In the Matter of Viola Dial, Respondent,v.John Rhea,, Appellant, 690 Gates, LP, Respondent.BriefN.Y.March 24, 2015To Be Argued By: Melissa R. Renwick 10 minutes requested APL-2014-00110 STATE OF NEW YORK COURT OF APPEALS [n the Matter of the Application of ViOLA DIAL, . Petitioner-Respondent, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, -against- JOHN RHEA, as Chairman of the New York City Housing Authority, Respondent-Appellant, 690 GATES LP, Respondent-Respondent. BRIEF OF RESPONDENT-APPELLANT KELLY D. MACNEAL Acting General Counsel Nancy M. Harnett, Of Counsel Corina L. Leske, Of Counsel Melissa R. Renwick, Of Counsel New York City Housing Authority 250 Broadway, 9th Floor New York, NY 10007 Tel: (212) 776-5010 Fax: (212) 776-5404 melissa.renwick@nycha.nyc.gov Attorneys for Respondent-Appellant Completion date: June 26, 2014 Reproduced on recycled paper TABLE OF CONTENTS PRELIMINARY STATEMENT ........... ..... .. ........................................................ 1 JURISDICTION .: ........ .......... ................. : ........ .......... ..... ......... ..... ........ ................ 9 QUESTIONS PRESENTED ......... ......... : ........................................................... 10 BACKGROUND ............. .................................................................................. . 11 Parties ................................... .. .... .......... ........................... .. .. .... .... ... .......... 11 Federal Regulations Governing the Section 8 Program ...................... ..... 12 Williams Consent Judgment and Subsidy Termination Procedures ............ ........................ ...... ........... ...................... 13 Termination of Petitioner's Subsidy ........................................................ 15 This Article 78 Proceeding and the Order ................ .. .. .. ......................... 16 . -GUl ~', ,- 20 AK lVllil , I ..................................................... .......... ............................. .. .. ... . . I. THE SECOND DEPARTMENT ERRED IN FAILING TO DISMISS THIS PROCEEDING AS BARRED BY THE STATUTE OF LIMITATIONS .. ...................... .... .......................... 20 A. Courts Must Strictly Enforce the Statute of Limitations ............. ...... ......................... ........ ........... 20 B. This Proceeding Is Time-Barred Based on Petitioller;s Receipt of the T -3 Notice .................................... .. 22 C. This Proceeding Is Time-Barred Based on When Petitioner Knew of the Housing Authority'S Determination ...... .. . 29 II. THE SECOND DEPARTMENT ERRED IN CONSIDERING THE MERITS OF A TIME-BARRED CLAIM ...................................... 35 III. THE SECOND DEPARTMENT ERRED IN NOT AFFORDING THE HOUSING AUTHORITY AN OPPORTUNITY TO ANSWER ......................................... ........... ...... .... 37 III. THE SECOND DEPARTMENT ERRED IN ORDERING THE HOUSING AUTHORITY TO MAKE RETROACTIVE SUBSIDY PAYMENTS .......................... 39 CONCLUSION ............................................... ............ .................................... ... 4 1 II TABLE OF AUTHORITIES Pagels) Federal Cases Atkins v. Parker, 472 U.S. 115 (1985) ... .................. ........................................ .. 27 E.E.O.C. v. New York Times Co., 196 FJd 72 (2d Cir. 1999) ...... ... ................ 23 Morgan v. Sylvester, 125 F. Supp. 380 (S.D.N.Y. 1954), aff'd, 220 F.2d 758 (1955), celt. denied, 350 U.S. 867 (1955) .......... ................ 27 United States v. Internat ional Bhd. of Teamsters, 998 F.2d 110 I (2d Cir. I 993) ... ... ...... ....... ........ ....... ...... ............ ........ .. ............... 22 United States v. Local 359, United Seafood Workers, 55 F.3d 64 (2d Cir. 1995) .. ................... ........... ....... .. .. ...... ............................ ...... 23 Williams v. New York City Hous. Auth., Case No. 81 -CV-1 80 1, docketed October 17, 1984 (S.D.N. Y.) ...................................................... passim State Cases 90-92 Wadsw0l1h Ave. Tenants Ass'n v. City of New York Dep't of Hous. Preserv. & Dev., 227 A.D.2d 33 I(l st Dep' t 1996) ...... ..... .. .. ............ 30, 3 I American Say. & Loan v. Twin Eagles Bruce, 208 A.D.2d 446 ( I st Dep't 1994), appeal dismissed 85 N.Y.2d 1032 (1995) ... 24 Alshawhati v. Zandani, 82 A.D.3d 805 (2d Dep' t 20 1 1) .......................... ..... .... 26 Banos v. Rhea, I I I A.D.3d 707 (2d Dep't 2013) ....... .. ............ .... 7, 18,24,25,3 1,33,34,36,37 Banushi v. Lambrakos, 305 A.D.2d 524 (2d Dep't 2003) ..... ..................... ... .... 27 Best Payphones, Inc. v. Dep't oflnfo. Tech. & Telcomms., 5 N.Y.3d 30 (2005) ................ ........ ........................... ........ ............................. ..... 20 III Pagels) State Cases (contin ued) Bigar v. Heller, 96 A.D.2d 567 (2d Dep't 1983) ................................... 30, 31, 32 Breed v. Insurance Co. of North America, 46 N.Y.2d 351 ( 1978) .................... 26 Castro II v. Incorp. Village of Head ofthe Harbor, 2 A.D.3d 443 (2d Dep't 2003) ..... ...... ......................... ......... ......... ... .......... ........ 33 Charter Private Line, Inc. v. Bd. ofEduc. ofthe City of New York, 182 A.D.2d 758 (2d Dep't 1992) ....................................... ... ..... ... ... .. ............... . 38 Cloverleaf Realty of N.Y. , Inc. v. Town ofWawayanda, 43 A.D.3d 419 (2d Dep't 2007) ..................... ... ....... .......... .................... 29, 31 , 32 Consedine v. Portville CtL Sch. Dist., 12 N.Y.3d 286 (2009) ..................... ...... 23 Fernandez v. New York City Hous. Auth., 284 A.D.2d 202 (I st Dep' t 200 I ) .......... ....... ...... ................................. ... 25,37,39 Goldmark v. Keystone & Grading Corp., 226 A.D.2d 143 (1st Dep't 1996) .. ............................ .. ............ .. ... ................ 27, 28 In re Evert, 72 A.D.3d 1081 (2d Dep 't 20 I 0) ... ........... ..................... ................. 27 ISCA Enters. v. City of New York, 77 N. Y.2d 688 ( 1991) ........ .. .. ................... 29 John J. Kassner & Co., Inc. v. City of New York, 46 N.Y.2d 544 (1979) ..... ... ............ .................. .. ... .. ................... ... ... ......... .......... 34 Lopez v. New York City Hous. Auth., 93 A.D.3d 448 (lst Dep't 2012), rev'g 30 Misc. 3d 1237(A) (Sup. Ct. N.Y. Co. Feb. 4, 2011) .......... 19, 25 , 37, 39 Matter of Save the Pine Bush v. City of Albany, 28 1 A.D.2d 832 (3d Dep' t 200 1) ........................................ ....... ... ..................... 33 IV Pagers) State Cases (continued) M & D Contractors v. New York City Dep' t of Health, 233 A.D.2d 230 (1st Dep't 1996) ............. .... .... .......................... ........... ............ . 35 McComb v. Town of Greenville, 163 A.D.2d 369 (2d Dep' t 1990) ... .............. 30 Nassau BOCES Cent. Council of Teachers v. Board of Coop. Educ. Servs., 63 N.Y.2d 100 ( 1984) ........... ....... .......................................................... ...... . 38, 39 Nassau Ins. Co. v. Murray, 46 N.Y.2d 828 (1978) ............................... .. ........... 24 New York City Health & Hosps. Corp. v. MeBarnette, 84 N.Y.2d 194 (1994) ...... .... .... ..... ...................... ... .................. ... ...... .................. 2 1 Northern v. Hernandez, 17 A.D.3d 285 (1st Dep't 2005) ..................... ........... .. 24 O'Neill v. Pfau, N.Y.2d ,2014 N.Y. LEXIS 1364 (2014) ........ ................ 29 - _ . Parks v. New York City Hous. Auth. , 100 A.D.3d 407 (1st Dep' t 20 12) ...... .... .. .. ... ... ...... ................... .. 24, 25, 37, 38, 39 Peny-Gething Found. v. Stinson, 218 A.D.2d 791 (2d Dep' t 1995), Iv. denied, 87 N.Y.2d 810 (1996) ............ ...... ..................................................... 33 Quesada v. Hernandez,S Misc. 3d 1028A (Sup. Ct. N.Y. Co. Oct. 27, 2004) ..... ................. ................................... ............. 37 Riverkeeper, Inc. v. Crotty, 28 A.D.3d 957 (3d Dep't 2006) ................... ......... 30 Roberson v. Ward, 278 A.D.2d 180 (I st Dep't 2000) ....................................... 33 Rodriguez v. Wing, 251 A.D.2d 335 (2d Dep't 1998) ....................................... 24 Roldan v. Allstate Ins. Co., 149 A.D.2d 20 (2d Dep't 1989) .................. ........... 28 Roundtree v. Singh, 143 A.D.2d 995 (2d Dep't 1988) ...................... .. .............. 28 v Page(s) State Cases (continued) Saunders v. Rhea, 92 A.D.3d 602 (1 st Dep' t 2012) ................ .. .................... .... . 35 Shamblee v. Rhea, 110 A.D.3 d 443 ( 1 st Dep't 2013) .. .... ............ .... ........ .......... 30 Solnick v. Whalen, 49 N.Y.2d 224 (1980) ......................................................... 2 1 Thornton v. New York City Hous. Auth., 100 A.D.3d 556 (lst Dep't 2012) ....................................................................... 35 Wallace v. 600 Partners Co., 205 A.D.2d 202 (1 st Dep't 1994) ........................ 26 Walter v. Jones, Sledzik, Garneau & Nardone, LLP, 67 A.D.3d 67 1 (2d Dep' t 2009) .................................. .... .. ............ .............. .... ... 27 Wood v. Glass, 226 A.D.2d 387 (2d Dep't 1996) .. .. .. ........ .... ...... ...... .. ...... ........ 