Shine Time, LLC v Town of Schodack

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Shine Time, LLC v Town of Schodack 2013 NY Slip Op 32084(U) August 6, 2013 Supreme Court, Rensselaer County Docket Number: 238051 Judge: George Ceresia Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] STATE OF NEW YORK SUPREME COURT COUNTY OF RENSSELAER SHINE TIME, LLC,BRIAN C. HART and ERIC J. HART, Plaintiff, -against- THE TOWN OF SCHODACK F d THE COUNTY OF RENSSELAER Defendants. All Purpose Term Hon. George B. Ceresia, Jr., Supreme Court Justice Presiding RJI: 4 1-0226- 12 Index No. 23805 1 Appearances: Wilson, Elser, Moskowitz, Edelman & Dicker LLP Attorneys For Plaintiffs 677 Broadway Albany, N 12207-2996 Y Stephen A. Pecfienik, Esq. Attorney For Defendant County of Rensselaer 1600 Seventh Avenue Troy, NY 12180 DECISIONIORDEWJUDGMENT George B. Ceresia, Jr., Justice Plaintiffs Brian C.Hart and Eric J. Hart are owners of real property having a street address of 1515 Columbia Turnpike, i the Town of Schodack (the Town ), Rensselaer n County (Tounty ). Plaintiff Shine Time, LLC (: plaintiff ) is atenant of the premises and, since 2003, has operated a car wash at that location. The premises is located within Town of Schodack Sewer District No. 6. Sewer District No. 6 does not have a waste water treatment facility. Because, i the view of the Town Board, the financing of a waste water n [* 2] treatment facility in a sewer district& ma11 as Sewer District No. 6 would be prohibitive, the Tom, in 1993, contracted with the Town of East Greenbush to connect with and utilize its waste water treatment facility. In 2002 the plaintiff applied to the Town of Schodack for a permit to connect to the Town sewer system (Sewer District No. 6. The application ) was granted, and the plaintiff was required to pay a sewer connection fee of $5,000.00, which the plaintiff paid. In 2007,pursuant to the 2004 Sewer Connection Agreement with the Town of East Greenbush, the Town of Schodack issued invoices for an additional sewer connection fee denominated East Greenbush Sewer Hookup Fees pursuant to Agreement dated the 24 hday of July, 1993 . The invoices were issued to at least eight commercial property owners2.The one issued to the plaintiff, dated March 22,2007, was i the amount n of $66,360.003. Notwithstanding the issuance of these invoices, officials of both Towns continued to conduct further negotiations concerning the sewer connection fees i the n ensuing two years. In 2009 they ultimately agreed that the sewer connection fee applicable to commercial propertiesWithin Sewer District No. 6 should be reduced. As a consequence, the sewer connection fee for the plaintiff was reduced fiom $66,360.00to $35,000.00.It The original contract between the two Towns was entered into on July 24,1998 ( I 998 Sewer Comection Agreement )).A subsequent agreement w a s entered into on May 27,2004 ( 2004 Sewer Connection Agreement ). qt is indicated that there were only a limited numbex of single family residential units i the Sewer District, and that the sewer hookup fees for these property owners had already been n paid. The total amount of the invoice was actually for $71,360.00,however Shine Time was credited with the $5,000.00payment it made in 2002. Significantly, although plaintiff was issued tan invoice for this amount, it was never levied on a Town and County red property tax bill. 2 [* 3] is indicated by the Town Supervisor of the Town of Schodack that the $35,000.00 which was invoiced represented the actual amount paid (or as the Town Supervisor indicated, >passed through ) to the Town of East Greenbush, without any additional markup . As a result of the foregoing,a sewer connection fee of $3 5,000.00was levied on phhtLff s 20 10 Town and County red property tax bill. This amount was subsequently confirmed i a n letter dated January 20,ZO 1 1 h m the attorney of the Town of Schodack to the attorney for Shine TimeV4 On October 13, 2011 the plaintiffs commenced the above-captioned action for injunctive and declaratory relief. Specifically, they seek a determination that the additional sewer connection fee (beyond the $5,000.00 paid i 2002) is unlawful under Town Law 6 n ,193 (I) (h), and violates NY Constitution Art IX QQ 1, 2, as well as the substantive and procedural due process clauses of the federa1and state constitutions. I addition, they allege n that the sewer connection fee constitutesa %king under the federal