This is a summary holdover eviction proceeding commenced by PS Northeast, LLC (“Petitioner”) against Julissa Brown, Denny Alvarez, John Doe and/or Jane Doe (“Respondents”). Petitioner’s notice of petition and petition filed August 12, 2020 seeks final judgment of possession, warrant of eviction, damages of $100 per day from February 22, 2020 until entry of final judgment, and costs and disbursements. Petitioner alleges, inter alla, that it owns the premises known as 60 East Kingsbridge Road, Mount Vernon, New York 10550 — a self-storage facility — and that said premises contains an apartment on the first floor designated for use by the residential property manager (“manager”) of the facility for the manager’s residence. Julissa Brown was employed as the manager and resides, with her spouse Denny Alvarez, in the apartment on the premises pursuant to an occupancy agreement signed by the parties on March 13, 2018. Findings of Fact Petitioner further alleges that Respondents’ tenancy ends if Brown’s employment is terminated and that they are required to vacate the apartment within three days of written notice of termination (twenty-four-hour notice if terminated for cause) of the occupancy agreement. Paragraph 2 of the occupancy agreement provides the stated time frame for Respondents to vacate “except otherwise required by law or stated in the notice of termination”. Petitioner alleges that it terminated Brown’s employment on February 18, 2020 and revoked Respondents right to use and occupy the apartment, and that Respondents failed to vacate and continue to hold-over in possession. Annexed to the petition is a letter signed by Jaimie Gauntlett (Director of Human Resources) dated February 17, 2020 entitled “Notice to vacate apartment” addressed to Julissa Brown requesting that she vacate the apartment by 12:00 p.m. on February 20, 2020. An affidavit of service, sworn to August 3, 2020 by one Julian Bembry, Petitioner’s District Manager, alleges that he served said notice on Respondent Brown on February 18, 2020. Notice to vacate was not served on the other respondents. Petitioner filed affidavits of service with the court on August 31, 2020 alleging that one Andrew John Mega served the Notice of Petition, Petition, and Notice to Respondents regarding Coronavirus Emergency on the Respondents by affixing to the door at 60 Kingsbridge Road, Mount Vernon on August 27, 2020 and mailing same to that address on August 28, 2020. Petitioner did not serve the form “Tenant’s Declaration of Hardship During the Covid-19 Pandemic” on Respondents. The case first appeared on the court’s calendar on September 9, 2020. Petitioner appeared by Joseph Miller of the law firm Miller & Lee LLP. Respondents did not appear. The matter was adjourned to October 8, 2020 for a court conference. On the adjourned date, Respondents did not appear. Petitioner made an oral application for payments of use and occupancy from February 21, 2020 through the date Respondents vacate the premises. The court set an inquest for November 23, 2020 to consider petitioner’s application and directed petitioner to file and serve all necessary papers and documents to prove the amount of use and occupancy of Petitioner’s claim on notice to all parties. On November 23, 2020, Respondents did not appear. Petitioner submitted a report dated November 20, 2020 from one Marc Gerber, a certified public accountant and license real estate agent alleging that the fair market rental value of $1,900.00 per month for Respondent’s apartment. The court directed Petitioner to settle an Interim Order for use and occupancy of $1,900.00 per month from April 1, 2020 to November 30, 2020 in the amount of $15,200.00 on notice to all parties. The case was adjourned to January 4, 2021. Respondent did not appear on that date and the case was adjourned to May 4, 2021. Respondent, Julissa Brown, filed a “Tenant’s Declaration of Hardship During the Covid-19 Pandemic” form (Covid-19 Hardship Declaration) with the court on February 22, 2021. On May 4, 2021, Petitioner’s counsel — Mr. Miller — appeared. Respondent, Julissa Brown, appeared without counsel. Petitioner’s counsel stated that he had not received the signed Interim Order from the court. Mr. Miller further stated, inter alia, that the petition requested damages under a “liquidated damage clause” in the occupancy agreement of $100 per day from February 22, 2020 until entry of final judgment. Respondent contested receiving proper service of notice of the proceedings and court papers, alleging that Petitioner locked her out of the premises preventing her from getting her mail. She further alleged that Petitioner was withholding her mail and only giving her certain mail. Petitioner’s counsel confirmed that Respondent was prevented from accessing certain areas of the premises because she was no longer an employee. Petitioner’s counsel alleged that Respondent did not show up in court because she was in Florida. Respondent provided a copy of a JetBlue Airlines boarding pass with her name for a flight between Fort Lauderdale Airport and LaGuardia Airport, New York. The boarding pass suggests that Respondent was in Florida on or about November 21-22, 2020. The inquest to determine whether the court should grant Petitioner’s application for use and occupancy was set for November 23, 2020. A review of the court files is devoid of any evidence that Petitioner served its motion for default, affidavit of merit from a person with knowledge of the facts with accompanying exhibits and documents supporting its application use and occupancy or a notice of inquest on Respondents before the November 23, 2020 court date. Respondent also disputes the amount of use and occupancy of $1,900.00. She indicated that Petitioner only paid her $15.50 per hour, suggesting that rental value of $1,900.00 would be