Opinion
15724/2017
03-02-2021
OUB COURT HOUSING COMPANY, INC., Petitioner-Landlord, v. Tanisha ALSTON, Respondent-Tenant, and N.Y.C.H.A., 250 Broadway, New York, NY 10007.
Attorney for Petitioner: Edgardo Baldinucci, Esq., Gutman, Mintz, Baker & Sonnenfeldt, LLP, 813 Jericho Turnpike, New Hyde Park, New York 11040, (516) 775-7007, Ebaldinucci@GMBSLLP.com Attorney for Respondent: Cristina Castro, Esq., Bronx Legal Services, 369 East 148th Street, 2nd floor, Bronx, New York 10455, (718) 928-2887, Cxcastro@lsnyc.org
Attorney for Petitioner: Edgardo Baldinucci, Esq., Gutman, Mintz, Baker & Sonnenfeldt, LLP, 813 Jericho Turnpike, New Hyde Park, New York 11040, (516) 775-7007, Ebaldinucci@GMBSLLP.com
Attorney for Respondent: Cristina Castro, Esq., Bronx Legal Services, 369 East 148th Street, 2nd floor, Bronx, New York 10455, (718) 928-2887, Cxcastro@lsnyc.org
Diane E. Lutwak, J.
Recitation, as required by CPLR Rule 2219(a), of the papers considered in the review of Petitioner's motion to vacate the August 3, 2018 stipulation and all subsequent stipulations and court orders and Respondent's cross-motion for an order to correct violations:
Papers/Numbered
Petitioner's Motion, Supporting Affirmation, Affidavit & Exs 1-4 1, 2, 3, 4-7
Respondent's Cross-Motion, Supporting Affirmation, Affidavit & Exs A-D 8, 9, 10, 11-14
Petitioner's Reply Affirmation & Exs 1-4 15, 16-19
PROCEDURAL HISTORY
This is a nonpayment eviction proceeding that was commenced by notice of petition and petition dated March 7, 2017 seeking rent arrears of $4839 at the monthly rate of $741 for October 2016 through March 2017 and a balance of $393 for September 2016. The petition alleges that the premises are exempt from Rent Control and Rent Stabilization as the building is owned by a limited profit housing company organized under Article 2 of the Private Housing Finance Law (PHFL) and supervised by the New York City Department of Housing Preservation and Development (HPD). The petition further states that "NYCHA [New York City Housing Authority] PAYS A PORTION OF THE RENT", that respondent "is a recipient of a NYCHA subsidy", that NYCHA objected to petitioner's "request for certification" and that NYCHA was named as a party pursuant to the "Williams Consent Decree". Prior to commencing the proceeding, petitioner sent NYCHA and respondent a "Certification of Basis for Eviction Proceeding Against Tenant Participating in the Section 8 Existing Housing Program" dated December 13, 2016, a copy of which is attached to the petition.
Respondent pro se answered the petition on March 13, 2017, raising a "general denial" and defenses of payment/partial payment and tender and refusal. The case settled at the first appearance on March 17, 2017 in a written agreement prepared by petitioner's counsel on the law firm's pre-printed settlement stipulation form. Respondent pro se consented to a money judgment for $4839 and a possessory judgment, with the warrant of eviction to issue forthwith but execution stayed through April 30, 2017 for respondent to pay the judgment plus rent for April 2017. The settlement agreement also set up access dates on which petitioner agreed to inspect and repair as required by law three specified conditions in the apartment.
Over the next two years respondent pro se filed fifteen orders to show cause (OSCs), briefly described as follows:
(1) Submitted and signed on 5/23/17, supported by respondent's affidavit stating that "rent was paid by HRA [NYC Human Resources Administration]" and HRA computer printouts showing rent payments made. Settled on the 6/8/17 return date in a "so-ordered" agreement prepared on petitioner's counsel's pre-printed form, requiring respondent to pay arrears of $2034 by 6/30/17 and petitioner to inspect and repair as required by law six conditions, including the same three that were listed in the 3/17/17 settlement agreement.
(2) Submitted on 8/10/17 and supported by respondent's affidavit stating that the rent had been paid and repairs were still needed. Rejected with the court's notations that no proof had been attached and payment and repairs were not conditional.
