In this Article 78 proceeding, petitioner seeks to annul the determination of respondent New York City Housing Authority, made in December 2009, which denied him the right to succeed to his deceased father's Section 8 subsidy. In the alternative, petitioner seeks a hearing to contest the determination.

The New York City Housing Authority raises the statute of limitations and laches as defenses. It also argues that its determination was not arbitrary and capricious, because petitioner joined his father's household as an adult child, given its policy that denies an adult child of a recipient of a Section 8 subsidy a right to continue receiving the subsidy.

Petitioner Menachem Klein is the son of Samuel Klein, who was the tenant of record of a two-bedroom apartment at 94 Ross Street in Brooklyn, owned by respondent Bedford Gardens Company (the landlord). (Verified Answer ¶¶ 5, 32.) According to petitioner's attorney, the apartment building is part of the Mitchell-Lama Housing program, supervised by the New York City Department of Housing Preservation & Development (HPD). (Walder Affirm. ¶ 3.)

Samuel Klein was the recipient of a Section 8 voucher from respondent New York City Housing Authority. (Verified Petition ¶ 38; Verified Answer ¶ 14.) In December 2006, Samuel Klein submitted a request for permission to add petitioner, who was then 70 years old, to the household. (Verified Answer, Ex F.) The request form states, in pertinent part:

"NOTE TO TENANT: No one may join your household (which is based on authorized original family composition) except through birth, unless you request written permission from and it is GRANTED by the HOUSING AUTHORITY. By submitting this form you request that a person or persons be given permanent permission or conditional permission to join your household. . . If conditional permission is granted, the additional person is permitted to reside with the Section 8 family during the duration of the subsidized tenancy. The added person has no right to succeed to Section 8 subsidy, in accordance with the Succession Policy."

"This notice certifies that I [landlord] am giving conditional permission, pending final approval by the New York City Housing Authority for the following person(s) to live with the above named Section 8 family:

[Menachem Klein]

I [landlord] acknowledge that once NYCHA grants conditional permission, the additional person is permitted to reside with the Section 8 family during the duration of the subsidized tenancy. The added person has no right to succeed to [the] Section 8 subsidy, in accordance with the Succession Policy."

(Id.) According to NYCHA, it granted conditional permission on December 8, 2006, as reflected on a copy of Samuel Klein's request for permission to add petitioner, in the space marked "For Office Use Only." (Verified Answer, Ex F.)

Samuel Klein died in January 2009. (Verified Petition ¶ 39; Verified Answer ¶ 15.) A letter dated December 7, 2009 addressed to petitioner from "Ms. V. Kan, Housing Assistant, Brooklyn - 3" states, "YOU WERE ADDED IN THE HOUSEHOLD EFF. 1/1/07 CONDITIONALLY. AS PER OUR PROCEDURE, YOU HAVE NO SUCCESSION RIGHTS TO CONTINUE TO RECEIVE SECTION-8 SUBSIDY." (Verified Petition, Ex 1.) According to the petition, NYCHA also sent a Notice of Termination of Section 8 Subsidy (T-1 Notice) dated December 7, 2009, addressed to petitioner, stating that the Section 8 subsidy was to be terminated because of the death of the tenant. (Verified Petition ¶ 39; Klein Aff. ¶ 7.) The T-1 Notice states, in relevant part:

"If you do not believe that your Section 8 benefits should be terminated, you may request an impartial hearing. To do so, YOU MUST CHECK THE FIRST BOX AT THE BOTTOM OF THIS LETTER AND RETURN ONE COPY OF THE LETTER TO THE ADDRESS LISTED BELOW SO THAT IT IS RECEIVED WITHIN TWENTY DAYS OF THE DATE OF THIS LETTER."

According to NYCHA, it continued issuing subsidy payments on Samuel Klein's behalf until January 2010, at which time NYCHA recouped the payments it had issued after Samuel Klein's death. (Verified Answer ¶ 35.) NYCHA asserts that it never issued subsidy payments on behalf of petitioner. (Id.)

Petitioner's attorney claims that the landlord served a notice to quit upon petitioner in June 2010 (Walder Affirm. ¶ 3). However, by a letter dated April 7, 2011, HPD approved petitioner's request for succession rights to the Mitchell-Lama apartment. (Verified Petition, Ex 3.)

