The following papers numbered 1 to 7 read herein:

Papers Numbered

Notice of Motion/Order to Show Cause/

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1 - 5

Opposing Affidavits (Affirmations)6

Reply Affidavits (Affirmations) verified answer7

Affidavit (Affirmation) [*2]

Other Papers

Upon the foregoing papers, petitioner Michael Pallodino seeks judicial review, under article 78 of the Civil Practice Law and Rules, of an informal hearing decision by respondent New York City Department of Housing Preservation and Development (HPD) which upheld the termination of petitioner's Section 8 rental subsidy administered by HPD's Housing Choice Voucher Program.

Petitioner is the occupant of Apt. 1K in a residential building owned by respondent Luna Park Housing Corp. at 2818 West 8th Street in Brooklyn. Petitioner moved into the apartment in 1972 with his parents, who have since passed away. According to the petition and affidavit of petitioner in support of the petition, petitioner and Margot Diaz have been dating for approximately fourteen years. Petitioner states that Margot Diaz often spent time at petitioner's home and moved into the apartment in November 2011 following the death of her father. On or about June 14, 2011, petitioner submitted a Section 8 recertification package wherein he listed himself as the sole household member and listed Steven Diaz (Margot Diaz's son) as a source of income in the amount of $245.00 per month. Among the forms in the package was a request to add a household member, which petitioner checked was "not applicable." In the recertification packages for the previous years of 2008, 2009 and 2010, petitioner likewise indicated that he was the sole household member of the subject apartment.

HPD thereafter conducted a search on the New York State Department of Social Services Welfare Management System (WMS) database which revealed that Steven Diaz and Margot Diaz were associated with the subject apartment. On September 1, 2011, petitioner appeared at a mandatory conference scheduled by HPD regarding his household composition. At the conference, petitioner signed a "Statement of Understanding - Section 8 Participant Obligations" and provided documentation indicating that Steven Diaz did not reside in the apartment. Petitioner also submitted a "Tenant Self-Certification" wherein he indicated that Margot Diaz "has been living with [petitioner] from 2005 [until] now." On September 9, 2011, HPD sent petitioner a request to provide documents "to add [a] household member." By letter dated September 27, 2011, which was forwarded by Luna Park's housing specialist to HPD, petitioner stated that he was the only one residing in the subject apartment.

In March 2012, petitioner's case was referred to HPD's Program Integrity and Compliance (PIC) Unit to investigate whether Margot Diaz was residing in the apartment as an unauthorized household member. The PIC Unit performed a public records search on LexisNexis which revealed that Margot Diaz was associated with the apartment from November 1999 through September 2012. An Equifax credit report obtained by the PIC Unit indicated that Margot Diaz was associated with the apartment since August 2010. [*3]According to a report from the Department of Motor Vehicles (DMV), the subject apartment was registered with the DMV as Margot Diaz's address since February 2006. The information obtained from the WMS database indicated that Margot Diaz was associated with the subject apartment since 2006.

Following service of a pre-termination notice, petitioner had a conference with the HPD on November 16, 2012. At the conference, petitioner signed a "Statement of Understanding - Section 8 Participant Obligations" which indicates that petitioner "claims he did not know he had to add on his girlfriend (Margo[t] Diaz) who has resided w[ith] him for 3 yrs." On December 3, 2012, HPD mailed petitioner a "Notice of Section 8 Subsidy Termination" advising that his Section 8 rent subsidy would be terminated because he misrepresented his household composition.

On March 20, 2013, an informal hearing was held before Hearing Officer Maurice Robinson. At the informal hearing, petitioner appeared with Margot Diaz and was represented by his attorney, Justin LaMort. HPD representative Valencia Thompson and PIC Unit manager Carlos Herrera were also present at the hearing. Various documents were submitted into evidence, including the reports procured by the PIC Unit, and testimony was given by petitioner, Margot Diaz, Herrera and Thompson.

By their testimony, Herrera and Thompson explained the searches performed on Margot Diaz and the results of the searches which were submitted into evidence. Herrera also testified, in part:

I conducted a field visit on September 21, 2012. . .I spoke to several different neighbors on the floor, and they all knew of Margot Diaz residing at the assisted address. So based on the information regarding Lex[i]sNex[i]s, a credit report, New York State ID, Medicaid and the field visit and her cellphone being associated with the home, we recommended a pre-termination of the subsidy. . .(Informal Hearing Transcript [tr] at 19.)

