68-74 Thompson Realty LLC v Heard, et al.

Rosenberg & Estis, P.C. has secured a victory for its client in a Civil Court trial and a subsequent appeal to the Appellate Term, First Department, after unraveling an elaborate scheme perpetrated by the tenant of record and her alleged roommate ("Appellant"), who claimed rights to the rent-stabilized apartment by alleging that the tenant of record was an illusory tenant. Appellant and the tenant of record fashioned a scheme to convince the Landlord that they were roommates, as permitted by law, so as to deprive Landlord of knowledge of what Appellant belatedly attempted to characterize as an illegal sublet for profit or an illusory tenancy. The scheme included Appellant appearing in Court as the tenant's roommate twice, with notarized letters from the tenant affirming same; fraudulently representing to the Civil Court and Landlord, in a so-ordered Stipulation, that she was the tenant's roommate; perpetuating their fraud by, among other things, making sure the tenant was present and appeared to be living at the Premises during Landlord's inspections of the Premises; opening a joint bank account and tendering all rent payments bearing the tenant's and Appellant's names; affirmatively acting to have the tenant sign all renewal leases (even mailing them out of the country when necessary; and mailing said renewals and rent checks to Landlord with the tenant's name written by Appellant as the sender.

After Appellant's deceit was discovered, Landlord commenced a non primary residence holdover proceeding against the tenant of record. Appellant appeared in Court, retreated from her prior representations and sought an unwarranted rent-stabilized tenancy, essentially, arguing that Landlord and the Civil Court should have known she was lying sooner. After the tenant of record defaulted, the sole issue at trial was Appellant's illusory tenancy defense. After a three day bench trial, Civil Court (Kraus, J.) found that Appellant was wholly incredible and rejected her claims because she participated in an elaborate scheme to hide the alleged subtenancy from Landlord and the Civil Court (in prior summary proceedings). Significantly, based on Rosenberg & Estis's cross-examination of the Appellant, Civil Court expressly found that "it is undisputed that [Appellant] will lie to the court and the landlord if she believes it will enable her to continue in occupancy..."

On appeal the Appellate Term, First Department, found "no cause to disturb the trial court's fact-laden determination that [Appellant] failed to prove her illusory tenancy defense." The Court also found that the trial record and evidence amply supported Civil Court's conclusions, noting further that, "the trial court, having heard [Appellant's] testimony and observed her demeanor, was entitled to discredit her testimony upon its assessment that it was "'inconsistent, contradictory and inherently unreliable.'" Appellant's motion for leave to appeal to the Appellate Division, First Department was denied, and Landlord subsequently executed on its warrant of eviction.

(Supreme Court of the State of New York, Appellate Term, First Department, Decided February 23, 2017)
(Rosenberg & Estis, P.C. Team: Deborah E. Riegel, Ethan R. Cohen, and Ilya Prokopets)