Preview
FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022
NYSCEF DOC. NO. 38 RECEIVED NYSCEF: 01/13/2023
EXHIBIT J
FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022
NYSCEF Zheng v.
DOC. City38
NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023
973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091
have contained trappings of contract language,
19 N.Y.3d 556 evidence indicated that City understood the
Court of Appeals of New York. documents to mean it was undertaking a
governmental social services obligation that was
Jasmine ZHENG et al., Appellants, within its discretion to terminate.
v.
5 Cases that cite this headnote
CITY OF NEW YORK, et al., Respondents.
June 26, 2012. [2] Landlord and Tenant Proceedings
Where Appellate Division affirmed trial court's
Synopsis
factual finding that City did not intend to
Background: Tenants in rent-subsidized apartments brought
enter into enforceable contracts with tenants
action alleging that City was contractually obligated to
of rent-subsidized apartments or their landlords
continue to pay rent subsidies to their landlords until
with regard to payments of subsidies, Court of
expiration of their leases. The Supreme Court, New York
Appeals' review was limited to issue of whether
County, Judith J. Gische, J., dismissed, and tenants appealed.
there was sufficient evidence to support trial
The Supreme Court, Appellate Division, 93 A.D.3d 510, 940
court's determinations.
N.Y.S.2d 582, affirmed, and tenants appealed.
2 Cases that cite this headnote
[Holding:] The Court of Appeals, Read, J., held that evidence
that mutual intent was lacking was sufficient to support
finding that City, in agreeing to subsidize rent payments, did Attorneys and Law Firms
not thereby intend to enter into enforceable contracts with
tenants and their landlords. ***302 Legal Aid Society, New York City (Steven Banks,
Jane Sujen Bock, Joshua Goldfein and Judith Goldiner of
counsel), and Weil, Gotshal & Manges LLP (Konrad L.
Affirmed. Cailteux, Isabella C. Lacayo, Jesse Morris, Emily L. Pincow
and Lisa Sokolowski of counsel), for appellants.
Ciparick, J., filed dissenting opinion, in which Lippman,
Chief Judge, and Jones, J., concurred. Michael A. Cardozo, Corporation Counsel, New York City
(Eric Rundbaken, Allan G. Krams, Nancy F. Brodie, David
Procedural Posture(s): On Appeal; Motion to Dismiss. Cooperstein and Michael Adler of counsel), for respondents.
West Headnotes (2)
*559 OPINION OF THE COURT
READ, J.
[1] Landlord and Tenant Government
Subsidies **712 Plaintiffs claim that the City of New York is
Evidence that mutual intent was lacking was contractually obligated to pay rent subsidies to their landlords
sufficient, in action arising out of a rent under the Advantage New York program until expiration
subsidy program, to support finding thatCity, of their leases. State and federal reimbursement for two
in agreeing to subsidize rent payments, did thirds of the Advantage program's costs ended on April 1,
not thereby intend to enter into enforceable 2011, causing the City to discontinue it as of that date. Both
contracts with tenants and their landlords, such lower courts found that the City did not intend to enter into
as would require City to continue paying the enforceable contracts with plaintiffs or their landlords under
subsidies after federal and state funding for the Advantage program, and the record supports this affirmed
the program was withdrawn; despite fact that finding of fact (see Brown Bros. Elec. Contrs. v. Beam Constr.
some documents pertaining to the program might
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 1
FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022
NYSCEF Zheng v.
DOC. City38
NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023
973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091
Corp., 41 N.Y.2d 397, 400, 393 N.Y.S.2d 350, 361 N.E.2d the State's Office of Temporary and Disability Assistance
999 [1977] ). Accordingly, we affirm dismissal of the lawsuit.
(OTDA), as required by state regulation (see 18 NYCRR
352.3[a][3][ii] [a social services district may, with OTDA's
prior approval, provide an additional shelter supplement for
I. PA recipients to reside in private housing, provided OTDA
“determines that there are sufficient funds available to provide
The City created the Advantage rentalassistance program such reimbursement”] ).
in 2007 to help homeless single adults and families achieve
independent living. The Advantage program replaced and The City's Department of Homeless Services (DHS)
was designed to fix unanticipated problems thought to and Human Resources Administration (HRA) jointly
compromise the effectiveness of a predecessor program called administered the Advantage program. To begin with, the City
Housing Stability Plus (HSP). HSP provided a five-year rent provided eligible individuals or families with a certification
**713 ***303 subsidy that was reduced automatically letter on DHS or HRA letterhead, which was routinely signed
each year by 20%. Participants in HSP were required to by city workers from these agencies, sometimes by facsimile
remain eligible for public assistance (PA) and to comply with rather than original signature. Several versions of this letter
all PA requirements. Two problems became apparent over included the following subject linein boldface type: “Re:
time as a result. First, some tenants limited the hours they Advantage Program (Guaranteed Rent Not Tied to [PA] ).”
worked because a higher income would render them ineligible
for PA and, consequently, the HSP rent supplement. Second, The certification lettergenerally informed recipients that
landlords grew reluctant to participate in this program they were “now eligible for the Advantage rental assistance
because subsidies were cut off whenever a tenant's PA case program”; and set out the certification and expiration dates,
was sanctioned or closed, thus interrupting the flow of the length of time that the certification would be valid, the
rental revenue. 1Under the Advantage program, by contrast, total maximum rent allowed, the monthly tenant contribution
landlords were assured that changes in a tenant's PA status (based on total gross household income as of the certification
would not disrupt payment of the rent subsidy over the course date) and the maximum subsidy amount. The letter also stated
of the lease. that “[t]he Advantage **714 ***304 program guarantees
*561
that the subsidy portion of the rent will be paid directly
*560 There were various versions of the Advantage to your landlord for one year,” and that a “second year of
program, with differing eligibility requirements. For example, rental assistance under Advantage” was available if the tenant
the program made rent subsidies payable to landlords for met the eligibilitycriteria.Recipients were encouraged to
households where at least one adult worked 20 hours or show the letterto prospective landlords and brokers when
more weekly at minimum wage or above (Work Advantage), searching for apartments.
received a fixed income benefit such as Supplemental
Security Income or Social Security Disability Insurance At lease signing, the tenant subscribed a participant
(Fixed Income Advantage) or had an active case with the statement of understanding, which indicated that “[u]nder
City's Administration for Children's Services while in shelter the Advantage Program, [the City] will pay a portion
(Children Advantage). In general, the family or single adult of my monthly rent (over and above [the tenant's]
had to have resided in shelter for a certain number of days, monthly rent contribution) directly to my Landlord.” As a
and have an active PA case and a gross household income not “condition” of “participation” in the program, the tenant
exceeding a specified percentage of the federal poverty level. made 22 “commitments,” which included understandings
and agreements to file for work supports and tax credits,
The Advantage program was carried out through a lease notify HRA of a change in address, seek appropriate services
between landlord and tenant to which the City was not a party, to maintain the tenancy, repay the security deposit and
and four documents drafted by the City: a certification letter, certain other payments if failing to move into the apartment
participant statement of understanding, landlord statement of after signing the lease, cooperate with the City in its
understanding and lease rider. These four documents differed administration of the program and take part in program
depending on the program type and participant(family or surveys and publicity. The participant statement was signed
single adult), vintage or agency, but contained the same by adult household members, who represented that they
basic provisions. The Advantage program was approved by had “read and under[stood their] obligations under [the
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022
NYSCEF Zheng v.
