WHEN ARE CHRONIC LATE PAYMENTS A SUBSTANTIAL DEFAULT

A rent regulated apartment in New York is a valuable asset mainly because of the rights of renewal and limits on rent increases. But this asset can be lost due to constant late payments.

Lincoln 64 Flats LLC v. Stranahan,  Date filed: 2019-02-25 Court: Civil Court, Kings, Judge: Judge Marc Finkelstein, Case Number: 71779/18:

"The standard to sustain a chronic late payment eviction proceeding is as follows:

A history of repeated nonpayment proceedings brought to collect chronically late rental payments supports an eviction proceeding on the ground that the tenant has violated a ‘substantial obligation’ of the tenancy (see, Sharp v. Norwood, 89 NY2d 1068; 9 NYCRR 2524, 3 [a]).

Adam’s Tower, Ltd. Partnership v. Richter, 186 Misc 2d 620 (App Term, 1st Dept).

In order to prevail in a chronic nonpayment of rent case commenced as a violation of a substantial obligation of the tenancy, petitioner must prove that “it was required to commence frequent nonpayment proceedings in a relatively short period of time.” 601 West Realty LLC v. Chapa, 2003 NY Slip Op 51253(U) (Civ Ct, NY County). See e.g., Adam’s Tower, supra (nine nonpayment proceedings in three years); Pamela Equities Corp. v. Coverton, NYLJ, July 18, 1990, p 18, col 1 (App Term, 1st Dept) [seven nonpayment proceedings in two years]; Chelsea 19 Assoc v. Minetti, NYLJ, October 27, 1986, p 13, col 6 (App Term, 1st Dept) [five nonpayment proceedings in two years]; 2564 Co. v. D’Addario, 35 Misc 2d 176 (App Term, 1st Dept 1961) [eleven nonpayment proceedings in one and a half years]; 25th Realty Associates v. Griggs, 150 AD2d 155 (1st Dept 1989) [eleven nonpayment proceedings in six years]. See also, PWV Acquisition, LLC v. Maddox, 2005 NY Slip Op 50955(U) (App Term, 1st Dept).

However, when evaluating whether a landlord has established a prima facie case of unjustified rent defaults on the part of the tenant, those nonpayment proceedings that were “not pursued” should not be “charged against” the tenant. 31-67 Astoria Corp v. Cabezas, 2017 N.Y. Misc. LEXIS 1160, 2017 NY Slip OP 50432(U) (App Term, 2d Dept 2017). See also, Chama Holding Corp v. Taylor, 2012 N.Y. Misc. LEXIS 4347, 2012 NY Slip OP 22255 (App Term, 1st Dept 2012). Here, the case summary sheet for Index No. 85101/15, annexed as Exhibit I, clearly indicates that this proceeding was not pursued by the landlord. The petition was filed on August 24, 2015 and nothing at all occurred in the case until July 13, 2018 when it was administratively dismissed. Therefore the 2015 proceeding is not charged against respondent. As to the remaining two 2017 proceedings respondent argues they should not be charged against respondent because although petitioner admittedly obtained a default possessory judgment and a warrant of eviction in both cases, petitioner did not pursue the cases thereafter. This argument is not correct. The court finds that a landlord not taking action to further proceed to eviction after obtaining a default judgment and warrant of eviction is not what 31-67 Astoria Corp and Chama Holding Corp mean in holding that a case not pursued by a landlord is not to be charged against the tenant. As opposed to the 2015 proceeding, petitioner did pursue the 2017 proceedings to the point of judgment and warrant.

However, what is left are only two nonpayment proceedings to support petitioner’s claim of chronic rent delinquency. The court finds that under the standard set forth in Adam’s Tower. Ltd. Partnership v. Richter, supra, only two nonpayment proceedings during respondent’s nine year tenancy do not constitute “a history of repeated nonpayment proceedings brought to collect chronically late rental payments so as to support an eviction proceeding on the ground that the tenant has violated a substantial obligation of the tenancy.” Other decisions holding that the commencement of two remaining nonpayment proceedings fails to establish a pattern of unjustified rent defaults on the tenant’s part to constitute a violation of a substantial obligation of the tenancy include: Chama holding Corp v. Taylor, supra; Hudson St. Equities v. Circhi, 2005 N.Y. Misc. LEXIS 2410, 2005 NY Slip Op 51764(U) (App Term, 1t Dept 2005); Eva Stern 500 Llc v. Streat, 2018 NYLJ LEXIS 2765 (Civ Ct, Kings County); 3424 Dekalb Assocs v. Pabon, 2019 NYLJ LEXIS 383 (Civ Ct, Bronx County)."

