In a stunning decision that has wide-reaching application to the scope of review to be used by appellate courts throughout the State of New York, the Court of Appeals has overturned an errant decision of the Appellate Division in a hotly contested “non-primary residence” case. Under the Rent Stabilization Law, an otherwise protected tenant who does not occupy his or her apartment as a primary residence loses the right to continued occupancy and can be evicted at the expiration of the lease.

Primary vs. Non-Primary Residence

Upon learning that a certain tenant did not occupy her apartment in Manhattan as a primary resident, an owner commenced a “non-primary residence” proceeding in Civil Court’s landlord-tenant part (Housing Court) upon the expiration of the tenant’s lease. After a three-day non-jury trial, the owner prevailed in the Civil Court on its claim that the tenant primarily lived in her home in Vermont, which she owned individually and lived in with her “life partner” and from which address she registered her car. Moreover, the owner established an extremely low utility usage in the New York apartment, lack of any real ties to New York, and a clear preponderance of credit card and ATM usage in Vermont as compared to New York. The owner further submitted evidence demonstrating that the tenant, a semi-retired freelance writer, had deducted the apartment’s rent as a business expense. In addition, the tenant did not have television cable service in her apartment.

The tenant appealed the Civil Court’s decision to the Appellate Term, which is the court of first appellate review after the Civil Court. In a unanimous decision, the Appellate Term found that a “fair interpretation of the evidence” supported the trial court’s determination. In affirming the lower court, the Appellate Term noted that the owner had established that there was “negligible electricity usage in the apartment” and that the “tenant had acknowledged that she spends a substantial amount of time in a house she owns in Westminster, Vermont, an address listed on tenant’s driver’s license and motor vehicle registration and where tenant’s long-time companion admittedly lived.”

Sushi Defense

Undaunted, the tenant obtained permission to further appeal to the Appellate Division, the second level of appellate review in New York. Rather than determining whether a “fair interpretation of the evidence” supported the trial court’s decision, in a troubling departure from traditional standards of appellate review, a majority of the justices of the Appellate Division five-justice panel reviewing the case conducted their own independent review of the evidence. Among other things, the Appellate Division justices gave undue credence to the tenant’s explanation of negligible cooking gas usage by noting that the tenant, a Japanese native, was fond of eating sushi – which of course requires no cooking. After re-weighing the evidence, in violation of the traditional standard of appellate review, the Appellate Division reversed the Appellate Term and found in favor of the tenant dismissing the non-primary residence case. Notably, two justices dissented from the majority’s reversal of the Appellate Term.

The New York Daily News reported the tenant’s victory in its October 2, 2012 edition, in an article with a headline starting with words “Sushi Defense.” The article reported that a tenant had won “a six-year fight to stay in her rent stabilized apartment Tuesday thanks in part to her unorthodox ‘sushi defense’.”

Based on the Appellate Division’s deviation from the traditional standard of appellate review and the dissent of two justices, the owner obtained permission to appeal to the Court of Appeals, which is New York’s highest appellate court. In a cogent and well-reasoned decision, the Court of Appeals noted that the Appellate Division had used the wrong standard of appellate review and remanded the case back to the Appellate Division for a new decision. On remand, the Appellate Division applied the proper standard of appellate review as directed by the Court of Appeal. This time, the Appellate Division affirmed the Appellate Term, and ruled that the “competent evidence in the record supports the trial court's conclusion that the tenant actually resided in a house in Vermont from 2004 to 2006, and that she had not used her New York apartment as her primary residence during that same time. The tenant's attempt to explain away this fact merely raises questions of fact and credibility for the trial court” to which an appellate court should defer.

Thus, seven years after commencing the proceeding, the owner prevailed. This shows that the Court of Appeals has not lost sight of the proper standard of appellate review. Notably, at the end of the day, the “Sushi Defense” did not fare well in this hotly contested proceeding. This decision has broad application to appellate courts throughout the entire State of New York in re-affirming the standard of appellate review to be used by such courts in reviewing trial court decisions.     

Robert Jacobs, a partner in the Transactional and Administrative Departments at Belkin Burden Wenig & Goldman, LLP, wrote the briefs to the Appellate Term and Appellate Division. The brief to the Court of Appeals was written by Magda Cruz, who heads BBWG’s Appellate Department.