In August 2011, the landlord commenced a non-payment proceeding for rent arrears in the Housing Court, in Kings County, Bedford Gardens Company v Klein, L & T Index No. 87404/2011. (Verified Petition, Ex 4.) Petitioner claims that the arrears began to accrue following NYCHA's termination of the Section 8 subsidy. Petitioner asserts that Social Security is his only source of income. (Klein Aff. ¶ 2.)

On February 15, 2012, petitioner commenced this Article 78 proceeding, which seeks to annul NYCHA's determination denying him succession rights to his deceased father's Section 8 subsidy. In the alternative, petitioner seeks a hearing to contest the determination. NYCHA answered the petition, asserting that petitioner's claims are barred by the statute of limitations and/or the doctrine of laches. NYCHA also maintained that its determination was rational, not arbitrary and capricious, and in full accord with federal law and regulations and NYCHA's own policies.

The Court held a series of conferences to explore alternatives to resolve the matter.

Petitioner argues that the statute of limitations has yet to run because NYCHA did not grant him a hearing to contest the termination of the subsidy after petitioner requested a hearing. Petitioner contends that NYCHA's failure to grant a hearing was a violation of the termination procedures established in a First Partial Consent Judgment entered into on October 4, 1984 in Williams v New York City Housing [*4]Authority (Case No. 81-CV-1801 [RJW])^[FN1], and NYCHA's own internal procedures promulgated to ensure compliance with the Williams First Partial Consent Judgment.

NYCHA asserts that the T-1 Notice was sent to petitioner in error, and that the Williams First Partial Consent Judgment does not apply to determinations of succession rights to a Section 8 subsidy.

The issue of whether petitioner was entitled to a hearing bears on the issue of whether NYCHA's determination dated December 7, 2009 was final and binding. One could argue that NYCHA's denial of succession rights would not be final and binding if petitioner were entitled to an administrative hearing, which could result in the determination being overturned. Thus, the Court must first address whether petitioner was entitled to a hearing.

For recipients of Section 8 subsidies, the Williams First Partial Consent Judgment requires NYCHA to follow certain procedures when terminating a Section 8 subsidy: [*5]

"First, after a preliminary determination that there exists a basis for termination, NYCHA must send the participant a warning letter specifically stating the basis for the termination and, if appropriate, seeking the participant's compliance. Thereafter, if the conditions which led to the preliminary determination have not been remedied within a reasonable time, NYCHA must send a second written notice, the Notice of Termination, by certified and regular mail, stating the specific grounds for termination and informing the participant that he or she may request a hearing (and an optional pre-hearing conference). If the participant does not respond to the Notice of Termination or T-1 letter, NYCHA is required to mail a Notice of Default advising the participant that the rent subsidy will be terminated and the grounds therefor and affording the participant another opportunity to request a hearing. If the participant takes no action after the Notice of Default or T-3 letter, the rent subsidy will be terminated on the 45th calendar day following the date of mailing of the Notice of Default. If, however, a participant requests a hearing after the 45-day period, the participant's default may be reopened upon a showing of good cause.'"

(Matter of Fair v Finkel, 284 AD2d 126, 127-28 [1st Dept 2001].)

These procedures affect when NYCHA's determination to terminate a Section 8 subsidy becomes final and binding. Paragraph 22 (f) of the Williams First Partial Consent Judgment states,

"for the purposes of Section 217 and Article 78 of the Civil Practice Law and Rules, the determination to terminate a subsidy shall, in all cases, become final and binding upon the receipt of the Notice of Determination pursuant to paragraph 22 (a)' hereinabove, or the Notice of Default, pursuant to paragraph 3(e)'above, except that where a default is reopened, the statute of limitations shall begin to run upon receipt of the Notice of Determination following the completion of such reopened proceeding or where members of the Authority review a determination pursuant to paragraph 21 the statute of limitations shall begin to run upon receipt of the notice of the results of such review."

