Title: Brad H., et al. v. The City of New York, et al.

State: new-york

Issuer: New York Appellate Court

Document:

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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 126  
Brad H., et al.,
            Appellants,
        v.
The City of New York, et al.,
            Respondents.
Christopher K. Tahbaz, for appellants.
Drake A. Colley, for respondents.
GRAFFEO, J.:
This case involves a dispute over the status of a
negotiated settlement agreement pertaining to New York City's
duty to provide mental health services to certain inmates in its
jails.  We are asked whether the term of the agreement expired
before plaintiffs filed a motion in Supreme Court seeking to
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No. 126
extend the City's obligations.  Applying our State's traditional
principles of contract interpretation, we hold that plaintiffs
sought relief prior to termination of the settlement agreement
and their motion was therefore timely filed.
I
Plaintiffs initiated this action in 1999, seeking
injunctive and declaratory relief for themselves and other
mentally ill inmates in New York City jails.1  According to
plaintiffs, the City had failed to satisfy its duty under the
State Constitution and Mental Hygiene Law to provide adequate
"discharge planning" services for mentally ill persons completing
their terms of incarceration.  More particularly, plaintiffs
requested that the City establish discharge planning that
included continuing access to medication, community-based mental
health treatment, housing and public benefits.  Plaintiffs were
certified as a class and granted a preliminary injunction (185
Misc 2d 420 [Sup Ct, NY County, 2000], affd for reasons stated
276 AD2d 440 [1st Dept 2000]).  
Protracted negotiations culminated in a settlement
agreement that was approved by Supreme Court on April 4, 2003. 
Because the agreement required the City to substantially comply
with the settlement requirements 60 days later, the
"implementation date" of the settlement -- i.e., the day
1 The complaint named a number of defendants who we will
collectively refer to as "the City."
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compliance by the City became obligatory -- was June 3, 2003.
The City's fundamental obligation under the negotiated
settlement was to provide plaintiffs with individualized,
clinically adequate and appropriate "discharge planning."  The
goal was to ensure that mentally ill inmates would receive
medical treatment and other services immediately upon release or
transfer from a City jail by transitioning them into community-
based mental health treatment and support services.  In
furtherance of this objective, the agreement included detailed
provisions setting forth the City's responsibilities in this
regard.
The parties further agreed that two "compliance
monitors" would be appointed to oversee the City's efforts by
evaluating "the provision of Discharge Planning in City Jails and
[the City's] compliance with the terms of" the settlement.  The
monitors were to be appointed and "begin the performance of their
duties . . . no later than the Implementation Date."  The
agreement also described the means by which the compliance
monitors would evaluate and report on the City's fulfillment of
its obligations.  The monitors' first report to the court was due
in September 2003, three months after the specified
implementation date.
The key provision of the agreement at issue in this
appeal is the termination clause.  The parties stated that the
agreement would "terminate at the end of five years after
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No. 126
monitoring by the Compliance Monitors begins pursuant to § IV" of
the settlement agreement.2  If, however, plaintiffs could
demonstrate before the agreement expired that the City had failed
to adequately discharge its responsibilities for two years, they
could ask Supreme Court to extend the settlement for an
additional two-year period so that violations could be corrected
before the agreement terminated.  Thus, the only way to determine
when the settlement was set to expire -- and whether a motion by
plaintiffs to extend the terms of the settlement was timely filed
-- is to establish the date when monitoring began.
The two monitors were appointed by Supreme Court on May
6, 2003.  According to the first report they issued in September
2003, the monitors "began to engage in some limited reviews of
draft policies and procedures" on May 19th, met with City
attorneys to discuss the draft policies on May 22nd, and observed
a training session on May 28th of persons who would conduct the
individualized discharge planning for inmates.  The City's new
discharge planning policies and procedures went into effect on
June 3rd -- in compliance with the implementation date set forth
in the settlement agreement.  The monitors, however, did not
begin their work monitoring the City's activities "in earnest"
until June 25, 2003 and, even as of the filing of the September
2 Over the course of the agreement, the parties consented to
extensions that tolled the expiration date by 356 days. 
Therefore, the expiration date is to be calculated using five
years plus 356 days.
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No. 126
2003 report, they were unable to provide an opinion regarding the
City's compliance with the agreement.  
In 2009, the parties were unable to resolve a notice to
cure noncompliance issued by plaintiffs and, on May 22, 2009,
plaintiffs moved for a temporary restraining order and a
preliminary injunction requiring the City to abide by its duties
under the settlement agreement.  The City cross-moved to dismiss,
claiming that the settlement commenced not on the implementation
date, but upon the appointment of the monitors on May 6, 2003. 
Consequently, the City contended that plaintiffs' motion was
untimely because the settlement had expired in April 2009 (taking
into account the agreed-to extensions).
