409-411 Sixth Street, LLC, Appellant,v.Masako Mogi, Respondent.

Brief

N.Y.October 8, 2013

40-19 72nd Street #3B Woodside, NY 11377 Tel 212-964-5364 acquit@manhattanfirm.com De Castro Law Firm July 24, 2013 State of New York Court of Appeals Clerk's Office 20 Eagle Street Albany, New York 12207-1095 Re: 409-411 Sixth Street v. Mogi Letter of Respondent APL-2013-00125 To the Court, This letter presents comments and arguments on behalf of respondent Masako Mogi, who has been the tenant of the same New York rent stabilized apartment since 1980. In the subject decision, the appellate division correctly denied the Landlord's petition for eviction of Ms. Mogi, and found that the Landlord had failed to meet its burden of proving its theory that Ms. Mogi abandoned her primary residence in New York and moved to Vermont. Pursuant to section 500.11 of the Court of Appeals Rules of Practice, this case should be heard through the Court's alternative procedure. This procedure is appropriate on the basis that this appeal involves mixed questions of law and fact, and narrow issues not of statewide importance. Ultimately, upon careful review of the trial record and all briefs, the appellate division decision should be AFFIRMED. Admitted to practice in the Federal and State Courts of New York. De Castro Law Firm Page 2 The Landlord's Argument That The Parties Had Not Fully Briefed the Issue of the Standard of Review Is Factually Incorrect. In objecting to the alternative procedure, the Landlord argues that the Court of Appeals would benefit from a new discussion of the appellate division's standard of review. The Landlord supports this argument, first, by claiming that this issue was not fully briefed below, and second, by claiming that the appellate division's decision deviated from established precedent. Both claims are without merit. Landlord claims surprise that the appellate division's decision “put into focus the appropriate scope of appellate review,” which they claim was “not an issue which the parties addressed substantially in the tenant's appeal.” The fact is that the appropriate standard of review was addressed by the Tenant on page 16 of the Appellant's Brief before the division. The Landlord, for its part, addressed the standard of review in POINT I of Respondent's Brief before the division. Following Point I, please note that there are no other argument points. Therefore, it is fair to say that the standard of review not only was addressed, it is the only point the Landlord considered worthy of a point heading, from which the rest of its arguments flow. Having expended that much ink, there is no reason to give the parties any further opportunities to brief the court, save for the alternative procedure here being used. The Standard of Review for this Court is Limited. Contrary to the Landlord's argument that the appellate division exceeded its authority, its authority to reverse findings of fact is enshrined in the CPLR, and the authority of the Court of Appeals to review said findings is limited. Two standards of review are involved in this appeal, depending on whether the division affirmed or reversed findings of fact. This appeal involves both standards, to be applied at different times, because the appellate division reversed some findings and affirmed others. Findings of fact that are affirmed by the Appellate Division are only reviewable to determine if there is evidence in the record to support them (Cannon v Putnam, 76 NY2d 644, 651 [1990]; Morgan Servs. v Lavan Corp., 59 NY2d 796, 797 [1983]). De Castro Law Firm Page 3 In situations where the Appellate Division reverses or modifies and expressly or impliedly finds new facts, the Court of Appeals can determine which of the findings more nearly comports with the weight of the evidence (CPLR 5501[b]; Matter of Y.K., 87 NY2d 430, 432 [1996]; Loughry v Lincoln First Bank, N.A., 67 NY2d 369, 380 [1986]). In the course of the appellate division's analysis, the appellate division favorably cited some of the lower court's findings. For example, the division fully agreed with the trial court that the Landlord's argument based on its data on the apartment's electrical usage was unpersuasive. In addition, the division agreed with the trial court that there was no reason to doubt the credibility of the eyewitness testimony. Nevertheless, the appellate division found no grounds to affirm the trial court's factual findings regarding the credit card and debit card transactions, and properly reversed. Since the appellate division found that the Landlord had failed to meet its burden of proving that Ms. Mogi lives in Vermont as her primary residence, the Court of Appeals must look at all the evidence and evaluate whether the evidence