BEULAH COMMONS ASSOCIATES v. HANKINS (2019)

In this proceeding for nonpayment of rent, which was resolved by Stipulation of Settlement on August 13, 2018, the Court held a hearing on July 9, 2019 on the narrow issue of whether that settlement agreement, as modified by a subsequent one signed on September 27, 2018, requires Respondents to pay rent for the months of September, October and November 2018 or whether Petitioner waived the collection of those rents.

PRIOR HISTORY OF PROCEEDING

Briefly, the history of this long-running proceeding as discerned from the contents of the court file and notations on the court file jacket is as follows. The Petition is dated December 15, 2016 and seeks rent arrears of $6,905.04. The Petition alleges that the premises are subject to Rent Stabilization and that the monthly rent is $503.35. Respondent Tina Hankins filed an Answer to the Petition on December 30, 2016 raising defenses and counterclaims based upon rent overcharge and conditions in the apartment needing repair. At the initial court appearance on January 11, 2017, the case was adjourned by Stipulation to February 1 for Respondents to retain counsel. On the adjourned date Respondents appeared by counsel and the proceeding was adjourned by Stipulation to March 10 for possible settlement. On March 10 the proceeding was adjourned to May 5 for trial in a Stipulation which stated that Petitioner alleged $8022.69 in rent arrears. Notations on the court file jacket indicate that on May 5 the proceeding was again adjourned for trial to June 28. On June 28 the proceeding was adjourned to August 8 for trial in a Stipulation in which both sides agreed that $1456.16 was outstanding to date at $489.88 per month “per rent reduction order”. On August 8 the proceeding was adjourned by Stipulation to October 11 for trial, with access dates for repairs to be made in the meantime. On October 11 the case was adjourned to December 5 for trial in a Stipulation which stated, “Respondents refuse to allow access for repairs” and that they would not permit access “until medically cleared by their son's physician.”

On December 5 the case was transferred to Part X for assignment to a trial judge and then adjourned to January 16, 2018. In the meantime, by Decision and Order dated December 21, 2017 a motion filed by Respondents' counsel seeking to withdraw from further representation was granted. Notations on the court file jacket indicate that the case then was adjourned in Part X on January 16 to March 5, 2018 for trial. By Decision and Order dated February 26, 2018 the Court denied Petitioner's intervening motion for an access order, noting the upcoming trial date of March 5. Notations on the court file jacket indicate that the case was then adjourned in Part X on March 5 to April 26, then to May 25, then to June 20 and then to July 12. It appears from a Stipulation signed on July 12 that the trial had started by then and that settlement discussions had resumed as that agreement adjourned the case to August 13 “in contemplation of settlement” and noted that “if the case is not settled the trial will continue on the adjourned date.” The July 12 Stipulation further states that the anticipated settlement would include that (1) Petitioner would offer Respondents a 3-bedroom apartment with an initial rent at the current rate; (2) Respondents would move to this other apartment; (3) Petitioner would agree to “waive arrears to date and pay to move Respondents to new location”; and (4) Respondents would agree to discontinue all pending proceedings they had filed against Petitioner.

THE AUGUST 13, 2018 STIPULATION OF SETTLEMENT

On August 13, 2018 Petitioner by counsel and Respondents pro se entered into a Stipulation of Settlement, the bulk of which is typewritten, with handwritten additions. In that agreement, both sides acknowledged that Petitioner “has been at all times ready, willing and able to perform any and all repairs”; that Respondents “have refused access for the performance of certain repairs they believe would adversely affect the health of their son”; and that to accommodate the needs of Respondents' son Petitioner was offering to relocate them temporarily until the repairs were completed in their apartment to another apartment in the Bronx: Apartment 4D at 1288 Hoe Avenue. The exact language and terms of that agreement which are relevant to the issue now to be determined are the following:

• “Respondents agree to accept Petitioner's offer to temporarily move to Apartment 4D at 1288 Hoe Avenue, Bronx, New York. This apartment is currently ready to be occupied and, if Respondents agree to move, they must do so by August 31, [2]018 1. Respondents agree to look at this apartment on 8/17/18 and advise mgmt. that day if they agree to move temporarily.”

• “Respondents must sign a relocation agreement prior to moving. Rent for Apt 4D at 1288 Hoe shall be $353 for the period of temporary relocation.”

• “Additionally, Petitioner agrees to waive all outstanding rental arrears to date and to pay moving expenses for Respondents if they timely move to apartment 4D at 1288 Hoe Avenue, Bronx, NY and qualify for this apartment.”

• “In consideration of Petitioner's waiving all outstanding sums to date and paying for Respondents' moving expenses, Respondents agree to withdraw or discontinue any outstanding proceedings they have brought against [Petitioner]” and other related entities, including but not limited to a list of proceedings listed in the agreement.

The agreement also adjourned the proceeding to September 27, 2018 “to monitor compliance.”