DOC. City38
NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023
973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091
participant statement]”; and by a city case manager and/or Faced with the imminent loss of two thirds of the program's
housing specialist,who “confirm[ed] that all present adult funding, the City closed the Advantage program to entrants in
household members have verbalized their understanding [of] mid-March 2011, and informed participants that their rental
the agreements outlined in this document, and that all adult subsidies would end on April 1, 2011, the beginning of the
household members have signed and received a copy of this State's fiscal year.
agreement.”
On March 28, 2011, plaintiffsJasmine Zheng and A.T., 3
Also at lease signing, the landlord (or an authorized on behalf of themselves and all others similarly situated,
representative) subscribed a landlord statement of brought this lawsuit against the City as well as DHS and
understanding, which specified that the City “will issue” or HRA and their respective commissioners (collectively,the
“will pay” rent subsidies directly to the landlord on behalf City). Plaintiffs alleged that they were “Advantage recipients,
of the tenant, who remained “responsible for paying directly now Advantage tenants,” suing on behalf of themselves and a
to ... the Landlord, a monthly rent contribution” in a specified class consisting of “approximately 15,000 current Advantage
amount “to cover the remaining portion of the rent under the Tenants,” and claimed that the City was contractually
Lease and Rider.” Further, as a “condition” to “participation” obligated to continue to pay the rent subsidies provided
in the program, the landlord made 12 “commitments,” which for under the Advantage program. They sought specific
included understandings and agreements not to charge an performance of this alleged contract; a declaratory judgment
Advantage tenant “any amount” beyond the agreed-upon rent; that the City was “contractually obligated to continue to
and to offer the apartment at the same level of rent for a secondmake Advantage subsidy payments *563 to Advantage
year, pay for heat and water and, in the event an Advantage Tenants' landlords for the remainder of [the alleged contracts]
tenant vacated the premises “due to an eviction or move,” and for a second year if the Advantage Tenants [met the
return any prepaid rent to the City or, at the City's option, City's] eligibility criteria”; injunctive relief to prevent the City
allow another program participant to reside in the apartment from discontinuing rent subsidy payments to landlords before
for the remainder of the lease's term. expiration of the alleged contracts; and “injunctive relief to
prevent [the City] from taking Advantage Tenants' property
Lastly, at lease signing the tenant and landlord both signed a interestswithout due process of law.” Basically, plaintiffs
rider to the landlord's standard lease. In the rider, the tenant were looking for the City to subsidize their leases for a full
*562 “agree[d] [to] authorize[ ]” the City to pay “rental two years, notwithstanding the loss in the interim of state
assistance directly to the Landlord.” 2 The rider also generally and federal funding for this purpose. Supreme Court signed
reiteratedthe landlord'sobligations set out in the landlord the accompanying order to show cause, thereby directing
statement. Additionally, the landlord “acknowledge[d] that ... a hearing on plaintiffs'request for injunctive relief and
the amount and duration” of subsidies was “subject to class certification, and temporarily restraining the City from
all applicable rules and requirements” of the Advantage discontinuing the rent subsidies.
program, and agreed to make the apartment available for
inspection. If the landlord “materially violate[d]” any of the On May 2, 2011, Supreme Court entered a decision and order
terms of the lease or rider, the tenant could terminate the lease,
denying plaintiffs' motion for a preliminary injunction and the
and the landlord was barred from participation in the program. City's cross motion to dismiss the complaint (2011 N.Y. Slip
A city worker signed the lease rider as either a DHS or HRA Op. 31120[U] [NY County 2011] ). Based on her review of the
witness. “program documents” (i.e., the certification letter, participant
and landlord statements of understanding and the lease rider),
The Advantage program was funded in equal parts by the the judge concluded that the complaint “survive[d]” the
city,state and federal **715 ***305 governments. But City's motion to dismiss, but that plaintiffs had not shown
the Governor's executive budget for fiscal year 2011–2012, “a likelihood of success on their claims that the program
submitted to the Legislature on February 1, 2011, did not documents constitute enforceable contracts” (id. at *26). 4
include an appropriation for the program. Although the City Supreme Court, however, continued the temporary restraining
aggressively lobbied the State for the Advantage program's order for 10 days to permit plaintiffs the opportunity to seek
continuation, funding was not restored in the subsequently a stay from the Appellate Division.
enacted state budget; once state financial support was
withdrawn, federal moneys were also no longer available.
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 3
FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022
NYSCEF Zheng v.
DOC. City38
NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023
973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091
Plaintiffs filed a notice of appeal with the Appellate Division circumstances, the situation of the parties and the objectives
on May 10, 2011, and on May 12, 2011, they moved they were trying to attain.”
for injunctive **716 ***306 relief.On June 2, 2011,
the Appellate Division granted plaintiffs'motion “to [the] After “viewing the evidence as a whole” in light of these
extent of directing [that the Advantage program] payments ... principles, Supreme Court “conclude[d] that [the City] did not
be maintained pending hearing and determination of the manifest an intent to be contractually bound to provide the
appeal” (2011 N.Y. Slip Op. 74744 [U] [2011] ). benefits associated with the Advantage program.” While the
judge also expressed her belief that “neither the tenants nor
Following an expedited, five-day nonjury trial in June and the landlords manifested an intent to be contractually bound,”
July and the completion of posttrial submissions on August *565 she added that “it would not matter even if they did”
11, Supreme Court issued a decision dated September 13, because “the requirement of intent must be mutual.” She then
2011 in which she held that reviewed the proof that supported her finding that the City
lacked the intent to be bound.
*564 “the Advantage program, no matter how laudable its
goals, is nothing more than a social benefit program, which First,there were “no formal contracts” between the City
[the City] had the right to terminate based upon the lack and tenants or the City and landlords. As a result, plaintiffs
of funding available for its continuation. [The City has] no relied on the four “program documents” (the certification
ongoing obligation, contractual or otherwise, to continue letter, participant and landlord statements of understanding
the Advantage Program.” and lease rider) to argue that the City intended to be
contractually obligated to fund plaintiffs' rent subsidies under
The judge observed that “[w]hile a social services program the Advantage program. With respect to these documents,
can be structured in such a way as to be operated and the judge addressed the parties' disputes over the importance
implemented through enforceable contracts,” plaintiffs were of the presence of the signatures of city workers on certain
required to prove by a fairpreponderance of the evidence of them. She determined that the “confirmation **717
that, in this instance, enforceable contracts did, in fact, exist ***307 signed by a city caseworker on the bottom of the
between tenants and the City or landlords and the City. participant statement “[did] not manifest any intent by [the
She listed the elements required for contract formation and City] to enter into a contractual relationship”; and neither did
pointed out that the parties did not dispute “capacity to the signature of a city caseworker as a witness to the lease
contract” or that “if the court were to find that[the City rider. She noted that the certification letter was “signed by
had] entered into enforceable contracts with the Advantage NYC representatives,” sometimes by facsimile, but, contrary
Landlords, the Advantage Tenants [would] have standing to to the City's arguments, “the fact that each signature was
enforce them as third party beneficiaries.” She then turned to not original [was] not legally significant.”Supreme Court
the two elements of contract formation disputed by the parties added that “[w]hile [the City could not] rely on the lack of a
—mutual assent and consideration. signature on the certification letter to disprove its intention to
be bound, the court still [would] need[ ] to look at the content
With respect to mutual assent, Supreme Court remarked of the documents and the circumstances of their making in
that “[w]hile a formally executed document is not always determining mutual assent.”
