District Court of Suffolk County, Third District, July 16, 2021

The Law Offices of Scott Gross, P.C., Westbury, for petitioner.

Burke & Burke Esqs. PC, Farmingdale, for respondent.

The decision/order on the motion is as follows:

The petitioner moves by application dated June 23, 2021, seeking to strike affirmative defenses and counterclaims detailed in the respondent's answer. The respondent cross-moves seeking summary judgment dismissing the subject petition and asserts that, at a minimum, the court is statutorily required to stay all matters until September 1, 2021.

The threshold issue advanced for disposition is whether the respondent's May 17, 2021 filing of a "Commercial Tenant Hardship Declaration" serves to unilaterally and automatically stay this summary eviction proceeding until after September 1, 2021.

The respondent argues that the "COVID-19 Emergency Protect Our Small Businesses Act of 2021," chapter 73 of the Laws of 2021 (as amended by L 2021, ch 104) (see also L 2020, ch 381, as amended by L 2021, ch 104) (hereafter COVID-19 Moratorium) as implemented by the memorandum order of the Chief Administrative Judge, dated May 24, 2021, requires no additional documentary proof to trigger its (moratorium) protection from eviction. The language of the statute provides that the submission of a declaration shall act as a temporary stay applicable to all entities. The Chief Administrative Judge's memorandum advises that for "[t]hose who submitted a hardship declaration . . . such proceedings are now stayed through August 31, 2021."^[FN*] (Mem of Chief Admin Judge of Cts, Residential and Commercial Eviction Proceedings under the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 and Commercial Eviction Proceedings under the COVID-19 Protect our Small Businesses Act of 2021 [B] [3] [May 24,{**72 Misc 3d at 1050} 2021].) The statute and order also provide that the hardship declaration shall serve as prima facie evidence establishing a rebuttable presumption that a commercial tenant is experiencing financial hardship due to COVID-19.

At first blush it appears that the creation of a "rebuttable presumption" implies that the petitioner landlord will be given an opportunity to rebut the declaration of hardship. The respondent's counterargument is that this hearing can only occur after the stay period has expired. (See id. [B] [4] [b].) Such a conclusion, which grants the respondent the ability to unilaterally obtain a stay without an adversary's ability to challenge same, violates "[t]he fundamental requisite of due process of law [which requires] the opportunity to be heard." (Mullane v Central Hanover Bank & Trust Co., 339 US 306, 314 [1950].)

This situation begs the question of what was the scope of the state legislature's intent in bending the Constitution's 14th Amendment requirement and temporarily denying landlords an opportunity to be heard. A reading of the COVID-19 statute and its proscribed notice reveals that it is meant to protect "tenants," "tenancies" and "leaseholders," who are person(s) responsible for paying rent; not the entire universe of non-owner persons occupying real property. Specifically [*2]excluded from this protected class are "licensees" such as non rent paying family members, "occupants at sufferance" such as post foreclosure holdovers, live-in home heath care assistants as well as assorted classes of squatters. What redress do landlords have if these classes of occupants wrongfully and unilaterally declare hardship?

It is a universal principle in the interpretation of New York's statutes that the specific mention of one person or thing implies the exclusion of other persons or things. (McKinney's Cons Laws of NY, Book 1, Statutes § 240; see generally Matter of Bonnaffe, 23 NY 169 [1861]; P.B. v L.B., 19 Misc 3d 186 [Sup Ct, Richmond County 2008].) Utilizing this logic, the legislature would have used the wording "all" occupants, and not designated a subclass "tenants" if it intended an automatic stay of all summary proceedings to deal with the COVID-19 pandemic. Inferentially, it had to be the legislature's intent to provide hearings for landlords to raise "standing issues" and that the moratorium is not automatic. Utilizing a similar argument, New York law requires this court to construe its statutes in such a manner so as to avoid constitutional impairment. (See generally People v Liberta, 64 NY2d 152 [1984]; see also Collado{**72 Misc 3d at 1051}v Boklari, 27 Misc 3d 161 [Suffolk Dist Ct 2009].) The court notes that the COVID-19 statute expressly provides for a hearing for "nuisance" tenants, for residential hardship cases. By simply construing the statute to allow for all "standing" challenges to all hardship declarations, the COVID-19 statute avoids any constitutional due process invalidity.

The court notes that several courts have declined to follow the administrative policy of automatically adjourning cases where a hardship declaration is filed. A Westchester court found that a landlord in a residential eviction proceeding is entitled to a hearing to challenge an occupant's claim of financial hardship but is precluded from a hearing if the occupant asserts a "significant health risk." (Piscionere v Gori, 2021 NY Slip Op 30096[U] [Rye City Ct 2021].) The Supreme Court in Ulster County determined in a commercial foreclosure proceeding that the companion language in the COVID-19 Moratorium statute which pertains to foreclosures allows for a standing hearing to challenge the merit of a hardship declaration. (Southern Acquisition Co. LLC v TNT, LLC, 71 Misc 3d 1002 [Sup Ct, Ulster County 2021].)

In the case at bar, the landlord has raised a challenge to the existence of financial hardship and also asserts the undisputed fact that the occupant is a tenant who New York State no longer recognizes as being in existence. A corporation's legal existence terminates upon dissolution, and as such, is prohibited from carrying on new business. (20B Carmody-Wait 2d § 121:579, citing Business Corporation Law §§ 1005-1006; Calabrese Bakeries, Inc. v Rockland Bakery, Inc., 102 AD3d 1033 [3d Dept 2013].) This is by virtue of the fact that the corporation was dissolved by the Secretary of State on August 31, 2016, which was its condition on the eviction petition date on August 20, 2020. The COVID-19 Moratorium statute and its predicate declaration of hardship expressly make the declarant state "[m]y business is resident in New York state." (L 2021, ch 73, § 3, part A, § 1 [4], as amended by L 2021, ch 104, § 14.) Clearly, this is a false statement as New York does not recognize its existence. These facts constitute a sufficient basis to conduct a COVID-19 Moratorium "standing" hearing, which will be held August 5, 2021, at 10:30 a.m. before this court. Upon a finding of a lack of standing to assert the COVID-19 Moratorium, the court will immediately proceed to trial for disposition of the within petition and answer.