Supreme Court denied the City's cross motion,
concluding that the five-year term began on the implementation
date and that the expiration date occurred on May 25 or 26, 2009,
thereby rendering plaintiffs' motion timely.  The Appellate
Division reversed in a 3-to-2 decision, holding that the five-
year term commenced when the monitors engaged in their first
affirmative act on either May 19th or 28th in 2003, which
produced a termination date of either May 10th or 19th in 2009,
both of which were prior to the filing date of plaintiffs' motion
(77 AD3d 103, 107 [1st Dept 2010]).  The dissenters concluded
that the agreement was ambiguous and, as such, the parties'
course of conduct -- treating the commencement date of the five-
year period as no earlier than the implementation date of June 3,
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No. 126
2003 -- should be used to calculate the termination date.  After
we dismissed plaintiffs' appeal as of right for lack of finality
(15 NY3d 937 [2010]), the Appellate Division granted leave to
appeal and certified a question of law to us, which we now answer
in the negative.
II
Plaintiffs assert that their May 2009 motion premised
on the City's alleged noncompliance was filed before expiration
of the settlement agreement because the parties' agreement
unambiguously provides that monitoring was not to begin before
the implementation date of June 3, 2003.  According to
plaintiffs, the purpose of the settlement was to institute
adequate discharge planning and the agreement did not obligate
the City to provide that service until the implementation date. 
The City, in contrast, claims that monitoring began no later than
May 28, 2003 (when a monitor observed a training session) because
it was possible for the monitors to begin evaluating the City's
plans for compliance before the implementation date.  The City
also argues that if the parties intended the five-year period to
start on the implementation date, the termination provision would
have specifically referred to that event rather than the
commencement of monitoring activities.
The settlement agreement is a contract and its meaning
must be discerned under several cardinal principles of
contractual interpretation.  A written agreement that is clear,
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No. 126
complete and subject to only one reasonable interpretation must
be enforced according to the plain meaning of the language chosen
by the contracting parties (see e.g. Vintage, LLC v Laws Constr.
Corp., 13 NY3d 847, 849 [2009]; Samuel v Druckman & Sinel, LLP,
12 NY3d 205, 210 [2009]; Greenfield v Philles Records, 98 NY2d
562, 569 [2002]).  To determine whether a writing is unambiguous,
language should not be read in isolation because the contract
must be considered as a whole (see e.g. Consedine v Portville
Cent. School Dist., 12 NY3d 286, 293 [2009]; Bailey v Fish &
Neave, 8 NY3d 523, 528 [2007]; Vermont Teddy Bear Co. v 538
Madison Realty Co., 1 NY3d 470, 475 [2004]).  Ambiguity is
determined within the four corners of the document; it cannot be
created by extrinsic evidence that the parties intended a meaning
different than that expressed in the agreement and, therefore,
extrinsic evidence "may be considered only if the agreement is
ambiguous" (Innophos, Inc. v Rhodia, S.A., 10 NY3d 25, 29 [2008]
[internal quotation marks omitted]; see e.g. Goldman v White
Plains Ctr. for Nursing Care, LLC, 11 NY3d 173, 176 [2008]; Van
Kipnis v Van Kipnis, 11 NY3d 573, 577 [2008]).  Ambiguity is
present if language was written so imperfectly that it is
susceptible to more than one reasonable interpretation (see e.g.
Evans v Famous Music Corp.,  1 NY3d 452, 458 [2004]; Nissho Iwai
Europe v Korea First Bank, 99 NY2d 115, 121-122 [2002]).
In this case, the provision at issue in the settlement
agreement -- the clause that establishes termination of the
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No. 126
settlement -- reads:  "five years after monitoring by the
Compliance Monitors begins."  But when did monitoring begin?  In
our view, the answer to this question becomes clear and
unambiguous if the agreement is read as an integrated whole with
a focus on the two fundamental purposes that the monitors were
intended to serve.  
Paragraph 108 of the agreement states that their
function was "to monitor [1] the provision of Discharge Planning
in City Jails and [2] Defendants' compliance with the terms of
this Agreement."  The Appellate Division believed that it was
possible for the monitors to undertake their first responsibility
prior to the implementation date because the development of the
discharge planning process necessarily occurred before any
inmates were actually evaluated.  Paragraph 1 (bb), however,
explicitly states that "discharge plan" refers to "the plan
describing the manner in which an individual will be able to
receive a clinically appropriate level of continuing mental
health treatment" and other assistance "immediately upon his or
her release from or transfer out of a City Jail" -- not the
preliminary planning and the organizational steps the City needed
to take before the program could be initiated.  Thus, paragraph
108's reference to discharge planning does not include the
initial development of substantive and procedural discharge
planning guidelines undertaken before the actual implementation
and evaluations of inmates occurred on or after June 3, 2003. 
