Matter of Peragine

[*1] Matter of Peragine 2009 NY Slip Op 51530(U) [24 Misc 3d 1220(A)] Decided on July 15, 2009 Sur Ct, Nassau County Riordan, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 15, 2009
Sur Ct, Nassau County

In the Matter of the Estate of Maria Peragine, Deceased.

Michael S. Peragine, as ADMINISTRATOR c.t.a. OF THE ESTATE OF MARIA PERAGINE, Petitioner,

against

The Housing Authority of the Town of Oyster Bay, MAUREEN A. FITZGERALD, COMMISSIONER, et al., THE TOWN OF OYSTER BAY, JOHN VENDITTO, SUPERVISOR, et al., THE BOARD OF DIRECTORS OF THE WOODBURY COVE REDEVELOPMENT COMPANY OWNER'S CORP., ELLEN GAUS, PRESIDENT, et al., Respondents.





09-6591



Marc A. Zirogiannis, Esq.

(for Board of Directors of the Woodbury Cove Redevelopment Company Owner's Corp.)

1065 Old Country Road

Suite 204

Westbury, NY 11590

Mr. Michael S. Pergagine

(Administrator pro se)

42 Berry Hill Road

Oyster Bay, NY 11771

Gregory J. Giammalvo, Esq.

(for respondents, the Town Board of the Town of Oyster Bay, John Venditto, Supervisor, et al.) Town Attorney

Town Hall

Audrey Avenue

Oyster Bay, NY 11771

Salvatore Pontillo, P.C.

(the Housing Authority of the Town of Oyster Bay)

11 Yoakum Street

Farmingdale, NY 11735

John B. Riordan, J.

The court has before it the petition of Michael S. Peragine as administrator c.t.a. of the estate of Maria Peragine, seeking declaratory and related relief respecting the assignment of decedent's proprietary lease and related shares respecting the cooperative unit known as 505 Park Avenue, Woodbury, New York, in the cooperative known as Woodbury Cove. The named respondents are the Housing Authority of the Town of Oyster Bay (the "Housing Authority"); the Town of Oyster Bay (the "Town"); and Woodbury Cove Redevelopment Company Owner's Corporation (the "Co-op Corp"). All three respondents have appeared. Petitioner contends that court intervention is necessary because his attempts to transfer the shares and lease to decedent's daughter have been thwarted by the Town, the Housing Authority and the Co-op Corp.

Decedent Maria Peragine died on May 11, 2008, a resident of Nassau County and the Town of Oyster Bay. Letters of administration c.t.a. were issued to her son, Michael S. Peragine, the petitioner herein (the "Administrator"). At the time of her death, the decedent resided in cooperative housing known as Woodbury Cove as tenant of unit 505. Decedent was a tenant under a proprietary lease with the Co-op Corp dated May 3, 1999 (the "Lease") and the owner of 10 shares of stock in the Co-op Corp, certificate number 45 (the "Shares"). The Lease was expressly subject to a declaration of covenants and restrictions made by Woodbury Cove Corp, the predecessor in interest to the Co-op Corp, dated October 13, 1998, and recorded with the Nassau County Clerk on July 9, 1999 (the "Declaration").

Woodbury Cove is part of a Golden Age Housing Zone, which permits higher density building than otherwise allowed and has restrictions on tenants such as residence, income and age. The restrictions are set forth in the Declaration and, on their face, constitute covenants running with the land. These covenants were required by the Town as a condition for Golden Age zoning for the project. Golden Age zoning districts were authorized by a 1993 amendment to Chapter 246 of the Town Code. Town Resolution 352-96, dated July 9, 1996, approves and grants the petition to amend the zoning of the project site from a "B" Residence District to a "S-2" Golden Age District, "subject to voluntary covenants and restrictions imposed upon the subject premises by the applicants, as set forth in the written instrument attached herewith, to be duly recorded in the Office of the Clerk of Nassau County within one year of this resolution ..."[FN1] [*2]

This court has the power to determine a decedent's interest in any property claimed to constitute part of her estate and to determine the rights of any persons claiming an interest therein, as against the decedent, or as between themselves and to construe any instruments made by her affecting such property (SCPA 209[4]; NY Constitution, Article VI; Matter of Piccione, 57 NY2d 278, 287-288 [1982]; Matter of Lupoli, 275 AD2d 44, 45 [2d Dept 2000]). The matter was commenced in Supreme Court, Nassau County, under Index No. 09-6591, and referred to this court. Where a case is commenced in Supreme Court and transferred to this court, this court has all the powers the Supreme Court [FN2] has in like actions and proceedings (SCPA 209[10]).