(3) Submitted and signed on 8/10/17, supported by respondent's affidavit stating that she had "proof they are getting the rent" and that repairs were still needed and copies of HRA checks and computer printouts. Settled on the 8/28/17 return date in a "so-ordered" agreement, prepared on petitioner's counsel's pre-printed form, requiring respondent to pay arrears of $5982 plus rent for September by 9/22/17 and petitioner to inspect and repair as required by law nine conditions, including the same three that were listed in the 3/17/17 settlement agreement.
(4) Submitted and signed on 10/3/17, supported by respondent's affidavit stating that petitioner "keep sending rent back" and "HRA said to see why they are not accepting the rent checks" and copies of HRA checks. After an adjournment by written stipulation "for petitioner to subpoena NYCHA Sec 8", the court granted the OSC on 12/11/17 to the extent of staying execution of the warrant of eviction through 1/12/18 for respondent to pay arrears of $9182 plus rent for January 2018. The court's Decision/Order noted that, "as per NYCHA § 8, Resp's current portion of rent is $800/mo".
(5) Submitted and signed on 1/29/18, supported by respondent's affidavit stating that "my case had gotten closed but I fixed it and my worker said it would be fix" and an HRA "Documentation Request Form" dated 1/12/18. The court granted the OSC on the 2/23/18 return date to the extent of staying execution of the warrant of eviction through 3/16/18 for respondent to pay $10,782 and scheduling access dates to repair seven conditions.
(6) Submitted and signed on 4/10/18, supported by respondent's affidavit stating that "rent checks [were] sent to court" and HRA documents including a "Check Receipt" dated 2/28/18 reflecting payment to petitioner of $7182. The court granted the OSC on 4/27/18 to the extent of staying execution of the warrant of eviction through 5/11/18 for respondent to pay $14,308 plus rent for May 2018 and scheduling new access dates for the same repairs listed in the court's 2/23/18 order plus one more item.
(7) Submitted and signed on 7/10/18, supported by respondent's affidavit stating, "HRA paid the rent. I just got my Section 8 back" and HRA computer printouts. Settled on the 8/3/18 adjourned return date in a "so-ordered" agreement, prepared on petitioner's counsel's pre-printed form, requiring respondent to pay arrears of $8480 by 8/17/18. Following eight printed provisions, a ninth hand-written provision states: "Above, pursuant to § 8 records, reflects T's portion @ $800 per month. 12/17 order for $9182 plus 1/18 through 8/18 @ $800 = $15,582.00 minus $8102 paid in that time = $8480." A tenth hand-written provision schedules an access date for petitioner to inspect and repair as required by law three items, all listed in the court's 2/23/18 Decision and Order.
(8) Submitted and signed on 9/26/18, supported by respondent's affidavit stating that HRA sent the checks to the wrong address and "needs to re-issue checks to the correct address" and HRA documents. The court granted the OSC on the 10/10/18 adjourned date to the extent of staying execution of the warrant of eviction to 10/31/18 for respondent to pay $10,080 and scheduling access dates for four repairs.
(9) Submitted and signed on 11/27/18, supported by copies of HRA checks and computer printouts and respondent's affidavit referencing those checks. After several adjournments, this OSC appears to have been denied on 3/12/19 in conjunction with the withdrawal of a motion filed by petitioner, described in greater detail below, that was originally returnable 1/15/19 and thereafter adjourned first to 2/19/19 and then to 3/12/19.
(10) Submitted on 3/18/19, supported by HRA documents and respondent's affidavit stating that "Section 8 came on 2/[??]/19 gave them 20 days to fix no one came HRA said I can get help but need amount owed to be signed by Judge". Rejected with the court's notations that $10,080 was due under the 10/10/18 order, rent for 11/18 through 3/19 was now also due, the case had been pending since March 2017 and respondent provided no explanation for the delay.
(11) Submitted on 3/19/19, supported by respondent's affidavit stating, "HRA did not send my paperwork on 11-30-18 so I had to go [apply] over now I have the proper paperwork" and HRA documents. Rejected with notations similar to those on the 10th OSC.
(12) Submitted on 3/20/19, supported by respondent's affidavit requesting more time to pay and stating, "HRA needs more time to issue checks" and "I am also doing a Section 8 restoration". Rejected for the same reasons as was the 11th OSC.
(13) Submitted on 3/21/19, supported by respondent's affidavit asking for more time and documents from HRA, BronxWorks/HomeBase and NYCHA, including a NYCHA receipt dated 3/20/19 for a "Restoration Request" and a NYCHA letter to respondent dated 2/15/19. This OSC was rejected with court notations referencing the reasons stated for the rejection of the 10th, 11th and 12th OSCs.
