Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 1 of 25

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------------------------------x
UNITED STATES OF AMERICA ex rel.
:
ANTI-DISCRIMINATION CENTER OF
METRO NEW YORK, INC.,
:
Plaintiff,
-v.-

:

REPORT AND
RECOMMENDATION

:
06 Civ. 2860 (DLC) (GWG)

WESTCHESTER COUNTY, NEW YORK,

:
:

Defendant.
---------------------------------------------------------------x
GABRIEL W. GORENSTEIN, United States Magistrate Judge
In 2006, The Anti–Discrimination Center of Metro New York, Inc. brought a qui tam
action on behalf of the United States under the False Claims Act alleging that Westchester
County (“the County”) had made false certifications to the United States Department of Housing
and Urban Development regarding its efforts to “affirmatively further fair housing” under 42
U.S.C. §§5304(b)(2), 12705(b)(15). See generally U.S. ex rel. Anti-Discrimination Ctr. of
Metro New York, Inc. v. Westchester Cnty., N.Y., 712 F.3d 761, 765-67 (2d Cir. 2013). The
Government intervened and the parties simultaneously submitted a settlement resolving the
litigation. See Order Granting Application of United States to Intervene, filed August 10, 2009
(Docket # 319); Stipulation and Order of Settlement and Dismissal, filed August 10, 2009
(Docket # 320) (“the Settlement”). In the Settlement, the County agreed to a set of injunctive
measures as well as the appointment of a Monitor to oversee the County’s compliance.
On May 8, 2015, the Monitor issued a report finding that the County had failed to comply
with certain provisions of the Settlement. See Monitor’s Supplemental Report Regarding
Implementation of the Stipulation and Order of Settlement and Dismissal for the 2014 Calendar

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 2 of 25

Year, filed May 8, 2015 (Docket # 507) (“the Report”). The County has now objected to
portions of the Report.1
For the reasons stated below, we conclude that the County’s objections should be
sustained in part and overruled in part.
I. BACKGROUND
A. The Settlement
The centerpiece of the Settlement is the County’s agreement to the construction of 750
new affordable housing units (“AFFH units”) within seven years of the agreement. Settlement
¶ 7. To ensure satisfaction of this obligation, the Settlement requires the County to meet certain
benchmarks pertaining to the 750-unit goal. Id. ¶ 23. There are two distinct obligations that
must occur at the end of each calendar year: first, to have a certain number of AFFH units with
“financing in place,” and second, to have a certain number of AFFH units “with building
permits.” This portion of the Settlement provides as follows:

1

See County’s Objections to the Monitor’s Report and Recommendation, filed June 16,
2015 (Docket # 518) (“Cnty. Obj.”); Memorandum of Law of the United States in Support of the
Monitor’s Report and Recommendation and in Opposition to the Objections filed by
Westchester County and for Contempt, filed July 21, 2015 (Docket # 529) (“Gov. Mem.”);
County’s Reply Memorandum of Law in Further Support of its Objections to the Monitor’s
Report and Recommendation and in Opposition to the Contempt Application of the United
States, filed August 11, 2015 (Docket # 532) (“Cnty. Reply”); Letter to Magistrate Judge Gabriel
W. Gorenstein from David J. Kennedy, filed August 14, 2015 (Docket # 542).
2

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 3 of 25

By end of calendar year

Sites with financing in place
(number of units)

Units with building permits

2011

100

50

2012

200

125

2013

300

225

2014

450

350

2015

600

525

2016

750

750

2010

Id. ¶ 23.
The Settlement recites that the “nature of real estate development, especially in the
context of developing affordable housing, depends on a number of factors that cannot always be
predicted or controlled.” Id. ¶ 15. Accordingly, paragraph 7 of the Settlement requires that
( i ) The County shall use all available means as appropriate to
achieve the objectives set forth in this paragraph, including, but not
limited to, developing financial or other incentives for other entities to
take steps to promote the objectives of this paragraph, and conditioning
or withholding the provision of County funds on actions that promote
the objectives of this paragraph . . .
( j ) In the event that a municipality does not take actions needed to
promote the objectives of this paragraph, or undertakes actions that
hinder the objectives of this paragraph, the County shall use all available
means as appropriate to address such action or inaction, including, but
not limited to, pursuing legal action. The County shall initiate such legal
action as appropriate to accomplish the purpose of this Stipulation and
Order to AFFH.
Id. ¶¶ 7(i)-(j).

3

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 4 of 25

B. The Chappaqua Station Development
The current dispute relates to a development known as “Chappaqua Station” in New
Castle, New York (“the Town”). The dispute has arisen because in order for the County to meet
paragraph 23’s requirement that there be 450 units with “financing in place” as of December 31,
2014, 24 of the project’s 28 units must be counted. Report at 10.
In February 2012, the County, the Town of New Castle, and Conifer Realty (“Conifer”)
approached the Monitor about including the Chappaqua Station development as part of the
AFFH units under the Settlement. See Monitor’s Second Biennial Assessment of Westchester
County’s Compliance, dated June 26, 2014 (Docket # 478) (“Second Biennial Assessment”), at
60. The County offered significant financing to New Castle to support the building of
Chappaqua Station. See id. New Castle had previously approached Conifer to lead the
development of Chappaqua Station and, working with County and Town officials, Conifer
developed a proposed building plan for submission to the Monitor. See id. at 60-61. In
September 2012, the Monitor endorsed Conifer’s proposal for Chappaqua Station and approved
the 28 units within the development as “further[ing] the goals of the consent decree.” See id. at
61; Letter from James E. Johnson to Andrew Bodewes, Vice President Conifer Realty LLC,
dated September 7, 2012 (annexed as Ex. 83 to Supplemental Exhibits to the Monitor’s Second
Biennial Assessment of Westchester County’s Compliance Part 6 of 6, filed June 27, 2014
(Docket # 487).
On September 10, 2013, the Town of New Castle granted Conifer a “Special Permit” to
build the Chappaqua Station development. Town of New Castle Town Board, Conifer Special
Permit Approval, dated September 10, 2013 (annexed as Ex. E. to Declaration of David J.
Kennedy, filed July 21, 2015 (Docket # 528) (“Kennedy Decl.”)), at 26. However, the Special
4

