90 ELIZABETH APT. LLC, Petitioner, v. Betty ENG and Steven Eng, Respondents.
90 Elizabeth Apt. LLC, the petitioner in this proceeding (“Petitioner”), commenced this holdover proceeding against Betty Eng (“Respondent”), a respondent in this proceeding, and Steven Eng (“Co–Respondent”), another respondent in this proceeding (collectively, “Respondents”), seeking possession of 90 Elizabeth Street, Apt. 5 and 6, New York, New York (“the subject premises”), on the ground that Respondents are licensees whose licenses have been terminated by the surrender of possession of the prior tenant of the subject premises (“the prior tenant”). Respondents interposed defenses that they are entitled to succeed to the tenancy of the prior tenant. The Court previously denied Petitioner's motion for summary judgment in this matter. Petitioner appealed the Court's denial of its summary judgment motion, and the Appellate Term affirmed, finding that Petitioner did not eliminate issues of material fact as to Respondents' succession claim. 90 Elizabeth Apt. LLC v. Eng, 56 Misc.3d 128(A)(App. Term 1st Dept.2017). The Court held a trial on this matter on August 25, 2017 and September 19, 2017 and then adjourned the matter to October 6, 2017 to enable the parties to make post-trial submissions.
Neither party disputes that the prior tenant was subject to the Rent Control Law and that the prior tenant surrendered possession of the subject premises by a stipulation dated October 2, 2015 (“the Stipulation”) settling a prior proceeding between Petitioner, Respondents, and the prior tenant, captioned at 90 Elizabeth Apt. LLC v. Eng, Eng, and Eng, Index No. L/T 79147/2013 (Civ.Ct. N.Y. Co .). Petitioner proved that it is the proper party to commence this proceeding and that it properly effectuated service of a notice to quit pursuant to RPAPL § 713(7).
Respondent testified that she is the prior tenant's daughter; that she has lived in the subject premises since 1971; and that she never lived anywhere else except for when she was in college.
Respondent testified on cross-examination that she did not have bank accounts from November 20, 2013 to October of 2015; that she had no source of income; that she did not file taxes; that she was registered to vote; that she had a landline phone; that the Con Edison account for the subject premises was not in her name; that there was cable service to the subject premises; and that Co–Respondent, her brother, and another brother of hers lived with her at the subject premises but no one else.
Respondents introduced into evidence a record of Respondent's voter registration, showing that Respondent was registered to vote at the subject premises and that she voted on November 7, 2006, September 15, 2009, September 29, 2009, November 3, 2009, November 6, 2012, September 10, 2013, and November 5, 2013; Respondent's bank statements mailed to her at the subject premises from September of 2013 through November of 2015; a mailer regarding voting mailed to Respondent at the subject premises in 2010; student loan documents mailed to Respondent at the subject premises in March, July, and August of 2010; an invoice for a veteran's hospital mailed to Respondent at the subject premises on March 11, 2010; a document concerning credit mailed to Respondent at the subject premises on December 2, 2010; and invoices from the online retailer Amazon mailed to Respondent at the subject premises dated September 9, 2009 and December 15, 2009. Respondents also introduced into evidence birth certificates for Respondent and Co–Respondent, which show that the prior tenant was their mother.
Co–Respondent testified that he is the prior tenant's son; that he has lived in the subject premises from the time that he was born until 2000, when he moved to New Jersey; that he moved back into the subject premises in 2012; that he is Respondent's brother; that Respondent lived at the subject premises her whole life; and that Respondent is the prior tenant's daughter.
Respondents introduced into evidence Co–Respondent's credit card statements and records of Co–Respondent's bank account from February of 2012 to December 21, 2015 mailed to him at the subject premises; Co–Respondent's pay stubs showing the subject premises as his address from October of 2013 through August of 2015; Co–Respondent's driver's license issued on February 20, 2013 with the subject premises as his address; Co–Respondent's income tax returns and W–2 forms for 2013, 2014, and 2015, with the subject premises as his address; and an invoice for Co–Respondent dated April 4, 2015 with the subject premises as his address.
Co–Respondent testified on cross-examination that he returned to the subject premises on March 1, 2012; that he filed tax returns; that he had a cell phone; that the prior tenant was in a nursing home as of 2010; that the prior tenant did not return to the subject premises after she entered the nursing home; and that the subject premises has five rooms, three of which are bedrooms.
