Opinion
No. 48981/2015.
11-02-2016
PROJECT RENEWAL, INC., Petitioner (Overtenant), v. Noel RODRIGUEZ and Shamkia Hill, Respondents (Undertenants).
Kellner Herlihy Getty & Friedman, LLP, New York, attorney for petitioner. Noel Rodriguez, pro se. Shamkia Hill, pro se. Thomas Giles, GAL, New York.
Kellner Herlihy Getty & Friedman, LLP, New York, attorney for petitioner.
Noel Rodriguez, pro se.
Shamkia Hill, pro se.
Thomas Giles, GAL, New York.
DIANE E. LUTWAK, J.
Recitation, as required by CPLR Rule 2219(a), of the papers considered in the review of the Respondent's Order to Show Cause returnable October 31, 2016:
Papers/Numbered
Order to Show Cause & Attached Affidavit ........1.
Affirmation in Opposition & Attached Exhibits A & B ......2.
BACKGROUND
This is a Holdover Proceeding filed on August 21, 2015 by Petitioner–Overtenant Project Renewal, Inc., a non-profit provider of supportive housing, against Respondent–Undertenant Noel Rodriguez based on the allegation that Respondent had violated the occupancy agreement governing his tenancy and was being discharged from the substance abuse recovery program he was enrolled in. At the time the proceeding was commenced, Respondent was incarcerated. Respondent–Undertenant Shamkia Hill appeared in court in response to the Petition and was joined as a party. While the case has been on the Court's calendar fourteen times including the initial return date of September 3, 2015, Mr. Rodriguez's first appearance was on October 17, 2016, when he took out the Order to Show Cause now before the Court which was made returnable on October 31, 2016. For the reasons set forth below, that Order to Show Cause is granted to the extent of vacating the judgment of possession against him that was entered on default on September 12, 2016 and setting the case down for conference on November 23, 2016 at 9:30 a.m.
PROCEDURAL HISTORY
Petitioner issued a Notice of Termination and a Notice of Discharge and Right to Appeal Determination dated June 15, 2015, both of which reference an "Occupancy Agreement" between the parties under which Project Renewal had permitted Mr. Rodriguez to occupy the premises on a month-to-month basis "as an incident to your participation in Project Renewal's Vivienda Program (the ‘Program’) for substance abuse recovery." The Notice of Termination advised Mr. Rodriguez that Project Renewal had made a determination to discharge him from the Program effective July 31, 2015 due to his failure to comply with Program requirements incorporated into the terms of his Occupancy Agreement including but not limited to a prohibition on the abuse of alcohol, prescription drugs or other substances; full and timely payment of monthly use and occupancy; a prohibition on non-occupancy of the apartment for a period of time in excess of 90 days; and attendance at various Project Renewal meetings. Both the Notice of Termination and the Notice of Discharge list five specific reasons for the determination to discharge Mr. Rodriguez from the Program: (1) failure to pay his portion of the use and occupancy due since December 2014; (2) failure to occupy the premises for a period of time in excess of 90 days; (3) failure to attend any of Project Renewal's required meetings since at least February 26, 2015; (4) behavior evidencing substance abuse on February 26, 2015; and (5) failure to reimburse Project Renewal for its payment of his portion of the use and occupancy due for a prior period of time.
The Affidavit of Service of the Notice of Petition and Petition indicates that they were served by delivery at the premises on August 28, 2015 to someone named Champien Rodriguez, identified as the wife of Noel Rodriguez, with additional copies sent to Respondent at that address by regular and certified mail. On the initial court date, September 3, 2015, notations on the court file indicate that someone by the name of Shamkia Hill appeared on Respondent's behalf, identified herself as Respondent Noel Rodriguez's girlfriend and advised the Court that Mr. Rodriguez was incarcerated in Pennsylvania and would not be released until March 2016. The case was adjourned first to September 9, 2015, and then to October 6, 2015 for the appointment of a guardian ad litem ("GAL") to act on behalf of Respondent. The Court issued an Order sua sponte dated September 25, 2015 appointing Thomas Giles as GAL for Mr. Rodriguez and adjourning the case to October 14, 2015.
