Claimant, Matthew Lombardi, commenced this small claims action against the defendant, Claire Guadagno, alleging that the defendant failed to pay rent. A trial was held on January 6, 2012. Both sides appeared without counsel.

Claimant testified that he is the owner of the premises 25 Eagan Avenue, Staten Island, New York and that he entered into a written lease with the defendant dated October 15, 2010. The term of the lease was October 16, 2010 to August 31, 2011 and set a monthly rent of $2,000.00. Claimant stated that the defendant failed to pay rent beginning in May 2011. He is seeking $4,500.00 which he claims is due and owing for the period May 2011 until August 15, 2011 when the defendant vacated the premises pursuant to a warrant of eviction. Although the defendant did not vacate the house until after August 1, 2011 claimant is only seeking rent for half of that month. Claimant asserts that he applied the $1,000.00 security deposit posted by the defendant to the amount claimed due leaving a balance of $4,500.00

The testimony disclosed that in May 2011, claimant, as landlord, had commenced a summary payment proceeding in the Housing Part of this court (L & T 51555/11) alleging that the defendant, as tenant, had failed to pay rent. The court reviewed that file so as to determine if the issues raised in this litigation had been previously resolved. That proceeding resulted in a "so ordered" stipulation of settlement between the parties dated [*2]June 24, 2011 [Civil Practice Law & Rules §2104]. An examination of the terms of the stipulation discloses that the claimant-petitioner agreed to reduce the rent for May, June & July 2011 to $1,000.00 a month from the lease rate of $2,000.00. Defendant-respondent agreed to vacate the premises by July 31, 2011. In addition, the defendant agreed to pay $1,500.00 on June 24, 2011 and an additional $1,500.00 on July 5, 2011 to cover all rent due for the period May to July 31, 2011.

Defendant only made the first $1,500.00 payment. Upon the failure of the defendant-tenant to pay the second $1,500.00 payment, claimant-landlord, on July 22, 2011, filed an order to show cause alleging that the defendant was in default of the stipulation and seeking a judgment of possession and an acceleration of the issuance of the warrant.

On July 29, 2011, the Housing Judge granted claimant's application to the extent of restoring the case to the Housing Part calendar and awarding a final judgment of possession to the claimant with the warrant to be issued forthwith with the execution stayed until July 31, 2011. There is no other reference to the terms of the June 24, 2011 stipulation of settlement and whether they were still in effect or had been voided by the defendant 's default. The judgment issued on July 29, 2011 is for possession only. No money judgment was awarded.

A warrant of eviction was issued on August 2, 2011. On August 11, 2011, the defendant brought an order to show cause seeking to stay the eviction. The application was denied by the court. The claimant had initially requested a warrant on July 11, 2011 after the defendant failed to make the second $1,500.00 payment. The claimant's application was rejected by the clerk of the court because there was "no final judgment." The claimant was instructed to "file order to show cause to restore case to enter judgment." Neither party was represented by counsel at any point in the Housing Part.

Generally, when one party defaults on the terms of a stipulation of settlement, the other party may enforce the rights created by the stipulation. The terms of the agreement made on the record in court creates new rights and obligations between the parties and negates any terms of the lease which would be in conflict. The new promises made by the parties in the stipulation are consideration for each other so that the breach by one party of the new agreement does not place either of them back in the position they would have been in prior to the stipulation unless the stipulation by its terms specifically reserves those rights to either party. The parties' rights and obligations are defined in the stipulation. The terms of stipulations, especially those entered into in open court are to be enforced and not set aside absent extraordinary circumstances [Hallock v State, 64 NY2d 224 (1984); In re Rose BB, 300 AD2d 868 (2002)].

What complicates this case is that the stipulation is silent as to the rights and obligations of the parties in the event of a default. The claimant agreed to reduce the [*3]monthly rent to $1,000.00 in consideration of defendant making payment in two installments of the reduced rental rate and the vacating of the premises by July 31, 2011. When the defendant neglected to make the second $1,500.00 payment and subsequently failed to vacate as agreed, the stipulation was breached. Yet no provision was made as to what were the claimant's rights in that situation.

Common sense says that when the defendant-tenant failed to perform as agreed the prior monthly rent rate of $2,000.00 should have been reinstated as there was no consideration running to the claimant for having reduced the rent. The tenant neither paid the reduced amount nor vacated as agreed. But because the stipulation is silent, a strong argument can be made that the claimant is limited to the $1,000.00 reduced rent agreed to as claimant did nothing to provide in the agreement for what would happen in the event there was a breach by defendant.

The stipulation did not convert this non-payment proceeding to a hold-over. It did not specifically grant the claimant a judgment of possession with the warrant of eviction being issued forthwith and the execution stayed until July 31, 2011. It did not grant the claimant a money judgment nor did it reinstate the prior monthly rent as the amount of damages in the event the defendant failed to either make the payment or vacate as agreed. It did not address the issue of what was to be done with the defendant's security deposit.

