author: Graffeo, J.

text:
    [973 NE2d 703, 950 NYS2d 293]
    Osqugama F. Swezey, Appellant, v Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Respondent, and Philippine National Bank et al., Intervenors-Respondents.
    Argued April 24, 2012;
    decided June 26, 2012

      POINTS OF COUNSEL

      Kohn, Swift & Graf, P.C. (Robert A. Swift, of the Philadelphia bar, admitted pro hac vice, of counsel), and Anderson Kill & Olick, P.C., New York City (Jeffrey E. Glen of counsel), for appellant.
    I. The New York statute of limitations precludes the Republic of the Philippines from being a necessary party in this turnover proceeding. (Guaranty Trust Co. v United States, 304 US 126; Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 5 NY3d 452.) II. Supreme Court correctly exercised its discretion by denying dismissal for failure to join a necessary party. (Aldinger v Howard, 427 US 1; Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801; Wilbur v Locke, 423 F3d 1101; Eclair Advisor Ltd. v Jindo Am., Inc., 39 AD3d 240; Matter of Herald Co. v Feurstein, 3 Misc 3d 885; Plaut v HGH Partnership, 59 AD2d 686; Republic of Philippines v Pimentel, 553 US 851.) III. The Appellate Division erred in according overriding weight to a nonparty’s sovereignty in a CPLR 1001 (b) analysis. (Koehler v Bank of Bermuda Ltd., 12 NY3d 533; Lamont v Travelers Ins. Co., 281 NY 362; Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 5 NY3d 452; Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801.) IV The Appellate Division majority opinion effectively denies to New York litigants the opportunity to contest the accuracy and the bona fides of a foreign sovereign’s determination of its own financial interests in property located in New York. (Republic of Philippines v Pimentel, 553 US 851.) V The Appellate Division erred in holding that human rights victims will be bound by a decision of the Philippine court to which they are not parties. (Hilao v Estate of Marcos, 103 F3d 762; Buechel v Bain, 97 NY2d 295; Baten v Northfork Bancorporation, Inc., 85 AD3d 697; Huntington Natl. Bank v Cornelius, 80 AD3d 245; Siderman de Blake v Republic of Argentina, 965 F2d 699.)

      Sidley Austin LLP, New York City (Daniel A. McLaughlin, A. Robert Pietrzak and Cameron Moxley of counsel), for respondent.
    This Court should not resolve statute of limitations arguments in favor of the Republic of the Philippines and the Philippine Commission on Good Government. (Republic of Philippines v Pimentel, 553 US 851; Baena v Woori Bank, 515 F Supp 2d 414; John J. Kassner & Co. v City of New York, 46 NY2d 544; State of New York v Fenton, 68 AD2d 951.)

      Mayer Brown LLP (Charles A. Rothfeld of the District of Columbia bar, admitted pro hac vice, and Brian J. Wong of counsel) and Mayer Brown LLP, New York City (Michael O. Ware and Andrew J. Calica of counsel), for intervenors-respondents.
    I. The Appellate Division correctly determined that the Republic of the Philippines is a necessary and indispensable party to the turnover proceeding because it is a foreign sovereign that has asserted nonfrivolous claims to the Arelma assets. (Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801; Triangle Pac. Bldg. Prods. Corp. v National Bank of N. Am., 62 AD2d 1017; Republic of Philippines v Pimentel, 553 US 851; Mechta v Scaretta, 52 Misc 2d 696; Schwartz v Public Adm’r of County of Bronx, 24 NY2d 65; County of Los Angeles v Davis, 440 US 625; Taylor v Sturgell, 553 US 880; Minnesota Mut. Life Ins. Co. v Ensley, 174 F3d 977; National Life Ins. Co. v Alembik-Eisner, 582 F Supp 2d 1362; Commerce Funding Corp. v Southern Fin. Bank, 80 F Supp 2d 582.) II. In the event that the court holds that the Republic of the Philippines is not an indispensable party, it should remand the case to the Appellate Division to consider the argument raised by intervenors but not addressed by that court, that Osqugama F. Swezey lacks a judgment that is enforceable in New York. (In re Estate of Ferdinand E. Marcos Human Rights Litig., 536 F3d 980; Glacial Aggregates LLC v Town of Yorkshire, 14 NY3d 127; Crawford v Liz Claiborne, Inc., 11 NY3d 810; De Leon v Marcos, 742 F Supp 2d 1168, 659 F3d 1276.)
   OPINION OF THE COURT

Graffeo, J.

We are asked in this case whether the invocation of sovereign immunity by the Republic of the Philippines in this turnover proceeding requires dismissal of the action under CPLR 1001.

I

Ferdinand E. Marcos was elected president of the Philippine Republic in 1965 and 1969. The constitution of that country, similar to the United States Constitution, limited the chief executive to a maximum of two four-year terms. Under that term limit, Marcos should have left office in 1973.

Rather than relinquishing power, President Marcos imposed martial law on the nation in September 1972, suspended the constitution and seized control of the entire government. He amended the constitution the following year, cementing his status as dictator of the Philippines. In that role, Marcos initiated a campaign of human rights violations against Philippine dissidents that included arrests, torture, summary executions and other actions.

President Marcos also systematically transferred public assets and property to his personal control through various schemes. Over time, he amassed a fortune that was estimated to be worth billions of dollars. Marcos was eventually deposed from power in 1986 and fled to Hawaii.

Almost immediately after President Marcos departed from his country, the Republic of the Philippines organized the Presidential Commission on Good Government (PCGG) for the purpose of identifying, locating and retrieving national assets stolen by Marcos and his administration. The PCGG relied on a 1955 Philippine law, which declared that any property derived from misfeasance in public office was deemed forfeited to the Republic when the misappropriation occurred. In addition to the efforts undertaken by the PCGG, Marcos was sued in a U.S. federal court in Hawaii by approximately 10,000 Philippine victims of his human rights abuses or their survivors, a group that is collectively known as the “Pimentel class.” After Marcos died, the class obtained a judgment against his estate for almost $2 billion (see In re Estate of Marcos Human Rights Litig., 910 F Supp 1460, 1464 [D Haw 1995], affd sub nom. Hilao v Estate of Marcos, 103 F3d 767 [9th Cir 1996]).

Enforcing the judgment proved to be a difficult task, however, because the Pimentel class was seeking to obtain monies and assets also sought by the Republic and PCGG. One such dispute involved the assets of Arelma, S.A., a Panamanian corporation. Marcos had transferred $2 million to the company for deposit in a brokerage account at the New York office of Merrill Lynch, Pierce, Fenner & Smith, Inc. The Republic subsequently discovered that the bearer shares pertaining to the ownership of Arelma (along with funds controlled by several other entities connected to Marcos) were located in Switzerland. At the PCGG’s urging, Swiss authorities froze those assets and the seizure was upheld by Switzerland’s Federal Supreme Court. Those assets, including the Arelma shares, were deposited in an escrow account established by the PCGG at the Philippine National Bank (PNB), pending a determination by a special Philippine anti-corruption court—the Sandiganbayan—as to whether the assets were owned by the Marcos estate or were forfeited to the people of the Republic.

The Republic and PCGG also requested that Merrill Lynch transfer the Arelma brokerage account (valued at approximately $35 million in 2000) to the PNB escrow account. Merrill Lynch declined to do so because of competing claims to the property, including that of the Pimentel class. The brokerage firm then commenced an interpleader action in federal court in Hawaii against a number of parties, among them the Republic, PCGG, Arelma, PNB and the Pimentel class, and deposited the Arelma assets with the court clerk. Invoking sovereign immunity, the Republic and PCGG moved to dismiss the interpleader action pursuant to rule 19 (b) of the Federal Rules of Civil Procedure for failure to join a required party. The motion was denied and the district court awarded ownership of the Arelma assets to the Pimentel claimants. The United States Court of Appeals for the Ninth Circuit affirmed (see Merrill Lynch, Pierce, Fenner & Smith, Inc. v ENC Corp., 464 F3d 885 [9th Cir 2006]).

In 2008, the United States Supreme Court reversed that determination and held that the assertion of sovereign immunity by the Republic and PCGG required dismissal for lack of a required party under rule 19 (b) (see Republic of Philippines v Pimentel, 553 US 851 [2008]). The Supreme Court explained that “where sovereign immunity is asserted, and the claims of the sovereign are not frivolous, dismissal of the action must be ordered where there is a potential for injury to the interests of the absent sovereign” (id. at 867). Observing that the “Republic and the [PCGG] have a unique interest in resolving the ownership of or claims to the Arelma assets,” the Court noted that there was “a comity interest in allowing a foreign state to use its own courts for a dispute if it has a right to do so” (id. at 866). In this regard, the Court explained that the “dignity of a foreign state is not enhanced if other nations bypass its courts without right or good cause” (id.).

Yet, the Supreme Court recognized the interests of the Pimentel class, stating that the passage of time or the occurrence of specific events could alter the balance of the equities under a rule 19 (b) analysis. In particular, a relevant consideration would be “if it appears that the Sandiganbayan cannot or will not issue its ruling within a reasonable period of time” (id. at 873). Similarly, a decision by the Sandiganbayan that the Arelma assets do not belong to the Republic would cause its claim in the interpleader case to be “less substantial” (id.). But if the Sandiganbayan were to rule in favor of the Republic and PCGG, the Republic could waive sovereign immunity and seek enforcement of its judgment in American courts or consent to join an interpleader action (see id.).

