Harborview Props. I, LLC v Valentin

[*1] Harborview Props. I, LLC v Valentin 2018 NY Slip Op 50104(U) Decided on January 22, 2018 Justice Court Of The Town Of Greenburgh, Westchester County Orden, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 January 22, 2018
Justice Court of the Town of Greenburgh, Westchester County

Harborview Properties I, LLC, Petitioner-Landlord,

against

Marycelli Valentin, Respondent-Tenant.



17080576



Petitioner was represented by James Dibbini, Esq.

Respondent was represented by Cherish N. Celetti, Esq., of counsel to Legal Services of the Hudson Valley
Bonnie L. Orden, J.

PROCEDURAL BACKGROUND

Respondent-tenant, Marycelli Valentin, requests that the petition seeking her eviction and a money judgment issued in landlord's favor be dismissed or, in the alternative, for the Court to vacate the judgment and warrant and restore this matter to the calendar. Tenant's motion stems from a Notice of Petition and Petition for Non-Payment filed by Petitioner-Landlord, Harborview Properties I, LLC, against tenant Marycelli Valentin, on August 18, 2017. The tenant resides at 300 Tarrytown Way, Apt. 321, White Plains, NY, 10603, Town of Greenburgh, Westchester County, NY, has lived in said premises for approximately ten years and resides there with a child and grandchild. The premises are owned by petitioner and are subject to the Emergency Tenant Protection Act of 1974, as amended, (ETPA), and Section 8 regulations under the Department of Housing and Urban Development (HUD).

On the return date of the petition, August 31, 2017, respondent failed to appear in court, but appeared the next day, September 1, 2017, and explained to the Court's clerk that she was confused as to the date. Due to respondent's failure to appear on August 31, 2017, a default judgment was entered against respondent for $2,535.00 in rent arrears, $250.00 in attorneys' fees, and $70.00 in costs and disbursements by a Justice of this Court. Landlord was granted possession and a warrant of eviction. The default judgment and warrant of eviction were stayed for ten days.

On September 20, 2017, tenant filed a "Pro Se Order to Show Cause to Stay the Issuance of Judgment and Warrant, or alternatively, to Vacate the Judgment and Warrant", which was signed by Justice Brathwaite of this Court. The matter was calendared for September 28, 2017. On that day, only tenant appeared and represented to the Court that she did not know she had to [*2]serve landlord. The Order to Show Cause (OTC) was denied with leave to renew. On October 5, 2017, tenant filed a similar pro se OTC and on October 6, 2017, it was signed by a former Justice of this Court. The case was calendared for October 19, 2017. Before the calendared court date, tenant obtained counsel through the Legal Services of the Hudson Valley.

On November 7, 2017, tenant's counsel, filed an Affirmation in Support of the pro se Order to Show Cause which alleged that the judgment should be vacated because: (1) tenant had a reasonable excuse for default and has meritorious defenses; (2) service was defective since it was not served upon the Public Housing Authority pursuant to 24 CFR 982.31 (e)(2)(ii); (3) service to respondent was defective pursuant to New York Real Property Actions and Proceedings Law (RPAPL) §732, §733, §735 and CPLR § 308; (4) petition and notice of petition allege an inaccurate rent balance due to inaccuracies in landlord's ledger; and (5) tenant is only responsible for $78.40 and should not be held responsible for payments allegedly due from the Department of Social Services (DSS).

On November 9, 2017, this matter was first heard before this Court. A response affirmation was filed by landlord on November 30, 2017, which alleged, inter alia, that tenant's claims were meritless. On the same date, tenant filed a reply affirmation reaffirming her argument that she had a reasonable excuse for default and that there was defective service sufficient to enter a money judgment.

ISSUES PRESENTED

The issues for this Court to determine are: whether respondent has shown a reasonable excuse for default that would permit the Court to examine any meritorious defenses the respondent provides; whether a Section 8 tenant can be held liable for rent outstanding by the Department of Social Services (DSS); whether a landlord may obtain legal fees and costs against a Section 8 tenant in a non-payment proceeding, whether service of process of the Notice of Petition and Petition complied with applicable law as it pertains to a summary eviction proceeding; and whether service of process was sufficient as to award a default monetary judgment.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

A court has discretion to relieve a party from a judgment or order on grounds that are just, such as an excusable default. CPLR R § 5015(a)(1). An excusable default requires that a reasonable excuse for the default exists, and that a meritorious defense has been demonstrated Suede v Suede, 124 AD3d 869 (2d Dept 2015). In Suede, the Court ruled that "[w]hether a proffered excuse is 'reasonable' is a sui generis determination to be made by the Court based on all relevant factors, including the extent of the delay, whether there has been prejudice to the opposing party, whether there has been willfulness, and the strong public policy in favor of resolving cases on the merits." Moreover, "[t]here is a strong public policy that favors deciding matters on the merits in the absence of demonstrable prejudice" Stephenson v Hotel Empl. & Rest Empl. Union Local 100 of AFL-CIO, 293 AD2d 324 (2002); see also J.R. Stevenson Corp. v Dormitory Auth., 112 AD2d 113, 116 (1985); Lirit Corp. v S. H. Laufer Vision World, Inc., 84 AD2d 734 (1981).

