170 NY Props. LLC v Boynton
Annotate this CaseDecided on March 21, 2008
Civil Court of the City of New York, Kings County
170 NY Properties LLC, Petitioner-Landlord
against
Kimberly Boynton, Respondent-Tenant
L & T 69936/2007
SCOTT D. GROSS
Attorney for Petitioner
151 Willis Avenue
Mineola, New York 11501
(516) 742-9099
JOAN L. BERANBAUM
Attorneys for Respondent
By: Barbara A. Cass, Of Counsel
DC 37 MUNICPAL EMPLOYEES LEGAL SERVICES
125 Barclay Street, 10th Floor
New York, NY 10007-2179
(212) 661-5100
Sabrina B. Kraus, J.
BACKGROUND
The underlying summary holdover proceeding was commenced by 170 NY PROPERTIES LLC, ("Petitioner") against KIMBERLY BOYNTON ("Respondent") the tenant of record of Apartment 27 at 170 New York Avenue, Brooklyn, New York, 11216 ("Subject Premises"). The Subject Premises is governed by Rent Control, and this chronic non-Payment holdover proceeding was commenced, based on the allegation that Respondent had breached a substantial obligation of her tenancy, by repeatedly failing to pay rent on a timely basis.
PROCEDURAL HISTORY
Respondent's tenancy was terminated by Petitioner on or
about March 16, 2007 by a Thirty Day Notice of Termination. The proceeding was commenced
on or about May 3, 2007, by service of a Notice of Petition and Petition. Respondent appeared in
the proceeding through counsel, and asserted an answer and counterclaim to the Petition. On or
about July 20, 2007, Judge Lansden issued an order striking Respondent's third, fourth and fifth
affirmative defenses and setting the matter down for a traverse hearing. The proceeding was
scheduled for traverse and trial on July 23, 2007.
On July 23, 2007, the parties entered into a stipulation of settlement ( "Stipulation")
resolving the proceeding. The Stipulation provided that Respondent was on probation for
twenty-four months, from August 2007 through July 2009. During said period, Respondent
agreed she would pay her rent, so that Petitioner received the payment no later than the tenth of
each month. Under the terms, Respondent would be excused from three rental defaults only. In
the event of a fourth default, Respondent would be in breach of its obligations under the [*2]Stipulation. Paragraph "5" of the Stipulation provides:
If Petitioner believes there is a breach & it is found by the court or conceded that
there is a breach by Resp., Petitioner shall be entitled to a possessory judgment, money judgment
& issuance of a warrant of eviction. Relief is to be obtained by motion.
(a) If such an application for a judgment and a warrant is made, & the Respondent
has utilized her permissible default, she will be entitled to a six month stay to vacate the subject
premises provided use and occupancy is paid.
On or about January 11, 2008, Petitioner moved to enforce the Stipulation alleging that four defaults had occurred, since the Stipulation had been so-ordered by the Court. Respondent opposes said motion, and cross-moves pursuant to CPLR § 2201 for a stay of the execution of any warrant issued by the Court. The motion and cross-motion are consolidated herein for disposition.
FACTS
The essential facts regarding the four defaults under the
Stipulation are not in dispute. [FN1] From October 2007 through January 2008 for
four consecutive months Respondent failed to tender the required rent payment so that it was
received by Petitioner by the 10th of the month as required by the stipulation. The details of the
each of the defaults are set forth below.
On or about October 2007, Respondent tendered a post dated personal check for
October rent. The check was dated October 18, 2007, and accompanied by a note, which
requested the check be deposited on October 18, 2007 or thereafter.
The following month Respondent once again submitted a post dated check dated
November 15, 2007, with a note asking that the check not be deposited before November 15,
2007.
The following month Respondent again submitted a post-dated check for December
rent. The check was dated December 14, 2007, and when the landlord deposited it on said date it
bounced.
Respondent failed to pay rent for January 2008 on or before January 10th, 2008, and
the following day Petitioner made the instant motion on the basis that said failure constituted
Respondent's fourth consecutive default under the terms of the stipulation. Respondent paid rent
for December and January by a bank check, which was not purchased until on or about January
26, 2008.
Respondent does not dispute that the above constituted defaults under the stipulation. Rather, Respondent argues that the motion should be denied because the defaults were de minimus, and did not substantially prejudice the Petitioner. Respondent argues that remedy is too harsh given the nature of the default.
Alternatively, Respondent argues that should the Court grant Petitioner's motion, it should also grant Respondent's cross-motion for a stay ("Sofizade Stay") pursuant to CPLR 2201 and 326-330 East 35th Street Assoc. v. Sofizade, 191 Misc 2d 329 (App. Term, 2002).
PETITIONER'S MOTION FOR A JUDGMENT
[*3]It is clear, based upon
the undisputed facts recited above, that Respondent has defaulted on the Stipulation, by failing to
pay her rent for the months of October 2007 through January 2008, so that Petitioner received the
rent on or before the 10th of each of month. Stipulations of settlement are contracts and are
subject to the principles of contract construction. Aivaliotis v. Continental Broker-Dealer
Corp., 35 AD3d 153 (1st Dept., 2006).