In the meantime, Petitioner served and filed a motion, originally returnable October 6, 2015 and then adjourned to October 14, 2015, to join Shamkia Hill as a Respondent. By Order dated October 15, 2015, Petitioner's motion was granted, Shamkia Hill was added as a Respondent, the caption was amended to include her and the case was adjourned to November 18, 2015 "for all purposes, and the results of the investigation by GAL Thomas Giles".
On November 18, 2015 both Ms. Hill and Mr. Giles, the court-appointed GAL for Mr. Rodriguez, appeared and the case was adjourned by Stipulation "for settlement purposes and for GAL to coordinate with Respondent Rodriguez" to December 16, 2015; the Stipulation included a statement in which Respondents—Rodriguez by his GAL, Hill pro se —consented to the Court's jurisdiction.
On December 16, 2015 another Stipulation was entered into by Mr. Giles "as duly appointed Guardian ad Litem for Respondent Noel Rodriguez, who is currently incarcerated in Pennsylvania" and by Petitioner's counsel, which noted that, "GAL has communicated with Respondent Noel Rodriguez by mail and needs more time to discuss this proceeding with his ward. A copy of this Stipulation will be mailed to jail." The Stipulation also noted that Ms. Hill had failed to appear in court that day and adjourned the case to January 27, 2016. A notation on the court file indicates that Respondent "has been transferred to Chester Correction Facility/PA". The case was adjourned on January 27, 2016 first to March 4, 2016 and then to April 6, 2016, at which time a Stipulation of Settlement was signed by Petitioner's attorney, Mr. Giles as GAL for Mr. Rodriguez and Ms. Hill pro so and so-ordered by the Court. Despite the notation on the court file that a copy of the Stipulation would be mailed to Mr. Rodriguez, his signature is not on the agreement. The key provisions of the Stipulation of Settlement are as follows: (1) the establishment of a 2–year probationary period, beginning April 6, 2016, during which Mr. Rodriguez agreed to refrain from engaging in conduct similar in nature to that alleged in the Holdover Petition and predicate Notice of Termination; (2) payment of "use and occupancy" arrears of $3440 due through and including April 2016 by June 30, 2016; (3) payment of ongoing "use and occupancy" in full and on time each month, regardless of whether Mr. Rodriguez was physically present in the premises; (4) Mr. Rodriguez's absence from the apartment for more than 90 days, even if such absence was the result of incarceration, would constitute a default in the agreement; (5) a waiver of any claims for "use and occupancy" from Ms. Hill in exchange for her agreement to surrender any tenancy claims and to move out of the premises no later than July 11, 2016; and (6) a restoration clause, under which Petitioner could restore the proceeding to the Court's calendar upon 8 days' written notice to seek a final judgment and warrant in the event of a default. The agreement makes no mention of when Mr. Rodriguez was expected to return to the apartment, and no indication of the relationship of that date to the compliance deadlines for payment and re-occupancy of the apartment.
By motion returnable August 9, 2016, Petitioner sought a final judgment of possession against both Mr. Rodriguez and Ms. Hill due to their various alleged breaches of the Stipulation of Settlement: Mr. Rodriguez had failed to occupy the apartment for a period in excess of 90 days and had failed to pay either the ongoing "use and occupancy" or the arrears; Ms. Hill had failed to move out. Petitioner entered into a Stipulation of Settlement with Ms. Hill on August 9, 2016, providing a final judgment of possession to Petitioner as against Ms. Hill, with execution of the warrant of eviction stayed until September 30, 2016. Mr. Giles had requested an adjournment due to his inability to be in Court on August 9, 2016 and the motion as to Mr. Rodriguez was adjourned to September 6, 2016. On that day, Mr. Giles reported that he had not been able to secure any information as to when Mr. Rodriguez might be returning to the apartment and submitted no opposition to Petitioner's motion. Thereafter, the Court granted Petitioner's unopposed motion, on default, by Order dated September 12, 2016 and issued a final judgment of possession against Mr. Rodriguez.
