NYC Tenant Attys Urge State, Courts To Prevent Default Spike

By Emma Whitford
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Law360 (October 30, 2020, 4:19 PM EDT) -- As many as 14,800 New York City heads of households that have been sued for failure to pay rent during the coronavirus pandemic could soon be at risk of losing their cases by default, a major step toward eviction that can be challenging to reverse, housing lawyers warn.

The latest of a series of executive orders that has paused default judgments for months is poised to lift on Nov. 4, and attorneys are calling for more time, concerned that the courts have not done enough to alert tenants. Once a default is issued, a tenant must take proactive steps to have their case reopened in order to avoid eviction.

"You've lost your case simply by virtue of the fact that you didn't file an answer," said Marika Dias, attorney and director of the Safety Net Project at the Urban Justice Center. "That's not irreversible, but that's not a strong position to be in. You have to show both that your case has merit and that you have an excusable reason for the default."

Under normal circumstances, tenants have 10 days to "answer" a nonpayment petition from their landlord in order to avoid defaulting. An answer is a tenant's formal response to the allegations set out in the petition, and is a prerequisite for scheduling the first hearing in their case.

But the 10-day rule has been on hold for months, and attorneys fear tenants won't know to hurry up and answer if regular civil court deadlines resume suddenly in early November. 

"No policy has been formulated on this yet," courts spokesperson Lucian Chalfen told Law360. "The best way for a tenant to ensure no default would be to try to answer the petition as soon as possible."

New York Gov. Andrew Cuomo's pause of civil court deadlines has been renewed on a monthly basis since March. But his most recent Executive Order 202.67 suggests finality, stating that "such suspension is only effective until Nov. 3, 2020, and after such date any such time limit will no longer be tolled."

The governor's office did not respond to multiple requests for comment on this decision, or whether it might be reconsidered.

Meanwhile, data from the Office of Court Administration indicates that the vast majority of tenants sued since June, when courts began accepting new filings, have not answered. 

A total of 17,388 residential nonpayment cases have been filed in New York City since June 22, according to the Office of Court Administration. Of those, only 2,585 have been answered, about 15%.

Landlord attorneys told Law360 that they doubt defaults will proceed quickly, as they might under normal circumstances, considering the court's track record during the pandemic. They also noted that court data does not account for interim deals reached outside of court. 

"There's no mechanism as far as I'm aware of even after Nov. 3 for the issuance of such judgments," said Mitchell Posilkin, general counsel for the Rent Stabilization Association, a landlord trade group. "I continue to hear that the court is short-staffed in order to social distance ... I suggest that [this is] really is of no moment. Certainly not in the short term." 

Nativ Winiarsky of Kucker Marino Winiarsky & Bittens LLP noted that the courts have instituted many pandemic-specific policies this year. For example, special hearings for tenants with pre-pandemic warrants intended to match them with lawyers.

"It is our belief at this point that the courts will be slow-walking … issuing a decision on [these default] warrants," Winiarsky said. "I don't believe residential tenants are in jeopardy of being evicted anytime this year."

But Chalfen indicated via email that these default cases may proceed on a faster track.

"What end would be served by just putting those cases aside and not doing anything with them for months," he wrote.

Ellen Davidson, a staff attorney with the Legal Aid Society, called it "astounding" that the courts haven't made a plan for Nov. 4, or updated their messaging to tenants.

Without a plan, or court notices urging tenants to answer, tenant attorneys are assuming that renters are at risk of losing their cases unwittingly. A standard default judgment is issued through a ministerial process, and doesn't require notice to the tenant.

Since June, Davidson said, the courts have required landlords to include a special notice with each petition — the paper notifying a tenant they've been sued. The all-caps notice urges tenants to call the city's office of civil justice because "you might be entitled by law to take additional days or weeks to file an answer."

"We've been talking to tenants who have called the courts and been told by the courts that they don't need to answer right now," Davidson said. "I think Cuomo should continue the toll of the statute of limitations and the courts should come up with a plan to contact the people they told not to answer."

Tenants who have been sued for nonpayment since June should also call 311 right away and ask to be connected to the tenant helpline for advice on how to proceed, Davidson added.

If tenants default and receive an eviction warrant they may be able to raise a defense under pandemic-specific federal and state-level orders, by filing a so-called order to show cause.

But assistance from a lawyer will likely be key. The process can also be alarming, as pro se tenants often learn they have defaulted when an eviction notice appears on their door.

"Resource capacity is a huge issue," said Patrick Tyrrell, a staff attorney for Mobilization for Justice. "Filing a motion to vacate a default takes a lot of time and resources."

In comments to Law360, Chalfen suggested that service organizations have a role to play in keeping tenants informed of changing guidance.

"Plans cut both ways," he said. "What is their plan? … We have been working for the past seven months to prepare amid the constantly shifting sands that make up the city's housing situation."

Davidson countered that the court should be responsible for updating its messaging.

"Right now this is mainly being discussed in the English language press and the courts seem to have delegated the responsibility to the legal services programs and to reporters to ensure that tenants learn that they can no longer rely on what the court told them," she said.

--Editing by Rebecca Flanagan.

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