As a result of the Pimentel decision in 2008, the federal district court in Hawaii returned the Arelma assets to Merrill Lynch in early 2009. Two events occurred shortly afterward. First, petitioner Osqugama Swezey—a member of the Pimentel class—commenced this CPLR 5225 turnover proceeding in New York Supreme Court against Merrill Lynch seeking to execute the Pimentel $2 billion judgment against the Arelma brokerage account. Second, the Sandiganbayan ruled that the funds Marcos used to establish the Arelma account had been stolen from the Republic and that the company’s assets had therefore been forfeited to the Republic.

In the New York Supreme Court turnover proceeding, PNB and Arelma moved to intervene and requested dismissal of the action under CPLR 1001, asserting that the Republic and PCGG were necessary parties but could not be subject to joinder in light of the assertion of sovereign immunity. Supreme Court denied the motion to dismiss, finding that a balancing of the interests allowed the matter to go forward without the Philippine government as a party (2009 NY Slip Op 32650[U] [2009]). The Appellate Division reversed, concluding that the invocation of sovereign immunity mandated dismissal under CPLR 1001 (87 AD3d 119 [1st Dept 2011]). The Appellate Division then certified a question to us asking if its decision was correctly made.

II

Swezey, representing the Pimentel class, urges us to answer the certified question in the negative and hold that dismissal of this turnover proceeding is not required by CPLR 1001. She contends that the Appellate Division placed undue emphasis on the Republic’s sovereign status and too little weight on the ability of the Pimentel class to challenge the Republic’s claim that it owns the Arelma assets. Swezey also submits that the motion to dismiss should have been denied under Saratoga County Chamber of Commerce v Pataki (100 NY2d 801 [2003]). She further maintains that it is unnecessary to join the Republic as a party in this case because the statute of limitations bars the Republic’s claim to the Arelma account.

Notably, the day after oral argument was heard on the appeal in our Court, a panel of the Philippine Supreme Court affirmed the Sandiganbayan’s decision, ruling that the Arelma assets were forfeited to the Republic (see Marcos v Republic of the Philippines, G.R. Nos. 189434 & 189505 [Sup Ct, 2d Div, Apr. 25, 2012] [Phil]). In light of that decision, Swezey claims that she is not bound by the order awarding the Arelma assets to the Republic since she was not a party to the litigation in the Philippines.

CPLR 1001 (a) states that an individual or entity is a necessary party to litigation “if complete relief is to be accorded between the persons who are parties to the action” or if the entity “might be inequitably affected by a judgment in the action.” Joinder is mandatory if the nonparty is subject to the court’s jurisdiction (see CPLR 1001 [b]). If jurisdiction can be obtained only by the entity’s consent or voluntary appearance—as in the situation where a sovereign nation invokes its right to immunity—“the court, when justice requires, may allow the action to proceed without [the entity] being made a party” (id.). Five factors must be considered in reaching a determination:

“1. whether the plaintiff has another effective remedy in case the action is dismissed on account of the nonjoinder;
“2. the prejudice which may accrue from the nonjoinder to the defendant or to the person not joined;
“3. whether and by whom prejudice might have been avoided or may in the future be avoided;
“4. the feasibility of a protective provision by order of the court or in the judgment; and
“5. whether an effective judgment may be rendered in the absence of the person who is not joined” (id.).

Although a court must consider all five criteria, no single factor is determinative in the discretionary analysis of whether an action may proceed in the absence of a necessary party who is not subject to mandatory jurisdiction (see Matter of Red Hook/ Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 5 NY3d 452, 459 [2005]). The overall statutory design is intended to (1) “guarantee[ ] that absent parties at risk of prejudice will not be ‘embarrassed by judgments purporting to bind their rights or interests where they have had no opportunity to be heard’ ” and (2) “protect against multiple lawsuits and inconsistent judgments” (id. at 458-459, quoting First Natl. Bank of Amsterdam v Shuler, 153 NY 163, 170 [1897]).

Based on these principles, we must first determine whether the Republic of the Philippines is a necessary party to this turnover proceeding. The Republic submits that the Arelma brokerage account was funded with money that Marcos stole from the government during his dictatorial reign. If the turnover action continues and Swezey prevails on the merits, the Arelma assets will be liquidated and the Republic’s claim will be “inequitably affected” (CPLR 1001 [a]). The involvement of the Republic is therefore necessary in the context of this proceeding. And since the principles of sovereign immunity require the Republic’s consent before a New York court may exercise jurisdiction over it, our second task is to analyze the five statutory factors to determine whether the case can proceed without the Republic as a party (see CPLR 1001 [b]).

The first factor weighs in Swezey’s favor. She and her fellow class members will not have a readily available remedy if this proceeding is dismissed for nonjoinder. In fact, she lacks a forum to identify which entity owns the Arelma assets and, at least for the immediate future, she must await a waiver of sovereign immunity by the Republic before an American court can intercede in the matter.

The second factor, however, strongly supports the Republic. Its national interests would be severely prejudiced by a turnover proceeding because it has asserted a claim of ownership regarding the Arelma assets that rests on several bases: the Philippine forfeiture law that predated the tenure of President Marcos; evidence demonstrating that Marcos looted public coffers to amass a personal fortune worth billions of dollars; findings by the Philippine Supreme Court and Swiss Federal Supreme Court that Marcos stole related assets from the Republic; and, perhaps most critically, the recent determination by the Philippine Supreme Court that Marcos pilfered the money that was deposited in the Arelma brokerage account. Consequently, allowing the federal court judgment against the estate of Marcos to be executed on property that may rightfully belong to the citizens of the Philippines could irreparably undermine the Republic’s claim to the Arelma assets.

Nor does the third factor—focusing on who can minimize prejudice—weigh against the Republic. The immunity principle is part of the natural law of nations and is “premised upon the ‘perfect equality and absolute independence of sovereigns, and th[e] common interest impelling them to mutual intercourse’ ” (Republic of Philippines v Pimentel, 553 US at 865, quoting Schooner Exchange v McFaddon, 7 Cranch [11 US] 116, 137 [1812]). It has been a doctrine in our legal system for centuries and is currently codified in federal statutes (see 28 USC §§ 1330, 1602-1611). The “privilege is much diminished if an important and consequential ruling affecting the sovereign’s substantial interest is determined . . . by a . . . court in the sovereign’s absence and over its objection” (Republic of Philippines v Pimentel, 553 US at 868-869).

The Republic’s declaration of sovereign immunity in this case is entitled to recognition because it has a significant interest in allowing its courts to adjudicate the dispute over property that may have been stolen from its public treasury and transferred to New York through no fault of the Republic. The high courts of the United States, the Philippines and Switzerland have clearly explained in decisions related to this case that wresting control over these matters from the Philippine judicial system would disrupt international comity and reciprocal diplomatic self-interests. Since only the Republic can decide whether it should submit to New York’s jurisdiction, it would be inappropriate to force the Republic to litigate in our state court system contrary to an otherwise valid invocation of the sovereign prerogative.

Swezey correctly notes that we allowed a claim to proceed in a sovereign’s absence in Saratoga County Chamber of Commerce v Pataki (100 NY2d 801 [2003]). But the underlying question in that case pertained to an important question about the fundamental balance of governmental powers under our State Constitution. We specifically observed that a dismissal premised on sovereign immunity claimed by the St. Regis Mohawk Tribe would have left the substantive issue unanswered because “no member of the public will ever be able to bring th[e] constitutional challenge” (id. at 820). And this would have allowed the Governor, in effect, to “sign agreements with any [sovereign] entity beyond the jurisdiction of the Court, free of constitutional interdiction ... a prospect antithetical to our system of checks and balances” (id.).

The dispute here, in stark contrast, involves a far different subject—the ownership of investment assets—that does not justify another limited exception to the general rule that an assertion of immunity by a sovereign entity requires dismissal of an action in which it is a necessary party if the entity’s claims are not frivolous and there is a potential for injury to its interests (see Republic of Philippines v Pimentel, 553 US at 867). To hold otherwise would flout the U.S. Supreme Court’s decision involving the same interested entities, the same property and the same general issues that are before us (see id.). Moreover, and unlike the situation in Saratoga County, a dismissal will not consign the question about Arelma’s ownership to potentially limitless legal purgatory because the matter has been decided by the Philippine court system and further proceedings in New York can address the final disposition of the Arelma assets held in this state.

We view the fourth factor—the feasibility of a protective order—as further support for a dismissal on these facts. In the context of this turnover proceeding, the only ruling by a New York court that can simultaneously safeguard the interests of the Pimentel class and the Republic is one that prevents either from accessing the Arelma assets so that neither claim to the property is irreparably prejudiced. The dismissal of the turnover action would accomplish that result at this point in time.

The fifth factor—whether an effective judgment can be entered in the absence of the Republic as a party to the litigation—tilts in favor of the Republic because allowing the turnover proceeding to go forward would create the possibility of multiple conflicting judgments. A turnover order in Swezey’s favor would not be binding on a nonparty such as the Republic. Furthermore, the ruling by the Philippine Supreme Court awarding ownership of the Arelma assets to the Republic now permits that nation to seek enforcement of its foreign judgment in New York. But if the turnover proceeding advances and Swezey prevails, the Arelma assets will be disbursed and the Republic may turn to Merrill Lynch for satisfaction, placing that firm at possible risk of duplicative liability even though it has been trying to remove itself from this battle involving the Arelma assets for over a decade. Thus, it is evident that continuation of the turnover action “would not further the public interest in settling the [ownership] dispute as a whole” (Republic of Philippines v Pimentel, 553 US at 870-871).

Based on our balancing of the five factors delineated in CPLR 1001 (b), we conclude that this case “cannot be decided without the presence of the foreign government” (Lamont v Travelers Ins. Co., 281 NY 362, 373 [1939]; see Oliner v Canadian Pac. Ry. Co., 27 NY2d 988 [1970], affg 34 AD2d 310 [1st Dept 1970]) and that the Republic’s absence compels dismissal without prejudice under these circumstances (see CPLR 1003).