On September 30, 2016, Ms. Hill took out an Order to Show Cause supported by her affidavit in which she asserted that "Noel Rodriguez needs paper work saying he can be release from the Halfway House in Penns[ylvania] so he can come home to take care of his rent and sign his lease the problem is he need these court papers to do so". The Court signed the Order to Show Cause but then denied it on the return date, noting that it had been "taken out not by Respondent Rodriguez's Guardian Ad Litem or by Respondent Rodriguez but by Respondent Shamkia Hill, and that it fails to state grounds for the relief sought." Mr. Rodriguez appeared in Court with Ms. Hill on the October 17, 2016 return date and was given a referral to a legal services organization. That same day, Mr. Rodriguez pro se took out the Order to Show Cause seeking restoration of the case to the Court's calendar which is now before the Court. Mr. Rodriguez does not claim that he did not breach the Stipulation, and instead supports his Order to Show Cause with the allegations that, "There are mistakes in the stipulation. I never had a chance to defend myself. I was incarcerated and need a show cause." The Order to Show Cause was signed with the notation that "Guardian Ad Litem Thomas Giles must also be served with a copy of this OSC" and made returnable October 31, 2016.
As a preliminary matter, the Court discharges and thanks Thomas Giles for his services as GAL for Respondent Rodriguez, as his services are no longer necessary. The reason for his appointment ended once Mr. Rodriguez was released from the correctional facility and was able to return to New York City.
Petitioner served and filed opposition papers, arguing that stipulations of settlement entered into in open court should not be set aside absent cause sufficient to invalidate a contract such as fraud, collusion, mistake or accident, citing to, inter alia, Hallock v. State of New York, 64 N.Y.2d 224, 485 N.Y.S.2d 510, 474 N.E.2d 1178 (1984), and asserting that "Respondent's interests in entering the stipulation [of April 6, 2016] were represented by his Guardian ad Litem, and the stipulation was not entered into in error. Therefore, the Stipulation should not be set aside and Respondent must be held to its terms." Petitioner also cites to the case of Chelsea 19 Associates v. Warren James, 67 A.D.3d 601, 889 N.Y.S.2d 564 (1st Dep't 2009), for the proposition that "since the Respondent does not demonstrate a meritorious defense to the stipulation, his loss of possession is not a forfeiture but merely a contracted for consequence of his noncompliance with the stipulation—even if he pays all the arrears today."
DISCUSSION
Petitioner is correct that, "Stipulations of settlement are favored by the courts and not lightly cast aside." Hallock v. State of New York, 64 N.Y.2d 224, 230, 485 N.Y.S.2d 510, 474 N.E.2d 1178 (1984). Strict enforcement of stipulations of settlement serves the interest of efficient dispute resolution, and is essential to the management of court calendars and the integrity of the litigation process. Id.; Mitchell v. New York Hosp., 61 N.Y.2d 208, 473 N.Y.S.2d 148, 461 N.E.2d 285 (1984) ; City of New York v. 130/40 Essex St. Dev. Corp., 302 A.D.2d 292, 756 N.Y.S.2d 23 (1st Dep't 2003) ; Thomas v. Brown, 50 Misc.3d 130, 29 N.Y.S.3d 850 (App. Term 1st Dep't 2015) ; 565 Tenant's Corp. v. Adams, 18 Misc.3d 1, 853 N.Y.S.2d 448 (App. Term 1st Dep't 2007).
However, the court, in certain circumstances, has discretion to vacate a stipulation. Matter of Frutiger, 29 N.Y.2d 143, 150, 324 N.Y.S.2d 36, 272 N.E.2d 543 (1971) (court has authority to vacate a stipulation of settlement where it appears that a party has "inadvertently, unadvisably or improvidently entered into an agreement which will take the case out of the due and ordinary course of proceeding in the action, and work[s] to his prejudice"); Siltan v. City of New York, 300 A.D.2d 298, 750 N.Y.S.2d 323 (2nd Dep't 2002) (court has discretion to refuse to enforce a stipulation where there is evidence of fraud, overreaching, unconscionability, or illegality); Matter of Martinez v. Jacobson, 253 A.D.2d 521, 677 N.Y.S.2d 161 (2nd Dep't 1998) (same); BML Realty Group v. Samuels, 15 Misc.3d 30, 833 N.Y.S.2d 348 (App. Term 1st Dep't 2007) (reversing lower court's denial of motion to vacate stipulation of settlement entered into by respondent's GAL); New York City Hous. Auth. v. Jackson, 13 Misc.3d 141(A), 831 N.Y.S.2d 360 (App. Term, 2d & 11th Jud. Dists.2007), aff'd, 48 A.D.3d 818, 853 N.Y.S.2d 138 (2d Dep't 2008) (same); Crenulated Co. Ltd. V. Purvis, 50 Misc.3d 1203(A), 28 N.Y.S.3d 647 (Civ.Ct.Bx.Co.2015) (vacating stipulation entered into by respondent's GAL).
