Landlord-Tenant—Rent Stabilization—Summary Holdover Proceeding—Non-Primary Residence—Use of Apartment for Commercial Purpose—Motion for Leave to Conduct Discovery and Cross-Motion for Summary Judgment Denied

This summary holdover proceeding had been commenced following the issuance of a "Notice of Non-renewal of the Lease…" (notice), on the grounds that the tenant did not primarily reside in the subject rent stabilized apartment (apartment) and that his use of the apartment was for "commercial use, not residential."

The notice alleged that the tenant was known as "Michael Foster and as Michael Hosten," there was "a NYS Tax Commission judgment" (judgment) against the tenant "listing an address of 250 West 57th Street, Apartment 2127; that a search of public records shows addresses for 'Michael Foster a.k.a. Michael Hosten' as 130 West 57th Street, Apartment 12A, 79 Jefferson Avenue in White Plains, New York, and an 612 Rachel Drive in Yorktown Heights, New York." The notice further stated that "building personnel" (staff) had observed the tenant "entering the premises in the morning hours and leaving in the evening."

The tenant claimed that he had at all times maintained the apartment as his primary residence. The landlord had moved, inter alia, for discovery, citing its "public database search revealing different addresses," the judgment and an "affidavit from [a] managing agent," that stated that "staff [had] not seen [the tenant] at the…premises 'in the last year or two with any regularity.'" The agent's affidavit was based on information and belief, repeated information from the public database search and provided detail regarding outstanding rent and arrears.

The tenant's attorney had previously advised the landlord that this is "a case of mistaken identity" and that "the 'Michael Hosten' referenced in the notice…as residing at 79 Jefferson Avenue in White Plains, NY, is a 58-year old African American man," and the tenant is a 50-year old Caucasian man who has "no connection to Michael Hosten or the White Plains or Yorktown Heights addresses." The attorney also stated that the tenant had "never had a…judgment against him, had maintained business offices at the two 57th Street addresses in the past, but never resided there," and has primarily resided only in the apartment for 23 years.

The tenant cross-moved for summary judgment. He submitted documentation showing that the West 57th Street buildings were "office buildings," provided a copy of a 57th Street lease which prohibited residential use, provided tax returns for the years 2010, 2011, a copy of his driver's license, a copy of his voter registration card and voting history record, a copy of his bank statement and a copy of credit card statements. The tenant also asserted that when he rented office space in the 250 W. 57th Street building, "the building contained no residential units and…his office did not have a bathroom, sink or kitchen." He further claimed that "he had no connection with Suite 2127," that he had surrendered office space in 130 W. 57th St. in 2009, and that office had a toilet, but no kitchen. He also asserted that he has eaten, slept and lived in the apartment for more than 22 years. He acknowledged that "he also works in the subject premises, and that he is a designer, but that he uses the premises as his primary residence, and has no other residence."

The tenant alleged that a doorman told him that he had been asked to sign an affidavit stating that the tenant had been "seldom seen in the building" and that "when he refused to sign it, he was suspended from his job without pay, which action is being challenged by his union." The tenant emphasized that the agent's affidavit was based on information and belief rather than on personal knowledge or observation and was contradicted by the notice which stated that the tenant had been observed entering the apartment in the early morning hours and leaving in the evening hours.

The landlord argued that necessary information was not within the landlord's personal knowledge, "but is within the exclusive custody of the [tenant]…." However, the court noted that "information directly refuting these allegations was supplied to petitioner's attorney" and was provided again in the tenant's litigation papers. The landlord had failed to provide any documentation showing any connection between the tenant and Michael Hosten, any proof that suggested the tenant used the office space on West 57th Street as a residence, something that was not permitted by the certificate of occupancy and the West 57th Street lease, or any proof of the alleged judgment.