Co–Respondent testified on redirect examination that the prior tenant wanted to return to the subject premises after she went into the nursing home.
A neighbor of Respondents (“the neighbor”) testified that her mother was a friend of the prior tenant; that she has known Respondent for thirty or forty years; and that she has been to the subject premises over that time span, where she saw Respondent.
The neighbor testified on cross-examination that, from November of 2013 through October of 2015, she was in the subject premises less than ten times; that she saw Respondent there when she was there; that sometimes she assists Respondent in moving things and sometimes Respondent helps her move things.
Another neighbor of Respondents (“the second neighbor”) testified that she lives on the same floor as the subject premises; that she knows Respondent; that she has been to the subject premises, although less so now that the prior tenant and Respondents' father have died than before they died, when she came to the subject premises once or twice a month; that she saw the prior tenant often before the prior tenant went into a nursing home, at least twenty times a year; that she saw Respondent at the subject premises; and that she didn't know if Respondent lived at the subject premises the entire time because Respondent went to college.
The second neighbor testified on cross-examination that she did not see the prior tenant after the prior tenant went into a nursing home.
On rebuttal, Petitioner submitted a notice to admit served on Respondents which sought an admission that the prior tenant primarily resided at nursing home since December 15, 2010. Respondents did not submit a response.
At Petitioner's request, the Court took judicial notice that Petitioner had previously commenced a holdover proceeding against the prior tenant and Respondents, captioned at 90 Elizabeth Apt. LLC v. Eng, Index # L/TA 54552/2014 (Civ.Ct. N.Y. Co.). Petitioner predicated this holdover proceeding on the ground that the prior tenant did not maintain the subject premises as her primary residence and that the prior tenant impermissibly sublet the subject premises to Respondents. Respondents had interposed a defense in that matter that they had the right to succeed to the prior tenant's tenancy. The Court in particular took judicial notice of a decision in that matter dated October 6, 2014 (“the 2014 decision”). The 2014 decision stated that the prior tenant was admitted into a nursing home as of December of 2010; that she maintained that she had the intent to return to the subject premises; that she did not consider the nursing home to be her permanent home; and that “[a]ll parties agree that to date, the tenant of record has not permanently surrendered possession of the subject premises and is still living.” The Court therefore granted Petitioner's motion for partial summary judgment dismissing Respondents' succession defenses as unripe and without prejudice to renewal should the prior tenant be deemed to permanently vacate possession of the subject premises.
Petitioner also introduced into evidence a transcript of a Court appearance dated March 18, 2015 in an action commenced pursuant to Article 81 of the Mental Hygiene Law, according to which Respondent stated that the prior tenant lived in the subject premises before entering a nursing home, that she entered the nursing home in December of 2010, and that the prior tenant could not return to the subject premises.
Petitioner requested that the Court impose an adverse inference on Respondents for failing to produce at trial records of a Con Edison account, Respondents' cable/internet account, and Respondents' phone accounts, both landline and mobile, and regarding the fact that Respondents' other brother did not testify. Petitioner requested an adverse inference with regard to the fact that the 2013 tax returns were incomplete.
RPAPL § 713(7)(c) provides that a lessor of a property may commence a holdover proceeding against a licensee once the licensor is no longer in possession of the property. See 85 Fourth Partners, L.P. v. Puckey, 16 Misc.3d 136(A)(App. Term 1st Dept.2007), Starrett City, Inc. v. Smith, 25 Misc.3d 42, 46 (App. Term 2nd Dept.2009)(an owner has a cause of action in a licensee holdover proceeding against occupant of a premises when the occupant remained in possession after a vacatur of a tenant of record therein). Accordingly, Petitioner has proven its prima facie case against Respondents. The Court therefore evaluates Respondents' succession defense.
A family member who has resided with a rent-controlled tenant for at least two years prior to the tenant's permanent vacatur from the rent-controlled dwelling succeeds to the tenancy. 9 N.Y.C.R.R. § 2204.6(d)(1). Petitioner did not rebut the evidence, i.e. birth certificates, that Respondents are both the children of the prior tenant, and thus family as defined by the regulation. 9 N.Y.C.R.R. § 2204.6(d)(3)(i). The outcome of this proceeding turns on the question of whether Respondents resided with the prior tenant for two years before the prior tenant permanently vacated.
