Matter of Nazor OATH Index No. 2570/14 (May 29, 2015), adopted, Loft Bd. Order No. 4668 (Apr. 20, 2017),

aff’d, 2020 NY Slip Op 00555 (1st Dep’t 2020) [Loft Bd. Dkt. No. TR-1184; 544 West 27th Street, New York, N.Y.]

In coverage proceeding, petitioners failed to demonstrate that 544 West 27th Street is an interim multiple dwelling that had two residentially occupied units during the applicable window period. ALJ recommended that the application be denied. ______________________________________________________

NEW YORK CITY OFFICE OF

ADMINISTRATIVE TRIALS AND HEARINGS

In the Matter of MARIA NAZOR & PETER MICKLE

Petitioners ______________________________________________________

REPORT AND RECOMMENDATION

ALESSANDRA F. ZORGNIOTTI, Administrative Law Judge

On March 3, 2014, an application was filed with the Loft Board on behalf of Maria Nazor

and Peter Mickle pursuant to Article 7-C, section 281 of the Multiple Dwelling Law (“Loft Law”

or “MDL”) and title 29 of the Rules of the City of New York (“RCNY”) (ALJ Ex. 1).

Petitioners seek a finding that: (1) the building known as 544 West 27th Street, New York, New

York (“Building” or “544 West 27th Street”) is an interim multiple dwelling (“IMD”); (2) during

the window period Ms. Nazor and Mr. Mickle residentially occupied units 4N and 4S

independently; (3) Shimon Milul occupied unit 5N residentially; and (4) Ms. Nazor and Mr.

Mickle are the protected occupants of units 4N and 4S respectively. Petitioners assert that, due

to the location of the Building, they need only show that two units were residentially occupied

under MDL section 281(5)(ii), but that there is evidence to establish three residential units.

The respondent-owner of the Building, Sydney Sol Group Ltd. formerly known as

Mushlam Inc., filed an answer (ALJ Ex. 2) and argued that: petitioners, who are married, did not

occupy units 4N and 4S as two independent families, or in the alternative, that Mr. Mickle

resided in apartment 9A at 55 West 14th Street, New York, New York (“55 West 14th Street” or

“apartment 9A”); Mr. Milul, the principal of the respondent corporation, lived in New Jersey and

occupied unit 5N as an office; and MDL section 281(5)(ii), requiring only two residentially

occupied units for Loft Law coverage, is unconstitutional.

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A trial was held on seven days between January 27 and February 25, 2015. During the

contentious trial, both parties presented voluminous documentary evidence much of which was

cumulative and collateral. Petitioners testified and called five witnesses including: Mr. Milul; a

contractor who testified about renovations in unit 5N; two friends who testified about petitioners’

marital status; and a colleague who testified about transporting Mr. Mickle to and from the

Building for work. Respondent called: petitioners; Mr. Milul; two friends who testified that Mr.

Milul lives in New Jersey; respondent’s employee who investigated petitioners’ bank records and

telephone use between 2004 and 2010; and the managing agent and concierge from 55 West 14th

Street, who testified that Mr. Mickle resided there from 2004 through 2010. The record was held

open until May 4, 2015, for the filing of post-trial submissions.

While petitioners demonstrated that Ms. Nazor residentially occupied the fourth floor

since 1983, they failed to meet their burden of proving that the Building was residentially

occupied by two independent families for 12 consecutive months in 2008 and 2009.

Accordingly, the application should be dismissed.

ANALYSIS

Proof from 1983 thorough 2009 relating to the fourth floor of 544 West 27th Street

Ms. Nazor testified that she is an artist and an Italian citizen. She first came to the United

States on an artist visa and became a permanent resident in 1996 (Tr. 26-27; Pet. Ex. 26).

Ms. Nazor testified that in 1983 she leased with a friend, the fourth floor of the Building

for 10 years from the then-owner (Pet. Ex. 2). The fourth floor was approximately 5000 square

feet, was in total disrepair, and was accessed by stairs or freight elevator (Tr. 28-29, 341; Pet. Ex.

5A-1). Ms. Nazor and her friend, with the owner’s consent, hired a contractor who created two

separate lofts each with their own kitchen and bathroom, five independent studio spaces, and a

corridor with a bathroom (toilet and sink) for the studios. The larger loft (4N) has a front

entrance by the elevator and stairs and a back door to the corridor near the studios. Access to the

smaller loft (4S) is from the far-end of the corridor (Tr. 33, 44-54; Pet. Exs. 4, 5A-2). Ms. Nazor

testified that she has occupied unit 4N since 1983 (Tr. 44).

Shortly after moving into the Building, Ms. Nazor’s friend returned to Europe and Ms.

Nazor rented unit 4S and the studios to various tenants and artists at a prorated rent (Tr. 33, 62-

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63, 217). Since 1983, Ms. Nazor has always paid the rent for the entire fourth floor to the owner

(Pet. Ex. 27) and utilities have been shared by the occupants (Tr. 220-22).

Mr. Mickle testified that he is an unlicensed architect who has worked for various firms

since the 1970’s and has had his own business in different forms since the mid 1980’s (Tr. 332,

400). Petitioners started dating in 1989 (Tr. 56, 333, 335).

In 1993, the then-owner gave petitioners a 10-year lease extension for the fourth floor

(Pet. Ex. 3; Tr. 220, 333). At the time petitioners were engaged and were subsequently married

(Pet. Ex. 12). Ms. Nazor testified that they married for love and denied respondent’s assertion

that she married Mr. Mickle to get a green card (Tr. 222-25, 309).

Petitioners testified that after they entered into the lease and got married in 1994, Mr.

Mickle continued to live on Clinton Street. Mr. Mickle testified that since Ms. Nazor was an

artist, he did not want to disrupt her work and also thought it would be good to have some

independence. When unit 4S became available in 1995, he moved into it and has lived there

since. Mr. Mickle kept most of his possessions in unit 4S some may have been in unit 4N

(Nazor: Tr. 54-58, 225; Mickle: Tr. 334, 336).

Ms. Nazor testified that she met Mr. Milul in the 1980s when his father rented the ground

floor in the Building. Mr. Milul’s company purchased the Building in 1995. Prior to the sale,

Mr. Milul inspected the fourth floor and has been there several times since to inspect leaks from

above (Nazor: Tr. 196-98; Milul: Tr. 613-15). In 1995 people were living and working on the

fifth and sixth floors. Three apartments were later built on the third floor and occupied

residentially (Nazor: Tr. 63-66, 129).

In 2002 Mr. Mickle established his current business, Rational Building Company Inc.

(“Rational Building”), and listed 544 West 27th Street as the company’s address (Tr. 333, 1101).

Ms. Nazor and Mr. Mickle testified that starting in 2002 until early 2004 they began to

separate. They remained cordial but were no longer romantically involved and did not socialize

or travel together. There was no formal separation agreement and they never divorced.

Petitioners testified that Ms. Nazor continued to occupy unit 4N and Mr. Mickle unit 4S (Nazor:

Tr. 58-60, 202-203, 214, 225-27; Mickle: Tr. 336-38). Ms. Nazor also testified that she did not

get divorced for religious reasons but that she and Mr. Mickle would have likely gotten a legal

separation had it not been for the stress of dealing with Mr. Milul (Tr. 309).

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According to Ms. Nazor, petitioners had no assets to divide. They had a joint checking

account that was not used after 2004 (Tr. 167-68). Citibank records from October 2005 to

October 2012 (Pet. Ex. 24C) show that a zero balance was maintained. In May and June 2006,

Citibank wrote petitioners that their account was inactive (Pet. Ex. 24D).

In support of petitioners’ assertion that they separated by 2004, Mr. Mickle submitted his

passport (Pet. Ex. 36) showing that, unlike Ms. Nazor, he did not travel after they were separated

(Tr. 396). Ms. Fernandez, a former tenant in the Building, also testified that sometime after 2004

she ran into petitioners separately in the neighborhood and they both told her that they had

separated (Tr. 574-75, 580-81, 584-85). Similarly, Mr. Gunther, a friend of Mr. Mickle since the

1980s, testified that sometime after 2003 petitioners separated and that he would invite them

individually to his house for parties (Tr. 587-88, 593).

Even though petitioners were separated, they kept keys to each other’s units in case of an

emergency including the on-going leaks in unit 4N from above (Tr. 229, 310-311). Mr. Mickle

also listed Ms. Nazor as an emergency contact on his passport (Tr. 397; Pet. Ex. 36).

In January 2003, Mr. Mickle installed a door with a lock near the elevator and stairs to

secure the corridor that accessed the studios, unit 4N’s back door, and unit 4S. Petitioners

testified that this was done to stop Mr. Milul from coming to the fourth floor, bothering the

people in the studios, and taking materials from them. Shortly thereafter, Mr. Milul took down

the door with an axe and Ms. Nazor called the police. The door was replaced and Mr. Milul was

given a key. Mr. Mickle denied that the door was installed because Ms. Nazor was nervous

about being the only person living on the fourth floor after their separation (Nazor: Tr. 198-201,

211-13, 295-96, 307, 328; Mickle: Tr. 343-44, 432, 434-35, 502-03). Ms. Nazor also testified

that she has always had a dog and that she keeps the dog in the corridor (Tr. 52-53).

