Opinion
L & T 53961/12
08-13-2015
92 Allen LLC, Petitioner v. Kei Nui Lee Chan a/k/a KEI NUI LEE WHITMAN CHAN a/k/a WAI MAN CHAN 92 Allen Street a/k/a 266 Broome Street Apt 4 New York NY 10002, Respondent JOHN DOE and JANE DOE
BELKIN BURDEN WENIG & GOLDMAN Attorneys for Petitioner By: David Skaller, Esq. 270 Madison Avenue New York NY 10016 (212)867-4466 LAW OFFICE OF GEORGE HAMBOUSSI, JR., ESQ. Attorney for Respondents 11 East Broadway, Suite 9D New York, NY 10038 (212) 608-8188
BELKIN BURDEN WENIG & GOLDMAN
Attorneys for Petitioner
By: David Skaller, Esq.
270 Madison Avenue
New York NY 10016
(212)867-4466
LAW OFFICE OF GEORGE HAMBOUSSI, JR., ESQ.
Attorney for Respondents
11 East Broadway, Suite 9D
New York, NY 10038
(212) 608-8188
Sabrina B. Kraus, J.
This summary holdover proceeding was commenced by Joe Erlichster (Erlichster), predecessor in interest to 92 ALLEN LLC(Petitioner), after the death of David Kuifai Chan a/k/a David Chan a/k/a Kwok Fai Chan a/k/a Kui Fai Chan (Tenant), the last tenant of record, seeking to evict his wife, KEI NUI LEE CHAN a/k/a KEI NUI LEE(Kei), and son WHITMAN CHAN a/k/a WAI MAN CHAN(Whitman),(collectively "Respondents") from Apartment 4 at 92 Allen Street a/k/a 266 Broome Street, New York, NY 10002(Subject Premises), their home since the 1970's, based on the allegation that Respondents are merely licensees of Tenant, and their right to occupancy ended upon Tenant's death on December 25, 2009.
Respondents assert that the Subject Premises is governed by Rent Control, and that they have the right to succeed to the Tenant's regulated tenancy.
PROCEDURAL HISTORY
Petitioner issued a Notice to Quit, dated December 19, 2011, and Notice of Petition and Petition dated February 1, 2012. Respondents appeared by counsel, and filed an answer on February 16, 2012, asserting defenses, including: defective predicate notice; succession for Chan who has lived in the Subject Premises from the inception of the tenancy and is the wife of Tenant, and for Whitman who has lived in the Subject Premises since his birth in 1982; and that the Subject Premises are governed by rent control.
The proceeding was initially returnable on February 17, 2012.
On March 6, 2012, the parties entered into a stipulation wherein Respondents agreed to appear for depositions, produce documents requested, and pay use and occupancy. The stipulation further provided that Petitioner claimed the Subject Premises was rent stabilized and Respondents assert it is rent controlled, and that if the parties arrived at an agreement regarding the status Petitioner would be entitled to amend the petition to reflect same. The proceeding was marked off calendar for discovery.
Depositions of Respondents took place on October 11, 2012, and copies of the transcripts were forwarded to Respondents for signature on May 16, 2013.
On October 16, 2013, Petitioner moved to amend the pleadings to substitute itself as the new owner and petitioner , and for an order directing Kei to provide completed authorization forms for submission to the IRS and New York State Department of Finance for Chan's 2009 tax returns, to confirm that Kei had not filed a 2009 tax return. Respondents failed to appear, and the motion was granted on default, only to the extent of restoring the proceeding to December 10, 2013.
The property was transferred to 92 ALLEN LLC, but Erlichster is still essentially the owner in his capacity as head officer of the LLC.
On December 10, 2013, the Court (Halprin, J) granted the balance of the motion on default, to the extent of substituting Petitioner in place of Erlichster, and adjourning the proceeding to January 29, 2014 for inquest. Respondents did eventually appear again in the proceeding which was adjourned on numerous occasions through July 27, 2014.