The Administrator presents the case as a matter of contract interpretation. He seeks a construction to the effect that decedent's unit can pass by devise, bequest or inheritance to a family member who meets the age and income qualifications set forth in the Declaration. He cites Article 15 (b) of the Lease which provides, inter alia:

If the lessee shall die, consent shall not be unreasonably withheld or delayed to an assignment of the Lease and shares to a financially responsible member of the Lessee's family ... subject to the approval of the Housing Authority of the Town of Oyster Bay as provided for in Article 15 (a) (ix) of this Proprietary Lease.

Article 15 (a) (ix) of the Lease restricts the assignability of the lease, "until:... (ix) Approval of the Housing Authority of the Town of Oyster Bay as to all resale, gifts, devices [sic][FN3], bequests, inheritances or other types of conveyances, of whatever nature. Approvals shall be limited to the requirements set forth in the Restrictive Covenants." The covenants in the Declaration, as herein applicable, require the assignee to be at least 62 years of age and have a maximum annual income below a set level [FN4] [Declaration ¶¶ 3, 4, 8 and 26].

The Co-op Corp has appeared, submitting opposition in the form of an affidavit from its president, Ellen Gaus. She opines, in effect, that the proprietary lease and related shares cannot pass by inheritance, devise or bequest.

The Housing Authority has also appeared. The affirmation of its counsel notes that on October 27, 1998, the Town Board passed Resolution No. 781-98 transferring the administrative obligation for S-2 developments from the Housing Authority to the Town's Department of Intergovernmental Affairs. It is thus claimed that the Housing Authority is not a proper party to this proceeding. According to the text of Town Resolution 781-98, the Town Board of the Town of Oyster Bay adopted it on October 27, 1998, to grant the "request of Maureen A. Fitzgerald, Commissioner of the Department of Intergovernmental Affairs, made by memorandum dated October 20, 1998, to redesignate the administrative responsibilities from the [*3]Town of Oyster Bay Housing Authority to the Town of Oyster Bay Department of Intergovernmental Affairs, for ..." applications to "review and qualify purchases for the sales, resales, gifts, devises, bequeaths [sic] and inheritances, or other types of conveyances, pursuant to the Restrictive Covenants authorized under the aforementioned Resolution [No. 352-96]..."

The Town has appeared and opposes the Administrator's petition. Such opposition is premised upon the contents of a purported 2006 amendment of the Declaration and a construction of the Lease, Declaration and Town Resolution No. 352-96 to the effect that the Lease and Shares cannot be transferred by devise, inheritance or bequest because such action would violate public policy as there is a lengthy waiting list for units in Woodbury Cove. Further, "the Town maintains the right to approve or deny any assignment or transfer of said shares... in furtherance of the goals of the Golden Age Housing program, specifically, to ensure that adequate housing is available for all seniors."

The Town would have the court construe the Lease, Declaration and Town Resolution No. 352-96 to the effect that upon the death of a tenant, despite the express language of Lease ¶¶ 15(b) and 15(a)(ix), the decedent's unit must be offered to the next senior on the Town's priority list. The Town claims that it has the inherent power to amend the previously recorded Declaration and amend the covenants running with the land, so as to affect the decedent's alienability of her shares and proprietary lease after she received her leasehold interest.

The Administrator asserts that he has been unable to obtain the approval or disapproval of the Housing Authority over a period of almost one year and seeks the court's intervention so as to obtain any needed approval upon establishing that the intended assignee complies with the age and income requirements set forth in the Declaration. During the interim, the estate is paying maintenance fees on the cooperative unit while being unable to occupy it.

It was agreed that the matter would be submitted for decision on the papers presented. Based upon all the submissions, the court will proceed to construe the Lease, the Declaration and Town Resolution No. 352-96, as well as the relevant public policy issues.

