Conigliaro v 2952 Victory Blvd. Pump Corp.

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[*1] Conigliaro v 2952 Victory Blvd. Pump Corp. 2004 NY Slip Op 51809(U) Decided on December 1, 2004 Supreme Court, Richmond County Maltese, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 1, 2004
Supreme Court, Richmond County

Antonio Conigliaro, GALINA CONIGLIARO, HOWARD JOYCE, THERESA JOYCE, THOMAS BALZANO, LOUISE BALZANO, EFRAIM RAZ, LOIS RAZ, LAURA TLUMACK, STEVEN TLUMACK, MICHAEL S. FLEISHMAN and LDK REALTY, INC., Plaintiffs,

against

2952 Victory Blvd. Pump Corp., Defendant.



12268/04

Joseph J. Maltese, J.



The plaintiff's are seeking a preliminary injunction to stop a sewage-waste pumping station from collecting fees.

On June 28, 1978, Trailway Pumping Station, Inc. entered into an agreement with Goller Place Corp. entitled "Declaration of Covenants" [hereinafter referred to as "Goller Covenant No.1"]. On August 20, 1978, Trailway Pumping Station, Inc. entered into an agreement with Goller Place Corp. entitled "Declaration of Covenants" [hereinafter referred to as "Goller Covenants #2"].

On May 3, 1978, Trailway entered into an agreement with Century Estate, Inc. entitled [*2]"Declaration of Covenants" [hereinafter referred to as "Century Covenant"]. On May 3, 1978, Trailway entered into an agreement with Foremost Estates, Inc. entitled "Declaration of Covenants" [hereinafter referred to as "Foremost Covenant"].

On May 10, 1978, Trailway entered into an agreement with Rosario LaQuidara, Eugene Bergman and Frank DiMisa, entitled "Declaration of Covenants" [hereinafter referred to as "LaQuidara Covenant"].

On January 12, 1979, Trailway entered into an agreement with LDK Realty, Inc. entitled "Declaration of Covenants" [hereinafter referred to as "LDK Covenant"].

All of the above covenants were recorded by the Richmond County Clerk.

The plaintiffs also claim that Trailway entered into one or more covenants in addition to the above covenants. These covenants, including Goller Covenant #1, Goller Covenant #2, Century Covenant, Foremost Covenant, LDK Covenant and LaQuidara Covenant, are collectively referred to herein as "the Covenants."

Pursuant to the Covenants, Trailway agreed to connect houses in specified parcels to sewers and to its pump and lift station, and it further agreed to charge the property owners specific annual charges, usually an annual charge of $150 for a one family house and $250 for a two family house.

Trailway breached its agreement, set forth in each of the Covenants, to operate the pumping station in compliance with applicable regulations. Trailway ceased operation and its principals disappeared. The pumping station was taken over by the City of New York, and the Department of Environmental Protection made emergency repairs to the facility. In 1999, the City took title through a tax forfeiture through the NYCTL 1999-1 Trust.

On September 16, 2003, the real property on which the pumping station is located was sold at public auction to Frank Arlia for $44,000. Mr. Arlia assigned his bid to A & F Realty Holdings, LLC, who took title. On or about November 25, 2003, defendant 2952 Victory Blvd. Pump Corp. [hereinafter referred to as "Victory Pump"] began invoicing residents for pump station services going back to 1998. Some of the residents received greater bills than others.

On or about January 22, 2004, plaintiff Howard Joyce received two letters and three invoices wherein defendant sought to recover from plaintiff sums in excess of $5,000 for alleged pumping service fees dating back to 1998.

On or about June 25, 2004, plaintiff Thomas Balzano received a letter and bill from defendant adjusting the amount due, but still claiming entitlement to fees from 1998 and a total sum in excess of $2,000.

On or about December 1, 2003, plaintiff Laura Tlumack received a letter and invoice [*3]from Victory Pump seeking to recover fees for 2003 of $460.29. Then on or about January 22, 2004, plaintiff Laura Tlumack received a letter from Victory Pump seeking to recover fees from 1998 and fees for 2004 of $525.94

On or about December, 2003, plaintiff Antonio Conigliaro received from Victory Pump letters and invoices seeking to recover $1,583.53 for 2003 and 2004, and he also received, on or about January 22, 2004, a letter and invoice from Victory Pump seeking to recover from him $4,374.61 for 1998-2002.

On or about December, 2003, plaintiff LDK Realty, Inc. received from Victory Pump letters and invoices seeking to recover over $100,000.

Plaintiffs brought on this preliminary injunction motion by Order to Show Cause on August 10, 2004. The defendant opposed the motion on the ground that it had acquired the right to collect sewer pump station fees back to 1998 when its landlord purchased the real estate or by assignment from Trailway. However, it appears that once the defendants realized that the assignment was from a defunct corporation and therefore invalid, the defendant took the position that the corporation was in fact a partnership. However, no proof of this corporation was submitted and they simply assert that Trailway was a partnership and that someone named Jerome Josefson is authorized to assign rights to sewer fees.