necessary,” the proponent of the existence of a contract—
here, plaintiffs—“must still prove an intent of the parties to The judge described “language used in the program
be bound.” Citing our decision in Brown Bros., the judge documents” as “[m]ost important” in ascertaining whether
stated that “[i]n finding [intent to be bound], the court does there was contractual intent,followed by “evidence in the
not depend on the subjective intent of the parties, [but] form of collateral writings (e.g. promotional materials) and
rather ...looks to objective manifestations of the intent of what the parties said and did at the time the program was
the parties as gathered by their expressed words and deeds.” implemented”; and “[t]he historical context of the formation
In undertaking this analysis, “[t]he parties'communicated of the relationships.” She added that “the unexpressed
expressions are interpreted objectively to give effect to the subjective thinking of the parties at the time the program was
reasonable expectations of the parties, not necessarily their implemented and/or the documents signed or generated” was
actual expectations.” Further, “[t]he fact finder should not put “[n]ot relevant.” Supreme Court then reviewed the program
disproportionate emphasis on any single act, phrase or other documents in detail.
expression, but instead,should consider the totalityof the
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 4
FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022
NYSCEF Zheng v.
DOC. City38
NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023
973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091
rental assistance payments were benefits and that the
The judge stressed the absence of such “traditional contract tenants and landlords had to fulfill conditions to participate
phrases” as “ ‘the parties agree’ ” or “ ‘the parties covenant.’ ” in the program” (emphasis added).
Instead, these documents consistently referred to Advantage
as a “program.” And while “[t]he documents [had] program Thus, Supreme Court found that the certification letter
‘conditions' for tenants and landlords ... [t]he language and promotional documents “do not, when read as a
[did] not expressly impose any mutuality of obligation on whole, contain *567 a contractual guarantee of payment
[the City].” Additionally, “representation[s] that [the City] if the program is no longer funded.” She called plaintiffs'
will pay or will issue checks” merely “set [ ] out the argument that the City might have included language in the
program benefits” and were *566 “entirely consistent with program documents stating that payments were contingent on
the administration of the Advantage program,” ratherthan continued program funding “a red herring” because “[t]his
“prov[ing] contractual obligations.” language would only be important if there was a contract
between the parties” in the first place.
Supreme Court then considered the word “guarantee,” which
was “more problematic” for the City “because ‘guarantee’ is Supreme Court also assessed the evidence of the City's
a contractual term, which generally refers to an obligation communications with landlords to promote the Advantage
to be responsible for the debt of another.” She added, program, which belied any intent on the part of the City
however, that “there are times when, depending on the to be bound contractually. Specifically, the judge found that
context of the use of the word, no binding obligation is during meetings held by the City “to induce the landlords
created,” so “[i]t is important ... to understand the context in to participate in the Advantage program ... landlords asked
which [the City] used ... the term guarantee in program or [the City] to obligate [itself] to the leases. Whenever these
other documents.” Here, the certification letter was the only suggestions were made, [the City] made it clear to landlords
program document to use the word “guarantee.” Specifically, that the lease obligations would be between the landlord and
these letters typically included this word in the subject line— the tenant and that NYC would not obligate itself.” 5
i.e., “Re: Advantage Program (Guaranteed Rent Not Tied to
[PA] )—and referred to the subsidies as being “guaranteed for The judge contrasted this objective contemporaneous
up to one year.” The judge noted that the word “guarantee” evidence of the City's intent with the testimony of A.T.
also appeared in promotional materials given to landlords and and her landlord at trial as to their after-the-fact professed
brokers. subjective belief that they had entered into contracts with
the City. Moreover, “[t]estimony by other landlords, real
Supreme Court then found that estate brokers and property managers[ ] indicates they either
had no understanding about whether they had a contractual
“[t]he use of the word guarantee was deliberate and made
relationship with [the City] or they understood they had
to induce landlords to participate in the Advantage rental
no such relationship.”Indeed, “a real estate broker with
assistance program. The word was used to differentiate
extensive experience about rental assistance programs,” who
the Advantage program from predecessor programs [i.e.,
was called by plaintiffs, “testified that he did not believe [the
HSP] where a disruption in a tenant's public assistance
City] had entered into contracts with individual landlords,
case, for any reason whatsoever, would interrupt the rental
and, further, that it never entered his mind to suggest that NYC
subsidy payments to a participating landlord. Under the
Advantage program, the guarantee was that the rental sign a separate contract with the landlords.” 6 She added,
assistance benefit would be paid to landlords, even if however, that **719 ***309 “these varied subjective
the tenant's public assistance payment was interrupted *568 understandings ... [were] not probative on the issue of
for any reason. This meaning was communicated to mutual assent.”
landlords and/or their representatives in meetings and
fairsthat [the City] held to induce landlords to **718 Next, Supreme Court rejected plaintiffs'argument that the
***308 participate in the program. The certification certification letter constituted an offer accepted by the tenants
letters'references to guarantees of rent are expressly and landlords “by their actual participation” in the Advantage
‘not tied to public assistance payments.’ The program program because “it lack[ed] the requisite specificity”: “the
documents and the promotional material pervasively used specific landlord was not identified, the specific apartment
language indicating that Advantage was a program, that was not identified, the term of the lease was not identified,
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 5
FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022
NYSCEF Zheng v.
DOC. City38
NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023
973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091
nor were all of the conditions, as otherwise stated in the the interlocutory order, and that the preliminary injunction
participant statement, the landlord statement and lease rider.” “must be dissolved since the purpose of a preliminary
injunction is to maintain the statusquo while an action is
Plaintiffsargued there was consideration for their alleged pending” (id. at 413, 938 N.Y.S.2d 29).
contracts with the City because “they entered into contracts
with private landlords for rents that they could not otherwise On February 16, 2012, a separate panel, with one Justice
afford,” and “obtained employment and incurred expenses for dissenting, denied plaintiffs' motion for a further stay pending
such things as child care, all in connection with fulfilling their
determination of their appeal from the final judgment (2012
obligations” under the Advantage program. Supreme Court N.Y. Slip Op. 64817[U], 2012 WL 539213 [1st Dept.2012]
disagreed, though, “[s]ince participation in the Advantage ). On March 20, 2012, the same panel, with the same Justice
program was required as part of continued eligibility [for] dissenting, affirmed Supreme Court's order and judgment
temporary housing”; therefore, “the tenants' requirements of dismissing the complaint (93 A.D.3d 510, 940 N.Y.S.2d 582
eligibility for the Advantage program [did not] constitute [ ] [1st Dept.2012] ). The Appellate Division concluded “that the
consideration that would support a contract” with the City. trial court correctly found that the Advantage rent subsidy
program for the homeless was simply a social services
Further, program, and that [the City] did not intend to be bound
contractually” (id. at 511, 940 N.Y.S.2d 582).