38 Yeshiva Univ. v. Fidelity & Deposit Co. of Md., 116 A.D.2d 49 (1 st Dep't 1986) ............................ .............. ............................... 34 Zumpano v. Quinn, 6 N.Y.3 d 666 (2006) .. ............ .. .. ........................................ 35 Federal Statutes and Regulations 24 C.F .R. § 982 .......... ...................................... .. ... .... .. .... .................................... 11 24 C.F .R. § 982 .1 51(a) .. .. .................................. " ............................................... 12 24 C.F.R. § 982.305(a)(2) ........ ........ .. .... .. .. ........ ................................. ... .......... .. 13 24 C.F.R. §§ 982.305(c) & (e) .......................... " .......................... .. ................... 12 24 C.F.R. §§ 982.308(a)-(d) ....................... ... ......................................... .. ........ .. 12 24 C.F.R. § 982.311 ............................................................................................ 40 V I Pagers) Federal Statutes and Regulations (continued) 24 C.F.R. § 982.40 I (a)(3) ............ ........ ....................................................... . 13,39 24 C.F.R. § 982.405 .... ........ ... .................................... ... ...... .. .. .... .. .. .............. 13,39 24 C.F.R. § 982.455 ........... .... ... .................................................................... 13,40 24 C.F.R. § 982.45 1 ............ ........... .... ...... .............................. ......... .......... ... .. ..... 12 24 C.F.R. § 982.551 ..................... ....... ........ .. ....... ... .... ............ .. .................... 13, 39 24 C.F.R. § 982.552 .... ........ ...................................................................... .... 13,40 24 C.F.R. § 982.555(c)(2) .. .................................................... ... .... .. ... ................ 28 42 U.S.C. § 1437f.. ......................................................... ........ .... ... ... .. ................ 11 State Statutes CPLR § 20 1 ................ ..................................... ..... ... .... .................. ..... 4,20,25,35 CPLR § 217(1) ... ... ....... ..... ... .... .. .......... .... ........... ..... 2,5,7,14,20,23,24,25,26 CPLR § 2103(b)(2) ................................. ... .......... .......................... ... .................. 24 CPLR § 5602(a)( I )(i) .............................................. .... ............................. ............ 9 CPLR § 7803(3) .................... ................................................ ...................... ....... 36 CPLR § 7804(1) .................................................... ... ...... ........ ................... 8,37,38 Vll PRELIMINARY STATEMENT With leave of the Appellate Division, Second Department ("Second Department"), Respondent-Appellant the Chair of the New York City Housing Authority ("Housing Authority") I appeals from the order of the Second Department ("Order") that affirmed the order of the Supreme Court, Kings County (Edwards, J.): denying the Housing Authority's cross-motion to dismiss this special summary proceeding as barred by the four-month statute of limitations for challenging a final agency determination; reversing the Housing Authority's 2007 determination terminating the Section 8 rent subsidy of Petitioner-Respondent Viola Dial ("Petitioner"); and directing the Housing Authority to reinstate Petitioner's subsidy retroactive to September 1, 2007 and pay any subsidy amount that was not issued because ofthe termination. In 2011, Petitioner commenced this Article 78 proceeding challenging the Housing Authority's 2007 determination to terminate her participation in the Section 8 program because she failed to comply with the annual recertification requirements. The Housing Authority mailed its final and binding determination (known as the "T-3 Notice") to Petitioner in August 2007. Petitioner concedes she knew about the Housing Authority 's determination to terminate her Section 8 John Rhea, the former Chair of the Housing Authority, is named as a Respondent in this proceeding. Mayor Bill de Blasia has appointed Shola Olatoye as Chair of the Housing Authority. subsidy. In December 2008, Petitioner sent a letter to the Housing Authority in which she admitted she "was issued a letter stating her Section S was term inated" and requested to be restored to the Section 8 program. The Housing Authority denied her restoration request and confirmed she was no longer a participant in the Section 8 program. In September 2010, Petitioner submitted a second request for restoration. That same month, the Housing Authority reiterated it had terminated her Section S subsidy effective October 31, 2007 (not in September 2007 as the Order suggests) and denied her second request for restoration. Petitioner brought this summary proceeding alleging the Housing Authority had improperly terminated her Section 8 subsidy because it fai led to comply with the notice requirements of the first partial consent judgment in Williams v. New York City Hous. Auth., Case No. SI-CY-IS0 1, docketed October 17, 1984 (SD.N.Y.) (RJW) ("Williams"). The Housing Authority cross-moved to dismiss this proceeding as time-barred under section 217(1) of the Civil Practice Law and Rules ("CPLR") because Petitioner did not commence it within four months after she received the T-3 Notice, which under Williams triggers the running of the statute of limitations. The Housing Authority established: (1) by the affidavits of two employees that it mailed the T-3 Notice to Petitioner on August 20, 2007; (2) under Williams and the CPLR, Petitioner presumptively received the T-3 Notice on August 25, 2007; (3 ) the statute of limitat ions expired four months later on 2 December 26, 2007; and (4) Petitioner did not commence this proceeding until May 18, 20 II, more than three years later. The Supreme Cmllt, without first addressing the threshold statute-of- limitations issue, reversed the HousingAuthority's determination to terminate Petitioner's Section 8 subsidy, concluding the determination was arbitrary and capricious because the Housing Authority allegedly failed to mail two other notices to Petitioner, a warning letter and a T-I Notice, and did not provide sufficient proof it mailed the T-3 Notice. The Supreme Court denied the Housing Authority's cross-motion to dismiss and did not provide the Housing Authority with an opportunity to answer. Although the Second Department recognized under Williams the statute of limitations begins to run upon Petitioner's receipt of the T-3 Notice and accepted the Housing Authority 's proof it mailed the 1'-3 Notice to Petitioner, it aftlrmed the Supreme COUlt'S order because the Housing Authority did not prove it mailed a warning letter and a T-I Notice to Petitioner. The Second Department held that reading Williams "as a whole" and consistent with its "letter, spirit and purpose," the Housing Authority "has the burden of satisfYing the condition precedent of serving all three notices upon the Section 8 participant before its determination to terminate a participant's subsidy can be considered final and binding upon the participant." Describing Section 8 participants as unsophisticated laypersons who 3 would have difficulty distinguishing a warning letter, a T-I Notice, and a T-3 Notice, the Second Department nevertheless stated Wi lliams "was entered into to ensure that a Section 8 participant would receive all three letters" and if the statute .oflimitations began to run upon receipt of the T-3 Notice alone it would render Williams "a nullity." The Second Department acknowledged, but di sagreed with and declined to follow, precedent of the Appellate Division, First Department ("First Depaliment") holding the statute of limitations runs from the T-3 Notice even where the Housing Authority did not prove it sent all three notices. This Court should reverse the Order for several reasons. First, it is contrary to section 20 I of the CPLR and precedent of this Court and other appellate cOUliS that courts must strictly enforce the statute of limitations. The Second Department failed to strictly enforce the statute of limitations even though it accepted the Housing Authority'S proof of mailing of the T-3 Notice, Peti tioner only raised a bald claim of non-receipt, which as a matter of law, is insufficient to rebut the presumption of receipt, and, apart from the T-3 Notice, the record ev idence established Petitioner knew about the termination of her Section 8 subsidy, at the latest more than two years before she commenced thi s proceeding. The Second Department's fai lure to strictly enforce the statute of limitations hinders the ability of individuals, agencies, and other entities to rely on the repose offered by the statute of limitations set by the Legislature. After the four-month statute of 4 limitations expires, government agencies must be able to rely on the finality of their determinat ions to budget and plan. Repose from claims brought by terminated participants years or even decades after the fact is especially important to the Housing Authority because the federa l government does not permit it to make retroactive subsidy payments using current fiscal year