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No. 126
Indeed, the City now concedes that the individualized discharge
planning process did not commence until the implementation date
arrived.  Because these services were not available to inmates
earlier than that date, it necessarily follows that there were no
discharge plans for the monitors to oversee until June 3, 2003.3
The monitors' second objective -- to assess the City's
compliance with the settlement -- also leads to the conclusion
that the five-year term began on the implementation date.  It is
true, as the City observes, that in various sections of the
settlement document there is an indication that the monitors
could perform certain duties in anticipation of the
implementation date.  Paragraph 127 of the agreement, for
example, suggests that the monitors could review drafts of
manuals, training materials and other documents before the
implementation date.  In fact, the monitors conducted such a
review on May 19, 2003.  The City also notes that the monitors
had access to staff and facilities, and a monitor attended a
training session on May 28th.  Such attendance was listed in the
3 Paragraph 1 (cc) of the agreement, relied on in the
dissent, is entirely consistent with this result.  It defines
"discharge planning" as the "process of formulating and
implementing the Discharge Plan," and from this clause the
dissent concludes that the agreement "contemplated monitoring of
the creation of the Discharge Plans" (dissenting op at 3).  We do
not disagree with this point.  However, the flaw in the dissent's
reasoning is that it fails to recognize that a "discharge plan"
(as that term is defined in paragraph 1 [bb]) refers to
evaluation of the needs of individual inmates.  Such personalized
evaluation was not available until June 3, 2003.
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No. 126
agreement as one of the means by which the monitors could
discharge their responsibilities.
But the fact that the monitors began preparatory work
before the implementation date is not dispositive.  The
termination provision was triggered five years after the
commencement of monitoring, not the start of planning or
preparatory work.  And compliance could not be monitored before
it was required by the agreement or attempted by the City.  It
simply was not possible for the monitors to review whether the
City was in "compliance with the terms of th[e] Agreement" before
June 3, 2003 because it is undisputed that the City had not yet
begun the individualized inmate discharge planning process and it
was not contractually obligated to be in compliance until the
implementation date (see paragraph 160 ["Defendants and their
contractors shall be in substantial compliance with the terms of
this Settlement Agreement at all times after the Implementation
Date"]; see also paragraph 105 [the City "shall complete the
implementation of all aspects of this Settlement Agreement no
later than the Implementation Date"]).  Stated differently, the
monitors could review whether the City abided by the terms of the
settlement agreement only after the City began to issue discharge
plans for inmates or compliance became obligatory, whichever
occurred first.4 
4 Certain portions of the settlement agreement indicate that
it was possible for the City to begin discharge planning before
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No. 126
The settlement, in essence, did not give plaintiffs
five years of involvement with monitoring; it gave them five
years of mental health service discharge planning for inmates
that was to be monitored for compliance.  As a result, these two
concepts -- discharge planning and oversight of the program --
were necessarily interrelated.  To read the agreement as creating
monitoring before compliance was necessary or discharge planning
and services were actually available to inmates is inconsistent
with the language of the settlement, would undermine its
overarching purpose and is foreclosed by our precedent on
contractual interpretation.  
Because discharge plans for eligible inmates and the
monitoring of the City's compliance obligations did not begin
until June 3, 2003, we hold that the monitoring functions
occurred no earlier than that date and the agreement did not
terminate until at least five years and 356 days later on May 25
or 26, 2009.  Since plaintiffs filed their motion for a temporary
restraining order and a preliminary injunction on May 22, 2009,
Supreme Court did not lack jurisdiction over the case and it
the implementation date, but the fact remains that it did not do
so.  That possibility also explains why the parties did not
establish a specific implementation date in the termination
clause -- if the City had begun discharge planning at some
earlier point in time, the monitors could have started their
compliance review on a date earlier than the June 3, 2003,
thereby triggering the commencement of the five-year settlement
period.  It is evident that the parties contemplated this
scenario because they stipulated that monitoring should begin "no
later than the Implementation Date."
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No. 126
properly denied the City's cross motion to dismiss.5
Accordingly, the order of the Appellate Division should
be reversed, with costs, the order of Supreme Court reinstated
and the certified question answered in the negative.
5 In light of this determination, the other issue raised by
plaintiffs is academic.
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Brad H. et al. v City of New York et al.
No. 126 
PIGOTT, J. (dissenting):
Because there is nothing in the record to support the
theory that monitoring began on or after June 3, 2003, I would
affirm the order of the Appellate Division and answer the
certified question in the affirmative, holding that monitoring
began on May 19, 2003.  For that reason, I respectfully dissent.
The Stipulation of Settlement provided, in paragraph
193, that it would "terminate at the end of five years after
monitoring by the Compliance Monitors begins pursuant to § IV". 