The documentary evidence supporting Respondent's claim that she has lived in the subject premises for her entire life lacks some of the traditional indicia of her residence, such as income tax returns or a driver's license. See, e.g., 300 East 34th St. Co. v. Habeeb, 248 A.D.2d 50, 55 (1st Dept.1997). However, Respondent had some documentation; Respondent and Co–Respondent testified credibly that she lived in the subject premises, save for when she was a full-time student; and the neighbor and the second neighbor, both disinterested witnesses, testified credibly and unremarkably to the same point. However sparse the documentary evidence may have been, Petitioner did not rebut the evidence, nor the testimony of Respondents' witnesses. Respondent has thus met her burden of proving that she has resided in the subject premises for her entire life, save for her stint as a full-time student. Compare 23 Jones St. Assocs. v. Keebler–Beretta, 284 A.D.2d 109 (1st Dept.2001), 585 W. 204th LLC v. Peralta, 53 Misc.3d 131(A)(App. Term 1st Dept.2016)(an occupant of a rent-controlled apartment who testified that he lived in the apartment with his parent, the original statutory tenant, from his birth until the tenant's death proved an entitlement to succession when the testimony was credible and particularly when the landlord did not rebut that testimony by any witness with factual knowledge). Nor does Petitioner rebut the evidence that Co–Respondent occupied the subject premises as of March of 2012.
Disputing Respondents' residency of the subject premises does not animate Petitioner's closing argument. Rather, Petitioner argues that Respondent cannot prove that she “resided with” the prior tenant for two years before the prior tenant permanently vacated, as required by 9 N.Y.C.R.R. § 2204.6(d)(1). The 2014 decision held that the prior tenant had not permanently vacated the subject premises as of October 6, 2014. The Stipulation shows that the prior tenant subsequently surrendered possession of the subject premises on October 2, 2015, just short of one year after the 2014 decision. Petitioner's unrebutted notice to admit seeks an admission that the prior tenant did not maintain the subject premises as her primary residence as of her admittance to a nursing home on December 15, 2010. Petitioner therefore argues that Respondents did not “reside with” the prior tenant from October 3, 2013 to October 2, 2015 (“the two-year period”) and therefore cannot succeed to the prior tenant's tenancy.
Family members seeking to succeed to tenancies subject to the Rent Stabilization Law cannot show that they have resided with former tenants if those former tenants did not primarily reside with their family members in the two years before the former tenants permanently vacated, and tenants who have otherwise moved out have not “permanently vacated” if they continue to pay rent and/or sign renewal leases. Third Lenox Terrace Assoc. v. Edwards, 91 AD3d 532, 533–534 (1st Dept.2012), Mia Terra Realty Corp. v. Sloan, 2017 N.Y. Misc. LEXIS 3961 (App. Term 1st Dept.2017), 206 W. 104th St. LLC v. Zapata, 45 Misc.3d 135(A)(App. Term 1st Dept.2014), 525 W. End Corp. v. Ringelheim, 43 Misc.3d 14, 15–16 (App. Term 1st Dept.2014), Extell Belnord LLC v. Eldridge, 42 Misc.3d 143(A)(App. Term 1st Dept.2014), BCD Delancey LLC v. Jian Gou Lin, 42 Misc.3d 132(A)(App. Term 1st Dept.2013). Petitioner's argument relies on the proposition that the prior tenant did not primarily reside in the subject premises during the two-year period, and thus that Respondents did not reside with the prior tenant for the requisite time period to succeed to her tenancy.
However, Third Lenox Terrace Assoc., supra, 91 AD3d at 533–534, Mia Terra Realty Corp., supra, 2017 N.Y. Misc. LEXIS at 3961, 206 W. 104th St. LLC, supra, 45 Misc.3d at 135(A), 525 W. End Corp., supra, 43 Misc.3d at 15–16, Extell Belnord LLC, supra, 42 Misc.3d at 143(A), BCD Delancey LLC, supra, 42 Misc.3d at 132(A), all adjudicate succession defenses in apartments subject to the Rent Stabilization Law where tenants moved out but continued to execute renewal leases and pay rent in their own name. Two significant and related factors distinguish this matter from the above line of cases: (1) the subject premises is subject to the Rent Control Law, and not the Rent Stabilization Law, and (2) there is no evidence in the record that any of the conduct deemed to be deceptive—such as payment of rent in a departed tenant's name or the execution of leases in a departed tenant's name—occurred herein.