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 5 of 25

Permit required Conifer to acquire certain variances from the “New York State Department of
State Review Board” (“the State Board of Review”). Id. ¶ 2.8.6. It also noted that “[o]ther
variances may be required upon further review, upon receipt of a complete Building Permit
application, and/or upon final design.” Id. ¶ 2.8.6.1. Proceedings then took place before the
State Board of Review, in which Conifer requested the necessary variances for Chappaqua
Station.
At the initial hearing on December 10, 2013, the State Board of Review adjourned the
matter to a later date and requested further information from the parties. Minutes of Hearing, In
re Chappaqua Station LLC, Petition No. 2013-0524, dated December 10, 2013 (annexed as Ex.
K to Declaration of Norma Drummond, filed June 16, 2015 (Docket # 520) (“Drummond
Decl.”)) (“State Board of Review December 2013 Hearing”), at 150. Soon after the hearing, on
December 16, 2013, the County voted against a funding proposal for Chappaqua Station. See
Lohud Westchester Blog, dated December 17, 2013 (annexed as Ex. G to Kennedy Decl.); Gov’t
Mem. at 7. By this point, some community opposition to the project had developed. See Flyer
(annexed as Ex. F to Kennedy Decl.). Indeed, at the December 10 hearing before the State
Board of Review, a new Town Supervisor testified against Conifer’s request for variances. State
Board of Review December 2013 Hearing at 83-86. The Town Building Inspector testified
unfavorably as well, at both the December 2013 Hearing and the subsequent meeting on April
18, 2014. State Board of Review December 2013 Hearing at 71-82; Minutes of Hearing, In re
Chappaqua Station LLC, Petition No. 2013-0524, dated April 4, 2014 (annexed as Ex. L to
Drummond Decl.), at 49-56. On July 2, 2014, the State Board of Review denied many of
Conifer’s variance requests. Minutes of Hearing, In re Chappaqua Station LLC, Petition No.
2013-0524, dated July 2, 2014 (annexed as Ex. M to Drummond Decl.), at 11-22. On November
5

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 6 of 25

17, 2014, Conifer returned to the State Board of Review with a modified proposal for Chappaqua
Station and a new petition for variances. See Minutes of Hearing, In re Chappaqua Station,
LLC, Petition No. 2014-0573, dated December 9, 2014 (annexed as Ex. N to Drummond Decl.)
(“State Board of Review December 2014 Hearing”), at 3. This new proposal soon received the
County’s financial support. On November 26, 2014, the County enacted four acts to allow
construction of the project. These acts (1) acquired the land for the project; (2) authorized the
issuance of bonds to finance the acquisition of the land; (3) authorized the issuance of bonds to
finance the costs of infrastructure improvements; and (4) authorized the County to enter into an
agreement with the Town of New Castle related to the project. See Westchester County N.Y.
Act Nos. 212-2014, 213-2014, 214-2014, 215-2014, dated November 24, 2014 (annexed as Ex.
U to Drummond Decl.). We will refer to these collectively as the “Chappaqua Development
Bond Acts” and to the bonds they authorize as the “County Bonds.” The two Chappaqua
Development Bond Acts that authorized the issuance of bonds contained the following
provision: “[t]he issuance of bonds. . . shall be subject to the approval of all required State and
Municipal variances.” See Westchester County N.Y., Act Nos. 213-2014 § 1, 214-2014 § 1
(annexed as Ex. U to Drummond Decl.).
On January 22, 2015, the State Board of Review approved Conifer’s new request for
State variances notwithstanding the opposition from the New Castle Town Supervisor and its
Building Inspector. See Chappaqua Daily Voice, State Board Approves Variances for
Chappaqua Station, dated January 22, 2015 (annexed as Ex. J to Kennedy Decl.) (“Daily Voice
Article”); State Board of Review December 2014 Hearing at 46-54. The State Board of
Review’s resolution was memorialized in a written decision on April 27, 2015. Decision on
Petition No. 2014-0573, dated April 27, 2015 (annexed as Ex. W to Drummond Decl.).
6

