Patchogue Props., Inc. v Mascia

[*1] Patchogue Props., Inc. v Mascia 2006 NY Slip Op 51933(U) [13 Misc 3d 1221(A)] Decided on October 6, 2006 District Court Of Suffolk County, Third District Hackeling, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through October 25, 2006; it will not be published in the printed Official Reports.

Decided on October 6, 2006
District Court of Suffolk County, Third District

Patchogue Properties, Inc., Plaintiff

against

Joseph Mascia, Kathleen Mascia, Defendants



INDEX NO.: HUC 6574-03



Kirschenbaum & Phillips, P.C.

Attorneys for Plaintiff

106 East Jericho Turnpike

Mineola, New York 11501

The Coalition of Landlords,

Homeowners and Merchants, Inc.

Attorneys for Defendants

28 E. Main Street

Babylon, New York 11702

C. Stephen Hackeling, J.

The Facts

The plaintiff, Patchogue Properties, Inc., seeks to recover $1,991.22 of home owner association assessments from the defendant homeowners for the years 2002-2005. It is undisputed that the defendants resided at and owned real property within the homeowner association area during this period and had access to the association's common property and facilities. It is also undisputed that defendant is not a shareholder of Patchogue Properties, Inc., which administers the affairs of the plaintiff homeowner's association.

The plaintiff introduced the Patchogue Properties, Inc. 2001-2005 annual budgets through the testimony of its accountant. His testimony was limited to indicating a 1942 incorporation date for the plaintiff, that the defendants were residents from 2002-2005 and that they owned one of 245 units that were equally assessed for the plaintiff's annual operating budget of approximately $122, 500. He confirmed that the defendants were not share holders of the plaintiff, and had received annual assessments ranging from $467-$526 for 2002-2005, for which a total sum of $1,991.22 is due. [*2]

The Law

The law is well settled concerning the controversy presented. Both this Court and the Appellate Courts have already determined that property owners in a private community are liable for their share of maintenance costs of common property and facilities. Seaview Association of Fire Island, NY v. Williams, 69 NY2d 987 (N.Y.1987). See Order of this Court in this case dated May 11, 2006, Bay Crest Ass'n Inc. v. DeLisi, 11 Misc 3d 1054A (NY Dist. Ct., Suffolk 2006), citing to Patchogue Props. v. Saccio, 185 Misc 2d 380 (App. Term, 2nd Dept. 2003).

However, the plaintiff's proof indicates budgeted expenses which extend beyond maintenance of common facilities. The plaintiff's assessment claim also includes the corporation's annual expenses, such as NYS corporation and income tax, office salaries, payroll taxes, undescribed capital and debt service expenses, and a significant security budget among other items.

At first blush, the plaintiff appears to bear the burden of proof in seeking to establish its common law cause of action soundings in implied or quasi contract. Usually, plaintiffs must demonstrate exactly what assessment funds are attributed to "maintaining the common property and facilities." There normally exists no presumptions that all charges listed in the corporation's annual budget are automatically deemed common facility maintenance assessments. The defendant is not a corporate shareholder and maintains no corporate participatory rights. In this action the defendants appear to be attempting to distinguish the afore stated law with the argument that as the plaintiff's prayer for relief is equitable in nature, it is limited to the defendant's proportionate cost of maintaining common property and does not extend to paying for all costs associated with the activity of a privately held corporation.

While this Court sympathetic to the argument that such a legitimate distinction exists; the Second Department Appellate Division ( Patchogue Properties, Inc. v. Cirillo, 60 Misc 2d 71 (App. Term, 2nd Dept. 1969), and the Appellate Term ( Patchogue Props v. Saccio, supra) have already reviewed the circumstances of the Patchogue Properties, Inc. "assessment system" on two occasions and appear to have painted with a broad brush in determining that the entirety of the plaintiff corporate assessments are payable upon demand without resort to any test that the plaintiff's corporate assessments are "reasonably related" to the maintenance of the common property, which this Court would prefer. [FN1] Such a test would also allow the advancement of the secondary argument that equity does not require unaffiliated homeowners to unwillingly pay for significant "enhancement changes" in the character of the common property which occur after they purchased the property. Absent such a test however, the current state of the law appears to allow a corporate homeowners [*3]association to improve a community beach with a multimillion dollar corporate country club facility and employ unlimited security/catering personnel; all at the expense of an unaffiliated non-shareholder homeowner who would conceivably have no rights to notice, input or redress in seeking to contest same.

It seems that modern day corporate management is an ill fit for a common law remedy which was established during simpler times when neighboring landowners sought to apportion communal expenses such as the digging of a common well. Nevertheless, this Court is constrained to follow precedent and must therefore enter judgment for plaintiff for all yearly corporate assessments in full. Any clarification of the law should be legislatively procured or be had at the Appellate level.

Judgment for the plaintiff against the defendant in the sum of $1,991.22, plus costs, no interest.

____________________________

J.D.C.

Dated: October 6, 2006

Decision to be published ____yes___no.

Footnotes

Footnote 1: See the dissent of P.J. Murphy, Seaview Ass'n of Fire Island, Inc. v. Williams, 122 AD2d 745 (.NY. A.D.1st Dept. 1986)