The Rent Stabilization Code, in particular 9 N.Y.C.R.R. § 2523.5(b)(1), imposes an affirmative obligation on a successor-claimant to inform a landlord of his or her status as a successor-tenant upon receipt of a lease renewal offer for a former tenant. 245 Realty Assocs. v. Sussis, 243 A.D.2d 29, 32–33 (1st Dept.1998). Thus, the failure to do so and, worse, the misleading execution of leases by a tenant who has moved out, carries implications for the compliance of a potential successor-tenant with the Rent Stabilization Code. In contrast, an occupant entitled to succession to a rent-controlled tenancy has no affirmative obligation to do anything to assert his or her claim. Golden Mtn. Realty Inc. v. Severino, 47 Misc.3d 141(A)(App. Term 1st Dept.2015). If the claimant qualifies to succeed, then he or she merely succeeds if that is his or her choice. Id., Klein v. N.Y. State Div. of Hous. & Cmty. Renewal, 17 AD3d 186, 188–189 (1st Dept.2005), 9 N.Y.C.R.R. § 2204.6(d)(1). Thus, succession propositions applying to tenancies subject to the Rent Stabilization Law are not congruent with those applying to tenancies subject to the Rent Control Law. Patmund Realty Corp. v. Foon Mui, 32 Misc.3d 1232(A)(Civ. Ct. N.Y. Co.2011).
While tenants subject to the Rent Control Law do not execute renewal leases, they potentially can still undermine succession claims by deceptive conduct after they move out by, for example, completing forms with the New York State Division of Housing and Community Renewal (“DHCR”) and retaining counsel to defend nonpayment proceedings, Ludlow 65 Realty, LLC v. Chin, 42 Misc.3d 126(A)(App. Term 1st Dept.2013), or by corresponding with their landlords as if they still lived in their apartments, participating in litigation against their landlords to the point of being provided with alternative housing, and by pursuing claims at DHCR. 3750 Broadway Realty Group, LLC v. Garcia, 2015 N.Y. Misc. LEXIS 2581 (Civ.Ct. N.Y. Co.2015).1 Petitioner has neither alleged nor proven any conduct of the prior tenant found to be deceptive as per Ludlow 65 Realty LLC, supra, and 3750 Broadway Realty Group, LLC, supra. Instead, the inherent difficulty of pinpointing a date upon which a rent-regulated tenant in a facility transitions from maintaining his or her apartment as a primary residence to a date of “permanent vacatur” underscores a significant distinction between this matter and cases finding that a tenant's deception undermined a succession claim. See Elk 300 E. 83 LLC v. Dowd, 2015 N.Y. Slip Op. 32443(U)(Civ. Ct. N.Y. Co.2015), aff'd, 52 Misc.3d 131(A)(App. Term 1st Dept.2016)(the Court does not adopt a bright line rule that a failure to notify a landlord upon an admittance of a rent-regulated tenant to a facility precludes a succession claim).
The record on this matter not only lacks indicia of deception and prejudice to Petitioner, but the Stipulation contained a caption with a 2013 index number that named both the prior tenant and Respondents, compelling the inference that Petitioner had least some knowledge of the occupancy of the prior tenant and Respondents vis a vis the subject premises in 2013, in between two years and three years after the prior tenant was first admitted to the nursing home. Cases adjudicating succession claims given similar facts have not found that owners experienced the kind of prejudice that would foreclose a succession claim. 585 W. 204th LLC, supra, 53 Misc.3d at 131(A), 354 E. 66th St. Realty Corp. v. Curry, 26 Misc.3d 130(A)(App. Term 1st Dept.2010) (a landlord could not show discernible prejudice sufficient to defeat an otherwise meritorious succession claim given a fifteen-month delay in notice to a landlord of the tenant's entry into a nursing home).