However, NYCHA indicates that the termination procedures of the Williams First Partial Consent Judgment applies to the "Termination of the subsidy or eligibility of any participant in the Section 8 Housing Assistance Program for Existing Housing, administered by [NYCHA]." (Verified Answer, Ex J [emphasis supplied].) It is undisputed that petitioner is not a Section 8 subsidy participant; [*6]petitioner was not a recipient of a Section 8 subsidy whose subsidy was being terminated. Rather, petitioner was seeking succession rights to his father's Section 8 subsidy.

Therefore, the Williams First Partial Consent Judgment does not apply here. Petitioner is not entitled to a hearing under the Williams First Partial Consent Judgment.

All these cases are inapposite. In Matter of Gill and Matter of Bajana, the petitioners sought succession rights to Section 8 subsidies granted to their parents, and the lower courts ruled that the petitioners were entitled to hearings. However, the petitioners in those cases were each entitled to a hearing for reasons and facts which are not present in this Article 78 proceeding. Matter of Moorer did not involve a claim of succession rights to a Section 8 subsidy.

In Matter of Gill v Hernandez, the petitioner brought an Article 78 proceeding seeking an order directing NYCHA to add the petitioner to the Section 8 household of her mother retroactively, and a declaration that the petitioner was a remaining family member entitled to succession rights to her mother's Section 8 subsidy. The petitioner resided with her mother, who was receiving a Section 8 subsidy from NYCHA. Petitioner and her mother claimed that they submitted paperwork to add the petitioner as a family member to her mother's household, and that the landlord allegedly granted the petitioner "permanent status," pending NYCHA's approval.

However, when the petitioner's mother listed the petitioner on annual income recertifications, NYCHA continued to insist that the petitioner's mother needed to complete paperwork to add the petitioner to the household. After petitioner's mother died, NYCHA terminated the mother's subsidy, stating that the mother had been the only tenant of record.

Justice Kornreich remanded the matter back to NYCHA, ruling:

"Regardless of whether petitioner would be ultimately entitled to section 8 relief, the record establishes that she and her elderly, disabled and homebound mother complied as well as they could with NYCHA's [*7]guidelines. Instead of providing them with much-needed assistance to negotiate the red tape, the agency representative failed to process the original application, repeatedly requested the same paperwork, callously demanded the personal appearance of the tenant, petitioner's mother, who she knew or should have known was physically unable to come, then failed to notify petitioner of any decision by the agency on the application and the request for permission to be included in her mother's household. The irony is palpable in the agency's hollow assertion that petitioner is now precluded from pursuing her remedy because she failed to provide the requisite paperwork and jump through the correct administrative hoops.

Under the circumstances of this case, the agency's actions in terminating the subsidy and failing to add petitioner to the household were arbitrary, capricious, unreasonable, and contrary to law. Petitioner was never afforded the opportunity to contest the denial because neither she nor her mother was ever notified of it.

In addition, under its succession policy, NYCHA was required to provide petitioner with an opportunity to dispute denial of succession to the subsidy. Paragraph IV of that policy provides, in pertinent part,

An RFM [remaining family member] claimant may dispute denial of succession to the subsidy of a former lessee and present his/her side of the case at an informal conference with an employee, at the level of assistant manager or higher, of the Housing Authority's Leased Housing Department . . . Neither the employee who denied the succession, nor his/her direct supervisor shall conduct the conference.'

Consequently, petitioner is entitled to notice and an opportunity to be heard before having the section 8 subsidy terminated and her rent increased."

(Matter of Gill, 22 Misc 3d at 397-398.)

Matter of Gill is inapposite. There, NYCHA purportedly made no decision as to the tenant's request to add her daughter to the Section 8 household, while it repeatedly insisted that the tenant had to resubmit the paperwork. Here, unlike Matter of Gill, it is undisputed that NYCHA granted petitioner conditional permission to join Samuel Klein's household, while specifying that petitioner has no right to succeed to the Section 8 subsidy. In addition, paragraph IV of the succession policy, [*8]which Justice Kornreich cited in Matter of Gill, is not in NYCHA's current succession policy. (See Verified Answer, Ex B, at 9-11; see also Petitioner's Mem. at 18 n 1["The 2007 Occupancy Policy is silent on a tenant's right to a hearing to contest succession rights."].)