(14) Submitted on 3/25/19, supported by respondent's affidavit stating that she was "working with BronxWorks" and a letter from that agency asking the court to stay respondent's eviction scheduled for 3/26/19. This OSC was rejected with the notation, "Renew w/an approval of all funds".
(15) Submitted and signed on 3/27/19; while the papers are missing from the court file notations in the court's case management system indicate it was denied on the 4/10/19 return date due to respondent's nonappearance.
Apparently at some point in April 2019 respondent secured counsel; without another OSC being submitted, signed and calendared or any other court appearance, two Stipulations of Settlement reflecting both sides to be represented by counsel were filed with the court which provided the following:
There is no Notice of Appearance by respondent's counsel in the court file.
• The first, dated 4/15/19 and stamped "filed" by the court on 4/16/19, stayed execution of the warrant of eviction through 5/10/19 for respondent to pay $3485 — calculated with reference, inter alia , to respondent's $800 share of the monthly rent - and required petitioner to inspect and repair eleven conditions.
• The second, dated 5/10/19 and stamped "filed" by the court on 5/13/19, discontinued the proceeding, vacated the warrant and judgment and gave respondent a $1727 credit "to be applied towards her rent share obligation starting June 2019." Further, petitioner agreed to inspect and repair five conditions.
PETITIONER'S THREE PRIOR SIMILAR MOTIONS
As noted above in the chronology of respondent's OSCs, while her ninth one was pending petitioner filed a motion returnable January 15, 2019 seeking to vacate "the prior Stipulations and Orders herein, to reflect the full amount due pursuant to the Parties' duly executed lease agreement, on the ground of mutual and/or unilateral mistake of the parties". In its supporting papers petitioner explained that the court's Decision and Order of October 18, 2018 was mistaken as it was "based upon the Respondent's Section 8 subsidy which she was no longer entitled to" and that, instead, respondent "was now responsible for paying the full amount due under the lease", referencing an attached lease effective July 1, 2017 with a monthly rent of $1974. On March 12, 2019 petitioner withdrew its motion without prejudice on a stipulation form which did not state the reason for the withdrawal but also stated, "warrant may execute in accordance with 10/10/18 order."
Petitioner filed a second motion returnable January 2, 2020 seeking to vacate "the May 10, 2019 stipulation on the grounds of unilateral and/or mutual mistake", to amend the petition to date and for a judgment of $33,353 as all rent due through December 2019. This motion was denied due to improper service as petitioner served respondent and not respondent's counsel.
Petitioner immediately served and filed a third motion, returnable January 28, 2020, seeking the same relief as the second motion. This motion was adjourned to February 25 for respondent to file opposition "and/or investigate any disputed checks". Opposition papers were filed by respondent's counsel and the motion was adjourned again by stipulation on February 25 to March 31 for petitioner to subpoena HRA records and for repairs to be done. The March 31, 2020 court appearance did not occur due to the COVID-19 pandemic and adjournment of all non-essential proceedings.
A series of videoconferences then took place starting on August 11, 2020, during which access dates for repairs were scheduled and possible restoration of the Section 8 voucher was discussed. At the fourth videoconference on November 17, 2020 petitioner's counsel withdrew its third motion without prejudice as it only sought to vacate the May 19, 2019 stipulation and not any of the prior stipulations and orders; a briefing schedule for petitioner to file another motion was agreed upon.
PETITIONER'S PENDING MOTION
In the motion now before the court, petitioner seeks to vacate "the August 3, 2018 stipulation" and "any and all subsequent stipulations and court orders" based on the grounds of "unilateral and/or mutual mistake". See Notice of Motion returnable January 5, 2021. Petitioner further seeks to amend the petition to date and asks the court to enter a judgment in its favor for $49,229, representing all arrears due through October 31, 2020. The motion is supported by an affirmation of petitioner's attorney; an affidavit of petitioner's agent Michelle Garcia; and copies of four documents: (1) the court's Decision and Order of April 27, 2018 granting respondent's sixth OSC to the extent of staying execution of the warrant of eviction through May 11, 2018 for respondent to pay $14,308 plus rent for May 2018; (2) the stipulation dated August 3, 2018 settling respondent's 7th OSC; (3) a one-year lease between the parties dated June 6, 2017 commencing July 1, 2017 with a monthly rent of $1974; and (4) a ledger for respondent's rent account dated October 13, 2020.