THE SEPTEMBER 27, 2018 STIPULATION

On the adjourned date, September 27, 2018, the parties entered into a handwritten Stipulation which states that the August 13, 2018 Stipulation “remains in full force and effect, except for the following changes/additions.” Three changes/additions follow, the first and third of which are relevant here:

(1) “The address of the apartment to which Respondents will be temporarily located is Apt 3B at 1288 Hoe Avenue, Bronx, NY (not 4D)”.

(2) [not relevant here: an addition to the paragraph listing the proceedings Respondents agreed to withdraw or discontinue]

(3) “Respondents must sign relocation agreement. Respondents must view Apt 3B on 9/28/18 9:30 and go to office to sign relocation agreement. Prior to return date.”

SUBSEQUENT PROCEDURAL HISTORY

The September 27, 2018 Stipulation adjourned the proceeding to October 15, 2018, on which date the case was adjourned first to February 4, 2019, then to April 1 and then to April 25, 2019, when the parties entered into another Stipulation in which they agreed that the current rent is $353.35 per month (subject to DHCR rulings); that Respondents would be credited $323.66 to cover certain moving supplies they had paid for; that Respondents would pay Petitioner $1089.74 in two installments along with their rent for May and June 2019; and that the amount remaining in dispute was $1060.05, which Petitioner claimed was due for the three months of September, October and November 2018 (at the rate of $353.35 per month) and which Respondents claimed had been waived by the Stipulation settling the case in August 2018, as modified by the Stipulation of September 27, 2018.

HEARING

At the hearing, held on July 9, 2019, Petitioner's counsel acknowledged that she had prepared both the August 13, 2018 Stipulation which contains primarily typewritten text with handwritten additions and the handwritten September 27, 2018 Stipulation, and that the handwriting on both is hers. Respondent Tina Hankins testified that it was her understanding that the period covered by the waiver of all “rental arrears to date” in the August 13 Stipulation was through the date when she and her family were able to move into the temporary relocation apartment, and pointed out that the earlier Stipulation of July 12, 2018, which laid out the basic terms of the contemplated settlement, used the same phrase regarding waiver of the arrears “to date”. The only reason the Hankins family did not move into Apartment 4D at 1288 Hoe Avenue by August 31, 2018 as required by the August 13 Stipulation was that it was not suitable: their beds and other basic furniture, even after giving away many things to family and friends, did not fit. Ms. Hankins testified that they were able to move in to Apartment 3B, the second apartment in 1288 Hoe Avenue they were shown, because the room dimensions were different. Ms. Hankins testified that Apartment 3B is still too small for her family's needs, that both of the Hoe Avenue apartments have only two not three bedrooms as originally promised, and that the only 3-bedroom apartment they were shown, prior to signing the August 13, 2018 agreement, was not acceptable because it was in a building next to a noisy subway station. Ms. Hankins testified that she viewed 3B on September 28, 2018 as agreed and the reason the move did not take place until early December 2018 was because of the time it took Petitioner to prepare the relocation agreement, deliver boxes and schedule a moving date.

Testifying for Petitioner was Eric Vasquez, who works for Petitioner's management company Dougert Management and who has appeared in court throughout the negotiations for the temporary relocation. Other than his testimony that it was his understanding that the period covered by the waiver of all “rental arrears to date” was through August 2018, the month when the agreement was signed, Mr. Vasquez's testimony was consistent with that of Ms. Hankins: Prior to showing Respondents the two 2-bedroom apartments in the Hoe Avenue building Mr. Vasquez had shown them a 3-bedroom apartment in 918 Freeman Street which Respondents rejected because it was too noisy. Mr. Vasquez acknowledged that the second two-bedroom apartment he showed Respondents had a different layout from the first one, although it was basically the same size. In response to a question from the Court about why the move did not take place until early December Mr. Vasquez testified that that was how long it took for the relocation agreement to be drawn up and signed, boxes to be delivered and packed and the move to be arranged, with a slight delay because of the Thanksgiving holiday.

DISCUSSION

The question of whether the August 13, 2018 Stipulation of Settlement between the parties requires Respondents to pay rent for the months of September, October and November 2018 or whether Petitioner waived collection of those monies is one of contract interpretation. While the words “to date” standing alone clearly mean “until now”, or “up to the present”, here they are contained in a sentence which creates an ambiguity as to their meaning and renders them reasonably subject to conflicting interpretations: In the first sentence of the fourth paragraph of the August 13, 2018 Stipulation Petitioner agrees “to waive all outstanding rental arrears to date”; however, the same sentence conditions the rent waiver as follows: “․ if [Respondents] timely move to apartment 4D at 1288 Hoe Avenue, Bronx, NY and qualify for this apartment”, with no provision for what was to happen if Respondents did not meet the contingency.