DISCUSSIONConstruing the Lease. Leases are subject to the same rules of construction as other types of contracts (Star Nissan v Frishwasser, 253 AD2d 491, 492 [2d Dept 1998]; 1 Dolan, Rasch's Landlord and Tenant, § 6:11 [4th ed]). If the Lease is "complete, clear and unambiguous" on its face, it "must be enforced according to the plain meaning of its terms" (Greenfield v Philles Records, 98 NY2d 562, 569 [2002]; W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]). It is a fundamental principle of the law of contracts that words are to be given their ordinary meaning where there is no evidence that they are to be given another meaning (1 Dolan, Rasch's Landlord & Tenant, Construction of Leases § 6:5 [4th ed]). Where the intention of the parties may be gathered from the four corners of the instrument, interpretation of the contract is a question of law and no trial is necessary to determine the legal effect of the contract (Bethlehem Steel Co. v Turner Const. Co., 2 NY2d 456, 460 [1957]; Matter of Western Union Telegraph Co. (American Communications Ass'n), 299 NY 177 [1949]; Brainard v New York Central R. Co., 242 NY 125 [1926]). As a general rule, "[a] lease is to be interpreted as a whole and construed to carry out the parties' intent, gathered, if possible, from the language of the lease" (Cobalt Blue Corp. v 184 W. 10th St. Corp., 227 AD2d 50, 53 [1st Dept 1996], citing [*4]Papa Gino's of Am. v Plaza at Latham 135 AD2d 74, 76 [3d Dept 1988]; see also Tantleff v Truscelli, 110 AD2d 240, 244-245 [2d Dept 1985], affd 69 NY2d 769 [1987]). Moreover, a lease should not be interpreted in such a way as would leave one of its provisions substantially without force or effect (Tantleff v Truscelli, 110 AD2d 240, 246; see also Corhill Corp. v S.D. Plants, Inc., 9 NY2d 595, 599 [1961]).

Under New York law, whether a written contract is ambiguous is a question of law for the trial court(W.W.W. Assoc., Inc. v Giancontieri, 77 NY2d 157, 163 [1990]). An "ambiguous" word or phrase is one capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business (Fox Film Corp. v Springer, 273 NY 434 [1937]; Rochester Park, Inc. v City of Rochester, 19 AD2d 776 [4th Dept 1963]). When the relevant language has a definite and precise meaning, unattended by danger of misconception in the purport of the contract itself, and concerning which there is no reasonable basis for a difference of opinion, no ambiguity exists (Breed v Insurance Co. of North Am., 46 NY2d 351, 355 [1978]).

The Town argues that Town Resolution No. 352-96 gives the Town the absolute right to set a system of priorities regarding sales and conveyances of Golden Age units. Such a reading of the Declaration that was approved by Resolution No. 352-96 is overly broad. Paragraph 7 of the Declaration states that the Housing Authority, not the Town, shall establish a system of priorities to govern "sales of units", not "sales and conveyances." The priorities thus established accordingly do not apply to assignments by inheritance, bequest or devise. Paragraph 8 states that all conveyances must be approved by the Housing Authority, not the Town, expressly limiting such approval to the requirements set forth in the Declaration. The court notes that the Housing Authority is a separate and distinct entity from the Town being a municipal housing authority created pursuant to section 480 of New York's Public Housing Law as "a body corporate and politic."

Here, the court concludes that the Lease provisions authorizing transfer of the Lease and Shares by inheritance, bequest and/or devise have a definite and precise meaning. Thus, the court concludes that no ambiguity exists with respect to them.

Contrary to the Town's contention, the assignment provision of the Lease, both when read as a whole and when read in concert with the Declaration, does not reflect an unambiguous intent to grant the Town "the right to approve or deny any assignment or transfer of the shares" and appurtenant Lease, whether "in furtherance of the goals of the Golden Age Housing Program" or otherwise. Indeed, the Town's interpretation would improperly render the provisions of the Lease related to assignment by bequest, devise and/or inheritance meaningless (International Chefs Inc. v Corporate Prop. Invs., 240 AD2d 369, 370 [2d Dept 1997]).