Landlord relies upon Abdul v Hirschfield, 71 AD3d 707 (2d Dept 2010) by arguing that forgetting to appear on a specified court date, or getting confused about the date, is not a reasonable excuse, and since tenant has failed to so demonstrate, the Court need not consider whether a meritorious defense exists. Reliance on Abdul is misplaced, since it is clearly distinguishable from the facts at bar. In Abdul, throughout the course of an entire year, the [*3]defendant offered no excuse for her failure to answer the complaint after having been given numerous opportunities to do so, failed to submit opposition papers, and when leave was granted for her to retain counsel, failed to do so, and failed — with or without counsel — to appear in court on the adjourned date. In its beneficence, the Court gave the defendant one year before it granted the unopposed default motion. It then took defendant almost another year before she moved the Court to vacate the order, merely stating that she forgot to appear on the adjourned date when the default judgment was, at last, granted. That is hardly the case in this matter.

Here, tenant affirmed in the pro se Order to Show Cause that she failed to appear on the return date because she got confused about the court dates, but she did appear in Court on the very next day and on every court date thereafter. Tenant, hardly savvy in court processes and procedures, did not serve landlord with the first OTC and, as a result, the OTC was denied with leave to renew. Respondent promptly refiled, and in the interim, sought legal representation. This Court finds that tenant's failure to appear on the very first calendar date was not willful as is evidenced by her appearance the next day in Court and every date thereafter. Additionally, there is absolutely no showing of any prejudice to the landlord and, as stated, supra, public policy which favors a resolution on the merits should be controlling.

As to the issue of having a meritorious defense(s), tenant alleges that but for $78.40 due landlord, the remainder was to come from DSS. HUD form No. 52641 contains the Housing Assistance Payments Contract (HAP contract). The HAP contract makes clear that this contract is an agreement between the Public Housing Agency (PHA) and the owner of the unit occupied by an assisted family. Additionally, it is clear that the funds go directly from HAP to the owner.

Tenant also argues that landlord's ledger is inaccurate in that it failed to account for payments made by tenant and by DSS. Landlord does not dispute this in his response papers. Tenant produced documentation from DSS proving two outstanding payments were in fact made by DSS that were never cashed by landlord, totaling $794.00. In an effort to rectify the outstanding payments, DSS sent landlord an e-mail on September 21, 2017, which requested information so that the two checks could be re-issued (Plaintiff Ex. C). However, landlord has not responded to the e-mail and refuses to cooperate with DSS procedures. Landlord asserts that he does not have to follow the procedures as outlined by DSS in the e-mail, which require that landlord fill out a form, have it notarized, and file a police report before checks can be reissued. Landlord reasons that because the checks are over 90 days old, they are void and DSS should just reissue the checks.

Moreover, while landlord concedes that there is proof that DSS sent the above referenced e-mail, landlord argues that tenant has failed to show proof it was received and/or read by landlord.[FN1] The Court finds that such a burden to impose on tenant is unreasonable. Even if tenant placed the DSS e-mail in landlord's hands, should tenant be required to prove that landlord actually read it? And, based upon the submissions of tenant, if landlord was unaware of what was expected of him before, he has certainly been appraised of what to do since November 9, 2017, whether he agrees with the DSS requirements or not.

Landlord's reply affirmation concedes that $872.40 is due landlord, not the $2,535.00 as claimed in the Notice of Petition and Petition, and not the $3,393.00 landlord alleged was due [*4]when he appeared in Court on October, 19, 2017, and that only $78.40 is due from the tenant, herself. However, landlord contends that tenant is liable for and obligated to pay rent that remains unpaid by DSS and, as such, owes respondent $872.40, which includes the two checks never cashed by landlord, and the $78.40 concededly owed by tenant. Although landlord asserts that "it is well settled case law that a tenant is still liable for and obligated to pay portions of rent that remain unpaid by DSS," no case law is cited.

