In February the novel Covid-19 virus began spreading in the greater New York City area. In response to the spread of this infectious virus the Governor of New York State, Andrew Cuomo, declared New York to be in a state of emergency on March 7, 2020. In accordance with the state of emergency Governor Cuomo has issued a “pause” on all non-essential business in New York State. https://www.nbcnewyork.com/news/local/our-9-11-moment-new-york-braces-as-nations-top-doctor-warns-saddest-week-ahead/2361336/.
Governor Cuomo decided that a “pause” was the best option for the health of New Yorkers. Research showed that limiting social interactions between individuals would hinder the spread of the virus and therefore it was recommended that everyone should be practicing “social distancing” by staying home whenever possible and maintaining a distance of at least six feet between yourself and anyone you do not live with when you are outside of your home. As a part of the “pause”, Governor Cuomo stated on March 20, 2020 that “we are all in quarantine.” https://www.nbcnewyork.com/news/coronavirus/nyc-hospitals-weeks-from-running-out-of-supplies-as-death-toll-soars/2335762/. As a result, many New Yorkers found themselves without a source of income while faced with their routine expenses like rent, food, and utilities. The stress that Covid-19 has put on New York, the United States, and the World is unprecedented and accordingly New York State and the Federal Government have both taken action to mitigate the harm by pausing the legal system.
NEW YORK STATE
In response to the struggle that New York residents are facing, Governor Cuomo issued an Executive Order on March 20, 2020 directing that there be a temporary halt on all foreclosures and evictions in New York: “there shall be no enforcement of either an eviction of any tenant residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days.” See, Executive Order 202.8, https://www.governor.ny.gov/news/no-2028-continuing-temporary-suspension-and-modification-laws-relating-disaster-emergency. This should effectively stay (stop) foreclosure actions in the New York Supreme Court (state courts) until June 18, 2020. The Executive Order also tolled (froze) the Statute of Limitations to take certain legal action. Governor Cuomo extended the “pause” for an additional two weeks, however, this appears to apply to matters other than foreclosure and evictions since those type of actions were already stayed for 90 days. https://www.governor.ny.gov/news/amid-ongoing-covid-19-pandemic-governor-cuomo-announces-nys-pause-functions-extended-additional. It may be argued by some lenders that this state court moratorium does not apply to foreclosures that were brought in Federal Court under “diversity jurisdiction” grounds, by an out-of-state lender as plaintiff.
NEW YORK STATE COURTS
Taking Governor Cuomo’s actions one step further, the Chief Administrative Judge of New York State, the Honorable Lawrence K. Marks, indefinitely halted all non-essential functions of the state courts effective 5 p.m. March 16, 2020. The court limited the New York City housing court from hearing any cases other than “essential applications as the court may allow.” See, Memorandum dated March 15, 2020. https://www.scribd.com/document/451894650. This same memorandum gave examples of what might be an “essential application” and listed “landlord lockouts, serious housing code violations, and repair orders” as the types of applications that may be accepted at the judge’s discretion. It seems unlikely that the courts would deem a foreclosure action or an eviction proceeding to be an “essential application.” While the moratorium on foreclosures and evictions by Governor Cuomo will last into June, Courts have taken steps to reopen, https://www.law360.com/articles/1261144/attachments/0. The courts aim to virtually hear non-essential cases starting on April 13, 2020. The judges are instructed to assess their cases and move forward with those in which a conference would be helpful in resolving the case. Judges were also instructed to facilitate discovery disputes and issue rulings on fully submitted motions. There is no specific mention about foreclosures and evictions but as a result of Governor Cuomo’s ruling these cases cannot be heard until at least June. Administrative judges have been instructed to contact the attorneys who practice in front of them with clarifications and further details on the new court procedures. The courts will have to sort through the logistics of handling cases by video and phone and notify the parties about the new dates in cases there were on hold during the suspension of the courts.
The Federal Government has taken some similar, however more limited steps than New York State. The United States Department of Housing and Urban Development issued a 60-day moratorium on foreclosures and evictions of certain mortgages until May 17, 2020. https://www.hud.gov/sites/dfiles/OCHCO/documents/20-04hsgml.pdf This applies to individuals who own single-family homes and are unable to pay their FHA backed mortgages or homeowners with loans backed by Fannie Mae or Freddie Mac.
THE NEW NORMAL
It is difficult for anyone to predict when this outbreak will be resolved but that has not stopped various organizations from planning for the future. The New York State Bar Exam was originally scheduled for late July but was rescheduled for September 2020. https://www.nybarexam.org. The courts are already proceeding to handle cases virtually by video and phone. Even Major League Baseball is looking to salvage the 2020 season and begin sometime in May. https://www.nbcsports.com/chicago/cubs/mlb-mlbpa-increasingly-focused-plan-start-2020-season-may-arizona. It is clear that the timeline of when this outbreak will end and when things can get back to normal is uncertain. We may be living with the new normal for a while, if not permanently. Get ready for lots of zoom meetings.
This post should not be relied upon as legal advice. It is for general information purposes only. You should check and confirm independently any dates and deadlines that may apply to your own specific cases. We also wish to thank our extern Brett Klatsky, Cardozo Law Class of 2020, for his assistance with this post.