After petitioners’ lease expired on May 31, 2003, they became month to month tenants

(Tr. 60-61). Ms. Nazor testified that she felt insecure about her status in the Building and had

the occupants of the studios move out. Petitioners combined four studios into two spaces and

identified them as “Workspace/storage-4S” and “Studio-4N” (Nazor: Tr. 189-90, 203-05, 214-

19, 305-06; Mickle: 341-42, 431-33); Pet. Ex. 5A-2).1

Ms. Nazor testified that in 2003 and 2004, Mr. Milul began eviction proceedings against

other tenants in the Building who eventually left (Tr. 67, 205; Pet. Ex. 40). In 2004 all elevator

1 The fifth studio was combined with unit 4N in 1987 and used as Ms. Nazor’s bedroom (Pet. Brief, at 8 fn. 5).

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service was cut-off. Ms. Nazor testified that she was unable to take her paintings out of the

Building because they were too large to take down the stairs. Similarly, petitioners were not

given access to the front door of the Building and had to use the side entrance (Tr. 191-95).

Eviction proceedings against petitioners began in June 2006 (Tr. 61, 203). In 2008 an

order was issued setting petitioners’ rent for use and occupancy of the fourth floor at $15,000

and granting them access to the elevator and front door. Mushlam Inc. v. Nazor, Index No.

100207/08 (Sup. Ct. N.Y. Co. Apr. 3, 2008). Petitioners were ordered to pay respondent $15,000

a month starting June 1, 2008 (Pet. Ex. 27).

Ms. Nazor described her relationship with Mr. Mickle as “complicated” and “difficult”

(Tr. 203-04, 226, 257, 321). Petitioners testified that, even though they were separated, they

faced the legal proceedings about the fourth floor together. As a result of the 2008 judgment

setting their monthly rent at $15,000 and their legal expenses, petitioners had to pool their

resources to pay these shared expenses. Mr. Mickle transferred over $300,000 to her to cover

these expenses. They came up with the money in any way possible including from Mr. Mickle’s

earnings and loans from his brother because they would be evicted if they did not pay the rent

(Nazor: Tr. 175-76, 268-70, 289-91, 308; Mickle: Tr. 338-39; Pet. Ex. 27; Resp. Exs. E, G, SS).

Ms. Nazor testified that in 2008 and 2009 she never went to unit 4S. She acknowledged

that even though he was living next door, she called Mr. Mickle often on the telephone as shown

by their telephone bills (Resp. Exs. A, B, J, MM, NN, OO, PP, QQ). Ms. Nazor testified that

during these calls they spoke about the pending lawsuit and how to pay their bills. At the time,

Mr. Mickle was drinking heavily and it was hard to reach him so Ms. Nazor would call him

repeatedly at all hours and at different phone numbers. Since they were both up late, it was not

unusual for them to speak at night (Tr. 315-20, 822-24, 827-28).

Mr. Mickle testified that during the window period he lived in unit 4S and never went to

Ms. Nazor’s unit (Tr. 494). He testified that many of the one minute calls recorded on their

phone bills represent missed calls (Tr. 1061-64; Pet. Exs. 50, 51). Mr. Mickle acknowledged

that even though he was living next door, Ms. Nazor would call his landline at 55 West 14th

Street at night (Tr. 1082-83). Mr. Mickle explained that he had calls to the landline forwarded to

his cell phone (Tr. 1055-57, 1094; Pet. Ex. 50).

To support their claims that they occupied the fourth floor residentially during the

window period, petitioners submitted documents from 2008, 2009, 2010, and 2011 listing 544

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West 27th Street as their address. None of the documents identify units 4N or 4S but some of

them list the fourth floor. Ms. Nazor’s documents included: cell and landline phone records; the

first page of her Citibank records; the first page of statements from American Express,

MasterCard, and Macy’s; insurance records; and correspondence for charitable contributions

(Pet. Exs. 15- 24B, 25). Mr. Mickle’s documents included: correspondence from the Internal

Revenue Service and the Social Security Administration; a life insurance policy; phone records;

the first page of his Citibank records; a jury summons; and election records (Pet. Exs. 29, 30, 32-

35). Mr. Mickle testified that he did not file for state or federal income taxes from 2007 through

2010 (Tr. 910). Ms. Nazor testified that she files her taxes in Italy (Tr. 310).

Petitioners also submitted: rent bills for the fourth floor from respondent to Mr. Mickle

from August 2004 through June 2006 ranging in amounts from $4,525.25 to $4,773.25 (Pet. Exs.

28) and Con Edison bills in Mr. Mickle’s name for gas and electricity for May 2009 through

March 2011 (Pet. Exs. 14, 31; Tr. 139-44, 297-98).

Petitioners called Mr. Quinn, a contractor, who testified that he met Mr. Mickle in 2009

on a construction project. He picked up and dropped-off Mr. Mickle sometimes several times a

week, at the Building where Mr. Mickle said he lived (Tr. 604-05, 607-10). Mr. Mickle denied

conducting any business at the Building during the window period (Tr. 1087). However,

business correspondence from 2008 and 2009 and a certificate of insurance for 2006-2008 for

Rational Business, listed the Building as its address (Tr. 1048, 1086; Pet. Ex. 47).

At the end of 2009, a judgment of ejectment was granted in respondent’s favor against

petitioners. Mushlam Inc. v. Nazor, Index No. 100207/08 (Sup. Ct. N.Y. Co. Dec. 31, 2009)

(Resp. Ex. H). Ms. Nazor testified that after she received the notice of ejectment, she started

packing her paintings into crates and stored them in the “Workspace/storage-4S” (Tr. 190-91).

Proof from 2004 to 2010 relating to 55 West 14th Street and other alleged office spaces

Mr. Mickle testified that in late 2003 or early 2004, he was no longer able to work in the

Building because there was no elevator or intercom. It was difficult to receive packages and

clients in the Building, and the environment was hostile. He looked for an office on Craigslist

and found a one-bedroom apartment where Ms. Starzecpyzel was renting the bedroom at 55

West 14th Street for $1300 a month. He entered into a verbal agreement with Ms. Starzecpyzel

to rent the 9’ by 15’ bedroom as an office while she occupied the rest of the apartment.

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According to Mr. Mickle, the apartment was conveniently located, affordable, had 24-hour

access, and he could receive deliveries there (Tr. 401-05, 428-30, 445-46, 500-02, 926-27).

In a 2014 deposition, Mr. Mickle testified that one of the reasons he moved to 55 West

14th Street was because it was “difficult” to receive clients at the Building (Tr. 910-13, 917). At

the trial he acknowledged that it was “impossible” to receive clients at 55 West 14th Street

because it was a residential building (Tr. 914-15, 925). Mr. Mickle admitted that he had no

documentation showing that 55 West 14th Street was a business address (Tr. 1093-94).

Mr. Mickle also acknowledged that in 2004 he disconnected his residential landline at

544 West 27th Street (Tr. 491, 504, 975-77; Pet Ex. F) and installed two landlines at 55 West 14th

Street, one for internet access and the other for a fax machine. According to the Coles directory,

both lines were residential accounts (Tr. 443, 976-78, 1094; Resp. Ex. LL).

Mr. Mickle testified that Ms. Starzecpyzel “moved away” from 55 West 14th Street and

her son, Mr. Grasso, moved in 2006 or 2007. Mr. Grasso slept in a “little place” that “they”

carved out while Mr. Mickle used the bedroom as his office (Tr. 408-09, 468-69, 504).

Mr. Mickle asserted that he never used the kitchen but used the bathroom at 55 West 14th

Street. The bedroom was filled with equipment including four computers, two monitors, a large

commercial printer, two work benches, office machines, storage units, a chair, and a fold-up

canvas cot. He rarely slept there but it happened when he worked late and he would “fall asleep”

or “pass out” because he was drinking heavily at that time (Tr. 405-07).

Mr. Mickle denied keeping any clothing at 55 West 14th Street except for maybe a change

of shirt (Tr. 910). Bank records indicate that, in 2007, Mr. Mickle used a cleaner at 36 West 15th

Street (Resp. Ex. G at 1391). Mr. Mickle had no recollection of a cleaner located around the

corner from 55 West 14th Street (Tr. 461-62). Mr. Mickle also had numerous cash withdrawals

from the Citibank ATM near 55 West 14th Street that he asserted was the closest bank to 544

West 27th Street (Resp. Ex. G; Tr. 463-67, 508-10).

Ms. Nazor denied that Mr. Mickle moved to 55 West 14th Street to live after they

separated and claimed that he used the rented bedroom as an office even though it was in a

residential building (Tr. 234-35, 245, 271). When she went to 55 West 14th Street, the bedroom

was so densely packed with printers and monitors that she could not go inside. She never saw a

bed there. Ms. Nazor said that she was unsure when Mr. Mickle was there and testified that he

had various “field offices” where he would work (Tr. 230, 263, 315, 325-26). Mr. Mickle would

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sometimes leave documents for Ms. Nazor with the concierge at 55 West 14th Street (Mickle: Tr.