While Respondent Rodriguez was not present in Court due to his incarceration at the time the Stipulation of Settlement was negotiated and entered into, the Court took steps to protect his interests by appointing a GAL for him and adjourning the case on a number of occasions to provide the GAL with time to investigate the case and communicate with his ward. Stipulations entered into by court-appointed GALs should not be vacated when there is no indication of a failure to comply with the Court's guidelines, wrong-doing, over-reaching or other good cause not to do so. See Hotel Cameron, Inc. v. Purcell, 35 A.D.3d 153, 155–156, 827 N.Y.S.2d 13, 15–16 (1st Dep't 2006). In Housing Court, responsibility for approval of any final resolution of the proceeding rests not with the GAL but with the judge who presides over the proceeding. See Fern Fisher, Administrative Judge, Civ.Ct. of City of N.Y. Advisory Notice, Settlement of GAL Cases [eff. Mar. 8, 2007]. The Court's ongoing obligation to supervise the work of the GAL extends in particular to the review and approval of any stipulation of settlement resolving the litigation. See, e.g., BML Realty Group v. Samuels, supra; New York City Hous. Auth. v. Jackson, supra. The Stipulation of Settlement herein appears to have been the product of negotiations over a period of time between and among Petitioner's attorney, Respondent Rodriguez's court-appointed GAL who was in touch with Mr. Rodriguez, and Respondent Hill. As in the Hotel Cameron case, the Stipulation of Settlement here permitted Mr. Rodriguez to avoid adjudication of his landlord's holdover petition and remain in possession of his apartment if he met certain requirements, including returning to possession of the apartment within 90 days, becoming current with his rent, acknowledging that he was the sole authorized occupant of the premises and not permitted to have long-term guests without first obtaining petitioner's permission, and refraining from certain other specified conduct for a two-year period. A two-year probationary period is not an unusual term in a stipulation of settlement resolving a holdover proceeding based upon lease violations or objectionable behavior. See, e.g., Hotel Cameron, Inc. v. Purcell, supra; St. Margaret's House Hous. Dev. Fund Corp. v. Hope, 26 Misc.3d 137(A), 907 N.Y.S.2d 104 (App. Term 1st 2010).
While this Court notes its concern that Respondent Rodriguez did not sign the Stipulation of Settlement, and the record does not reflect why this is the case and whether there were any impediments to securing his written consent to the agreement, at this juncture the Court is not inclined to vacate the April 6, 2016 Stipulation of Settlement. However, Respondent Rodriguez has made a sufficient showing in his moving papers—which the Court construes liberally, CPLR § 3026, especially in light of Respondent's appearance pro se, Pezhman v. City of New York, 29 A.D.3d 164, 812 N.Y.S.2d 14 (1st Dep't 2006), and interprets so as to raise the strongest arguments they suggest, Hollingsworth v. Regional Tr. Serv., Inc., 20 Misc.3d 224, 857 N.Y.S.2d 477 (City Ct. Roch.2008) —of both an excuse for his default on Petitioner's motion to restore the proceeding for breach of the Stipulation of Settlement and a meritorious defense to that motion warranting vacatur of his default under CPLR § 5015(a)(1). Goldman v. Cotter, 10 A.D.3d 289, 781 N.Y.S.2d 28 (1st Dep't 2004). An application for relief from a default judgment is to be liberally construed, Myzal v. Mecca, 28 A.D.2d 28 A.D.2d 1022, 283 N.Y.S.2d 785 (3rd Dep't 1967), courts do not look favorably upon the forfeiture of leases, Sharp v. Norwood, 223 A.D.2d 6, 11, 643 N.Y.S.2d 39, 43 (1st Dep't 1996), and there is a preference in this State for cases to be determined on their merits rather than on default, Fromartz v. Bodner, 266 A.D.2d 122, 698 N.Y.S.2d 142 (1st Dep't 1999).