On July 22, 2014, the parties entered into a stipulation agreeing to October 21, 2014 as a trial date. Respondents acknowledged that they had the tax related authorization forms and would deliver executed copies along with checks payable to the agencies by July 22, 2014. The stipulation further provided that if Respondents failed to comply "... the Court shall draw a negative inference as against Respondents and in favor of Petitioner with respect to the contents of any of the tax returns requested in the authorization forms ....".
On June 15, 2015, the proceeding was assigned to Part R for trial. The trial commenced and concluded on that day. At the conclusion of the trial, the Court dismissed Whitman's claim for succession because no documentary evidence was submitted to support his claim, and the Court reserved decision on the balance of the issues.
FINDINGS OF FACT
The parties stipulated to the admission of certain documents at the commencement of the trial and Petitioner rested without calling a witness.
Petitioner is the owner of the Subject Premises pursuant to a deed dated August 6, 2013 (Ex 1) and the property is properly registered as a multiple dwelling (Ex 2). The building is a five story walk up with eight units, and is also known as 266 Broome Street.
Tenant was the tenant of record of the Subject Premises pursuant to a lease dated October 15, 1972 (Ex A). The lease was for a two year period commencing October 1972 and ending October 1974, at a monthly rent of $150.00. The lease provides that it was rented as a private dwelling for Tenant and members of his family. No further leases were executed and the rent was never increased.
Tenant and Kei married on May 18, 1971 (Ex G), in Virginia. Tenant and Kei lived in the Subject Premises from the inception of the tenancy in 1972 forward. The couple raised three children together in the Subject Premises. The Con Edison account for the Subject Premises was in the names of Tenant and Kei from 2007 through 2009 and bills were addressed to Tenant and Kei at the Subject Premises (Ex F1-3). Tenant and Kei maintained a joint bank account at China Federal Savings Bank. Statements for said account were sent to Tenant and Kei at the Subject Premises from 2003 through 2005 (Ex D1-3). Tenant and Kei filed joint tax returns in 1994, 1995 and 1996 (Ex C1-3).
Social Security Statements for Tenant were sent to him at the Subject Premises for 2008 and 2009 (Exs E-1 and E-2). They show that Tenant was paid $4819 in 2008 and $5112 in 2009.
Kei submitted a key request to Erlichster dated May 5, 2002, signed by herself identifying the individuals living in the Subject Premises as Tenant, Kei, their two daughters and Chan. The request stated Tenant was working out of town, and provided the dates of birth and full names for all family members (Ex 5).
Rent for May 2002 through August 2003 was paid by checks, signed by Tenant, in the name of Tenant and Kei (Ex 5). A final check signed by Tenant for January 2010 rent was submitted (Ex 12). Kei testified that Tenant signed this check in advance of his death.
Tenant worked in Chinese Restaurants. Tenant worked in Baltimore Maryland at one such establishment in the early 2000s and purchased equipment for the restaurant in January 2000 ( Ex 6) . This restaurant was located at 1639 Pennsylvania Avenue in Baltimore Maryland.
Later in the decade, from 2004 through January 2009, Tenant worked as a manager for a take out restaurant located at 4702 Liberty Heights Avenue, in Baltimore, Maryland (Ex 7). The lease for the take out restaurant included the take out shop on the first floor and a residential unit on the second floor. The owner of the restaurant and lessee was Shi Cheng Liu (Ex 7).
Each restaurant provided tenant with housing or a "dorm" as they are commonly referred to the industry, as part of Tenant's employment.
In December 2007, Tenant, represented by counsel, filed a Chapter 7 petition in Bankruptcy Court in the Southern District of New York (Ex 11). Tenant listed his residence at the Subject Premises. Tenant represented therein that he had been domiciled in the district for at least 180 days prior to the date of the petition. Tenant represented that he was not married, and that his household size was 1 (Ex 11, Form 22 A and Schedule 1). The primary purpose of the bankruptcy was to address credit card debt of approximately $38,000.00 that Tenant had incurred, primarily while gambling in Atlantic City. A final decree discharging Tenant's debt was issued on March 20, 2008.
