Matter of Matos v Hernandez

[*1] Matter of Matos v Hernandez 2005 NY Slip Op 52188(U) [10 Misc 3d 1068(A)] Decided on October 19, 2005 Supreme Court, New York County Acosta, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 19, 2005
Supreme Court, New York County

In the Matter of the Application of NANCY MATOS, Petitioner, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules

against

TINO HERNANDEZ, as Chair of the New York City Housing Authority, and the NEW YORK CITY HOUSING AUTHORITY, and MAGPAN REALTY COMPANY, Respondents.



401592/05

Rolando T. Acosta, J.

Petitioner Nancy Matos ("Matos") brings this Article 78 proceeding seeking

a judgment from this Court reversing and annulling respondents' New York City Housing Authority ("NYCHA" or "Housing Authority") determination to terminate petitioner's Section 8 subsidy.[FN1] Respondents cross move to dismiss the petition as barred by the four-month Statute of Limitations for a Article 78 proceeding, as set forth in CPLR §217.

NYCHA's procedures for terminating a participant's Section 8 subsidy benefits are set forth in the first partial consent judgment entered in Diedre Williams, et al. v. New York City Housing Authority, et al., docketed October 17, 1984, 81 Civ. 1801. In administering the Section 8 program, NYCHA is required to examine the participant's income and family composition at the time of admission, and at least annually during participation in the program. To accomplish this, the Housing Authority annually sends re-certification packages to participants of the program. If [*2]a Section 8 participant fails to respond, the Housing Authority sends a "Final Request" form seeking re-certification information, as well as a new set of re-certification forms to be completed. The Final Request form warns participants that failure to complete and submit the forms could result in a termination of their subsidy.

The follow-up Notice of Termination of Section 8 Subsidy form ( known as

"T-1") states the NYCHA's intention to terminate the participant's subsidy, and that the participant must respond within twenty (20) days and request a hearing if she wishes to contest termination of her subsidy. A failure to respond to the Notice of Termination results in NYCHA sending the participant a Notice of Default (known as "T-3"), which has the same force and effect as a determination after a hearing to terminate subsidies. The Notice of Default informs the participant she must request a hearing within forty-five (45) days of the date of the Notice of Default to challenge the default. A request for a hearing serves to continue the participant's subsidy until a final determination is made. Pursuant to the Williams decree, a participant's time to challenge her proposed termination of subsidy benefits begins to run from the fifth day following the mailing of the T-3 form.

According to the mailing procedures enunciated in the Williams consent judgment, both the T-1 notice and the T-3 notices must be mailed to the participant both by certified and regular mail. This procedure is required by the Housing Authority to increase the likelihood that the participant will actually receive the notice. Matter of Green v. Hernandez, 6 Misc 3d 1041 (2005). In fact, it is NYCHA's owns stated policy that the purpose of such a double-mailing policy is to increase the chances that the participant will respond to the notice and thus continue their participation in the Section 8 program and avoid termination. LHD 01-0 Memorandum. Moreover, the burden rests on the agency to establish that the requisite notice of an action or hearing was given. Matter of MacLean v. Procaccino, 53 AD2d 965 (3rd Dept. 1976).

NYCHA terminated petitioner's Section 8 subsidy because petitioner failed to comply with the re-certification procedures in failing to respond to any of its notices. Respondents contends that the Williams consent judgment creates a rebuttable presumption that the T-3 form was received by the participant within 5 days of its mailings. Petitioner argues, inter alia, that the presumption is rebutted by the fact that it is undisputed that the certified mail was never claimed, and that there is no evidence that NYCHA did in fact mail petitioner the T-3 form via regular mail.

Judicial review of an administrative determination brought on by an Article 78 proceeding is limited to the evaluation of whether that administrative determination is consistent with lawful procedures, whether it is arbitrary or [*3]capricious, and whether it is a reasonable exercise of the agency's discretion. Matter of Pell v. Board of Education of Union Free School District, 34 NY2d 222, 230 (1974). The Court of Appeals has defined an administrative agency's action to be arbitrary and capricious if the action "is without sound basis in reason and is generally taken without regard to the facts." Id. at 231. The agency's determination will be found to have a rational basis where it is "supported by proof sufficient to satisfy a reasonable [person], of all the facts necessary to be proved in order to authorize the determination. Matter of Weber v. Town of Cheektowaga, 284 NY 377, 380 (1940); see also Park East Land Corporation v. Finkelstein, 299 NY 70, 75 (1949) (the administrative agency's determination will not be disturbed by the Courts if the determination has support in the record, has a reasonable basis in law, and is not arbitrary or capricious).

Here, NYCHA's decision to terminate petitioner's Section 8 subsidy was arbitrary and capricious because it cannot be said that NYCHA complied with the procedures outlined in the Williams decree, or even its own stated procedures. The record fails to demonstrate that in reaching its determination, the Housing Authority properly fulfilled its mailing requirements, which are designed to assure compliance with federal due process requirements. Robinson v. Martinez, 308 AD2d 355 (1st Dept. 2003). The Housing Authority, by failing to give petitioner proper legal notice, did not have a sound basis in fact or reason to terminate her participation in the Section 8 subsidy. Matter of Pell v. Board of Education of Union Free School District, 34 NY2d 222, 231 (1974).