Similar to the U.S. Supreme Court, we are certainly sympathetic to the plight of Swezey and her fellow class members. They are survivors of Marcos’ reign of terror and the heirs of individuals who were horrifically brutalized by his nefarious regime. Their entitlement to compensation is well recognized in international circles. Regrettably, their multi-billion dollar judgment remains predominantly unsatisfied despite their best efforts over the past two decades.

But the judgment that they secured is against the estate of Ferdinand Marcos and it can be lawfully executed only against property that the estate legally owns. If the Arelma assets belong to the people of the Philippines—as that country’s highest court has declared—the class has no claim to that property and the assets should be returned to the people of the Philippines, who were also victimized by the Marcos government. Consequently, final judicial disposition of the Arelma assets will have to await the Republic’s voluntary submission to our jurisdiction. Although unlikely, if the Republic fails to seek enforcement of its judgment or some other avenue of recourse, the time may come when the Pimentel class could again ask a New York court to reconsider the enforcement of its judgment. For now, New York courts should not intercede in a matter that remains within the province of Philippine self-governance and national sovereignty.

For all of these reasons, we hold that the Appellate Division did not err as a matter of law when it concluded that dismissal of this turnover proceeding without prejudice was required under CPLR 1001 (b).

Ht H<

Accordingly, the order of the Appellate Division should be affirmed, with costs, and the certified question answered in the affirmative.

Chief Judge Lippman and Judges Ciparick, Read, Smith, Pigott and Jones concur.

Order affirmed, etc.

      . This act provided that “[w]henever any public officer or employee has acquired during his incumbency an amount of property which is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the income from legitimately acquired property, said property shall be presumed prima facie to have been unlawfully acquired” and if the individual “is unable to show to the satisfaction of the court that he has lawfully acquired the property in question, then the court shall declare such property, forfeited in favor of the State, and by virtue of such judgment the property aforesaid shall become property of the State” (see An Act Declaring Forfeiture in Favor of the State Any Property Found to Have Been Unlawfully Acquired by Any Public Officer or Employee and Providing for the Proceedings Therefor, Rep Act No. 1379, §§ 2, 6, 51:9 O.G. 4457 [June 18, 1955] [Phil]).

      . The Pimentel class tried to obtain relief in Philippine courts but it was stymied by a judicial ruling that set the filing fee at $8.4 million and the appeal of that ruling took over six years before a resolution was issued in favor of the class. The issues stemming from the filing fee imbroglio caused a committee of the United Nations to conclude that the Republic had violated the Optional Protocol to the International Covenant on Civil and Political Rights.

        (n. cont’d)

      . Excluding the Arelma shares, the remaining assets were valued at over $350 million at the time of the transfer to PNB.

      . While the interpleader action was pending, the Sandiganbayan and Philippine Supreme Court determined that the non-Arelma property that had been transferred to the PNB escrow account by Swiss officials (the value of which had grown to over $650 million) was forfeited to the Republic under the Philippine misappropriation statute.

      . In awarding the Arelma assets to the Republic, the Sandiganbayan stated that the lawful income of President Marcos and his wife during his tenure in office had been the equivalent of $304,372.43, but that the value of the Arelma account in 1983 was more than $3.3 million. Consistent with the Philippine misappropriation law, the Sandiganbayan indicated that it ruled in the Republic’s favor because representatives of the estate of Marcos failed to explain how Marcos could have lawfully acquired the funds deposited in the brokerage account.

        (n. cont’d)

      . At some point, Merrill Lynch transferred the Arelma assets (now valued at approximately $40 million) to New York City’s Commissioner of Finance pursuant to a court order.

      . To the extent Swezey argues that the Republic has not validly asserted sovereign immunity, diplomatic correspondence in the record refutes that claim.

      . Since Swezey has not definitively established that a statute of limitations precludes the Republic from obtaining the Arelma assets, she is unable to show that the Republic has fatally undermined its ability to pursue the property (see Republic of Philippines v Pimentel, 553 US at 867-868; see generally Matter of Red Hook, 5 NY3d at 462 [where jurisdiction may be obtained only by consent or appearance, a statute of limitations issue should be considered in the five-factor CPLR 1001 (b) analysis]; cf. Windy Ridge Farm v Assessor of Town of Shandaken, 11 NY3d 725, 726-727 [2008] [the five-factor test does not apply if a necessary party with a valid statute of limitations defense is subject to the court’s jurisdiction]).

      . The panel’s decision appears to be final but under Philippine court rules, the Second Division may be able to refer the case to the full Philippine Supreme Court for en banc consideration (see Republic of the Philippines, Internal Rules of the Supreme Court, AM. No. 10-4-20-SC, part I, rule 2, § 11 [May 4, 2010]).


source: Caselaw Access Project

author: Read, J. Cipahick, J. (dissenting).

license: Public Domain

text:
    [973 NE2d 711, 950 NYS2d 301]
    Jasmine Zheng et al., Appellants, v City of New York et al., Respondents.
    Argued May 31, 2012;
    decided June 26, 2012

      POINTS OF COUNSEL

      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. Cailteux, Isabella C. Lacayo, Jesse Morris, Emily L. Pincow and Lisa Sokolowski of counsel), for appellants.
    I. The First Department erred as a matter of law when it applied the wrong standard in determining that there was no mutual assent to contract. (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397; Mencher v Weiss, 306 NY 1; Matter of Express Indus. & Term. Corp. v New York State Dept. of Transp., 93 NY2d 584; Ahlstrom Mach. v Associated Airfreight, 272 AD2d 739; TAJ Intl. Corp. v Bashian & Sons, 251 AD2d 98; Accurate Realty, LLC v Donadio, 80 AD3d 1041; Keis Distrib. v Northern Distrib. Co., 226 AD2d 967; Conopco, Inc. v Wathne Ltd., 190 AD2d 587; Baum v County of Rockland, 337 F Supp 2d 454; Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106.) II. But for the First Department majority’s misapplication of the legal standard for mutual assent, the Advantage tenants would have prevailed. (Greenfield v Philles Records, 98 NY2d 562; Flores v Lower E. Side Serv. Ctr., Inc., 4 NY3d 363; De Kovessey v Coronet Props. Co., 69 NY2d 448; Joseph Martin, Jr., Delicatessen v Schumacher, 52 NY2d 105; Matter of 166 Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp., 78 NY2d 88; Matter of Express Indus. & Term. Corp. v New York State Dept. of Transp., 93 NY2d 584; Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475.) III. Social services programs can be operated through contracts with third parties. (Marks v City of New York, 121 Misc 2d 303; McNeill v New York City Hous. Auth., 719 F Supp 233; Mutual Hous. of Tompkins County, Inc. v Hawes, 4 Misc 3d 247.)

      Michael A. Cardozo, Corporation Counsel, New York City (Eric Rundbaken, Allan G. Krams, Nancy F Brodie, David Cooperstein and Michael Adler of counsel), for respondents.
    I. This Court cannot reweigh the evidence that led the trial court and Appellate Division to conclude that the City of New York did not contractually obligate itself to continue paying plaintiffs’ Advantage rent subsidies after the Legislature decided to cut off the bulk of the program’s funding. (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397; Rudman v Cowles Communications, 30 NY2d 1; Farrell Lines v City of New York, 30 NY2d 76; Levine v Shell Oil Co., 28 NY2d 205; Cohen v Hallmark Cards, 45 NY2d 493; Jacobellis v New York State Thruway Auth., 51 AD3d 976.) II. The Appellate Division applied the Brown Bros. Elec. Contrs. v Beam Constr. Corp. (41 NY2d 397 [1977]) standard, not one based on subjective intent. (Sokoloff v National City Bank of N.Y., 239 NY 158.) III. The trial evidence is legally sufficient to support the finding that the City of New York did not enter into contracts in the Advantage program. (Seif v City of Long Beach, 286 NY 382; Matter of New York State Med. Transporters Assn. v Perales, 77 NY2d 126; Rock Island, A. & L. R. Co. v United States, 254 US 141; Marks v City of New York, 121 Misc 2d 303; Mutual Hous. of Tompkins County, Inc. v Hawes, 4 Misc 3d 247; Richardson v Belcher, 404 US 78; Matter of Judge Rotenberg Educ. Ctr. v Maul, 91 NY2d 298.) IV The Advantage certification letter did not constitute an offer that could be accepted and create a contract with the City of New York. (1240 Third Ave., Inc. v Birns, 232 App Div 522; Matter of Express Indus. & Term. Corp. v New York State Dept. of Transp., 93 NY2d 584; Carmon v Soleh Boneh Ltd., 206 AD2d 450; De Kovessey v Coronet Props. Co., 69 NY2d 448; Paige v Faure, 229 NY 114.) V Even if the City of New York had contracted with Advantage landlords, it retained discretion not to continue Advantage subsidies for a second year. (Matter of General Elec. Capital Corp. v New York State Div. of Tax Appeals, Tax Appeals Trib., 2 NY3d 249; Jiggetts v Grinker, 75 NY2d 411; Matter of Natural Resources Defense Council v New York City Dept. of Sanitation, 83 NY2d 215; Matter of Marro v Bartlett, 61 AD2d 729, 46 NY2d 674; Matter of Riches v New York City Council, 75 AD3d 33, 15 NY3d 735; Brown v Manufacturers Trust Co., 278 NY 317.)

      Gibson, Dunn & Crutcher LLP, New York City (Randy M. Mastro and Christopher Muller of counsel), for Sanctuary for Families and others, amici curiae.
    I. The City of New York designed Advantage to convince participants that payments were assured. (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397.) II. Domestic violence victims forced out of Advantage housing will be at serious risk of violence and other harm.
   OPINION OF THE COURT

Read, J.