“[the] argument[ ] that Advantage Tenants gave up other
available housing and/or programs to participate in the The court cited our decision in Brown Bros. as setting out
Advantage program[ ] was never proven at trial. In fact, the proper framework for resolving the factual question of
there was testimony ... that the Advantage program was contractual intent, whereas “plaintiffs and the dissent place[d]
perceived as a means to fill what was then the prevailing undue emphasis on the trappings of contract language
time gap in the availability of section 8 housing.” 7 such as ‘guarantee’ or ‘will pay,’ construing them as legal
promises *570 rather than mere assurances” (id.).The
As the judge commented, while section 8 housing “was Appellate Division, like Supreme Court, found that the word
always *569 subject to long waiting lists,”by 2010 it “guarantee” was intended “to allay fears that rents would
had become “virtually unavailable, due to severe budget not be paid in the absence of public assistance, as had often
cutbacks.” happened under previous subsidy programs”; and that “the
signing procedure ...was meant to accomplish no more
Supreme Court also disagreed with plaintiffs'
“collateral than ensure that participants were aware of the terms of the
argument (raised in the context of consideration) that, absent [Advantage] program” (id.). “Even if the tenant participants
a contractual relationship, the Advantage landlords would and the landlords intended to be contractually bound,” the
not have participated in the program,” based on the history court continued,
of landlord participation in the City's rental assistance
programs. Finally, the judge remarked that plaintiffs' claims of “there [was] no enforceable contract in either instance
entitlement to a second year of eligibility under the Advantage because [the City] profess[es] to have understood the
program and of due process violations “fail[ed]” in view documents differently with respect to their basic material
of her finding that there were no contractual obligations. nature [and thus] there was no meeting of the minds.
Supreme Court's decision was entered by order and judgment
“Ultimately, as [Supreme Court] properly found at the
on October 6, 2011. Plaintiffs took an appeal.
nonjury trial, all of the surrounding circumstances lead to
the ineluctable conclusion that the Advantage program was
On February 2, 2012, the Appellate Division granted the
a social service program no different from any other, and
City's motion to dismiss plaintiffs' appeal of Supreme Court's
not a contractual obligation undertaken by government”
interlocutory order entered on May 2, 2011 and to vacate the
(id. at 512, 393 N.Y.S.2d 350, 361 N.E.2d 999 [citation
stay; and denied plaintiffs' motion seeking to consolidate the
omitted] ).
appeals of Supreme Court's two orders and continue the stay
(92 A.D.3d 412, 938 N.Y.S.2d 29 [1st Dept.2012] ). The court
Although the Appellate Division did not need to reach the
held that the entry of final judgment dismissing the complaint
issue of whether there was “consideration for plaintiffs'
terminated plaintiffs' right to**720 ***310 appeal from
becoming participants in the Advantage program,” the court
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 6
FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022
NYSCEF Zheng v.
DOC. City38
NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023
973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091
nonetheless observed that “a promise to perform an existing
obligation is not valid consideration”; and here, “[p]ursuant On March 29, 2012, plaintiffs sought, by order to show
to 18 NYCRR 352.35, plaintiffs were obligated to cooperate cause, permission to appeal, an expedited appeal with a time
and accept the housing offered by the Advantage program” preference and interim relief; on March 30, 2012, a Judge of
(id.). As a result, plaintiffs' “claim of providing considerationthis Court signed the order to the extent of bringing on the
by suffering the detriment of leaving shelters and of leasing motion for permission and preference. On May 8, 2012, we
apartments that cost more than they could afford” was without granted plaintiffs leave to appeal and denied their request for
merit (id.). interim relief (19 NY3d 849, 946 N.Y.S.2d 103, 969 N.E.2d
220 [2012] ). We now affirm.
The dissenting Justice concluded that the City implemented
the Advantage program through enforceable contracts by
“agree[ing] to pay plaintiffs' rent in return for [their] leaving
II.
the shelter system [and agreeing] to pay rent so the landlords
would provide housing for the ... program”; and that “[t]hese Brown Bros. presents the template for deciding a case, such as
bargained for exchanges support[ed] the existence of a this one, where the issue is “whether the course of conduct and
contract, primarily between the participants and the City, but communications between [the parties have] created a legally
also between the landlords and the City” (id. at 513, 393 enforceable agreement” (Brown Bros., 41 N.Y.2d at 398, 393
N.Y.S.2d 350, 361 N.E.2d 999). She disagreed with Supreme N.Y.S.2d 350, 361 N.E.2d 999). There, in January 1967, the
Court's finding thatmutual assent and consideration were owner and builder of a shopping plaza entered into a written
lacking. contract with a general contractor to construct a section of
the plaza. The general contractor, in turn, subcontracted with
Addressing plaintiffs first, the dissenting Justice stated that, Brown for the electrical work. Starting as early as March, the
in her view, “there**721 ***311 [was] a contract between general contractor, although more than current in the receipt
the City and the *571 Advantage participants by virtue of of moneys from the owner/builder, was running behind in
the Certification Letter,the Participant Statements and the itspayments to Brown. As a result,Brown threatened in
riders to the leases through which the City agreed to pay writing to claim a breach of contract unless the payments
plaintiffs' rent for two years” (id. at 515, 393 N.Y.S.2d 350, were brought up to date. Then in July, the general contractor
