NYCTL 2011-A Trust v 816 Crossbay LLC
Annotate this CaseDecided on December 10, 2013
Supreme Court, Queens County
NYCTL 2011-A Trust, Plaintiff,
against
816 Crossbay LLC, Defendant.
15227/2012
Duane A. Hart, J.
Plaintiffs NYCTL 2011-A Trust (Trust) and Bank of New York Mellon, as collateral agent and custodian for the Trust, commenced this action on July 23, 2012, to foreclose a tax lien certificate dated November 16, 2011 with respect to the real property known as 818 Cross Bay Boulevard, Queens, New York (Block 15460, Lot 0001). The tax lien certificate indicates that the liens were comprised of delinquent real property taxes levied against the property prior to August 4, 2011 in the amount of $14,426.80, plus $106.90 in noticing fees, and $731.19, representing the addition of a 5% surcharge on the tax lien as of the date of sale. Plaintiffs allege that they are the owners and holders of the tax lien certificate and that defendant 816 Cross Bay Blvd, LLC s/h/a 816 Crossbay, LLC (816 Cross Bay), the fee owner of the property, failed to pay the tax lien balance on or before February 4, 2012, one year after the sale of the tax lien. Plaintiffs also allege that by reason of this default, plaintiff Bank of New York Mellon elected to foreclose the tax lien, and that as of June 5, 2012, the unpaid tax lien balance totaled the sum of $16,545.87, plus interest and attorneys' fees.
Defendant 816 Cross Bay served an answer with various affirmative defenses, counterclaims, and cross claims against defendant New York City Department of Finance (DOF). Defendant 816 Cross Bay alleges that it participated in program known as the Industrial and Commercial Incentive Program (ICIP) and as a result, was entitled to a tax abatement with respect to the property. Defendant 816 Cross Bay also alleges that defendant DOF failed to apply the tax exemption or abatement, and as a consequence, wrongfully caused a tax lien to be placed against the property. Defendant 816 Cross Bay further alleges that DOF wrongfully, arbitrarily and capriciously has refused to recall the lien, notwithstanding its request that the DOF do so. Defendant 816 Cross Bay seeks a judgment against plaintiff and defendant DOF, declaring that the subject lien is invalid and directing DOF to recall the lien and remove it from this foreclosure action. [*2]
Defendants New York City Environmental Control Board, New York City Department of Transportation Parking Violations Bureau, DOF, and People of the State of New York are in default in appearing or answering. Plaintiffs did not cause defendants "John Doe #1" through "100" to be served with process, having determined they are not necessary party defendants to the action.
Plaintiff moves for summary judgment in their favor as against defendant 816 Cross Bay, pursuant to CPLR 3211 to dismiss the counterclaims asserted against them by defendant 816 Cross Bay, to strike the answer of defendant 816 Cross Bay, pursuant to RPAPL 1321 for leave to appoint a referee to ascertain and compute the amount due and owing plaintiffs and to determine whether the subject premises can be sold in one parcel, and for leave to amend the caption deleting reference to defendants "John Doe #1" to "John Doe #100." Defendant DOF moves to dismiss the cross claims asserted against it by defendant 816 Cross Bay for lack of subject matter jurisdiction pursuant to CPLR 3211(a)(2). Defendant 816 Cross Bay opposes both motions, and cross moves to strike the complaint insofar as asserted against it, and the answer of defendant DOF, preclude plaintiffs and defendant DOF from introducing documents, and draw a negative inference from the failure by plaintiffs and defendant DOF to provide documents in response to its notice of discovery and inspection dated October 3, 2012, or in the alternative to compel plaintiffs and defendant DOF to produce the documents. Defendant 816 Cross Bay asserts that plaintiffs' motion is premature since plaintiffs and defendant DOF have failed to respond to its discovery notice, and comply with the preliminary conference order dated December 13, 2012.
The motions numbered 123 and 124 on the motion calendar for April 25, 2013 are joined together for determination as follows:
To the extent defendant 816 Cross Bay asserts plaintiffs' motion is premature, "[s]ervice of a notice of motion [seeking summary judgment] stays disclosure until determination of the motion unless the court orders otherwise" (CPLR 3214[b]). " If when a motion is made [for summary judgment] there is outstanding any obligation to disclose, whether pursuant to a mere notice or a court order, the mere making of the motion stays the disclosure ... The stay of disclosure is automatic' (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 3214:2, p 856)" (Federal Deposit Ins. Corp. v Hyer, 66 AD2d 521 [2d Dept 1979]). Thus, plaintiffs' making of the motion for summary judgment on February 12, 2013 stayed the preliminary conference order, which among other things, directed that "all requests" for documentation and corresponding inspection be completed on or before March 12, 2013 (emphasis supplied).
