NO. 2004-1275 K C






Motion by tenant-appellant for a stay of execution of the warrant pending appeal granted to the extent of staying execution of the warrant for 10 days from the date of the order hereon with leave to tenant to renew her application to vacate the default final judgment in the court below.

In this nonpayment proceeding, a final judgment of possession was entered in favor of landlord on March 2, 2004 upon tenant's failure to answer. Tenant moved by order to show cause dated March 12, 2004 to vacate the default judgment, asserting that she lacked notice of the proceeding and that the transfer of title to landlord was done illegally. By order dated March 31, 2004, the Civil Court (D. Waltrous, J.) set the matter down for a traverse hearing. Following the hearing, the court (B. Scheckowitz, J.) found, in an order dated May 12, 2004, that service was effectuated by conspicuous-place service and referred the matter back for determination of the balance of tenant's motion. By further order dated May 12, 2004, the court (B. Kramer, J.) stayed execution of the warrant until May 24, 2004 for tenant to seek a stay from the Supreme Court. On May 24, 2004, the Supreme Court (L. Ruchelsman, J.) refused to sign an order to show cause submitted by tenant seeking a stay of the eviction, but the application was subsequently signed on June 9, 2004 by the Appellate Division pursuant to CPLR 5704 (a). By order dated July 14, 2004, the Supreme Court (I. Harkavy, J.), granted tenant 's motion for a stay of eviction only to the extent of staying the execution of the warrant for 15 days for tenant to move in the Housing Court for a hearing on the merits. Thereafter, tenant submitted two applications for orders to show cause to the Housing Court, but both were refused. Tenant also filed a notice of appeal from Judge Kramer's order of May 12, 2004 and now seeks a stay pending determination of that appeal. In support of her application, tenant asserts that she is the former owner of the subject house; that a mortgage foreclosure action was commenced after she fell behind on her mortgage payments; that she was contacted by an attorney named Tina Fellows, who told her that she could assist her in obtaining refinancing; that Fellows introduced her to Scott Sims, a petitioner herein, who identified himself as a banker working for Southern Star Mortgage Company, 54 Willis Avenue, Mineola, the same address that Fellows uses; that she paid Sims a fee of $970 to cover the cost of the mortgage application and appraisal; that she was informed by Fellows and Sims that DNC Mortgage Company had approved her mortgage application; that she went with Sims to a closing, which was also attended by Fellows, and was there told by Sims that he was providing her with an attorney named Richard Cantor (or Canter); and that she signed the documents as directed by Cantor. She was not given copies of the documents or a closing statement. The documents turned out to be not a refinance but a sale to petitioner Skopicki, who is Fellows ' mother, and a lease back.

In opposition to tenant's motion for a stay pending appeal, landlord's attorney claims, inter alia, that tenant is a master gamesman who has used every trick to continue her "shameful" occupancy; that tenant has been living at the expense of others for years; that tenant received consideration for the sale of the house in that her mortgages were satisfied and she was given a lease back at a fair rental and an opportunity to re-acquire the premises; and that the mortgage debt which landlords incurred in purchasing the house and carrying costs are roughly equal to the rent which tenant is supposed to pay.

While the Housing Court has determined that conspicuous-place service was effectuated, the alternative relief sought in tenant's motion to vacate the default final judgment, i.e., vacatur of the judgment based on a showing of an excuse for the default and a meritorious defense, was either not disposed of or was denied without being considered. The court's failure to dispose of this issue presents an arguably meritorious appeal warranting the granting of a stay pending appeal (Ananda Capital Partners v Stav Elec. Sys., 301 AD2d 430 [2003]; Brooklyn Props. v Shade, 4 Misc 3d 29 [App Term, 2d & 11th Jud Dists 2004]). With respect to the issue of meritorious defense, we note that tenant has raised serious and troubling questions regarding the legitimacy of the deed to landlord and of the lease back. Although complete relief upon these claims, which would here include setting aside the deed and the lease, can only be had in the Supreme Court (Lex 33 Assoc. v Grasso, 283 AD2d 272 [2001]), these claims nevertheless constitute an equitable defense to this proceeding (RPAPL 743; Murphy v Baldari, 2003 NY Slip Op 50754 [U] [App Term, 2d & 11th Jud Dists] [Civil Court must hear any legal or equitable defense which overcomes the assertion of title]; Nissequogue Boat Club v State of New York, 9 AD3d 454 [2004] [claim of adverse possession properly interposed as defense in summary proceeding]; Cobert Constr. Corp. v Bassett, 109 Misc 2d 119, 121 [1981] ["any equitable defense offered by the tenant to show that landlord is not entitled to possession must be considered"). However, a stay pending appeal would merely delay a hearing on the merits. Since a prompt resolution of this matter is to be desired, we stay the execution of the warrant for only 10 days with leave to tenant to move to renew her motion, in the court below, to vacate the default final judgment based on excusable default and meritorious defense.