of this matter, however, where the only basis for Petitioner's knowledge of Respondent's personal financial situation is Respondent's social media feed, a hearing held in a meaningful manner means a hearing where the order of proof begins with Respondent's evidence of his hardship.
Petitioner's motion to have the Court so-order a subpoena
Petitioner moves for an order so-ordering a subpoena duces tecum and a subpoena ad testificandum upon Respondent Soto seeking information related to the hardship declaration. The notice of motion and supporting affirmation state that the purpose of the subpoena is to have Respondent Soto produce documents at the hearing. In reply to Respondent Soto's opposition that Petitioner did not satisfy the elements necessary for leave to obtain discovery pursuant to CPLR §408, Petitioner's counsel affirms, inter alia, that the subpoena is a trial subpoena, not a discovery subpoena.
A subpoena duces tecum for use at a hearing is not the equivalent of an order of disclosure, but an order to the subpoenaed party to have the documents in court so that the court may make appropriate direction with respect to the use of such documents. People ex rel. Hickox v. Hickox, 64 A.D.2d 412, 413-14 (1st Dept. 1978). However, the language of the subpoena itself indicates in multiple ways that it is actually a discovery subpoena. The subpoena demands production of documents at Petitioner's counsel's office rather than the Court, states that the subpoena is served pursuant to CPLR §3111, i.e. pursuant to a deposition, the subpoena actually references a deposition, and paragraphs 8, 9, 10, and 11of the subpoena refer to it as a "discovery" demand.
Given the inconsistency between Petitioner's characterization of the subpoena as a trial subpoena and the subpoena's actual language seeking discovery, the Court cannot so-order the subpoena as written and still have it serve the function as a trial subpoena. Moreover, the Court prefer not to sua sponte rewrite the subpoena before so-ordering it. Accordingly, the Court will deny Petitioner's motion to so-order a subpoena. This denial is without prejudice to renewal and without prejudice to Petitioner's issuance of a subpoena upon Respondent Soto which Petitioner, by Petitioner's counsel, may do without a Court order. CPLR §2302(a), 1286-1290 First Ave., LLC v. Stern, 14 Misc.3d 138 (A)(App. Term 1st Dept. 2007).
Accordingly, it is
ORDERED that the Court stays Harbor Tech LLC v. Correa, Index # 60788/19 (Civ. Ct. Kings Co.) pending the determination of Respondent Correa's eligibility for ERAP, and it is further
ORDERED that the entirety of Petitioner's motion and the balance of Respondent Correa's cross-motion in Harbor Tech LLC v. Correa, Index # 60788/2019 (Civ. Ct. Kings Co.) remains in abeyance pending the stay of that proceeding, and it is further
ORDERED that the Court grants Petitioner's motion to hold a hearing challenging Respondent Soto's hardship declaration in Harbor Tech LLC v. Soto, Index # 60790/2019 (Civ. Ct. Kings Co.) on a date to be arranged with counsel for the parties, and it is further
ORDERED that the order of proof of the hearing in Harbor Tech LLC v. Soto, Index # 60790/2019 (Civ. Ct. Kings Co.) shall be set such that Respondent Soto bears the initial burden of proving his hardship, and it is further
ORDERED that the Court denies Petitioner's motion to have the Court so-order a subpoena, without prejudice to renewal and without prejudice to Petitioner's counsel's issuance of its own trial subpoena upon Respondent Soto pursuant to CPLR §2302(a), and it is further
ORDERED that the Court holds Respondent Soto's cross-motion in abeyance pending any expiration of any other extant stay that applies to Harbor Tech LLC v. Soto, Index # 60790/2019 (Civ. Ct. Kings Co.).
This constitutes the decision and order of this Court.