To paraphrase the Court of Appeals in Corhill Corp. v S. D. Plants, Inc. (9 NY2d 595, 599 [1961]), to sustain the Town's interpretation of this document, the express provision in Lease Article 15 authorizing assignment by devise, bequest and/or inheritance, subject to limited conditions, would be rendered entirely meaningless, and the court may not do that. It is a cardinal rule of construction that a court should not "adopt an interpretation" that will operate to leave a "provision of a contract ... without force and effect" (Muzak Corp. v Hotel Taft Corp., 1 NY2d 42, 46 [1956]; Fleischman v Furgueson, 223 NY 235, 239 [1918]). [*5]

Specifically, the construction proposed by the Town would make the references in lease Articles 15(b) and 15(a)(ix) nugatory. Article 15(b) expressly provides that upon the death of a lessee, the lease can be assigned to a family member who meets the restrictions in the Declaration, while Article 15(a)(ix) addresses conveyances pursuant to inheritance, devise or bequest. Permitting the priority waiting lists to negate or supercede this express language not only lacks support in the language used in the controlling documents, but would impermissibly leave the inheritance language "without force and effect" (Corhill Corp. v S. D. Plants, Inc., 9 NY2d 595, 599 [1961]; Muzak Corp. v Hotel Taft Corp.,1 NY2d 42 [1956]; Fleischman v Furgueson, 223 NY 235 [1913]).

Thus, under the general rules of contract construction, the assignment of the Lease and Shares to the daughter must be approved if she meets the age and income restrictions of the Declaration, unless the lease provisions relating to assignment by inheritance, bequest or devise are void as against public policy.

There is one further construction issue presented by the Town. Paragraph 23 of the Declaration provides: "This Declaration shall not be modified, changed, altered or amended, except with the consent of the Town Board of the Town of Oyster Bay after a public hearing." The Town argues that this provision in the Declaration grants the Town the authority, sua sponte, to alter or amend the covenants and restrictions even though the Town is not the owner of the property. The Town has not provided any statutory authority or case law precedent for such a usurpation of the property owner's rights and the court's own research has not discovered any. Relying on this interpretation of the original Declaration, the Town purported to amend the covenants and restrictions retroactively by adding, among other things, a requirement that all conveyances must be to the next person on the Town's priority list. The clear import of the quoted amendment language at Declaration ¶23 is that any attempt by the property owner to amend the covenants and restrictions must be approved by the Town. There is nothing to suggest that the property owner was ceding its rights to modify the covenants and restrictions to the Town.

In addition, the court is constrained to add that the position espoused by the Town and Co-op Corp is arguably subject to constitutional infirmities. Under the plain meaning of these contractual provisions, decedent had a property right in the assignability of the Lease and Shares to her heirs from the time she executed the Lease. The suggested construction would take such property right away in violation of the due process protections in Article 18, §1 of the New York State Constitution and Article 14 of the United States Constitution.[FN5] As such construction would [*6]be based upon a resolution of the Town Board, it would also violate the contract clause of Article 1, § 10 of the United States Constitution. These issues need not be addressed here, but are present should the other grounds for rejecting such position not suffice.

Public Policy and the Declaration. Woodbury Cove is an example of conditional zoning accomplished through the Town's requirement of the issuance and recording of the Declaration containing the restrictions and covenants arguably at issue. Restrictive covenants, sometimes known as negative easements, restrain servient landowners from making otherwise lawful uses of their property (Huggins v Castle Estates, 36 NY2d 427, 430 [1975]). "Restrictive covenants will be enforced when the intention of the parties is clear and the limitation is reasonable and not offensive to public policy" (Chambers v Old Stone Hill Rd. Assoc., 1 NY3d 424, 431 [2004] [citations omitted]). Since the law favors "unencumbered use of real property" (Huggins v Castle Estates, Inc., 36 NY2d 427, 430 [1975]), restrictive covenants are "strictly construed against those seeking to enforce them" (Witter v Taggart, 78 NY2d 234, 237 [1991]).

It is an accepted practice for a municipality to impose appropriate conditions in conjunctionwith a zoning change (see Matter of St. Onge v Donovan, 71 NY2d 507 [1988]; Matter of Dexter v Town Board, 36 NY2d 102 [1975]). The conditions imposed, however, must be reasonable and be "directly related to and incidental to the proposed use of the property" (Matter of St. Onge v Donovan, 71 NY2d 507, 516 [1988]), in a manner aimed at minimizing the impact to the area as a result of the variance. Conversely, zoning boards may not impose conditions that are unrelated to the purposes of zoning (Matter of St. Onge v Donovan, 71 NY2d 507 [1988]; see also 2 Anderson, New York Zoning Law and Practice § 23.55 [3d ed]), such as those which seek to regulate an enterprise being operated on the premises (Matter of St. Onge v Donovan, 71 NY2d 507, 516-517 [1988]). Fundamentally, the conditions must relate to the land, and not the person who owns or occupies it (Matter of Dexter v Town Bd., 36 NY2d 102,105 [1975]).