funds. Second, the Second Department ignored appellate precedent holding a court may not add, delete, or distort terms of a contract. The Order fai led to follow Williams, which expl icitly 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 fina l and binding upon receipt of ... [the T-3] Notice of Default," which is presumed to occur "on the fifth date following the date of mailing." Third, the Second Department's concern that enforcing the terms of Williams and running the statute of limitations from receipt of the T-3 Notice "puts the burden on the unsophisticated layperson to figure out whether the correspondence he or she received is a warning letter, a T-I [Notice], or a T-3 [Notice], all of which look very similar" is misplaced for several reasons. It ignores that like all citizens, "unsophisticated laypersons" are presumed to know the law and policies relevant to them, and pro se litigants do not acquire greater rights than those of any other litigant and cannot use their pro se status to deprive a 5 defendant ofthe same rights enjoyed by other defendants whose adversaries are represented. There is no reason to believe Section 8 tenants in New York are any more unsophisticated than laypersons palticipating in other Section 8 programs across the country for whom federal regulations require only one termination notice. Even if they were, multiplying the number of notices would not assist the unsophisticated layperson under the Second Department's theory that it is difficult for the "unsophisticated layperson to figure out whether the correspondence he or she received is a warning letter, a T-l [Notice], or a T-3 [Notice]" because all the termination notices "look very similar." Tn any event, a court cannot decline to enforce the statute of limitations because doing so may produce results it deems unfortunate. Fourth, the Second Department ignored precedent of this Court and other appellate courts that the statute oflimitations runs from when a litigant knew or should have known ofthe termination she is challenging. The Order failed to address the Housing Authority's alternative argument that even if Petitioner did not receive the T-3 Notice - which she did not establi sh - the four-mon th statute of limitations began to run in December 2008, at the latest, when Petitioner acknowledged in a letter to the Housing Authori ty that it had telminated her subsidy. The Housing Authority denied her restorat ion request and con firmed her termination from the Section 8 program. Petitioner st ill fai led to commence her 6 Aliicle 78 proceeding until more than two years later. (Indeed, Petitioner did not even bring this proceeding within four months of the Housing Authority's denial of her second restoration request in September 2010.) As the dissentingjustice correctly explained in Banos v. Rhea, III A.D.3d 707, 708 (2d Dep't 2013), issued by the Second Department the same day as the Order, even if a petitioner had rebutted the presumption she received the T-3 Notice, which Petitioner in this case did not do, the proceeding is time-barred where "the record conclusively demonstrates that the petitioner had actual notice of the Housing Authority's final determination ... and the proceeding was not brought within four months after this later date." Nothing in Wi lliams precludes applying the knew-or-should-have- known analysis. As the dissent in Banos accurately stated, Williams does not "purport to alter" "the applicable case law which defines when an agency determination becomes 'final and binding' for the purposes ofCPLR [section] 217(1 )." Fifth, in concluding the statute of li mitations would "indefinitely be tolled" or, alternatively, the Housing Authority "failed to demonstrate that the statute of limitations had even begun to run" because of its alleged violation of Will iams, the Second Depmiment ignored precedent of this Court and other appellate courts that parties cannot contract to extend or toll the statute of limitations before a cause of action accrues. Williams, executed in 1984, cannot constitute a tolling agreement 7 for challenges to the termination of Petitioner's participation in the Section 8 program in 2007, 23 years later. Sixth, the Order conflicts with this Court 's precedent holding a Court may not decide time-barred cla ims. The Housing Authority 's alleged fa ilure to comply with all of the procedural steps required by Williams before tenninating Petitioner's participation in the Section 8 program is precisely the type of claim Petitioner should have timely raised. Because the statute of limitations bars claims regardless of whether they have merit, the Second Department erred in considering the merits of Petitioner's time-barred claim; Seventh, the Order violates CPLR section 7804(1) and appellate precedent requiring a court to afford a respondent an opportunity to answer the petition when the court denies the respondent's pre-answer motion to dismiss, unless the facts are so fully presented there is no dispute concerning them. In moving to di smiss this proceeding as barred by the statute of limitations, the Housing Authority did not need to establish it mailed the warning letter and the T-l Notice because, as set forth in Williams, the T-3 Notice constitutes the Housing Authority 's final and binding determination, and the statute of limitations begins to run from the participant 's receipt of the T-3 Notice. Even though the Housing Authority reserved the right to answer the petition, the Supreme Court and the Second Department did not give the Housing Authority an opportunity to establish it 8 properly terminated Petitioner's subsidy based on her failure to comply with the annual recertification requirements. Eighth, the Order conflicts with federal regulations because it requires the Housing Authority to pay retroactive subsidies for the more than three years Petitioner delayed in asserting her claim for an apartment that has not passed annual inspections required under federal regulations, on behalf of a tenant who has not certified her continuing eligibility for the Section 8 program, pursuant to a Housing Assistance Payments ("HAP") contract between the Housing Authority and Respondent-Respondent 690 Gates, LP ("690 Gates") which expired by operation of law in April 2008. For each of these reasons, as discussed more fully below, this Court should reverse the Order and dismiss this proceeding in its entirety as barred by the statute of iimitations. JURISDICTION This Court has jurisdiction to hear this appeal under CPLR section 5602(a)(1 lei) because the Second DepaItment granted leave to appeal its Order, . this action originated in the Supreme Court, and the Order finally determined the proceeding. 690 Gates served the Housing Authority by regular mail with notice of ently of the Order on December 9, 2013. On January 10, 2014, the Housing . 9 Authority moved in the Second Department for leave to appeal to this Court. On April 29, 2014, the Second Department granted the Housing Authority's motiori. QUESTIONS PRESENTED The appeal to this Court raises for consideration the following questions for review: Whether the Order affirming the Supreme Court's denial of the Housing Authority's cross-motion to dismiss as barred by the four-month statute of limitations this proceeding challenging Petitioner's termination from the Section 8 rental subsidy program more than three years earlier: (a) conflicts with precedent of this Court and other appellate courts holding (I) statutes ofl imitations must be strictly enforced to provide repose from stale claims and permit rational planning (see Record on Appeal ("R") 153-60,320-329); (2) a court should enforce a consent decree as a contract and, under Williams, the statute of limitations for challenging termination from the Section 8 program runs from the palticipant's receipt of the T-3 Notice (see R 154-55; 321-24); (3) all persons are presumed to know the law and policies relevant to them (see R 334-35); (4) where a party establ ishes lack of notice, the statute of limitations runs from when the party knew or should have known of the determination (see R 324-325); (5) parties cannot contract to extend or toll the statute of limitations before a cause of act ion 10 accrues (see R 153-58, 320-25); and (6) a court cannot consider the merits of a time-barred claim (see R 155 n.5, 323); and (b) conflicts with state and federal law: (1) prohibiting a court fi·om extending the statute of limitations (see R 153-54,320-21 ); (2) requiring a court to afford a respondent an opportunity to answer the petition if the court denies the respondent's pre-answer motion to dismiss (see R 145, 160,335- 36); and (3) requiring a public housing authority to annually inspect a Section 8 apartment for compliance with HQS and to review household income to confirm continued el igibility for the Section 8 program in order to pay subsidy (see R 333). The Housing Authority respectfully submits this Court should answer these questions in the affi rmative. BACKGROUND Parties The Housing Authority is one of the agencies that administer the Section 8 program in the City of New York through which the federa l government provides rent subsidies to lower-income families to enable them to rent privately owned housing. See generally 42 U.S.c. § 1437f; 24 C.F.R. § 982 et seg. The Housing Authority administers its Section 8 program in accordance with regulations and directives promulgated by the United States Department of Housing and Urban I I Development ("HUD"). See R 150 at ~ 3. Petitioner is a former participant in the Housing Authority's Section 8 program. See R 152 at ~ 9. Federal Regulations Governing the Section 8 Program One form of Section 8 housing assistance is tenant-based in which the participant uses a HUD-funded voucher to obtain a subsidy for a portion of the rent at a privately owned apartment building. The tenant-based subsidy involves four distinct legal relationships: (I) the relationship between the Housing Authority and the participant governed by the voucher; (2) the relationship between the participant and the landlord governed by the lease (see 24 C.F.R. §§ 982.308(a)- (d)); (3) the relationship between the Housing Authority and the landlord governed by the HAP contract, whereby the Housing Authority agrees to pay the difference between the contract rent and the tenant' s share of the rent (see 24 C.F.R. §§ 982.305(c) & (e); 24 C.F.R. § 982.451); and (4) the relationship between the Housing Authority and HUD, which regulates and finances the voucher program pursuant to an Annual Contributions Contract (see 24 C.F.R. § 982. 