Greene v M.S. Hous. Assoc.

[*1] Greene v M.S. Hous. Assoc. 2009 NY Slip Op 51233(U) [24 Misc 3d 1202(A)] Decided on June 17, 2009 Civil Court Of The City Of New York, New York County Martino, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 17, 2009
Civil Court of the City of New York, New York County

Anika Greene, Petitioner,

against

M.S. Housing Associates and D.H.P.D., Respondents.



200060/07



Petitioner: Legal Aid Society Harlem Community Law Office by Clarissa M. Gomez, Esq.

Respondent: Rappaport, Hertz, Cherson & Rosenthal PC, by Robert I. Miller, Esq.

Ruben A. Martino, J.

INTRODUCTION

In the instant Housing Part action, petitioner moves for contempt. Respondent opposes and moves to vacate or amend stipulations for unilateral mistake, fraud, and other related relief. The stipulations executed by all parties require that respondent transfer petitioner to a different apartment and conduct repairs in petitioner's current apartment until such transfer can be effectuated. Based on the February 2, 2009 Order to Show Cause (1), April 13, 2009 Order to Show Cause (2), Notice of Cross-Motion to Vacate Stipulation (3), Reply Affirmation and Opposition to Respondent's Cross-Motion (4), Notice of Motion to Vacate and/or Amend Stipulation (5), and Affirmation in Opposition (6), the Court denies the respondent'smotions to vacate stipulations and grants petitioner's Orders to Show Cause for Contempt to the extent indicated below.

FACTS

Petitioner commenced the instantHousing Part action against respondent for conditions in petitioner's apartment that were in need of repair. On October 7, 2008, the parties entered into a stipulation of settlement requiring respondent to transfer petitioner to the first available two-bedroom apartment in petitioner's building. If no two-bedroom apartment were to become available within 30 days of the order, respondent was to conduct repairs in petitioner's apartment until such apartment became available. When respondent failed to comply with the stipulation, petitioner filed an Order to Show Cause for Contempt. On March 30, 2009, the parties entered into a second stipulation of settlement, in which respondent agreed to transfer petitioner to a vacant apartment before the adjourn date. [*2]

After entering into the second stipulation, respondent was told by the New York CountyDistrict Attorney's office to initiate a holdover proceeding against the petitioner due to a January 15, 2009 heroin arrest made in petitioner's apartment. Respondent discovered that petitioner knew of the arrest when the parties signed the second stipulation. Respondent then informed petitioner that no transfer would take place. Petitioner filed a second Order to Show Cause for Contempt for respondent's failure to comply with the March 2009 stipulation.

Respondent moved to vacate the March 2009 stipulation for fraud, unilateral mistake, and other relief. Petitioner filed an affirmation in opposition to respondent's motion, arguing in part that even if the March 2009 stipulation is vacated, respondent is still bound by the October 2008 stipulation. In response, respondent filed a motion to vacate the October 2008 stipulation for unilateral mistake, or to amend it to allow respondent to repair petitioner's current apartment while he litigates the drug holdover proceeding.

VACATUR OF STIPULATIONS

Stipulations of settlement are favored by courts and not lightly cast aside, (Hallock et al. v State of NY et al., and Power Auth. of State of NY, 64 NY2d 224, 230, 485 NYS2d 510 [1984], citing Matter of Galasso, 35 NY2d 319, 321, 361 NYS2d 871 [1974]), particularly when made in open court (Hallock, 64 NY2d at 230, 485 NYS2d 510, citing Matter of Dolgin Eldert Corp., 31 NY2d 1, 10, 334 NYS2d 833 [1972]). Adhering to stipulations of settlement "serves the interest of efficient dispute resolution" and "is essential to the management of court calendars and integrity of the litigation process" (Hallock, 64 NY2d at 230, 485 NYS2d 510). A stipulation "will not be destroyed without a showing of good cause therefor, such as fraud, collusion, mistake, accident, or some other ground of the same nature" (Campbell v Bussing, 274 AD893, 893, 82 NYS2d 616 [2d Dept 1948]; see also Hallock, 64 NY2d at 230, 485 NYS2d 510; Matter of Frutiger, 29 NY2d 143,149-150, 324 NYS2d 36 [1971]; Canino v Elec. Tech. Co. et al., 49 AD3d 1050, 1051, 856 NYS2d 683 [3d Dept 2008][applying standard for vacating stipulation in context of amending stipulation]).

Respondent argues that the court should vacate or amend the October 2008 stipulation and vacate the March 2009 stipulation for unilateral mistake. According to respondent, the January 2009 heroin arrest "changed the circumstances and the playing field for the parties" (respondent's Notice of Motion filed June 1, 2009 ¶ 6). Respondent relies on Frutiger to support its contention that this change in circumstances warrants vacatur for unilateral mistake. Respondent's reliance on Frutiger is misplaced. Frutiger neither sets forth "change in circumstance" as a basis for vacatur, nor does it specifically address the issue of vacatur for unilateral mistake (see Frutiger, 29 NY2d at 149-150, 324 NYS2d 36 [presenting fraud, collusion, mistake, accident, and other similar bases as grounds for vacating stipulations]).