In Matter of Bajana, the petitioner sought succession rights to a Section 8 subsidy that her mother received from NYCHA. NYCHA granted the petitioner conditional permission to join her mother's household in 2008. The petitioner's mother died in October 2009 after being struck by a vehicle, and NYCHA cancelled the mother's Section 8 voucher a week after she died. NYCHA denied the petitioner succession rights because she had been granted only conditional permission to join the household. In the Article 78 proceeding, the petitioner argued that she had been denied due process because she had never been given notice or an opportunity to dispute NYCHA's determination to grant her conditional permission instead of a status as a permanent family member.

Justice Lobis stated,

"[P]etitioner's mother was entitled to written notice of NYCHA's determination regarding her daughter's status as a conditional resident only, which was effectively a denial of permanent residency status. According to NYCHA policy, petitioner's mother would have been entitled to dispute the denial at an informal conference with an employee at the level of Housing Manger or higher.' See LHD Memorandum No.07-22, § VI. However, since there was a clear failure on NYCHA's part to duly notify Ms. Mosquera in writing of the determination regarding her daughter's residency status, neither petitioner nor her mother ever had the opportunity to contest this determination."

Like Matter of Bajana, NYCHA's current policy states, "The Lessee may dispute the denial of permission at an informal conference with an employee at the level of Housing Manager or higher." (Verified Answer, Ex B, at 7.) However, unlike the petitioner Matter of Bajana, petitioner is not claiming that neither he nor his father was unaware that NYCHA granted conditional permission for petitioner to join his father's household, instead of permanent permission. [*9]

Matter of Moorer is also inapposite. Matter of Moorer did not involve a claim of succession rights to a Section 8 subsidy. Rather, the petitioner in Matter of Moorer was a recipient of a Section 8 voucher administered by the New York City Department of Housing Preservation and Development (HPD). HPD terminated the petitioner's subsidy because HPD claimed to have discovered that two individuals whom the petitioner had listed as family members on her income recertification were living in another household, which was receiving a housing subsidy from NYCHA. The petitioner had requested a hearing, and HPD's own termination procedures required it to afford the petitioner a hearing to challenge the termination before the subsidy could be terminated. (Matter of Moorer, 101 AD3d at 565.)

In sum, petitioner has not demonstrated that he was entitled to a hearing to dispute NYCHA's denial of succession rights to his father's Section 8 subsidy.

"[F]or the purposes of the commencement of the statutory period, the petitioner cannot be said to be aggrieved by the mere issuance of a determination when the agency itself has created an ambiguity as to whether or not the determination was intended to be final. A similar principle should apply when the petitioner has received no notice, ambiguous or otherwise, of the determination by which he is said to be aggrieved. Indeed, 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 he was not aware."

Here, NYCHA created an ambiguity as to whether its letter dated December 7, 2009 was final and binding because it also sent a T-1 Notice dated December 7, 2009 to petitioner, which indicated that petitioner could request a hearing.

Because of the ambiguity, NYCHA has not demonstrated that the petition is time-barred, to the extent that petitioner contends that NYCHA's denial of succession [*10]rights to his father Section 8 subsidy was arbitrary and capricious.

The Court need not address NYCHA's remaining argument that the petition is barred by laches. NYCHA raised this argument because it construed the petition as seeking, among other things, mandamus to compel NYCHA to grant petitioner a hearing. Petitioner himself did not apparently believe that the petition was in the nature of mandamus to compel, insofar as NYCHA gave no determination denying his request for a hearing. In any event, as discussed above, the Court has found that petitioner was not entitled to a hearing under Williams First Partial Consent Judgment, and that petitioner did not cite any applicable case law establishing that he was entitled to a hearing.

Turning to the merits, NYCHA's occupancy/succession policy is part of a written administrative plan, which NYCHA is required to adopt pursuant to federal regulations. (See 24 CFR 982.54 [2009].) The written administrative plan is a supporting document to the public housing agency plans (PHA plans) that NYCHA must submit to the U.S. Department of Housing and Urban Development (HUD) pursuant to federal law and regulations. (See 42 USC 1437c-1; 24 CFR 903.4 [2009].)^[FN2] The written administrative plan "must be in accordance with HUD regulations and requirements" (24 CFR 982.54 [b] [2009]), and it must cover "How to determine who remains in the program if a family breaks up." (24 CFR 982.54 [d] [11].) NYCHA must administer the Section 8 voucher program in accordance with the administrative plan. (24 CFR 982.54 [c] [2009].)