Petitioner thereafter testified as follows:

It says that I signed papers that she was living there since 2005, which that is not true. She's living with me since 2011 when her father passed away. She'd come to stay with me, on and off, you know, on the weekends or other days, but you know, not living there permanently. And the reason why she had her address for her was because she — hospital, and she needed a Brooklyn address, so I let her use my address, my girlfriend address. That's the only reason why she was receiving mail there, and I was seeing her for 14 years. That's [*4]as good as I could do. Since her father died, she had nowhere to go, 2011, that's why I let her stay with me" (tr at 22-23).

The hearing officer inquired as to why Margot Diaz was not added to the household after HPD had inquired about Stephen Diaz. Petitioner testified:

They asked me about Stephen, and I went to the office, and I proved to them, and I got papers that Stephen wasn't living there, and everything that they actually —, I got for them and I brought it to them, and they signed — they see — they noted that Stephen wasn't living there, and I did that.

As far as Margot Diaz, why I didn't put her down, on my affidavit, I didn't understand that I had to put her down because I wasn't married to her, and I was the only person living in the apartment, and I always filled out the affidavit as best I can and tell the truth and wrote everything out, and I signed it, notarized, signed it, and gave it to Luna Park, and they accepted it.

They never told me that I had to put Margot Diaz as living there for me, because she wasn't. She was just my girlfriend on and off. I'm allowed to have my girlfriend come and stay with me on weekends. Sometimes she stayed till Tuesday. I'm allowed to have that. I thought I was allowed to have that, I didn't know I had to put her down as living there when she wasn't.

But 2011, she's living there since 2011 (tr at 32-33).

The hearing officer asked petitioner why he didn't list Margot Diaz as part of the household when she moved in, to which petitioner replied:

I wasn't told that I had to put her down in 2011, otherwise I would have. There's no reason why I wouldn't put her down and telling - as I put my income down and sign the affidavit, I do the same for her and tell her to sign it, and put down your own income. If I had to do that I would've did that. I was fine with that, but maybe I read it wrong. I didn't realize - I had to put it down. I just didn't know (tr at 33).

Petitioner also testified about his alleged cognitive disorder, stating that he "had trouble in class, reading writing" and "left school never went back." Petitioner testified that while he went to see a doctor "because [he] was developing skills late," he "never [*5]really found out" and "never went back to the doctors after that. . ." (tr at 44). Petitioner testified that he was never diagnosed with any disorder (tr at 53).

Margot Diaz was asked by the hearing officer if she had any lease, bills, or other proof that she was living at a different address prior to 20011. Margot Diaz testified that "everything I got mailed to [petitioner's] house . . .I didn't use anybody else's address (tr at 41-42). Margot Diaz testified that she did not have any proof indicating that she lived elsewhere prior to 2011.

After receiving the evidence and testimony, the hearing officer issued a decision upholding the termination of the Section 8 subsidy. In his decision, the hearing officer stated, in part:

Although [petitioner] claims that Ms. Diaz has only resided [in the subject apartment] since September 11, 2011, a preponderance of the evidence supports HPD's finding that Ms. Diaz has been residing at the premises since at least 2005. First, [petitioner's] inconsistent statements cast doubt on the veracity of his testimony. At the September 1, 2011 conference, [he] was briefed on his family obligations under the Section 8 program and he reported to the Agency that Ms. Diaz has been his "live-in girlfriend" since 2005. He was given an opportunity to add Ms. Diaz to the household composition when HPD sent him a "Request to Add Household Member." The Record indicates that he failed to do so. He testified at the Informal Hearing that Ms. Diaz has indeed lived with him at the Premises, though he claimed it was "on and off, usually temporarily" and that it was only on September 11, 2011 that Ms. Diaz moved to the Premises on a permanent basis. Even if that part of [petitioner's] testimony is to be credited, it is contradicted by the letter he wrote to [Luna Park] on September 27, 2011 in which he stated that he was "the only one residing" at the Premises. These statements are contradictory and difficult to reconcile.

His testimony is further weakened by the fact tat several reliable reports associate Ms. Diaz with the Premises since 2005, including a [WMS] report and an Equifax report. The [WMS] report indicates that Ms. Diaz has made credible representations to other government agencies that the assisted Premises is in fact her address. She has done so to effectuate certain government benefits.

* * *

. . .Moreover, neither [petitioner] nor Ms. Diaz provided any proof whatsoever to establish that Ms. Diaz lived elsewhere during the time period in question.