As in this case, the process of "conditional zoning" may be accomplished by the municipality's conditioning the zoning amendment on the execution of a declaration restricting the use of the property by private parties interested in re-zoning the property and once the conditions are incorporated into the amending ordinance, those conditions effectively become part of the zoning law (Collard v Incorporated Vil. of Flower Hill, 52 NY2d 594, 602 [1981]). So long as the conditions imposed are consistent with the purposes of zoning, they are binding on successor owners (Matter of Trinity Place Co. v Finance Admin. of the City of New York, 38 NY2d 144 [1975]; Eagle Tenants Corp. v Fishbein, 182 AD2d 610 [2d Dept 1992]).

The foregoing principles are often in conflict with "the fundamental rule that zoning [basically] deals with land use and not with the person who owns or occupies it" (Matter of Dexter v Town Bd., 36 NY2d 102, 105 [1975]) and "[w]hile it is proper for a zoning board to impose appropriate conditions and safeguards in conjunction with a change of zone" (Church v [*7]Town of Islip, 8 NY2d 254 [1960]), "such conditions and safeguards must be reasonable and relate only to the real estate involved without regard to the person who owns or occupies it" (Matter of Dexter v Town Bd., 36 NY2d 102, 105 [1975]).

In order for this court to modify or vacate the assignment provisions in the Lease relating to inheritance, devise and/or bequest on public policy grounds, the court must be able to examine the Lease and Declaration on their face, without engaging in extended fact finding or legal analysis, and conclude that public policy precludes its enforcement (Matter of Sprinzen [Nomberg], 46 NY2d 623, 631 [1979]). The interpretation of the Declaration and Lease as requested by the Town would require this court to conclude that the assignment terms in these instruments directly conflict with a strong public policy amounting to gross illegality or its equivalent, generally to be found in a readily identifiable source in the statutes or common-law principles" (Matter of Fallon [Greater Johnstown School Dist.], 118 AD2d 936, 937 [3d Dept 1986], lv. denied 68 NY2d 603 [1986], quoting Matter of Board of Educ. [McGinnis], 100 AD2d 330, 333 [3d Dept 1984], quoting Matter of Port Washington Union Free School Dist. v Port Washington Teachers Assn., 45 NY2d 411, 422 [1978] [Breitel Ch. J., concurring]). This standard has not been met.

While the court accepts the premise that a laudable goal of the Golden Age Housing program is to ensure that adequate housing is available for seniors, such goal does not support the Town's purported right to approve or deny any assignment or transfer of shares "in furtherance of the goals of the Golden Age Housing program...", specifically, "to ensure that adequate housing is available for all seniors." No allegation of gross illegality nor identification of a specific statutory or common law source has been presented (Matter of Fallon, 118 AD2d 936, 937 [3d Dept 1986). While the Town, as it claimed, might not be bound by the proprietary lease, its rights, if any, to disapprove the assignment by the Administrator to the daughter are not inherent but derivative of the Declaration and not the purported amended declaration. Indeed, the power that the Town seeks is arguably beyond the proper scope of conditional zoning (Matter of Dexter v Town Bd., 36 NY2d 102, 105 [1975]).

The restrictions set forth in the Declaration are built into the Lease (Lease Article 15). To remove the tenant's ability to assign the lease by inheritance, bequest and/or devise (Matter of Dexter v Town Bd., 36 NY2d 102, 105 [1975]), particularly after the parties entered into the Lease, would most probably violate public policy as well as constitute an amendment of the Lease and Declaration. The Town has no such power and even lacks standing to seek an amendment of the Lease as a lease amendment can only be accomplished pursuant to Lease Article 6, which requires a two-thirds vote of all cooperative shareholders.

As noted by the Town, it is not a party to the Lease. It thus has no standing to object to its assignment. The Town's only remedies lie under the zoning laws (Declaration ¶23).

The Purported Amendments to the Declaration Are Both Nugatory and Irrelevant. The timing of this purported amendment, seven years after issuance of the Lease, renders it irrelevant to the assignment of the Lease. To be binding, restrictive covenants must exist before or at the time of the conveyance, here execution and delivery of the Lease to the decedent. As stated in Witter v Taggart,78 NY2d 234, 238 [1991] [emphasis added] [internal citations and internal quotation marks omitted]: [*8]

"The guiding principle for determining the ultimate binding effect of a restrictive covenant is that [i]n the absence of actual notice before or at the time of ... purchase or of other exceptional circumstances, an owner of land is only bound by restrictions if they appear in some deed of record in the conveyance to [the owner] or [that owner's] direct predecessor in title."