In her supporting affidavit, petitioner's agent references the attached lease and explains the alleged mistake that was made as follows:
The parties appeared on August 3, 2018 and entered into a two-attorney stipulation in the amount of $8,480.00. However, the parties were under the mistaken belief that the tenant was still entitled to her section 8 share. In fact, the tenant had signed a new lease on July 1, 2017 after the termination of her section 8 subsidy for the amount of $1,974.00. As evidenced by the Respondent's breakdown, as of the date of the Stipulation, the Respondent actually owed the Petitioner for $21,568.00.
This is an incorrect statement. Respondent was not represented by counsel at the time of the August 3, 2018 stipulation; the April 15, 2019 stipulation is the first document filed with the court in which respondent is represented by counsel.
Garcia Affid. at ¶ 8.
In his supporting affirmation, petitioner's attorney asserts that the August 3, 2018 stipulation "erroneously states the Respondent's rent to be $800.00 per month", Attorney's Affirm. at ¶ 12, and that "after entering into the August 3, 2018 stipulation and several subsequent stipulations, the Petitioner's attorneys became aware that the Respondent entered into a lease agreement with the Petitioner commencing July 1, 2017 and ending June 30, 2018, for the full contract rent totaling $1,974.00". Attorney's Affirm. at ¶ 10.
Citing the case of 104-106 E 81st St LLC v O'Brien (12 Misc 3d 1175[A], 824 N.Y.S.2d 764 [Civ Ct NY Co 2006] ), petitioner lays out the standard for voiding a stipulation based on unilateral mistake and argues that the facts of this case establish these elements and enforcement of the stipulation here would be unconscionable as "it would be unduly oppressive and unfair" for petitioner to allow respondent "to bypass their contractual obligations under the lease with the Petitioner due to a mistake in the stipulation of which the Respondent was presumably aware." Attorney's Affirm. at ¶ 23.
Petitioner also argues that even though respondent used to have a Section 8 subsidy, because she entered into a new lease after that subsidy was terminated she is responsible for the full contract rent, citing to, inter alia , Prospect Place HDFC v Gaildon (6 Misc 3d 135[A], 800 N.Y.S.2d 355 [AT 1st Dep't 2005] ). Petitioner also argues that it would unjustly enrich respondent if she is not held responsible for the full rent that accrued as she "would have essentially been allowed to live rent-free". Attorney's Affirm. at ¶ 32.
RESPONDENT'S OPPOSITION AND CROSS-MOTION
In opposition, respondent submits her attorney's affirmation, her own affidavit and copies of four documents: (A) a printout from the "StreetEasy" website for the subject building (512 East 145th Street, Bronx, NY) stating that it was built in 1972; (B) a printout from HPD's website for the subject building showing that it has 44 units, 6 stories and "Mitchell-Lama" status and that 21 violations were found in respondent's apartment following an inspection on December 16, 2020; (C) a printout from a nyc.gov website showing that the subject building receives a J-51 tax abatement; and (D) a two-attorney stipulation dated August 13, 2020 setting up access dates for petitioner to inspect and repair as required by law sixteen conditions.
In her affidavit, respondent asserts that she moved into the subject apartment seven years ago "through a Section 8 voucher". Resp. Affid. at ¶ 2. Respondent acknowledges signing the lease effective July 1, 2017 with a monthly rent of $1974 but asserts that she did not think that signing it "would affect my obligation to pay only my share of the rent." Resp. Affid. at ¶ 6. The stipulation of settlement on August 3, 2018 "reflected a balance calculated based [on] my portion of the rent which was $800.00." Resp. Affid. at ¶ 7.
Regarding repairs, respondent asserts that she has lived with "serious, ongoing conditions" which she did not cause, which she notified petitioner of and which petitioner "never fully repaired". Resp. Affid. at ¶ 4. Due to the unrepaired conditions in her apartment her Section 8 subsidy was first suspended effective January 31, 2016 and thereafter terminated due to failure to meet federal Housing Quality Standards ("HQS"). Respondent asserts she unsuccessfully tried to get her landlord to make repairs and was always available on agreed-upon access dates. Recently, on December 16, 2020, HPD inspected her home and found 21 violations, comprised of two Class "C", seventeen Class "B" and two Class "A".