Moreover, confinement of a tenant with Alzheimer's disease to a nursing home is not, in and of itself, sufficient to prove that the tenant no longer occupies his or her home as a primary residence. Metroka v. Andrews, N.Y.L.J. July 12, 2006 at 26:1 (Civ.Ct. N.Y. Co.). The intent of a rent-regulated tenant to return to his or her apartment factors in. Cohen & Zerenowitz Realty Corp. v. Asero, N.Y.L.J., Nov. 21, 1991, at 26:4 (App. Term 1st Dept.), L.J.M. Venture No. 1 v. Joy, 105 Misc.2d 291, 296 (S.Ct. N.Y. Co.1980), Soybel v.Gruber, 136 Misc.2d 430 (Civ.Ct. N.Y. Co.1987)(Tom, J.)(“the primary residence law was not intended and should not apply to a senior citizen who is confined in a geriatric facility or nursing home and has no intention of abandoning her rent-regulated apartment”). Determining whether a move to a nursing home constitutes a change in primary residence necessitates a “careful examination of the facts and circumstances causing the nursing home move,” potentially requiring “expert medical testimony․” L.J.M. Venture No. 1, supra, 105 Misc.2d at 296. Thus, while prior testimony of Respondent in an Article 81 Court appearance in March of 2015, seven months before the prior tenant, by counsel, surrendered possession of the subject premises, is probative, it is not determinative. Instead, the 2014 decision, the very decision that Petitioner urges the Court to find has preclusive effect on the matter herein, stated that the prior tenant intended to return to the subject premises and did not consider the nursing home to be her permanent home.
Petitioner argues, in part, that Respondent's failure to respond to Petitioner's notice to admit establishes that the prior tenant did not maintain the subject premises as her primary residence for the two-year period. However, as a general principle of common-law evidence, lay witnesses may testify to facts and not to, inter alia, conclusions drawn from the facts. People v. Russell, 165 A.D.2d 327, 332 (2nd Dept.1991), aff'd, 79 N.Y.2d 1024, 1025 (1992). As this rule of evidence relates to a notice to admit, the purpose of a notice to admit is only to eliminate from litigation matters which will not be in dispute at trial, Murphy v. University Club, 200 A.D.2d 532, 533 (1st Dept.1994), not to reach ultimate conclusions, which can only be made after a full and complete trial. Taylor v. Blair, 116 A.D.2d 204, 206 (1st Dept.1986). Accordingly, a notice to admit in a nonprimary residence holdover proceeding seeking an admission that a tenant had lived in the subject apartment for 183 days during the preceding calendar year is “palpably improper,” Hyatt Ave. Assoc., LLC v. Rahman, 49 Misc.3d 24, 27 (App. Term 2nd Dept.2015), much less an admission with regard to whether an apartment is a primary residence of a tenant. The Court shall not deem a failure to timely respond to an improper notice to admit to be an admission of the matters stated therein. Williams v. City of New York, 125 AD3d 767, 768 (2nd Dept.2015).
The preponderance of the evidence shows that the prior tenant did not permanently vacate the subject premises as of the finding of the Court on October 6, 2014; that the status of the prior tenant transitioned at some point in time after that; that Respondents, both family members of the prior tenant, occupied the subject premises for at least two years before the prior tenant's permanent vacatur; that neither Respondent nor the prior tenant engaged in any deceptive conduct; and that Petitioner's awareness of the status of Respondents and the prior tenant vis a vis the subject premises vitiates any purported claim of prejudice on Petitioner's part. The Court therefore finds that Respondents are successors to the prior tenant's tenancy. The Court therefore dismisses Petitioner's holdover proceeding against them.
The parties are directed to pick up their exhibits within thirty days or they will either be sent to the parties or destroyed at the Court's discretion in compliance with DRP–185.
This constitutes the decision and order of this Court.
1. The case law is mixed on the effect of payment of rent by a departed rent-controlled tenant on a subsequent succession claim. While Ludlow 65 Realty LLC, supra, 42 Misc.3d at 126(A) and 3750 Broadway Realty Group LLC, supra, 2015 N.Y. Misc. LEXIS at 2581, both refer to payment of rent in conjunction with the other deceptive conduct, Herzog v. Joy, 74 A.D.2d 372, 373–76 (1st Dept.1980), aff'd, 53 N.Y.2d 821 (1981) holds that an occupant otherwise entitled to succeed to a rent-controlled tenancy may do so even when the previous rent-controlled tenant paid the rent. Be that as it may, the record does not contain any evidence of the prior tenant paying rent in her own name after she was admitted into a nursing home.
JACK STOLLER, J.