Plaintiffs claim that the City of New York is contractually obligated to pay rent subsidies to their landlords under the Advantage New York program until expiration of their leases. State and federal reimbursement for two thirds of the Advantage program’s costs ended on April 1, 2011, causing the City to discontinue it as of that date. Both lower courts found that the City did not intend to enter into enforceable contracts with plaintiffs or their landlords under the Advantage program, and the record supports this affirmed finding of fact (see Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397, 400 [1977]). Accordingly, we affirm dismissal of the lawsuit.

1

The City created the Advantage rental assistance program in 2007 to help homeless single adults and families achieve independent living. The Advantage program replaced and was designed to fix unanticipated problems thought to compromise the effectiveness of a predecessor program called Housing Stability Plus (HSP). HSP provided a five-year rent subsidy that was reduced automatically each year by 20%. Participants in HSP were required to remain eligible for public assistance (PA) and to comply with all PA requirements. Two problems became apparent over time as a result. First, some tenants limited the hours they worked because a higher income would render them ineligible for PA and, consequently, the HSP rent supplement. Second, landlords grew reluctant to participate in this program because subsidies were cut off whenever a tenant’s PA case was sanctioned or closed, thus interrupting the flow of rental revenue. Under the Advantage program, by contrast, landlords were assured that changes in a tenant’s PA status would not disrupt payment of the rent subsidy over the course of the lease.

There were various versions of the Advantage program, with differing eligibility requirements. For example, the program made rent subsidies payable to landlords for households where at least one adult worked 20 hours or more weekly at minimum wage or above (Work Advantage), received a fixed income benefit such as Supplemental Security Income or Social Security Disability Insurance (Fixed Income Advantage) or had an active case with the City’s Administration for Children’s Services while in shelter (Children Advantage). In general, the family or single adult had to have resided in shelter for a certain number of days, and have an active PA case and a gross household income not exceeding a specified percentage of the federal poverty level.

The Advantage program was carried out through a lease between landlord and tenant to which the City was not a party, and four documents drafted by the City: a certification letter, participant statement of understanding, landlord statement of understanding and lease rider. These four documents differed depending on the program type and participant (family or single adult), vintage or agency, but contained the same basic provisions. The Advantage program was approved by the State’s Office of Temporary and Disability Assistance (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 PA recipients to reside in private housing, provided OTDA “determines that there are sufficient funds available to provide such reimbursement ”]).

The City’s Department of Homeless Services (DHS) and Human Resources Administration (HRA) jointly administered the Advantage program. To begin with, the City provided eligible individuals or families with a certification letter on DHS or HRA letterhead, which was routinely signed by city workers from these agencies, sometimes by facsimile rather than original signature. Several versions of this letter included the following subject line in boldface type: “Re: Advantage Program (Guaranteed Rent Not Tied to [PA]).”

The certification letter generally informed recipients that they were “now eligible for the Advantage rental assistance program”; and set out the certification and expiration dates, the length of time that the certification would be valid, the total maximum rent allowed, the monthly tenant contribution (based on total gross household income as of the certification date) and the maximum subsidy amount. The letter also stated that “[t]he Advantage program guarantees that the subsidy portion of the rent will be paid directly to your landlord for one year,” and that a “second year of rental assistance under Advantage” was available if the tenant met the eligibility criteria. Recipients were encouraged to show the letter to prospective landlords and brokers when searching for apartments.

At lease signing, the tenant subscribed a participant statement of understanding, which indicated that “[u]nder the Advantage Program, [the City] will pay a portion of my monthly rent (over and above [the tenant’s] monthly rent contribution) directly to my Landlord.” As a “condition” of “participation” in the program, the tenant made 22 “commitments,” which included understandings and agreements to file for work supports and tax credits, notify HRA of a change in address, seek appropriate services to maintain the tenancy, repay the security deposit and certain other payments if failing to move into the apartment after signing the lease, cooperate with the City in its administration of the program and take part in program surveys and publicity. The participant statement was signed by adult household members, who represented that they had “read and understood their] obligations under [the participant statement]”; and by a city case manager and/or housing specialist, who “confirm[ed] that all present adult household members have verbalized their understanding [of] the agreements outlined in this document, and that all adult household members have signed and received a copy of this agreement.”

Also at lease signing, the landlord (or an authorized representative) subscribed a landlord statement of understanding, which specified that the City “will issue” or “will pay” rent subsidies directly to the landlord on behalf of the tenant, who remained “responsible for paying directly to . . . the Landlord, a monthly rent contribution” in a specified amount “to cover the remaining portion of the rent under the Lease and Rider.” Further, as a “condition” to “participation” in the program, the landlord made 12 “commitments,” which included understandings and agreements not to charge an Advantage tenant “any amount” beyond the agreed-upon rent; and to offer the apartment at the same level of rent for a second year, pay for heat and water and, in the event an Advantage tenant vacated the premises “due to an eviction or move,” return any prepaid rent to the City or, at the City’s option, allow another program participant to reside in the apartment for the remainder of the lease’s term.

Lastly, at lease signing the tenant and landlord both signed a rider to the landlord’s standard lease. In the rider, the tenant “agree[d] [to] authorize[ ]” the City to pay “rental assistance directly to the Landlord.” The rider also generally reiterated the landlord’s obligations set out in the landlord statement. Additionally, the landlord “ acknowledge [d] that . . . the amount and duration” of subsidies was “subject to all applicable rules and requirements” of the Advantage program, and agreed to make the apartment available for inspection. If the landlord “materially violate[d]” any of the terms of the lease or rider, the tenant could terminate the lease, and the landlord was barred from participation in the program. A city worker signed the lease rider as either a DHS or HRA witness.

The Advantage program was funded in equal parts by the city, state and federal governments. But the Governor’s executive budget for fiscal year 2011-2012, submitted to the Legislature on February 1, 2011, did not include an appropriation for the program. Although the City aggressively lobbied the State for the Advantage program’s continuation, funding was not restored in the subsequently enacted state budget; once state financial support was withdrawn, federal moneys were also no longer available. Faced with the imminent loss of two thirds of the program’s funding, the City closed the Advantage program to entrants in mid-March 2011, and informed participants that their rental subsidies would end on April 1, 2011, the beginning of the State’s fiscal year.

On March 28, 2011, plaintiffs Jasmine Zheng and A.T., on behalf of themselves and all others similarly situated, brought this lawsuit against the City as well as DHS and HRA and their respective commissioners (collectively, the City). Plaintiffs alleged that they were “Advantage recipients, now Advantage tenants,” suing on behalf of themselves and a class consisting of “approximately 15,000 current Advantage Tenants,” and claimed that the City was contractually obligated to continue to pay the rent subsidies provided for under the Advantage program. They sought specific performance of this alleged contract; a declaratory judgment that the City was “contractually obligated to continue to make Advantage subsidy payments to Advantage Tenants’ landlords for the remainder of [the alleged contracts] and for a second year if the Advantage Tenants [met the City’s] eligibility criteria”; injunctive relief to prevent the City from discontinuing rent subsidy payments to landlords before expiration of the alleged contracts; and “injunctive relief to prevent [the City] from taking Advantage Tenants’ property interests without due process of law.” Basically, plaintiffs were looking for the City to subsidize their leases for a full two years, notwithstanding the loss in the interim of state and federal funding for this purpose. Supreme Court signed the accompanying order to show cause, thereby directing a hearing on plaintiffs’ request for injunctive relief and class certification, and temporarily restraining the City from discontinuing the rent subsidies.

On May 2, 2011, Supreme Court entered a decision and order denying plaintiffs’ motion for a preliminary injunction and the City’s cross motion to dismiss the complaint (2011 NY Slip Op 31120[U] [NY County 2011]). Based on her review of .the “program documents” (i.e., the certification letter, participant and landlord statements of understanding and the lease rider), the judge concluded that the complaint “survivefd]” the City’s motion to dismiss, but that plaintiffs had not shown “a likelihood of success on their claims that the program documents constitute enforceable contracts” {id. at *26). Supreme Court, however, continued the temporary restraining order for 10 days to permit plaintiffs the opportunity to seek a stay from the Appellate Division.

Plaintiffs filed a notice of appeal with the Appellate Division on May 10, 2011, and on May 12, 2011, they moved for injunctive relief. On June 2, 2011, the Appellate Division granted plaintiffs’ motion “to [the] extent of directing [that the Advantage program] payments ... be maintained pending hearing and determination of the appeal” (2011 NY Slip Op 74744[U] [2011]).

Following an expedited, five-day nonjury trial in June and July and the completion of posttrial submissions on August 11, Supreme Court issued a decision dated September 13, 2011 in which she held that

“the Advantage program, no matter how laudable its goals, is nothing more than a social benefit program, which [the City] had the right to terminate based upon the lack of funding available for its continuation. [The City has] no ongoing obligation, contractual or otherwise, to continue the Advantage Program.”

The judge observed that “[w]hile a social services program can be structured in such a way as to be operated and implemented through enforceable contracts,” plaintiffs were required to prove by a fair preponderance of the evidence that, in this instance, enforceable contracts did, in fact, exist between tenants and the City or landlords and the City. She listed the elements required for contract formation and pointed out that the parties did not dispute “capacity to contract” or that “if the court were to find that [the City had] entered into enforceable contracts with the Advantage Landlords, the Advantage Tenants [would] have standing to enforce them as third party beneficiaries.” She then turned to the two elements of contract formation disputed by the parties—mutual assent and consideration.