Contrary to landlord's unsubstantiated declaration, Section 8 tenants are only liable for their share of the rent according to the Brook Amendment to the Housing Act as codified in 42 USC 1437(a). As well, 24 CFR §982.310 (b) states, in pertinent part, that nonpayment by PHA is not grounds for the termination of a tenancy, and that the tenant is not responsible for payments made under the HAP contract between the owner/landlord and PHA. See also Riverview II Preserv, L.P. v Brice-Frazier, 13 NYS3d 852 (App Term 9th & 10th Jud Dists 2015). The reasoning is clear: landlord may not pursue the tenant for non-payment of rent owed by DSS, since it would exceed the lawful amount that tenant is responsible for as a Section 8 voucher recipient.[FN2]

Furthermore, since the judgment also included attorney's fees and costs, this aspect of the stayed judgment must be addressed as well. In two separate proceedings which originated from this Courthouse, Fairview Hous, LLC v Wilson, 38 Misc 3d 128(A) (2012), and Greenburgh Hous Auth v Hall, 55 Misc 3d 146(A) (2017), on appeal, both cases were, in part, reversed by the Appellate Term of the Supreme Court, Second Department, 9th Judicial District. The Appellate Term ruled that attorney's fees in a non-payment proceeding against a Section 8 tenant may not be recovered in a non-payment proceeding. In Fairview Hous, LLC, the Appellate Term ruled that "[n]otwithstanding that landlord's House Rules, incorporated by reference into the lease . . . , attorney's fees as 'additional rent' . . . , may not be deemed additional rent as against a Section 8 tenant and may not be recovered against a Section 8 tenant in a summary proceeding. See Spring Val. Homes Assocs. v Logan, NY Slip Op 51224(U) [App Term, 9th & 10th Jud Dists 2003]; Binghampton Hous Auth v Douglas, 217 AD2d 897 (1995). In Binghampton Hous Auth v Douglas, 217 AD2d 897 (1995), the Court held that "since Federal regulations fully govern the amount that petitioner may charge as rent, we find that the City Court, affirmed by the County Court, correctly determined that the regulations, rather than the lease provisions, constitute the governing document." Id.

There are essential parallels to be drawn between Fairview Hous, LLC, id., and the instant action. Concerning the initial award of non-payment, the Appellate Court in Fairview opined that "[i]n our view, tenant's motion . . . to vacate the warrant, should have been granted . [*5]. . [by the lower Court]. [T]hat tenant produced a Department of Social Services guarantee letter . . . , [since] tenants needed only a short delay for the Department of Social Services to reissue checks that it had canceled due to a computer error, the granting of a brief delay would have been appropriate" Id.

As a result, this Court finds that tenant has raised numerous meritorious defenses, some of which have gone unchallenged, and some of which were challenged by landlord without any substantiation. As a result, this Court finds that the only non-payment by tenant amounts to $78.40.

SERVICE OF NOTICE OF PETITION AND PETITION

Tenant argues that the case must be dismissed based on defective service because the process server failed to comply with the requirements set by RPAPL § 732, §733, §735 and CPLR § 308; that the affidavit of service does not provide the certified mail numbers; that there was only a single attempt at personal service for purposes of the warrant of eviction — where at least two attempts are required; and that Westchester County CVR, the public housing authority administering tenant's Section 8 benefits, was not served. Tenant also alleges that there was a lack of sufficient service to enter a money judgment because the higher "due diligence" standard, pursuant to CPLR § 308 for purposes of a monetary default judgment, was not met.

Landlord states that there was sufficient service utilizing the "reasonable application" standard, prior to conspicuous service, under RPAPL §735. Landlord fails to distinguish between service which is compliant with statute and case law for a landlord to pursue a default judgment to obtain summary possession as opposed to the requirements seeking a monetary judgment.

This Court will deal with these issues seriatim. First, to obtain possession of property in a summary proceeding, a landlord must demonstrate "reasonable application" in its prior attempts to serve the tenant personally before resorting to conspicuous "nail and mail" service. See RPAPL § 735(1); Palumbo v Estate of Clark, 94 Misc 2d 1 (1978); see also Eight Associates v Hynes, 102 AD2d 746, 748 (1st Dept 1984); Brooklyn Heights Realty Co. v Gliwa, 92 AD2d 602 [2nd Dept 1983]). Here, contrary the tenant's assertions, the landlord's Affidavit of Conspicuous Service indicates that personal service was attempted on August 22, 2017, at 3:31 P.M., (working hours), and on August 23, 2017, at 6:33 A.M., (non-working hours).[FN3] This Court finds that there was a sufficiently "reasonable application" in landlord's attempts to personally serve tenant before resorting to conspicuous service or "nail and mail," concerning repossession of property. Landlord has also sufficiently demonstrated that the CVR administrator was properly served.

Tenant also argues that in order to obtain a money judgment against a defaulting tenant following conspicuous service, a landlord must exercise "due diligence" in his attempts to personally serve process on the tenant pursuant to CPLR § 308, Avgush v Berrahu, 17 Misc 3d 85 (2007). While the NY Appellate Courts appear split on the issue of proper service with respect to the requirements of a default monetary judgment, in the Appellate Term of the Second Department of the 9th Judicial District, the standard of "due diligence" must be met in order for landlord to obtain a monetary judgment against tenant in a non-payment default proceeding. In Augush, id., the Court ruled, "money judgments shall be available upon a tenant's default . . . upon a showing that such service would be sufficient to support the entry of a money judgment [*6]in a plenary action." Therefore, prior to resorting to conspicuous service, petitioner must comply with at least two key prerequisites to satisfy the "due diligence" test.