409-10; Nazor: Tr. 312-313, 329).

Mr. Mickle testified that he rented at 55 West 14th Street from 2004 until sometime in

2009 but that he used it “progressively” less starting in 2006 (Tr. 408). Mr. Mickle claimed that

he started occupying other spaces because he was working with assistants and had projects on

the Upper East Side. In 2006 he used, rent-free space inside an apartment he was renovating at

1150 Fifth Avenue. However, there were limitations since that location only allowed work

between 9:00 a.m. and 5:00 p.m. during the week, so he worked at 55 West 14th Street after

hours (Tr. 439). When that job came to an end in 2007, he took a desk in an architect’s office on

92nd Street and Madison Avenue. Later in 2008 he took a conventional office at 66 West

Broadway because he had more people working for him. When he could no longer sustain that

economically, he took another desk in an architect’s office in the same building (Tr. 411-15).

Mr. Mickle also stated that at some point he began to owe rent for 55 West 14th Street and

was reluctant to go there. He knew it was unwise to be paying for a space that he never used but

that he would sometimes go there at night to work. Mr. Mickle testified that his equipment was

obsolete but that he did not know what to do with it and used the bedroom primarily as storage.

Eventually, he abandoned the space. He “bumped” into Mr. Grasso in late 2009 or early 2010

and was told that all of his things had been thrown away (Tr. 412-13, 415-16, 506, 529-31). Mr.

Mickle claimed that the last time he used 55 West 14th Street was in 2008 or 2009 (Tr. 416).

In March 2009 Mr. Mickle’s father, Peter Mickle, passed away (Tr. 274). Mr. Mickle’s

brother, Stuart Mickle, was appointed the executor of the estate. In the petition to the

Surrogate’s Court for letters of administration sworn to on April 8, 2009, Stuart Mickle listed

Mr. Mickle’s “domicile” as 55 West 14th Street, apartment 9A and attested to the truth of the

matter (Resp. Ex. D at 1564, 1566). In the consent to the appointment of his brother as executor

sworn to on April 6, 2009, Mr. Mickle’s address was listed as 55 West 14th Street, apartment 9A

(Resp. Ex. D at 1554). Mr. Mickle testified that he did not know who prepared the consent form

for his signature and could not recall the circumstances when he signed it. He also stated that he

never saw the petition submitted by his brother. Mr. Mickle explained that he gave his family

the address at 55 West 14th Street so that they could communicate with him but that he never told

them it was his residence (Tr. 418-21, 486-90, 521-23, 918-24, 928, 1093-94).

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In support of their claim that Mr. Mickle used 55 West 14th Street as an office, petitioners

submitted six rent checks from Rational Business to Mr. Grasso for $1300 a month from 2008

and 2009 (Pet. Ex. 37; Tr. 397). However, Mr. Mickle acknowledged that he also paid the rent

out of his personal checking account and by cash (Resp. Ex. G; Tr. 449-50, 453-60). Petitioners

also called Mr. Gunther, Mr. Mickle’s friend, who testified that Mr. Mickle once mentioned an

office on 14th Street but that he never visited and was unsure when this conversation occurred

(Tr. 589, 592, 596, 599).

Ms. Gould testified that she has managed the building at 55 West 14th Street since 2004.

Her office is located in the building and she is familiar with apartment 9A (Tr. 769-71). Ms.

Gould testified that in 2005 Ms. Starzecpyzel was incarcerated and that the landlord, Courtney

House, started receiving rent checks from her attorney. Ms. Gould testified that, based on

conversations with building staff, she knew that Mr. Grasso would visit occasionally and that

Mr. Mickle resided there. In 2006, Ms. Gould hired the law firm Belkin, Burden, Wenig and

Goldman, LLP (respondent’s counsel) to investigate the occupancy of apartment 9A and

determine whether eviction proceedings were feasible. A log of when Ms. Starzecpyzel came to

the building was maintained, which showed she was there four times between 2007 and 2009

(Tr. 772, 775-77, 783-85, 798; Resp. Ex. GG).

Ms. French testified that she was the concierge at 55 West 14th Street from 1991 until

2013 and is currently an office assistant to the resident manager. When she was the concierge,

she was responsible for announcing guests and accepting deliveries for tenants in the building.

She usually worked a split shift on Sundays and Mondays from 7:30 a.m. to 4:00 p.m. and

Tuesday, Wednesday, and Thursday from 3:30 p.m. to midnight (Tr. 938-40).

Ms. French testified that Mr. Mickle moved into 55 West 14th Street around 2004 and left

in 2010. Ms. Starzecpyzel introduced Mr. Mickle as her roommate and Ms. French saw him

move boxes and bags into the apartment. Ms. French testified that while she was a concierge,

she saw Mr. Mickle during the day, in the evening, and at night including in the lobby, washing

his clothing in the laundry room on Sundays, in the hallways, and getting mail out of the

mailboxes. She testified that Mr. Mickle had a few visitors that she would announce and that he

would submit work orders to have things fixed in apartment 9A (Tr. 940-45, 950, 956, 965-68).

Ms. French testified that Ms. Starzecpyzel stopped living in apartment 9A about a year

after Mr. Mickle moved in. Ms. Starzecpyzel’s son, Mr. Grasso, would sometimes stay there

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when he visited and would speak to Ms. French. She knew that Mr. Grasso was not the tenant of

record and never lived there on a full-time basis (Tr. 949-52, 966-69).

Ms. French testified that she had no indication that Mr. Mickle was using apartment 9A

as an office. She also denied Mr. Mickle’s claim that he was not using it for several years prior

to 2010 (Tr. 953-54, 962). She testified that when she did double shifts overnight, which

occurred at least twice a month in 2008 and 2009, she saw Mr. Mickle come in late at night and

leave early the next morning (Tr. 955).

Ms. Gould testified that Courtney House commenced an action in December 2009 to

evict Ms. Starzecpyzel from the rent-stabilized apartment for non-primary residency and named

Mr. Grasso and Mr. Mickle as her undertenants (Tr. 775; Resp. Ex. I). Mr. Mickle was never

served in the eviction proceedings and asserted that he had no idea about them until his

deposition was taken in 2014 in the related court proceeding with respondent (Tr. 470, 512-14,

519). Ms. Gould testified that the only time she spoke to Mr. Mickle regarding the eviction was

when she received a call from him advising that he was not going to appear for a scheduled

deposition in the eviction proceeding (Tr. 795, 800-01).

In a deposition taken on November 29, 2010, Mr. Grasso stated under oath that he moved

into apartment 9A at 55 West 14th Street in 2005. In 2006 his mother was spending time with

her fiancé and moved out in 2007. From 2005 to 2007, Mr. Grasso split his time between New

York and Florida and would sometimes stay in New Jersey. Mr. Grasso also testified that: Mr.

Mickle moved in when his mother was living there; Mr. Mickle was staying there on a regular

basis between September 2005 and December 2007; Mr. Mickle was still his roommate but that

since May of 2010 he had not been there regularly; Mr. Mickle’s bedroom was still “chock a

block” with his belongings including a bed, a desk, shelving, and a lot of other stuff and that it

was like a small studio for him; Mr. Mickle usually arrived late and left early; Mr. Mickle paid

approximately $1000 a month plus $100 for utilities, a portion of the cable and cleaning costs but

that he was sometimes delinquent and made it up the next month; he did not know where Mr.

Mickle worked but knew it involved architecture; Mr. Mickle disconnected his telephone line

that he used for his business; and Mr. Mickle rarely asked about the eviction proceedings (Resp.

Ex. I at 23000-21301, 23004-23005, 23007).

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Proof relating from 2010 to the hearing

Following the amendments to the Loft Law in June 2010 providing for the possibility of

Loft Law coverage for the Building, petitioners moved to vacate the judgment of eviction in

Mushlam Inc. v. Nazor, Index No. 100207/08 and to amend their answer to interpose a defense

based on the newly enacted Loft Law.

In an affidavit sworn to on August 16, 2010, filed in support of petitioners’ motion to

interpose a Loft Law defense (Resp. Ex. C-1), Mr. Mickle stated that since Mr. Milul’s periodic

denials of his access to the Building and on-going deprivations of elevator service since 2007,

Mr. Mickle’s architecture practice was frustrated to the point where he moved it to a temporary

jobsite at 1150 Fifth Avenue, followed by 30 East 92nd Street and 66 West Broadway in 2008.

He maintained that he has had no other residence since moving into unit 4S in 1995 and made no

mention that he rented a bedroom at 55 West 14th Street (Resp. Ex. C-1 at ¶¶ 14-15).

In a decision concerning various consolidated motions, the court, inter alia, vacated the

judgment of eviction and granted petitioners’ application to interpose a Loft Law coverage

defense. Mushlam Inc. v. Nazor, Index No. 100207/08 (Sup. Ct. N.Y. Co. Dec. 13, 2010) (Pet.