Copies of Tenant's credit card statements from Bank of America, NA were admitted into evidence (Ex 10). The credit card statements were sent to Tenant at the corresponding address to each restaurant he worked at in Baltimore Maryland. From 2003 through March 2004, the statements were addressed to Tenant at 1639 Pennsylvania Avenue, and from April 2004 through November 2007, the statements were sent to 4702 Liberty Heights Avenue. The statements show regular and substantial use at various Casinos and Hotels in Atlantic City. The November 2007 statement shows a balance of over $23,000.00 (Ex 10).
Tenant kept his gambling hidden from Kei.
Tenant, passed away on December 25, 2009 at Mount Sinai Hospital. Tenant was 64 years old at the time of his death, and the death certificate lists the Subject Premises as his residence. The death certificate contains a representation that the death was from natural causes (Ex 3).
Petitioner served a Notice to Admit (Ex 5) dated April 16, 2014. No response was submitted from Respondents. The Notice asserts that Tenant's death was the result of an automobile accident in Baltimore, Maryland and that Tenant was initially hospitalized in Maryland and then transferred to Mount Sinai in New York.
RENT REGULATORY STATUS OF SUBJECT PREMISES
The petition fails to assert the regulatory status of the Subject Premises. The Notice to Quit asserts that Tenant was the former rent stabilized tenant of record, and Petitioner argues the Subject Premises are subject to Rent Stabilization. A certified printout from DHCR, from December 31, 2013, regarding building wide registrations for the years 1984 through 2011 (Ex 4) shows that the landlord filed no registrations at all for the building prior to 1994. In 1994, the landlord registered six apartments in the Subject Building, some as rent stabilized, some as rent controlled. The Subject Premises was not one of the apartments registered at that time.
However, an earlier printout from DHCR from January 20, 2010, shows that the Subject Premises were registered as Rent Controlled from 1984 to 1997 (Ex H). The landlord filed no further registrations for the Subject Premises until December 15, 2011, (four days prior to issuing the December 19, 2011 Notice to Quit, which serves as a predicate for this proceeding), when the landlord registered the deceased Tenant as the rent-stabilized tenant of record at a legal registered rent of $150 per month (Ex 4).
The Subject Premises appears to have been subject to Rent Stabilization, an the inception of the tenancy. An Expulsion Order was issued in the early 1980's reverting the Subject Premises to regulation under rent control. This is evidenced by an order from the City of New York Office of Rent and Housing Maintenance Rent Control Division (Ex B1-2), dated January 9, 1984, setting a maximum rent at $150.00. The order is issued by the Recontrol Unit and provides in pertinent part:
You are hereby given notice that a proceeding has been instituted pursuant to Section 36 of the Rent and Eviction Regulations to establish maximum rents for the above listed housing accommodation(s) based upon the landlords failure to join or remain a member in good standing of the Rent Stabilization Association.
The District Rent Director pursuant to Section 36 of the Rent and Eviction Regulations proposes:
Determine that the housing accommodation is subject to the regulations as of date of order.
Establish a maximum rent at $150.00 per month effective as of such date.
Determine the subject apartment consists of 3 rooms.
The dwelling space, essential services, furniture and equipment included in the proposed maximum rent are those which were provided for in the rent charged on the date the housing accommodation became subject to the Rent Stabilization Laws.
All rent collected in excess of the maximum rent established by the order to be issued shall be credited to the tenant in full commencing with the rental payment immediately following issuance of the order.
The proposed rent is based on comparable rent controlled accommodations within the subject building, pursuant to Section 131 of the rent and Eviction Regulations giving consideration to the elapsed time element and taking into consideration all equities involved. (Ex B-2).
This order establishes that while the Subject Premises may have been subject to Rent Stabilization at the inception of his tenancy, it reverted to Rent Control based on the landlord's failure to comply with applicable regulations. At the time this order was issued, the Administrative Code, §YY51-4.0(a) et seq., provided that dwelling units which otherwise would have been covered by rent stabilization revert to regulation under rent control if the owner was not in good standing with the Rent Stabilization Association [137-86 70th Ave., Llc v. Padel, 2015 NY Slip Op 31413(U), citing Matter of Wood v. Metroploitan Hotel Indus. Stabilization Assn., 95 AD2d 560, 562-563 (1st Dept 1983)].