Moreover, NYCHA did not have adequate proof that petitioner was duly notified that NYCHA would terminate her participation in the Section 8 subsidy. Id. at 230. As such, respondents' actions are tantamount to conduct that is arbitrary and capricious. It is uncontroverted that the T-1 and T-3 forms sent by NYCHA to petitioner Matos were marked as "unclaimed" and returned to the Section 8 offices. Therefore, NYCHA was aware that Matos never actually received either the T-1 or T-3 forms via certified mail. Matter of Green v. Hernandez, 6 Misc 3d 1041 (2005).

Significantly, while NYCHA mail log records indicate that both the unclaimed T-1 and T-3 forms were mailed to petitioner via certified mail, there is no indication in NYCHA's own records that the forms were actually mailed by regular mail, as is required by the Williams consent judgment. The absence of proof of such mailing by NYCHA is fatal to their position that petitioner was duly notified of her termination as a participant in the Section 8 program, and that NYCHA followed the procedures outlined in the Williams decree. Compliance with the mandates of the Williams consent judgment, including properly mailing the T-1 and T-3 form notice [*4]by both certified and regular mail are strictly observed. Matter of Danielle Fair v. Kalman Finkel, et al., 284 AD2d 126 (1st Dept. 2001). It is entirely unreasonable for respondents to have certain mailing guidelines to ensure participants are given adequate notice, while at the same time bypassing those requirements and thus violating a clear state policy against forfeiture of a leasehold. See Sharp v. Norwood, 223 AD2d 6, 11 (1st Dept. 1996) aff'd, 89 NY2d 1068. Tenants like those in petitioner's position have a property right assuring them continued tenancy except for cause shown. Hudsonview Terrace, Inc. v. Maury, 100 Misc 2d 331(App. Term, 1st Dept. 1979).Thus NYCHA had no rational basis in effectively discontinuing petitioner's tenancy by terminating her Section 8 subsidy. See also New York City Housing Authority, 179 Misc 2d 822 (App. Term 2nd Dept. 1999) ("...the adjudication that a tenant is no longer eligible for continued occupancy and that good cause exists to evict is made by the Authority in the exercise of its adjudicatory authority and in

conformance with procedures adopted pursuant to Federal consent decrees.").

It should also be noted that petitioner Matos, whose income consists of her own limited wages and SSI for her daughter, has a record of timely and properly submitting her re-certification since 2002, the year in which she became a Section 8 participant. It is also unrefuted that she has always provided access for inspection to her apartment upon reasonable notice from NYCHA. Moreover, being concerned about not having received the re-certification paperwork for the upcoming year of 2005, it is uncontraverted that petitioner Matos herself contacted her social worker on or about November 15, 2004 inquiring as to whether any mail regarding re-certification was mailed to her. Petitioner was notified that no mail regarding her re-certification or termination of her subsidy had been sent to her. Given petitioner's record of compliance, it is clear that NYCHA did not have a rational basis in law or reason to terminate her subsidy for failing to complete her re-certification after she was advised by NYCHA that the re-certification forms were never mailed to her.

Respondents' contention that the petition is untimely is without merit. Section 217 of the CPLR states that "a proceeding against a body or officer must be commenced within four months after the determination to be reviewed becomes final and binding..." Paragraph 22 of the Williams consent judgment specifies the Housing Authority's determination to terminate a participant's Section 8 subsidy becomes final and binding upon the participant's receipt of the T-3 letter (emphasis added). Petitioner, having not received the T-3 Notice of Default, was not given " prompt written notice of a decision... to deny or terminate assistance on behalf of the participant", 24 C.F.R. § 8220216(b)(3), and as such, the Statute of Limitations did not begin to run against her. See also Wadsworth Ave. Tenants Ass'n v. N.Y.C. Dep't [*5]of Housing Development Preservation and Development, 227 AD2d 331 (1st Dept. 1996); Biondo v. New York State Board of Parole, 60 NY2d 832, 834 (1983) (It is well settled that in Article 78 proceedings the Statute of Limitations does not begin to run until the party challenging the determination actually receives the decision). Consequently, the Court find that petitioner timely challenged NYCHA's erroneous determination inasmuch as "fundamental fairness would seem to compel the conclusion that a petitioner should not be held to have been dilatory in challenging a determination of which [she] was not aware. In the Matter of Bianca v. Frank, 43N.Y.2d (1977).

Finally, the present action is the latest in a line of cases in which the New York City Housing Authority has failed to comply with its own internal procedures, and those outlined in the Williams consent decree. As Justice Wetzel of this Court noted, "This Court implores the respondent Housing Authority to stop banging its head against the procedural wall of the Williams Consent Decree and to set in place administrative procedures which scrupulously conform to the Decree's requirements. Quesada v. Hernandez, 5 Misc 3d 1028(A) (Su Ct NY Co 2004). Accordingly, it is

ADJUDGED that the New York City Housing Authority's decision to terminate petitioner's Section 8 subsidy is reversed; and it is further

ORDERED that the New York City Housing Authority reinstate petitioner's

subsidy retroactive to the effective date of the termination of the subsidy on November 30, 2004; and it is further

ORDERED that the New York City Housing Authority pay any rent subsidy

amount that has not been issued because of the unlawful termination; and it is

further

ORDERED that respondents' motion to dismiss the petition is denied.

This constitutes the Decision and Judgment of the Court.

Dated: October 19, 2005 ENTER

__________________________ Rolando T. Acosta, J.S.C. [*6] Footnotes

Footnote 1: This decision has been edited for publication.