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 7 of 25

Despite having obtained the necessary variances from the State Board of Review, Conifer
faced problems both in maintaining their Special Permit and in acquiring a local building permit.
See Declaration of Edward J. Phillips, filed August 11, 2015 (Docket # 536) (“Phillips Decl.”),
¶¶ 59-62, 84-89. On February 3, 2015, Conifer contacted New Castle to confirm the length of
the Special Permit the Town had previously authorized. Phillips Decl. ¶ 58. The Town took the
position that the Special Permit was valid only for a period of 18 months, while Conifer argued
that the permit was valid for 25 years. Id. ¶¶ 58-59. Under New Castle’s interpretation of the
Special Permit, the permit would expire on March 20, 2015. Conifer Realty, LLC v. Town of
New Castle, Index No. 5286/2015 (Sup. Ct. Westchester Cty.) (annexed as Ex. L to Kennedy
Decl.) (“State Court Decision”), at 3. Because of this looming deadline, the Town advised
Conifer to request an extension from the Town Board, which the Town suggested “was likely to
be granted.” Phillips Decl. ¶¶ 59-62. Instead, on February 19, 2015, Conifer initiated litigation
against the Town seeking a judicial declaration regarding the Permit’s length. See Verified
Complaint, Conifer Realty, LLC, v. Town of New Castle, dated February 19, 2015 (annexed as
Ex. J to Phillips Decl.); State Court Decision. The County did not join as a party or participate
in the suit. See State Court Decision. On May 6, 2015, the court hearing Conifer’s action
rejected Conifer’s arguments and granted the Town’s motion to dismiss. Id. at 8. Nevertheless,
on May 26, 2015, the Town Board approved an extension of Conifer’s Special Permit until
November 2016. Town of New Castle Town Board, Resolution Extending Time to Complete
Improvements Pursuant to Town Code § 60-430(M), dated May 26, 2015 (annexed as Ex. M to
Kennedy Decl.).
Notwithstanding the acquisition of both the necessary State variances and the extension
of the Special Permit, Conifer had yet to acquire a building permit from New Castle’s Building
7

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 8 of 25

Inspector as of the time of the briefing of the instant Objection. Gov. Mem. at 10; Cnty. Reply at
20. The Town has estimated that the review process of Chappaqua Station will conclude by “the
end of September 2015,” Philips Decl. ¶ 88, an estimate that has not been updated since the
briefing of the Objection. The Government contends that the Town Building Inspector may
further delay the progress of Conifer’s variance requests because “[he] opposed Chappaqua
Station in the past, and spoke out against it at the [State Board of Review] meetings on
December 10, 2013, again on April 8, 2014, and again on December 9, 2014.” Gov. Mem. at 910 (internal citations omitted). Furthermore, the Government notes that New Castle’s Building
Inspector has suggested he would not begin reviewing Conifer’s request until the $152,000
permit fee was paid, and that even then, it “would go . . . to the bottom of the pile.” Id. 2
D. Monitor’s 2014 Supplemental Report
On May 8, 2015, the Monitor filed the Report regarding the County’s progress toward
meeting its 2014 benchmarks under the Settlement.3 See Report. We will not repeat the full
factual description contained in the Report, id. at 1-8, familiarity with which is assumed.
Upon review of the County’s progress, the Report found that the County had breached
its duty to ensure “financing [was] in place” for the required benchmark of 450 AFFH units as of
December 31, 2014. Id. at 11. The Report reached this conclusion because it did not count the
28 AFFH units within the Chappaqua Station development toward the 2014 benchmark. Id. The

2

It appears that the permit fee was paid on July 1, 2015. Phillips Decl. ¶ 84.

3

The Monitor had previously filed a status report reviewing the entirety of the County’s
progress but had requested further information from the parties concerning the status of the
Chappaqua Station development. See Monitor’s Report Regarding Implementation of the
Stipulation and Order of Settlement and Dismissal for the 2014 Calendar Year, filed April 1,
2015 (Docket # 506).
8

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 9 of 25

Report noted that the County had financed the project through the use of county bonds that were
“subject to the approval of all required State and Municipal variances.” See Report at 3;
Westchester County N.Y., Act Nos. 213-2014 § 1, 214-2014 § 1 (annexed as Ex. U to
Drummond Decl.). The Report found that, as of December 31, 2014, the approval of the
outstanding variances had not occurred. Id. at 13-14. The Report therefore concluded that
because the Town had reserved the right in Conifer’s Special Permit to impose additional local
variances, financing could not be deemed “in place” without an official assurance from the Town
that no further variances or pre-conditions would be required. Id. at 16.
The Report found that the County’s failure to provide “financing in place” triggered an
immediate monetary penalty of $30,000 and subsequent penalties of $60,000 for each month of
continued non-compliance. Report at 14; Settlement ¶ 38. The Report further found that these
penalties accrue “until such time as: (i) the bonds are issued; or (ii) the County presents
dispositive evidence, in the form of a final order issued by the State Board of Review and a
declaration by New Castle that no further variances are required, that all preconditions to its
funding commitment have been met.” Report at 16. The Report also determined that the
County’s breach would require development of AFFH units beyond the 750 already required
under the Settlement. Id.
Separately, the Report found that the County had violated paragraph 7 of the Settlement
because it had failed to “use all available means as appropriate” to address municipal opposition
to the Chappaqua Station development. Id. at 17, 20; Settlement ¶ 7. The Report found that the
Town had undertaken actions that hindered the building of AFFH units in violation of paragraph
7(j), including the Town’s public criticism of the project, the Town’s opposition before the State
Board of Review, its litigation with Conifer, and the statement that Conifer’s application would
9