Here, the decedent had actual notice of the covenants as set forth in the recorded Declaration by the terms of the Lease and no notice of the purportedly changed covenants as appearing in the so-called amended declaration.[FN6] The Administrator, as lessee's successor in interest [Lease ¶37], is charged with the same notice and no more (Vogeler v Alwyn Improvement Corp., 247 NY 131, 135-136 [1928]). Thus, while the legally enforceable restrictions in the Declaration are binding against the decedent and her successors in interest, the subsequent restrictions in the amended declaration, were that document otherwise enforceable, are not (Witter v Taggart, 78 NY2d 234, 237 [1991]).[FN7]

Need for Housing Authority Approval of the Assignment; Impossibility. In the July 14, 2008 letter from the Co-op Corp's counsel to the Administrator, it is stated that: "Article 15 (a)(ix) expressly states that Approval of the Housing Authority is needed as to all ... bequests, inheritances or other types of conveyances of whatever nature. To date no approval from the Town of Oyster Bay has been furnished..." A July 21, 2008 "Notice to Cure" mailed by the Co-op Corp to the Administrator asserts a default under the Lease and quotes Article 15(a)(ix)'s requirement of Housing Authority approval, and then states: "to date no approval from the Town of Oyster Bay has been furnished by you to my office nor does the Town of Oyster Bay have a record of such approval having been granted in their files...."

According to the Administrator's affidavit, the Housing Authority refused to rule on the Administrator's request for approval. This is understandable based upon the pre-Lease [*9]termination of its gatekeeper role with respect to Golden Age Housing.[FN8] If the Housing Authority lacked the power to approve the qualifications of new tenants or heirs or beneficiaries at the time decedent entered into the Lease or even when the Declaration was filed, it would be impossible for the daughter, through no fault of her own or of the decedent, to obtain the approval of the Housing Authority as to the requested assignment as required by express language in both the Lease and Declaration.

Mindful that restrictive covenants are to be strictly construed (Witter v Taggart, 78 NY2d 234 [1991]), the court concludes that under the terms of the Lease, Declaration and Town Ordinance No. 352-96, the Housing Authority is the only entity that could properly rule on the qualifications of assignees for the Woodbury Cove project. Declaration ¶23 expressly provides the Town with a limited role, including enforcement of the restrictions "to the same extent and same authority as enforcement of a zoning ordinance" and requiring the Town's consent, after a public hearing, to any modification, change, amendment or alteration of the Declaration. While the Lease could be modified by the court so as to require some agency or entity other than the Housing Authority to review and determine whether the proposed assignee is eligible under the Restrictions, and requiring the Co-op Corp to accept such ruling in lieu of that of the Housing Authority under Lease Article 15(a)(ix), a request for such relief is not before the court and the court declines to consider such relief.

Housing Authority approval of the assignee's qualifications became impossible when the Housing Authority's authority to process such applications ceased in 1998. Compliance with that requirement is therefore excused (Matter of Kramer & Uchitelle, Inc. [Eddington Fabrics Corp.], 288 NY 467, 472 [1942]). Impossibility excuses a party's performance of a condition precedent where the means of performance make performance objectively impossible (Kel Kim Corp. v General Mkts., Inc., 70 NY2d 900 [1987]). It is noted that the respective language used in the Lease and Declaration does not address the situation where the Housing Authority will no longer serve the gatekeeper function or, as appears to have occurred here, the function has been assigned or transferred to another entity prior to execution and delivery of the Lease and recording of the Declaration.[FN9]

The court concludes that the performance of the covenant to obtain approval as to the proposed assignee's qualifications from the Housing Authority was impossible of performance and such approval is accordingly excused (Kel Kim Corp. v General Mkts., Inc., 70 NY2d 900 [1987]; Restatement, Contracts § 456 [2009]). It is the conclusion of this court that such impossibility renders that restriction on assignability invalid and unenforceable. Based upon [*10]Lease ¶47, the invalidity of the approval provision does not affect the balance of the Lease provisions.

