Opinion
104351/2003.
Decided October 15, 2004.
Michelle Lewin, Esq., Latham Watkins LLP, New York NY, for the Petitioners.
Deborah Rand, ACC, Office of the Corporation Counsel, New York NY, for the Respondent.
Petitioners are a community advocacy group, comprised of a coalition of resident and business owners in Fort Greene, Brooklyn and two individual residents/business owners opposed to the placement of a homeless shelter in their neighborhood. The petitioners seek to permanently enjoin the respondents, comprised of the City of New York and certain of its agencies and their heads (City Respondents); Wolf, the registered owner of the premises located at 65 Clermont Avenue; Brooklyn, New York; Wolf's company The Wolf Group, Inc.; and Moishe Unger, the owner of block 2046, in Brooklyn, from operating the shelter. The premises at issue in this proceeding are a privately owned building, construction of which began in 2000. They are owned by respondent Reuven Wolf. Although initially envisioned as a six-story residential building containing twelve apartments, the building was later changed to be a 24-unit building for temporary housing. In the alternative, petitioners seek an order directing the City Respondents to submit the premises to for a Fair Share review pursuant to the New York City Charter.
Wolf, The Wolf Group, Inc. and Unger, have never answered or appeared (Resp. Memo of Law at 2, n. 2).
By decision and order dated December 5, 2003, the Justice previously assigned to handle this matter held final resolution of this proceeding in abeyance pending expedited and limited discovery to determine whether a contract existed between the Department of Homeless Services (DHS) and the developer. That discovery has now been completed, and petitioners move to restore this matter to the calendar for a final determination of this Article 78 proceeding. Accordingly, the motion to restore the matter to the calendar brought under motion sequence number 002 is granted. Upon restoral, the petition for declaratory and permanent injunctive relief, or in the alternative for an order directing a Fair Share Hearing is denied and the petition is dismissed.
This court is constrained by the contours of the interim decision in this matter. Most importantly, the previously assigned Justice held that "the narrow issues before this court are whether the City Respondents properly complied with the zoning Resolution, and whether they were obligated to comply with the Fair Share Criteria." (Pet. Aff. of May 4, 2003, Ex. 10 [Dec. Ord. of Dec. 5, 2003 at 5]). In the interim decision, the previously assigned justice resolved the first issue in favor of the City Respondents. The sole issue left before this court is whether the City Respondents were obligated to comply with the Fair Share Criteria, described below. Petitioners have not proffered any documents not previously submitted to the court, with the exception of a somewhat updated DHS billing report (Pet. Aff. Ex. 5).
The New York City Charter calls for the making of a Fair Share Review, using Fair Share Criteria, whenever a city facility is placed in a community ( see, Pet. Aff. Ex. 6 [City Charter § 203 at 77], Ex. 7 ["Fair Share" Criteria: Guide for City Agencies]). As discussed in the court's December 5, 2003 decision, the Fair Share Criteria were adopted in 1990 pursuant to section 203 of the New York City Charter, and establishes guidelines to City agencies for locating new city facilities and expanding, closing or reducing the size of existing facilities ( see, Community Planning Board No. 4 v. Homes for the Homeless, 158 Misc 2d 184, 191 [Sup. Ct., NY County 1993]). Of crucial import here is that the only type of facility subject to a fair share review is a "city facility" as defined in the Charter ( Ferrer v. Dinkins, 218 AD2d 89, 95 [1st Dept. 1996]). A "city facility" is
a facility used or occupied or to be used or occupied to meet city needs that is located on real property owned or leased by the city or is operated by the city or pursuant to a written agreement on behalf of the city.
(Pet. Aff., Ex. 6 [NY City Charter § 203 (c)] [emphasis added]). The Fair Share Criteria, as developed by the New York City Department of City Planning, further defines "city facility" as:
A facility providing city services whose location, expansion, closing or reduction in size is subject to control and supervision by a city agency, and which is (i) operated by the city on property owned or leased by the city which is greater than 750 square feet in total floor area; or (ii) used primarily for a program or programs operated pursuant to a written agreement on behalf of the city which derives at least 50 percent and at least $50,000 of its annual funding from the city.
(Pet. Aff. Ex. 7 [Fair Share Criteria, App. 1, at 47] [emphasis added]).
The premises in question are, according to an October 21, 2002 email, a privately owned facility operated by the Clermont Family Residence LLC, and social services are provided "[b]y operator" (Pet.Aff. Ex. 3). The City Respondents argue that not only are the premises not owned or operated by the City, but there is no written agreement between DHS and non-party Somerstein Associates ("Somerstein"), the developer who was working with the non-City respondents. The affidavits of the DHS Assistant Commissioner for Intake and Reception Services and the DHS Deputy Commissioner for Policy and Planning both state that there is no written agreement between DHS and Somerstein concerning the operation of the premises as an apartment building to which DHS refers homeless families for shelter (Resp. Aff. in Opp. Ex. C [Sullivan Aff. ¶¶ 2, 3]; Ex. D [Schretzman Aff. ¶ 6]). The agreement is characterized as "an understanding" or "an arrangement . . . for the referral of families" (Resp. Aff. in Opp. Ex. C [Sullivan Aff. ¶¶ 2, 3]; Ex. D [Schretzman Aff. ¶ 6]).