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 10 of 25

“go all the way to the bottom of the pile.” Report at 19. The Report further found that the
County had not used “all available means” to address the Town’s opposition, characterizing the
County’s actions as that of a “spectator.” Report at 20. Specifically, the Report states that the
County had
refused to consider financial or other incentives to encourage New Castle to
modify its stance; failed to undertake efforts to reach out to New Castle to address
its opposition; declined to specify any steps it plans to take to address New
Castle’s opposition; and had not undertaken any steps in connection with the
pending litigation between New Castle and Conifer. Rather, the County has
offered the hope that the litigation will address New Castle’s concerns. Hope,
however, is not a strategy.
Report at 20. The Report stated it was referring the County’s violation to the Department of
Justice “for a determination of whether a contempt motion should be filed.” Id. at 21.
C. The County’s Objections
The County makes essentially three objections to the Report: (1) that the Monitor failed
to comply with a provision of the Settlement prior to his submission of the Report that required
him to meet with the parties; (2) that the Report erred in finding that County did not have
“financing in place” for the Chappaqua Station development as of December 31, 2014; and (3)
that the Report incorrectly found that the County failed to use “all available means as
appropriate” to address any opposition to Chappaqua Station by the Town of New Castle. Cnty
Obj. at 13-29.
II. APPLICABLE LAW
A. Standard of Review
Review of both the Monitor’s factual findings and legal conclusions are de novo. See
Fed. R. Civ. P. 53(f)(3),(4) (review of factual findings and legal conclusions of a master

10

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 11 of 25

appointed by a court are “de novo”).4
B. Interpretation of the Settlement
Interpretation of the Settlement here is in accordance with the law that governs the
interpretation of consent decrees. See U.S. ex rel. Anti-Discrimination Ctr. of Metro New York,
Inc. v. Westchester Cnty., N.Y., 712 F.3d 761, 767 (2d Cir. 2013). As the Second Circuit stated
in the course of its review of previous objections to a report from the Monitor in this case:
Consent decrees “reflect a contract between the parties (as well as a judicial
pronouncement), and ordinary rules of contract interpretation are generally
applicable.” Doe v. Pataki, 481 F.3d 69, 75 (2d Cir.2007). This requires that
“ ‘deference ... be paid to the plain meaning of the language of a decree and the
normal usage of the terms selected.’ ” United States v. Broad. Music, Inc., 275
F.3d 168, 175 (2d Cir.2001) (quoting Berger v. Heckler, 771 F.2d 1556, 1568 (2d
Cir.1985)). The rules of contract interpretation, however, do not contemplate
considering any provision of the contract in isolation “but in the light of the
obligation as a whole and the intention of the parties as manifested thereby.” JA
Apparel Corp. v. Abboud, 568 F.3d 390, 397 (2d Cir.2009) (citation and internal
quotation marks omitted).
Id.
Upon reviewing the meaning of a contract’s terms, a court’s initial question is “whether
the contract terms are ambiguous.” Revson v. Cinque & Cinque, P.C., 221 F.3d 59, 66 (2d Cir.

4

In ruling on a previous objection to a report from the Monitor, this Court issued an
Opinion and Order regarding the dispute. See Opinion and Order, filed March 16, 2012 (Docket
# 396). We did so based on our conclusion that paragraph 14(d) of the Settlement reflected the
parties’ consent to disposition of such disputes by the magistrate judge assigned to the case
pursuant to 28 U.S.C. § 636(c)(1), and that the references in paragraph 14(d) to the standard of
review referred to review of the Monitor’s decision, not review by the district court of the
magistrate judge’s decision. See id. at 2-3. The district judge rejected this view, however, see
Opinion and Order, filed May 3, 2012 (Docket # 402), at 10-11, a conclusion that was affirmed
by the Second Circuit. Accordingly, we interpret paragraph 14(d) as referring all objections to a
Monitor’s report to the magistrate judge for purposes of providing a report and recommendation
to the district judge pursuant to 28 U.S.C. §636(b). We thus also conclude that the reference in
paragraph 14(d) to review “governing reports and recommendations from a magistrate judge”
does not refer to review of the Monitor’s reports. As a result, the citation above is to the
standard governing review of reports from special masters.
11

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 12 of 25

2000). The meaning of an unambiguous settlement agreement “is a question of law for the court
to decide,” id., and should be “discerned within [the agreement’s] ‘four corners, and not by
reference to what might satisfy the purposes of one of the parties to it.’” United States v. Apple,
Inc., 791 F.3d 290, 337 (2d Cir. 2015) (citing United States v. Armour & Co., 402 U.S. 673, 682
(1971)).
As with any contract, a court construing a consent decree “also may consider . . . normal
aids to construction such as the circumstances surrounding the formation of the consent order,
any technical meaning words used may have had to the parties, and any other documents
expressly incorporated in the decree.” United States v. Int'l Bhd. of Teamsters, Chauffeurs,
Warehousemen & Helpers of Am., AFL-CIO, 998 F.2d 1101, 1106 (2d Cir. 1993) (citation and
internal quotation marks omitted). Ultimately, a reviewing court remains bound to the “express
terms of a consent decree and may not impose supplementary obligations on the parties even to
fulfill the purposes of the decree more effectively.” Perez v. Danbury Hosp., 347 F.3d 419, 424
(2d Cir. 2003).
III. DISCUSSION
A. Paragraph 40 Meeting Requirement
The Report arose from the Settlement’s requirement that the Monitor file periodic reports
addressing the “observed or substantiated lapses in the County’s compliance . . . [and] the
adequacy of the County’s implementation plan and efforts.” Settlement ¶ 39. The Settlement
provides that, prior to any such submission, the Monitor “shall meet with representatives of the
County and the Government to discuss compliance issues, recommendations for corrective
action, and other matters.” Id. ¶ 40. The text of the Settlement does not address the
consequences of any failure on the part of the Monitor to engage in the required meeting and
12

