Clinton Arms Associates, Petitioner, v. Ana Duran De Gonzalez, Respondent-Tenant. (2023)

RECITATION, AS REQUIRED BY CPLR 2219(A), OF THE PAPERS CONSIDERED IN THE REVIEW OF THIS MOTION BY THE PETITIONER TO VACATE THE ERAP STAY: NYSCEF Documents 6 (Notice of Motion with Affidavit and Affirmation in Support); 7-8 (Exhibits in Support); 10 (Affirmation in Opposition); 11 (Affidavit in Opposition); 12-15 (Opposition Exhibits).

UPON THE FOREGOING CITED PAPERS, THE DECISION/ORDER IN THIS MOTION IS AS FOLLOWS:

PROCEDURAL POSTURE

This non-payment proceeding was commenced by petition dated October 7, 2020 (see petition at NYSCEF Doc. 1). It appears this matter was not heard until February 2022. However, as there was an Emergency Rental Assistance Program (ERAP) application pending as of June 2021, the matter was stayed. Petitioner now moves to vacate the stay arguing that ERAP will not pay because the respondent is a subsidized tenant. In this case, the tenant resides in a HUD project-based subsidized building. (see NYSCEF DOC 1 at par. 7). Respondent opposes the motion, arguing that the plain language of the ERAP statutes requires the stay remain until a determination is made on respondent's application.

DISCUSSION

Section 8 of the ERAP statutes states, in relevant part, as follows:

" Except as provided in section nine-a of this act, in any pending eviction proceeding, whether filed prior to, on, or after the effective date of this act, against a household who has applied or subsequently applies for benefits under this program to cover all or part of the arrears claimed by the petitioner, all proceedings shall be stayed pending a determination of eligibility [by the Office of Temporary and Disability Assistance]."¹

Though the statute is not written as applying to anyone who filed an application with OTDA, there was a presumption that filing stayed any summary proceeding not specifically exempted. It did not matter whether the case was a holdover, a non-payment, or something else. (see e.g. Joute v Hinds, 75 Misc 3d 764, 767, 170 NYS3d 827 [Civ Ct, Kings County 2022] (anyone can file an ERAP application and "[t]he mere act of filing the application, regardless of whether the person is a tenant, lawful occupant, squatter, family member, guest, licensee, former employee, would conceivably stay the proceeding The person filing the application evokes the automatic stay even if such application was not made in good faith or where rent or use and occupancy is not sought."); Actie v Gregory, 74 Misc 3d 1213(A), *1, 2022 NY Slip Op 50117(U) [Civ Ct, Kings County 2022] ("An occupant may file an ERAP application, whether eligible or not, an intended beneficiary of the program or not, in good faith or bad, and significantly where the outcome will not result in the preservation of a tenancy.")).

Indeed, the mere mention of "ERAP" caused cases to be placed on administrative calendars, often without a judge deciding that the applicant was a person intended to be protected by the statute. (see EQR-Hudson Crossing, LLC v Magana, 75 Misc 3d 979, 982, 170 NYS3d 837 [Civ Ct, New York County 2022] ("As an application for ERAP funds has the effect of staying 'all proceedings pending a determination of eligibility,' this proceeding was administratively stayed by the court upon receiving notice of the application."), citing Admin Order of Chief Admin Judge of Cts AO/34/22.). The burden was on petitioners to make motions to vacate stays.

This appears to have been in error. This court can state this only because it is is armed with both the benefit of hindsight and with recent appellate caselaw. In Bank of NY Trust Co. v Courtney, decided on March 23, 2023, the Appellate Term held that "[h]ad the Legislature intended to extend the ERAP stay to any individual who files an application, regardless of status, it could have chosen to do so through appropriately worded legislation." (2023 NY Slip Op 23075, *2 [App Term, 1st Dept 2023]).

Despite [or maybe because of] the broad application of the stay, courts began to vacate stays in a class of cases where small homeowners wanted possession of their property and ERAP funds, even if paid, would not preserve a tenancy. (see Ami v Rosen, 75 Misc 3d 335 [Civ Ct, Kings County 2022]; Actie v Gregory, supra (unregulated unit in a private house and the landlord would not renew the lease because he wanted it for family use); Joute v Hinds, supra; Silverstein v Huebner, 2022 NY Slip Op 31051(U), 2022 WL 1243191 [Civ Ct, Kings County 2022] (unregulated unit sought for personal use); Papandrea-Zavaglia v Arroyave, 75 Misc 3d 541, 168 NYS3d 789 [Civ Ct, Kings County 2022]).