* * *

In this case, [petitioner] does not meet the verification [of disability] requirement set out by the HPD Administrative Plan. Mr. LaMort erroneously claims that HPD had been made aware of [petitioner's] "cognitive disabilities." As evidence, he submitted a Disability Verification Form in [petitioner's] name. There are several issues with that evidence. First, the form is incomplete; only the first page is submitted as evidence. Second, nothing in the record shows that HPD ever received said form. In fact, the fax transmission on the top of the page shows that the form was faxed to CAMBA on May 12, 2010, not to HPD. And third, Mr. LaMort testified that [petitioner] "never followed up because he did not understand the form." It is unclear from the Record the reason why the Disability Verification Form was not completed. However, the burden is on the participant to follow up on such a claim. The record is clear on the fact that [petitioner] was receiving assistance from CAMBA since at least 2006. HPD reaches out to participants who need additional help to a certain degree, e.g. by referring them to community-based organizations such as CAMBA, who will help Participants with their Section 8 obligations. However, by [petitioner's] own testimony, he does not have proof of his disability because he refuses to see doctors about his condition. As a result, [petitioner] has not established that he is disabled and HPD cannot excuse his failure to comply with his Section 8 family obligations on that basis. To accept such undocumented claims of this kind would be to invite abuse of the program and its policies.

The hearing officer further addressed petitioner's mitigating circumstances:

First, [petitioner] argues that Ms. Diaz does not have any source of income and therefore no fraud was committed. [*7]Thus, the Agency did not suffer any financial harm. Second, [petitioner] testified that he has no job skills and no income and termination may lead to homelessness.

It is impossible to determine whether [petitioner's] misrepresentation caused the Agency any financial harm because the Agency cannot verify Ms. Diaz's income as she is not a subsidized participant of the Section 8 Program. However, there is no doubt that [petitioner's] misrepresentation of household composition harmed the integrity of the Section 8 Program. [Petitioner] had several opportunities to report Ms. Diaz as a member of his household, but he failed to do so each time. Further, Ms. Diaz was either living in the home as an unauthorized resident, or Ms. Diaz, through the authorization of [petitioner], was making known false statements of material fact about her residence in order to have other entities and government agencies justifiably believe that she was entitled to certain benefits and privileges that were for her own personal gain or advantage. Such action is the very definition of fraud, and cannot and should not be supported by this or any other government agency, as the harm to the sense of fairness and equality to this and other pivotal public programs is immensely damaged.

While [petitioner] claims several mitigating circumstances, he provided no documentary evidence to verify any of his claims. [Petitioner] may be adversely affected by termination of his rent subsidy. However, that does not absolve [petitioner] from the consequences of his non-compliance. Further, it appears from the record and [petitioner's] testimony that the [petitioner] has not exhausted all possible avenues for assistance and resources. [Petitioner] cannot be deemed as facing homelessness and destitution if sufficient evidence cannot be shown that [petitioner] has tried and is incapable of receiving any additional support or resources to maintain himself. In fact it appears, that [petitioner] has faired well enough that he thought himself capable of taking on and assisting Ms. Diaz during her time of need. Based on the evidence presented, I find that HPD's [*8]decision to terminate [petitioner's] Section 8 subsidy was correct and reasonable.

The instant article 78 proceeding ensued.

Judicial review of the determination of an administrative agency pursuant to CPLR article 78 is limited to questions expressly identified by statute and includes the question of whether the determination was "arbitrary and capricious or an abuse of discretion, including abuse of discretion as to the measure or mode of penalty or discipline imposed" (CPLR 7803 [3]) and "whether a determination made as a result of a hearing held, and at which evidence was taken, pursuant to direction by law is, on the entire record, supported by substantial evidence" (CPLR 7803 [4]). Also, the court may set aside a determination by an administrative agency if the measure of punishment or discipline imposed is so disproportionate to the offense, in light of all the circumstances, as to be shocking to one's sense of fairness" (Matter of Pell v Board of Educ., 34 NY2d 222, 233 [1974]). A result may be "shocking to one's sense of fairness if the sanction imposed is so grave in its impact on the individual subjected to it that it is disproportionate to the misconduct, incompetence, failure or turpitude of the individual, or to the harm or risk of harm to the agency or institution, or to the public generally visited or threatened by the derelictions of the individuals" (Matter of Pell, 34 NY2d at 234; see Alexander v Rhea, 90 AD3d 1041, 1041-1041 [2d Dept 2011]).

22 CFR § 982.552 (a) provides, in relevant part:

(a) Action or inaction by family ^[FN1]—

(1) a PHA may deny assistance for an applicant or terminate assistance for a participant under the programs because of the family's action or failure to act as described in this section or § 982.553. . .

(2) Denial of assistance for an applicant may include any or all of the following: denying listing on the PHA waiting list, denying or withdrawing a voucher, refusing to enter into a HAP contract or approve a lease, and refusing to process or provide assistance under portability procedures.