more closely comports with the trial court finding (that Ms. Mogi abandoned New York to live in Vermont) or the appellate division finding (that Landlord failed to prove same). The weight of the evidence clearly favors the appellate division's determination. The division correctly held: Inconclusive is the evidence the landlord introduced to buttress its theory that the tenant maintained her Vermont cabin rather than the subject apartment as her primary residence. The landlord's evidence is explainable and is as likely, if not more likely, to support a finding that the tenant occupied the subject apartment as her primary residence. Given the documentary and testimonial evidence connecting the tenant to the subject apartment, the landlord has not met its burden to persuade this Court that the tenant did not occupy the subject apartment as her primary residence during the 2004-2006 period. De Castro Law Firm Page 4 409-411 Sixth St., LLC v Mogi, 2012 NY Slip Op 06568 [100 AD3d 112] (Renwick, J.). Upon examining the trial evidence which led to the above conclusion, the appellate division's finding will be found correct in all respects. Without regurgitating what has already been briefed, the Landlord's case that Ms. Mogi changed her primary residence to Vermont breaks down to (1) electricity usage, (2) eyewitness testimony, and (3) recorded digital transactions made during the relevant 1023-day period. Appellate division affirmed the trial court's finding that the evidence of electrical usage was unpersuasive. The Landlord attempted to prove, through a comparison of electrical usage, that Ms. Mogi spent more of her time in her Vermont cabin than in her New York apartment. Ms. Mogi in fact owns a cabin in Vermont, but it has been occupied full-time by her friend, Noriko Isogai, for many years. Therefore, it is safe to assume that Ms. Isogai is consuming electricity and other utilities even when Ms. Mogi is not in the cabin. The appellate division noted that the trial court did not find 'particularly persuasive' the fact that the tenant's 'electrical usage in her New York City apartment was well below average, and that it was significantly lower than her usage in Vermont.' In the court's view, these facts were not probative of whether the tenant did not use her New York apartment because it was undisputed that the tenant does not occupy the New York apartment 'full time' while her companion occupied the Vermont house 'full time'; and that the Vermont electric bills cover heat and hot water, while those utilities are provided by the landlord in New York. 409-411 Sixth St., LLC v Mogi, 2012 NY Slip Op 06568 [100 AD3d 112] (Renwick, J.). Ms. Mogi credibly testified and produced detailed records to show that the electricity consumption in the New York apartment had not changed at all after the cabin's purchase. To Ms. Mogi's evidence that there was no De Castro Law Firm Page 5 change in electrical usage, the Landlord provided no opposing evidence whatsoever. Accordingly, the division affirmed the trial court's determination that the landlord's attempt to link Ms. Mogi's low electricity consumption to non-primary residence was unpersuasive. Under the appropriate standard of review, this affirmed factual finding should not be disturbed by this court. The appellate division correctly noted that the Tenant provided relevant uncontroverted eyewitness testimony, and the Landlord provided none. The division searched the record for the eyewitness testimony of all who lived or worked in the building. Ms. Mogi testified on her own behalf and produced three other witnesses, neighbors in and around the building. One of the witnesses occupied the apartment directly across the hall from the Ms. Mogi. All eyewitnesses at trial who had knowledge of Ms. Mogi's residence during the relevant years testified to having regularly seen and interacted with Ms. Mogi while she resided in New York. These witnesses include Howard Weil, who resides in the apartment directly across the hall from Ms. Mogi, and therefore had a front-row seat to the factual issues of this trial (R. 224). The Landlord attempted to attack the credibility of the witnesses because they were friends of Ms. Mogi, but that is not entirely the case. One of the witnesses, Larry Wallach, barely knows Ms. Mogi at all, but lives in the building and has been aware of seeing Ms. Mogi in the hallways, on the street and occasionally at the local supermarket on a regular basis for years. (R. 213) In regard to witness testimony, it could be argued that the appellate division simply affirmed the trial court. The division noted, “Significantly, neither Civil Court, which heard the trial testimony, nor the Appellate Term, made any finding that these witnesses were incredible.” 