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 13 of 25

discussion.
The County alleges that the Monitor did not fulfill his obligation to meet with
representatives from both sides prior to issuing the Report and to discuss with them the issues
raised in the Report. The County asserts that the Monitor’s failure to adhere to the terms of the
Settlement has denied it “the opportunity to have the discussion that is expressly mandated by
Paragraph 40.” Cnty. Obj. at 14. In the County’s view, the discussion should have addressed
both compliance issues and the Monitor’s “recommendations for corrective action.” Cnty. Reply
at 3. In response, the Government notes that there were “three rounds of letters and a telephonic
meet and confer,” between the County and the Monitor prior to the submission of the Report.
Gov. Mem. at 16. The County argues that the letters and phone call did not match the issues
ultimately raised in the Report. Cnty. Reply at 3-4. After the Report was submitted, the
Monitor requested a meeting with both parties and the Court, to which the County failed to
respond. Id. at 4; Gov. Mem. at 16.
The Court does not believe it is necessary to decide whether there has been a violation of
paragraph 40 of the Settlement. Even if the County is correct that the meeting required by that
paragraph did not occur, its objection must be overruled because there is nothing in the language
or structure of the Settlement to suggest that any failure to comply with the meeting requirement
renders a Report issued pursuant to the Settlement invalid. The paragraph of the Settlement
describing the process for objecting to a Report, paragraph 14(d), makes no reference to the
meeting requirement. Nor is there any other indication in the Settlement text that a failure to
comply with the meeting requirement has any bearing on the validity of a Report from the
Monitor.
Moreover, the County has not shown any prejudice that has resulted from any failure to
13

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 14 of 25

meet. While the County suggests that it might have convinced the Monitor of the merits of its
position had there been a meeting, Cnty. Reply at 3, this does not qualify as prejudice inasmuch
as the County has not been constrained in any objections it wishes to make to the substance of
the Monitor’s Report.
In the end, any failure to meet could not detract from the Court’s obligation to determine
whether there has been a breach of the County’s obligation to comply with the Settlement. This
is best understood by examining contract law principles which, as already noted, govern the
interpretation of the Settlement. See U.S. ex rel. Anti-Discrimination Ctr. of Metro New York,
Inc., 712 F.3d at 767. Under principles of contract law, only a “material” breach of the
Settlement would have excused the County’s performance of its obligations. See, e.g., Frank
Felix Assocs., Ltd. v. Austin Drugs, Inc., 111 F.3d 284, 289 (2d Cir. 1997). To qualify as a
material breach, the breach must be “so substantial that it defeats the object of the parties in
making the contract.” Id. Any failure to meet plainly did not defeat the main purpose of the
Settlement, which was to construct 750 fair housing units. Accordingly, the County’s objection
to the Report on the basis that there was a failure to meet should be overruled.
B. Paragraph 23
The Monitor found that the 28 units of the Chappaqua Station development did not have
“financing in place” as of December 31, 2014. Settlement ¶ 23; Report at 13-14. Because the
Monitor did not include these units in the County’s yearly benchmark total, the Monitor found
the County had not satisfied its obligation under paragraph 23. See Report at 13-14.
The question of whether the County violated the Settlement on December 31, 2014,
turns on the meaning of the words “financing in place.” As already noted, a court interpreting a
consent decree must read the language selected for its “plain meaning” and according to the
14

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 15 of 25

chosen words’ “normal usage.” Mastrovincenzo v. City of New York, 435 F.3d 78, 103 (2d Cir.
2006) (citations and internal quotation marks omitted). Additionally, where possible, a consent
decree’s terms should be read so as not to render any provision superfluous or meaningless. See
Galli v. Metz, 973 F.2d 145, 149 (2d Cir. 1992).
The parties provide no evidence that the term “financing in place” has an established
trade usage. The cases that the Government has pointed to that use the term, Gov. Mem. at 1719, do not suggest that it has a meaning in common parlance, let alone a fixed legal meaning that
is relevant to the issue before the Court. See, e.g., Irving Capital Corp. v. Serologicals
Acquisition, Inc., 1986 WL 2763, at *2 (S.D.N.Y. Feb. 27, 1986) (quoting a party’s letter
describing their belief that an underlying contract required “a binding written commitment for all
financing in place”); Internet Homes, Inc. v. Vitulli, 778 N.Y.S.2d 534, 535 (2d Dep’t 2004)
(finding unsubstantiated assertions of credit and the allegation that a party was ready, willing,
and able to perform insufficient to show financial capacity to purchase property). Nonetheless,
we agree with the Government that the term “financing in place” would ordinarily be understood
to mean that a party has “secur[ed] the funds necessary to meet the obligation.” Gov. Mem. at
18.
The Government further argues that “financing in place” means that there is an “absence
of contingencies or preconditions.” Gov. Mem. at 18. But the cases the Government cites do
not say this directly. At best, they refer to the financing involved in those cases as being
“binding” or “firm.” See, e.g., Payer ex rel. Transition Metals Technology, Inc. v. The SGL
Carbon, LLC, 2006 WL 2714190, at *8 (W.D.N.Y. Sept. 22, 2006) (“financing in place”
requires more than mere “attempts and efforts” to secure financing); In re Ralph C. Tyler, P.E.,
P.S., Inc., 156 B.R. 995, 997 (Bankr. N.D. Ohio 1993) (Chapter 11 plan did not have “firm
15