and state constitutions, and that the Town of Schodack should be estopped from charging and enforcing the fee. As 4Tkeletter recited:: This wil confirm that the invoice sent to your dient and dated Mach 22,2007, is not the operative billing i this matter. Instead, n the proper billing was the charge placed upon the property owned by the Harts, from whom your clients rent, in (sic) the s u m of $35,000.00.That mount was imposed with the real property tax bill in January, 2009. There is no evidence that the Town ever made any further attempt to collect this sum. In this respect, the Court finds that the Town abandoned the invuice i the amount of $66,36O,OO, n 3 [* 4] a final cause of action, they seek a permanent injunction from the collection of the sewer connection fee. Issue was joined, and the plaintiffs made a motion pursuant to CPLR 32 12 for summary judgment and, pursuant to CPLR 3 224 and 3 126, to strike the answer of the defendant Town of Schodack. The defendants opposed plaintiffs m o t h . In a decision-order dated April 1,2013 the Court, citing SpinneyAt Pond View, LLC v Town Board of Town of Schodack (99 AD2d 1088 [3d Dept., 2012), granted the cross- motion of the Town for summary judgment and dismissed the action on grounds that the action was untimely commenced. The Court also denied plaintiffs' motion for summary judgment, and for relief under CPLR 3 I24 and 3 126. The,plahtiffshave made a motion to reargue limited to grounds that the Court, in its April 1,2013 decision-order, failed to address that portion of their motion which sought summary judgment against the County. The County has cross-moved for summary judgment. The plaintiffs argue that the statute of limitations defense was not raised by the County, and therefore their claims against the County are not time-barred. A motion to reargue,directed to the sound discretion ofthe Court, must demonstrate that the Court overlooked, misapplied or misapprehended the relevant facts or law (see. CPLR 2221 [d] 121; Loris v S & W Real? Corn., I6 AD3d 729, 730 [3rdDept., 20051; Matter of Smith v Town of Plattekill, 274 AD2d 900,90 1-902 [3d Dept., ZOOO]; Spa k a l t v Associates v. Springs Associates, 2 13 AD2d 781,783 /3rd Dept., 19951; Grassel v Albanv Medical Center, 223 AD2d 803, 803 [3rd Dept., 19941). Its purpose is not to serve as a vehicle to permit the unsuccessful party to ague once again the very questions previously decided (B Foley v Roche 68 AD2d 558,567 [Ist Dept., 1979]), IV denied 56 NY2d 507). 4 [* 5] The Court fmds that the motion to reargue, as limited, should be granted by reason that the Court did not expressly address that portion of plaintiff s motion for relief against the County. The plaintiffs have submitted copies of all the papers submitted by the parties on the original motion, which will be considered, In this instance, plaintiffs second amended complaint recites as follows: Defendant County of Rensselaer ( County ) is a County situated in the State ofNew York, operated and governed as a County pursuant to the New York State County Law. Although Plaintiff does not allege that the County is guilty of any active wrongdoing in this case, the County is named herein as a necessary defendant because the annulment and enjoinment of certain acts by Schodack (described below) will require an order modifj.ing a property tax bill. (Plaintiffs Second Amended Complaint, paragraph 6). Plaintiffs do not allege any wrongdoing on the part of the County. A11 of the causes of action are directed solely at the acts of the Town. Plaintiffs have failed on this motion, to demonstrate how or in what respect the County has taken any action i violation of n plaintiffs statutory or constitutional rights. There is no factual basis for a claim of estoppel against the County, or factual support for the issuance of a permanent injunction. In the Court s view, it would be improper for the Court to permit the plaintiffsto colIaterally attack the County s tax lien, in a situation where the plaintiffs have been unsuccessful i their n direct attempt to challenge the underlying assessment imposed by the Town. For this reason alone, the Court finds that the plaintiffs failed to carry their burden of proof on the motion as against the County. Even if, however, the foregoing reasoning did not apply, the Court would still find 5 [* 6] that the plaintiffs failed in their burden of proof on the motion. Town Law 6 198 ( 1 ) contains the following provisions: Sewer districts. After a sewer district shall have been established, the town board may; [] ( f ) enter into a contract or contracts with mother sewer district or with any incorporated city or village or with one or more corporationsor individuals for thejoint disposal of sewage, and the expense of such joint disposal of sewage shall be apportionedbetween the conkactingparties i proportion to the n areas served, volumes of sewage disposed of or the benefits received by each contracting party; [I (h) establish, from time to time, charges, fees or rates to be paid by the owners of real property within such district for the connection of house service Iines or mains with such sewer system. Such connection charge may include any expense incurred for the purpose of providing service, whether such expense be incurred for constructionwithin the property line o r within the street lines. In addition, such connection charge may include a fee for the inspection of such connection, the expense of performing service in relation thereto or fop. any other special benefit received []. (emphasis supplied) Town Law $202 recites, in part, as follows: 1. The expense o any public improvement m d e under f uuthoriw o this article shall include the amouvt o all f f contracts, the costs of all lands and interests therein necessarily acquired including the total payments ofprincipal remaining on obligations assumed pursuant to paragraph (b) of subdivision twelve of section one hundred ninety-eight, the costs of erection of necessary buildings for operation or administration of the improvement, printing, publishing, interest on loans, legal and engineering services and all other expenses incurred or occasioned by masun o the improvement or project. [] f (emphasis supplied) 2. The expense of the establishment of a sewer, sewage 6 [* 7] disposal, wastewater clisposal, drahage or water quality treatment district and of constructing a trunk sewer or drainage system therein and of constructing lateral sewers, drains and water rnaifls pursuant to paragraph (a) of subdivision one of section one hundred ninety-nine, and of constructing street improvements pursuant to section two hundred shall be borne by local assessment upon the several lots and parcels of lands which the town board shall determine and specify to be especially benefited by the improvement, and the town board shall apportion and assess upon and collect from the several lots and parcels of land so deemed benefited, so much upon and from each as shall be injust proportion to the amount of benefit which the improvement shall confer upon the same. (Town 5 202, emphasis supplied) In the Court s view paragraph 2 of Town Law 4 202, which mentions the expense of the establishment of a sewer, sewage disposal, wastewater disposal drainage or water qudity treatment district , is referring to the expenses set forth in paragraph I, which is broadly worded to include %e momt of all contracts and alI other expenses incurred or occasioned by reason of the improvement or project a ) great significance here, the .Of . Town has the authority to enter into contracts with other municipalities for purposes ofjoint sewage disposal (Town Law 6 198 [ 11 [fl, sup). The authority to enter into such contracts implicitly carries with it the authority to fulfill the financial obligations which akse as a result of such municipal agreements. The plaintiff would construe Town Law § 198 (1) (h) narrowly, to authorize the Town only to recover costs for physical improvements to plaintiffs property (or adjacent property) ignoring the last phrase of said swtion or any other speciaI benefit received . The Court does not agree. Moreover, by entering into the Sewer Connection Agreements, the Town of Schodack conferred a special benefit, within the meaning of Town Law 6 198 (1) (h), upon 7 [* 8] the effected property by bringing waste water disposal service to Sewer District No. 6. The special benefit is of the kind and nature expressly mentioned in Town Law 6 198 (1) (Q @& As pointed out by the Town, one hundred percent of the sewer connection fee charged to effected property owners is paid over to the Town of East Greenbush, as part of the compensation for use of the Town of East Greenbush waste water treatment facility. The Court i New York State Dormitory Auth. v Board of Trustees (206 AD2d 483 n [2d Dept., 19941) stated the following: It is well