An Extraordinary Decision From the Appellate Division

I could hardly believe my eyes as I read a decision from the Appellate Division, First Department released two days ago on Tuesday, October 2, 2012. The decision in the case, 409-411 Sixth Street v. Mogi, 2012 NY Slip Op 06568 (1st Dept. 2012) saw Housing Court Judge Jean Schneider and the Appellate Term reversed by the Appellate Division after the landlord had prevailed in this non-primary residence proceeding after trial and then after the initial appeal to the Appellate Term. There was a spirited dissent written by Justice Catterson and joined by one of the judges – making this decision a 3-2 reversal.

At trial the landlord was able to prove that the tenant spent the majority of her time at a house in Vermont that she owned and which was always occupied by her companion. The landlord also was able to prove that the electricity usage in the subject rent stabilized apartment was so low that for months on end the usage supported a running refrigerator and no more. The tenant had a Vermont driver license and a car licensed in Vermont.

In ruling for the landlord, Judge Schnieder emphasized that the tenant’s credit card bills and bank statements showed where the tenant actually was on a day to day basis (if you use your credit card to buy groceries in Vermont it is hard to argue that you are not in Vermont). In affirming Judge Schneider the Appellate Term indicated that it believed that undue emphasis had been placed on the credit card records but relied heavily on the fact that the electric usage was negligible and that the tenant’s companion lived in Vermont full time.

The Appellate Division granted leave to appeal and reversed. Why did the Appellate Division reverse? It is hard to say. The Appellate Division believed that the tenant’s 3 witnesses (who vaguely and generally testified that the tenant was seen at the building) should have been given more weight in light of the fact that Judge Schneider did not specifically find their testimony incredible. The second reason that the Appellate Division gave is that the Appellate Term should not have relied upon the fact that the tenant’s companion was primarily residing elsewhere.

In New York – and for primary residence purposes – a spouse can maintain a separate primary residence from his/her spouse. In every case where the landlord emphasizes that the tenant’s spouse is elsewhere the Appellate Division (and Court of Appeals) has been quick to let us know that two spouses being apart is a perfectly normal and even expected thing.

The final item that should be noted is that Judge Schneider found and the Appellate Division noted that the tenant was in Vermont 55% of the time and elsewhere 45% of the time. I am often asked and then answer that the precise percentage of time that a rent stabilized tenant spends in his/her apartment is important but not the determining factor. This case certainly proves that to be true. Here, despite a finding that the tenant was absent from the apartment with her companion in Vermont 55% of the time, the tenant was still found to be a primary resident.

In his dissent Justice Catterson spends some time talking about a case in which I was the trial attorney on behalf of the landlord – Carmine Limited v. Gordon. There I proved at trial that there was zero electric usage in the apartment for several months and negligible usage for many months more. I lost at trial and lost on appeal to the Appellate Term 2-1. The decision was eventually reversed by the Appellate Division. Much of the reasoning for the reversal was the negligible electric usage. In the Mogi case the electric usage (or lack thereof) did not seem to be as important.

Is there a lesson to be learned here? I would say that it is to not emphasize that two spouses live apart. Conducting trials like this all of the time I confess that it would be my instinct to point it out. It would seem to show where the tenant really lives. However, the Appellate Division has made its feeling on the subject known.

An interesting case indeed.