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 16 of 25

financing in place” because petitioner had produced absolutely “no evidence of any commitment
to such financing”). We certainly do not glean from these cases that there is any common
understanding of the term “financing in place” that excludes a condition of any kind.
To assist us in understanding the meaning of “financing in place,” we first turn to the
dictionary definition of the phrase “in place.” See, e.g., CBS Corp. v. Eaton Corp., 2009 WL
4756436, at *4 (S.D.N.Y. Dec.7, 2009) (“A sound method for determining the plain meaning of
words is to look at their dictionary definitions.”) (citation and internal quotation marks omitted).
The dictionary definition closest to the meaning intended here is “set up, ready for action; (fig.)
in force, operative” — a meaning that is related to an original meaning of “in place” as being in
“proper position.”5 Thus, in the context of financing, the term “in place” is best understood to be
financing that is ready or in force — that is, in existence and available to be accessed as a
practical matter without restriction.
The purpose of the Settlement confirms the phrase’s meaning. As noted, the main
purpose of the settlement was to construct the 750 AFFH units. Paragraph 23’s creation of a
benchmark for units with “financing in place” was obviously intended to further that goal and to
ensure that it would be timely achieved. Thus, the phrase must be construed to refer to units that
have “financing in place” as a practical matter.
The Report’s only concern about the financing of the Chappaqua development is that the
acts allowing issuance of the County Bonds make reference to the fact that “[t]he issuance of
bonds . . . shall be subject to the approval of all required State and Municipal variances.”

5

In Place, Oxford English Dictionary, definition P2.a.(c),
http://www.oed.com/view/Entry/144864?rskey=2mPRGT&result=1#eid29910380 (last visited
Nov. 18, 2015).
16

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 17 of 25

Westchester County N.Y., Act Nos. 213-2014 § 1, 214-2014 § 1 (annexed as Ex. U to
Drummond Decl.). Read in isolation, the use of the word “subject to” would understandably
raise concerns that it operated as a restriction on the availability of financing. But this reading
does not consider the practicalities of the situation. The record is devoid of evidence that the
inclusion of this provision makes the financing any less available for the Chappaqua Station
development as a practical matter than would be the case if the bond acts omitted the “subject
to” language. The Government does not dispute the County’s argument, Cnty. Obj. at 17-18,
that even without this phrase, the project would still require approval of any required state and
municipal variances. See also Phillips Decl. ¶ 22 (“By operation of law, Conifer has always had
the legal obligation to fulfill the conditions attached to the Special Permit, including but not
limited to the issuance of all required building and fire code variances.”).6
Moreover, uncontested testimony reflects that the provision has no practical effect on the
availability of financing from the County. According to Ann Marie Berg, the Commissioner of
the Westchester County Department of Finance and the Chief Financial Officer for the County,
the County uses its available funds to pay for the expenses relating to a capital project and only
afterwards issues bonds to reimburse the money spent on the project. Declaration of Ann Marie
Berg, filed June 16, 2015 (Docket # 521) (“Berg Decl.”), ¶ 3. Thus, after a bond act has been
adopted to authorize the issuance of bonds for an AFFH project, the County can spend its own
funds for the project, which are then reimbursed by the bonds issued at a later date. Id. ¶ 3. This

6

The Government contends that any argument that the phrase in the County Bond acts
does not affect the availability of financing violates the canon of construction that a court should
“give effect to every word of a statute wherever possible.” Gov. Mem. at 22 (citation omitted).
But we seek to give full effect to phrase as written. That is, we accept that the bonds cannot be
issued until the variances have been obtained. However, as described above, giving this phrase
full effect has no practical effect on the availability of financing for the project.
17

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 18 of 25

system is described in both of the acts authorizing the County Bonds, which state that
prior to issuance of the bonds authorized herein . . . [t]he County intends to finance, on an
interim basis, the costs or a portion of the costs of said objects or purposes for which
bonds are herein authorized, which costs are reasonably expected to be reimbursed with
the proceeds of debt to be incurred by the County, pursuant to this Bond Act . . .This Act
is a declaration of official intent adopted pursuant to the requirements of Treasury
Regulation Section 1.150-2.
Westchester County N.Y., Act Nos. 213-2014 § 3, 214-2014 § 3 (annexed as Ex. U to
Drummond Decl.). Indeed, throughout the implementation of the Settlement, the County has
funded other projects in this manner. Drummond Decl. ¶ 35. Under this system of financing,
the variance condition in the acts authorizing the County Bonds — even if it was not already
irrelevant because of Conifer’s inability to build without any required variances — could only
delay the County’s ability to reimburse itself for earlier disbursements of funds. It would not
have any effect on the funding of the project. Notably, the Government does not dispute the
County’s ability to provide the necessary funding prior to the issuance of the applicable bonds.
See also Letter to Darryl C. Towns, Commissioner NYS Homes and Community Renewal, from
Edward Buroughs, Commissioner Westchester Department of Planning, dated May 21, 2014
(annexed as Ex. S. to Drummond Decl.) (stating that the County has a “capital project budget
totaling $51.6 million to be used to assist in financing AFFH housing units”).
Commissioner Berg similarly explains that this method accords with how the County
ordinarily pays an entity such as Conifer for the construction of an AFFH project: that is, the
bonds are issued only after the builder has submitted its claim for construction costs. Berg. Decl.
¶ 4. There is no suggestion that a claim for construction costs could even be made without any
required State and Municipal variances having been approved sometime beforehand. To the
contrary, there is uncontested evidence in the record that funds are not released until after the
18

