JUDICIAL REVIEW VOIDS ATTORNEY STIPULATION

88 AVE. REALTY DE LLC v. Castro, 2022 NY Slip Op 22168 - NY: City Court, Civil Court 2022:

"Judicial discretion to decline to approve a stipulation is within the fundamental powers of the judiciary.^[2] A stipulation cannot go beyond the subject matter jurisdiction of the Housing Court as provided in New York City Civil Court Act §110.

When a "two attorney stipulation" is presented to the Housing Court is that the end of the inquiry? Does it mean that the Housing Court must approve a stipulation because it's a "two attorney stipulation?" Is the Housing Court expected to act as a rubber stamp? Should the Housing Court accept and approve an admission of a penal law without regard to the rights of the accused under the Constitution of the United States and the laws of the State of New York? If it did so, does that mean that a respondent can now be treated as a defendant and the Housing Court should engage in allocution of a guilty plea? What does a guilty plea or admission of the penal law mean when accomplished through the Housing Court? Can such a guilty plea result in the eventual sentence and incarceration of the respondent? Does this mean that Housing Court is a place where litigators can bypass the protocol of entering a guilty plea under the penal law?

Courts are aware that protocols must be followed upon entering a guilty plea. A plea agreement under the penal law must be approved by the court. People v. Harris, 61 NY2d 9 (1983); People v Pellegrino, 26 NY3d 1063 (2015). The trial judge accepting a guilty plea has the vital responsibility to make sure that the accused has full understanding of what the plea means and its consequences. Waiver of a guilty plea allocution would be contrary to public policy. Most recently on April 20, 2022, in People v. Mothersell, 2022 NY Slip Op 02661, the Appellate Division wrote, "A trial court is constitutionally required to ensure that a defendant, before entering a guilty plea, has a full understanding of what the plea entails and its consequences" citing (People v Belliard, 20 NY3d 381, [2013]; People v Streber, 145 AD3d 1531, 1532, [4th Dept 2016]). See also, Riverside Syndicate, Inc. v. Munroe, 10 NY3d 18 (2008), finding that a stipulation waiving Rent Stabilization cannot be enforced as it is contrary to public policy.

As the stipulation contains paragraphs and admissions which are potentially incompatible with the Constitution of the United States and the State of New York, the Court declines to approve the stipulation. The stipulation that was filed cannot be accepted by the Court. Nor can the Court deconstruct the stipulation and parse out parts that are proper or improper.

The Housing Court is not authorized to hear allegations under the penal law that would require proof beyond a reasonable doubt. This allegation is simply beyond the jurisdictional mandates of the Housing Court.

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[2] Both in the Federal and State Courts, judicial review to disallow agreements which are not authorized by law has been affirmed and approved by the appellate courts. See, In re Purdue Pharma, L.P., 635 B.R. 26 (U.S.D.C., Southern District Dec. 16, 2021) appeal pending U.S. Court of Appeals 2nd Circuit; Wright v. Brockett, 150 Misc 2d 1031 (Sup. Ct 1991); See also, Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (U.S.C. A. 2nd Circuit August 7, 2015.)"

CONTRACTS IN VIOLATION OF STATUTE STILL ENFORCEABLE?

In Grape Solutions, Inc. v. Majestic Wines, Inc., 2015 NY Slip Op. 30770(U) (NY Sup. Ct. May 11, 2015), the court held that in an action for breach of contract, the contract may be enforced even though the contract may have violated a New York statute:

""Contracts which violate statutory provisions are, as a general rule, unenforceable on public policy grounds where the statute which is violated is enacted to protect the public health and safety." Eber Bros. Wine & Liquor Corp. v Rare Spirits, Inc., 21 Misc3d 201, 208 (Sup Ct, Monroe County 2008); Rosasco Creameries v Cohen, 276 NY 274, 278 (1937). However, `"[i]f the statute does not provide expressly that its violation will deprive the parties of their right to sue on the contract, and the denial of relief is wholly out of proportion to the requirements of public policy . . . the right to recover will not be denied.'" Benjamin v Koeppel, 85 NY2d 549, 553 (1995), quoting Rosasco Creameries, 276 NY at 278. Courts generally enforce the contract "where there are [other] regulatory sanctions and statutory penalties in place to redress violations of the law." Lloyd Capital Corp. v Pat Henchar, Inc., 80 NY2d 124, 127 (1992).

"To constitute a valid defense to an action on a contract, the alleged illegality must be `central to or a dominant part of the plaintiff's whole course of conduct in performance of the contract.'" FCI Grp., Inc. v City of New York, 54 AD3d 171, 177 (1st Dept 2008), quoting McConnell v Commonwealth Pictures Corp., 7 NY2d 465, 471 (1960). The illegality defense is inapplicable where it would result in a substantial forfeiture to one party while allowing the other party, who has already reaped the benefit of the transaction, to avoid the corresponding obligation. Murray Walter, Inc. v Sarkisian Bros., 107 AD2d 173, 178 (3d Dept 1985). "This is particularly true where the two parties are equally culpable with respect to the illegal conduct." Unger v Leviton, 5 Misc3d 925, 929 (Sup Ct, Nassau County 2004). Forfeitures by operation of law are disfavored where the party who is alleged to have breached the contract is attempting to improperly use public policy "`as a sword for personal gain rather than a shield for the public good.'" Charlebois v J.M. Weller Associates, Inc., 72 NY2d 587, 595 (1988). Thus, once the party seeking such enforcement has performed his obligations, "the court should consider the quality of the illegality, the extent of public harm, the relative guilt of the parties, and the cruelty of the forfeiture involved in a denial of remedy." Murray Walter, Inc., 107 AD2d at 177."

This case is also discussed at http://www.schlamstone.com/court-enforces-contract-that-violates-statute/