The determination by the administrative agency that the Subject Premises was governed by Rent Control can not be collaterally attacked by Petitioner herein (Katz 737 Corp v Cohen 104 AD3d 144).
Pursuant to the expulsion order, the Subject Premises remains subject to Rent Control, until the order is revoked or superceded by a subsequent order ( see eg In re 770 Saint Marks, LLC DHCR Order issued September 29, 2006, Administrative Review Docket No UE220003RO holding absent an order revoking expulsion order or superceding order the housing accommodation continues to be subject to rent control; In re Fein 101 Misc 2d 216). No evidence was provided at trial that there was ever a reinstatement. Based on the foregoing the court finds that the Subject Premises is subject to Rent Control.
SUCCESSION
The parties agree Tenant permanently vacated the Subject Premises upon his death in December 2009. Petitioner argues Kei must lose her home of several decades based on their allegation that Tenant was not living in the Subject Premises as his primary residence for the two years prior to his death. The court disagrees.
It is undisputed that Kei and Tenant were legally married in 1971 and that Kei moved in to the Subject Premises with Tenant, at the inception of the tenancy, in approximately 1972. It is unknown why Kei's name was not included on the 1972 lease, along with her husband. The testimony at trial established that for some years, between 2000 and his death in 2009, Tenant was employed in a Chinese food restaurant in Baltimore, Maryland and, as a result, had housing and a bank account there.
New York City Rent and Eviction Regulations §2204.6(d)(1)(d) allows for an interruption of residency if tenant is engaged in employment requiring temporary relocation from the housing accommodation. The court finds that Tenant never established a primary residence in Baltimore and that the Subject Premises continued to remain his primary rseidence through his death.
Kei attempted to persuade the court that Tenant was physically present on a daily basis for the two years before his death in the Subject Premises. The court did not find said testimony credible. However, it was clear that Kei was ashamed that her husband spent his weekends in Atlantic City gambling, rather than returning to New York to spend time with his family. The fact that there may have been tension during their marriage, does not mean that Tenant gave up his primary residence at the Subject Premises. Any documents not related to his gambling debt or his employment continued to list the Subject Premises as Tenant's residence through the date of his death.
Whitman, who was born and raised in the Subject Premises, spent a portion of 2008 and 2009 away from the apartment due to his military service Iraq.
Tenant's presence in Baltimore, Maryland, was strictly related to his employment, and that the housing provided by his employer in connection with his employment did not constitute his primary residence.
Tenant did maintain the Subject Premises as his address through the Social Security Administration, significantly receiving his benefit checks at the Subject Premises for the two years prior to his death, as well as evidence by utility bills, joint bank accounts and the rent was continually paid by Tenant and accepted by Petitioner. Tenant also listed the Subject Premises as his address of record when filing for Bankruptcy.
Rent regulation and Rent Control Laws in the City of New York were created, in part, "to prevent uncertainty, hardship and dislocation [ McKinneys Uncons. Laws of New York §8581(1)]. Kei has lived in the Subject Premises continually from the inception of the tenancy until the time of Tenant's death, a total of forty-three years. There were no allegations Kei lived anywhere else. The purpose of NYCRR §2204.6[d][1], is remedial "to prevent the grievous harm that would ensue from the wholesale eviction of family members from their home following the record tenant's death or departure (1504 Associates LP v. Wescott 972 NYS2d 809, quoting Lesser v. Park 65 Realty Corp, 140 AD2d 169)."
If the Court were to find Kei was not entitled to succession because of Tenant's employment in Maryland, or apparent gambling problem, it would undoubtably cause her the "grievous harm" the statute is intended to avoid.
CONCLUSION
Based on the forgoing, the Court finds Respondent Kei is entitled to succeed Tenant's tenancy as the Rent Controlled tenant of record, and the petition is dismissed.
This constitutes the decision and order of the Court.
Parties may pick up trial exhibits within thirty days of the date of this decision, from Window 9 in the clerk's office on the second floor of the courthouse. After thirty days, the exhibits may be shredded in accordance with administrative directives.
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Dated: New York, New York
August 13, 2015
Sabrina B. Kraus, JHC
TO: