The Heywood Condominium by its Board of Managers v. Steven Wozencraft et al.

The Heywood Condominium by its Board of Managers v. Steven Wozencraft et al.

Supreme Court of the State of New York, Appellate Division, First Department, January 12, 2017

Plaintiff, a residential Board of Managers (the “Board”) of a condominium commenced this action against a unit owner (the “Defendant”) to foreclose on a common charge lien and moved for summary judgment and for an order appointing a receiver to collect the rent from the Defendant. Defendant cross-moved to dismiss the action for, inter alia, defective service, a fraudulently inflated lien and failure to state a cause of action.

The matter was referred to a special referee for a traverse hearing and to determine if a receiver should be appointed to collect fair market rent. The special referee concluded that the defendant was properly served and recommended the appointment of a receiver. The Board moved to confirm the referee’s report and Defendant cross-moved to reject. The lower court granted the Board’s motion and denied Defendant’s cross-motion in its entirety holding that the referee “repeatedly defined the issues and made pronouncements as to which evidence he found credible and persuasive,” and the record supported the findings.

Six months after appointment, the receiver moved pursuant to Section 221 of the Real Property Actions and Proceedings Law for a writ of assistance ejecting the Defendant from the unit for failure to pay the fair market rent for the unit. The lower court granted the receiver’s motion with a twenty day stay of the ejectment. Upon motion by Defendant, the Appellate Division granted a stay of the order pending the result of Defendant’s appeal of the lower court’s order.

On the service issue, the Appellate Division affirmed the trial court’s order holding that the special referee’s findings were sufficiently supported by the record. The Appellate Division also held that the lien was not fraudulent and that the Board was entitled to include attorneys’ fees, late fees and interest in the amount pursuant to Real Property Law (“RPL”) §339-z and the Condominium’s By-Laws.

On the issue of the receiver’s appointment and her subsequent motion for a writ of assistance for ejectment, the Appellate Division held that the appointment of a receiver was correct pursuant to RPL 339-aa and section 5.9 of the Condominium’s By-Laws and that the receiver was correct to demand the reasonable rental amount. The Court also held that the receiver was properly granted a writ of assistance since the order of appointment authorized such action and that it was unnecessary to institute a summary proceeding to obtain legal possession. The ejectment was also not unconstitutional since the defendant “failed to comply with the court’s order directing him to pay the reasonable fair market rent of $6,500.00 per month for his use and occupancy of the unit.”