Can the Court vacate a Housing Court Stipulation of Settlement that was made by a tenant Without the Assistance of Counsel?

 

  1. If a tenant or occupant of a premises appears in Housing Court in response to a Non-payment or Holdover Petition and enters into a Stipulation of Settlement to vacate, and later realizes that compliance with the Stipulation is impossible, can they seek that the Court vacate and essentially nullify the Stipulation?

  2. In Order to obtain this relief, the tenant/occupant would need to return to Court with an Order to Show Cause requesting the vacatur of the Stipulation and the restoration of the case to the Court’s calendar. Whether the Stipulation is vacated is at the discretion of the presiding Judge.

  3. A court may vacate its own judgment for sufficient reason and in the interests of substantial justice (see Ladd v. Stevenson, 112 N.Y. 325, 332, 19 N.E. 842 (1889); see generally 10 Weinstein–Korn–Miller, N.Y. Civ. Prac. 5015.01, at 50–299; 5015.12, at 50–338 [2002]).

  4. In 270 Glenmore Ave LLC v. Blondet, 55 Misc3d 133(A), 55 NYS3d 695 (Table) (App. Term 2nd Dept. 2017), the Appellate Term reversed the lower court and vacated a Stipulation of Settlement of the Housing Court action on the following grounds:

    “Upon a review of the record, we find that the branch of tenant’s motion seeking to vacate the stipulation of settlement, final judgment and warrant should have been granted, as the stipulation was entered into inadvisedly (see Matter of Frutiger, 29 N.Y.2d 143, 150 [1971]; Weitz v. Murphy, 241 A.D.2d 547 [1997]; 1420 Concourse Corp. v. Cruz, 135 A.D.2d 371, 373 [1987]; Park Props. Assoc., L.P. v. Williams, 38 Misc.3d 35, 37 [App Term, 2d Dept, 9th & 10th Ju Dists 2012]). In her affidavit, made upon personal knowledge, in support of her motion, tenant showed that when she had moved into the building three years earlier, someone had been living in the first-floor apartment that landlord claims is a commercial space, and that she had observed a bathroom with a shower, and a kitchen with a regular stove in that apartment. These assertions were sufficient to make a prima facie showing that, contrary to the allegations of the petition, tenant’s apartment was rent stabilized as a result of the building having contained six residential units (see Joe Lebnan, LLC v. Oliva, 39 Misc.3d 31 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013] ). Under the circumstances, tenant established a proper basis to vacate the stipulation, the final judgment and the warrant (see 1796 Nostrand Ave., LLC v. Gabriel, 47 Misc.3d 141[A], 2015 N.Y. Slip Op 50618[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015] ).”

  5. In Sampson Management LLC v. Cordero, 62 Misc3d 129(A), 112 NYS3d 422 (App. Term 2018), the Appellate Court ruled that:

    “While a stipulation of settlement is essentially a contract and will not be lightly set aside absent proof that the stipulation was tainted by fraud, collusion, mistake or other ground sufficient to invalidate a contract (see Hallock v. State of New York, 64 NY2d 224, 230 [1984]; Matter of Frutiger, 29 NY2d 143, 149-150 [1971] ), courts possess the discretionary authority to relieve parties from the consequences of a stipulation “if it appears that the stipulation was entered into inadvisedly or that it would be inequitable to hold the parties to it” (Matter of Frutiger, 29 NY2d at 150 [internal quotation marks and citation omitted]; accord 1420 Concourse Corp. v. Cruz, 135 AD2d 371, 373 [1987]; see Weitz v. Murphy, 241 AD2d 547, 548 [1997]; Park Props. Assoc., L.P. v. Williams, 38 Misc 3d 35, 37 [App Term, 2d Dept, 9th & 10th Jud Dists 2012] ).
    Upon a review of the record, we find that the stipulation was entered into inadvisedly, as appellant submitted documentary evidence showing prima facie that the rent agreed to in the stipulation was an illegal rent, and plaintiff’s opposition papers failed to rebut this showing (see 443-445 Jefferson Ave., LLC v. Severin, 55 Misc 3d 140[A], 2017 NY Slip Op 50565[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; 2701 Grand Assn. LLC v. Morel, 50 Misc 3d 139[A], 2016 NY Slip Op 50163[U] [App Term, 1st Dept 2016]; Clermont York Assoc. LLC v. Zgodny, 42 Misc 3d 143[A], 2014 NY Slip Op 50257[U] [App Term, 1st Dept 2014] ).           

    20. Similarly, in 2247 Webster Ave. HDFC v.  Galarce, 62 Misc3d 1036,     90 NYS3d 872 (NYC Civil CT. 2019), the Court held that:

    “However, courts maintain the discretionary power to relieve a party of an agreement “if it appears that the stipulation was entered into inadvisedly” or will “take the case out of the due and ordinary course of proceeding in the action, and in so doing may work to [its] prejudice.” (In re Frutiger’s Estate, 29 N.Y.2d 143, 150, 324 N.Y.S.2d 36, 272 N.E.2d 543 [1971] [internal quotation marks and citations omitted].) “The discretion of a court is not that closely confined [to the grounds commonly cited]” and an unjust stipulation should be vacated when the parties may be returned to their former status. (Solack Estates, Inc. v. Goodman, 102 Misc.2d 504, 506, 425 N.Y.S.2d 906 [App. Term, 1st Dept. 1979], affd, 78 AD2d 512, 432 NYS2d 3 (1980).

  6. In considering whether to vacate a Stipulation of Settlement, the Court will consider a number of factors, including, but not limited to the following: (a) the legal knowledge, experience or training of the Tenant; (b) the mental and physical state of the Tenant at the time the Stipulation of Settlement was signed, (c) whether the Tenant  received any benefit or consideration by signing  the Stipulation, such as cash in exchange for a promise to vacate by a certain date or a waiver of rent arrears, (d) the terms of the Stipulation and particularly, whether the Stipulation is inequitable and unreasonable. For example, if a Tenant signs a Stipulation agreeing to vacate a premises on the first court date in a very short period of time under the threat of eviction and homelessness, without counsel, the Stipulation may be vacated.

  7. In conclusion, the Court will look at the totality of the circumstances when determining whether a Stipulation of settlement should be vacated.