361 N.E.2d 999). She construed the certification letter as an abandoned the job.
offer, which Advantage participants accepted by signing the
participant statement and lease rider; she found it “clear [that] *572 Between March and July,Brown and the owner/
plaintiffs provided consideration to support the contract” by builder had discussed ways and means to secure payment
moving out of shelters and saving the City money which for Brown. And with the owner/builder's knowledge, consent
would otherwise have been spent on the shelter system (id. at and cooperation, Brown continued to perform electrical work
516, 393 N.Y.S.2d 350, 361 N.E.2d 999). on the project after the general contractor departed. Brown
finished this work by the end of August, and sent the owner/
Additionally, the dissenting Justice concluded that the City builder an invoice for the amount stilldue. The owner/
had contracted with landlords. Based on her review of the builder wrote back in September that it would send its check
program documents, she opined that “[a] clearer indication of for “payment of the balance” upon receipt of underwriters'
assent to guarantee rent payment would be hard to imagine” inspection certificatesfrom Brown. When Brown sent the
as a consequence of the City's use of the word “guarantee” certificates,though, the owner/builder did not make any
and such phrases as “will pay” and “shall pay” in program payment, prompting Brown to sue. In the ensuing litigation,
documents, which thereby “demonstrate[d] an intent to bind the owner/builder argued that it had not entered into a contract
Preview
FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022 NYSCEF DOC. NO. 38 RECEIVED NYSCEF: 01/13/2023 EXHIBIT J FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022 NYSCEF Zheng v. DOC. City38 NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023 973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091 have contained trappings of contract language, 19 N.Y.3d 556 evidence indicated that City understood the Court of Appeals of New York. documents to mean it was undertaking a governmental social services obligation that was Jasmine ZHENG et al., Appellants, within its discretion to terminate. v. 5 Cases that cite this headnote CITY OF NEW YORK, et al., Respondents. June 26, 2012. [2] Landlord and Tenant Proceedings Where Appellate Division affirmed trial court's Synopsis factual finding that City did not intend to Background: Tenants in rent-subsidized apartments brought enter into enforceable contracts with tenants action alleging that City was contractually obligated to of rent-subsidized apartments or their landlords continue to pay rent subsidies to their landlords until with regard to payments of subsidies, Court of expiration of their leases. The Supreme Court, New York Appeals' review was limited to issue of whether County, Judith J. Gische, J., dismissed, and tenants appealed. there was sufficient evidence to support trial The Supreme Court, Appellate Division, 93 A.D.3d 510, 940 court's determinations. N.Y.S.2d 582, affirmed, and tenants appealed. 2 Cases that cite this headnote [Holding:] The Court of Appeals, Read, J., held that evidence that mutual intent was lacking was sufficient to support finding that City, in agreeing to subsidize rent payments, did Attorneys and Law Firms not thereby intend to enter into enforceable contracts with tenants and their landlords. ***302 Legal Aid Society, New York City (Steven Banks, Jane Sujen Bock, Joshua Goldfein and Judith Goldiner of counsel), and Weil, Gotshal & Manges LLP (Konrad L. Affirmed. Cailteux, Isabella C. Lacayo, Jesse Morris, Emily L. Pincow and Lisa Sokolowski of counsel), for appellants. Ciparick, J., filed dissenting opinion, in which Lippman, Chief Judge, and Jones, J., concurred. Michael A. Cardozo, Corporation Counsel, New York City (Eric Rundbaken, Allan G. Krams, Nancy F. Brodie, David Procedural Posture(s): On Appeal; Motion to Dismiss. Cooperstein and Michael Adler of counsel), for respondents. West Headnotes (2) *559 OPINION OF THE COURT READ, J. [1] Landlord and Tenant Government Subsidies **712 Plaintiffs claim that the City of New York is Evidence that mutual intent was lacking was contractually obligated to pay rent subsidies to their landlords sufficient, in action arising out of a rent under the Advantage New York program until expiration subsidy program, to support finding thatCity, of their leases. State and federal reimbursement for two in agreeing to subsidize rent payments, did thirds of the Advantage program's costs ended on April 1, not thereby intend to enter into enforceable 2011, causing the City to discontinue it as of that date. Both contracts with tenants and their landlords, such lower courts found that the City did not intend to enter into as would require City to continue paying the enforceable contracts with plaintiffs or their landlords under subsidies after federal and state funding for the Advantage program, and the record supports this affirmed the program was withdrawn; despite fact that finding of fact (see Brown Bros. Elec. Contrs. v. Beam Constr. some documents pertaining to the program might © 2023 Thomson Reuters. No claim to original U.S. Government Works. 1 FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022 NYSCEF Zheng v. DOC. City38 NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023 973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091 Corp., 41 N.Y.2d 397, 400, 393 N.Y.S.2d 350, 361 N.E.2d the State's Office of Temporary and Disability Assistance 999 [1977] ). Accordingly, we affirm dismissal of the lawsuit. (OTDA), as required by state regulation (see 18 NYCRR 352.3[a][3][ii] [a social services district may, with OTDA's prior approval, provide an additional shelter supplement for I. PA recipients to reside in private housing, provided OTDA “determines that there are sufficient funds available to provide The City created the Advantage rentalassistance program such reimbursement”] ). in 2007 to help homeless single adults and families achieve independent living. The Advantage program replaced and The City's Department of Homeless Services (DHS) was designed to fix unanticipated problems thought to and Human Resources Administration (HRA) jointly compromise the effectiveness of a predecessor program called administered the Advantage program. To begin with, the City Housing Stability Plus (HSP). HSP provided a five-year rent provided eligible individuals or families with a certification **713 ***303 subsidy that was reduced automatically letter on DHS or HRA letterhead, which was routinely signed each year by 20%. Participants in HSP were required to by city workers from these agencies, sometimes by facsimile remain eligible for public assistance (PA) and to comply with rather than original signature. Several versions of this letter all PA requirements. Two problems became apparent over included the following subject linein boldface type: “Re: time as a result. First, some tenants limited the hours they Advantage Program (Guaranteed Rent Not Tied to [PA] ).” worked because a higher income would render them ineligible for PA and, consequently, the HSP rent supplement. Second, The certification lettergenerally informed recipients that landlords grew reluctant to participate in this program they were “now eligible for the Advantage rental assistance because subsidies were cut off whenever a tenant's PA case program”; and set out the certification and expiration dates, was sanctioned or closed, thus interrupting the flow of the length of time that the certification would be valid, the rental revenue. 1Under the Advantage program, by contrast, total maximum rent allowed, the monthly tenant contribution landlords were assured that changes in a tenant's PA status (based on total gross household income as of the certification would not disrupt payment of the rent subsidy over the course date) and the maximum subsidy amount. The letter also stated of the lease. that “[t]he Advantage **714 ***304 program guarantees *561 that the subsidy portion of the rent will be paid directly *560 There were various versions of the Advantage to your landlord for one year,” and that a “second year of program, with differing eligibility requirements. For example, rental assistance under Advantage” was available if the tenant the program made rent subsidies payable to landlords for met the eligibilitycriteria.Recipients were encouraged to households where at least one adult worked 20 hours or show the letterto prospective landlords and brokers when more weekly at minimum wage or above (Work Advantage), searching for apartments. received a fixed income benefit such as Supplemental Security Income or Social Security Disability Insurance At lease signing, the tenant subscribed a participant (Fixed Income Advantage) or had an active case with the statement of understanding, which indicated that “[u]nder City's Administration for Children's Services while in shelter the Advantage Program, [the City] will pay a portion (Children Advantage). In general, the family or single adult of my monthly rent (over and above [the