“A cardinal principle governing the construction of contracts is that the entire contract must be considered and, as between possible interpretations of an ambiguous term, that will be chosen which best accords with the sense of the remainder of the contract.” Rentways, Inc v. O'Neill Milk & Cream Co (308 NY 342, 347, 126 NE2d 271, 273 [1955]). Further, it is well-settled that, “where there is ambiguity in the terms of a contract prepared by one of the parties, ‘it is consistent with both reason and justice that any fair doubt as to the meaning of its own words should be resolved against’ such party.” Id. (308 at 348, 126 NE2d at 273) quoting Mutual Ins Co v. Hurni Co (263 US 167, 174, 44 SCt 90, 91, 68 Led 235, 238 [1925]); Jacobson v. Sassower (66 NY2d 991; 489 NE2d 1283; 499 NYS2d 381 [1985]); 67 Wall Street Co v. Franklin Nat'l Bank (37 NY2d 245, 249, 333 NE2d 184, 187, 371 NYS2d 915, 918 [1975])(“a contract must be construed most strongly against the party who prepared it and favorably to a party who had no voice in the selection of its language”). This is especially so where the non-drafter is not represented by counsel. In re Riconda (90 NY2d 733, 740, 688 NE2d 248, 253, 665 NYS2d 392, 397 [1997].

While facts and circumstances extrinsic to an agreement can be considered to determine the intention of the parties where there is ambiguity, Winston v. Mezzanine Invs, LP (170 Misc 2d 241, 249, 648 NYS2d 493, 499 [Sup Ct NY Co 1996]), the Court does not base its decision on the testimony of Ms. Hankins and Mr. Vasquez as neither of them explained anything about what transpired during the negotiations that would support their claims as to the intent behind the rent waiver provision.

Rather, the Court finds as a matter of law that the August 13, 2018 agreement is ambiguous, WWW Assocs v. Giancontieri (77 NY2d 157, 162, 566 NE2d 639, 642, 565 NYS2d 440, 443 [1990]), and that it is an undisputed fact that Petitioner's attorney drafted it. Accordingly, any ambiguity or confusion as to the meaning of its provisions will be viewed in the light most favorable to the non-drafting, unrepresented Respondents. The ambiguity here arises from the fact that the agreement contains inconsistencies, contradictions and references to various contingencies without providing any alternative pathways for resolution or outcomes. As an example of an inconsistency and contradiction, while the first typewritten sentence in the agreement states emphatically that, “Respondents agree to accept Petitioner's offer to temporarily move to Apartment 4D at 1288 Hoe Avenue”, the meaning of this provision is undermined by the second typewritten sentence which states, “if Respondents agree to move, they must do so by August 31, [2]018”. As an example of a contingency for which no alternative resolution is provided, as stated above the rent waiver “to date” provision in the fifth paragraph is made contingent in the same sentence upon Respondents' “timely move to apartment 4D at 1288 Hoe Avenue”, with no provision for what would happen if they did not “timely move” to that apartment.

Further compounding the ambiguity in the meaning of the rent waiver “to date” provision is that Respondents in fact did not meet the contingency that they “timely move to apartment 4D at 1288 Hoe Avenue” because it turned out that that apartment was not suitable for them. Rather, the parties amended the agreement on September 27, 2018, approximately four weeks after the August 31, 2018 move date contemplated by the August 13, 2018 agreement by substituting a different apartment, 3B, which Respondents were to view on September 28, 2018. Then, “Prior to return date” of October 15, 2018, Respondents were to “go to office to sign relocation agreement” with no indication of what would constitute a revised “timely move” for purposes of the rent waiver “to date” provision of the original agreement. The testimony of Ms. Hankins that she did go view the apartment on September 28 and thereafter moved forward in a timely manner with the next steps of the relocation process was corroborated by the testimony of Mr. Vasquez as to the time it took to draw up the relocation agreement, provide Respondents with boxes to pack their belongings in and schedule a moving date, with latitude for the Thanksgiving holiday. Moreover, there was no testimony or other evidence of any recalcitrance or delay by Respondents in the progress of the move.

It is undisputed that the relocation the parties agreed to in the August 13, 2018 agreement eventually did take place, albeit in early December 2018 rather than by August 31, 2018. Whatever the parties may have intended on August 13, 2018 as to the rent waiver, it cannot be separated from the fact that the relocation of the Hankins family clearly took longer than what was originally contemplated. The fact that the September 27, 2018 agreement is silent on the rent waiver provision exacerbates the ambiguity of the original agreement and, following basic contract law principles, warrants a resolution in favor of Respondents and against Petitioner, whose attorney drafted both agreements.

CONCLUSION

Accordingly, Petitioner's claim that Respondents owe $1060.05 under the prior Stipulations of Settlement in this proceeding is denied. This constitutes the Decision and Order of the Court.

FOOTNOTES

1.   The Court has corrected what is an obvious typographical error, as the date actually typed in to the agreement is “August 31, 1018”.

Diane E. Lutwak, J.