151 (a)). Generally, tenants who receive Section 8 rental assistance are required to pay 30 percent of their income for rent. See R 150-51 at ~~ 4-5. Federal regulations require Section 8 recipients to regularly furnish the Housing Authority with information regarding their income. These regulations 12 authorize the Housing Authority to terminate a Section 8 subsidy if the recipient fa ils to comply. See R 151 at ~ 6; 24 C.F.R. §§ 982.551 & 982.552. Federal regulations also require apartments occupied by Section 8 recipients to meet federal housing quality standards (UHQS") established by HUD. The "[Housing Authority] may not give approval for the family to lease a dwelling unit, or execute a HAP contract, until . . . [t]he unit has been inspected by the [Housing Authority] and passes HQS." 24 C.F.R. § 982.305(a)(2). "All program housing must meet the HQS performance requirements both at commencement of assisted occupancy, and throughout the assisted tenancy." 24 C.F.R. § 982.401(a)(3). The Housing Authority must inspect each apartment at least annually. See R 160 at ~ 18; 24 C.F.R. § 982.405(a). HUD regulations further provide a Section 8 HAP contract automatically terminates if the public housing authority does not pay subsidy payments pursuant to that contract for six consecutive months. See 24 C.F.R. § 982.455. Williams Consent Judgment and Subsidy Termination Procedures Williams sets forth the notice and hearing procedures the Housing Authority follows before terminating a participant's Section 8 subsidy, including sending a warning letter, a T-I Notice, and a T-3 Notice to the participant, all of which inform the participant that he or she has violated a program obligation, give the part icipant an opportunity to resolve the matter, and warn the participant that the 13 Housing Authority will terminate the subsidy absent a resolution or a request for a hearing. See R 162-63 at 1]3. Williams explicitly states the T-3 Notice "shall have the same force and effect as a determination after a hearing to terminate the subsidy." R 163 at 1]3(e). Williams establishes "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 receipt of ... [the T-3] Notice of Default" (R 171 at 1] 22(f), which is presumed to occur "on the fifth date following the date of mailing" (R 171 at 1] 22(g». At the time relevant to this proceeding, although Williams did not require two separate mailings, the Housing Authority's regular business practice was to mail the T-3 Notice by both certified and regular mail. See R 227-28 at 1]1] 2-6. When the Housing Authority prepared a copy of the T-3 Notice to be mai led by certifi ed mai l, it also prepared a copy of the T-3 Notice to be mai led by regular mail. See R 228 at 1]1]4-6. The Housing Authority submitted its certified mail to the United States Postal Service ("USPS") with a mail log, listing the certified mail numbers and names and addresses for each piece of mail. See R 152 at 1]8. The USPS certified it had received and accepted the certified mail by stamping the mai l log. See id. 14 Termination of Petitioner's Subsidy In August 2007, after Petitioner failed to submit her annual income certification documents, the Housing Authority mailed a T-3 Notice to Petitioner at her apartment by certified and regular mail consistent with its regular business practice. See R 228-29 at 1]1] 3-7,230-32,233-34 at 1]1]2-4. An entry of the certified mail number, together with Petitioner's name and address, was then made in a mail log. See R 232. The USPS returned the T-3 mail log to the Brooklyn Leased Housing Department bearing the USPS 's stamp attesting to its receipt of the listed items on "AUG 20 2007.,,2 See R 228-229 at 1]1] 4 & 7, 232. The T-3 Notice noti fied Petitioner she had violated her obligations by failing to complete her affidavit of income. The T-3 Notice further informed Petitioner her Section 8 subsidy would be terminated 45 days after the letter, unless she requested a hearing within that period. See R 230-231. Petitioner did not request a hearing to challenge the termination of the subsidy and did not otherwise respond to the T -3 Notice. On October 24, 2007, more than 45 days after the mailing of the T-3 Notice, the Housing Authority informed Petitioner's landlord it would terminate Petitioner' s participation in the 2 The USPS maintains cert ified mail records for two years; therefore, the Housing Authority has been deprived of the opportunity to track the T-3 Notice it sent to Petitioner by cert ified mail nearly four years before she commenced this Artic le 78 proceeding. See R 337-41 ; USPS Frequently Asked Questions, http://fag.llsps.comiadaplivcdesktop/faq. jsp?et=USPSF AO&search=track%20and%20con firm&s earchPropcrtics- tvpc%3anatura l&naturaIAdvance-fal se&varset%28sourcc%29 sourceTvpe%3 ascarch, (last visited Jun. 13,20 14). 15 Section 8 program effective October 31, 2007 for her failure to comply with annual recertification requirements. See R 185. The Housing Authority terminated Petitioner's Section 8 subsidy effective October 31, 2007. In December 2008, over one year after the Housing Authority terminated Petitioner's Section 8 subsidy, she sent a letter to the Housing Authority requesting it restore her to the Section 8 program. See R 53. In her letter, Petitioner admits she "was issued a letter stating my Section 8 was terminated." Id. The Housing Authority denied Petitioner's request and reiterated it had terminated her from the Section 8 program. See R 54. In September 20 I 0, Petitioner submitted a second request for restoration. See R 55. The Housing Authority reiterated it had terminated her Section 8 subsidy effective October 31 , 2007 for her fai lure to comply with the annual recertification requirements, and denied Petitioner's second request for restoration that same month. See R 56. This Article 78 Proceeding Petitioner commenced this Article 78 proceeding on May 18, 20 II , when she filed an Order to Show Cause and Verified Petition with the County Clerk. See R 186. Petitioner argued she did not receive the warning letter, the T-I Notice, and the T-3 Notice, and thus, the Housing Authority improperly terminated her Section 8 subsidy because it allegedly failed to comply with Williams. See R 46- 48 at ~~ 24-34. The Housing Authority cross-moved to dismiss the petition as 16 time-barred by the four-month statute of limitations and reserved its right to answer. See R 145-236. The Housing Authority proved by the affidavits of two employees that it mailed its final and binding detennination, the T-3 Notice, to Petitioner by both regu lar and certified mail in August 2007, over three years before Petitioner commenced this proceeding in May 20 II. See R 152 at 1\9, 154- 55-41 at 1\13,227-234. In its order, the Supreme Court, without first addressing the threshold statute-of-limitations issue, reversed the Housing Authority 's determination to terminate Petitioner's Section 8 subsidy, concluding that determination was arbitrary and capricious because the Housing Authority allegedly failed to mai l a warning letter and a T- I Notice as required by Williams. See R 33-34. The Housing Authority was not required to prove in its cross-motion that it had mailed these notices to establish its statute-of-lim itations defense because under Williams, the statute of limitations runs from the participant's receipt of the T-3 Notice. The Supreme Court also concluded there is " insufficient proof' the Housing Authority properly mailed the T-3 Notice to Petitioner by both certified and regular mail, without any analysis of how the Housing Authority's proof was deficient. See R 34. The Supreme Court denied the Housing Authority's cross-motion to dismiss and did not provide the Housing Authority with an opportunity to answer. See R 17 34-35. Instead, the Supreme Court ordered the Housing Authority to (I) reinstate Petitioner's Section 8 subsidy