With respect to mutual assent, Supreme Court remarked that “[w]hile a formally executed document is not always necessary,” the proponent of the existence of a contract—here, plaintiffs— “must still prove an intent of the parties to be bound.” Citing our decision in Brown Bros., the judge stated that “[i]n finding [intent to be bound], the court does not depend on the subjective intent of the parties, [but] rather . . . looks to objective manifestations of the intent of the parties as gathered by their expressed words and deeds.” In undertaking this analysis, “[t]he parties’ communicated expressions are interpreted objectively to give effect to the reasonable expectations of the parties, not necessarily their actual expectations.” Further, “[t]he fact finder should not put disproportionate emphasis on any single act, phrase or other expression, but instead, should consider the totality of the circumstances, the situation of the parties and the objectives they were trying to attain.”

After “viewing the evidence as a whole” in light of these principles, Supreme Court “conclude[d] that [the City] did not manifest an intent to be contractually bound to provide the benefits associated with the Advantage program.” While the judge also expressed her belief that “neither the tenants nor the landlords manifested an intent to be contractually bound,” she added that “it would not matter even if they did” because “the requirement of intent must be mutual.” She then reviewed the proof that supported her finding that the City lacked the intent to be bound.

First, there were “no formal contracts” between the City and tenants or the City and landlords. As a result, plaintiffs relied on the four “program documents” (the certification letter, participant and landlord statements of understanding and lease rider) to argue that the City intended to be contractually obligated to fund plaintiffs’ rent subsidies under the Advantage program. With respect to these documents, the judge addressed the parties’ disputes over the importance of the presence of the signatures of city workers on certain of them. She determined that the “confirmation” signed by a city caseworker on the bottom of the participant statement “[did] not manifest any intent by [the City] to enter into a contractual relationship”; and neither did the signature of a city caseworker as a witness to the lease rider. She noted that the certification letter was “signed by NYC representatives,” sometimes by facsimile, but, contrary to the City’s arguments, “the fact that each signature was not original [was] not legally significant.” Supreme Court added that “[w]hile [the City could not] rely on the lack of a signature on the certification letter to disprove its intention to be bound, the court still [would] need[ ] to look at the content of the documents and the circumstances of their making in determining mutual assent.”

The judge described “language used in the program documents” as “[mjost important” in ascertaining whether there was contractual intent, followed by “evidence in the form of collateral writings (e.g. promotional materials) and what the parties said and did at the time the program was implemented”; and “[t]he historical context of the formation of the relationships.” She added that “the unexpressed subjective thinking of the parties at the time the program was implemented and/or the documents signed or generated” was “[n]ot relevant.” Supreme Court then reviewed the program documents in detail.

The judge stressed the absence of such “traditional contract phrases” as “ ‘the parties agree’ ” or “ ‘the parties covenant.’ ” Instead, these documents consistently referred to Advantage as a “program.” And while “[t]he documents [had] program ‘conditions’ for tenants and landlords . . . [t]he language [did] not expressly impose any mutuality of obligation on [the City].” Additionally, ‘ ‘representation^] that [the City] will pay or will issue checks” merely “set[ ] out the program benefits” and were “entirely consistent with the administration of the Advantage program,” rather than “prov[ing] contractual obligations.” Supreme Court then considered the word “guarantee,” which was “more problematic” for the City “because ‘guarantee’ is a contractual term, which generally refers to an obligation to be responsible for the debt of another.” She added, however, that “there are times when, depending on the context of the use of the word, no binding obligation is created,” so “[i]t is important ... to understand the context in which [the City] used . . . the term guarantee in program or other documents.” Here, the certification letter was the only program document to use the word “guarantee.” Specifically, these letters typically included this word in the subject line—i.e., “Re: Advantage Program (Guaranteed Rent Not Tied to [PA])—and referred to the subsidies as being “guaranteed for up to one year.” The judge noted that the word “guarantee” also appeared in promotional materials given to landlords and brokers.

Supreme Court then found that

“[t]he use of the word guarantee was deliberate and made to induce landlords to participate in the Advantage rental assistance program. The word was used to differentiate the Advantage program from predecessor programs [i.e., HSP] where a disruption in a tenant’s public assistance case, for any reason whatsoever, would interrupt the rental subsidy payments to a participating landlord. Under the Advantage program, the guarantee was that the rental assistance benefit would be paid to landlords, even if the tenant’s public assistance payment was interrupted for any reason. This meaning was communicated to landlords and/or their representatives in meetings and fairs that [the City] held to induce landlords to participate in the program. The certification letters’ references to guarantees of rent are expressly ‘not tied to public assistance payments.’ The program documents and the promotional material pervasively used language indicating that Advantage was a program, that rental assistance payments were benefits and that the tenants and landlords had to fulfill conditions to participate in the program” (emphasis added).

Thus, Supreme Court found that the certification letter and promotional documents “do not, when read as a whole, contain a contractual guarantee of payment if the program is no longer funded.” She called plaintiffs’ argument that the City might have included language in the program documents stating that payments were contingent on continued program funding “a red herring” because “[t]his language would only be important if there was a contract between the parties” in the first place.

Supreme Court also assessed the evidence of the City’s communications with landlords to promote the Advantage program, which belied any intent on the part of the City to be bound contractually. Specifically, the judge found that during meetings held by the City “to induce the landlords to participate in the Advantage program . . . landlords asked [the City] to obligate [itself] to the leases. Whenever these suggestions were made, [the City] made it clear to landlords that the lease obligations would be between the landlord and the tenant and that NYC would not obligate itself.”

The judge contrasted this objective contemporaneous evidence of the City’s intent with the testimony of A.T. and her landlord at trial as to their after-the-fact professed subjective belief that they had entered into contracts with the City. Moreover, “[t]estimony by other landlords, real estate brokers and property managers [ ] indicates they either had no understanding about whether they had a contractual relationship with [the City] or they understood they had no such relationship.” Indeed, “a real estate broker with extensive experience about rental assistance programs,” who was called by plaintiffs, “testified that he did not believe [the City] had entered into contracts with individual landlords, and, further, that it never entered his mind to suggest that NYC sign a separate contract with the landlords.” She added, however, that “these varied subjective understandings . . . [were] not probative on the issue of mutual assent.”

Next, Supreme Court rejected plaintiffs’ argument that the certification letter constituted an offer accepted by the tenants and landlords “by their actual participation” in the Advantage program because “it lack[ed] the requisite specificity”: “the specific landlord was not identified, the specific apartment was not identified, the term of the lease was not identified, nor were all of the conditions, as otherwise stated in the participant statement, the landlord statement and lease rider.”

Plaintiffs argued there was consideration for their alleged contracts with the City because “they entered into contracts with private landlords for rents that they could not otherwise afford,” and “obtained employment and incurred expenses for such things as child care, all in connection with fulfilling their obligations” under the Advantage program. Supreme Court disagreed, though, “[s]ince participation in the Advantage program was required as part of continued eligibility [for] temporary housing”; therefore, “the tenants’ requirements of eligibility for the Advantage program [did not] constitute [ ] consideration that would support a contract” with the City.

Further,

“[the] argument[ ] that Advantage Tenants gave up other available housing and/or programs to participate in the Advantage program! ] was never proven at trial. In fact, there was testimony . . . that the Advantage program was perceived as a means to fill what was then the prevailing time gap in the availability of section 8 housing.”

As the judge commented, while section 8 housing “was always subject to long waiting lists,” by 2010 it had become “virtually unavailable, due to severe budget cutbacks.”

Supreme Court also disagreed with plaintiffs’ “collateral argument (raised in the context of consideration) that, absent a contractual relationship, the Advantage landlords would not have participated in the program,” based on the history of landlord participation in the City’s rental assistance programs. Finally, the judge remarked that plaintiffs’ claims of entitlement to a second year of eligibility under the Advantage program and of due process violations “fail[ed]” in view of her finding that there were no contractual obligations. Supreme Court’s decision was entered by order and judgment on October 6, 2011. Plaintiffs took an appeal.

On February 2, 2012, the Appellate Division granted the City’s motion to dismiss plaintiffs’ appeal of Supreme Court’s interlocutory order entered on May 2, 2011 and to vacate the stay; and denied plaintiffs’ motion seeking to consolidate the appeals of Supreme Court’s two orders and continue the stay (92 AD3d 412 [1st Dept 2012]). The court held that the entry of final judgment dismissing the complaint terminated plaintiffs’ right to appeal from the interlocutory order, and that the preliminary injunction “must be dissolved since the purpose of a preliminary injunction is to maintain the status quo while an action is pending” {id. at 413).

On February 16, 2012, a separate panel, with one Justice dissenting, denied plaintiffs’ motion for a further stay pending determination of their appeal from the final judgment (2012 NY Slip Op 64817[U] [1st Dept 2012]). On March 20, 2012, the same panel, with the same Justice dissenting, affirmed Supreme Court’s order and judgment dismissing the complaint (93 AD3d 510 [1st Dept 2012]). The Appellate Division concluded “that the trial court correctly found that the Advantage rent subsidy program for the homeless was simply a social services program, and that [the City] did not intend to be bound contractually” {id. at 511).

The court cited our decision in Brown Bros, as setting out the proper framework for resolving the factual question of contractual intent, whereas “plaintiffs and the dissent place[d] undue emphasis on the trappings of contract language such as ‘guarantee’ or ‘will pay,’ construing them as legal promises rather than mere assurances” (id.). The Appellate Division, like Supreme Court, found that the word “guarantee” was intended “to allay fears that rents would not be paid in the absence of public assistance, as had often happened under previous subsidy programs”; and that “the signing procedure . . . was meant to accomplish no more than ensure that participants were aware of the terms of the [Advantage] program” (id.). “Even if the tenant participants and the landlords intended to be contractually bound,” the court continued,

“there [was] no enforceable contract in either instance because [the City] profess[es] to have understood the documents differently with respect to their basic material nature [and thus] there was no meeting of the minds.
“Ultimately, as [Supreme Court] properly found at the nonjury trial, all of the surrounding circumstances lead to the ineluctable conclusion that the Advantage program was a social service program no different from any other, and not a contractual obligation undertaken by government” (id. at 512 [citation omitted]).