settled that special assessments are presumed to be valid, regular, and legal, and that the burden of rebutting the presumption falls upon the landowner (see, Matter of Pokoik v hcorporated ViI. of Ocean Beach, 143 AD2d 102I; Matter of Nolan v Bureau of Assessors, 31 NY2d 90). Moreover, a determination by a board with respect to the mount of benefit conferred on properties by improvements involves the exercise of the legislative powerwhich will not be interfered with unless it is shown to be so arbitrary or palpably unjust as to amount to a confiscation of property Isee. Badivi v Town of Hirnands, 147 AD2d 432; DWS N.Y.Holdinas v County of Dutchess, 110 AD2d 837; Matter of Scarsdale Chateaux RTN v Steyer, 53 AD2d 672, affd 41 NY2d 1043). (New York State Dormitoq Auth. v Board o f Trustees ,supra, at 484, also citing Kermani v Town Bd., 40 W 2 d 854) The 1998 Sewer Connection Agreement between the Town of Sclmdack and the Town ofEast Greenbush, established a formula for a sewer connection fee based upon water usage. Under the formula the Town of East Greenbush would receive a one time sewer connection fee calculated by dividing the average m u d water usage by 400 gallons per day, multipIied by $5,000.00. The 2004 Sewer Connection Agreement, as relevant here, : 400 gallons per day was deemed the equivalent of the average water usage for a single family residence, for which there was an assessment of $5,000.00. [* 9] contained asentid1y the same formula, even though it differentiated between residences and commercial property. The Town has the responsibility of apportioning the costs of the waste water disposal system in just-proportion to tke amount of benefit which the improvement shdl confer upon the same @ T o m Law 0 202 [ ] . Generally speaking, Z) with regard to such apportionment [t]he Town Board sdetermination is conclusive and not subject to review by the courts in the absence of a showing of fraudulent or arbitrarily discriminative action by the council (Matter ofBrewster-Mi11Park Realty v Town Bd., 17 AD2d 467,468[3d Dept 19621, quoting Matter of Amundson Ave. Sewer, 24 Misc 2d 6 18, 623-6241, Significantly, it is the burden of the property owner to establish that the owner was not benefited or only received a comparatively insignificant benefit (&). In Kemani v Town Board of Guilderland (40 NY2d 854, 855 119761, S U D ~ ) , the Court rejected a taxpayer s argument that the sewer instdlation charge should bear a direct relation to the assessed value ofthe property. The Court there found that the petitioner did not sustain his burden of demonstrating that the town [J failed to meet the statutory mandate that the f a c a burden of sewer system imtalIation shdl be apportioned among the parcels mni1 benefited in just proportion to the mount of benefit which ~e improvement shall confer upon the same ( citing Town Law & 0 202 121). Here, plaintiffs have failed in their burden to demonstrate that the Town s action was either hudulent or arbitrarily discriminative & Matter of Brewster-Mill Park Realty v Town Bd., supra), or that the plaintiffs property was only benefited i a comparatively insignificant.manner (see id.). n Nor have the plaintiffs carried their burden of demonstrating that the Town lacked jurisdiction, or that its action was so flagrantly baseless as to amount to a confiscation of 9 [* 10] their property (seeScarsdale Chateaux RTN v Stever, 53 AD2d 672,673 [2d Dept., 19761, aff d 41 NY2d 1043 [1977]). In this instance, the record indicates that the Town of East Greenbush did not present a formal demand to the Town of Schdack for payment of the sewer connection fees due it until 2007. Thereafter the two Towns negotiated further, after which, in the Fdl of 2009, they reached a final agreement with respect to the amount owed (which resulted in a further reduction of the fees to be charged). There is, in the Court s view, no showing of bad faith on the part ofTom officials. The Court finds that the plaintiffs failed to satisfy their burden of demonstrating that the Town s action violated NY Constitution Article IX (1) andor (2) by acting beyond the scope of Town Law 6 198 ( 1) (h). Accordingly, any argument directed against the County derived from, or arising out of the actions df Town officials has no merit. Similarly, mindful of the broad discretion the Town possesses in imposing a special assessment, the Court finds that the plaintiffs have failed to carry their burden of demonstrating that the Town s action constituted a confiscation of its property andor a taking under the substantive Due Process Clause of the United States or New York State Constitutions (a re the C o n h a t i o n of the Report of the Cornm rs of Assessment for In Grading, Paving & otherwke Immoving: Sackett & De Craw Sts., i the City of Brooklyn, n 74 NY 95, 107 [18783; In re Improvement of Constr. of Lateral Sewer, 24 Misc. 2d 6 18, 623-624 [Sup.Ct,. 