First, a minimum of three personal service attempts are required, with at least two attempts on dates and times when it can reasonably be expected that the person to be served will not be at work or in transit. See Greene Major Holdings, LLC v Trailside at Hunter, LLC, 148 AD3d 1317, 1320-21 (2017); Kader v Kader, 132 AD3d 1376, 1377 (4th Dept 2015); Serraro v Staropoli, 94 AD3d at 1085 (2012); Austin v Tri-Cnty. Mem'l Hosp., 39 AD3d 1223, 1224 (4th Dept 2007); County of Nassau v Letosky, 34 AD3d 414, 415 (2nd Dept 2006); O'Connell v Post, 27 AD3d 630, 631 (2nd Dept 2006). In this case, the process server's affidavit states only two attempts were made as indicated supra. Therefore, the requirement for three personal service attempts was not met.

Second, before resorting to conspicuous service, a process server must make "genuine inquiries" to ascertain the party's place of work so that the party can be served at work, and must attempt to talk to neighbors to find out where the party might be found. Where a party seeking a default money judgment following conspicuous service of process fails to demonstrate such inquiries, due diligence is not satisfied. See Greene Major Holdings, LLC at 1321; Gurevitch v Goodman, 269 AD2d 355, 355-56 (2nd Dept 2000); Moran v Harting, 212 AD2d 517, 518 (2nd Dept 2003); Serraro v Starpoli, 94 AD3d at 1085; Estate of Waterman v Jones, 46 AD3d 63, 67 (2nd Dept 2007).

Here, the process server's affidavit does not indicate that he made any inquiries into the tenant's whereabouts or place of work, nor is there any indication that tenant's neighbors were asked about her whereabouts. Therefore, landlord also failed to exercise the second key requirement for due diligence which is necessary to entitle him to a default money judgment against tenant following conspicuous service of process. As a result, the monetary judgment, which this Court finds amounts to $78.40 based upon the facts and the case law as cited above, is hereby vacated and dismissed.

CONCLUSION

Based upon the facts presented through the litigants' submissions, and the relevant case law, this Court finds that:

1. Tenant demonstrated a reasonable excuse for default, by arriving at the courthouse one day late due to confusion about the date of appearance and has never failed to appear again; and, since landlord has failed to demonstrate any willful default or prejudice to landlord, the Court deems it fair and equitable to look at meritorious defenses;2. Tenant had multiple meritorious defenses, which leads to the inescapable conclusion, uncontested by litigants, that tenant is only responsible to landlord for $78.40; 3. Landlord may not pursue a non-payment proceeding against a Section 8 tenant for monies owed by the Department of Social Services;4. Landlord may not obtain legal fees and costs against a Section 8 tenant in a non-payment proceeding;5. Landlord has failed to satisfy the service requirements of CPLR § 308 with respect to a monetary default judgment.

Therefore,

THE DEFAULT JUDGMENT IS VACATED AND DISMISSED.

THE WARRANT OF EVICTION WILL BE RESTORED TO THE CALENDAR FORTHWITH, WITH NOTICE TO ALL PARTIES, AT WHICH TIME THE PARTIES ARE [*7]DIRECTED TO ADVISE THE COURT OF THE STATUS OF THE OUTSTANDING RENT OF $78.40.

THIS CONSTITUTES THE DECISION AND ORDER OF THIS COURT.

Dated: January 22, 2018

Town of Greenburgh

White Plains, New York

Hon. Bonnie L. Orden Footnotes

Footnote 1: The email in question was sent to dk@hvp.com. The Court notes with curiosity that according to a signature/verification page, an individual with the initials "DK," is identified as a member of HarborView Properties I, LLC.

Footnote 2: Attached to the petition, tenant was notified that "[t]his is an attempt to collect a debt. Any information obtained will be used for that purpose. This is a communication from a debt collector." A 30-day notice was given to respondents to dispute the validity of the debt as stated in the petition and only after this period will "This Office" provide tenant with the name and address of the original creditor, if different from the current creditor. No creditor's name is provided. Whether the debt collection notice was consistent with the Fair Debt Collection Practices Act, ("FDCPA"), is not before this Court, however, counsel must be aware that FDCPA imposes strict liability on debt collectors. Overstatement of monies owed, even if there is an inadvertent failure to credit tenant with a partial payment can subject the landlord's attorney to damages and attorney's fees. See 15 U.S.C. § 1692 (a)(3).

Footnote 3: The Court takes judicial notice of the fact that August 22, 2017, was a Tuesday and August 23rd, 2017, was a Wednesday.