Although the Appellate Division did not need to reach the issue of whether there was “consideration for plaintiffs’ becoming participants in the Advantage program,” the court nonetheless observed that “a promise to perform an existing obligation is not valid consideration”; and here, “[p]ursuant to 18 NYCRR 352.35, plaintiffs were obligated to cooperate and accept the housing offered by the Advantage program” (id.). As a result, plaintiffs’ “claim of providing consideration by suffering the detriment of leaving shelters and of leasing apartments that cost more than they could afford” was without merit (id.).

The dissenting Justice concluded that the City implemented the Advantage program through enforceable contracts by “agreeing] to pay plaintiffs’ rent in return for [their] leaving the shelter system [and agreeing] to pay rent so the landlords would provide housing for the . . . program”; and that “[t]hese bargained for exchanges supported] the existence of a contract, primarily between the participants and the City, but also between the landlords and the City” (id. at 513). She disagreed with Supreme Court’s finding that mutual assent and consideration were lacking.

Addressing plaintiffs first, the dissenting Justice stated that, in her view, “there [was] a contract between the City and the Advantage participants by virtue of the Certification Letter, the Participant Statements and the riders to the leases through which the City agreed to pay plaintiffs’ rent for two years” (id. at 515). She construed the certification letter as an offer, which Advantage participants accepted by signing the participant statement and lease rider; she found it “clear [that] plaintiffs provided consideration to support the contract” by moving out of shelters and saving the City money which would otherwise have been spent on the shelter system (id. at 516).

Additionally, the dissenting Justice concluded that the City had contracted with landlords. Based on her review of the program documents, she opined that “[a] clearer indication of assent to guarantee rent payment would be hard to imagine” as a consequence of the City’s use of the word “guarantee” and such phrases as “will pay” and “shall pay” in program documents, which thereby “demonstrate^] an intent to bind oneself contractually” (id. at 517-518). In her view, “[t]he trial court was also incorrect in finding that the landlords did not manifest assent” because the commitments they made in the lease riders in exchange for guaranteed rental payments evinced an intent to be contractually bound (id. at 518-519).

On March 29, 2012, plaintiffs sought, by order to show cause, permission to appeal, an expedited appeal with a time preference and interim relief; on March 30, 2012, a Judge of this Court signed the order to the extent of bringing on the motion for permission and preference. On May 8, 2012, we granted plaintiffs leave to appeal and denied their request for interim relief (19 NY3d 849 [2012]). We now affirm.

IL

Brown Bros, presents the template for deciding a case, such as this one, where the issue is “whether the course of conduct and communications between [the parties have] created a legally enforceable agreement” (Brown Bros., 41 NY2d at 398). There, in January 1967, the owner and builder of a shopping plaza entered into a written contract with a general contractor to construct a section of the plaza. The general contractor, in turn, subcontracted with Brown for the electrical work. Starting as early as March, the general contractor, although more than current in the receipt of moneys from the owner/builder, was running behind in its payments to Brown. As a result, Brown threatened in writing to claim a breach of contract unless the payments were brought up to date. Then in July, the general contractor abandoned the job.

Between March and July, Brown and the owner/builder had discussed ways and means to secure payment for Brown. And with the owner/builder’s knowledge, consent and cooperation, Brown continued to perform electrical work on the project after the general contractor departed. Brown finished this work by the end of August, and sent the owner/builder an invoice for the amount still due. The owner/builder wrote back in September that it would send its check for “payment of the balance” upon receipt of underwriters’ inspection certificates from Brown. When Brown sent the certificates, though, the owner/builder did not make any payment, prompting Brown to sue. In the ensuing litigation, the owner/builder argued that it had not entered into a contract directly with Brown, and that Brown had done no more, in completing the electrical work, than fulfill its obligation to the general contractor.

The trial court, sitting without a jury, handed down a decision in favor of Brown. The Appellate Division affirmed, finding that the record developed at trial established the existence of a contract between Brown and the owner/builder and that, in accordance with that contract, the latter was obligated to pay the former the balance due for electrical work performed up to the time of completion. We affirmed, stating that “[o]ur own examination of the proof reveals that the course of conduct between [the owner/builder] and Brown, including their writings, especially taken against the continuum of events from March through September, was sufficient to spell out a binding contract between Brown and [the owner/builder] independent from the one that had pre-existed between Brown and [the general contractor]” (41 NY2d at 399). We then set out the principles governing our analysis leading to this result.

First, we explained, “the existence of a binding contract [was] not dependent on the subjective intent of either” Brown or the owner/builder because

“[i]n determining whether the parties entered into a contractual agreement and what were its terms, it is necessary to look, rather, to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds. In doing so, disproportionate emphasis is not to be put on any single act, phrase or other expression, but, instead, on the totality of all of these, given the attendant circumstances, the situation of the parties, and the objectives they were striving to attain” (id. at 399-400 [citations omitted]).

We added that the “aim” of this exercise was “a practical interpretation of the expressions of the parties to the end that there be a realization of [their] reasonable expectations” (id. at 400 [internal quotation marks omitted]).

Next, we pointed out that “while it is the responsibility of the court to interpret written instruments, where a finding of whether an intent to contract is dependent as well on other evidence from which differing inferences may be drawn, a question of fact arises” (id. [internal quotation marks and citations omitted] [emphasis added]). Because each of the lower courts found as a fact that Brown and the owner/builder “intended to contract,” our review was confined to an “examin[ation of] the nature of the proof to determine whether [the lower courts] were warranted” in finding this fact (id.).

We then detailed the course of conduct and communications between Brown and the owner/builder between March and September 1967, as proved at trial, concluding that “[t]his step-by-step continuum of events and permissible inferences, viewed in totality, brought the determination of whether there was an intent to contract within the realm of fact finding”; that the Appellate Division had found that there was a contract between Brown and the owner/builder under “the terms of which Brown would be bound to continue to perform the electrical installations which remained undone and [the owner/builder] would be bound to pay Brown all sums still unpaid when the work was completed”; and that we “[could not] say that there was insufficient evidence to support that finding” (id. at 401-402).

On this appeal, plaintiffs argue that the lower courts misapplied the Brown Bros, standard for mutual assent and abused their discretion in reaching a conclusion that was not supported by the record, which they claim establishes enforceable contracts between the City and the landlords, to which they are third-party beneficiaries. In particular, plaintiffs portray the lower courts as improperly focused on the City’s subjective intent. As proof of this proposition, they lean heavily on two isolated phrases in the Appellate Division’s decision: “that [the City] did not intend to be bound contractually” (93 AD3d at 511), and “understood the [program] documents differently with respect to their basic material nature” (id. at 512).

But we made clear in Brown Bros, that the key question of fact for the factfinder to decide in a case such as this is whether the parties to the putative contract exhibited “an intent to contract.” This is no different from asking whether they “intend[ed] to be bound contractually,” as the Appellate Division put it, or—in expressions of Supreme Court also criticized by plaintiffs—whether the City “manifested] an intent to be contractually bound to provide the benefits associated with the Advantage program” or “manifested] an intent to create a contractual obligation.” Further, the other supposedly improper phrase in the Appellate Division’s decision, when read in context, simply makes the unexceptional point that mutuality of intent is necessary for a valid contract.

Contrary to plaintiffs’ assertions, Supreme Court painstakingly applied the Brown Bros, standard, as our detailed discussion of the judge’s opinion demonstrates: she “look[ed] ... to the objective manifestations of the intent of the parties”—in particular, the City—by reviewing “expressed words and deeds”; and “[i]n doing so,” the judge did not place “disproportionate emphasis ... on any single act, phrase or other expression, but, instead, [considered] the totality of all of these, given the attendant circumstances, the situation of the parties, and the objectives they were striving to attain” (Brown Bros., 41 NY2d at 399-400).

For example, plaintiffs fault Supreme Court for affording insufficient weight to the word “guarantee” in the certification letter sent to a prospective Advantage tenant, which they construe as an offer to a landlord to contract. But consistent with Brown Bros., Supreme Court did not look at the word “guarantee” or the certification letter in which it appeared in isolation. Rather, the judge looked at the word as it appeared in the document’s subject line—i.e., followed by the parenthetical “(Guaranteed Rent Not Tied to [PA])” (emphasis added)—and in light of “the attendant circumstances, the situation of the parties, and the objectives they were striving to attain.” In this regard, several witnesses, representing both landlords and the City, testified that the defining characteristic of the Advantage program was that subsidy payments would not be tied to a tenant’s PA eligibility; there was testimony that the program was designed in this way so as to avoid some of the problems that had hampered the effectiveness of HSP, a predecessor program with the same goal of moving homeless families and single adults from temporary shelter to permanent housing. In light of the totality of the evidence, Supreme Court found, as a matter of fact, that the City had not, when it used the word “guarantee” in the certification letter or promotional materials, intended to make a contractual guarantee of payment to landlords under the Advantage program (see supra at 566). The Appellate Division agreed.

As Brown Bros, also teaches, our review in this case, where Supreme Court’s factual findings have been affirmed by the Appellate Division, is limited to whether there is sufficient evidence in the record to support Supreme Court’s determinations; in particular, the finding that the City did not intend to enter into enforceable contracts with plaintiffs or their landlords under the Advantage program. While plaintiffs urge otherwise, there is more than sufficient evidence in the record to support Supreme Court’s findings of fact.