As proven by the clerk's rejection of the initial request for a warrant, the stipulation did nothing other than reduce the monthly rent. Parties are bound by the terms of these agreements and the fact that there was no reservation of rights as to these issues leads to the conclusion that they were waived and subsumed into the negotiated settlement [ Hamir Realty Co. v Tesa, NYLJ 1/14/03, p.18 col. 1, 2003 WLI 39568].

The question must be asked what consideration did the claimant receive for his abandoning his right to a speedy trial on the issue of non-payment of rent? The case was originally on the Housing Part calendar on May 27, 2011 and was adjourned until June 24, 2011 "for trial." Had he had a trial even at that point and prevailed on his petition, the defendant would have had to pay the amount due by June 29, 2011 or be evicted. Instead, he entered into a stipulation which did nothing other than give the claimant $1,500.00 to which he was entitled and nothing else. In fact, it placed him in a worse position. The tenant remained in possession for a longer period of time than if the matter had been litigated, and the amount due and owing was reduced without substantially increasing claimant's ability to collect the amount due. It also kept the defendant in possession until August 2011 triggering an additional month 's rent. The fact that the claimant may have made a "bad bargain" does not permit the court to vacate the terms of the stipulation and provide the claimant with rights not reserved to him in that document.

The above being said, a review of the summary proceeding file discloses that there were defects in claimant's petition which may have required dismissal of the action had the court been required to deal with the merits of the case. For instance, the multiple dwelling [*4]status is not pleaded; the three-day notice was only served by conspicuous service-no mailing is indicated as required by the statute; likewise the notice of petition and petition appear not to have been properly served. All of these defects would have been sufficient to deprive the court of personal jurisdiction had the issue been litigated and required the claimant to recommence the proceeding. Parenthetically, the stipulation does not provide for the parties consenting to the jurisdiction of the court. It appears that the consideration claimant received was not having his cause of action dismissed and then having to commence a new summary proceeding; which in retrospect would have probably been the wiser course to follow. Entering into the stipulation negated these defects and acted as a waiver of any personal jurisdiction defenses of the defendant. This served as sufficient consideration for the agreement.

Taking all of these factors into account, they still do not create any right to enforce the agreement in a plenary small claims action.

The problems with this litigation are further compounded by the fact that the claimant brought an order to show cause when defendant failed to pay the second $1,500.00 alleging the defendant's breach of the stipulation and seeking a "final judgment" without indicating whether it was for both possession and money or either of them. This application was returnable July 29, 2011. At this point, as petitioner, he was entitled to seek both a money judgment and a judgment of possession even though neither issue was specifically resolved in the stipulation.

Yet when he appeared in court, on the return date of the order to show cause he did not seek a money judgment as was his right in this non-payment summary proceeding and neither did he affirmatively preserve his right to seek a money judgment in a plenary proceeding. He consented to a final judgment of possession only. Had he obtained a money judgment defendant would have had five days to pay the judgment, stay the issuance or execution of any warrant [Real Property Actions and Proceedings Law §747-a] and have the tenancy reinstated if payment of the money judgment was made. To follow this procedure would have given the defendant a date beyond July 31, 2011 (until August 4, 2011) in order to comply. Claimant opted instead to regain possession of the premises and to forgo either payment from the defendant or entry a money judgment.

Having had the opportunity to litigate in the Housing Part the issue of how much rent was owed and abandoning that claim without affirmatively preserving his right to collect unpaid rent, claimant is precluded from bringing a new action for the same relief in the Small Claims Part. Claimant has elected his remedy. He sought relief in the Housing Part. The fact that he did not obtain the relief he initially sought is his responsibility and cannot be revived in a new small claims action.

This litigation is just one of a substantial number of cases appearing in the Civil Court equivalent of the "Ground Hog Day" where issues unresolved in the Housing Part, [*5]primarily unpaid rent or failure to return security deposit suits, move across the hall to the Small Claims Part for adjudication. Unless this is a requirement hidden in The Small Claims's Arbitrator's Full Employment Act, the court must question why the public is being subject to a re-run of their previous court appearance.

Judgment for defendant. Claimant is barred from bringing this litigation. There is no question that the defendant owes rent. Whether it is the $4,500.00 alleged by the claimant or some other lesser amount, claimant is owed rent. Unfortunately he had his opportunity to collect in the summary proceeding and failed to do so. He elected his remedy and cannot now re-litigate the issue in another forum.

This case can serve as the "poster boy" for why all parties should be represented by competent counsel and why unidentified third parties should not be preparing stipulations of settlement for litigants.

Judgment for defendant. Claimant's cause of action is dismissed.

Exhibits, if any, will be available at the office of the clerk of the court thirty days after receipt of a copy of this decision.

The foregoing constitutes the decision and order of the court.

Dated: January 6, 2012

Staten Island, NYHON. PHILIP S. STRANIERE

Judge, Civil Court