retroactive to September I, 2007 despite the fact the Housing Authority did not tenminate Petitioner's Section 8 subsidy until October 31, 2007; and (2) pay rent subsidies not paid because of the tenmination. See R 34- 35. On December 23, 20 II , the Housing Authority served a copy of the order with notice or"entry on Petitioner. See R 30-38. On Januaty 4, 2012, the Housing Authority served notice of appeal (see R 17-29), and on July 3, 2012, it perfected its appeal to the Second Department. Although the Second Department acknowledged under Williams the statute of limitations begins to run upon Petitioner's receipt of the T-3 Notice (see R 13- 14) and did not identify any deficiencies in the Housing Authority'S proof it served that notice, it affirmed the Supreme Court's order because the Housing Authority did not prove it mailed a warning letter and the T- I Notice to Petitioner (see R 14- 15). J The Second Department held that reading Williams "as a whole" and consistent with its "letter, spirit and purpose," the Housing Authority "has the burden of satisfying the condition precedent of serving all three notices upon the Section 8 participant before its determination to terminate a participant's subsidy can be considered final and binding upon the participant." R 14. Describing 3 On the same day the Second Department issued the Order in this case, it also issued a sp lit decision in Banos, affinning the Supreme Court's denial of the Housing Authority's cross· motion to dismiss another Article 78 proceeding challenging the termination of a Section 8 subsidy. Banos, III A.D.3d at 707. On March 28, 2014, the Second Department granted the Housing Authority's motion for leave to appeal its order in Banos to this Court. 18 Section 8 participants as unsophisticated laypersons who would have difficulty distinguishing a warning letter, a T- I Notice, and a T-3 Notice (see R 14), the Second Department nevertheless stated Williams "was entered into to ensure that a Section 8 participant would receive all three letters" and if the statute of limitations began to run upon receipt of the T-3 Notice alone it would render Williams "a nulli ty" (see id). The Second Department acknowledged, but disagreed with and declined to follow, Lopez v. New York City Hous. Auth., 93 A.D. 3d 448 (1st Dep't 2012), in which the First Department dismissed as untimely the petitioner's Article 78 proceeding challenging her termination ITom the Section 8 program ' because she did not bring it within four months of her receipt ofthe T-3 Notice, even though the Housing Authority did not prove it mailed all three termination notices. See R 14. The Order did not specifically address the Housing Authority's alternative argument that the statute of limitations began to run when Petitioner knew her Section 8 subsidy had been terminated, but stated the Housing Authority's "remaining contentions are without merit." R 15. 19 ARGUMENT POINT I THE SECOND DEPARTMENT ERRED IN FAILING TO DISMISS THIS PROCEEDING AS BARRED BY THE STATUTE OF LIMITATIONS A. Courts Must Strictly Enforce the Statute of Limitations Under section 201 of the CPLR, "[a]n action ... must be commenced within the time specified in [Article2 of the CPLR on limitations of time] unless a different time is prescribed by law or a shorter time is prescribed by written agreement. No COUlt shall extend the time limited by law for the commencement of an action." Section 217(1) of the CPLR states, "[u]nless a shortertime is provided in the law authorizing the proceeding, a proceeding against a body or officer must be commenced within four months after the detennination to be reviewed becomes final and binding upon the petitioner." CPLR § 2 17(1). As this Court has acknowledged in strictly enforcing the statute of limitations, the New York State Legislature deliberately imposed a short statute of limitations to protect government operations from stale litigation and permit rational planning for government agencies charged wi th allocating scarce resources funded by taxpayer dollars. See Best Payphones, Inc. v. Department of Info. Tech. & Telcomms., 5 N.Y.3d 30, 34 (2005) ("[a]n article 78 proceeding must be brought wi thin four months after the determination to be reviewed becomes fin al 20 and binding upon the petitioner. A strong publ ic policy underlies the abbreviated statutory time frame: the operation of government agencies should not be unnecessarily clouded by potentiallitigation[.l") (citations and quotations omitted); New York City Health & Hosps. Corp. v. McBarnette, 84 N.Y.2d 194,205 (1994) ("A rule that requires those subject to regulatory decisions such as Medicaid rate- making to bring their challenges promptly fac ilitates rational planning by all concerned parties[.]"); Solnick v. Whalen, 49 N.Y.2d 224, 232 (I 980) (strict adherence to the statute ofl imitations is grounded in a "strong policy, vital to the conduct of celtain kinds of governmental affairs, that the operation of government not be trammeled by stale litigation and stale determinations") (citation omitted). The Second Department's failure to strictly enforce the four-month statute of limitations impedes the Housing Authority's ability to plan and budget to effectively administer its Section 8 program, especially if terminated participants are permitted to reappear years or even decades later to claim new vouchers and a share of the Housing Authority's lim ited funding. A stale claim is especially prejudicial to the Housing Authority because HUD only permits the Housing Authority to use current fi scal year funds to pay current fi scal year HAP contracts. See PlH 2012-9 at 1]9, found at portal.hud.govlhuddoc/pih2012- 9.pdf. HUD does not permit the Housing Authority to make retroactive subsidy payments using current fiscal year funds but instead requires the retroactive 21 payments to be paid using available program reserve funds, which are held by HUD and which the Housing Authority no longer can rely on. See id. Furthermore, if agencies cannot rely on the finality of their detenminations after the statute of limitations has run, they will be forced to store documents and · information for an indeterminate period of time or risk indefinite liabi lity in future court cases because they are unable to prove they complied with all procedural requirements in making a years- or decades-old determination. Even if an agency expends considerable resources storing documents and information relating to old detenninations, it may lose them for anyone of a number of reasons, including natural disaster, technical failure, or human error. As discussed below, the Second Department erred by not strictly enforcing the statute of limitations in this case. If left undisturbed, the Order wi ll deprive the Housing Authority and parties like it of the repose the Legislature saw fit to provide. B. This Proceeding Is Time-Barred Based on Petitioner's Receipt of the T -3 Notice Consent judgments "should be construed basically as contracts." United States v. International Bhd. of Teamsters, 998 F.2d 110 I, 1106 (2d Cir. 1993) (citations omitted). "A court may not replace the terms ofa consent decree with its own, no matter how much of an improvement it would make in effectuating the decree's goals." Teamsters, 998 F.2d at 1107. While courts do have "equitable powers to enforce consent decrees, such power exists only to ensure compliance 22 with the decrees' terms." E.E.O.C. v. New York Times Co., 196 F.3d 72,78 (2d Cir. 1999) (citing United States v. Local 359, United Seafood Workers, 55 F.3d 64, 69 (2d Cir. 1995)). A court reviewing a contract "may not by construction add or excise terms, nor distOlt the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing." Consedine v. Portville Ctr. Sch. Dis!., 12 N.y'3d 286, 293 (2009) (quotations and citations omitted). In the Order, the Second Department acknowledged that under paragraph 22(1) of Williams, the final and binding determination that triggers the running of the statute of limitations for Article 78 review is the T-3 Notice. See R 13-14, 171 at '11'1122(1) & (g) ("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 receipt of ... [the T-3] Notice of Default," which is presumed to occur "on the fifth date following the date of mailing."). The Second Department accepted the Housing Authority's proof it mailed its fin al determination, the T-3 Notice, to Petitioner by both certified and regular mail on 23 August 20, 2007 (see R 52 at '\1 9,227-34)4 Petitioner is presumed to have received the T-3 Notice within five days of its mail ing, or by August 25 , 2007. See R 171 at '\I 22(g). Therefore, pursuant to CPLR section 217( 1), the statute of limitations expired .four months later on December 26,2007. Petitioner, however, failed to commence this proceeding until May 18, 2011, over three years after the statute of limitations expired. See R 186. Thus, the Second Department should have reversed the lower court' s order and dismissed this proceeding as untimely. See Banos, III A.D.3d at 71 0-14 (Miller, J. dissenting) (Williams "provides that the determination to terminate a subsidy shall, in all cases, become final and binding upon receipt of ... the Notice of Default [i .e., the T-3 letter]. Accordingly, the express language of the consent judgment itself provides that the Housing Authority'S determination to terminate Section 8 benefits becomes final and binding upon receipt of the T-3 letter which, in this case, was received by the petitioner and expressly informed her of the Housing Authority's fin al determination to terminate her benefits.") (internal quotations omitted); Parks v. 4 Petitioner offered no mOfC than a bald claim of nonreceipt, which the Second Department did not credit (see R 14, 45 ~ 13) and which, as a matter: of law, cannot rebut the presumption she received the T-3 Not ice within five days of its mai li ng (see R 171 at ~ 22(g); CPLR § 2103(b)(2); Nassau Ins. Co. v. Murray, 46 N.Y.2d 828, 829-30 (1978) ("Denia l of receipt by the insureds, standing alone, is insufficient to rebut the presumption."); Northern v. Hernandez, 17 A.D.3d 285,286 ( 1st Dep't 2005) ("A mere conclusory denial of receipt wou ld be insufficient to rebut that presumption [of receipt]"); Rodriguez v. Wing, 25 1 A.D.2d 335, 336 (2d Dep' t 1998) ("[T]he concJusory assertions of the petitioner of lack of receipt were insufficient to rebut the presumption of mailing.") (c itations omitted); American Say. & Loan Assoc. v. Twin Eagles Bruce_ Inc., 208 AD.2d 446, 447 (1st Dep't 1994) (rejecting "conclusory denial" he was not served), ~ dismissed, 85 N.Y.2d \032 (1995». 