The dissenters warn that “[a]fter today, even the clearest of contract terms on which public and private entities routinely rely to efficiently coordinate their transactions apparently will grant no assurance that the law will recognize an agreement and provide a remedy for its breach” (dissenting op at 582). We suggest, however, that the “clearest of contract terms” are generally to be found in a written agreement executed by contracting parties, which “when unambiguous on its face must be enforced according to the plain meaning” (Greenfield v Philles Records, 98 NY2d 562, 569 [2002]). Here, no document whatsoever was executed by the City and any landlord respecting the Advantage program. By contrast, as part of a Section 8 housing program, a city agency and a landlord execute a document specifically captioned “Housing Assistance Payments Contract (HAP Contract),” by which the City is, in fact, contractually obligated to pay rent subsidies to the landlord on behalf of the specific tenant household identified in the agreement (see supra at 568 n 7).

Additionally, the dissenters lament the “human consequences” of our decision (dissenting op at 582). But we are not well-positioned to predict what “human consequences” may result from termination of the Advantage program. The City represented at oral argument that it is committed to helping tenants deal with the loss of the Advantage subsidy and that, to date, very few have returned to shelters. For their part, the dissenters simply disregard that knowledgeable city officials—charged with equitable distribution of services for all vulnerable New York City residents, not just these plaintiffs— made a considered judgment in 2011 that the roughly $160 million required to continue the Advantage program was better spent in other ways.

This judgment was obviously reluctantly reached by city officials, who developed and championed the Advantage program in the first place, but the loss of two thirds of the funding forced a policy choice. The courts are not empowered to second-guess the City by conjuring up a “contract” from bits and pieces of documents meant to explain and condition participation in what was a voluntary government program. Indeed, doing so can only discourage governmental bodies from enacting voluntary programs to help the needy; they will fear being compelled by judges to continue such programs even if sources of funding are reduced or withdrawn. However much our sympathies may lie with plaintiffs, the fact remains that the courts below found, with record support, that the City made no contractual commitment to continue the Advantage program through expiration of plaintiffs’ leases.

Accordingly, the order of the Appellate Division should be affirmed, without costs.

Cipahick, J. (dissenting).

In the City of New York, the number of people currently in need of shelter, that most basic of human necessities, is staggering: on a recent night in June, 42,007 individuals were in the city shelter system; 17,301 of them were children (see http://www.nyc.gov/html/dhs/downloads/pdf/ dailyreport.pdf [accessed June 14, 2012]). In 2007, the City, through its agencies and codefendants the Department of Homeless Services (DHS) and Human Resources Administration (HRA), created Advantage New York, a program designed to move homeless individuals and families out of shelters and into permanent housing by providing rental subsidies to enable them to lease apartments from private landlords. Because I believe that the City, as a matter of law, formed a contract with participating landlords to continue paying rental subsidies on behalf of current Advantage tenants like plaintiffs—an agreement that plaintiffs rightly seek to enforce as third-party beneficiaries—I respectfully dissent.

It is axiomatic that “[t]o create a binding contract, there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms” (Matter of Express Indus. & Term. Corp. v New York State Dept. of Transp., 93 NY2d 584, 589 [1999]). “Generally, [we] look to the basic elements of the offer and the acceptance to determine whether there is an objective meeting of the minds sufficient to give rise to a binding and enforceable contract” (id.).

“In determining whether the parties entered into a contractual agreement and what were its terms, it is necessary to look ... to the objective manifestations of the intent of the parties as gathered by their expressed words and deeds” (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397, 399 [1977]; see also Mencher v Weiss, 306 NY 1, 7 [1953] [“It is well-established contract law that in determining whether the parties possessed the necessary intention to contract, an objective test is generally to be applied”] [internal quotation marks, brackets and citation omitted]). One party’s subjective or actual intent not to be legally bound is of no moment (see Lord, Willis-ton on Contracts § 4:1 [“(I)t was long ago settled that secret, subjective intent is immaterial”]), unless “the other knows or has reason to know of that intention” (Restatement [Second] of Contracts § 21, Comment a, Illustration 2 [emphasis added]). Thus, as Judge Learned Hand stated, even “[i]f ... it were proved by twenty bishops that either party, when he used the words, intended something else than the usual meaning which the law imposes upon them, he would still be held, unless there were some mutual mistake, or something else of the sort” (Hotchkiss v National City Bank of N.Y., 200 F 287, 293 [SD NY 1911] [emphasis added]).

It follows that, here, while “disproportionate emphasis is not to be put on any single act, phrase or other expression” (Brown Bros., 41 NY2d at 399-400), we must ascertain the City’s manifested intent, in the first instance, “from the language [it] used” (Lally v Cronen, 247 NY 58, 63 [1928]) in the documents that implemented the Advantage program. “[T]he aim is a practical interpretation of the expressions of the parties to the end that there be a realization of their reasonable expectations” (Brown Bros., 41 NY2d at 400 [internal quotation marks and brackets omitted]). To that end, we apply the well-settled principle that “an interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part. . . of no effect” (Restatement [Second] of Contracts § 203 [a]).

Relying on Brown Bros, and proceeding on the premise that the “issue is whether the course of conduct and communications between the parties have created a legally enforceable agreement” (majority op at 571 [internal quotation marks and brackets omitted]), the majority erroneously determines that Supreme Court’s affirmed finding (that the City did not manifest its assent to contract with Advantage landlords) is one of fact, such that our review is limited to whether record evidence supports that determination (see majority op at 573, 573-574). But “where a question of intention is determinable by written agreements, the question is one of law, appropriately decided by an appellate court” (Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285, 291 [1973] [emphasis added]). Here, there is no need to look to the parties’ course of conduct or any “continuum of events and permissible inferences” (Brown Bros., 41 NY2d at 401) because we can determine the question of the City’s intent—and, more importantly, what a reasonable person in the position of the landlords would reasonably have understood the City’s intent to be—from the language of the Advantage program documents alone. Thus, our inquiry is one of law, guided by the familiar principles discussed above.

Taken together, the Advantage program documents unambiguously memorialize a bargained-for exchange between the City and the Advantage landlords to which the parties mutually assented. In the Certification Letter, which was drafted on DHS and HRA letterhead, signed by a city representative and shown to the landlords to induce them into renting apartments to plaintiffs in lieu of other potential tenants, the City “guarantee[d] that the subsidy portion of the rent will be paid directly to [the] landlord for one year” (emphasis added). Having accepted the City’s offer in accordance with its terms, a landlord signed a Landlord Statement of Understanding, printed on DHS letterhead, that indicated his or her understanding that “the [City] will pay directly to me, the Landlord, monthly rent . . . for a period of one year” and that an Advantage tenant “is automatically entitled to a self-executing renewal of the Lease for a second year” (emphasis added). In exchange, the landlord made significant “commitments,” including to refrain from charging an Advantage tenant any amount beyond the agreed upon rent, to offer the apartment at the same level of rent for a second year, to supply heat and hot water and to allow the City to place another Advantage tenant in the apartment in the event the original tenant moved or was evicted. Lastly, an Advantage tenant and participating landlord signed a lease rider, providing that the tenant “agree[d] [to] authorize[ ]” the City to pay “rental assistance directly to the Landlord” and that the City “shall pay” those subsidies. None of the statements contained in those documents were conditioned on the City’s receipt of state or federal aid, or on the City’s ability to fund the subsidies.

Terms and phrases such as “guarantee,” “shall” and “will pay” are not merely “trappings of contract language” or “mere assurances,” as the Appellate Division majority declared (Zheng v City of New York, 93 AD3d 510, 511 [1st Dept 2012]). Rather, “the usual meaning which the law [and common usage] impose[ ] upon” these words (Hotchkiss, 200 F at 293) is one of binding obligation, not election (see Black’s Law Dictionary 772 [9th ed 2009] [defining “guarantee” as “(t)he assurance that a contract or legal act will be duly carried out”]; see also Matter of Syquia v Board of Educ. of Harpursville Cent. School Dist., 80 NY2d 531, 536 [1992]; Matter of Jewett v Luau-Nyack Corp., 31 NY2d 298, 304 [1972] [construing “shall” as mandatory, rather than permissive]). Thus, a reasonable person in the position of the Advantage landlords would justifiably understand that the City was, by virtue of that mandatory language, promising to pay rental subsidies on plaintiffs’ behalf for the term of plaintiffs’ leases. Indeed, it would have been patently unreasonable for landlords to read such language in the anomalous manner of the courts below, which, in essence, found that “guaranteed” meant “not guaranteed,” “shall” meant “may,” and “will pay” meant “may pay.” That strained interpretation renders the City’s own choice of words of no effect, an outcome the law instructs us to avoid (see Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475, 483 [1989] [“the conclusion that a party’s promise should be ignored as meaningless is at best a last resort”] [internal quotation marks omitted]; see also Restatement [Second] of Contracts § 203 [a]).