unreasonable and disproportionate to her compensation. Respondent also indicated the rental value was based on her pay scale on her paystub. In its application for default judgment, Petitioner did not provide any evidence to the court in connection with the rental value based on Respondent’s pay scale. The May 4, 2021 conference was adjourned to May 27, 2021. On May 27, 2021, both sides appeared. Respondent Julissa Brown appeared without counsel. The court noted that Respondent filed a Covid-19 Hardship Declaration on February 22, 2021. The matter was adjourned to May 28, 2021. On that date both parties appeared. Respondent Julissa Brown remained unrepresented. She alleged again that Petitioner has been withholding her mail and delivering only certain mail. The court asked Petitioner’s counsel whether all papers and documents including the Covid-19 Declaration form were served on Respondent – to which counsel responded affirmatively, except for the Covid-19 Declaration form. As previously stated, a review of the court records indicates that no affidavit of service was filed showing that Petitioner served its application for use and occupancy and notice of inquest on Respondent. The court referred Respondent Brown to Legal Services of the Hudson Valley to obtain legal representation and adjourned the matter to June 28, 2021. No judgement of possession or warrant of eviction was issued or entered in this matter. The court finds that Respondent did not receive actual notice of the November 23, 2020 proceedings on Petitioner’s motion for default judgment. Conclusions of Law There is a strong public policy that matters should be disposed of on the merits in absence of real prejudice to plaintiff Colgar Enterprises, Inc. v. Giaitno, 41 AD2d 654, 340 NYS2d 573 (2d Dept. 1973). The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the following grounds: (1) excusable default; or (2) newly-discovered evidence; or (3) fraud, misrepresentation, or other misconduct of an adverse party; or (4) lack of jurisdiction to render the judgment or order; or (5) reversal, modification or vacatur of a prior judgment or order upon which it is based. See CPLR §5015(a). In addition to the grounds stated in CPLR §5015(a), a court may vacate its own order or judgment “in the interest of substantial justice.” Woodson v. Mendon Leasing Corp. 100 NY2d 62, 760 NYN2d 727 (C.A.2003). The court finds that self-represented Respondent Brown’s objections to the Interim Order, on the record, on May 4, 2021, May 27, 2021, and May 28, 2021 constitute an oral motion for relieve from the Interim Order, with due notice given to Petitioner whose counsel appeared and fully participated in each court conference. A defendant seeking to vacate a default in appearing for a compliance conference is required to demonstrate a reasonable excuse for the default and a potentially meritorious defense. See Foley Inc. v. Metropolis, 130 AD3d 680 (2″ dept. 2015). Here, the Respondent established reasonable excuse for failure to appear at the November 23, 2020 court conference scheduled for an inquest on Petitioner’s application for payment of use an occupancy because the notice of inquest and the motion papers for the default judgement were not served on Respondent. The evidence suggests that Respondent was in Florida during the time when service would have been effectuated and would not have received any court papers mailed to her apartment. Respondent also made uncontroverted allegations that Petitioner’s employees prevented her from obtaining her mail by locking her out of the premises. The court finds that Respondent lacked actual notice of the proceedings on Petitioner’s motion conducted on November 23, 2020. In absence of actual notice of the November 23, 2020 proceedings, Respondent’s failure to appear could not constitute a default as there is no failure to perform a legal duty. See Foley Inc. v. Metropolis, supra; Sposito v. Cutting, 165 AD3d 863 (2″ dept. 2018). Consequently, vacatur of default is require as a matter of law and due process without any showing of a potentially meritorious defense. Id. Nevertheless, the court finds that Respondent raised a potentially meritorious defense as to the amount of use and occupancy awarded to Petitioner in the Interim Order. The rental value of $1,900.00 per month awarded as use and occupancy is based on evidence of fair market rental value submitted by Petitioner’s expert. Respondent disputes the rental value of the $1,900.00 per month as unreasonable and disproportionate to her compensation from Petitioner of $15.50 per hour. As Respondent stated, her understanding was that the use and occupancy was of nominal rental value deducted from her pay-stub. Petitioner did not submit any evidence regarding Respondent’s pay scale in its application for use and occupancy payments. Also, the valuation method differs from the allegation in the petition, which seeks to enforce a provision in the occupancy agreement for liquidated damages at $100 per day from February 22, 2020 until entry of final judgment. Petitioner did not amend the petition to alleged use and occupancy based on the fair market rental value of the apartment and did not serve Respondent with motion papers supporting the new claim for use and occupancy based on fair market rental value. Therefore, a judgment cannot be properly awarded without notice to Respondent. P & K Marble, Inc v. Pearce, 168 Ad2 439 (2″ dept 1990); RD. Smithtown, LLC v. Lucille Roberts Figure Salons, Inc, 277 AD2d 439 (2nd dept. 2000). For reasons stated herein and in the interest of substantial justice, the Interim Order granting petitioner’s application for payment of use and occupancy is hereby vacated, without prejudice any rights of Petitioner to renew its motion. This constitutes the Decision and Order of this Court. Dated: June 16, 2021