24 New York City Hous. Auth., 100 A.D.3d 407, 408 (lst Dep't 2012) (unanimously reversing the lower court's decision which denied the Housing Authority's cross- motion to dismi ss as untimely because it fai led to show it mailed the warning letter and holding "Pursuant to paragraph 22(1) of the first partial consent judgment in Williams ... the four-month statute of limitations ofCPLR [section] 217 began to run on the date of receipt of' the T-3 Notice); Lopez, 93 A.D.3d at 448 (same), rev'g 30 Misc. 3d I 237(A); Fernandez v. New York City Hous. Auth. , 284 A.D.2d 202,202 (1 st Dep' t 200 1) ("Under paragraph 22(1) of the first partial consent judgment in Williams . .. the four-month statute oflimitations ofCPLR [section] 217 began to run on the date of receipt of' the T-3 Notice). Instead, the Second Department imposed on the Housing Authority the "burden of satisfying the condition precedent of serving all three notices upon the Section 8 participant before its determination to terminate a participant' s subsidy can be considered final and binding upon the participant." R 14; see Banos, III A.D. 3d at 708 (the "burden of proving compliance with the three-notice requirement" for the statute of limitations to run "rests with the [Housing Authority],,). The Second Department concluded the Housing Authority's alleged fa ilure to send the warning letter and the T-l Notice meant "the statute of limitations was not properly triggered and did not begin to run ." R 14. This analysis violated CPLR section 201 and appell ate precedent. 25 The Second Depat1ment's stated rationale is that "[r]unning the clock for statute of limitations purposes solely upon proof that the T-3 letter has been sent, rather than after all three required notices have been sent, fail s to sati sfY the letter, spirit, and purpose of [Williams]." R 14. An analysis of the spirit and purpose of Williams is immaterial because its language is clear. See Breed v. Insurance Co. of North America, 46 N.Y.2d 351 , 355 (1978) (internal citations omitted) (finding insurance policy unambiguous where "the words in the paragraphs of the policy under examination have a definite and precise meaning, unattended by danger of misconception in the purport ofthe policy itself, and concerning which there is no reasonable basis for a difference of opinion"); Alshawhati v. Zandani, 82 A.D.3d 805, 807 (2d Dep't 20 II) ("As with any contract, where the terms of a stipulation of settlement are unambiguous, the Supreme Court must give effect to the parties' intent based upon the plain meaning of the words used by the parties"); Wallace v. 600 Partners Co., 205 A.D.2d 202, 208 ( I st Dep' t 1994) ("It is incumbent on the court, when interpreting a contract, to give the words and phrases contained therein their ordinary, plain meaning"). Williams states "for the purposes of Section 217 and Art icle 78 of the Civi l Practice Law and Rules, the determination to terminate a subsidy shall , in all cases, become final and binding upon receipt of the ... Notice of Default [i.e., the T-3 Notice] pursuant to paragraph '3(e)' above." R 171 at 1] 22(f). If the parties had intended to make the running of the statute of 26 limitations depend on a tenant 's receipt of all three notices, they could clearly have so stated. Instead, they identified receipt ofa single document, the T-3 Notice, as the trigger for the statute of limitations. Moreover, the Second Department's concern that enforcing the terms of Williams and running the statute of limi tations from receipt of the T-3 Notice "puts the burden on the unsophisticated layperson to figure out whether the correspondence he or she received is a waming letter, a T-l [Notice], or a T-3 [Notice], all of which look very similar" (R 14) ignores that like all citizens, "unsophisticated laypersons" are presumed to know the law and policies relevant to them (see Atkins v. Parker, 472 U.S. 11 5, 131 (1985) ("The entire structure of our democratic government rests on the premise that the individual citizen is capable of informing himself about the particular policies that affect his destiny.")), and pro se litigants do not acqu ire greater rights than those of any other litigant and cannot use their pro se status to deprive a defendant of the same rights enjoyed by other defendants whose adversaries are represented (see Morgan v. Sylvester, 125 F. Supp. 380, 388 (S.D.N.Y. 1954), aff'd, 220 F.2d 758 (1955), cert. denied, 350 U.S. 867 (1955); In re Evert, 72 A.D.3d 1081, 1082 (2d Dep't 20 I 0); Walter v. Jones, Sledzik, Garneau & Nardone, LLP, 67 A.D.3d 671, 672 (2d Dep't 2009); Banushi v. Lambrakos, 305 A.D.2d 524, 524 (2d Dep' t 2003); Goldmark v. 27 Keystone & Grading Corp., 226 A.D.2d 143, 144 (1st Dep't 1996); Roundtree v. Singh, 143 A.D.2d 995, 996 (2d Dep't 1988)). There is no reason to believe Section 8 tenants in New York are any more unsophisticated than laypersons participating in other Section 8 programs across the country for whom federal regulations require only one termination notice. See 24 C.F.R. § 982.555(c)(2)). Even if they were, multiplying the number of notices would not assist the unsophisticated layperson under the Second Department's theory that it is difficult for the "unsophisticated layperson to figure out whether the correspondence he or she received is a warning letter, a T-l [Notice), or a T-3 [Notice)" because all the termination notices "look very similar." See R 14. In any event, a court cannot decline to enforce the statute of limitations because doing so may produce results it deems unfortunate. See Roldan v. Allstate Ins. Co., 149 A.D.2d 20, 33 (2d Dep't 1989) ("The courts are not free to extend the Statute of Limitations, and certainly may not invent tolling provisions simply because to do so might seem necessary.(o avoid results thOUght to be unfortunate in particular cases") (citations omitted). Contrary to the Second Department's expressed concern, allowing the Housing Authority to rely on its statute of limitations defense once it proves it mailed the T-3 Notice does not render Williams a nullity. Cf. R 14. If the Housing Authority fail s to send the warning letter or the T-I Notice to a Section 8 28 p31ticipant before te rminating the subsidy, that participant can challenge the Housing Authority 's determination by timely commencing an Article 78 proceeding withi n four months of his or her receipt ofthe T-3 Notice. C. This Proceeding Is Time-Barred Based on When Petitioner Knew ofthe Housing Authority's Determination In cases where a patty establishes lack of notice, this Court and the departments of the Appellate Division have held the statute of limitat ions runs from when the party knew or should have known of the determination. See O'Neill v. Pfau, N.Y.2d ,2014 N.Y. LEXIS 1364, *2 (20 14) (affirming - - dismissal of claim as time-barred when not brought within four months of receipt of check which did not include continuous service credit petitioners sought); ISCA Enters . v. City of New York, 77 N.Y.2d 688, 696-97 (1991) (affirming dismissal of proceeding as time-barred as measured from plaintiff's actual notice because, even though plaintiff claimed notto have received notice of tax foreclosure in 1981 , plaintiff "became aware of the tax foreclosure" in December 1983); Cloverleaf Realty of N.Y., Inc. v. Town ofWawayanda, 43 A.D.3d 419, 421 (2d Dep' t 2007) ("Merely because the plaintiffs couched their claim as an alleged denial of constitutional due process because they did not receive direct notice of a public hearing prior to a special assessment, it does not fo llow that the plaintiffs compliance with the statute of limitations applicable to CPLR article 78 29 proceedings is abrogated, since it is undisputed that the plaintiffs received actual notice of the assessment."); Riverkeeper, Inc. v. Crotty, 28 A.D.3d 957, 961 (3d Dep't 2006) (claims challenging extension