Need for Co-op Corp Consent to the Assignment. The Administrator has been unable to exercise the estate's contractual rights to assign "the Lease and shares to a financially responsible member of the Lessee's family" [Lease ¶15(b)]. The Co-op Corp has cited lack of approval by the Housing Authority and/or the Town as the sole basis for its refusal to approve the assignment [see e.g. the July 14, 2008 letter].

The court, having concluded that such approval is unnecessary, hereby directs the Co-op Corp to accept the assignment of the subject unit's proprietary Lease and related Shares from the Administrator to the daughter, issuing a new lease and replacement shares as appropriate and permitting the daughter's immediate occupancy of the premises, within twenty (20) days of service of this decision and order.

The proceeding is dismissed as against the Housing Authority as it has no role in the assignment process.

To the extent the petition seeks affirmative relief from the Town, inasmuch as Town action is deemed unnecessary, such claims are dismissed as well.

This constitutes the decision and order of the court.

Dated: July 15, 2009

John B. Riordan

Judge of the

Surrogate's Court Footnotes

Footnote 1: The court notes that an unsigned copy of the Declaration bearing an October 13, 1998 date was attached to the copy of the Resolution presented to the court by the Town presenting a time anomaly and that the Declaration was not filed within one year of the adoption of the Resolution.

Footnote 2: Pursuant to Administrative Order, the Surrogate is an acting Justice of the Supreme Court.

Footnote 3: The Lease uses the word "device" but the proper term is "devise". Further references herein to the "devise" concept, as they appear in the Lease or the Declaration, will use the proper word.

Footnote 4: The $44,000 per year income limit is subject to a cost of living adjustment [Declaration ¶4].

Footnote 5: As held in Williams v White Plains Housing Auth., 62 Misc 2d 613, 616 [Sup Ct, Westchester County 1970], since the State has recognized and acknowledged that low income housing is a proper governmental function, the function is subject to constitutional mandates foremost among which our constitutional mandates that a citizen may not be deprived of property without due process of law (Rudder v United States, 226 F2d 51, 53 [DC Cir 1955]). Due process of law extends to those situations where a citizen may be deprived of life, liberty or property whether the proceeding be judicial, administrative or executive in nature (Stuart v Palmer, 74 NY 183, 190-191 [1878]; Vinson v Greenburgh Housing Auth., 29 AD 338 [2d Dept 1968]). This is rooted in a fundamental concept that the essence of due process is the protection of the individual against arbitrary action(Ohio Bell Tel. Co. v Public Util. Commn., 301 US 292, 302 [1937]; Slochower v. Board of Educ., 350 US 551, 559 [1956]). Due process requires that selections for public housing must be made in accordance with reasonable and ascertainable standards (Holmes v New York City Housing Auth., 398 F2d 262, 265 [2d Cir 1968]; Colon v Tompkins Square Neighbors, Inc., 294 F Supp 134 [SDNY1968]).

Footnote 6: The court notes the requirement in Declaration ¶24 that a copy of the Declaration be issued to all proposed purchasers of these residential units prior to the execution of the contract of sale, with the proposed purchasers required to acknowledge receipt, and the receipt filed with the Housing Authority. No receipt executed by the decedent has been presented to the court.

Footnote 7: Assuming its relevance to a construction of the decedent's Lease, there was no foundation laid to authenticate the amendment [it was presented as an exhibit to an attorney's affirmation], it was unsigned [implicating the statute of frauds], it names the original 1998 Declarant, Woodbury Cove Corp, no longer the property owner, as the "Declarant", rather than the Co-op Corp which was the owner in 2006; it is misdated bearing an October 13, 1998 date, as does the original filed Declaration, while it was admittedly prepared in 2006; it purports to amend all the Woodbury Cove proprietary leases but was not authorized by a two-thirds vote of the cooperative shareholders; and there is no evidence as to when, if ever, the amended Declaration was presented to the decedent, as no evidence of the "receipt" required by Declaration ¶24 to establish such presentation, was submitted to the court.

Footnote 8: While the Housing Authority was stripped of its gatekeeper role by Town Resolution 781-98 prior to the execution of the Lease, and that role devolved on or was assigned to a Town Department, this change was not noted in the Lease or Declaration, and did not result in an amendment to Town Resolution No. 352-96.

Footnote 9: During a pre-submission conference, the Town acknowledged that the daughter had been approved for tenancy at another Town Golden Age project and that the Town was not contesting her qualifications. Thus, if the gatekeeper role had been effectively transferred to the Town, the Town would have had to approve the daughter as a qualified assignee.