We are called upon to determine, as a matter of law, when
monitoring began.  The majority opts for the settlement
agreement's Implementation Date – June 3, 2003.  This would have
been an easy date for the parties to choose to mark the beginning
of the five years; after all, the Implementation Date is defined
in the agreement.  But the parties elected not to do so.  In
fact, the theory that monitoring began on or after the
Implementation Date flies in the face of unambiguous language in
§ IV of the agreement, and the undisputed activities of the
Monitors themselves. 
Plaintiffs have two principal arguments in opposition
to defendants' contention that the agreement had expired when
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No. 126
they filed their motion – that monitoring logically could not
begin before the Implementation Date, and that monitoring in fact
did not begin before the Implementation Date.  Both arguments are
contrary to the record.
There is no doubt that the settlement agreement
contemplated the possibility that the Compliance Monitors would
begin monitoring before the Implementation Date; the Stipulation
made sure that the Compliance Monitors would be appointed in time
"so that they could begin the performance of their duties
pursuant to [the] Settlement Agreement no later than the
Implementation Date" (¶ 113 [emphasis added]).  The
Implementation Date was simply a deadline.  As the majority puts
it, "if the City had begun discharge planning at some earlier
point in time, the Monitors could have started their compliance
review on a date earlier than June 3, 2003" (majority op at 11, n
4). 
Section IV, paragraph 108 of the Stipulation gave the
Compliance Monitors a single task, "to monitor," and specified
two objects of that monitoring: "the provision of Discharge
Planning in City Jails and Defendants' Compliance with the terms
of [the Settlement]."  Pursuant to the Stipulation, both
monitoring of Discharge Planning and monitoring of Compliance
could begin before the Implementation Date. 
The majority attempts to defend the position that,
under the Stipulation, it was impossible for the Compliance
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No. 126
Monitors to monitor Discharge Planning until after the
implementation date.  They cite paragraph 1 (bb) of the
Stipulation, which defines a "Discharge Plan" as a "plan
describing the manner in which an individual" will receive mental
health treatment and other assistance immediately upon release or
transfer from a City jail.  According to the majority, the term
"Discharge Planning" in paragraph 108 refers to such Discharge
Plans, which were not available for monitoring until after the
Implementation Date.  However, that argument ignores Paragraph 1
(cc) of the Stipulation, which defines "Discharge Planning," as
"the process of formulating and implementing the Discharge Plan"
(emphasis added).  Because the settlement agreement expressly
contemplated monitoring of the creation of Discharge Plans, there
is no basis for the assertion that monitoring did not embrace the
initial development of discharge planning guidelines before the
actual implementation.  Indeed, under paragraph 127 of the
settlement agreement, defendants had to provide the Compliance
Monitors with materials related to "the provision of Discharge
Planning" that were "in existence on the date on which the
Compliance Monitors are appointed" – i.e. discharge planning
materials that existed before the Implementation Date.
It is also clear that monitoring did as a matter of
fact begin before the Implementation Date.  According to the
Compliance Monitors' First Report, they began on May 19, 2003 to
engage in reviews of defendants' draft policies and procedures,
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No. 126
and to participate in meetings.  One Monitor observed a training
session of persons who would conduct discharge planning – a task
that the Stipulation expressly listed as a "principal means of
monitoring" (¶ 118).  
In the same Report, the Monitors provided a table
outlining "the major monitoring activities" (emphasis added) they
had engaged in.  The table begins with the training observation,
which occurred on May 28, 2003.  Moreover, an invoice, dated
November 3, 2003, charges for the Monitors' services at an hourly
rate, with the first charge incurred on May 19, 2003, the same
date that the Monitors said they began work.  Clearly, the
Monitors considered themselves to have begun monitoring before
the June 3, 2003 Implementation Date.  There is no reason for
disregarding the Monitors' own assessments of when they commenced
monitoring.  
If plaintiffs had wished to ensure five years of
monitoring after the Implementation Date, they could easily have
done so.  Instead they made the agreement terminate five years
after monitoring began, presumably because at the time of the
Stipulation that date remained uncertain.  It may be that they
expected that there would be delays in the appointment of the
Compliance Monitors.  Perhaps plaintiffs wanted to guarantee five
years of monitoring, even if the Monitors started their duties
some time after the Implementation Date.  But when plaintiffs
decided they would be filing an enforcement action, it was
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No. 126
incumbent on them to bear in mind that the Monitors had in fact
started their monitoring duties before the Implementation Date.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order reversed, with costs, order of Supreme Court, New York
County, reinstated, and certified question answered in the
negative.  Opinion by Judge Graffeo.  Chief Judge Lippman and
Judges Ciparick and Jones concur.  Judge Pigott dissents and
votes to affirm in an opinion in which Judges Read and Smith
concur.
Decided June 28, 2011
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