Ex. 1A). Petitioners’ rent for the use and occupancy of the fourth floor was modified from

$15,000 to $3,600 retroactive to May 1, 2008. Mushlam Inc. v. Nazor, Index No. 100207/08

(Sup. Ct. N.Y. Co. July 9, 2012) (Pet. Ex. 1B). The monthly rent was again modified to

approximately $4,700 a month. Mushlam Inc. v. Nazor, 104 A.D.3d 483 (1st Dep’t 2013).

Photographs of the fourth floor were taken in 2010, 2011, and 2015 (Pet. Exs. 6A, 6B,

7A, 7B, 8A, 8B, 9A, 9B, 10A, 10B), which petitioners testified accurately represent how units

4N and 4S looked at the time the photos were taken and in 2008 and 2009 (Nazor: Tr. 81, 107,

122, 124, 137; Mickle: Tr. 377-78, 383). The photographs, which were not date-stamped, show

indicia of residential living in each unit including: a sleeping area; a living area with couches,

tables, and chairs; a bathroom with a sink and shower; and a kitchen with a refrigerator, stove,

sink and various kitchen appliances including a washer and a dryer in unit 4N. Both units had

residential furniture and effects. The closet in unit 4N contained Ms. Nazor’s clothing and

personal items. The closet in unit 4S contained Mr. Mickle’s clothing and personal items.

In a stipulation of settlement between Courtney House and Mr. Grasso dated April 27,

2011, Mr. Grasso surrendered the keys to apartment 9A at 55 West 14th Street and represented

that Mr. Mickle permanently vacated it in February 2011 (Tr. 771-774, 808-09; Resp. Ex. I).

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Petitioners filed their Loft Board application in March 2014, even though they had

successfully raised the Loft Law defense in the court proceeding, to preserve their rights before

the application deadline for filing coverage applications was closed (Tr. 9-10).

Preliminary Matters

In 2010, the state legislature passed amendments to the Loft Law, which added section

281(5) to the MDL. L. 2010, Ch. 135 § 1 (eff. June 21, 2010) (adding MDL § 281(5)); L. 2010,

Ch. 147 § 1 (eff. June 21, 2010). Amended section 281(5) defines an IMD, inter alia, as any

building located in Manhattan north of West 24th Street and south of West 27th Street and west of

Tenth Avenue and east of Eleventh Avenue that: (1) at any time was occupied for commercial

purposes; (2) lacks a certificate of compliance or occupancy pursuant to section 301 of this

chapter; (3) is not owned by a municipality; and (4) was occupied for residential purposes as the

residence or home of two or more families living independently from one another for a period of

12 consecutive months during the period commencing January 1, 2008, and ending December

31, 2009 (“window period”), “provided that the unit” (i) is not located in a basement or cellar

and has at least one entrance that does not require passage through another residential unit to

obtain access to the unit, (ii) has at least one window opening onto a street or a lawful yard or

court as defined in the zoning resolution for such municipality, and (iii) is at least 400 square feet

in area. MDL § 281(1), (2), (5) (Lexis 2014).

Whether MDL section 281(5), providing for Loft Law coverage based on two units, is

constitutional is beyond the jurisdiction of this tribunal. Matter of Tenants of 51-55 West 28th

Street, OATH Index No. 2877/09, mem. dec. at 4-5 (June 26, 2009), adopted, Loft Bd. Order No.

3580 (June 17, 2010).2

The following facts are not in dispute. The Building is located on the south side of 27th

Street between Tenth and Eleventh Avenues and falls within the two-unit exception of amended

section 281(5) of the MDL. The six-story Building is owned by a private corporation, is located

in New York City with a population of more than one million people, and qualifies as having

prior commercial use under MDL section 281(1). There is a certificate of occupancy indicating

that there is no Multiple Dwelling Law classification for the Building and listing commercial

2 In the related court proceedings, respondent challenged the constitutionality of MDL section 281(5). The court declined to make a declaratory judgment without a finding that only two families resided independently in the Building. Mushlam Inc. v. Nazor, Index No. 156217/12 (Sup. Ct. N.Y. Co. Oct. 21, 2013) (Pet. Ex. 1C).

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uses for the first floor (Pet. Ex. 46). During 2008 and 2009 the first, second, third, and sixth

floors were occupied by commercial tenants (Tr. 205-08, 866). The disputed units are above the

ground floor, do not require passage through another unit, have least one window opening onto a

street, and are at least 400 square feet in area.

The disputed issues concern whether petitioners residentially occupied the fourth floor as

two independent families and whether Mr. Milul occupied unit 5N residentially.

Petitioners’ argument that the only issue is whether they occupied the fourth floor as a

single unit or as two units, not whether Mr. Mickle resided at 55 West 14th Street, is without

merit. In the related court proceedings, the judge in the Supreme Court action observed in dicta

that respondent argued petitioners occupied the fourth floor as a residence. The court stated that

the ultimate issue for trial on Loft Law coverage was whether the fourth floor was occupied as

one or two residences. Mushlam Inc., Index No. 100207/08 at 3.

The doctrine of res judicata (claim preclusion), and the related concept of collateral

estoppel (issue preclusion), bar relitigation of an identical claim or issue by the same parties

where there has been a final judgment on the merits. See Ryan v. New York Telephone Co., 62

N.Y.2d 494, 500 (1984); Matter of Newmann, OATH Index No. 2680/08 at 16 (Oct. 30, 2008),

adopted, Loft Bd. Order No. 3502 (Apr. 23, 2009).

The only issues decided by the courts thus far relate to petitioners’ eviction, their rent for

the use and occupancy of the fourth floor, and whether petitioners could interpose a Loft Law

defense (Pet. Exs. 1A-D; Resp. Ex. H). The parties have yet to litigate whether, under the Loft

Law, the Building is an IMD and petitioners the protected occupants of their respective units.

Indeed, petitioners acknowledged that the Supreme Court will likely defer to the Loft Board on

these questions (Tr. 10). Since there has been no final judgment on the merits of Loft Law

coverage, respondent should not be precluded here from interposing a colorable defense that was

only discovered after petitioners’ motion to interpose a Loft Law defense was granted in the

related court proceeding (Tr. 636-37). For the same reasons, petitioners’ arguments that the

judge in the Supreme Court action also observed that, at some point, Mr. Milul used unit 5N as a

“pied-a-terre” (Tr. 8, 11, 627, 660, 662) is not binding on the instant coverage determination.

Similarly, petitioners’ claims that respondent engaged in bad faith and should be

estopped from presenting proof that Mr. Mickle resided at 55 West 14th Street are without merit.

“Under the doctrine of . . . estoppel against inconsistent positions, a party is precluded from

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inequitably adopting a position directly contrary to or inconsistent with an earlier assumed

position in the same proceeding.” Maas v Cornell Univ., 253 A.D.2d 1, 5 (3rd Dep’t 1999).

First, petitioners’ coverage application is not the “same proceeding” as respondent’s

eviction proceeding in state court. Second, there is no evidence of bad faith. When the related

ejectment proceedings began in 2006, respondent had no proof that Mr. Mickle resided

elsewhere. The 55 West 14th Street address was only discovered in 2014. Moreover, petitioners

have failed to demonstrate any prejudice since the question whether Mr. Mickle residentially

occupied unit 4S for purposes of Loft Law coverage has yet to be litigated and petitioners were

on notice that this would be raised at this hearing. Finally, there is no obligation under the Loft

Law rules to plead and prove that Mr. Mickle lived someplace else. Rather, the burden is on

petitioners to show that Mr. Mickle resided independently from Ms. Nazor in the Building.

Petitioners’ argument that a negative inference should be drawn for respondent’s failure

to maintain window period video from the Building is also without merit. Mr. Milul credibly

testified that the Building’s surveillance system preserves only 30 days of video before it is

overwritten (676-81). Since the window period was not established until June 2010, respondent

had no reason or a legal obligation to preserve video from an earlier period. Petitioners’

remaining arguments, including respondent’s failure to call his wife as a witness and witness

tampering, have been considered and found to be without merit.

In order to prevail on their coverage application, petitioners must prove their case by a

preponderance of the evidence. 29 RCNY § 1-06(i)(4) (Lexis 2014). Preponderance has been

defined as “the burden of persuading the triers of fact that the existence of a fact is more

probable than its non-existence.” Richardson on Evidence § 3-206 (Lexis 2008). Petitioners

failed to meet their burden.