Regarding her Section 8 voucher, respondent states: "I made several efforts to have [it] reinstated, but since there are so many conditions in the apartment which remain unrepaired, my apartment has continuously failed inspection. My voucher was initially terminated due to the long-term suspension, but through my own extensive advocacy, I was able to get it reinstated (even while payments continue to be suspended to the landlord) but now my voucher has again been terminated due to the long-term suspension. I worry that the more time that goes by without the repairs done and with my apartment being unable to pass inspection, that I will not be able to get my voucher reinstated again." Resp. Affid. at ¶ 10.
Respondent's first argument in opposition to petitioner's motion starts with the claim that her tenancy is subject to Rent Stabilization based on the building's size, year it was completed and participation in the J-51 Tax Incentive Program. Attorney's Affirm. at ¶ 5. Respondent's attorney asserts that respondent's tenancy is also subject to a Section 8 payment contract between petitioner and NYCHA and that respondent "is only responsible for a share of her rent based on her income" which was last calculated to be $800 per month. Attorney's Affirm. at ¶ 6. Based on the alleged Rent Stabilized status of her apartment and under the authority of decisions such as 835-37 Trinity Ave HDFC v Royal (26 Misc 3d 1240[A], 907 N.Y.S.2d 436 [Civ Ct Bx Co 2010] ), respondent argues petitioner was not permitted to offer her a renewal lease that was not on the same terms and conditions as her prior lease. Upon losing her Section 8 subsidy, respondent argues, petitioner was relegated to the remedy of terminating her tenancy and commencing a holdover eviction proceeding for violation of a substantial obligation of her tenancy. Accordingly, respondent argues, there was no mistake in the August 3, 2018 stipulation of settlement or the subsequent stipulations and orders that were based on respondent's last monthly Section 8 tenant share of the rent of $800.
Alternatively, respondent argues that petitioner's motion should be denied given the length of time that has passed since the August 3, 2018 stipulation, the prejudice it would cause respondent if the motion is granted. Respondent asserts that petitioner's "extraordinary delay" has disadvantaged respondent "in any efforts she may pursue to obtain assistance" to pay the $49,229 petitioner claims was due through October 31, 2020. Attorney's Affirm. at ¶ 31. Further, countering petitioner's argument that respondent would be "unjustly enriched" if the stipulations are not vacated, respondent points to petitioner's "unclean hands" due to its failure to make repairs which resulted in respondent's Section 8 subsidy being first suspended and then terminated.
In her cross-motion, respondent seeks an order requiring petitioner to correct the 21 violations which HPD found in her apartment on December 16, 2020.
PETITIONER'S REPLY
On reply, petitioner submits its attorney's affirmation and, in addition to copies of several documents that were attached to the original motion papers, a copy of respondent's original lease dated August 21, 2014 and a "Regulatory Agreement" between petitioner and the New York City Housing Development Corporation (NYCHDC). Petitioner asserts that respondent's tenancy is not Rent Stabilized but rather subject to the "Mitchell-Lama" law, as stated in the petition, the leases between the parties and petitioner's "Regulatory Agreement" with the NYCHDC.
Petitioner does not oppose respondent's cross-motion.
DISCUSSION
It is well-settled that stipulations of settlement "are favored by the courts and are not lightly cast aside." Hallock v State of New York (64 N.Y.2d 224, 230, 474 N.E.2d 1178, 485 N.Y.S.2d 510 [1984] ). This is especially so in the case of "open court" stipulations where the party seeking vacatur is represented by counsel. Weissman v Bondy & Schloss (230 A.D.2d 465, 467-68, 660 N.Y.S.2d 115, 117 [1st Dep't 1997], app dismd , 91 N.Y.2d 887, 691 N.E.2d 637, 668 N.Y.S.2d 565 [1998] ); Zombeck v Segesta (2013 NY Misc LEXIS 1488, 2013 NY Slip Op 30733[U], 2013 WL 1655216 [Civ Ct NY Co 2013] )(citing Town of Clarkstown v MRO Pump & Tank, Inc (287 A.D.2d 497, 731 N.Y.S.2d 231 [2nd Dep't 2013] ).
Nevertheless, "where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident," Hallock, supra , "[t]he court ‘possesses the discretionary power to relieve parties from the consequences of a stipulation effected during litigation upon such terms as it deems just and, if the circumstances warrant, it may exercise such power if it appears that the stipulation was entered into unadvisedly or that it would be inequitable to hold the parties to it.’ " Genesis Holding, LLC v Watson (5 Misc 3d 127[A], 798 N.Y.S.2d 709 [AT 1st Dep't 2004] ), quoting 1420 Concourse Corp v Cruz (135 A.D.2d 371, 373, 521 N.Y.S.2d 429 [1st Dep't 1987], app dism'd, 73 N.Y.2d 868, 534 N.E.2d 325, 537 N.Y.S.2d 487 [1989] ), citing Matter of Frutiger (29 N.Y.2d 143, 150, 272 N.E.2d 543, 324 N.Y.S.2d 36 [1971] ).