100 A.D.3d at 121. The Landlord makes much of the fact that the witnesses lacked the ability to monitor Ms. Mogi's whereabouts on a daily basis. But this is not the point. When examining whether Ms. Mogi treats New York as her primary residence, provable subjective factors are just as important as objective factors. To understand this importance, imagine for a moment the credibility of a person who claims New York City as his home and yet cannot name a single friend in that city, and has never been seen in the vicinity of his apartment. Ms. Mogi has proven that she does not suffer that deficiency. And yet the Landlord, who employs people in and around the De Castro Law Firm Page 6 building for daily maintenance, decided that it was not in its best interest to put an eyewitness on the stand. As the division stated: What is significant here is that all the tenant's friends and cotenants consistently testified of the tenant's constant presence in the New York apartment during the relevant period, which is sufficient for the purpose of establishing an ongoing, substantial and physical nexus with the regulated premises (see 310 E. 23rd LLC v Colvin, 41 AD3d 149 [1st Dept 2007]; 300 E. 34th St. Co. v Habeeb, 248 AD2d at 55). In our review of the record, we find no basis to reject the New York tenants' testimonies as incredible. In fact, the landlord failed to produce any witness who lived or worked in the New York apartment building during the relevant time period to rebut their testimony. 409-411 Sixth Street, LLC v. Mogi, 100 A.D.3d at 122. In sum, the Tenant presented credible eyewitnesses in support of its position and the Landlord presented none. The appellate division held, “Here, even when 'due regard' is given to the views of the trial judge (300 E. 34th St. Co. v Habeeb, 248 AD2d 50, 55 [1st Dept 1997], quoting Universal Leasing Servs. v Flushing Hae Kwan Rest., 169 AD2d 829, 830 [2d Dept 1991]), we believe that, under any fair interpretation of the record, a clear preponderance of the probative and credible evidence supports the conclusion that the tenant was using the New York apartment as her primary residence for a substantial period of time prior to the service of landlord's notice of nonrenewal in September 2006.” 100 A.D.3d at 121. The appellate division correctly concluded that the digital transactions failed to prove Ms. Mogi's residence in Vermont, even given the speculative methods that the trial court employed in counting the digital transactions. The centerpiece of the Landlord's evidence is its attempt to prove Ms. Mogi's presence in Vermont through the use of her credit cards, her debit cards, and her New York telephone records during the relevant 1023-day De Castro Law Firm Page 7 period, all of which the Landlord proffered and had admitted into evidence. Ultimately, these records likely did more damage to the Landlord's case. Although credit cards are a great convenience, society is not yet at the level where all people are bound to use their credit card or make a logged telephone call every single day. Consumers have different habits. Not all New Yorkers use credit cards with the same frequency. While some will frequently charge even very small purchases, others will use their cards only for the larger purchases, preferring to use cash for the rest. As such, it is clearly a mistake to assume that every person's physical presence can be accurately tracked through the use of credit card, debit card, and phone records. Further complicating matters is the fact that a great many credit cards are jointly held. Where a transaction on a jointly held credit card is made, the court in a primary residence case must naturally seek evidence to identify which of the cardholders made the transaction. Without such evidence, identifying the purchaser in a transaction from a joint account would be a matter of speculation. Given these complications, it is worth examining the appellate division's finding regarding digital transactions, and conceding that the decision's language can easily be taken out of context. Seen in the proper context, the division's decision was entirely correct. As indicated by Appellate Term, Civil Court's reliance upon credit and debit card transactions to determine when the tenant was at her second home in Vermont was speculative, as both respondent and her companion (a Vermont resident) are authorized to use the cards. Further, even under the Civil Court's speculative formula, and allowing some margin of error for same, it is significant that the tenant was in New York 45% of the time, which is not insignificant. 