In order for a unit to be covered by the Loft Law, “it must possess sufficient indicia of

independent living to demonstrate its use as a family residence.” Anthony v. NYC Loft Bd., 122

A.D.2d 725, 727 (1st Dep’t 1986). The determination of coverage requires a case by case

analysis of the indicia of residential use. See Matter of Pels, OATH Index No. 2481/11 at 5-6

(June 20, 2012), adopted, Loft Bd. Order No. 4161 (June 20, 2013). As noted in Matter of South

11th Street Tenants’ Assoc., OATH Index Nos. 1242/96, 1243/96, 1244/96 at 41 (Mar. 30, 1999),

adopted, Loft Bd. Order No. 2397 (Apr. 29, 1999), “no one factor is dispositive . . . the

regulations defining a residential unit were deliberately left open-ended to allow for a more

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flexible approach to coverage determination.” However, the regulations specify two factors to

consider: whether a unit has a separate entrance accessible from a public hallway or street, and

has “one or more rooms such as a kitchen area, a bathroom, a sleeping area and a living room

area arranged to be occupied exclusively by the members of a family and their guests . . . .” See

29 RCNY § 2-08(a)(3)(i), (ii) (Lexis 2014).

This tribunal and the Loft Board have also considered circumstantial evidence of a

tenant’s intent to make a unit a residence, such as the receipt of mail at the unit, whether the

unit’s address is used for voter registration, driver’s license, and other official documents, and

whether the tenant has maintained another residence. See, e.g., Matter of Gareza, OATH Index

Nos. 2061/12 & 760/13 at 8 (Dec. 12, 2012) adopted in part, rejected in part, Loft Bd. Order No.

4243 (Feb. 20, 2014) (receiving mail at address, using the address on a bank account, and being

registered to vote at the address was evidence of residential use); Application of Mussman, Loft

Bd. Order No. 905, 9 Loft Bd. Rptr. 50, 59 (May 25, 1989) (tenant did not residentially occupy

unit based in part on automobile and voter registration reflecting another address plus the

tenant’s inability to explain why his wife resided at that address without him).

“[T]here is no requirement for Loft Law coverage that residentially occupied units be the

primary residences of their tenants.” Vlachos v. NYC Loft Bd., 70 N.Y.2d 769, 770 (1987); see

also Kaufman v. American Electrofax Corp., 102 A.D.2d 140, 142 (1st Dep’t 1984) (unit covered

by Loft Law even though occupant maintained a separate primary residence). However, the

residential use of the unit for which coverage is sought may not be incidental to a predominant

commercial use. See 29 RCNY § 2-08(l)(1) (Lexis 2014); see also Franmar Infants Wear, Inc.

v. Rios, 143 Misc. 2d 562 (App. Term, 1st Dep’t 1989) (where only a 5’ by 8’ space of 625

square foot artist’s studio was used residentially, space remained commercial); Loft Realty Co. v.

Aky Hat Corp., 123 Misc. 2d 440, 445 (Civ. Ct. N.Y. Co. 1984), aff’d, 131 Misc. 2d 541 (App.

Term, 1st Dep’t 1984) (where tenant used approximately 2% of a unit residentially and the rest a

hat factory, unit not covered because residential use was incidental to commercial use); Matter of

Addis, OATH Index Nos. 1574/02, 1575/02 at 8 (Nov. 25, 2002), adopted, Loft Bd. Order No.

2772 (Jan. 9, 2003) (insufficient residential use where commercial tenant slept in loft only a few

nights per month).

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The tenants’ purpose for occupying the unit is also considered in determining whether a

unit is principally residential or commercial. See Anthony, 122 A.D.2d at 727-28 (unit leased as

a dance studio not covered where the tenant slept there occasionally due to the need to prepare

for dance performances); Matter of Tenants of 323-325 W. 37th Street, OATH Index No. 692/06

at 18-19 (May 18, 2007), adopted in part, modified in part, Loft Board Order No. 3457 (Sept. 18,

2008), reconsideration granted in part and denied in part, Loft Bd. Order No. 3496 (Apr. 23,

2009), aff’d, 79 A.D.3d 488 (1st Dep’t 2010) (unit leased by a museum display company was

primarily commercial, despite tenants creation of a space with a bed, couch, refrigerator, and

stove and where tenants used it temporarily when one was evicted from his apartment and the

other had marital discord).

To the extent resolution of the disputed issues relies on a determination of witness

credibility, this tribunal has looked to witness demeanor, the consistency of a witness’s

testimony, supporting or corroborating evidence, witness motivation, bias or prejudice, and the

degree to which a witness’s testimony comports with common sense and human experience in

determining credibility. Dep’t of Sanitation v. Menzies, OATH Index No. 678/98 at 2-3 (Feb. 5,

1998), aff’d, NYC Civ. Serv. Comm’n Item No. CD 98-101-A (Sept. 9, 1998).

Both parties had compelling financial motives to lie: petitioners to obtain Loft Law

protection for two large rent regulated units in a prime location in Manhattan; and respondent to

avoid a finding of Loft Law coverage and thereby eject petitioners from the Building. Since

2006, the parties have been involved in contentious litigation regarding petitioners’ status in the

Building and there is an even longer history of hostility and distrust between them. None of

these parties were particularly forthcoming witnesses and all, at one point or another, gave non-

responsive, vague, or untruthful testimony. Mr. Milul and Mr. Mickle also made inconsistent

statements throughout the hearing (Milul: Tr. 614-19, 630-33, 643-46, 655-56, 684-86; Mickle

Tr. 425-31, 460-62, 494-96, 907-09, 914-16).

Most importantly, petitioners failed to disclose that Mr. Mickle rented a bedroom at 55

West 14th Street from 2004 through 2009 when they made a motion to interpose a Loft Law

defense in the related court proceedings (Resp. Ex. C-1). Petitioners’ testimony about Mr.

Mickle’s use of unit 4S as his residence and 55 West 14th Street as his office was strained,

evasive, and incredible. When respondent delved into these areas, Mr. Mickle appeared visibly

uncomfortable and claimed that he did not understand the questions (Tr. 436-38, 481-82, 1085-

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92). When confronted with sworn statements that were inconsistent with his claim that he used

55 West 14th Street as an office only (Resp. Exs. C-1, D), Mr. Mickle gave incredible

explanations and asserted that he did not draft the documents (Tr. 418, 500, 521, 918, 928).

Thus, unless a party’s self-serving testimony comported with common sense or was

corroborated by reliable, independent evidence, it was found insufficient to establish any of the

disputed facts. See Dep’t of Education v. Brust, OATH Index No. 2280/07 at 10 (Sept. 29,

2008), adopted, Chancellor’s Dec. (Oct. 22, 2008) (if a witness is found to have been false in one

instance, trier-of-fact may reject all of the witness’s testimony); see also People v. Barrett, 14

A.D.3d 369, 369 (1st Dep’t 2005) (the maxim falsus in uno falsus in omnibus, false in one thing,

false in everything, may be applied to witness testimony).

Petitioners failed to demonstrate that the fourth floor was residentially occupied by two independent families during the window period.

The record supports a finding that Ms. Nazor has residentially occupied and worked on

the fourth floor since 1983. The unrebutted testimony of petitioners also supports a finding that

during the time they were married between 1995 through 2003, Mr. Mickle lived and worked on

the fourth floor. Whether petitioners occupied the fourth floor as one family before they

separated or whether they lived independently in units 4S and 4N, as they claimed, is unclear

from the record. The record also supports petitioners’ assertion that, as corroborated by their

inactive joint checking account and the testimony of Mr. Gunther and Ms. Fernandez, they were

separated by 2004.

Turning to whether petitioners occupied the fourth floor as two independent families after

they separated in 2004, petitioners failed to demonstrate by a preponderance of the credible

evidence that Mr. Mickle lived in unit 4S while Ms. Nazor lived in unit 4N. Rather, the record

supports a finding that Mr. Mickle moved to 55 West 14th Street and lived there until 2010.

Petitioners admit that, while they remained cordial after they separated, their relationship

was strained and difficult. It makes sense that Ms. Nazor would stay in the space that she built to

work as a painter and had lived in for 20 years and that Mr. Mickle would move his residence

someplace else. Indeed, Mr. Mickle rented the bedroom at 55 West 14th Street immediately

following petitioners’ separation. Petitioners’ assertion that Mr. Mickle practiced architecture in

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a small bedroom in a residential building at 55 West 14th Street was incredible and contrary to

the weight of the evidence for a number of reasons.

First, architecture involves drafting and working with large plans and petitioners, as

corroborated by Mr. Grasso, testified that the bedroom at 55 West 14th Street was so crammed

with a cot, a desk, and equipment that a person could barely step inside it. Second, it would have

been difficult for Mr. Mickle to receive clients in apartment 9A because it was a residential

building. Third, Ms. French and Mr. Grasso stated that Mr. Mickle resided at 55 West 14th Street

and neither had any indication that he lived elsewhere and worked only there. Mr. Mickle’s

explanation that Mr. Grasso was referring to other offices when he testified that he did not know

where Mr. Mickle worked was unconvincing (Tr. 479-81). Fourth, petitioners had no documents

showing 55 West 14th Street being used as a business address. Fifth, Mr. Mickle admitted that he

paid rent for the bedroom out of his personal account and by cash. It seems unlikely that

someone would pay a business expense with personal funds when a business account existed for

that purpose. Sixth, Mr. Mickle’s testimony that he eventually paid $1300 a month to keep the

bedroom as a storage space for obsolete computer equipment and items that were “junk” (Tr.

445) was incredible.

Moreover, the testimony of Ms. French, as corroborated by Ms. Gould and Mr. Grasso’s

deposition, that Mr. Mickle lived at 55 West 14th Street from 2004 until 2010 was credible. Ms.