The underlying proceeding was predicated on the allegation that Respondent had failed to timely pay rent. The proceeding was settled by agreeing that the failure to pay Petitioner by the 10th of any month was a default. Because the essential obligation of Respondent was to pay on time, a late payment not a de minimus default, but rather a default that goes to the heart of Respondent's obligation of under the Stipulation.
"A covenant to pay rent at a specified time ... is an essential part of the bargain as it represents the consideration to be received for permitting the tenant to remain in possession of the property of the landlord." Fifty States Mgt.v. Pioneer Auto Parks, 46 NY2d 573, 575 (1979). Repeated breaches of the covenant to timely pay are not de minimus, but are breaches of a material term of the contract. Cyber Land Inc. v. Chon Property Corporation, 36 AD3d 748 (2nd Dept., 2007).
The Stipulation was entered under advice of counsel, and so-ordered by the Court. The Stipulation expressly provided that if Respondent breached the terms, Petitioner would be entitled to the entry of a judgment of possession, after moving for said relief. Such language has been held to be unambiguous, and subject to enforcement without extrinsic evidence of the parties' intent. 64th Street - 3rd Ave. Ass. v. Wall, 257 AD2d 487 (1st Dept.,1999).
Appellate Courts have held that it is an abuse of discretion, when trial courts excused late payments in a chronic non-payment holdover proceeding, if the stipulation clearly provided that a breach would entitle the landlord to an eviction.
For example, in Kalimian v. Cutarella, NYLJ May 23, 3003 (App. Term, 1st Dept.), the Appellate Term held that where the stipulation provided that two late payments during a twelve month period would entitle landlord to execute on the warrant of eviction, the language was unambiguous and required that the stipulation be enforced according to its terms. The Appellate Term reversed the lower court's finding that the breach was de minimis, and noted that the tenant's excuse of the late payment was "insufficient cause to warrant relief from the stipulations provisions". Kalimian v. Cutarella, Supra, citing Hallock v. State of New York, 64 NY2d 224; see also M & B Lincoln Realty Corp. v. Lubrun, 4 Misc 3d 129 (A) (App. Term, 2nd Dept., 2004); M.F. Realty v. Santini, NYLJ, July 15, 2003 (App. Term, 1st Dept.) (Affirming lower court's denial of tenant's motion for a further stay on the execution of the warrant as tenant had breached two stipulations and late payments continued in the probationary period).
The cases cited above do differ from the case at bar in that the stipulations settling those proceedings, provided for the entry of a judgment and the issuance of a warrant of eviction. The stipulation herein did not provide for said relief until the breach occurred. However, neither party addresses this issue in their papers and the cases do not indicate that a different result is warranted.
In this case, the first three defaults wherein Respondent submitted post-dated checks, were intentional and willful. Respondent knew that payment was to be received by Petitioner no later than the tenth of the month. By delivering checks that were post dated, [*4]Respondent was not making payment, but essentially was offering a promise of payment at a later date. This was not an agreed upon term of the Stipulation.
Respondent's explanation for the first two defaults, namely that she could not afford to timely comply with the Stipulation, because as a Board of Education employee she received no pay between from September through Mid-October, is insufficient cause to warrant relief from the provisions of the stipulation. Respondent executed the Stipulation with full knowledge that she would be receiving no paycheck for said period.
Respondent offers no explanation as to why she submitted a post dated check in December, since presumably the "back ups in pay" alluded to for September through Mid- October were no longer the basis for a post dated check submitted in December.
The third default became even more substantial when the post-dated December 14, 2007, check was subsequently dishonored by the bank. Respondent states that she fully expected the post-dated December check would clear as she had money deposited to cover that check. But in fact she had not deposited any money. She was anticipating a direct deposit of her payroll check on said date. She attaches a single page of the transaction history of her checking account in support of her position. The page attached shows activity from November 20, 2007 through December 28, 2007. The transaction sheet does not exhibit the balance in the account for any of said dates. Additionally, the transaction sheet shows four separate charges for "non sufficient funds" during that one month period.
The decision to risk issuing a post dated check, prior to there being sufficient funds in Respondent's account was a deliberate decision made by Respondent. While Respondent may have proceeded on the assumption that the same day a direct deposit would be made, she assumed the risk inherent in delivering the payment late to begin with, and allowing her bank account balance to run so low that the check risked being dishonored, as it indeed was.
While she alleges the default was being the Bank's error "because the deposit and the check
crossed paths and the system did not recognize the deposit when the check was received, a
reasonable person might have taken greater precautions to insure that a payment all ready late to
begin with, would absolutely be good when tendered. This is particularly so given that the
payment tendered was late for the third consecutive month. Whether a direct deposit due the
same date as a check was sufficient to cover said check is not certain. Respondent's choice as to
method and timing of the payment, put her in a situation where the funds were not available
when the check was presented to be cashed. .