tenant's] had to have resided in shelter for a certain number of days, monthly rent contribution) directly to my Landlord.” As a and have an active PA case and a gross household income not “condition” of “participation” in the program, the tenant exceeding a specified percentage of the federal poverty level. made 22 “commitments,” which included understandings and agreements to file for work supports and tax credits, The Advantage program was carried out through a lease notify HRA of a change in address, seek appropriate services between landlord and tenant to which the City was not a party, to maintain the tenancy, repay the security deposit and and four documents drafted by the City: a certification letter, certain other payments if failing to move into the apartment participant statement of understanding, landlord statement of after signing the lease, cooperate with the City in its understanding and lease rider. These four documents differed administration of the program and take part in program depending on the program type and participant(family or surveys and publicity. The participant statement was signed single adult), vintage or agency, but contained the same by adult household members, who represented that they basic provisions. The Advantage program was approved by had “read and under[stood their] obligations under [the © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2 FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022 NYSCEF Zheng v. DOC. City38 NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023 973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091 participant statement]”; and by a city case manager and/or Faced with the imminent loss of two thirds of the program's housing specialist,who “confirm[ed] that all present adult funding, the City closed the Advantage program to entrants in household members have verbalized their understanding [of] mid-March 2011, and informed participants that their rental the agreements outlined in this document, and that all adult subsidies would end on April 1, 2011, the beginning of the household members have signed and received a copy of this State's fiscal year. agreement.” On March 28, 2011, plaintiffsJasmine Zheng and A.T., 3 Also at lease signing, the landlord (or an authorized on behalf of themselves and all others similarly situated, representative) subscribed a landlord statement of brought this lawsuit against the City as well as DHS and understanding, which specified that the City “will issue” or HRA and their respective commissioners (collectively,the “will pay” rent subsidies directly to the landlord on behalf City). Plaintiffs alleged that they were “Advantage recipients, of the tenant, who remained “responsible for paying directly now Advantage tenants,” suing on behalf of themselves and a to ... the Landlord, a monthly rent contribution” in a specified class consisting of “approximately 15,000 current Advantage amount “to cover the remaining portion of the rent under the Tenants,” and claimed that the City was contractually Lease and Rider.” Further, as a “condition” to “participation” obligated to continue to pay the rent subsidies provided in the program, the landlord made 12 “commitments,” which for under the Advantage program. They sought specific included understandings and agreements not to charge an performance of this alleged contract; a declaratory judgment Advantage tenant “any amount” beyond the agreed-upon rent; that the City was “contractually obligated to continue to and to offer the apartment at the same level of rent for a secondmake Advantage subsidy payments *563 to Advantage year, pay for heat and water and, in the event an Advantage Tenants' landlords for the remainder of [the alleged contracts] tenant vacated the premises “due to an eviction or move,” and for a second year if the Advantage Tenants [met the return any prepaid rent to the City or, at the City's option, City's] eligibility criteria”; injunctive relief to prevent the City allow another program participant to reside in the apartment from discontinuing rent subsidy payments to landlords before for the remainder of the lease's term. expiration of the alleged contracts; and “injunctive relief to prevent [the City] from taking Advantage Tenants' property Lastly, at lease signing the tenant and landlord both signed a interestswithout due process of law.” Basically, plaintiffs rider to the landlord's standard lease. In the rider, the tenant were looking for the City to subsidize their leases for a full *562 “agree[d] [to] authorize[ ]” the City to pay “rental two years, notwithstanding the loss in the interim of state assistance directly to the Landlord.” 2 The rider also generally and federal funding for this purpose. Supreme Court signed reiteratedthe landlord'sobligations set out in the landlord the accompanying order to show cause, thereby directing statement. Additionally, the landlord “acknowledge[d] that ... a hearing on plaintiffs'request for injunctive relief and the amount and duration” of subsidies was “subject to class certification, and temporarily restraining the City from all applicable rules and requirements” of the Advantage discontinuing the rent subsidies. program, and agreed to make the apartment available for inspection. If the landlord “materially violate[d]” any of the On May 2, 2011, Supreme Court entered a decision and order terms of the lease or rider, the tenant could terminate the lease, denying plaintiffs' motion for a preliminary injunction and the and the landlord was barred from participation in the program. City's cross motion to dismiss the complaint (2011 N.Y. Slip A city worker signed the lease rider as either a DHS or HRA Op. 31120[U] [NY County 2011] ). Based on her review of the witness. “program documents” (i.e., the certification letter, participant and landlord statements of understanding and the lease rider), The Advantage program was funded in equal parts by the the judge concluded that the complaint “survive[d]” the city,state and federal **715 ***305 governments. But City's motion to dismiss, but that plaintiffs had not shown the Governor's executive budget for fiscal year 2011–2012, “a likelihood of success on their claims that the program submitted to the Legislature on February 1, 2011, did not documents constitute enforceable contracts” (id. at *26). 4 include an appropriation for the program. Although the City Supreme Court, however, continued the temporary restraining aggressively lobbied the State for the Advantage program's order for 10 days to permit plaintiffs the opportunity to seek continuation, funding was not restored in the subsequently a stay from the Appellate Division. enacted state budget; once state financial support was withdrawn, federal moneys were also no longer available. © 2023 Thomson Reuters. No claim to original U.S. Government Works. 3 FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022 NYSCEF Zheng v. DOC. City38 NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023 973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091 Plaintiffs filed a notice of appeal with the Appellate Division circumstances, the situation of the parties and the objectives on May 10, 2011, and on May 12, 2011, they moved they were trying to attain.” for injunctive **716 ***306 relief.On June 2, 2011, the Appellate Division granted plaintiffs'motion “to [the] After “viewing the evidence as a whole” in light of these extent of directing [that the Advantage program] payments ... principles, Supreme Court “conclude[d] that [the City] did not be maintained pending hearing and determination of the manifest an intent to be contractually bound to provide the appeal” (2011 N.Y. Slip Op. 74744 [U] [2011] ). benefits associated with the Advantage program.” While the judge also expressed her belief that “neither the tenants nor Following an expedited, five-day nonjury trial in June and the landlords manifested an intent to be contractually bound,” July and the completion of posttrial submissions on August *565 she added that “it would not matter even if they did” 11, Supreme Court issued a decision dated September 13, because “the requirement of intent must be mutual.” She then 2011 in which she held that reviewed the proof that supported her finding that the City lacked the intent to be bound. *564 “the Advantage program, no matter how laudable its goals, is nothing more than a social benefit program, which First,there were “no formal contracts” between the City [the City] had the right to terminate based upon the lack and tenants or the City and landlords. As a result, plaintiffs of funding available for its continuation. [The City has] no relied on the four “program documents” (the certification ongoing obligation, contractual or otherwise, to continue letter, participant and landlord statements of understanding the Advantage Program.” and lease rider) to argue that the City intended to be contractually obligated to fund plaintiffs' rent subsidies under The judge observed that “[w]hile a social services program the Advantage program. With respect to these documents, can be structured in such