Appeal from an order of the Civil Court of the City of New York, Richmond County (Marina Mundy, J.), entered June 15, 2006. The order denied tenant Naomi Hunter's motion to vacate a stipulation of settlement and the final judgment entered pursuant thereto.

Order reversed without costs, tenant Naomi Hunter's motion to vacate the stipulation and final judgment granted, and matter remanded to the court below for all further proceedings.

In this nonpayment proceeding, landlord seeks a possessory judgment and over $11,000 in back rent, costs and fees, listed in the petition and three-day notice as dating from November 2004 through February 2006. Tenant Naomi Hunter, appearing pro se, entered into a stipulation of settlement with landlord, agreeing that landlord would have a possessory final judgment for a total of $11,309.62. She thereafter obtained counsel and moved to vacate the stipulation on the ground that it was improvidently entered into in that she had inadvisably waived the defenses of statute of limitations and laches as to a portion of the arrears sought. In particular, tenant claimed that she had received no notice of any arrears since 1999, and it was clear from her moving papers that, unless she were able to obtain assistance from the Department of Social Services, she would be unable to pay the judgment. The court below denied the motion (except that, for reasons not here relevant, the final judgment was reduced, on landlord's consent, to $10,713.98), and this appeal ensued. [*2]

The court has control over stipulations, and the power to relieve a party from the terms thereof, and it should exercise such power where it appears that the stipulation was entered into inadvisably or that it would be inequitable to hold the parties to the stipulation (Matter of Frutiger, 29 NY2d 143, 149-150 [1971]; Cabbad v Melendez, 81 AD2d 626 [1981]). Here, there is no merit in tenant's assertion that a portion of the monetary claim is barred by the six-year contract statute of limitations. A review of landlord's records, submitted by tenant upon her motion to vacate the stipulation, shows that tenant's payments were applied to the oldest outstanding amounts due, which is proper in the absence of an agreement or specification to the contrary (see e.g. Hughes v Wagner, 4 AD2d 980 [1957]; cf. L & T E. 22 Realty Co. v Earle, 192 Misc 2d 75 [App Term, 2d & 11th Jud Dists 2002]). The records reflect that landlord is seeking rent for a period of approximately two years prior to the commencement of the proceeding, well within the statute of limitations for breach of contract.

However, upon this motion, tenant made a sufficient showing of prejudice arising from landlord's delay in instituting the instant proceeding. As noted, tenant asserted that she had no notice of any arrears since 1999, and she made it clear that she would be unable to pay the arrears without the assistance of the Department of Social Services. Because a meritorious and substantial laches defense has been shown to exist (see e.g. 1560-80 Pelham Parkway Assoc. v Errico, 177 Misc 2d 947 [App Term, 1st Dept 1998]; see also Haberman v Singer, 3 AD3d 188 [2004]), the stipulation of settlement was improvidently entered into, and tenant's motion to vacate the stipulation and the final judgment entered pursuant thereto should have been granted (see Cabbad v Melendez, 81 AD2d 626, supra; D'Alesso v Haggins, 9 Misc 3d 138[A], 2005 NY Slip Op 51799[U] [App Term, 2d & 11th Jud Dists]; Floral Assoc. v Piehl, NYLJ, July 12, 1994 [App Term, 2d & 11th Jud Dists]; 144 Woodruff Corp. v Lacrete, 154 Misc 2d 301 [Civ Ct, Kings County 1992]).

Accordingly, tenant Naomi Hunter's motion is granted, the stipulation of settlement and final judgment are vacated, and the matter remanded for all further proceedings.

Pesce, P.J., and Belen, J., concur.

Weston Patterson, J., dissents in a separate memorandum.

Weston Patterson, J., dissents and votes to affirm the order in the following memorandum:

"Stipulations of settlement are favored by the courts and not lightly cast aside" (Hallock v State of New York, 64 NY2d 224, 230 [1984] [citations omitted]). "Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation" (id.). Because I find no basis to vacate the so-ordered stipulation at issue herein, I respectfully dissent.

Tenant negotiated a binding stipulation wherein she agreed to a final judgment in the sum of $11,309.62. The stipulation gave tenant credit for all the sums that she had paid and provided her with a month in which to pay the judgment amount. Only after defaulting under the terms of the stipulation did tenant obtain counsel and move to set the stipulation aside, alleging that she was "surprised" when she received landlord's demand for over $13,000 in arrears and that she did not understand the terms of the stipulation and believed that she had to sign it. [*3]

Here, tenant failed to show that she was the victim of any unfair bargaining or that there was fraud, collusion, accident or mistake. To the contrary, the record shows that the tenant entered into the stipulation freely and knowingly in open court and that the amount agreed to was in fact owed. To unravel a stipulation of settlement under these circumstances would have a chilling effect upon future litigants entering into such settlements and, indeed, would render them meaningless. While the Court is sympathetic to this self-representing litigant, it must be mindful of its role to administer justice fairly and evenly and cannot ignore the basic tenets of the law.

Tenant also claimed that the statute of limitations barred the maintenance of the proceeding. However, the petition sought arrears only from April 2004, well within the statute of limitations.
Decision Date: October 22, 2007