Section 11 of NYCHA's written administrative plan, "Determining who remains in the program if a family breaks up", states:

"NYCHA shall determine, on a case-by-case basis, which family member or members remain in the assisted household, and whether the [*11]resulting assisted household may remain in the housing unit that it occupies at the time such decision is made. Any such decision shall comply . . . with NYCHA's Section 8 Succession Policy . . . ."

It is undisputed that, under NYCHA's succession policy, only a family member who either entered the unit as an original family member, or whom was accorded "permanent status" by NYCHA to join the household, may be considered a Remaining Family Member for succession rights to a Section 8 subsidy, after one full year of residency. (Verified Answer, Ex B, at 9.) Under NYCHA's occupancy policy, a request for permanent permission to join the household may be approved only for the following persons:

"A.The spouse or registered domestic partner of any authorized family member.

B.The dependent children of an added spouse or registered domestic partner.

C.An adult legally adopted by an authorized family member.

D.A child under 18 years old born to or adopted by an authorized family member who is not currently residing in the household."

Petitioner does not contend that NYCHA's succession policy contravenes a specific federal regulation or federal law. Rather, he argues that NYCHA's policy is contrary to the federal statutory framework governing Section 8 subsidies. Petitioner argues that a policy "which totally exempts adult biological children continuously living in a household for several years from the status of permanent' members . . . is not rational." (Petitioner's Reply Mem. at 6.) Petitioner argues that the federal policies of Section 8 should supersede NYCHA's internal policies, i.e., the occupancy policy and succession policy.

NYCHA states that it does not provide succession rights to conditional family members because

"it has determined the many thousands of applications on the Section 8 [*12]waiting list should take priority over newly-arrived, adult, biological children of participants who left the program or have died. The Housing Authority's occupancy and succession policies are designed to effectively balance the needs of those individuals who join a household in order to assist a Section 8 family member against those individuals on the waiting list for Section 8 vouchers."

Petitioner's policy argument is based on an extensive discussion of the Section 8 housing program and its aims in Morrisania II Associates v Harvey (139 Misc 2d 651 [Civ Ct 1988] [Stallman, J.]). Morrisania II Associates involved a licensee holdover proceeding brought against the daughter of a tenant who leased an apartment pursuant to a Section 8 tenancy until the tenant's death. The landlord argued, among other things, that the daughter was either a squatter or a former licensee whose license terminated upon the tenant's death. The daughter contended that she was the legal successor to her mother's Section 8 tenancy, and she moved for summary judgment to dismiss the holdover proceeding, arguing that federal law preempted the holdover proceeding and thus required its dismissal. In denying the respondent's motion, the court discussed the Section 8 program at length:

"The section 8 program recognizes the entire family as the tenant, entitled to occupancy and assistance. It thereby encourages family cohesion and the care of the elderly and disabled in the home. The statute construes family' broadly to include, inter alia, a remaining member of a tenant family' and an elderly or disabled single person.

The term remaining member of a tenant family' (42 USC § 1437a [b] [3] [C]) is not otherwise defined by statute or regulation. Since it is not ambiguous, it should be defined according to the ordinary and natural meaning of its own words, as a person who had actually been in occupancy as a part of the family unit at the time of the named tenant's death. Its use recognizes an underlying statutory assumption: all family members have occupancy rights which are not terminated by the death of any member. In contrast, one who assumed occupancy just before the tenant's death, with no purpose other than that of succeeding to the tenancy, is not so protected. Such an interloper is not part of the class which the Federal law sought to benefit.

In sum, section 8 guarantees continued protection to every legitimate member of the family unit in occupancy. It recognizes that no such family member should suffer eviction, dislocation and homelessness upon the death of the tenant of record. It is thus consistent with the original ameliorative purpose of the United States Housing Act of 1937, the comprehensive legislation of which section 8 forms a part."