100 A.D.3d at 123. Here the decision uses the word “speculative” twice. This is not redundant: the division means to convey that the trial court's findings were speculative in two different ways. The trial court's findings based of credit card and debit card transactions was indeed speculative in the sense that the entire record of transactions is categorically insufficient to prove anyone's whereabouts, because the credit and bank cards were not used exclusively by Ms. Mogi. De Castro Law Firm Page 8 Ms. Mogi's friend, Noriko Isogai, shared the cards in question. Since Ms. Isogai lives in Vermont, many of the Vermont transactions, or possibly all of them, were made by Ms. Isogai. There is no way to know.1 But the appellate division does not stop there. It describes the trial court's method of extrapolating these transactions to be a “speculative formula,” and even then, the division was being kind. The Landlord, for its part, does not call the trial court's formula speculative, but rather, characterizes it as applying a “gap-filling” formula. And since the gaps to which the Landlord is referring are actually gaps in the evidence, the moniker “gap-filling formula” seems just as bad. A brief review of the facts will demonstrate the speculative nature of the court's untested analysis. After the close of trial, the Landlord made charts of the tenant's electronic transactions, and presented them in post-trial memorandum. (R. 1097, 1098, 1099). Out of a total of 1,023 days, the Landlord claimed that it had evidence that Ms. Mogi had spent 229 days at her Vermont cabin, broken down as follows: 66 days in the year 2004; 80 days in the year 2005; and 83 days in the year 2006.2 Id. So, despite the fact that the landlord was able to produce every single credit card, bank, and phone transaction, the number of days that the Landlord could show by competent evidence that a transaction occurred in Vermont was 229, nowhere near a majority of the 1,023 days under scrutiny. Thereafter, the trial court, apparently frustrated by the lack of direct evidence, decided to employ what the Landlord now calls a “gap-filling” formula. But the formula is not a formula at all, because to this day, neither party nor any appellate court has been able to discover how the trial court arrived at its numbers. Essentially, the trial court turned an absence of evidence into, quite literally, evidence of absence. The trial court first shifted the mathematical burden of proof. Instead of weighing how many days out of 1023 that the landlord could prove Ms. Mogi to be living in Vermont, the court shifted the burden to Ms. Mogi, to prove how many days she lived in New York. But even here, Ms. Mogi, according to the Landlord's original count, spent more days in New York than in Vermont. 1The only reliable digital transaction account used exclusively by Ms. Mogi was her landline telephone, which is situated in her New York apartment. These phone records are discussed, infra. 2 The relevant time period only extends into parts of 2004 and 2006. De Castro Law Firm Page 9 During its extrapolations, the trial court committed an egregious error of law by ignoring admitted evidence and apparently forgetting to count the 252 days out of the entire 1023 in which Ms. Mogi used her New York landline telephone, despite the established precedent that, as the division pointed out, “Tenant's telephone and other utility bills that show how often the tenant used utilities in the apartment is probative of whether the tenant had the requisite physical nexus to the apartment (see Carmine Ltd. v. Gordon, 41 AD3d 196 [1st Dept. 2007]; Brian Hill Apts. Co. v Teperman, 165 AD2d 519 [1st Dept. 1991]).” 100 A.D.3d at 120. The judge's exclusion of these records is remarkable, because the landline telephone was used almost exclusively by Ms. Mogi in her apartment, while the credit cards were all jointly used. Note that, when simply looking at the digital transactions in evidence, Ms. Mogi only showed activity in Vermont at a rate for 82 days per year. Appellant's Brief, page 6. But when the trial court revised the numbers, all of the trial court's speculative methods favored the Landlord. Even then, the evidence failed to show that Ms Mogi spent the majority of any year in Vermont. Essentially even after the trial court (1) counted every transaction that Ms. Isogai made in Vermont as if it were Ms. Mogi's, (2) subtracted 252 days in which Ms. Mogi was in New York using her landline telephone, essentially reducing Ms. Mogi's recorded time in New York by 25%; (3) and used a gap-filling “formula” that is incapable of verification, the court concluded that Ms. Mogi is recorded to have spent at least 45% of her time in New York. As the division found, 45% under this speculative formula is not insignificant. The trial court's errors do not even stop at those