a way as to be operated and the judge addressed the parties' disputes over the importance implemented through enforceable contracts,” plaintiffs were of the presence of the signatures of city workers on certain required to prove by a fairpreponderance of the evidence of them. She determined that the “confirmation **717 that, in this instance, enforceable contracts did, in fact, exist ***307 signed by a city caseworker on the bottom of the between tenants and the City or landlords and the City. participant statement “[did] not manifest any intent by [the She listed the elements required for contract formation and City] to enter into a contractual relationship”; and neither did pointed out that the parties did not dispute “capacity to the signature of a city caseworker as a witness to the lease contract” or that “if the court were to find that[the City rider. She noted that the certification letter was “signed by had] entered into enforceable contracts with the Advantage NYC representatives,” sometimes by facsimile, but, contrary Landlords, the Advantage Tenants [would] have standing to to the City's arguments, “the fact that each signature was enforce them as third party beneficiaries.” She then turned to not original [was] not legally significant.”Supreme Court the two elements of contract formation disputed by the parties added that “[w]hile [the City could not] rely on the lack of a —mutual assent and consideration. signature on the certification letter to disprove its intention to be bound, the court still [would] need[ ] to look at the content With respect to mutual assent, Supreme Court remarked of the documents and the circumstances of their making in that “[w]hile a formally executed document is not always determining mutual assent.” necessary,” the proponent of the existence of a contract— here, plaintiffs—“must still prove an intent of the parties to The judge described “language used in the program be bound.” Citing our decision in Brown Bros., the judge documents” as “[m]ost important” in ascertaining whether stated that “[i]n finding [intent to be bound], the court does there was contractual intent,followed by “evidence in the not depend on the subjective intent of the parties, [but] form of collateral writings (e.g. promotional materials) and rather ...looks to objective manifestations of the intent of what the parties said and did at the time the program was the parties as gathered by their expressed words and deeds.” implemented”; and “[t]he historical context of the formation In undertaking this analysis, “[t]he parties'communicated of the relationships.” She added that “the unexpressed expressions are interpreted objectively to give effect to the subjective thinking of the parties at the time the program was reasonable expectations of the parties, not necessarily their implemented and/or the documents signed or generated” was actual expectations.” Further, “[t]he fact finder should not put “[n]ot relevant.” Supreme Court then reviewed the program disproportionate emphasis on any single act, phrase or other documents in detail. expression, but instead,should consider the totalityof the © 2023 Thomson Reuters. No claim to original U.S. Government Works. 4 FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022 NYSCEF Zheng v. DOC. City38 NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023 973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091 rental assistance payments were benefits and that the The judge stressed the absence of such “traditional contract tenants and landlords had to fulfill conditions to participate phrases” as “ ‘the parties agree’ ” or “ ‘the parties covenant.’ ” in the program” (emphasis added). Instead, these documents consistently referred to Advantage as a “program.” And while “[t]he documents [had] program Thus, Supreme Court found that the certification letter ‘conditions' for tenants and landlords ... [t]he language and promotional documents “do not, when read as a [did] not expressly impose any mutuality of obligation on whole, contain *567 a contractual guarantee of payment [the City].” Additionally, “representation[s] that [the City] if the program is no longer funded.” She called plaintiffs' will pay or will issue checks” merely “set [ ] out the argument that the City might have included language in the program benefits” and were *566 “entirely consistent with program documents stating that payments were contingent on the administration of the Advantage program,” ratherthan continued program funding “a red herring” because “[t]his “prov[ing] contractual obligations.” language would only be important if there was a contract between the parties” in the first place. Supreme Court then considered the word “guarantee,” which was “more problematic” for the City “because ‘guarantee’ is Supreme Court also assessed the evidence of the City's a contractual term, which generally refers to an obligation communications with landlords to promote the Advantage to be responsible for the debt of another.” She added, program, which belied any intent on the part of the City however, that “there are times when, depending on the to be bound contractually. Specifically, the judge found that context of the use of the word, no binding obligation is during meetings held by the City “to induce the landlords created,” so “[i]t is important ... to understand the context in to participate in the Advantage program ... landlords asked which [the City] used ... the term guarantee in program or [the City] to obligate [itself] to the leases. Whenever these other documents.” Here, the certification letter was the only suggestions were made, [the City] made it clear to landlords program document to use the word “guarantee.” Specifically, that the lease obligations would be between the landlord and these letters typically included this word in the subject line— the tenant and that NYC would not obligate itself.” 5 i.e., “Re: Advantage Program (Guaranteed Rent Not Tied to [PA] )—and referred to the subsidies as being “guaranteed for The judge contrasted this objective contemporaneous up to one year.” The judge noted that the word “guarantee” evidence of the City's intent with the testimony of A.T. also appeared in promotional materials given to landlords and and her landlord at trial as to their after-the-fact professed brokers. subjective belief that they had entered into contracts with the City. Moreover, “[t]estimony by other landlords, real Supreme Court then found that estate brokers and property managers[ ] indicates they either had no understanding about whether they had a contractual “[t]he use of the word guarantee was deliberate and made relationship with [the City] or they understood they had to induce landlords to participate in the Advantage rental no such relationship.”Indeed, “a real estate broker with assistance program. The word was used to differentiate extensive experience about rental assistance programs,” who the Advantage program from predecessor programs [i.e., was called by plaintiffs, “testified that he did not believe [the HSP] where a disruption in a tenant's public assistance City] had entered into contracts with individual landlords, case, for any reason whatsoever, would interrupt the rental and, further, that it never entered his mind to suggest that NYC subsidy payments to a participating landlord. Under the Advantage program, the guarantee was that the rental sign a separate contract with the landlords.” 6 She added, assistance benefit would be paid to landlords, even if however, that **719 ***309 “these varied subjective the tenant's public assistance payment was interrupted *568 understandings ... [were] not probative on the issue of for any reason. This meaning was communicated to mutual assent.” landlords and/or their representatives in meetings and fairsthat [the City] held to induce landlords to **718 Next, Supreme Court rejected plaintiffs'argument that the ***308 participate in the program. The certification certification letter constituted an offer accepted by the tenants letters'references to guarantees of rent are expressly and landlords “by their actual participation” in the Advantage ‘not tied to public assistance payments.’ The program program because “it lack[ed] the requisite specificity”: “the documents and the promotional material pervasively used specific landlord was not identified, the specific apartment language indicating that Advantage was a program, that was not identified, the term of the lease was not identified, © 2023 Thomson Reuters. No claim to original U.S. Government Works. 