Both Supreme Court and the Appellate Division majority determined that, in using the mandatory language discussed above, the City meant to distinguish the Advantage program from its predecessor program, Housing Stability Plus (HSP), which tied the receipt of rental subsidies to the tenant’s public assistance (PA) status and, to the ire of landlords, resulted in frequent subsidy disruptions. The courts found that in “guaranteeing]” subsidy payments regardless of changes in a tenant’s PA status, the City intended not to bind itself contractually, but to allay landlords’ concerns that rent would go unpaid (see Zheng, 93 AD3d at 511). But accepting this manufactured definition of “guarantee” is problematic for two reasons. First, it mistakenly relies almost entirely on the City’s subjective understanding of the language it used, as opposed to what a reasonable person in the landlords’ position would understand the language to have meant. In neither decision below was that vital analysis undertaken with regard to any of the program documents. Secondly, even if one in that position would have understood the City’s mandatory language as conveying a distinction from HSP—due to the parenthetical appearing in the Certification Letter’s subject line, “(Guaranteed Rent Not Tied to [PA])”—it would only serve to enhance one’s belief that the City’s commitment to consistent subsidy payments was binding. After all, that changes in PA status would not disrupt payment of a rental subsidy would be a promise of scant value if, in actuality, the City was under no continuing obligation to pay the subsidy at all and could terminate it at will.

The majority’s statement that “no document whatsoever was executed by the City and any landlord respecting the Advantage program” (majority op at 575) effectively cuts the Landlord Statement of Understanding—drafted on city letterhead, signed by landlords and embodying the parties’ mutual promises regarding the Advantage program—right out of the record. That this and other Advantage program documents were not “specifically captioned” as a contract, like documents used pursuant to the Section 8 housing assistance program (see id.), is not determinative of whether they created a contract as a matter of law (see generally Winston v Mediafare Entertainment Corp., 777 F2d 78, 80 [2d Cir 1986]; see also 1 Williston on Contracts § 1:3 [“A binding agreement sufficient to establish a contract requires no precise formality”]).

Although I strongly maintain that the question before us is one of law, even if it were, as the majority holds, one of fact (see majority op at 573), the record evidence purportedly supporting the conclusion that the City did not manifest its assent to a contract with the landlords is inapposite. The City’s unwillingness, for example, to become a party to the underlying leases between the Advantage tenants and landlords has nothing to do with whether the City entered into a separate and distinct agreement with Advantage landlords to subsidize the rent obligations created by the leases. Quite simply, the City’s emphasis on its status as a nonparty to any Advantage lease is entirely misplaced; that one is not bound by contract A has no bearing on whether one assented to be bound by contract B.

Much has been made of the fact that “the Advantage rent subsidy program for the homeless was simply a social services program” (Zheng, 93 AD3d at 511), as though the term “social services program” were anathema to the law of contracts; it is not. Nor is it a shield that, when invoked, permits the City to renege on the very promises it used to induce private parties— here, the landlords, who received no program benefits—to enter into separate agreements, causing them to forgo profitable alternatives for the use of their property. The result of the majority’s decision is cause for concern. After today, even the clearest of contract terms on which public and private entities routinely rely to efficiently coordinate their transactions apparently will grant no assurance that the law will recognize an agreement and provide a remedy for its breach.

The human consequences of today’s decision are even more compelling. As Justice Moskowitz opined in her dissent:

“Now, because the City breached its contractual obligations, the landlords face the expense of eviction proceedings in court and nonreceipt of rent. Plaintiffs are now potentially liable for the balance of leases they cannot afford. They are also in an untenable situation whereby they face eviction and homelessness. Many Advantage participants are victims of domestic violence. They will not be eligible to return to the relative safety of the domestic violence shelter system unless they suffer new incidents of domestic violence” {id. at 519).

Accordingly, I would reverse the order of the Appellate Division and grant the relief sought, a declaration that the City entered into binding contracts with its Advantage landlords and that plaintiffs are entitled to specific performance of those contracts.

Judges Graffeo, Smith and Pigott concur with Judge Read; Judge Ciparick dissents and votes to reverse in a separate opinion in which Chief Judge Lippman and Judge Jones concur.

Order affirmed, without costs.

      . At the trial in this case, a real estate broker specializing in apartment rentals testified that “[c]lients kept on falling off [PA] eligibility status in the middle of the program and landlords stopped getting paid and because of that, they just shied away from the program [•—] they said don’t bring HSP not interested.”

      . The tender of payments for PA is generally to be made directly to the recipient with exceptions, notably including “when the applicant/recipient requests in writing that vendor or protective payments be made” (18 NYCRR 381.2 [a] [emphasis added]).

      . Zheng later withdrew as a named plaintiff, although she has continued as a class member; the identity of A.T. has remained confidential throughout this proceeding because she is a victim of domestic abuse.

        . Supreme Court also decided that class certification was “unnecessary at this time” in light of the City’s agreement “to apply [her] determination equally to all similarly situated”; and therefore also denied plaintiffs’ motion for class certification (2011 NY Slip Op 31120[U] at *25). Before the first day of trial, the City agreed to certification of the plaintiff class in this action.

      . While the judge discussed this evidence solely with respect to the City’s intent, it also bears on the intent of landlords—i.e., why would landlords make these entreaties if, as the dissenters contend, “a reasonable person” in their position would have clearly understood that the City, by virtue of the program documents, “entered into a separate and distinct agreement with [them] to subsidize the rent obligations created by the leases” (dissenting op at 582)? Although the dissenters criticize Supreme Court for not undertaking the “vital analysis” of landlord intent (id.), the judge explained, as noted earlier, that once she found no intent on the part of the City, landlord intent did “not matter” because intent must be mutual.

      . In other words, although the dissenters assert that “a reasonable person in the position of the Advantage landlords” would have clearly understood that the City had contracted with them and, indeed, it would have been “unreasonable” to conclude otherwise (dissenting op at 580), the overwhelming after-the-fact testimony was that landlords harbored no such illusion. While subjective understandings, as Supreme Court noted, are “not probative on the issue of mutual assent,” it is impossible to reconcile the fact that actual participants in the Advantage program from the real estate community did not consider the City to be contractually bound with the dissenters’ conclusion that “the Advantage program documents unambiguously memorialized] a bargained-for exchange between the City and the Advantage landlords to which [they] mutually assented” {id. at 579 [emphasis added]).

        (n. cont’d)

      . Section 8 of the Housing Act of 1937 (42 USC § 1437f), as repeatedly amended, authorizes a variety of rental assistance programs on behalf of low-income households. A document pertaining to Section 8 benefits, captioned “Housing Assistance Payments Contract (HAP Contract),” which is executed (not merely witnessed) by a representative of a city public housing agency and the rent-subsidized tenant’s landlord, was entered into evidence at trial (see
        McNeill v New York City Hous. Auth., 719 F Supp 233, 238-240 [SD NY 1989] [discussing the Section 8 program]).

        (n. cont’d)

      . The complete sentence reads as follows:
      “Even if the tenant participants and the landlords intended to be contractually bound, there is no enforceable contract in either instance because [the City] profess[es] to have understood the documents differently with respect to their basic nature, i.e., that the City was undertaking a governmental social services obligation that was within its discretion to terminate rather than a contractual obligation; there was no meeting of the minds” (93 AD3d at 512).

      . In a letter submitted to us in connection with plaintiffs’ motion for leave to appeal, Corporation Counsel stated that
      “[w]hen plaintiffs appealed the order denying their motion for a preliminary injunction, a short-lived trial-court stay and ensuing Appellate Division preliminary injunction required the City to continue making rent payments through January 2012. As a result, the City was forced to expend approximately $115 million of the $160 million it expected not to have to use to continue Advantage subsidies. The City’s savings diminish dramatically over time since tenant leases expire every month, and all will be expired by March 2013.”
      According to plaintiffs’ counsel, roughly 8,000 households remained in the Advantage program as of February 1, 2012.

      . In Brown, by contrast, there was no writing or set of writings embodying a complete agreement; rather, an invoice sent by Brown, a subcontractor, to the defendant owner and the owner’s response that it would “pay . . . the balance” evinced that the parties may have come to a prior, unmemorialized agreement (see 41 NY2d at 399). Only upon thoroughly examining the surrounding circumstances and the parties’ communications, however, was it apparent that the owner and subcontractor, out of mutual self-interest, had arrived at an agreement for the latter to complete the electrical work it was hired to perform by the general contractor, despite the general’s default (see id. at 400-401).

        (n. cont’d)

      . Under New York law, official letterhead of a city agency such as DHS and HRA constitutes the signature of that agency, and, by extension, the City (see General Construction Law § 46). However, the absence of a signature would still not be fatal to an agreement possessing the requisite elements of a contract in light of the “common-law rule that written documents can be enforced even if they are not signed” (Flores v Lower E. Side Serv. Ctr., Inc., 4 NY3d 363, 369 [2005]).

      . The Certification Letter also indicated the total rent allowable under the program, the amount of rent the City would subsidize, the amount of rent for which the tenant was responsible, the initial prerequisites for the program and when the certification would expire.

      . The Certification Letter contained a section entitled “Information for Brokers and/or Landlords,” instructing landlords to contact DHS at a provided phone number and stipulating that “[a] 11 apartments must pass a Housing Quality Standard inspection before being leased.”

      . The Participant Statement, also printed on DHS letterhead and signed by the tenant and a city representative, provided that “[u]nder the Advantage Program, [the City] will pay a portion of [the tenant’s] monthly rent . . . directly to [his or her] Landlord.”

      . The majority incorrectly states that the analysis we find lacking in the decisions below concerned the landlords’ intent (majority op at 567 n 5). Rather, as we have explained, what is at issue is the City’s objectively manifested intent, which should be gleaned from looking to what a reasonable person in the position of the landlords, as promisees, would have understood from the City’s writings (see 1 Lord, Williston on Contracts § 1:2 [4th ed] [“(Wlhether a manifestation of intention by the promisor will have operative effect as a promise depends upon how the promisee understands the manifestation. That manifestation, however, is judged by an objective standard”]).

      . We now know from the City’s post-argument submission that, in fact, 252 families within the class are victims of domestic violence (see letter of defendant, June 4, 2012 1Í 2).