The landlord had submitted additional affidavits from doormen who alleged that they would see the tenant leaving the building in the evening, "but never saw him return before [their] shift ended in the afternoon." One affidavit stated that the tenant would arrive in the morning and the doorman did not see him leave as of the time the doorman's shift ended in the middle of the afternoon. Such affidavit also stated that approximately a year or two ago, the doorman noticed, inter alia, that the tenant was spending "considerably less time in the…building."

The tenant countered that none of the affidavits explained where the doormen are located in the building or what opportunities they would have to observe the tenant's "comings and goings." There were also large "gaps in time when none of the building employees claim any knowledge of [tenant] entering or exiting the building."

The court found that the landlord had failed to provide "sufficient…facts and/or proof in support of the need for disclosure in its motion." There was no evidence to "refute [the tenant's] proof that [he had] simply rented office space on West 57th Street, and there [was] no proof showing any connection between [the tenant] and the White Plains or Yorktown Heights addresses." The staff affidavits were "conclusory, vague, and contradictory" and "[e]ven if [tenant] is seen on some occasions leaving the building in the evening, and returning in the morning, there are many explanations for that other than non-primary residence." There was no assertion that the tenant had not been seen in the building or sufficient evidence demonstrating that he runs a business out of his apartment, and no "proof of a connection to any other residential address than the subject premises." Thus, the landlord failed "to provide sufficient facts and/or reasons to support its discovery motion."

The tenant's "website" had listed the address for his interior design firm as his apartment. However, the court noted that it was possible that the tenant "goes out to clients' apartments when they get home from work in the evening, and is home before [a particular member of the staff] comes on duty." Furthermore, if the tenant had been absent from the apartment for long periods of time, the staff "would be able to attest to this."

Moreover, the tenant had provided the landlord with "extensive documentation which is…exactly the type of information it seeks in the discovery motion." The landlord failed to meet the "Farkas test for discovery in a summary proceeding" (see NYU v. Farkas, 121 Misc.2d.642 (Civ Ct, NY County 1983). Thus, the court held that the landlord was "not entitled to any further discovery" and denied the motion for discovery.

Since both sides had raised numerous issues of fact, the tenant's motion for summary judgment was denied.

Ennismore Apartments v. Foster, L&T 82732/12, NYLJ 1202603736001, at *1 (Civ., NY, Decided June 4, 2013), Wendt, J.

Landlord-Tenant—Illegal Activity—Holdover Proceeding Pursuant to RPAPL §§711(5), 715(1) and RPL §231(1) and an Alleged Breach of Lease Dismissed

At the request of a district attorney's office, a landlord commenced a holdover proceeding against a tenant, pursuant to RPAPL §711(5), §715(1), RPL§231(1) and an alleged breach of a lease, as well as the rules and regulations of the United States Department of Housing and Urban Development (HUD). The landlord alleged that the subject apartment had been "used or permitted to be used for an immoral or illegal purpose and for an illegal trade or business, specifically, the sale, storage, packaging or manufacturing of a controlled substance."

The tenant had been arrested, inter alia, "for criminal sale of marijuana" and "criminal possession of marijuana." The notice of termination (notice) alleged that the tenant had been "arrested in a public place at or near the complex exchanging marijuana for United States currency…." The description alleged that the tenant had been observed talking with another person and handing that person "a clear plastic bag. "This did not happen in the…apartment, but near the complex."

A police officer claimed that "he observed the [tenant] in control of several zip-lock bags which contained a green leafy substance." The tenant allegedly threw those bags onto a shelf at a nearby store. "The field test of the items" found on the store shelf contained less than an eighth of an ounce of marijuana. The notice stated that "the officer observed [the tenant] in his apartment with 36 zip-lock bags and 10 candy wrappings with dried green leafy substances with a distinctive odor in a shoe box. These substances were alleged and believed to be marijuana in excess of 25 grams; the equivalent of less than an ounce…." One of the 36 bags was tested and was found to be positive for marijuana. The search of the apartment had not been made pursuant to a search warrant and there was no statement in either the notice or the petition as to how the officer had gained entry to the apartment.