In granting petitioners limited discovery, the previous court noted petitioners' argument that "some writings must exist setting forth the terms of the agreement between Somerstein and DHS in order for Somerstein to get paid." (Pet. Aff. Ex. 10 [Dec. Ord. at 8]). This is because, pursuant to the City Charter, "the City is required to submit a written agreement to the Comptroller in order to receive the necessary funds to pay Somerstein." ( Id.). The court was thus persuaded by petitioners that they needed "to ascertain whether the agreement between DHS and Somerstein contains essential terms necessary for forming a contract, or whether any documents or series of writings exist, which, when read together, constitute a legally written agreement with respect to the use and management of the Premises." (Pet. Aff. Ex. 10 [Dec. Ord. at 8]).
Petitioners now concede that there is no one document that could be itself termed a written agreement between DHS and Somerstein. However, petitioners argue that there are several documents in existence which taken together constitute a written agreement. They ask the court to extend the reasoning in Crabtree v. Elizabeth Arden Sales Corp., 305 NY 48 (1953) to the facts at bar in order to find the kind of written agreement required by the City Charter. In Crabtree, which concerned an employment contract, the Court of Appeals held that in the context of the statute of frauds, a series of signed and unsigned writings may be read together, providing they clearly refer to the same subject matter or transaction, so as to form a contract ( 305 NY at 55). As Judge Fuld explained, the statute of frauds allows a contract to be "`pieced together out of separate writings, connected with one another either expressly or by the internal evidence of subject matter and occasion.'" ( Id. at 54, quoting Marks v. Cowdin, 226 NY 138, 145).
Petitioners do not point to any cases where a court has used a Crabtree analysis to satisfy the City Charter provision requiring a written agreement. However, they argue that all the terms of a contract can be construed from the following documents: the August 26, 2002 signed letter from a Deputy Commissioner of DHS to various local and State officials stating that DHS had entered into "an agreement" for use of 24 units of the Clermont premises; a subsequent DHS letter dated Oct. 22, 2002 confirming the existence of an agreement and stating that the premises would be "operated by Summerstein [sic] Associates through an agreement with DHS," and two emails concerning the rate of payment for each family to be made by the City, that social services would be provided by Clermont Family Residence LLC, and a list of the number of units and beds (Pet. Aff. Ex. 1-4). Petitioners also proffer a copy of the DHS billing system reports to establish a history of services rendered and payments received from October 22, 2002 through January 29, 2004 (Pet. Aff. Ex. 5). They conclude that these documents, read together, along with statements made in the pleadings of City Respondents, comprise a written agreement between DHS and Somerstein, containing all the necessary terms of an agreement. Specifically, the parties are DHS and Somerstein, the subject matter is the 24 units of the Clermont Avenue premises; the price was established at $97.00 per family per day; services commenced on October 22, 2002; and payments have been made from at least October 22, 2004 through January 29, 2004 (Pet. Memo of Law, at 6-7).
Petitioners suggest that the City Respondents compare the term "understanding" to the standard City "requirements contract," in their statement that "the City refers homeless families to Somerstein Associates for placement in the building on an `as needed' basis and compensation is based upon the period of time that a family occupies the premises, paid at monthly intervals" (Pet. Memo of Law at 5 n. 4).
As an initial matter, the documents now argued by petitioners to form a written agreement are the same documents which were previously considered by the previously-assigned Justice before issuing the interim decision and order. The court was apparently not persuaded that those particular documents formed a contract, but allowed discovery to ascertain whether "any documents or series of writings exist, which, when read together, constitute a legally written agreement with respect to the use and management of the Premises" (Pet. Aff. Ex. 10 [Dec. Ord. at 8]). Secondly, as discussed in Henry L. Fox Co. v. William Kaufman Organization, Ltd., 74 NY2d 136 (1989), the purpose of the Statute of Frauds (GOL § 5-703), is to avoid fraud by preventing enforcement of contracts which were never made. It will generally be satisfied by a note or document signed by the party to be charged that adequately establishes an agreement "when considered in light of the admitted facts and surrounding circumstances." ( Henry L. Fox Co., at 140). When such a note or document exists, the contract's particular terms may be pieced together by other related writings ( Id., at 140, citing Crabtree). However, contrary to petitioners' position, "[t]he writings are not the agreement, of course, only evidence of the agreement." ( Id.). Here, where the City Charter requires a written agreement, not "evidence of the agreement," petitioners fail to establish their claim.