The court may direct the lifting of the automatic stay, but in this instance defendant 816 Cross Bay has failed to show that its claimed need for discovery will lead to relevant evidence (see Auerbach v Bennett, 47 NY2d 619, 636 [1979]; Ruttura & Sons Constr. Co. v Petrocelli Constr., 257 AD2d 614, 615 [1999], lv dismissed 93 NY2d 956 [1999])" (Bailey v New York City Tr. Auth., 270 AD2d 156 [1st Dept 2000]). Defendant 816 Cross Bay asserts defendant DOF accepted it into the ICIP in 2007, and approved its completion application on October 14, 2011. Defendant 816 Cross Bay asserts that it therefore was entitled, no later than by the end of 2008, to an exemption or abatement, regarding taxation of that portion of the assessment attributable to increases in the assessed value of the property, resulting from physical improvements made by defendant 816 Cross Bay to qualify for the ICIP benefits. Defendant 816 Cross Bay contends that its real estate taxes nevertheless continued to rise, and that defendant DOF did not apply the [*3]exemption until tax year 2012/2013, after the issuance of the tax lien certificate. It also contends that it should have received the ICIP tax exemption or abatement no later than by the end of 2008. Defendant 816 Cross Bay asserts that it needs to obtain copies of all preliminary and final certificates of eligibility issued by defendant DOF for the ICIP program, and records and correspondence regarding DOF's approval of its application for the ICIP tax abatement program to show the tax lien is invalid.
Under RPTL 701(4)(b), an "excessive assessment" is defined to include an entry on an assessment roll of the taxable assessed valuation of real property when "the real property failed to receive all or a portion of a partial exemption to which the real property or owner thereof is entitled pursuant to the law authorizing the partial exemption." Hence, defendant 816 Cross Bay's claim that defendant DOF failed to apply an ICIP partial exemption to its property for the tax years 2006/2007 through 2010/2011 is equivalent to one that the tax assessment was "excessive" (RPTL 701[4]; see Rochdale Village, Inc. v Finance Adm'r of New York, 159 AD2d 494 [2d Dept 1990]; 1688 Rojav Realty LLC v Frankel, 32 Misc 3d 1247[A] [New York County, Sup Ct 2011]). A claim that the tax assessment is "excessive, unequal or unlawful, or that [the] real property is misclassified" is properly presented in proceeding pursuant to RPTL article 7 (see generally NYCTL 1996-1 Trust v Westmoreland Associates, 2 AD3d 811, 812 [2d Dept 2003]). The statutory limitations period for challenging the tax assessments for the tax years 2006/2007 through 2010/2011 has passed (see RPTL 702; New York City Charter §§ 165, 166; see also NYCTL 1996-1 Trust v Westmoreland Associates, 2 AD3d at 812). Under such circumstances, any discovery sought by defendant 816 Cross Bay to establish the period when the ICIP partial exemption should have been applied to the subject property is not relevant to any defense herein, since 816 Cross Bay is not entitled to any adjustment of the tax assessments for the tax years 2006/2007 through 2010/2011 underlying the tax lien.
Consequently, the cross motion by defendant 816 Cross Bay is denied.
That branch of the motion by plaintiffs for leave to amend the caption deleting reference to the "John Doe" defendants is granted.
With respect to the motion by plaintiffs for summary judgment against defendant 816 Cross Bay, it is well established that the proponent of a summary judgment motion "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557 [1980]). Plaintiffs have submitted a copy of the certificate (No. 4A dated November 16, 2011), indicating the existence of the tax lien against the property (see NYCTL 1996-1 Trust v Railroad Maintenance Corp. 266 AD2d 39 [1st Dept 1999], lv to appeal dismissed 94 NY2d 899 [2000]). In addition, they have submitted the affidavit of Douglas Badaszewski, a vice-president of Plymouth Park Tax Services, LLC, plaintiffs' servicing agent, indicating that plaintiffs are the owners and holders of the tax lien certificate and defendant 816 Cross Bay failed to pay the semi-annual interest due on the tax lien balance following the sale of the tax lien to plaintiffs. Under such circumstances, plaintiffs have made a prima facie showing of entitlement to summary judgment against defendant 816 Cross Bay by demonstrating that 816 Cross Bay did not pay the payments due under the subject tax lien (see NYCTL 1998-2 Trustee v 2388 Nostrand Corp., 69 AD3d 594 [2d Dept 2010]; see NYCTL 1996-1 Trust v Orit Diagnostic Ctr., Inc., 19 AD3d 668 [2d Dept 2005]; NYCTL 1996-1 Trust v [*4]Westmoreland Assoc., 2 AD3d 811).