The tenant moved to dismiss the petition, arguing that the apartment had not been used for "any illegal trade or business and by failing to allege ongoing illegal activity at the premises dismissal is required for failure to state a cause of action." The tenant also argued that "any claim for breach of lease or violation of HUD rules and regulations, must state which specific provisions of these agreements were violated."

Additionally, the tenant asserted that "he cannot have a void lease pursuant to RPL 231(a), and simultaneously be sued for a violation of this lease," since "inconsistent legal theories" are prohibited by RPAPL 741. Finally, the tenant argued that a "suppression hearing should be held as the search of his apartment, and the seizure of any items, was illegal, making any drugs obtained the fruit of the poisonous tree" and that "any tainted evidence obtained cannot be the basis of his eviction."

The landlord cited HUD lease provisions which permit termination of a tenancy for "drug related activity on or near the premises, not solely for engaging in an illegal business or trade." The landlord argued that it may evict a household member who is using a drug or where the tenant has engaged in criminal activity and that it is irrelevant that the predicate notice failed to allege that "criminal activity was habitual and customary." The landlord emphasized that it may terminate a tenancy "for any criminal activity, either in the apartment or in the immediate vicinity."

The court explained that:

RPAPL §711(5) provides that a special proceeding may be maintained upon the grounds that the premises are used or occupied as a bawdy-house…or for any illegal trade or manufacture, or other illegal business. RPAPL §711 (5) permits a summary proceeding only if the premises are used for an illegal trade or business. The term "use" means doing something "customarily or habitually upon the premises"…. It requires ongoing activity….

RPAPL §715 states the grounds and procedure to evict where there is an allegation of the premises being used or occupied as a bawdy-house, or for any illegal trade, manufacture or other illegal business. RPL§231 provides that such illegal activity shall void the lease between the parties. Proceedings commenced pursuant to RPAPL §711, §715 and RPL §231 do not involve an alleged lease violation; the grounds are statutory…. In order for the petitioner to state a cause of action under these provisions of the RPAPL and RPL it must show that the activity alleged was illegal, and if illegal, that the activities rise to the level of a trade, manufacture, or other illegal business. The activity needs to be commercial in nature. The personal use of illegal drugs, regardless of the duration or quantity of the use, does not constitute an illegal use of the premises for the purposes of RPL 231.

The court then noted that "[a]ll the usual indicia of an illegal business or trade are absent in this petition." The court acknowledged that "[t]he recovery of an extraordinary quantity of drugs" may rise to an "inference that the premises are being used for an illegal trade." Here, the petition alleged that "an aggregate of 2.674 grams of 'green leafy substance' identified as marijuana was found from inside and outside of [the tenant's] apartment." The amount was less than "an eighth of an ounce of marijuana. The amount of 'green leafy substance' believed to be marijuana, but not tested, totaled 35 grams, or somewhat above one ounce." The court opined that absent "any additional indicia of an illegal business, the total amount of 'green leafy substance' recovered does not rise to the level of an illegal business of trade."

In determining whether an illegal business exists, courts consider not only the amount of drugs recovered, but "associated paraphernalia to glean the existence of a business." Here, there was "no allegation of scales, safes, very large quantities of cash, and/or records." There was "no allegation of unusual traffic or specific prior complaints," nor were there any allegations as to guns or ammunition or packaging material. Thus, the "[i]ndicia of a drug business, with the apartment as the focal point is entirely missing from these pleadings."

The court also granted the tenant's motion to dismiss based on the landlord's "failure to set forth specific lease provisions in that part of its termination notice claiming breach of lease and breach of rules and regulations." Accordingly, the court dismissed the proceeding.

Morrisania APTS LLC v. Linton, L&T 55227/12, NYLJ 1202603559958, at *1 (Civ., BX, Decided May 29, 2013), Stanley, J.

Scott E. Mollen is a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law.