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 19 of 25

“closing” occurs; that the “closing” cannot occur until building permits are obtained; and that
building permits cannot be obtained until “all necessary variances have been obtained.”
Drummond Decl. ¶¶ 36-39. Thus, as a practical matter, this provision in the County Bonds
regarding the approval of variances has no effect on the availability of financing for the
Chappaqua Station development.
The Government notes that the variance language in Bond Act No. 212-2014 is absent
from the County acts relating to an earlier AFFH project known as the Waterwheel Development
Project. Gov. Mem. at 20-21. But the absence of the variance language in the bonds for that
project has not been shown to have had any bearing on the availability of its financing. As the
County notes, Cnty. Reply at 13-14, the Waterwheel project was funded in the exact same manner
as Chappaqua Station — that is, by the County using its funds to finance the project on an interim
basis and then seeking reimbursement of these funds from the proceeds of a bond, see
Westchester County N.Y., Act No. 152-2012, dated October 15, 2012 (annexed as Ex. B to
Supplemental Declaration of Anne Marie Berg, dated August 11, 2015 (Docket # 533) (“Supp.
Berg. Decl.”); see also Supplemental Declaration of Norma Drummond, dated August 11, 2015
(Docket # 534) (“Supp. Drummond Decl.”), ¶ 2; Supp. Berg Decl. ¶ 3, 4. There is no evidence
that funds for the Waterwheel project were or could have been released in the absence of any
required variances.
The conclusion we reach here should not be construed as suggesting that a bond act with
conditions of any sort would qualify a project to be counted toward the “financing in place”
benchmark. See generally Report at 13 (noting that it is insufficient to meet the benchmark to
enact funding legislation where the financing could be “terminated in the event that a
precondition is not satisfied”). What is important is that the particular “condition” at issue here
19

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 20 of 25

does not operate to affect the availability of money to build the project.
For these reasons, we conclude that the 28 units of the Chappaqua Station development
should be counted toward the paragraph 23 “financing in place” benchmark. As a result, there
has not been a violation of paragraph 23.
C. The Paragraph 7(i) and 7(j) Requirements
1. Background
Paragraph 7 of the Settlement requires the County to construct 750 new AFFH units.
Paragraph 7(i) instructs the County to “use all available means as appropriate . . . including, but
not limited to, developing financial or other incentives for other entities to take steps to promote
the objectives of this paragraph.” Settlement ¶ 7(i). Paragraph 7(j) provides that “[i]n the event
that a municipality does not take actions needed to promote [these objectives], . . [t]he County
shall use all available means as appropriate to address such action or inaction, including, but not
limited to, pursuing legal action.” Id. ¶ 7(j).
The Report concluded that New Castle presented opposition to Chappaqua Station
development and that the County failed to “use[] all available means as appropriate” to help
resolve this opposition. Report at 19-21. The Report highlights that
New Castle officials ha[d] publically criticized Chappaqua Station . . . testified against
Conifer’s variance petition . . . and, after Conifer apparently secured the variances, asked
the State Board of Review to reconsider . . . engaged in litigation against Conifer;
continued to push for the project to be relocated . . . and indicated that Conifer’s building
permit application ‘would go all the way to the bottom of the pile.’
Report at 19. The Report noted that these actions had already caused the County to “miss the
financing benchmark for 2014” and also “hinder[ed] the County’s ability to achieve Paragraph 7’s
objective[s].” Id. at 20. In response to this opposition, the Report found the County had acted
merely as a “spectator” to the success or failure of Chappaqua Station. Id. The Monitor faulted
20

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 21 of 25

the County for
refus[ing] to consider financial or other incentives to encourage New Castle to modify its
stance; fail[ing] to undertake efforts to reach out to New Castle to address its opposition;
declin[ing] to specify any steps it plans to take to address New Castle’s opposition; and []
not undertak[ing] any steps in connection with the pending litigation between New Castle
and Conifer.
Id. In light of these findings, the Report stated that it was referring the County’s violations to the
Department of Justice “for a determination of whether a contempt motion should be filed.”
Report at 21.
2. Analysis
We agree that New Castle both “[did] not take actions needed to promote” the building of
the AFFH units contemplated in paragraph 7 of the Settlement and also “under[took] actions that
hinder[ed] the objectives” of paragraph 7.” See Report at 19; Settlement ¶ 7(j). Both New
Castle’s Town Supervisor and Building Inspector expressed public opposition to Chappaqua
Station’s development. Daily Voice Article; State Board of Review December 2013 Hearing at
71-82; Minutes of Hearing, In re Chappaqua Station LLC, Petition No. 2013-0524, dated April 4,
2014 (annexed as Ex. L to Drummond Decl.), at 49-56. As the project progressed, the Town
Building Inspector is reported to have stated that Conifer’s building permit request “would go all
the way to the bottom of the pile.” Letter from Andrew V. Bodewes, Senior Vice President at
Conifer, to William J. Maskiel, New Castle Building Inspector, dated April 2, 2015 (annexed to
Report as Ex. 12), at 1. These actions, among others, threatened the ability to construct the AFFH
units. Thus the County was obligated to use “all available means as appropriate” to counter this
opposition. See Settlement ¶ 7(j).
The County has provided the Court with a list of actions it took to promote the
development of Chappaqua Station. See Cnty. Reply at 21. They include, among other things,
21