Equally unavailing is Respondent's explanation that January payment was late
because she lost a check book and cancelled checks. The payment eventually tendered was
tendered by bank check. It was not purchased until January 26, 2008. Respondent does not
explain why the lost checkbook resulted in her late payment. Although she does attach
documentation showing that the checking account was on hold, the effective date of this is
indicated as being January 16, 2008, six days after January's rent payment would have been do.
Moreover, Respondent could have withdrawn the funds necessary to pay December and January
rent prior to putting the hold on the account, but elected not to do so.
Given the foregoing stipulated facts and applicable case law, the Court finds that the
defaults were not de minimis, and that Petitioner is entitled to the entry of a judgment of
possession and the forthwith issuance of the warrant.
RESPONDENT'S CROSS-MOTION FOR A SOFIZADE
STAY
[*5]
In 326-330 East 35th Street Assoc. v.
Sofizade, 191 Misc 2d 329 (App. Term, 2002), the Appellate Term held in pertinent
part:
Finally, while adhering to the view that a demonstrated lease violation based upon
a history of chronic rent defaults is not subject to a traditional post-judgment cure under RPAPL
753(4), we also recognize that there may exist circumstances warranting the issuance of a stay of
a possessory judgment "upon such terms as may be just " in order to avoid a leasehold forfeiture
in this type of eviction proceeding. If conditioned upon appropriate terms, such as the tenant's
compliance with a prospective payment schedule, the grant of a discretionary stay in a proper
case, though providing no complete remedy for a tenant's prior rent defaults, can serve both to
prevent unwanted future rent defaults and to avoid an unnecessary
eviction.
Id. at 332 (citations omitted).
It seems clear that the Sofizade Stay was meant to be at the court's discretion, after a trial or final determination by the Court on the merits. It is not at all clear to this Court that the Sofizade Stay was meant to apply to the enforcement of a stipulation of settlement arrived at between two attorneys, after an arms length negotiation. The purpose of issuing such a stay, as enunciated by the court in the decision, has already been met in a proceeding where the parties agree to a settlement based on a probationary period. The probationary period in the Stipulation afforded Respondent the opportunity to avoid eviction, conditioned on her compliance with the payment schedule of the stipulation. Essentially, when a landlord enters into a probationary stipulation with a tenant to resolve a chronic non-payment proceeding, the landlord is consenting to the Sofizade Stay up front, conditioned upon the terms of the particular agreement.
The Stipulation afforded Respondent more favorable terms then a post trial Sofizade Stay would have, had Petitioner established its case at trial, in that the Stipulation allowed the proceeding to be settled, without entry of a judgment of possession or warrant unless the probationary terms were violated.
The Stipulation did specifically address the issue of post judgment stays. The parties agreed that in the event of a breach, Respondent would be entitled to a six month stay on the execution of the warrant, provided use and occupancy is paid, to afford Respondent an opportunity to vacate. This provides Respondent with the maximum time allowed under RPAPL 753(1), and is evidence that the parties considered the issue of a post judgment stay and chartered their own course as to which stays would and would not be appropriate in such a situation.
Just as the parties negotiated a stay in accordance with RPAPL 753(1), and included it as a provision of the stipulation, Respondent could have preserved her right to seek a Sofizade Stay, in the event of breach, by explicitly reserving that right in the agreement. By seeking such a stay, without having bargained for the ability to do so in the Stipulation, Respondent, after having received all the benefits of the Stipulation, is seeking to deny Petitioner the agreed upon remedy for her breach.
Moreover, under the circumstances the loss of possession of the premises is not a forfeiture as argued by Respondent. "Rather it is merely the contracted for consequence of ... [*6]tenant's own failure to do that which she promised to do." Hotel Cameron Inc. v. Purcell, 35 AD3d 153 (1st Dept., 2006) (citations omitted). CONCLUSION
Based on the foregoing, the court grants Petitioner's motion and denies Respondent's cross-motion in its entirety. Petitioner is awarded a final judgment of possession as against Kimberly Boyton. The warrant of eviction shall issue forthwith, execution of the warrant is stayed through and including September 30, 2008, provided Respondent pays use and occupancy at the rental rate provided for under the stipulation on or before the 10th of each month for April 2008 forward. Upon default the warrant may execute upon service of a Marshall's notice.
This constitutes the decision and order of this Court.
Dated: March 21, 2008
Brooklyn, New York
_______________________
Hon. Sabrina B. Kraus
J.H.C.
TO:
SCOTT D. GROSS
Attorney for Petitioner
151 Willis Avenue
Mineola, New York 11501
(516) 742-9099
JOAN L. BERANBAUM
Attorneys for Respondent
By: Barbara A. Cass, Of Counsel
DC 37 MUNICPAL EMPLOYEES LEGAL SERVICES
125 Barclay Street, 10th Floor
New York, NY 10007-2179
(212) 661-5100
Footnotes
Footnote 1: Respondent's monthly rent as
due under the stipulation ranged between $320.60 and $350.00 per month.
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