described above. The trial court's “gap-filling formula” is even further damaged by the fact that 120 days, or 12% of the total number of days under scrutiny, represent days in which Ms. Mogi maintained her New York apartment while vacationing in Japan (R. 1024). Since it is ridiculous to state that a person abandons their primary residence while on vacation, this 12% should have been added to the New York side of the tally, or at least accounted for by deeming it inconclusive, and reducing the overall quotient, which would have made the trial court's figure of 45% in New York to be at least 51%. Nevertheless, it is not necessary to examine the number of days that Ms. Mogi spent in New York at all. Since the Landlord has the burden of proof, the Landlord should have been required to first prove its case, that De Castro Law Firm Page 10 Ms. Mogi spent the majority of her time in Vermont, which it never did, even under the most relaxed calculation. In the subsequent appeals, the Landlord attempted to put a scientific varnish on the so-called gap-filling formula by creating a new calculation chart. Yet even this attempt further proved the speculative nature of the exercise, because the Landlord failed to reproduce the trial court's numbers.3 The threshold question on the credit and debit card transactions. Nevertheless, the undersigned is perhaps misrepresenting the appellate division's decision by getting into the minutiae of the trial court's “formula.” The appellate division majority wisely found such an engagement unnecessary, because it felt obligated to confront the threshold question: what evidence enables the court to distinguish Noriko Isogai's credit and debit card transactions, from those of Ms. Mogi? Having confronted that question, the appellate division found that no such evidence exists. By contrast, the trial court's treatment of this threshold question is to ignore it. The appellate division was right to address this question, and the trial court was wrong. The dissent, rather than citing evidence, simply cited the lack of evidence. The dissenting Justice Catterson argues that the majority “simply substitutes its own different interpretation of evidence such as the tenant's credit card transactions in Vermont and 'negligible' electric usage at the subject apartment.” 100 A.D.3rd at 124. Even if it is correct that the majority substituted their own interpretation for that of the trial court, the trial court's interpretation is not necessarily superior to that of the majority. As stated above, in situations where the Appellate Division reverses or modifies and expressly or impliedly finds new facts, the Court of Appeals can determine which of the findings more nearly comports with the weight of the evidence (CPLR 5501[b]; Matter of Y.K., 87 NY2d 430, 432 [1996]; Loughry v Lincoln First Bank, N.A., 67 NY2d 369, 380 [1986]). As shown below, the majority's 3 The Landlord concluded that the digital transactions prove Ms. Mogi that was in Vermont for 223 days out of the 1023. (R. 1097, 1098, 1099) De Castro Law Firm Page 11 interpretation of the evidence is clearly closer to the evidence than that of either the trial court or the dissent. The dissent interprets the evidence thus: While the tenant, as a Japanese citizen, is not eligible to vote, and thus has no address for voter registration purposes, she listed her Vermont address on her driver's license and vehicle registration. Moreover, she listed the New York apartment address on a federal tax return only once in the relevant period and solely for the purpose of deducting her utilities and rent as a business expense. Additionally, in my opinion the Civil Court's determination that the tenant spent less than 183 days per calendar year for the relevant period in the New York apartment was a fair interpretation of the evidence of the tenant's credit card transactions. There was no evidence or any dispute to counter the assumption that the card traveled with tenant between New York and Vermont even though the tenant testified that her companion was authorized to use the credit and debit card. The tenant did not deny that she was in Vermont on any day when a Vermont transaction occurred, or provide evidence that she traveled to New York on any day in between two Vermont transactions: she did not maintain a parking space in New York, did not purchase an E-Z Pass, or provide Amtrak travel receipts or tickets to show travel between Vermont and New York. Dissent, 100 A.D.3d at 126. Despite the fact that the Landlord bears the burden of proving that Ms. Mogi established her primary residence in Vermont, the dissent bases its argument almost entirely on a lack of evidence. By contrast, the majority looked at the evidence that