UNEMPLOYMENT INSURANCE - MISCONDUCT

On the other hand, researching the recent decisions of the Appellate Division, 3rd Department (which is where all appeals from the Appeals Board goes to), it appears that the Court is quite strict with the issue of repeated lateness - here's a sample case and note that it was decided almost a year and a half after the Appeals Board denied the claim:

IN THE MATTER OF THE CLAIM OF DIANE ARMELLINO, Appellant v.

COMMISSIONER OF LABOR, Respondent.

507342.

Appellate Division of the Supreme Court of New York, Third Department.

Calendar Date: November 4, 2009.

Decided and Entered: January 14, 2010.

Appeal from a decision of the Unemployment Insurance Appeal Board, filed August 21, 2008, which ruled that claimant was disqualified from receiving unemployment insurance benefits because heremployment was terminated due to misconduct.

Diane Armellino, New York City, for appellant.

Andrew M. Cuomo, Attorney General, New York City (Linda D. Joseph of counsel), for respondent.

Before: Mercure, J.P., Spain, Lahtinen, Malone Jr. and Garry, JJ.

MEMORANDUM AND ORDER

Claimant was employed as an administrative assistant at a fence and ironworks installation company starting in July 2006. On July 25, 2007, despite prior warnings concerning her tardiness and absenteeism, claimant failed to report to work. As a result,claimant's employment was terminated. The Unemployment Insurance Appeal Board ultimately disqualified her from receiving unemployment insurance benefits on the ground that her continued absences constituted misconduct. Claimant now appeals.

Substantial evidence supports the Board's decision finding that claimant was discharged from her employment due to disqualifying misconduct. "It is well settled that continued absenteeism and tardiness despite previous warnings can constitute
disqualifying misconduct" (Matter of Schnabel [Commissioner of Labor], 307 AD2d 572, 572 [2003] [citations omitted]). Here, the employer's representatives testified that claimant had been warned several times prior to July 25, 2007 about her poor attendance and punctuality. Claimant, while not contesting that she had been absent
from work numerous times, gave conflicting testimony that she had never been warned of the consequences of her continued absences,which created a credibility issue for the Board to resolve (see Matter of Alexander [City Univ. of N.Y. — Commissioner of
Labor], 7 AD3d 860, 861 [2004]).

Mercure, J.P., Spain, Lahtinen, Malone Jr. and Garry, JJ., concur.

ORDERED that the decision is affirmed, without costs.

UNEMPLOYMENT INSURANCE - MISCONDUCT

Repeated lateness - usually disqualifying conduct. But I have a hearing coming up tomorrow where the following case may be of help:

"NEW YORK STATE DEPARTMENT OF LABOR
UNEMPLOYMENT INSURANCE DIVISION
ADJUDICATION SERVICES OFFICE

March 24, 1989

Tardiness caused by a transportation delay on claimant’s last day of work is not misconduct when claimant had followed the employer’s prior advice to leave home at an earlier hour to overcome these delays, but was nevertheless unavoidably late.

A.B. 390,570

FINDINGS OF FACT: The claimant was employed as a trimmer in a handbag factory for approximately two and a half years until April 18, 1988. She was scheduled to start work at 8:00 A.M. During the last months of her employment, claimant was warned about her tardiness. All of the latenesses were due to transit delays. After being advised by her employer to leave earlier in the morning in order to arrive on time, the claimant did so. She allowed an hour and a half to one and ¾ hours for travel time. On her last day of work, the claimant came in approximately nine minutes late. This was caused (by) a fifteen-minute verified delay of the train claimant took to work. The train also skipped the station at which claimant needed to alight in order to go to her job site. If there were not a transit delay, she would have arrived at her place of employment at the time scheduled for her to start work. Her employer discharged the claimant because of her pattern of lateness.

OPINION: The credible evidence now before the Board establishes that the claimant was approximately nine minutes late to work on April 18, 1988, because of a subway delay. After being warned by her employer about her tardiness and after receiving the employer’s advice to leave home at an earlier hour in order to overcome transit delays, claimant allowed more time for travel. Claimant’s lateness on her last day of work because of a transit delay, together with the train skipping her station, in spite of her efforts to get to work on time, was beyond her control, nor foreseeable by her. The fact that the employer chose to discharge this employee after a certain number of latenesses, does not require the conclusion that she committed an act of misconduct in relation to her employment (A.B. 360,930; A.B. 357,414; A.B. 346,580; A.B. 331,918). Accordingly, we conclude that claimant lost her employment under non-disqualifying conditions.

DECISION: The initial determination of the local office is sustained. The employer’s objection is overruled. The decision of the administrative law judge is reversed."