The papers before this court establish, beyond any question, that defendant has no present right to pumping station fees, either before the tax sale of the real property or after. Fees from before 2001 are barred by laches and the statute of limitations. No fees could be claimed in any event for the time (1994-2003) when Trailway had abandoned the station and the City was operating it. To award the defendant fees for service neither they nor their assignor provided would be an unjust enrichment.

Moreover, the defendant cannot presently collect ongoing fees. The defendant has no reasonable basis for setting the amount of fees at this time. Additionally, the fees set forth in the covenants have terminated by their terms and because defendant does not appear to be a successor to Trailway. The covenants are therefore unenforceable because there is no privity of estate (Eagle Enterprises v. Gross, 39 NY2d 505 [1976]). Moreover, it appears that the City's subsequent operation of the pumping station terminated the covenants according to the terms of the covenants.

Lastly, in order to collect a fee the defendant must have a certificate of occupancy and the fee must be approved by the Water Board. Until this is done, there can be no ongoing fees.

Under these circumstances, it is clear that the plaintiffs will suffer irreparable harm if the defendant is not enjoined from collecting the fees it seeks and leining their property.

The defendant's claim rests on an assignment, signed by Jerome Josefson, that purported to transfer its rights to fees under the covenants. Josefson does not appear to be an officer of Trailway. The corporation, having been abandoned and not registered with the Secretary of [*4]State, has no present contractual ability to assign anything. The defendant now states that Trailway, a partnership, had an easement interest. No evidence of this purported written easement, recorded or unrecorded is presented. Another claim of the defendant is that the pumping station is a "trade fixture" that did not pass to the City when the City took tax title to the land. (J.K.S.P. Restaurant, Inc. v. County fo Nassau, 127 AD2d 121, [2nd Dept 1987].)

In J.K.S.P. Restaurant, a tenant was in possession of the premises under a lease that expressly provided that the diner was personal property and severable from the realty. However, the defendant does not claim a lease in this case, nor does it point to any agreement severing the pump station from the realty. Without such a severability agreement, fixtures are part of the realty and pass with the tax title.

At a time when the defendant obtains a certificate of occupancy and the right to operate the pumping station, it can negotiate an appropriate fee level with its customers. If they cannot agree, it may fall to this court to set reasonable fees after a hearing on that issue. Fees for use of the sewer system must be fair and reasonable and approved by the Water Board. Public Authorities Law Section 1045-g(4) requires that sewer system fees be set by the Water Board and that they be subject to administrative and judicial review. (In re Westmoreland Apt. Corp., 294 AD2d 587, [2nd Dept. 2002].)

Plaintiffs are entitled to a preliminary injunction because they have shown a likelihood of success on merits, irreparable harm, and equitable entitlement. Accordingly, a temporary injunction will be granted at this time, while the case moves forward and the plaintiffs seek a permanent injunction against collection of improper fees and a declaratory judgment as to the rights of the parties.

Therefore, due deliberation having been had, and it appearing to this court that a cause of action exists in favor of the plaintiff and against the defendant, and that the plaintiff is entitled to a preliminary injunction on the ground that the defendant threatens or is about to do, or is doing or procuring or suffering to be done, an act in violation of the plaintiffs' rights respecting the subject of the action and tending to render the judgment ineffectual, as set forth in the aforesaid decision.

CPLR 6312(b) provides that, when issuing an injunction, the court is to fix an undertaking in an amount sufficient to cover any damages and costs which could be sustained by reason of the issuance of the injunction. The amount of such a bond herein cannot be substantial because defendant has withheld facts regarding the cost of operating this facility, the amount sought from each of these plaintiffs, etc. An undertaking must be non-speculative and rationally related to actual potential damages. Lelekakis v. Vikamamis, 303 AD2d 380, 755 NYS2d 665 (2d Dept 2003).

The potential damages to defendant from issuance of this injunction are not substantial. The plaintiffs ask that this amount be fixed at $30 per property. This court feels that sum is inadequate to cover the potential damages that may occur to the defendants if the plaintiffs are unsuccessful. Accordingly, the amount will be sent at $100 per property. [*5]

The defendants may request that the preliminary injunction be listed when they obtain a certificate of occupancy.

Accordingly, it is hereby:

ORDERED, that the undertaking is fixed in the sum of $100 per property conditioned that the plaintiff, if it is finally determined that they were not entitled to an injunction, will pay to the defendant all damages and costs which may be sustained by reason of this injunction; and it is further

ORDERED, that defendant, its agents, servants, employees and all other persons acting under the jurisdiction, supervision and/or direction of defendant, are enjoined and restrained, during the pendency of this action, from doing or suffering to be done, directly or through any attorney, agent, servant, employee or other person under the supervision or control of defendant or otherwise, from collecting or attempting to collect pumping station fees from the plaintiffs absent further order of this court.

This case shall appear for a Preliminary Conference on the main action and complaint on February 1, 2005 at 9:30 A.M. Clerk shall add the case to the calendar.

ENTER,

DATED: December 1, 2004

Joseph J. Maltese

Justice of the Supreme Court