French had no apparent motive to lie and petitioners’ attempt to impeach her failed (Tr. 958-60,

963-65; Pet. Ex. 52). Ms. French, the concierge responsible for monitoring the lobby, gave

believable testimony that Ms. Starzecpyzel introduced Mr. Mickle as her roommate, that she saw

him move in, and that she observed him from 2004 through 2010 coming and going at all hours,

collecting mail, receiving guests, doing his laundry, and filing work orders for repairs in

apartment 9A. Mr. Mickle did not challenge Ms. French’s testimony that Ms. Starzecpyzel left

shortly after he moved in and that Mr. Grasso never resided there full-time. Thus, Mr. Mickle,

who admitted to sometimes sleeping at 55 West 14th Street, enjoyed exclusive use of the entire

one-bedroom apartment much of the time he was renting it.

Further support that Mr. Mickle lived at 55 West 14th Street was his admission that he

gave his family this address so that they could keep in touch with him. Mr. Mickle and his

brother also signed documents under oath in the 2009 Surrogate’s Court proceeding listing 55

West 14th Street as Mr. Mickle’s residence. Mr. Mickle’s explanation that these documents

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incorrectly listed his residence was unbelievable. The Loft Board has held that where one holds

oneself out as residing is probative of where one resides in fact. Matter of Muschel, Loft Bd.

Order No. 33, 1 Loft Bd. Rptr. 27, 30 (Nov. 23, 1983).

Other relevant evidence that Mr. Mickle lived at 55 West 14th Street was his August 16,

2010 affidavit filed in support of petitioners’ motion to interpose a Loft Law defense in the court

proceedings. The affidavit recited Mr. Mickle’s offices that he rented between 2007 and 2009

but made no mention that he rented one at 55 West 14th Street from 2004 to 2009. Mr. Mickle’s

explanation that he did not draft the affidavit and forgot to include this long-term rental, which

he had paid rent on as recently as November 2009 (Pet. Ex. 37; Resp. Ex. I), was incredible (Tr.

427-28, 500). It seems likely that petitioners intentionally omitted this address because they

wanted to conceal that Mr. Mickle lived there. But for the coincidence that respondent’s counsel

was the same law firm that initiated the eviction proceedings against the tenants of apartment 9A

at 55 West 14th Street, it is likely that Mr. Mickle’s use of the residential apartment would never

have been discovered.

Even though Mr. Mickle was never served in the eviction action, his assertion that he had

no knowledge of the proceeding was also unbelievable. Ms. Gould credibly testified that Mr.

Mickle called to say he would not be attending a related deposition and Mr. Grasso testified that

he spoke to Mr. Mickle about these proceedings. It seems likely that Mr. Mickle stopped going

with any regularity to 55 West 14th Street after the eviction proceedings were commenced in

December 2009. While petitioners were not present to question Mr. Grasso at his November 29,

2010 deposition, there was no apparent reason to doubt Mr. Grasso’s sworn testimony that was

corroborated in part by other evidence in the record. Mr. Grasso stated that Mr. Mickle created a

small studio apartment in the bedroom for himself, that since May 2010 he had not been using it

as often as before, and that he was still paying rent and had his belongings there. It also seems

likely that when Loft Law protection for the Building was on the horizon in 2010, Mr. Mickle

stopped paying rent at 55 West 14th Street and attempted to reestablish his residence in unit 4S.

Mr. Grasso likely threw away Mr. Mickle’s things around February 2011, the month he

represented that Mr. Mickle vacated apartment 9A (Resp. Ex. I).

There is also support for respondent’s theory that, while Mr. Mickle was living at 55

West 14th Street between 2004 and 2010, Ms. Nazor used unit 4S as her residence while unit 4N

became her painting studio. The post-window period photographs of the fourth floor, which

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petitioners testified show how it looked during the window period, demonstrate that unit 4S was

a more pleasant living space than unit 4N, which looks more like an artist studio and has

significant water damage on the ceiling that Ms. Nazor was very upset about (Nazor: Tr. 70-71,

300-03; Mickle: Tr. 494-96, 527; Pet. Ex. 11A). Unit 4S has south facing windows in good

condition whereas unit 4N has heavily damaged north-facing windows some of which are

covered with paper (Tr. 87). Unit 4S has a finished floor whereas unit 4N’s floors are unfinished

and parts are covered with paper. Unit 4S has a newer kitchen, a dining table, and a television

whereas unit 4N has an outdated kitchen, no dining table, no television, and walls and items

covered in plastic or drop cloths. Ms. Nazor admitted that the plants and many of the books in

unit 4S were hers (Tr. 278, 280-83, 498).

Notably, in 2003 Mr. Mickle installed a security door in the corridor by the elevator that

could be locked so that the fourth floor could be used as one space. Such a door and a large dog

(Pet. Ex. 7A-33) in the corridor would have provided extra security to Ms. Nazor, who admitted

to feeling insecure in the Building, when she was alone there. Mr. Mickle’s limited presence in

the Building would also explain why he left documents for Ms. Nazor with the concierge at 55

West 14th Street and why she called repeatedly on different numbers at all hours of the day and

night looking for him (Resp. Exs. MM-QQ). Petitioners’ various charts (Pet. Exs. 50, 51) and

testimony explaining the numerous calls between them lacked credulity. It seems likely, given

the strained relationship between the couple, that Mr. Mickle avoided Ms. Nazor and that she

occupied the majority of the fourth floor.

It also seems likely that, between 2004 and 2010, Mr. Mickle stored his furniture and

personal items that could not be kept in the furnished apartment at 55 West 14th Street on the

fourth floor and used the “Workspace/storage-4S” as an occasional office. Shortly before Mr.

Mickle moved to 55 West 14th Street, petitioners had the tenants who were occupying the four

studios leave and combined the studios into two spaces. During the window period, Mr. Mickle

listed the Building’s address on his business documents. Mr. Mickle’s claim that he rented other

office spaces was uncorroborated and suspect. It seems unlikely that Mr. Mickle, would pay rent

on three different properties, especially when the Building had ample work space, 55 West 14th

Street had a concierge, and some of his projects had space for him to work on site.

In the face of the proof that Mr. Mickle was residing at 55 West 14th Street, petitioners’

circumstantial evidence, including Mr. Mickle’s window period documents from the Internal

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Revenue Service and the Social Security Administration, a life insurance policy, phone and bank

records, a jury summons, and election records, cannot support a finding that he was living in the

Building during the window period. See 23 Jones Street Assoc. v. Keebler-Beretta, 284 A.D.2d

109, 109 (1st Dep’t 2001) (while documentary evidence can be significant in determining

residence, it is not necessarily preponderate over inconsistent testimony); 300 East 34th Street

Co. v. Habeeb, 248 A.D.2d 50 (1st Dep’t 1997) (traditional indicia of residence, such as driver’s

license, voter’s registration, tax returns, telephone and bank records not dispositive in the light of

credible testimony to the contrary); West 157th Street Associates v. Sassoonian, 156 A.D.2d 137

(1st Dep’t1989) (although tenant’s traditional indicia of residence showed one address, credible

testimony that tenant lived at a different address precluded summary judgment).

Petitioners admitted that Mr. Mickle was drinking heavily and having difficulty

managing his day-to-day life. It seems likely that after moving out of the Building in 2004, Mr.

Mickle never bothered to change his address for these records and collected his mail at what was

now a conveniently located office. Mr. Quinn’s half-hearted assertion that in 2009 Mr. Mickle

told him that he lived in the Building was unpersuasive. Mr. Quinn, who never went inside, had

a motive to assist Mr. Mickle who hires him to work on construction jobs (Tr. 607-08). Except

for petitioners’ self-serving testimony, they failed to produce a single window period photograph

or credible witness who could verify that they were living as two independent families on the

fourth floor.

Mr. Mickle’s claim that he continued to reside next door to his estranged wife during

contentious eviction proceedings with Mr. Milul because it was his “home” (Tr. 402, 499-500,

536-37, 1079-80) was incredible and made no sense. Petitioners argue that Mr. Mickle’s

payments over the past nine years “of hundreds of thousands of dollars” to the owner for the

court-ordered $15,000 a month rent and the “substantial attorneys’ fees” (that began in 2006) is

further evidence that he resided in unit 4S (Pet. Brief at 31 emphasis in original). Except for two

checks written on April 22 and July 8, 2011(Pet. Ex. 27), which was after petitioners’ motion to

interpose a Loft Law defense was granted on December 13, 2010, there are no documents to

establish that Mr. Mickle paid rent for the fourth floor or related legal fees between 2004 and

2010.

While Mr. Mickle’s personal Citibank records from 2006 through 2010 (Resp. Ex. G)

show frequent $1300 a month checks and cash withdrawals for the 55 West 14th Street rent, they

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show no payments that can be linked to the fourth floor. The “hundreds of thousands of dollars”

referred to consist of money transferred from Mr. Mickle to Ms. Nazor’s Citibank account (Resp.