of permit beyond 1997 were time- barred because petitioners were. "aware by 1997 that the extension had lasted more than the claimed permissible period" but did not file within four months); 90-92 Wadsworth Ave. Tenants Ass'n v. City of New York Dep't ofHous. Preserv. & Dev., 227 A.D.2d 331 ,33 1-32 (Ist Dep't 1996) ("In circumstances where a party would expect to receive notification of a determination, but has not, the Statute of Limitations begins to run when the party knows, or should have known, that it was aggrieved by the determination."); McComb v. Town of Greenville, 163 A.D.2d 369,370 (2d Dep 't 1990) ("[t]he four-month period must be measured from ... th[ e] date the plaintiff knew or should have known he was aggrieved"); Bigar v. Heller, 96 A.D.2d 567, 568 (2d Dep' t 1983) ("In a situation in which a party would be expected to receive notice of the determination ofa public agency pursuant to statutory requirements, but has not, the Statute of Limitations begins to run when he knows or should know that he has been aggrieved by a determination."). The First Department recently applied this knew-or-should-have-known analysis in a case involving Williams. In Shamblee v. Rhea, 110 A.D.3d 443 (1st Dep't 2013), the First Department held the proceeding was time-barred because, regardless of whether petitioner timely received the T-3 Notice, she did not 30 commence it within four months of when she "had to have known" the Housing Authority was no longer paying her Section 8 subsidy. See id. at 443 (citing 90-92 Wadsworth Ave. Tenants Ass'n, 227 AD.2d at 33 1-32)). Similarly, the dissent in Banos stated a Section 8 participant's case is time-barred where, as here, she does not commence it within four months of when she knew her subsidy was terminated. See Banos, III A.D.3d at 712 (Miller, J. dissenting) ("even if petitioner had adequately rebutted the presumption of receipt ... the statute of lim itations would still have begun to run when petitioner concededly had notice of the Housing Authority'S final determination in July 20 I 0, and the proceeding was not brought within four months after this later date"). The Second Department should have applied the same analysis here. Instead, it declined - without explanation - to consider the Housing Authority's argument this proceeding is time-barred as measured from when Petitioner knew the Housing Authority had terminated her Section 8 subsidy. See R 15 (the Housing Authority'S "remaining contentions are without merit"). The Second Depaltment's failure to apply or even acknowledge Petitioner' s admi ssion she knew her Section 8 subsidy was term inated is puzzling for two reasons. First, in other cases, the Second Department measured the running of the statute of limitations from actual notice notwithstanding alleged noncompliance with notice requirements. See Cloverleaf Realty, 43 A.D.3d at 421; Bigar, 96 AD.2d at 568. 31 In Cloverleaf Realty, the court found, despite plaintiffs attempt to couch the action as a declaratory judgment action, that "the challenge is directed not at the substance of the [assessment) but at the procedures followed in its enactment, [and thus the action] is maintainable in an atticle 78 proceeding" and is untimely because plaintiffs failed to commence it within four months of their actual notice of the tax assessment. See Cloverleaf Realty, 43 A.DJd at 420-21. In Bigar, despite an agency's failure to comply with statutory notice requirements, the Second Department ruled the "Special Term properly concluded that the 30-day period of limitation applicable to this action began to run when plaintiffs acquired actual notice that [the agency) issued a tidal wetlands permit for the property in question." Bigar, 96 A.D.2d at 568. The Second Department upheld the lower court's finding the proceeding was timely because it was commenced wi thin 30 . days of when plaintiffs " first became aware of the tidal wetlands permit ... , when their counsel discovered the permit in the [agency's) regional office." Id. (emphasis added). Thus, the Second Department measured the statute of limitations period from plaintiffs' actual notice even after concluding the agency had not complied with statutory notice requirements, which are no less important than the notice requirements in Williams. Second, in this case, the Second Department's stated concern is that measuring the statute of limitations period based solely on the Housing Authority's 32 mailing of the T-3 Notice would not give participants sufficient notice about the termination of their Section 8 subsidies. See R 14; Banos, III A.D.3d at 708. Here, the record establishes there is no doubt Petitioner knew the Housing Authority had terminated her Section 8 subsidy by December 30, 2008 when she submitted a letter requesting restoration and stated "I was issued a letter saying my Section 8 was terminated ... " (R 53). Therefore, at the latest the statute of limitations expired four months later in April 2009, and the Second Department erred in failing to dismiss this proceeding commenced on May 18,2011 as time- barred.' (Indeed, Petitioner did not even bring this proceeding within four months of the Housing Authority'S denial of her second restoration request in September 2010.) Williams does not preclude the Housing Authority from relying on the case law that holds the statute of limitations starts to run when a party knew or should have known of a determination. As the dissent in Banos properly recognized, Williams does not "purpOJ1 to alter" "the applicable case law which defines when 5 Petitioner did not even submit her first. request for restoration to the Section 8 program until December 2008 - nearly one year' after the statute of limitations expired in December 2007. See R 53. Because of Petitioner's unreasonable delay in seeking restoration and in commencing this Article 78 proceeding, laches bars this proceeding. See Castroll v. Incorp. Village of Head Dfthe Harbor, 2 A.DJd 443, 443-44 (2d Dep't 2003) (holding hybrid Article 78 and declaratory judgment proceeding was barred by the statute of limitations and laches); Matter of Save the Pine Bush v. City of Albanv, 281 A.D.2d 832 (3d Dep't 2001); Roberson v. Ward, 278 A.D.2d \80, 180 (1st Dep't 2000) (finding an Article 78 proceeding barred by laches because petitioner waited II years to challenge his dismissal from the police department); Perrv-Gething Found. v. Stinson, 218 A.D.2d 791 (2d Dep't 1995), Iv. denied, 87 N. Y.2d 810 (1996). 33 an agency detennination becomes' final and binding' for the purposes of CPLR [section]217( I )." Banos, III A.D.3d at 713. Here, the Second Department erred in concluding the statute of limitations is either to lled indefinitely or does not begin to run if the Housing Authority cannot locate a record to establish it mailed all three notices, regardless of when a former participant became aware of the determination and no matter how many years she waits to asseli a claim. See R 14 ("under circumstances such as those presented in this case, the statute of limitations would indefinitely be tolled" based on the Housing Authority's alleged fa ilure to mail the three tennination notices pursuant to Williams). This holding would violate this Court's precedent that paliies cannot waive their right to assert the statute of limitations by contract before a cause of action accrues. See John J. Kassner & Co., Inc. v. City of New York, 46 N.Y.2d 544, 55 1 ( 1979) ("[i]fthe agreement to "waive" or extend the Statute of Limitation is made at the inception of liab ility it is unenforceable because a party cannot ' in advance, make a valid promise that a statute founded in public policy shall be inoperative"') (citations omitted); Yeshiva Univ. v. Fidelity & Deposit Co. of Md., 116 A.D.2d 49, 51-52 ( I st Dep't 1986) (unan imously reversing order in which Special TenTI concluded Yeshiva's discovery of the existence of a defect, nearly five years after the final payment under the subcontract, meant the work had not been completed and therefore "the two-year contractual limitation period had never commenced to run" 34 and holding "[a]n agreement to waive or even extend the Statute of Limitations, adopted at the inception of the contract and not after the cause of action has accrued, is against public policy and void"). Williams, executed in 1984, cannot constitute a tolling agreement for challenges to the termination of Petitioner's participation in the Section 8 program in 2007, 23 years later. POINT II THE SECOND DEPARTMENT ERRED IN CONSIDERING THE MERITS OF A TIME-BARRED CLAIM A reviewing court should not reach, much less decide, the merits of an untimely claim. See Zumpano v. Quinn, 6 N.Y.3d 666, 671 (2006) (refusing to address plaintiffs' claims where the consolidated actions were time-barred and stating "[t]he merits of these claims are not before us and we have no occasion to pass upon the strength of the allegations"); Thornton v. New York City Hous. Auth., 100 A.D.3d 556,557 (1st Dep't 2012) ("This Court cannot extend the statute oflimitations (see CPLR [section] 201), nor does it have discretion to address the merits of petitioner's other arguments"); Saunders v. Rhea, 92 A.D.3d 602,603 (1st Dep't 2012) ("[S]ince the proceeding is