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 22 of 25

review of zoning amendments, testimony from Deputy Commissioner Drummond in favor of the
project before the Board of Review, letters requesting further funding for the project, a letter sent
to the New York State Department of State in support of Conifer’s variance request, and a letter
sent to New Castle supporting Conifer’s bid for an extension of their Special Permit. Id.
However, the issue before this Court is not whether the County took any steps to promote the
development of Chappaqua Station, but rather whether the County used “all available means as
appropriate” to counter municipal opposition.
Importantly, the significance of this phrase for purposes of the matter before the Court is
whether the County should be held in contempt based on its conduct. See Report at 21. As the
Second Circuit has noted, to obtain an order of contempt
[a] movant must establish that (1) the order the contemnor failed to comply with is
clear and unambiguous, (2) the proof of noncompliance is clear and convincing,
and (3) the contemnor has not diligently attempted to comply in a reasonable
manner.
Latino Officers Ass’n City of New York, Inc. v. City of New York, 558 F.3d 159, 164 (2d Cir.
2009) (citation and internal quotation marks omitted). The Second Circuit has further
emphasized that a contempt sanction must not be imposed if “there is a fair ground of doubt as to
the wrongfulness of the defendant's conduct.” Id. (citation and internal quotation marks omitted).
In the context of an effort to obtain sanctions for contempt, the Second Circuit has emphasized
that the language of a consent decree “must dictate what a party is required to do and what it must
refrain from doing.” Perez v. Danbury Hosp., 347 F.3d 419, 424 (2d Cir. 2003).
In this instance, there is insufficient evidence to allow the Court to find that the County’s
conduct met this rigorous test. The obligation to use “all available means as appropriate” is not
“clear and unambiguous” with respect to the specific failures to act noted in the Report. While
22

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 23 of 25

we can certainly imagine actions or nonactions of the County that would “clearly” constitute a
violation of this obligation, the broad language of this provision makes the identifications of such
violations a more difficult task than would be the case if the Settlement identified specific actions
required of the County. Cf. Perez, 347 F.3d at 424 (court considering contempt must “evaluate
whether the order was ‘clear and unambiguous’ with reference to the conduct in question”)
(emphasis added).
Turning to the specific matters raised in the Report, the Report states that the County
could have offered “financial or other incentives” to encourage New Castle to modify its stance
against the project. Report at 20. But the record does not allow us to identify what financial or
other incentives should have been offered and why they would be appropriate. The County
makes a reasonable argument that it could not properly offer direct financial incentives to
overcome the most obvious area in which the Town has frustrated or may frustrate the project —
the failure to issue any required variances or permits. Cnty. Reply at 22. While there may be
incentives that the County could have (and still might) offer that are not directly tied to the
process for granting variances or permits, this is certainly an area where there is “fair ground of
doubt,” Latino Officers Ass’n City of New York, Inc. 558 F.3d at 164, as to the wrongfulness of
the County’s conduct and where its obligation to offer such incentives under the Settlement was
not clear and unambiguous.
As to the County’s failure to intervene or file an amicus brief in Conifer’s litigation with
the town regarding the duration of the Special Permit, Report at 18, 20, we would view this
failure as significant if there were evidence before us that Conifer’s efforts in instituting litigation
could have been ameliorated by the County’s presence. Notably, the judge deciding Conifer’s
central contention — that its Special Permit issued by the Town had a duration of 25 years —
23

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 24 of 25

found that Conifer’s argument on this point was “absurd on its face.” State Court Decision at 6.
We have been presented with no evidence by the Government as to why this conclusion was
incorrect, let alone why the County should have become involved in advancing it. Additionally,
even if we accept, arguendo, that intervention in Conifer’s court action might have been an act
that the County could have undertaken, we cannot find that the obligation to do so was “clear and
unambiguous.” Rather this is an area where, once again, there is “fair ground of doubt” as to the
wrongfulness of the County’s conduct in choosing not to involve itself with Conifer’s court case
against the Town.
The same is true of the remaining failings identified in the Report: namely, that as of the
date of the Report the County had not made greater efforts to “reach out to New Castle to address
its opposition” or specify steps to do so, and that it did not “submit[] testimony at public hearings
in support of the development.” Report at 18, 20. The County has described a number of steps
that it has taken. See Cnty. Reply at 21-23. To find that taking these steps without more violated
the settlement, it must be clear what additional steps the County should have taken. While we
agree that there were additional steps that the County could have taken that were “available” and
“appropriate,” we cannot conclude on the current record that the Settlement language was clear
and unambiguous “with reference to the conduct in question” such that the County could be held
in contempt for not taking the additional actions stated in the Report. Perez, 347 F.3d at 424.
IV. CONCLUSION
For the forgoing reasons, the County’s objections should be overruled in part (as to its
complaint regarding the alleged failure to meet prior to the issuance of the Report) and sustained
as to the remaining objections.

24

 Case 1:06-cv-02860-DLC Document 544 Filed 11/19/15 Page 25 of 25

PROCEDURE FOR FILING OBJECTIONS TO THIS
REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure,
the parties have fourteen (14) days including weekends and holidays from service of this Report
and Recommendation to serve and file any objections. See also Fed. R. Civ. P. 6(a), (b), (d).
Such objections (and any responses to objections) shall be filed with the Clerk of the Court, with
copies sent to the Hon. Denise Cote at 500 Pearl Street, New York, New York 10007. Any
request for an extension of time to file objections must be directed to Judge Cote. If a party fails
to file timely objections, that party will not be permitted to raise any objections to this Report and
Recommendation on appeal. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP
v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).
Dated: November 19, 2015
New York, New York

25