Where mistake is alleged as the basis for a request to vacate a stipulation, case law providesdifferent standards for mutual and unilateral mistakes:
• A mutual mistake renders an agreement voidable and subject to rescission if it is substantial and existed at the time the agreement was entered into. Gould v Bd of Educ of Sewanhaka Cent Higih School Dist (81 N.Y.2d 446, 453, 599 N.Y.S.2d 787, 790, 616 N.E.2d 142, 146 [1993] ). However, "there is a ‘heavy presumption that a deliberately prepared and executed written instrument [manifests] the true intention of the parties’, and a correspondingly high order of evidence is required to overcome that presumption. The proponent of reformation must ‘show in no uncertain terms, not only that mistake or fraud exists, but exactly what was really agreed upon between the parties’ ". Chimart Assocs v Paul (66 N.Y.2d 570, 574, 498 N.Y.S.2d 344, 347, 489 N.E.2d 231, 234 [1986] [internal citations omitted]). "The idea is that the agreement as expressed, in some material respect, does not represent the ‘meeting of the minds’ of the parties." Gould v Board of Educ, supra (81 N.Y.2d at 453, 599 N.Y.S.2d at 790, 616 N.E.2d at 146 ).
• A unilateral mistake may render an agreement voidable if four criteria are met: (1) enforcement would be unconscionable; (2) the mistake is material and made despite the exercise of ordinary care by the party in error; (3) the innocent party had no knowledge of the error; and (4) it is possible to place the parties in status quo ante. 104-106 E 81st St LLC v O'Brien (12 Misc 3d 1175[A], 824 N.Y.S.2d 764 [Civ Ct NY Co 2006] ). Vacatur of a stipulation may be warranted, "if failing to do so would result in unjust enrichment of the [petitioner]." Weissman v Bondy & Schloss (230 A.D.2d 465, 469, 660 N.Y.S.2d 115 [1st Dep't 1997], app dismd, 91 N.Y.2d 887, 691 N.E.2d 637, 668 N.Y.S.2d 565 [1998] ).
As a preliminary matter, respondent's allegation that her tenancy is subject to Rent Stabilization is incorrect. Rather, as stated in the petition at ¶ 7, the premises are exempt from Rent Stabilization as they are owned by a limited profit housing company organized under Article 2 of the Private Housing Finance Law (PHFL), otherwise known as "Mitchell-Lama". See generally E Midtown Plaza Hous Co, Inc v Cuomo (20 N.Y.3d 161, 166 at n 1, 957 N.Y.S.2d 644, 646, 981 N.E.2d 240, 242 [2012] ). The PHFL Article 2/ "Mitchell-Lama" status of the subject building and respondent's tenancy is evidenced by respondent's original lease dated August 21, 2014 and her more recent lease dated June 6, 2017 at paragraph 4(b); the "Regulatory Agreement" between petitioner and the NYCHDC; and the HPD printout attached to respondent's opposition papers.
That petitioner may receive a J-51 tax abatement does not impose Rent Stabilization coverage as argued by respondent; while the J-51 program generally mandates rent regulation as a condition of participation, see 28 RCNY § 5-03(f), the term "rent regulation" includes, in the alternative, dwellings that are subject to the PHFL. Accordingly, respondent's argument that petitioner's motion should be denied as she was entitled to a lease renewal upon all of the same "terms and conditions" as her prior lease, see Rent Stabilization Code § 2522.5(g), including her status as a Section 8 voucher recipient, is misplaced.
Nevertheless, for the reasons that follow, petitioner's motion is denied. It is undisputed that at the time this proceeding was commenced, as stated in paragraph 7A of the petition, NYCHA subsidized respondent's rent payments through the federal Section 8 voucher program. Through this program, the United States Department of Housing and Urban Development (HUD) provides rent subsidies to qualifying lower-income families to enable them to afford decent, safe and sanitary rental housing in the private housing market. See 42 USC §§ 1437 (a) (1) (A), 1437f (a). The Section 8 program requirements are set forth in regulations promulgated by HUD at 24 CFR Part 982. NYCHA, a public benefit corporation that operates and maintains low-income housing in New York City, is a public housing agency (PHA) that administers one of the City's Section 8 voucher programs.