5 FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022 NYSCEF Zheng v. DOC. City38 NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023 973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091 nor were all of the conditions, as otherwise stated in the the interlocutory order, and that the preliminary injunction participant statement, the landlord statement and lease rider.” “must be dissolved since the purpose of a preliminary injunction is to maintain the statusquo while an action is Plaintiffsargued there was consideration for their alleged pending” (id. at 413, 938 N.Y.S.2d 29). contracts with the City because “they entered into contracts with private landlords for rents that they could not otherwise On February 16, 2012, a separate panel, with one Justice afford,” and “obtained employment and incurred expenses for dissenting, denied plaintiffs' motion for a further stay pending such things as child care, all in connection with fulfilling their determination of their appeal from the final judgment (2012 obligations” under the Advantage program. Supreme Court N.Y. Slip Op. 64817[U], 2012 WL 539213 [1st Dept.2012] disagreed, though, “[s]ince participation in the Advantage ). On March 20, 2012, the same panel, with the same Justice program was required as part of continued eligibility [for] dissenting, affirmed Supreme Court's order and judgment temporary housing”; therefore, “the tenants' requirements of dismissing the complaint (93 A.D.3d 510, 940 N.Y.S.2d 582 eligibility for the Advantage program [did not] constitute [ ] [1st Dept.2012] ). The Appellate Division concluded “that the consideration that would support a contract” with the City. trial court correctly found that the Advantage rent subsidy program for the homeless was simply a social services Further, program, and that [the City] did not intend to be bound contractually” (id. at 511, 940 N.Y.S.2d 582). “[the] argument[ ] that Advantage Tenants gave up other available housing and/or programs to participate in the The court cited our decision in Brown Bros. as setting out Advantage program[ ] was never proven at trial. In fact, the proper framework for resolving the factual question of there was testimony ... that the Advantage program was contractual intent, whereas “plaintiffs and the dissent place[d] perceived as a means to fill what was then the prevailing undue emphasis on the trappings of contract language time gap in the availability of section 8 housing.” 7 such as ‘guarantee’ or ‘will pay,’ construing them as legal promises *570 rather than mere assurances” (id.).The As the judge commented, while section 8 housing “was Appellate Division, like Supreme Court, found that the word always *569 subject to long waiting lists,”by 2010 it “guarantee” was intended “to allay fears that rents would had become “virtually unavailable, due to severe budget not be paid in the absence of public assistance, as had often cutbacks.” happened under previous subsidy programs”; and that “the signing procedure ...was meant to accomplish no more Supreme Court also disagreed with plaintiffs' “collateral than ensure that participants were aware of the terms of the argument (raised in the context of consideration) that, absent [Advantage] program” (id.). “Even if the tenant participants a contractual relationship, the Advantage landlords would and the landlords intended to be contractually bound,” the not have participated in the program,” based on the history court continued, of landlord participation in the City's rental assistance programs. Finally, the judge remarked that plaintiffs' claims of “there [was] no enforceable contract in either instance entitlement to a second year of eligibility under the Advantage because [the City] profess[es] to have understood the program and of due process violations “fail[ed]” in view documents differently with respect to their basic material of her finding that there were no contractual obligations. nature [and thus] there was no meeting of the minds. Supreme Court's decision was entered by order and judgment “Ultimately, as [Supreme Court] properly found at the on October 6, 2011. Plaintiffs took an appeal. nonjury trial, all of the surrounding circumstances lead to the ineluctable conclusion that the Advantage program was On February 2, 2012, the Appellate Division granted the a social service program no different from any other, and City's motion to dismiss plaintiffs' appeal of Supreme Court's not a contractual obligation undertaken by government” interlocutory order entered on May 2, 2011 and to vacate the (id. at 512, 393 N.Y.S.2d 350, 361 N.E.2d 999 [citation stay; and denied plaintiffs' motion seeking to consolidate the omitted] ). appeals of Supreme Court's two orders and continue the stay (92 A.D.3d 412, 938 N.Y.S.2d 29 [1st Dept.2012] ). The court Although the Appellate Division did not need to reach the held that the entry of final judgment dismissing the complaint issue of whether there was “consideration for plaintiffs' terminated plaintiffs' right to**720 ***310 appeal from becoming participants in the Advantage program,” the court © 2023 Thomson Reuters. No claim to original U.S. Government Works. 6 FILED: NEW YORK COUNTY CLERK 01/13/2023 11:17 AM INDEX NO. 452058/2022 NYSCEF Zheng v. DOC. City38 NO. of New York, 19 N.Y.3d 556 (2012) RECEIVED NYSCEF: 01/13/2023 973 N.E.2d 711, 950 N.Y.S.2d 301, 2012 N.Y. Slip Op. 05091 nonetheless observed that “a promise to perform an existing obligation is not valid consideration”; and here, “[p]ursuant On March 29, 2012, plaintiffs sought, by order to show to 18 NYCRR 352.35, plaintiffs were obligated to cooperate cause, permission to appeal, an expedited appeal with a time and accept the housing offered by the Advantage program” preference and interim relief; on March 30, 2012, a Judge of (id.). As a result, plaintiffs' “claim of providing considerationthis Court signed the order to the extent of bringing on the by suffering the detriment of leaving shelters and of leasing motion for permission and preference. On May 8, 2012, we apartments that cost more than they could afford” was without granted plaintiffs leave to appeal and denied their request for merit (id.). interim relief (19 NY3d 849, 946 N.Y.S.2d 103, 969 N.E.2d 220 [2012] ). We now affirm. The dissenting Justice concluded that the City implemented the Advantage program through enforceable contracts by “agree[ing] to pay plaintiffs' rent in return for [their] leaving II. the shelter system [and agreeing] to pay rent so the landlords would provide housing for the ... program”; and that “[t]hese Brown Bros. presents the template for deciding a case, such as bargained for exchanges support[ed] the existence of a this one, where the issue is “whether the course of conduct and contract, primarily between the participants and the City, but communications between [the parties have] created a legally also between the landlords and the City” (id. at 513, 393 enforceable agreement” (Brown Bros., 41 N.Y.2d at 398, 393 N.Y.S.2d 350, 361 N.E.2d 999). She disagreed with Supreme N.Y.S.2d 350, 361 N.E.2d 999). There, in January 1967, the Court's finding thatmutual assent and consideration were owner and builder of a shopping plaza entered into a written lacking. contract with a general contractor to construct a section of the plaza. The general contractor, in turn, subcontracted with Addressing plaintiffs first, the dissenting Justice stated that, Brown for the electrical work. Starting as early as March, the in her view, “there**721 ***311 [was] a contract between general contractor, although more than current in the receipt the City and the *571 Advantage participants by virtue of of moneys from the owner/builder, was running behind in the Certification Letter,the Participant Statements and the itspayments to Brown. As a result,Brown threatened in riders to the leases through which the City agreed to pay writing to claim a breach of contract unless the payments plaintiffs' rent for two years” (id. at 515, 393 N.Y.S.2d 350, were brought up to date. Then in July, the general contractor 361 N.E.2d 999). She construed the certification letter as an abandoned the job. offer, which Advantage participants accepted by signing the participant statement and lease rider; she found it “clear [that] *572 Between March and July,Brown and the owner/ plaintiffs provided consideration to support the contract” by builder had discussed ways and means to secure payment moving out of shelters and saving the City money which for Brown. And with the owner/builder's knowledge, consent would otherwise have been spent on the shelter system (id. at and cooperation, Brown continued to perform electrical work 516, 393 N.Y.S.2d 350, 361 N.E.2d 999). on the project after the general contractor departed. Brown finished this work by the end of August, and sent the owner/ Additionally, the dissenting Justice concluded that the City builder an invoice for the amount stilldue. The owner/ had contracted with landlords. Based on her review of the builder wrote back in September that it would send its check program documents, she opined that “[a] clearer indication of for “payment of the balance” upon receipt of underwriters' assent to guarantee rent payment would be hard to imagine” inspection certificatesfrom Brown. When Brown sent the as a consequence of the City's use of the word “guarantee” certificates,though, the owner/builder did not make any and such phrases as “will pay” and “shall pay” in program payment, prompting Brown to sue. In the ensuing litigation, documents, which thereby “demonstrate[d] an intent to bind the owner/builder argued that it had not entered into a contract