exists. On her tax return, Ms. Mogi reported New York as her residence. She paid New York taxes. Meanwhile, all the banking, credit card, and debit card records which made up so many hundreds of pages of the record bore the address of the New York apartment. In addition, Ms. Mogi has maintained several De Castro Law Firm Page 12 friendships through being present in New York, and has been seen regularly in and around the apartment building, as established by credible eyewitnesses. While Ms. Mogi did co-own a car with Ms. Isogai in Vermont – with all the other documents related to that maintenance – there is literally no other Vermont document in evidence that is not related either to merely owning a Vermont property and co-owning a Vermont car, facts which the majority correctly deemed to be unremarkable. The dissent argues that Ms. Mogi deducted her rent as a business expense, but what the justice failed to mention is that Ms. Mogi deducted only 20% of her rent as a business expense, not all of it. (R.95) Therefore, this amounts to no more than a home office deduction for 20% of the apartment's floor space. The dissent further failed to point out that Ms. Mogi paid thousands of dollars in property taxes for the Vermont cabin, simply because she refused to declare Vermont as her primary residence and thereby qualify for a homestead tax abatement. To bolster their claim of primary residence in Vermont, the dissent's reliance on the tax return is extremely thin. Even thinner is Justice Catterson's adoption of the Landlord's argument that Ms. Mogi “relocated to Vermont after the events of 9-11 in 2001.” The smoking gun to this theory is simply a letter which Ms. Mogi wrote stating that she is “temporarily staying away from NYC” and requesting that the Landlord forward her mail, which, according to the justice, proves that “she relocated to Vermont after the events of 9-11 in 2001, and thereafter no longer used the New York apartment as her primary residence.” Here, the Justice again uses one piece of evidence, yet ignores the actual meaning of the note, which clearly states that Ms. Mogi would be leaving town temporarily. The dissent's opinion is that since Ms. Mogi left this note and did not countermand it in writing when she returned, that the note has a perpetual effect and that the Landlord must have forgotten to mention that it has been forwarding Ms. Mogi's mail for 12 years. This theory about Ms. Mogi leaving after 9/11 and never returning is not even born out by the credit card and debit card transactions to which the dissent gives so much weight. These records show literally hundreds of transactions in New York, after 2001. This issue of the letter is so insubstantial that it was properly ignored by the trial judge as well as every appellate judge hearing the case until now. De Castro Law Firm Page 13 In addition, the dissent adopts the Landlord's argument regarding the electricity usage, that was, in the words of the Landlord's expert witness, considerably “below average.” Yet the trial court properly found this evidence to be unpersuasive. Not only did Ms. Mogi adequately explain her low usage and Vermont's high usage, but New York has a population of over 8 million people, and if Ms. Mogi's electrical usage is below average, that means that she would still be part of a numerically large group. As stated above, the appellate division affirmed the trial court's factual finding regarding electrical usage, which limits the Court of Appeals review to determine if there is evidence in the record to support it (Cannon v Putnam, 76 NY2d 644, 651 [1990]; Morgan Servs. v Lavan Corp., 59 NY2d 796, 797 [1983]). Being that there is ample evidence to support the trial court's finding on electricity, the finding should be left undisturbed. The appellate division decision should be affirmed. Given that there is no way to attribute the credit card and debit card transactions to the individual cardholders who made them, that the eyewitnesses at trial all contradicted the landlord's theory, and that Ms. Mogi filed her taxes listing the New York apartment as her address and paid New York taxes, the appellate division had no choice but to conclude as it did: In sum, this Court finds that the preponderance of the evidence establishes that the tenant occupied the subject New York apartment as her primary residence during the 2004-2006 period. Inconclusive is the evidence the landlord introduced to buttress its theory that the tenant maintained her Vermont cabin rather than the subject apartment as her primary residence. 100 A.D.3d at 123. The appellate division decision should be AFFIRMED. cc: Magda L. Cruz Attorney for Appellant Yours, Steven De Casro Steven De Castro Attorney for Masako Mogi