A landlord participating in the Section 8 voucher program enters into a "housing assistance payments" (HAP) contract with the PHA which, inter alia , obligates the landlord to maintain the apartment in a habitable condition in accordance with certain "housing quality standards" (HQS). 24 CFR §§ 982.404(a)(1), 982.452(b)(2) & 982.453(a). Federal regulations provide various remedies for a landlord's failure to do so, including "termination, suspension or reduction of housing assistance payments and termination of the HAP contract." 24 CFR § 982.404(a)(2). See also 24 CFR § 982.453(b). Termination of the HAP contract is automatic at the point of "180 calendar days after the last housing assistance payment to the owner." 24 CFR § 982.455. While suspension and termination of the subsidy and/or HAP contract are distinct remedies, there is fluidity in their applicability. Even where a subsidy and HAP contract have been terminated, they may be reinstated upon a proper request to do so. Matter of MRC-754 E 161st St Hous Dev Fund Corp v NYC Hous Auth (2011 N.Y. Slip Op. 30620[U][ Sup Ct NY Co 2011] ); and see generally McNeill v NYC Hous Auth (719 F Supp 233 [SDNY 1989] ); Matter of Flosar Realty LLC v NYC Hous Auth (127 A.D.3d 147, 5 N.Y.S.3d 382 [1st Dep't 2015] ); Gerard Realty LLC v Recabarren (2017 NYLJ LEXIS 3041 [Civ Ct Bx Co 2017]); 1212 Grand Concourse LLC v Ynguil (27 Misc 3d 205, 894 N.Y.S.2d 713 [Civ Ct Bx Co 2010] ).
A Section 8 tenant is not responsible for payment of the portion of the rent covered by the subsidy, 24 CFR § 982.310(b)(1), even if it is terminated, "[a]bsent a showing by landlord of a new agreement". Prospect Place HDFC v Gaildon (6 Misc 3d 135[A], 800 N.Y.S.2d 355 [AT 1st Dep't 2005] ) quoting Rainbow Assocs v Culkin (2003 NY Misc LEXIS 392, 2003 N.Y. Slip Op. 50771[U], 2003 WL 2004427 [AT 2nd Dep't 2003] ).
Petitioner argues that a critical distinction between Gaildon and the case now before this court is that here "a new agreement" has been shown to have been entered into after the termination of respondent's subsidy and that respondent is therefore obligated to pay the full rent stated in that "new agreement". The stipulation of August 3, 2018 should be vacated due to mistake, petitioner argues, because at that time, "the parties were under the mistaken belief that the tenant was still entitled to her section 8 share", Garcia Affid. at ¶ 8. Two critical factual assertions underlie this argument: (1) that on June 6, 2017 the parties entered into a new lease agreement effective July 1, 2017; and (2) that respondent's Section 8 subsidy had been terminated prior to the execution of that 2017 lease.
There is no dispute that the parties signed a lease on June 6, 2017 effective July 1, 2017. There is also no dispute that - at some point - NYCHA terminated respondent's subsidy due to HQS violations. However, petitioner's statement that, "In fact, the tenant had signed a new lease on July 1, 2017 after the termination of her section 8 subsidy", Garcia Affid. at ¶ 8 (emphasis added), is simply not supported by the record before the court. Petitioner provides no proof of when the subsidy was terminated, and the conclusory statement that this occurred before the 2017 lease was signed is belied by the fact that, on December 11, 2017, after respondent's fourth order to show cause was adjourned for petitioner to subpoena NYCHA, the court in its Decision and Order found that, "as per NYCHA § 8, Resp's current portion of rent is $800/mo".
In fact the only evidence presented in any of the motion papers of the status of respondent's Section 8 subsidy is what respondent herself, confusingly and without any specified time frames, explains in her sworn affidavit in opposition: that, because of the violations in her apartment, her Section 8 subsidy was first suspended, then terminated, then reinstated "through my own extensive advocacy," and then terminated again, leaving her worried now, "the more time that goes by without the repairs done and with my apartment being unable to pass inspection, that I will not be able to get my voucher reinstated again." Resp. Affid. at ¶ 10. It is evident from respondent's statement that she believes that her voucher has not been irrevocably revoked, and that it is still subject to reinstatement once petitioner makes the repairs needed for her apartment to pass NYCHA's inspection.