The question of whether in similar situations when there is no written agreement, a lease could be said to exist has been answered negatively in Ferrer v. David Dinkins 218 AD2d 89 (1st Dept. 1996) and Matter of Davis v. Dinkins, 206 AD2d 365 (2d Dept. 1994). Both decisions partly concerned whether the City was obliged to conduct a Fair Share Review pertaining to two homeless shelters operating in the Bronx and Queens, respectively. Ferrer concerned the Wakefield Motor Inn in the Bronx which reached an "unspecified accord" with the city to place needy clients, after which the City advised Bronx Borough President Fernando Ferrer that it was commencing regular referral of clients to the Wakefield, that the Inn would bill the City a set rate on a per-day basis, and that the families would remain in residence until permanent housing could be secured ( Id. at 90, 91). The Appellate Division reversed the order for a Fair Share Review, finding that the petitioners had not shown the existence of a written lease or that the building "fit" under any other criterion, and that "[e]ven if the petitioners had made such a threshold showing, a privately run facility is not subject to fair share requirements" ( Id. at 96, citing Community Planning Bd. No. 4 [Manhattan] v. Homes for the Homeless, 158 Misc 2d at 192).
In Matter of Davis v. Dinkins, 206 AD2d 365, the Appellate Division reversed a lower court decision which had held that the arrangement to shelter homeless residents made between the City and the Kennedy Inn, a Queens hotel, constituted an oral lease. The Appellate Division held that the agreement was not a lease, as the central characteristic of a lease is the surrender of absolute possession and control of property to another for an agreed-upon period of time, and that the agreement between the City and the hotel did not include an obligation to rent a particular number of rooms, or to rent for a particular time, and the City was not obligated to pay for rooms which were not occupied, nor was the hotel obliged to keep a certain number of rooms available for the City. The dissent in Matter of Davis argued that there was an oral lease, as evidenced by the agreement to make a certain number of rooms available at a set daily rate, the fact that the hotel evicted certain commercial tenants to create room for special-assistance programs for the City clients, and that the projected occupancy was not merely temporary or revokable at whim ( 206 AD2d at 368-370).
Similarly in the matter at bar, the documents do not clearly establish a lease, in that there is nothing to show that the City would pay for unoccupied rooms, or that the owner did not retain control to revoke the agreement at any particular time. However, petitioners do not argue that there was a written lease, but rather a "written agreement." It is not clear what sort of agreement petitioners believe would exist, given that the agreement concerns the operation of the premises to house residents. Both Ferrer and Matter of Davis analyzed similar facts to those at issue and, in determining that there was no written lease, impliedly held that there was no other written agreement that would satisfy the terms of the City Charter. In other words, neither Ferrer nor Matter of Davis held that although a written lease did not exist, another sort of written document would have passed muster pursuant to the requirements of the City Charter.
Petitioners contend that the City "should not be allowed to rely on their failure to abide by lawful procedures in order to prevent them from complying with the [Fair Share] Criteria." (Pet. Memo of Law at 8). They argue, as they had previously, that the City respondents violated the City Charter by failing to submit a written agreement to the New York City Comptroller in order to receive the funds to pay Somerstein. They point to the 1998 audit by the Office of the Comptroller which recommended that the City enter into written agreements (Pet. Aff. Ex. 12 [Rep. to the Mayor and City Council, esp. at 130]), and to a 2003 Audit Report (Pet. Aff. Ex. 11) which stated that the City continued to enter into informal agreements with operators of homeless facilities, and that neither the Charter nor the Courts support the City's contention that it is not required to enter into agreements. They further contend that the City should not be allowed to avoid its obligations under the Fair Share Criteria by avoiding compliance with the Charter's written agreement requirements.
However, in the context of this proceeding, the only question before this court is whether the facility is a city facility under the City Charter because it is run pursuant to the terms of a written agreement. While it may or may not be true that the City did not abide by the terms of the Charter's written agreements provision, and while it may or may not be true that the City repeatedly does not abide by the terms of the Charter when entering into agreements for homeless shelters, that is simply irrelevant to the court's limited review role, which is not the same as the Comptroller. The only issue here is whether there is a written agreement that would bring the Clermont residence into the ambit of the City Charter's requirement for a Fair Share Review pursuant to the Fair Share Criteria. Simply put, petitioners are not able to establish the existence of a written agreement. Accordingly, their motion for a Fair Share Review cannot be granted. It is therefore
ADJUDGED that the petitioner's motion to restore this proceeding to the calendar for a final adjudication of the merits is granted; and it is further
ADJUDGED that on its merits the petition is denied and the proceeding is dismissed.
This constitutes the decision, order and judgment of the court. The court has mailed courtesy copies to counsel.