Ex. E). These transfers appear to have begun in 2007 when Mr. Mickle wrote Ms. Nazor two

personal checks for $9,500 on December 27 and 28, 2007. There were also roughly 53 wire

transfers in various amounts, including $7,000 and $9,500, from Rational Business between

March 28, 2008 and June 28, 2010 totaling, approximately $323,215. In between the checks and

wire transfers, from January 4 to March 17, 2008, there were seven deposits in the amounts of

$7,000, $9,500, and $9,600 into Ms. Nazor’s account that cannot be directly traced to Mr.

Mickle’s personal account or his Rational Business account (Resp. Exs. E, G, SS). It seems

more likely than not, however, because these deposits are in similar amounts and intervals as the

other transfers that these were cash deposits from Mr. Mickle who was trying various methods of

conveyance before settling on wire transfers. The total amount transferred to Ms. Nazor between

December 27, 2007 and June 28, 2010, was approximately $406,415.

Notably, the payments of “hundreds of thousands of dollars” by Mr. Mickle for the

alleged increased rent and legal fees, was not part of petitioners’ direct case. Petitioners’

Citibank records showing this activity were provided by respondent (Resp. Exs. E, G, SS) and

were admitted over petitioners’ objections that they were duplicative of their exhibits, which

were the cover pages of their bank records (Tr. 284-88, 450-51; Pet. Exs. 24, 33). When

respondent questioned Ms. Nazor about these transfers on cross-examination, she asserted for the

first time that Mr. Mickle gave her money to cover the increased fourth floor expenses. When

asked where the money came from she opined, again for the first time, that Mr. Mickle obtained

it from his earnings and loans from his brother. Oddly, Mr. Mickle, who had the most complete

information about the transfers, never mentioned them even though he testified three times

including on rebuttal.

The records of the money transfers cannot be related to the fourth floor rent increase. By

the time petitioners were ordered to pay $15,000 a month rent beginning June 1, 2008, Mr.

Mickle had already transferred approximately $92,700 to Ms. Nazor over the course of five

months. There also was no evidence that these transfers were used for legal expenses that began

more than a year earlier and no bills or proof of payment were provided.

A review of petitioners’ financial records and related testimony (Nazor: Tr. 175-76, 268-

70, 289-91, 308; Mickle: Tr. 338-39; Pet. Exs. 27, 37; Resp. Exs. E, G), raise more questions

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than they answer including: If Mr. Mickle was paying for his use and occupancy of the fourth

floor, why are none of the rent checks to the owner from him? Why did Mr. Mickle make wire

transfers from Rational Business to Ms. Nazor instead of writing her a check with a memo to

identify the purpose of the expenditure? Why did Mr. Mickle pay alleged personal expenses out

of his business account and alleged business expenses out of his personal account? If Mr.

Mickle was getting these transferred funds from his earnings as an unlicensed architect in 2007

through 2010, why did he not file tax returns for these same years? Under the circumstances,

Ms. Nazor’s vague and self-serving testimony is insufficient to prove that the money she

received from Mr. Mickle was used to pay any portion of the fourth floor expenses between 2006

and 2010.

The preponderance of the credible evidence demonstrates that Mr. Mickle resided at 55

West 14th Street from 2004 until 2010, and that Ms. Nazor was the only person who residentially

occupied the fourth floor during this period. Thus, petitioners failed to demonstrate that the

fourth floor was residentially occupied by two independent families for 12 consecutive months in

2008 and 2009.

Petitioners also failed to demonstrate that unit 5N was residentially occupied for 12 consecutive months in 2008 and 2009.

In the event petitioners established that there was only one residentially occupied unit on

the fourth floor, they argued that unit 5N was also residentially occupied during the window

period and that the Building is, therefore, an IMD that should be covered by the Loft Law. This

claim must fail.

Mr. Milul testified that he has lived in the same five-bedroom house in Tenafly, New

Jersey, since 1999. During the window period Mr. Milul lived there with his wife and children

(Tr. 612-13, 843-44). Mr. Milul testified that in 2012 his wife moved out and asked for a

divorce. According to Mr. Milul, they have an amicable separation despite his wife’s Facebook

profile saying she is divorced (Pet. Ex. 39). He bought his wife a new house nearby and they

have joint custody of their children (Tr. 683-93, 873-83, 688-94).

Mr. Kaniel testified that he lives near Tenafly and has known Mr. Milul since 1999.

They are good friends and their families have socialized regularly at each other’s homes. Since

1999, Mr. Kaniel and Mr. Milul have played soccer on a weekly basis in New Jersey and coach

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children’s soccer. Mr. Kaniel testified that Mr. Milul separated from his wife a few years ago.

In 2009, Mr. Milul would come to morning prayers at the Lubavitch temple in Tenafly two or

three times a week but now he comes every day. Daily prayers start at 7:00 a.m. followed by a

religious study class which ends around 8:00 or 8:30 a.m. Mr. Milul would sometimes leave

before the class ended. Mr. Kaniel testified that he drove with Mr. Milul by his office in

Manhattan and that Mr. Milul never said he lived there (Tr. 744-52, 759-60).

Rabbi Gershovitz testified that, since 2007, he has been a rabbi at the Lubavitch temple.

He has known Mr. Milul to be a resident of Tenafly since 2007 because Mr. Milul comes

regularly to temple, he often sees Mr. Milul at the kosher grocery, and they play soccer together.

Rabbi Gershovitz testified that he also knows Mr. Milul’s family from the temple and that they

live in Tenafly. Since 2012, Mr. Milul and his wife have been separated. Rabbi Gershovitz was

involved in speaking to them about getting back together and that the couple never obtained a

“get” which is a divorce under Jewish law (Tr. 725-30, 741).

Rabbi Gershovitz testified that, in 2008 and 2009, Mr. Milul came to temple in the

morning at least once a week, on holidays, and on Saturdays with his son who was preparing for

his bar mitzvah. Mr. Milul now comes to the temple every morning (Tr. 731-32, 738).

To support the claim that Mr. Milul lived in Tenafly, respondent submitted documents

from 2007, 2008, and 2009 listing Mr. Milul’s New Jersey address on: tax returns; income

statements; W-2 statements; public school documents for his children; e-mails and photographs

relating to him coaching soccer; bank records; medical documents; E-Z pass records; credit card

statements; water bills; social security statements; health insurance statements; landscaping bills;

receipts; temple invoices; and community center statements (Resp. Exs. K, L, M, N, O, P, Q, R,

S, T, U, V, W, X, Y, Z, AA, BB, CC).

Mr. Milul testified that respondent purchased the Building in 1995 (Tr. 613) and that he

has always used unit 5N as an office. To support respondent’s contention that 544 West 27th

Street is used as a business, respondent submitted corporate tax returns for Mushlam Inc. for

2007 through 2011 (Resp. Ex. EE). The 2007 through 2009 returns identify a commercial

building in New York, New York. The 2010 and 2011 returns identify the Building as a

commercial building located at 544 West 27th Street. Mr. Milul testified that respondent used a

post office as a mailing address for safety reasons (Tr. 897-98). Respondent also submitted Mr.

Milul’s real estate license for 2012-2014 listing the Building’s address (Resp. Ex. FF).

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Ms. Nazor testified that Mr. Milul began construction on the fifth floor in late 2005 (Tr.

67). In December water with acid came down her walls damaging some of her paintings. She

went upstairs and spoke to the contractor who was power washing the walls in unit 5N. He did

not realize that anyone was below and stopped the work. The contractor told Ms. Nazor that he

was renovating the unit and was installing an oversized tub in a bathroom. Ms. Nazor testified

that Mr. Milul eventually moved into unit 5N and that she has been experiencing leaks since that

time (Tr. 68-73, 197-98, 209-10, 300-05; Pet. Exs. 6A, 7A, 8A, 11A). Ms. Nazor also testified

that since Mr. Milul moved into unit 5N, including in 2008 and 2009, she has heard voices and

people walking above her sometimes at night and on weekends (Tr. 73-75).

Mr. Lucic testified that he is a contractor and did some work in the Building between

2004 and 2006 (Tr. 544-47). In early 2006 Mr. Lucic’s workers were in unit 5N because Mr.

Milul wanted to build an office. The work included framing the windows, building movable

bookshelves for a library (Pet. Exs. 11-B(8) and (30)), cleaning the brick, and installing a new

kitchen. He did not do any work on the bathrooms (Tr. 547-53, 561-62, 567). Mr. Lucic

testified that after the work was completed he visited unit 5N a few times and never saw a bed

there. Mr. Lucic also renovated one of Mr. Milul’s bathrooms in a house in New Jersey and met

his wife and one of his children (Tr. 555-56, 564, 568).

Mr. Milul acknowledged that he had the kitchen and bathrooms in unit 5N renovated in

2006. He denied that he ever cooked there and stated that he used the microwave to heat up food

and the stove to heat water for coffee and tea. Mr. Milul testified that he probably showered

there two or three times (Tr. 653-55). He testified that during the window period he never slept

in unit 5N and there was no bed or clothing kept there. The library area was used for storage (Tr.

829-31, 867, 870).

Mr. Milul acknowledged that he had residential phone lines in the Building (Pet. Ex. 43).

In 2006 he installed one in the elevator and one for a fax in unit 5N. He stated that he installed

residential lines because they are less expensive than commercial ones (Tr. 647-49, 842, 871-73).