One court noted regarding a Section 8 tenant whose subsidy had been first suspended and then terminated following the landlord's failure to repair HQS violations that, "NYCHA's policy regarding restoration to the Section 8 program is problematic and potentially confusing for tenants who try to remain in their apartments and seek restoration." Matter of Arocho v Rhea (2010 N.Y. Slip Op. 31775[U]), ¶ 11 [Sup Ct NY Co 2010] ).
Whether this belief is well-founded cannot be discerned, as no proof has been shown that NYCHA is still willing to reinspect the apartment and reinstate the voucher if no HQS violations are found.
Accordingly, petitioner has not proven that in fact it was a mistake when it assumed that the Section 8 subsidy was still in place on August 3, 2018. In addition to the absence of any proof of when the subsidy was terminated, petitioner does not offer any explanation of why, if in fact the subsidy had been terminated prior to the execution of the 2017 lease, its attorneys nevertheless drafted the August 3, 2018 agreement (or any prior or subsequent agreements) to read as it did. The specific reference in that agreement to Section 8 records reflecting respondent's portion of the rent to be $800 per month indicates, as did the court's Decision and Order of December 11, 2017, that NYCHA still considered respondent to be a participant in the Section 8 program at that time.
Accordingly, petitioner has demonstrated neither a mutual nor a unilateral mistake warranting vacatur of the August 3, 2018 and subsequent agreements. Petitioner did not meet its heavy burden to "show in no uncertain terms", Chimart Assocs v Paul, supra, that a mistake existed at the time the agreement was negotiated and that the agreement "does not represent the ‘meeting of the minds’ of the parties," Gould v Board of Educ, supra. Petitioner also has not shown how it was able to enter into the August 3, 2018 and subsequent agreements — including the one dated May 10, 2019 that vacated the judgment and warrant, discontinued the proceeding and credited respondent's account with $1727 to be applied towards future rent — despite the exercise of ordinary care. 104-106 E 81st St LLC v O'Brien, supra.
Finally, allowing the stipulation of August 3, 2018 and subsequent agreements and orders to stand is neither unfair nor unconscionable. Petitioner has not responded to respondent's allegations that, essentially, but for petitioner's failure to make repairs she would not have lost her Section 8 subsidy and would not have been left to live with her family in substandard conditions for many years, continuing at least through the date of her sworn affidavit in support of her cross-motion for an order to correct current violations. Almost every stipulation of settlement and order in this case dating back to the original settlement agreement on March 17, 2017 includes a list of repairs and access dates. Petitioner has not addressed much less refuted respondent's statements that she has always been available on the agreed-upon access dates and has been persistent — although unsuccessful - with her efforts to secure the repairs she needed for her apartment to pass NYCHA's inspection. Similar to the case of 1212 Grand Concourse LLC v Ynguil, supra, the argument petitioner makes "is flawed because it portrays the landlords, rather than the tenants, as victims, when all along the petitioner landlords have held within their hands the power to restore their right to receive the Section 8 portion of the rent; they need simply to do what they are obliged to do—that is, correct the HQS violations." ( 27 Misc 3d at 213, 894 N.Y.S.2d at 718 ). Under these circumstances, there was no unjust enrichment of respondent at petitioner's expense that should be remedied by equity. Weissman v Bondy & Schloss, supra (230 A.D.2d at 469, 660 N.Y.S.2d at 119 ). Compare, e.g., Higgins v NYC Hous Auth (30 Misc 3d 1231[A], 924 N.Y.S.2d 309 (Sup Ct NY Co 2011]) (Article 78 petition seeking vacatur of stipulation granted where unrepresented litigant had agreed to surrender apartment without a determination of her succession rights claim).
Respondent's unopposed cross-motion for an order to correct the 21 conditions that still exist in her apartment - comprised of two Class "C" ("immediately hazardous"), seventeen Class "B" ("hazardous") and two Class "A" ("non-hazardous") —is granted.
Under NYC Administrative Code § 27-2115(a), violations of housing standards are subject to civil penalties, the severity and dollar amounts of which are based upon their designation as either non-hazardous ("A"), hazardous ("B") or immediately hazardous ("C").
CONCLUSION
For the reasons set forth above, the court denies petitioner's motion and grants respondent's motion to the extent of ordering petitioner to correct all remaining violations within 30 days of the date of this Decision and Order. This constitutes the Decision and Order of this Court, copies of which are being emailed to the parties' attorneys.