Rodriguez alleges as his excuse for his default that he was incarcerated. Incarceration can be the basis for excusable default. 46 Downing St. LLC v. Thompson, 41 Misc.3d 1018, 976 N.Y.S.2d 761 (Civ.Ct. N.Y. Co.2013)and cases cited therein. While Rodriguez's court-appointed GAL Mr. Giles was able initially to prevent a default on Petitioner's motion, getting it adjourned from August 9, 2016 to September 6, 2016, Mr. Giles did not file any opposition and apparently was unable to ascertain that Mr. Rodriguez soon would be returning to New York from Pennsylvania and able to appear in court, as he did on the October 17, 2016 return date of Ms. Hill's Order to Show Cause. Had a request for an adjournment to October 17, 2016 been made to the Court on September 6, 2016 so that Mr. Rodriguez could appear it no doubt would have been granted so as to provide him with an opportunity finally to be heard in this proceeding; the right to be heard is a key component of due process and a cornerstone of our system of justice. U.S. Const. Amend. XIV ; Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950).
As his defense to Petitioner's motion, Respondent alleges that "there are mistakes in the stipulation". While Respondent's moving papers lack specificity in this regard, construing them liberally and interpreting them so as to raise the strongest arguments they suggest, the Court finds it to be evident that the time frames for Mr. Rodriguez's payment of use and occupancy and return to the apartment were unrealistic and likely based on incomplete information about his anticipated dates of release and return to New York City.
Aside from any mistakes that may have been incorporated in the Stipulation of Settlement, had he not been incarcerated and not defaulted on Petitioner's motion, or had that motion been adjourned to a date on or around October 17, 2016, Respondent would have been in a position to ask the Court to excuse his breach of the Stipulation and give him another chance to comply. See, e.g., 4220 Broadway LLC v. Gomez, 33 Misc.3d 1207(A), 938 N.Y.S.2d 227 (Civ.Ct. N.Y. Co.2011), citing 2246 Holding Corp. v. Nolasco, 52 A.D.3d 377, 860 N.Y.S.2d 516 (1st Dep't 2008) ; 421 W. 22 LLC & 421 W. 22B LLC v. Walberg, 30 Misc.3d 136(A), 926 N.Y.S.2d 344 (App. Term 1st Dep't 2011) ; Brothers v. Sasso, 10 Misc.3d 132(A), 814 N.Y.S.2d 561 (App. Term 1st Dep't 2005).
Petitioner's citation to Chelsea 19 is inapt, and that case does not dictate the outcome in this proceeding. In Chelsea 19, the parties' so-ordered stipulation settling a nonpayment proceeding provided that upon the tenant's failure to pay certain monies by a certain date, the landlord could restore the case to the calendar for entry of a judgement and issuance of a warrant of eviction. The tenant failed to comply with the stipulation and the landlord moved for a judgment which was granted on default. Three months later the tenant moved to vacate the judgment and warrant, offering to tender all moneys due under the stipulation as well as rent arrears that had subsequently accrued. While the trial court granted the requested relief, finding that "[u]nder these circumstances, a forfeiture is not favored", the Appellate Term reversed, finding that the tenant had offered neither an excuse for the default in opposing landlord's motion to enforce the stipulation nor a meritorious defense to the stipulation. In its affirmance, the Appellate Division found that the tenant "does not show a meritorious defense to the stipulation, his loss of possession is not a forfeiture but ‘merely the contracted-for consequence’ of his noncompliance with the stipulation, and Civil Court lacked the discretion not to enforce the stipulation." Here, as discussed above, Respondent has offered both an excuse for his default and a meritorious defense to the stipulation.
CONCLUSION
Accordingly, the Order to Show Cause of Respondent Rodriguez is hereby granted to the extent of vacating the judgment and warrant that were entered on default against him by the Court's Order dated September 12, 2016 and restoring the case to the Court's calendar for a conference on November 23, 2016 at 9:30 a.m.
This constitutes the Decision and Order of this Court.