Mr. Mickle testified that in 2011 he was in unit 5N during an inspection and observed an

alcove that could be closed with glass doors and a kitchen with a double-door refrigerator, a gas

range with a microwave, a dishwasher, a toaster oven, kitchen cabinets, and a granite island.

When he went back in 2014 for another inspection the glass doors and most of the kitchen had

been removed (Tr. 346-47). Mr. Mickle also testified that the bathrooms were above the areas in

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Ms. Nazor’s unit that sustained water damage (Tr. 347). A leak occurred just before the 2014

inspection. When Mr. Mickle went to unit 5N he observed that the showerhead had been

removed, there was an open pipe, and the shower was filled with boxes (Tr. 352-53).

During an inspection in 2011, Mr. Mickle took photographs of unit 5N (Tr. 354; Pet. Ex.

11A). The photos show the kitchen as described above with bar stools around an island and a

rug under the stools. There are no pots, dishes, or food items seen in any of the photographs.

Near the kitchen is a round table with black leather conference chairs and folders and documents

on the table. Photos of the two bathrooms show one bathroom with a vanity and a roll of paper

towels and hand soap. The other bathroom has a glass enclosed shower with a seat. The shower

has a large vacuum and cleaning supplies including a large mop inside. There are no personal

hygiene supplies seen in either bathroom. There is also a billiard table near the library-alcove.

Outside the library are bookshelves holding office supplies, metal filing cabinets, and a desk.

There are numerous plants and some items on the walls.

Mr. Milul acknowledged that there was a pool table in unit 5N and said that he thought he

could put a top on it but that he got a conference table and removed the pool table. Mr. Milul

denied that the alcove area was ever used as a bedroom and maintained it was always a library

(Tr. 655-60). Mr. Milul submitted his own photographs of unit 5N taken during the 2011

inspection (Resp. Ex. DD). He testified that they show office equipment and reflect what the

unit looked like during the window period with some minor modifications (Tr. 831-41). Mr.

Milul also acknowledged that after 2011 he removed most of the kitchen and stated it was

because he wanted to market the unit to a commercial tenant (Tr. 661-67).

Mr. Mickle took photographs of unit 5N during the 2014 inspection (Tr. 360; Pet. Ex.

11B). The photos show the front door with a plaque for Home Quest Properties. Inside the unit

is the same round table with chairs, metal cabinets, and book cases. There is a large desk with

computer monitors. The only remaining fixtures from the kitchen are the lower cabinets with the

sink and an under the counter refrigerator. The bathroom shower is filled with cleaning supplies

and boxes. Inside the alcove area are more bookcases and a low chest on wheels.

While unit 5N could have functioned during the window period as a residence because it

had a kitchen, a full bathroom, and an alcove that could be closed and used as a sleeping area,

petitioners failed to provide any credible evidence or inferences drawn therefrom that it was

actually used as a residence. Cf. Matter of Various Tenants of 357 Bowery, OATH Index No.

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1067/14 (Oct. 22, 2014) adopted in part, rejected in part, Loft Bd. Order No. 4350 (Jan. 15,

2015) (tenants proved that owner lived above them by demonstrating that unit was residentially

furnished with personal items, they regularly heard him at night watching television and using

the bathroom, they brought him food in the unit, and assisted him in household activities there).

Petitioners’ proof on whether unit 5N was residentially occupied for 12 consecutive

months during the window period consisted primarily of circumstantial evidence. Circumstantial

evidence is defined as: “evidence of a collateral fact, that is, of a fact other than a fact in issue,

from which, either alone or with other collateral facts, the fact in issue may be inferred.” Dep’t

of Sanitation v. Ivy, OATH Index No. 2376/00 at 17 (May 3, 2001), aff’d, NYC Civ. Serv.

Comm’n Item No. CD 02-07-SA (Mar. 22, 2002). In order to establish a fact in issue by

circumstantial evidence, the inference sought to be drawn must be based on proven facts. See

Sosa v. Joyce Beverages, Inc., 159 A.D.2d 335 (1st Dep’t 1990). It is only permissible to draw

an inference from the proven collateral facts where it is more likely than not that the inference is

a consequence of the proven facts. If the probabilities are evenly balanced, no inference as to the

fact in dispute may be drawn. Police Dep’t v. Leonick, OATH Index No. 1342/90 (Oct. 2, 1990).

Except for Ms. Nazor’s vague testimony that she occasionally heard voices in unit 5N at

night or on weekends, there was no proof that, since 2005, anyone slept, cooked meals, or

showered there. Indeed, Mr. Mickle acknowledged that he never saw any clothing or a bed in

unit 5N and was unaware of anyone ever sleeping there (Tr. 494-97). Similarly, Mr. Lucic

testified that he never saw a bed in unit 5N and that it was renovated in 2006 to be Mr. Milul’s

office. Photographs of the unit taken in 2011 do not show any personal items, cooking supplies,

or other indicia of residential use that are normally found in a residential unit.

The fact that Ms. Nazor has leaks from above does not prove that unit 5N was used for

residential purposes. Notably, petitioners’ claim that in 2006 Mr. Milul installed a large bathtub

that was the source of her continuous leaks was mistaken. Mr. Milul installed a shower with a

seat. Photographs of the shower taken in 2011 and 2014, show it being used to store cleaning

supplies and Mr. Milul stated in an earlier deposition that this was its primary purpose (Tr. 656).

While Mr. Milul admitted that he used the shower a few times since it was installed, it is possible

that the leaks could have come from the toilet or a sink in the same bathroom. Similarly,

petitioners’ claim that Mr. Milul dismantled the kitchen and removed the showerhead prior to the

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2014 inspection to cover-up prior residential use made no sense. The fixtures were evident

during the 2011 inspection and respondent conceded that they existed during the window period.

All evidence indicated that respondent used unit 5N for commercial purposes as alleged

by Mr. Milul and corroborated by Mr. Lucic and documentary evidence including corporate

records and photographs. Indeed, Ms. Nazor acknowledged that the intercom listing “Sydney

Group” for unit 5N was in existence during the window period (Tr. 129-35; Pet. Ex. 9C-2).

Also credible was Mr. Milul’s testimony, as corroborated by extensive documentary

evidence, and the testimony of Rabbi Gershovitz and Mr. Kaniel, neither of whom had an

apparent motive to lie, that during the window period Mr. Milul lived in New Jersey with his

family and that he only became separated from his wife in 2012.

There was no reliable evidence to support petitioners’ claim that by 2008 and 2009, Mr.

Milul had moved into unit 5N to enjoy a life of “clubbing” as a single man in Manhattan (Tr.

688-94, 741,761-62, 875, 881-86, 1034-47; Pet. Exs. 39, 49). While E-Z pass records show him

crossing the George Washington Bridge into New York on weekends and evenings, these records

and Mr. Milul’s bank records showing ATM withdrawals in New Jersey (Resp. Ex. E) also

support Mr. Milul’s testimony that: he usually came to New York during the week for work in

the late mornings; he often did not work on Fridays; he sometimes visited other properties in

New Jersey during the week; and he would sometimes check on the nightclub on the first floor of

the Building that was involved in a lawsuit and would return to Tenafly the same night (Tr. 696-

720, 883-84).3

Petitioners’ inconclusive evidence and speculation cannot support a finding that unit 5N

was residentially occupied for 12 consecutive months during the window period and is contrary

to the weight of the evidence showing Mr. Milul was living in New Jersey at that time.

FINDING AND CONCLUSION

Petitioners failed to demonstrate that 544 West 27th Street is an interim multiple dwelling under the Loft Law that had two independently occupied residential units during the window period.

3 Because the bridge toll is only in-bound to New York, there are no tolls showing when Mr. Milul returned to New Jersey (Tr. 696-98). Contrary to petitioner’s assertion, the calendar attached to respondent’s closing brief was submitted after the court suggested that the parties create a chart showing the dates and times the E-Z pass was used. Petitioner does not allege that the dates and times listed on the calendar are wrong.

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RECOMMENDATION

While the Loft Law is to be liberally construed in favor of coverage, Ass’n of

Commercial Property Owners v. NYC Loft Board, 118 A.D.2d 312, 318 (1st Dep’t 1986), it

cannot create rights where none exist. Since petitioners failed to demonstrate that the Building

was occupied as the residence of two families living independently from one another for a period

of 12 consecutive months in 2008 and 2009, the application should be denied. Laermer v. NYC

Loft Bd., 184 A.D.2d 339 (1st Dep’t 1992) (where petitioner failed to prove requisite number of

units were residentially occupied, application denied).

Alessandra F. Zorgniotti Administrative Law Judge

May 29, 2015 SUBMITTED TO: RICK D. CHANDLER, P.E. Commissioner APPEARANCES: WARSHAW BURSTEIN, LLP Attorneys for Petitioners BY: BRUCE H. WIENER, ESQ. BY: MAXWELL BREED, ESQ. BELKIN, BURDEN, WENIG, & GOLDMAN, LLP Attorneys for Respondent BY: JOSEPH BURDEN, ESQ. BY: LISA GALLAUDET, ESQ.