Succession to the Section 8 subsidy was not at issue in Morrisania II. Rather, the summary holdover proceeding in Morrisania II involved the issue of whether the daughter of the deceased tenant had the right to remain in the apartment. In the instant case, petitioner's right to remain in his father's apartment is not at issue. As discussed in the background allegations, HPD accorded petitioner succession rights to remain in the apartment. At issue here is whether NYCHA should have granted petitioner succession rights to the Section 8 subsidy.

Lower courts are divided as to whether NYCHA's succession policy contravenes the federal policies of the Section 8 program. Citing Morrisania II, Justice Lobis stated,

"nowhere in the Act [the Housing and Community Development Act of 1974] or the federal regulations applicable to Section 8 does the distinction between conditional and permanent family member exist. The federal scheme-including other forms of federal housing assistance to low income families administered by NYCHA, such as public housing-does not broadly prohibit additional family members from attaining permanent residency with an authorized tenant in a housing unit that benefits in some way from federal subsidies. The local housing authority cannot promulgate regulations that frustrate the purpose of Section 8 legislation."

"[P]etitioner has not demonstrated that respondents have violated the [*14]spirit of the federal regulations by categorizing an adult daughter who was not part of the original family composition, but who later moves in with her mother, as a conditional member of the household, and not as a permanent member. The Housing Authority's rules do not deem the daughter in these circumstances to be a nonfamily member, but simply deem her to be a conditional member of the household who may reside with the lessee during the tenancy. The promulgation of these rules is within the respondent's discretion and in furtherance of the goals and objectives of the Section 8 program. As is argued persuasively by respondents, [t]he Housing Authority has a lengthy waiting list of eligible individuals who are homeless, victims of domestic violence, or in other dire straits, and who are awaiting Section 8 assistance. There is no rational basis on which to conclude that petitioner should bypass those on the waiting list of eligible individuals to succeed to her mother's subsidy.' [citation omitted]"

Petitioner does not point any federal statute or regulation which is contrary to NYCHA's succession policy or occupancy policy, which grants only conditional permission to adult children who are added to a Section 8 household. The Court agrees with Justice Abdus-Salaam that the lack of succession rights for adult children under NYCHA's policies is neither arbitrary and capricious, nor a violation of federal law.

Finally, petitioner cites cases where courts permitted occupants to prove, either at a hearing or at trial, that they were remaining family members entitled to succession rights in project-based Section 8 apartments, notwithstanding the fact that they were not listed in the family composition on annual statements or forms. Those cases are distinguishable. First, those cases involved the issue of whether the person seeking succession rights to a project-based Section 8 apartment was a bona fide occupant of the apartment with the tenant of record. Here, petitioner's father was the recipient of a "tenant-based" Section 8 subsidy—a voucher. Unlike a project-based subsidy, which is associated with a specific dwelling unit, a voucher is "portable," i.e., "a portable voucher which a tenant can use to pay rent on any apartment, within certain limits, in the United States." (Matter of Manhattan Plaza Assoc. v Department of Hous. Preserv. & Dev. of City of New York, 3 Misc 3d 717, 718 n 1, affd 8 AD3d [*15]111.)^[FN3] Second, the agency policy in the one of those cases that petitioner cites permitted the occupant who sought remaining family member status to present evidence of a bona fide occupancy, notwithstanding that the occupant was not listed on income affidavits. (Matter of Manhattan Plaza Assocs., L.P., 8 AD3d at 112 [HPD regulation permitted a family member not listed on the annual certifications to rebut the presumption that he or she did not live in the apartment].) Finally, those cases do not stand for the proposition that courts are empowered to disregard an agency policy that expressly and unambiguously does not recognize succession rights, where such policy is neither arbitrary and capricious nor a violation of federal law. (See Matter of Filonuk v Rhea, 84 AD3d 502, 503 [1st Dept 2011] ["Although NYCHA's written consent requirement is not a formal rule or regulation, petitioner was required to obtain such consent in order to be entitled to RFM status"].)

Accordingly, it is hereby ADJUDGED that the petition is denied and the proceeding is dismissed.

Dated: April 18, 2013

New York, New York

ENTER:

/s/

J.S.C.