Respondent has failed to prove unilateral mistake. A stipulation may be voided for unilateral mistake only where "(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 NYS2d 764 [table; text at 2006 WL 1887515 *2] [Civ Ct, NY County 2006]). Unilateral mistake must be induced by "fraud, duress or other inequitable conduct" at the time that the stipulation was executed (Vermilyea v Vermilyea, 224 AD2d 759, 761, 636 NYS2d 953 [3d Dept 1996]). [*3]

Enforcement of the stipulations is not unconscionable. "Unconscionability is contractual overreaching, imposition, oppressiveness, or unfairness" (Mazzola v CNA Ins. Co., 145 Misc 2d 896,901, 548 NYS2d 610 [1989], quoting Hume v United States, 132 US 406 [1889]). Respondent was represented by counsel when the October 2008 stipulation was signed, and both parties were represented by counsel when the March 2009 stipulation was signed. Respondent failed to produce evidence of overreaching.

Respondent's mistake is not material. To vacate a stipulation on equitable grounds, the party in error must prove that it was unaware of a material fact bearing on the issue of dispute when the parties entered into the stipulation (see Matter of Hofmann, 287 AD2d 119, 121, 733 NYS2d 168 [1st Dept 2001]). As petitioner asserts, respondent was under a preexisting obligation to meet housing standards by repairing petitioner's apartment. Respondent would have been required to repair the apartment regardless of any activity allegedly occurring in the apartment at the time of the stipulation. For this reason, a return to the status quo would necessitate the same repairs as those contemplated by the stipulations.

Respondent argues that his mistake was induced by fraud, since petitioner and her counsel signed the March 2009 stipulation knowing of the heroin arrest. Petitioner's actions do not constitute fraud, since petitioner did not procure the terms of settlement by means of misrepresentation to the Court of a material fact (see 142 Fulton LLC v Hegarty, et al., 41 AD3d 286, 287, 839 NYS2d 45 [1st Dept 2007], citing Thornton v Baron, 5 NY3d 175, 178, 800 NYS2d 118 [2005]). As of yet, no holdover proceeding has been commenced by respondent, and there is no criminal conviction or finding of drug activity. If anything, petitioner failed to disclose to the Court information regarding allegations of illegal activity that are both denied by petitioner and had little to no bearing on the terms of the stipulation. This does not rise to the level of fraudulent misrepresentation.

A court may rescind a stipulation for unilateral mistake where failing to do so would result in unjust enrichment, (Weissman v Bondy & Schloss et al., 230 AD2d 465, 469, 660 NYS2d 115 [1st Dept 1997], citing Matter of Gould v Bd. of Educ. of Sewanhaka Cent. High School Dist., 81 NY2d 446, 453, 599 NYS2d 787), but a stipulation will not be set aside merely because it was improvident (Cavalli v Cavalli, 226 AD2d 666, 667, 641 NYS2d 724 [2d Dept 1996], citing Wilutis v. Wilutis, 184 AD2d 639, 587 NYS2d 171 [2d Dept 1992]). Enforcing the stipulations will not result in unjust enrichment. In essence, the stipulations require only that the respondent provide the tenant with an apartment that meets housing standards. Respondent contends that he never would have agreed to transfer petitioner to another apartment had he known about the drug arrest. Respondent may argue that he will be unable to litigate a holdover proceeding against petitioner should he transfer her. Petitioner recognizes this concern, and concedes that the Court may direct that the transfer will not prejudice respondent's ability to bring the holdover proceeding (petitioner's Affirmation in Opposition ¶ 25).

CONTEMPT

Respondent admittedly failed to comply with the stipulations. The Court therefore holds respondent in contempt, but will provide respondent with the opportunity to purge contempt by transferring petitioner to apartment 6F within 30 days. If apartment 6F is not available, respondent shall transfer petitioner to the next available 2-bedroom apartment within 30 days, [*4]and conduct repairs in petitioner's current apartment until transfer. If petitioner is not transferred, the case may be restored for the Court to impose an appropriate punishment for the contempt.

CONCLUSION

Since respondent failed to establish the criteria necessary to vacate the parties' stipulations of settlement, the Court denies respondent's motions to vacate or amend the October 2008 and March 2009 stipulations. This decision is without prejudice to respondent's ability to bring a drug holdover proceeding, and, as agreed by petitioner, transfer to another apartment shall in no way affect respondent's right to maintain a proceeding for illegal activity in petitioner's current apartment. Further, the Court grants petitioner's Orders to Show Cause for Contempt to the extent indicated above. This constitutes the order of the Court.

Hon. Ruben A. Martino

Acting Supreme Court Justice

June 17, 2009

Harlem, New York