19591; Scarsdale Chateau RTN v Stever, 53 AD2d 672,673, a. Because an administrativemechanism was available to challengethe assessment both before it was fmd (E Town Law 8 239), m after administrative review ( d & 10 Town Law [* 11] 85 239,2461, the Court finds that plaintiffs failed i their burden of proof tu demonstrate n a procedural due process violation (seeHughes Vil. Rest.. Inc. v Village of Castleton-on- Hudson, 46 AD3d 2044, 1046 [3d Dept., 2007). The plaintiffs maintainthat the Town should have been estopped from collecting any more than h e $5,000.00 it initially charged for the sewer connection fee. As noted, the delay i imposing the proper assessment appears to be the result of protracted negotiations n between the Town of Schodack and the Town of East Greenbush concerning the sewer connection fee owed to the Town of East Greenbush. In addition, the Court cannot ignore the fact that, as set forth above, the plaintiffs (as well as other tax payers in Sewer District No. 6) received a significant benefit through their ability to utilize the Town of East Greenbush water treatment facility. For the reasons set forth in its decision-order dated April I, 20 13, the Court fmds that principles of estoppel do not apply to prevent the Town or County from carrying out their responsibilitiesunder the Town Law or Real Property Tax Law to collect the special assessment (sea Matter of Schorr v New York City DeDartment of Housinrr Presewation, 10 NY3d 776, 779 [ZOOS]; Matter of Pegasus Cleaning Corporation v Smith, 73 AD3 d 1328,13 3 0 [3dDept ., 20 IO];Matter of Amsterdam Nursing Home Cornoration (1992) v Daines, 68 AD3d 1591, f 592 [3d Dept., 20091). Lastly, based upon all of the foregoing, because the plaintiffs have failed to demonstrate that any of the actions of the Town or County are u h vires, andor a violation ofplaintiffs state or federd constitutional ri&ts, the Court finds that the plaintiffs have failed to demonstrate, prima facie, their entitlement to a permanent injunction to prevent collection of the assessment andor imposition of a lien. 11 [* 12] Turning to the County s cross- motion for sumtnary judgment, the plaintiffs assert that it is improper for the County to make such a cross-motion i response to the motion to n reargue. In the Court s view, there is no restriction in CPLR 22 15 with regard to the subject-matter of a cross-motion; and, indeed, the relief could have been sought by a separate motion. The Court finds that this is not a reason to deny the cross-motion. The County argues that the complaint must be dismissed because the County, which in its view performs a ministerial function in collecting the tax, is only involved secondarily and derivatively as a tax collector, and has no culpability (or liability) for the actions of the Town. The County points out that all of the actions alleged to be wrongful in plaintiffs , second amended complaint are those of Town officials, not County officials. It m i t i s anan that because the action was dismissed as against the Town, the action may not now proceed forward i the absence of a necessary party. The Court agrees. n In this instance, the T o m of Schodack,the only alleged wrongdoer here, is no longer aparty to the action, having been granted summqjudgment. In the Court s view, i order n to defeat the County s tax lien, the plaintiffs first had to be successful in overturning the Town s assessment, which the plaintiffs have failed to do. As noted, there are no factual allegations i the complaint supportive of any wrongdoing on the part ofthe County. Nor n do the plaintiffs advance arguments which would mandatejudgment against the County as a matter of law. The Court frnds that it may properly search the record (which includes the motion papers submitted by the plaintiffs and the Town on the original motion for summary judgment). Mindful of the presumptions set forth above with respect to lawfulness and regularity of special assessments (particularlywithregard their apportionment), and mindful 12 [* 13] that the County was not involved with any of the proceedings before the Town, the Court finds that the County met its burden of proof on the mutian. Plaintiffs have not presented evidence to demonstrate the existence of a triable issue of fact. Under the circumstances, the Court finds that the cross-motion of the County must be granted. Lastly, the Court is mindful of its obligation to make appropriate declarations i an n action for a decIaratoryjudgment (Matter of Gabrielli v Town of New Paltz, 93 AD3d 923, 925 [3d Dept., 20121). The Court wiI1 proceed to do so, Accordingly, it is ORDERED, that the plaintiffs limited motion for reargument oftheir prior motion is granted, and upon reargument, plaintiff s motion for summary judgment against the defendant.Countyof Rensselaer is denied; and it is further ORDERED, that the cross-motion of the defebdant County of Rensselaer for summary judgment is granted; and it is ORDERED, ADJUDGED and DECLARED, that the actions of the Town of Schodack in levying a $35,000.00 sewer connection fee as a special assessment on plaintiffs 2010 Town and County real property tax bill was not an u h u vires act under Town Law 9 198 (I) (h); and it is ORDERED, ADJUDGED and DECLARED, that the actions of the Town of Schodack i levying a $35,000.00 sewer connection fee as a special assessment on n plaintiffs 2010 Town and County real property tax bill, and the actions of the County of Rensselaer under the provisions of the New York Real Property Tax Law i impqsing andlor n enforcing a tax lien upon plaintiffs premises arising f-rom the said $35,000.00 special 13 [* 14] assessmentdo not constitute an dira vires act i vioIatiotl &New York Constitution Article n IX; and it is further ORDERED, ADJUDGED and DECLARFD, that the actions of the Town of Schodack i levying a $35,000,00 sewer connec$ion fee as a special assessment on n plaintiffs 2010 Town and County real property tax bill, and the actions of the County of Rensselaer under the provisionsof the New YorkReal Property Tax Law i imposing and/or n enforcing a tax lien upon plaintiffs premises arising from the said $35,000.00 special assessment do not constituteavidation ofplaintiffs rightsto substantive andor procedural due process under the Fifth and Fourteenth Amendments of the United States Constitution or New York Constitution Article I $6, and do not constitutean unlawful taking thereunder; and it is . - ORDEFWD, ADJUDGED and DECLARED,hat the actions of the Town of Schodack i levying a $35,000.00 sewer connection fee as a special assessment on n plaintiffs 2010 Town and County real property tax bill, and the actions of the County of Rensselaerunder the provisions of the New York Real Property Tax Law i imposing and!or n enforcing a tax lien upon plaintiffs premises arising f b r n the said $35,000.00special assessment are not barred under grounds of estoppel; and it is ORDERED, ADJUDGED and DECLARED, that the $5,000.00 sewer connection fee paid by Shine Time in 2002 is not the only lawful sewer connection fee, but rather Shine Time is also liable for the $35,000.00special assessment imposed in its 2010 Town of Schodack tax bill; and it is ORDERXD and ADJUDGED, that plaintiffs cause of action for a permanent 14 [* 15] injunction is dismissed; and it is ORDERED and ADJUDGED, that plaintiffs cause of action to strike the $35,000.00 special assessment from their 20 10 Town of Schodack bill is dismissed. This shall constitute the decision, order and judgment of the Court. The original decisidordedjudgment is returned to the attorney for the County of Rensselaer. AI1 other papers are being delivered to the Supreme Court Clerk for delivery to the County Clerk or directly to the County Clerk for filing. The signing of this decisionlorderljudgment and delivery of this decisiodorder does not constitute entry or filing under CPLR Rule 2220. Counsel is not relieved from the applicable provisions of that rule respecting filing, entry and notice of entry. Dated: August 6 t ,2013 Troy, New York George 8. Ceresia, Jr. P a p a Considered; 1. 2. 3. Notice of Motion dated April 12,2013, Supporting Papers and Exhibits Notice of Cross-Motion dated May 13,20 13, Supporting Papers and Exhibits Reply Affirmation of Benjamin F. Neidl, Esq., dated May 30,2013 David L. Gruenberg, Esq. 54 Second Street Troy, NY 12180 15

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