The issue on appeal is whether the Tenant Hardship Act (Act), which grants courts the power to stay an eviction up to a maximum of six months, restricts a court's power to vacate a judgment for possession on equitable grounds pursuant to Rule 4:50-1.
Cathy Little rents an apartment for $125 per month from the Housing Authority of the Town of Morristown (Authority), a public-housing agency. Little lives with her five minor children. She receives food stamps and benefits under the Aid to Families with Dependent Children (AFDC) program. In April 1992 the Authority filed a complaint for summary dispossess, alleging nonpayment of rent. At that time, Little's rent payment was one month past due. Eventually, the Authority obtained a default judgment for possession. Thereafter, the Authority filed a request for a warrant of removal, which the court issued. The warrant was executed, and Little and her children were evicted. That same day, Little offered to pay the Authority the rent money owed. The Authority refused that offer. The court allowed Little to re-enter her apartment, pending a hearing on her application to vacate the judgment of possession. After a hearing on the matter, the trial court invoked Rule 4:50-1 and vacated the judgment for possession on payment by Little of the full amount of rent owed. In vacating the judgment of possession, the court considered the presence of five minor children; the unavailability of suitable housing at the same rent; and the fact that public housing was involved.
The Appellate Division reversed the decision of the trial court, finding that a court's power to vacate a judgment for possession in a summary-dispossess proceeding based on non-payment of rent is foreclosed by the Act. The Appellate Division held that a tenant cannot avoid a judgment for possession for non-payment of rent by paying rent after the judgment has been entered; that the trial court's action in vacating the judgment for possession exceeded the limits of judicial discretion authorized by the Legislature; and that under certain circumstances a court could grant relief from a judgment for possession under Rule 4:50-1, but Little had not met the criteria for application of that rule.
The Supreme Court granted Little's petition for certification. Little applied for and was granted a stay of execution by the Appellate Division, effective until final disposition by this Court.
The trial court had the authority to invoke Rule 4:50-1 to vacate a judgment for possession in a summary-dispossess action after a warrant for removal had been executed. Because the court vacated the judgment seven days after the execution of the warrant, the court acted within the ten-day time limitation of the Tenant Hardship Act.
1. The court has jurisdiction to hear applications for "lawful relief" for up to ten days after a warrant of removal has been executed. A form of relief often granted by the courts is a hardship stay of execution pursuant to the Act, which authorizes the court to stay the issuance of a warrant for up to six months if the tenant will suffer hardship because of the unavailability of another place to live. (pp. 6-9)
2. A court has the sound discretion to vacate a judgment of possession on equitable grounds pursuant to Rule 4:50-1. Rule 4:50-1 should be used sparingly, in exceptional circumstances, when a grave injustice will occur. The facts of this case should be considered under Rule 4:50-1(e) and (f). Rule 4:50-1(e) gives the court discretion to relieve a party from a final judgment or order if the party can show that it is no longer equitable that the judgment or order shall have prospective application. Such relief must be supported by evidence of changed circumstances. The party seeking relief bears the burden of proving that events have occurred after the entry of judgment that, without the relief requested, will result in extreme hardship. Rule 4:50-1(f) provides relief from a final judgment or order for any reason justifying relief from the operation of that judgment or order. That rule is appropriate in summary dispossess proceedings only in truly exceptional circumstances. The court is required to weigh carefully all relevant evidence in determining whether the grounds advanced to support relief outweigh the policy favoring finality of judgments. (pp. 9-18)
3. A court's limited power to grant a stay under the Act is consistent with a court's residual power to vacate a judgment pursuant to Rule 4:50-1. There is no evidence that the Legislature, in enacting the Act, intended to limit the ability of a court to vacate a judgment for possession for good cause. (pp. 18-20)
4. The trial court considered Little's ability to pay the Authority the entire amount of the rent three days after the execution of the warrant of removal; she had five children living in her apartment; and suitable housing was not readily available at the same monthly rental. The court may also have considered that the Authority is subject to public-policy responsibilities not generally imposed on private landlords. Because Little receives AFDC benefits, she and her family would have been eligible for Emergency Assistance benefits had they become homeless through eviction by the Authority. The trial court's exercise of discretion to vacate the judgment evicting Little reflected a recognition that the State's homelessness-prevention policies would be disserved by the eviction of a tenant in public housing who had demonstrated satisfactorily her ability to fulfill her rental obligations. Thus, the trial court did not abuse its discretion in vacating the judgment for possession. (pp. 20-25)
5. The Court need not contest or concede the concurrence's point that a trial court's consideration of homelessness in exercising discretion under Rule 4:50-1 is a factor entitled to as much weight in respect of tenants of private landlords as it is of tenants of public-housing authorities. Notably, housing authorities, as distinguished from private landlords, are entrusted by the Legislature with the specific power to provide emergency shelter, transitional housing, and support services to the homeless. In that context, it would be expected that a court might exercise its discretionary authority under Rule 4:50-1 somewhat more freely when the evicting landlord is a public body charged with serving only low income tenants and authorized by the Legislature to provide assistance to homeless families. (pp. 24-26)
Judgment of the Appellate Division is REVERSED.
The opinion of the court was delivered by: Stein, J.
JUSTICE GARIBALDI, concurring, in which JUSTICE HANDLER joins, agrees with the Court's holding but is of the view that the Court unnecessarily discussed the Prevention of Homeless Act and that Act's effect on the Authority's public-policy responsibilities. The possibility that a dispossessed tenant may become homeless is an equitable consideration that a trial court should take into account in deciding whether to vacate a judgment of possession under Rule 4:50-1. However, that possibility should be given exactly the same weight regardless of whether a tenant is dispossessed by a private landlord or a public-housing authority. The relevant statutes do not distinguish between public-housing tenants and private-housing tenants; neither should the Court.
CHIEF JUSTICE WILENTZ and JUSTICES POLLOCK, POLLOCK and O'HERN join in JUSTICE STEIN's opinion. JUSTICE GARIBALDI filed a separate concurring opinion in which JUSTICE HANDLER joins.
On certification to the Superior Court, Appellate Division, whose opinion is reported at 263 N.J. Super. 368 (1993).
The issue presented by this appeal is whether N.J.S.A. 2A:42-10.6 of the Tenant Hardship Act, which grants courts the power to stay an eviction up to a maximum of six months, restricts a court's power to vacate a judgment for possession on equitable grounds pursuant to Rule 4:50-1.
The Housing Authority of the Town of Morristown ("Authority") instituted a summary dispossess action against a tenant, Cathy Little. The trial court entered a default judgment for possession in favor of the Authority based on nonpayment of rent. See N.J.S.A. 2A:18-61.1.a. The court also issued a warrant of removal. See N.J.S.A. 2A:18-57. After the warrant had been executed and Little had been evicted, the court issued a stay of the warrant and allowed Little to return to her apartment. The court then vacated the judgment pursuant to Rule 4:50-1 on Little's payment of the back rent in full to the Authority. The Appellate Division reversed, holding that the Tenant Hardship Act ("the Act"), L. 1957, c. 110, limited a court's authority to ...