22 CFR § 982.551 provides, in relevant part:

(a) Purpose. This section states the obligations of a participant family under the program.

(b) Supplying required information—

(1) The family must supply any information that the PHA or HUD determines is necessary in the administration of the program, including submission of required evidence of citizenship or eligible immigration status (as provided by 24 CFR part 5). "Information" includes anyrequested certification, release or other documentation.

(2) The family must supply anyinformation requested by the PHA or HUD for use in a regularly scheduled reexamination or interim reexamination of family income and composition in accordance with HUD requirements.

* * *

(4) Any information supplied by the family must be true and complete.

* * *

(h) Use and occupancy of unit.—

(1) The family must use the assisted unit for residence by the family. The unit must be the family's only residence.

(2) The composition of the assisted family residing in the unit must be approved by the PHA. The family must promptly inform the PHA of the birth, adoption or court-awarded custody of a child. The family must request PHA approval to add any other family member as an occupant of the unit. . .

Upon a review of the administrative record, the court finds that the hearing officer's decision, to the extent of determining that petitioner was in violation of 24 CFR § 982.551 by failing to notify HPD and request approval of Margot Diaz's occupancy, is [*10]rational and supported by substantial evidence.^[FN2] However, the court finds that the penalty imposed by HPD, termination of the section 8 subsidy, is disproportionate to the offense under the circumstances.

While the hearing officer rationally concluded that, based upon the evidence, petitioner failed to demonstrate that he suffered from a disability, petitioner sought the services of CAMBA to assist him with the recertification forms. At the informal hearing, Thompson explained that "HPD uses CAMBA when they have difficulty in reaching some of their participants, namely some that are disabled and some that are elderly, and they havwe them to reach out to those participants to explain about the recertification process, to fill out the documents and submit, making sure that they're submitted to the program" (tr at 40). It is not in dispute that petitioner had occupied the same apartment since 1972, when he moved in with his parents at the age of 16 years. Petitioner violated the rule for reporting his household beginning in 2005 at the earliest. There is no allegation or indication in the record that, in this thirty-three year period, petitioner had committed any crime or caused any problems in the building, had any problems with other tenants in the building or had violated any HPD rule or regulation involving his subsidy or otherwise. Significantly, there is no allegation or indication in the record that petitioner failed to accurately report the income he received, and did in fact dutifully report the income he was receiving from Stephen Diaz. There is nothing in the record showing that Margot Diaz earned any income or provided petitioner with income which went unreported or showing what impact petitioner's failure to report Margot Diaz's occupancy had on the amount of his subsidy (see Matter of Duroseau v Cestero, 100 AD3d 889 [2d Dept 2012] [termination of subsidy not warranted where there was no indication in the record of what impact the petitioner's failure to report her adult daughter's income had, if any, on the amount of her housing subsidy] Matter of Gray, 58 AD3d at 488). While the hearing officer stated that Margot Diaz's income could not have been established until she was added to petitioner's household, in the absence of such proof it cannot be gleaned that petitioner intended to defraud HPD or "game the system" by failing to report Margot Diaz's occupancy. In certain cases, where a tenant has occupied an apartment for a significant period of time, yet allowed an unauthorized occupant to reside in the apartment or failed to report income, the courts found that the penalty of termination of a Section 8 subsidy is disproportionate to the offense (Matter of Sicardo v Smith, 49 AD3d 761, 762 [2d Dept 2008] [finding tenant's failure to disclose that her former husband was residing in the apartment with her and the children warranted a penalty of something less than termination of the subsidy] Matter of Williams v Donovan, 60 AD3d 594 [1st Dept 2009] [penalty of termination of subsidy for tenant who resided in apartment for 28 years with an "unblemished tenancy" is disproportionate [*11]to offense of failure to report adult son's income] Matter of Gray v Donovan, 58 AD3d 488 [1st Dept 2009] [penalty of termination of subsidy for tenant who resided in apartment for thirty years with no record of any prior offenses is disproportionate to offense of failure to report children's income]).Under the circumstances here, the court finds that the decision to terminate petitioner's Section 8 subsidy was disproportionate to the offense. Accordingly, the petition is granted to the extent that petitioner's subsidy shall be reinstated, retroactive to the date of termination. This decision is without prejudice to HPD to terminate petitioner's subsidy upon any future failure of petitioner to accurately report his household on recertification forms or upon any other violation by petitioner for which termination of the subsidy is authorized.

The foregoing constitutes the decision and order of the court.

E N T E R,

J. S. C.