Though these cases often invoked equity, they also relied on the statute's intent--to preserve tenancies. When that goal was not realistic, the courts reasoned that it was futile to maintain a stay. (id. at 546; 178 Broadway Realty Corp. v Charles, 75 Misc 3d 937, 939-940, 172 NYS3d 323 [Civ Ct, Kings County 2022]). It can be argued that the respondents in this line of cases also did not have a "rent" obligation, as the term is defined in the statute. (see Awaly v Pena, 75 Misc 3d 1227(A), *2, 2022 NY Slip Op 50673(U) [Civ Ct, Bronx County 2022] ("rent" in the ERAP statute is defined under RPAPL§ 702--" 'rent' shall mean the monthly or weekly amount charged in consideration for the use and occupation of a dwelling pursuant to a written or oral rental agreement.")). Once a lease expires, "rent" cannot be sought. (see Fairfield Beach 9th, LLC v Shepard-Neely, 2022 NY Slip Op 51351(U) [App Term, 2nd Dept 2022] (holding "there must be a rental agreement in effect at the time the proceeding is commenced pursuant to which rent is due and owing") [emphasis added]). Consequently, those respondents likely should not have been protected by the stay in the first instance. (see Bank of NY Trust Co. v Courtney, 2023 NY Slip Op 23075 at *2 [stay applies to tenants with a lease, statutory tenants, and occupants with a rent obligation]).

There was another line of cases where the courts applied the statute's plain language and vacated stays where the applicant was not a tenant, nor an occupant obligated to pay rent. (see 2986 Briggs LLC v Evans, 74 Misc 3d 1224(A), 2022 WL 853132 [Civ Ct, Bronx County 2022] (respondent was not a tenant, but a licensee who was not obligated to pay rent;); Karan Realty Assoc. LLC v Perez, 75 Misc 3d 499, 166 NYS3d 492 [Civ Ct, Queens County 2022] (respondent was former employee and he had no duty to pay rent); Kelly v Doe No.1, 75 Misc 3d 197, 166 NYS3d 481 [Civ Ct, Kings County 2022] (respondents had no legal right to possession and thus no obligation to pay rent); U.S. Bank Trust, NA v Alston, 74 Misc 3d 1068, 162 NYS3d 909 [Justice Ct, Town of Pleasant Valley, Duchess County 2022] (occupants were former owner and tenant of foreclosed property with no "rent" obligation); see also Awaly v Pena, 75 Misc 3d 1227(A) (licensee); West 49th Street LLC v O'Neill, 76 Misc 3d 459, 173 NYS3d 189 [Civ Ct, New York County 2022] (licensee); Valsac 908 LLC v Crespo, 75 Misc 3d 1213(A), 2022 NY Slip Op 50484(U) [Civ Ct, New York County 2022] (superintendent); 22 Hawthorn Street LLC v Lendor, Index No. 308930/21, Decided Sept. 6, 2022, Hon. J. Weisberg [Civ Ct, Kings County] (opining that RPAPL § 713 proceedings [where no landlord tenant relationship exists] are not "holdovers")).

During this time, no case emerged where the stay was vacated for a rent-regulated tenant obligated to pay rent. This court remarked in Robo LLC v Matos, decided on June 2, 2022, that the petitioner had failed to identify any case where the ERAP stay was vacated when the tenant in a non-payment case had a pending application. (75 Misc 3d 1211(A), *2 [Civ Ct, Bronx County 2022]). This was not surprising, since the Legislative Intent section for the amended ERAP statute states that the Legislature "is especially cognizant of the ongoing risks posed by residential evictions stemming from non-payment of rent during the height of the public health emergency, and its recovery period, such as the potential to exacerbate the resurgence of COVID-19, the damage significant numbers of evictions would cause to the state's economic recovery, and the deleterious social and public health effects of homelessness and housing instability." (2986 Briggs LLC v Evans, 74 Misc 3d 1224(A) at *4, quoting L. 2021, c. 417, § 2) [emphasis added]).

Recently, however, several cases have vacated the stay in a non-payment proceeding against rent-regulated tenants. In Bay Park Two-A LLC v Pearson, the court determined the equities were out of balance and lifted the stay for pre- and post-pandemic arrears. (see 77 Misc 3d 534 [Civ Ct, Kings County 2022]). Pearson involved a Section-8 tenancy. Ultimately, the holding has been used, fairly or not, to support arguments that stays must be vacated because subsidized tenant applications are unlikely to be paid. In fact, Pearson expressly does not rely on whether the applications will ultimately be approved. "While this court does not agree with petitioner's essentially speculative assertion that monies will never be paid on these cases, it does agree that the continued stay is prejudicial, particularly as the statute does not expire for close to three years." (id. at 540). In other words, the Pearson court found that prejudice, largely measured through the passage of time, supersedes the statute's plain language.