time-barred, petitioner's argument that her right to due process was violated cannot be addressed."); M & D Contrs. v. New York City Dep 't of Health, 233 AD.2d 230, 231 (lst Dep't 1996) ("As the proceeding is time-barred, petitioner's argument that its right to due process was violated by the placement of liens on the property before it had been 35 given notice of any violations cannot be addressed. "). I f courts reached the merits to determine the timeliness of a claim, they would usurp the role of the Legislature by eviscerating the statute oflimitations. Even meritorious claims must be timely . brought. The Second Department rejected the Housing Authority's statute of limitations defense after concluding the Housing Authority had improperly terminated Petitioner' s participation in the Section 8 program because it allegedly failed "to abide by the notice provisions set forth in" Will iams inasmuch as it "failed to show that it mailed two of three required notices" - the warning letter and the T-l Notice. See R 14. In reaching this conclusion, the Second Department necessarily considered the merits of Petitioner's claim. See CPLR § 7803(3) (listing possible grounds for an Article 78 proceeding, including, "whether a determination was made in violation of lawful procedure"). As the dissent in Banos correctly stated, [t]he fact that an agency mayor may not have followed proper procedure in reaching its determination relates to the merits of the underlying petition. It does not affect the finality of the agency's determination for statute of limitations purposes. To hold otherwise would effectively eliminate the statute of limitations for every determination that was made in violation of lawful procedure and would require courts to determine the merits of such petitions before they could determine when, if ever, the statute of limitations began to run. 36 Banos, III A.D.3d at 713-14 (Miller, l. dissenting). In support of its contrary conclusion, the Second Department in this case relied solely on Quesada v. Hernandez, 5 Misc. 3d 1028A, at *4 (Sup. Ct. N.Y. Co. Oct. 27, 2004), a lower court decision that is inapposite for two reasons. First, Quesada predates the First Department's decisions in Fernandez, Lopez, and Parks. See R 14; Parks, 100 A.D.3d at 408; Lopez, 93 A.D.3d at 448; Fernandez, 284 A.D.2d at 202. Second, the T-3 Notice in Quesada was not properly addressed. See Quesada, 5 Misc. 3d 1028A, at *4 (concluding the record established the Housing Authori ty mailed the T-3 Notice to "Apaltment I L, not petitioner's actual residence, Apartment I C"). Here, the Second Department accepted the Housing Authority's proof it properly mailed the T-3 Notice to Petitioner in August 2007 by both certified and regular mail, but still failed to di smiss this proceeding brought in 2011 as time-barred. See R 14. The Second Department violated this Court's precedent in reaching the merits of Petitioner's claim, which Petitioner failed to timely raise. POINT III THE SECOND DEPARTMENT ERRED IN NOT AFFORDING THE HOUSING AUTHORITY AN OPPORTUNITY TO ANSWER Section 7804(1) of the CPLR states "[t]he respondent may raise an objection in point of law . . . [i]f the motion is denied, the court shall permit the respondent to answer." CPLR § 7804(1) (emphasis added). "The mandate ofCPLR section 37 7804(1) . .. proscribes dismissal on the merits following such a motion, unless the facts are so fully presented in the papers of the respective parties that it is clear that no dispute as to the facts exists and no prejudice will result from the failure to require an answer." Nassau BOCES Council of Teachers v. Board of Coop. Educ. Servs. of Nassau County. 63 N.Y.2d 100, 101-02 (1984) (citations omitted). The Second Department has recognized the "mandatory" language of CPLR section 7804(1) requires a court to allow a respondent to answer an Article 78 petition. See Wood v. Glass, 226 A.D.2d 387, 388 (2d Dep't 1996); Charter Private Line. Inc. v. Board ofEduc. of the City of New York, 182 A.D.2d 758, 759 (2d Dep't 1992) (holding the lower court properly denied petitioner's motion to strike the answer because following a denial of a motion to dismiss, the court "shall" permit respondent to answer) (citing CPLR § 7804(1)). Here, the Housing Authority raised an objection in point of law in its cross- motion and specifically reserved an opportunity to answer the petition if the Supreme Court denied its cross-motion. See R 145, 160. In moving to dismiss this proceeding as barred by the statute of limitations, the Housing Authority did not need to establish it mailed the warning letter and the T-I Notice because, as set forth in Williams, the T-3 Notice constitutes the Housing Authority ' s final and binding determination (see R 171 at ~ 22(1)), and the statute of limitat ions begins to run from the participant's receipt of the T-3 Notice (see id.; see also Parks, 100 38 A.D.3d at 407; Lopez, 93 A.D.3d at 448; Fernandez, 284 A.D.2d at 202). Thus, there would have been no reason for the Housi ng Authority to establish it mailed earlier notices, like the warning letter or the T-I Notice, or to address the merits of Petitioner's claim challenging the Housing Authority's terminat ion of her Section 8 subsidy. The Supreme Court and the Second Department did not give the Housing Authority an oppOltunity to establish it properly terminated Petitioner 's subsidy based on her fa ilure to complete her affidavit of income. Because the facts were not so fully presented that there is no dispute concerning them, the Housing Authority was prejudiced by not having the opportunity to answer. See Nassau BOCES Council of Teachers, 63 N.Y.2d at 101-02. POINT IV THE SECOND DEPARTMENT ERRED IN ORDERING THE HOUSING AUTHORITY TO MAKE RETROACTIVE SUBSIDY PAYMENTS Federal regul ations require a public housing authority annually to inspect apartments to ensure they comply with HQS and preclude the Housing Authority from paying subsidy for an apartment that does not comply. See 24 C.F.R. § 982.401(a)(3); 24 C.F.R. § 982.405(a)). Federal regulations also require a Section 8 participant to regularly furnish the Housing Authority with information regarding his or her income and authorize a housing authority to terminate participation in the program if the participant fail s to comply. See 24 C.F.R. §§ 982.551 & 39 982.552. In addition, federal regulations only permit the Housing Authority to make subsidy payments "in accordance with the terms of the HAP contract" (see 24 C.F.R. § 982.31 I (a)) and provide a Section 8 HAP contract automatically terminates if no subsidy payments are made pursuant to that contract for six consecutive months (see 24 C.F.R. § 982.455). Here, the Housing Authority stopped paying Petitioner's Section 8 subsidy effective October 31,2007. See R 152-53 at ~~ 9-10,186; 227-34. Thus, the HAP contract expired by operation of law in April 2008. See 24 C.F.R. § 982.455. The Order conflicts with federal regulations because it requires the Housing Authority to pay retroactive subsidies for the more than three years Petitioner delayed in asserting her claim during which the Housing Authority did not inspect the apartment for HQS violations, Petitioner did not certify her continuing eligibility for the Section 8 program, and the HAP contract between the Housing Authority and 690 Gates expired by operation of law. 40 CONCLUSION Based on the foregoing, the Housing Authority's Chair respectfully requests this Court reverse the Order and dismiss this Article 78 proceeding in its entirety. Dated: New York, NY June 26, 20 14 Nancy M. Harnett Corina L. Leske Melissa R. Renwick, Of Counsel TO: Michael Weisberg Co-Director, Housing Law Unit Ten), Herman, Of Counsel KELLY D. MACNEAL Acting General Counsel New York City Housing Authority 250 Broadway, 9th Floor New York, NY 10007 (212) 776-5010 Attorneys or Respondent-Appellant By: Melissa R. Renwick, Of Counsel South Brooklyn Legal Services, [nco 105 Court Street Brooklyn, New York I 120 I (7[8) 237-5553 Attorneys for Petitioner-Respondent Viola Dial Robert Gordon, Of Counsel Reliant Realty Services, Inc. 885 2nd Avenue, 3[st Floor, Suite C New York, NY 10017 (646) 374-0100 Attorneys for Respondent-Respondent 690 Gates LP 41 AFFIRMATION OF SERVICE Melissa R. Renwick, an attorney duly ad mitted to practi ce law in the State of New York, hereby affirms under penalties of perjury as fo llows: I a111 not a party to th is proceeding, I am over 18 years of age, and I am an Agency Attorney with the New York City Housing Authority with offices at 250 Broadway, New York , NY 10007. On June 26, 2014, I served three copies of the within Brief of Rcspondcnt- Appellant upon: Terry Hemlan, OfCounse! South Brooklyn Legal Services 105 Court Street Brooklyn, New York 11 20 I Robert Gordon, Of Counsel Reliant Realty Services, Inc . 885 2nd Avenue, 3151 Floor, Suite C New York, NY 100 17 by placing a true copy of these papers in postage paid properly addressed envelopes, addressed as set f0l1h above, and depositing it in a receptacle under the exclusive care and custody or UPS Express fo r overnight delivery service for delivery within the State of New York, to arrive June 27,20 14. Dated: New York , New York . June 26, 2014 /fl1£.~' Melissa R. Renwick