The burden shifts to defendant 816 Cross Bay to raise a triable issue of fact rebutting plaintiffs' showing or as to the merit of its affirmative defenses or its counterclaims (see NYCTL 1998-2 Trustee v 2388 Nostrand Corp., 69 AD3d 594, 595; NYCTL 1996-1 Trust v Orit Diagnostic Ctr., Inc., 19 AD3d 668; NYCTL 1996-1 Trust v Westmoreland Assoc., 2 AD3d 811, 812). To the degree defendant 816 Cross Bay claims the tax lien was the result of the failure by defendant DOF to apply a tax exemption or abatement for certain tax years, a certiorari proceeding pursuant to article 7 of the Real Property Tax Law is a taxpayer's exclusive remedy for challenging real property assessments (see NYCTL 1998-2 Trust v Ackerman, 82 AD3d 447 [1st Dept 2011], lv to appeal dismissed 18 NY3d 986 [2012]; NYCTL 1996-1 Trust v Westmoreland Associates, 2 AD3d 811), and the statutory limitations period for challenging the tax assessments has passed (see RPTL 702; New York City Charter and Code §§ 165 and 166).
To the extent defendant 816 Cross Bay claims that defendant DOF has wrongfully, arbitrarily and capriciously has refused to recall the lien, such claim does not constitute a defense to the foreclosure action. In addition, it fails to state a cause of action against plaintiffs. Defendant 816 Cross Bay has failed to raise a triable issue of fact rebutting plaintiffs' showing or as to the merit of any of its other affirmative defenses or counterclaims.
That branch of the motion by plaintiffs for summary judgment in its favor against defendant 816 Cross Bay and dismissing the counterclaims asserted against it by defendant 816 Cross Bay is granted.
With respect to the motion by defendant DOF, defendant DOF contends defendant 816 Cross Bay, by its cross claims, is in effect asking the court to review whether the tax assessments for the property, for the period encompassing April 2007 through October 2011, are excessive. Defendant DOF asserts that the court lacks subject matter jurisdiction to hear such cross claims.
Defendant 816 Cross Bay opposes the motion by defendant DOF on the ground defendant DOF has failed to answer its cross claims. The question of whether the Supreme Court has subject matter jurisdiction over a claim, however, may be raised at any time (see Manhattan Telecom. Corp. v H & A Locksmith, Inc., 21 NY3d 200 [2013]; Jose M. v Angel V., 99 AD3d 243 [2d Dept 2012]), and is not dependent upon joinder of issue with respect to such claim. In any event, defendant 816 Cross Bay has made no showing that it made a demand for an answer in response to its cross claims. In the absence of such demand, the denial of the allegations of the cross claims are "deemed" to have been made (CPLR 3011).
The cross claims of defendant 816 Cross Bay against defendant DOF are based upon 816 Cross Bay's claim that the DOF wrongfully caused an invalid tax lien to be placed upon the subject property, and refused to recall the alleged lien. Defendant 816 Cross Bay alleges the tax lien is invalid because the property was subject to excessive tax assessments for the period encompassing April 2007 through October 2011. A tax certiorari proceeding under RPTL article 7 provides the exclusive means for reviewing a real property tax assessment (see Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v Town of Fallsburg, 78 NY2d 194, 201—204 [1991], rearg denied 78 NY2d 1008 [1991]; RPTL 700, 706; NY City Charter § 166), and therefore, the court lacks subject matter jurisdiction to hear the cross claims of defendant 816 Cross Bay against it. The motion by defendant DOF to dismiss the cross claims asserted against it by defendant 816 Cross Bay [*5]is granted.
That branch of the motion by plaintiff for leave to appoint a referee is granted.
Settle order.
Dated:
J.S.C.
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