This notion of prejudice [through delay] has been accepted in subsequent non-payment cases where the tenant is the beneficiary of a subsidy. (see Leschinsky v Lutula, 77 Misc 3d 1206(A), *3 [Civ Ct, Kings County 2022] ("as the time passes with the respondent's application lingering, the prejudice to petitioner outweighs the benefit of waiting for a possible outcome on a filed ERAP application and the likelihood of any payments by OTDA diminishes") [internal citation omitted and emphasis added]; Horizon Realty of Mt. Vernon v Dabbs, 77 Misc 3d 1233(A), *2 [Civ Ct, Mt Vernon 2023] ("Forcing the Petitioner to wait any longer would only exacerbate the inequity placed upon the Petitioner/landlord in this process. To reiterate, the lifting of the stay is premised at this time to the inequity suffered by the Petitioner/landlord in the protracted amount of time and the reality that the likelihood of the Respondent securing any monies from ERAP is slim to none at this point.") [emphasis added]).

Unsurprisingly, petitioner here moves to vacate the ERAP stay citing to Bay Park Two-A LLC v Pearson, alleging prejudice caused by the passage of time and that the application will not be paid because of respondent's section-8 status. (see Affirmation in Support at NYSCEF Doc. 6, p. 6).

The motion is denied. This court will not abandon its reasoning as stated in Robo LLC v Matos, notwithstanding the further passage of time. Having subsidized tenants at the back of the ERAP applications line is written into the statute. OTDA has implemented the statute as written. "Whatever the wisdom of this choice, this is the policy choice the legislature has made." (75 Misc 3d 1211(A) at *2, citing Xiang Fu He v Troon Management, Inc., 34 NY3d 167, 172, 114 NYS3d 14 [2019]; Hope v Perales, 83 NY2d 563, 575, 611 NYS2d 811 [1994] ("It is not the role of the courts to pass upon the wisdom of the Legislature's policy choice."); see also Savy Props. 26 Corp. v James, 76 Misc 3d 1214(A), *1, 2022 NY Slip Op 50942(U) [Civ Ct, Kings County 2022] ("Public policy determined by the legislature is not to be altered by a court by reason of its notion of what the public policy ought to be It is not the role of the court to 'second-guess' the determination of the legislature the court may not substitute its own determination therefor A statute must be read and given effect as it is written by the legislature, not as the court may think it should or would have been written if the legislature had envisaged all of the problems and complications which might arise in the course of its administration and no matter what disastrous consequences may result from following the expressed intent of the legislature, the judiciary cannot avoid its duty") [internal citations omitted]).

More recently, the court in Elliot Place Properties v Jaquez declined to vacate the ERAP stay in circumstances like those here and in Matos. (see 77 Misc 3d 1230(A), 2023 NY Slip Op 50067(U) [Civ Ct, Bronx County 2023]. The Jaquez court relied on the plain words of the statute. (id. at *3 ["Here, the unambiguous language of the statute, which provides protection to a Section 8 tenant who has applied for the program, shall be given its plain meaning and this court may not resort to statutory construction beyond the words of the statute], citing Kuzmich v 50 Murray Street Acquisition L.L.C., 34 NY3d 84, 91, 132 NE3d 624 [2019]).

Bank of NY Trust Co. v Courtney, the first appellate level decision addressing ERAP stays, also supports the Matos and Jaquez analysis. (see 2023 NY Slip Op 23075 [App Term, 1st Dept 2023]). Critically, the Courtney court reminds the courts that "[i]t is a fundamental principle of statutory interpretation that a court should attempt to effectuate the intent of the Legislature, and where the statutory language is clear and unambiguous, the court should construe the statute to give effect to the plain meaning of the words used." (id. at *1) [internal citations omitted]).

Courtney reiterates that those decisions finding that non-tenants without a rent obligation were not entitled to a stay were correct. (id.) ["The ERAP statute contains no language affording a stay to one who is neither a tenant nor an occupant obligated to pay rent."]). Conversely, this court reads Courtney as reiterating that those persons "protected" by the statute, such as the tenant here, continue to be protected by the stay until OTDA makes its determination, notwithstanding that petitioner and those similarly situated are undoubtedly prejudiced. (see Jaquez at *3 [Despite delay, "Respondent is still entitled to the continuance of the stay even though she owes more than 15 months in rental arrears and the E.R.A.P. funds would not cover all the arrears outstanding The plain reading of the statute supports that finding." [emphasis added]).

Whatever outcomes the ERAP stay may lead to must be addressed by the legislature, not the courts.

For these reasons, the motion to vacate the ERAP stay is denied. The case shall remain on the court's administrative calendar. This constitutes the Decision of the court. It will be posted on NYSCEF.

Dated: March 27, 2023

Bronx, New York

SO ORDERED,

/S/

_______________________

HON. SHORAB IBRAHIM

Judge, Housing Part

FOOTNOTES

1.   L 2021, ch 56, § 1, part BB, subpart A, § 8, as amended by L 2021, ch 417, § 2, Part A, § 4.

Shorab Ibrahim, J.