Blue Island Dev., LLC v. Town of Hempstead

• Decision Date: 12 August 2015
• Docket Number: 2014-09818, 2015-00094
• Parties: BLUE ISLAND DEVELOPMENT, LLC, et al., respondents-appellants, v. TOWN OF HEMPSTEAD, et al., appellants-respondents; Long Island Builders Institute, nonparty-respondent.
• Court: New York Supreme Court — Appellate Division

131 A.D.3d 497
15 N.Y.S.3d 807
2015 N.Y. Slip Op. 06488

BLUE ISLAND DEVELOPMENT, LLC, et al., respondents-appellants
v.
TOWN OF HEMPSTEAD, et al., appellants-respondents;
Long Island Builders Institute, nonparty-respondent.

2014-09818, 2015-00094

Supreme Court, Appellate Division, Second Department, New York.

Aug. 12, 2015.

15 N.Y.S.3d 808

Berkman, Henoch, Peterson, Peddy & Fenchel, P.C., Garden City, N.Y. (

15 N.Y.S.3d 809

Todd C. Steckler of counsel), for appellants-respondents.

Weber Law Group LLP, Melville, N.Y. (Jason A. Stern of counsel), for respondents-appellants.

REINALDO E. RIVERA, J.P., JOHN M. LEVENTHAL, SHERI S. ROMAN, and SYLVIA O. HINDS–RADIX, JJ.

Opinion

131 A.D.3d 498

In an action, inter alia, for a judgment declaring invalid a determination of the Town Board of the Town of Hempstead dated November 12, 2013, which denied the plaintiffs' application for the modification of a restrictive covenant adopted July 13, 2010, the defendants appeal, as limited by their notice of appeal and brief, from (1) so much of an order of the Supreme Court, Nassau County (Brown, J.), entered August 11, 2014, as, upon converting a proceeding pursuant to CPLR article 78 to an action pursuant to CPLR 3001 for declaratory relief, denied their motion to dismiss the complaint pursuant to CPLR 3211(a), and (2) so much of an order of the same court entered November 25, 2014, as, upon reargument, adhered to so much of the determination in the order entered August 11, 2014, as denied those branches of their motion which were to dismiss the first and second causes of action, and the plaintiffs cross-appeal, as limited by their brief, from (1) so much of the order entered August 11, 2014, as denied, as premature, their cross motion for summary judgment, inter alia, declaring the subject restrictive covenant invalid, and (2) so much of the order entered November 25, 2014, as, upon reargument, vacated so much of the order entered August 11, 2014, as denied that branch of the defendants' motion which was pursuant to CPLR 3211(a) to dismiss the third cause of action, which alleged a taking pursuant to the takings clauses of the state and federal constitutions, and thereupon granted that branch of the defendants' motion.

ORDERED that the appeal from the order entered August 11, 2014, is dismissed, as that order, insofar as appealed from by the defendants, was superseded by the order entered November 25, 2014, made upon reargument; and it is further,

ORDERED that the order entered August 11, 2014, is affirmed insofar as cross-appealed from; and it is further,

ORDERED that the order entered November 25, 2014, is affirmed insofar as appealed from; and it is further,

ORDERED that the order entered November 25, 2014, is reversed insofar as cross-appealed from, on the law, and, upon reargument, the determination in the order entered August 11, 2014, denying that branch of the defendants' motion which was to dismiss the third cause of action is adhered to; and it is further;

ORDERED that one bill of costs is awarded to the plaintiffs.

The plaintiffs, Blue Island Development, LLC, and Posillico

131 A.D.3d 499

Development Company at Harbor Island, Inc. (hereinafter together Blue Island), purchased land in the Town of Hempstead which had formerly been used as an oil storage facility. Blue Island intended to remediate the environmental contamination and thereafter to develop the property into 172 waterfront condominium units. In 2008, it petitioned the Town and the Town Board of the Town of Hempstead (hereinafter together the Town) for a change in the zoning of the property to permit the proposed use. The Town granted the zoning change requested. In connection with the rezoning, restrictive covenants were imposed on the property, including a provision which required Blue Island to sell all the units in the proposed developments as condominium units, but which permitted subsequent owners of the units to lease them to the

15 N.Y.S.3d 810

extent otherwise permissible under Town law.

In 2010, Blue Island petitioned the Town for a modification of that restrictive covenant and, at its request, the Town modified the subject covenant in a resolution dated July 13, 2010, to provide that Blue Island was permitted to lease up to 17 of the 172 units for a period of five years after the issuance of the certificate of occupancy or until the delivery of title to the 155th unit, whichever occurred first. In 2013, Blue Island sought a further modification allowing it to sell 32 units and maintain the remaining 140 as rentals. In a resolution dated November 12, 2013, the Town denied this application without explanation.

Blue Island then commenced a hybrid CPLR article 78 proceeding/declaratory judgment action challenging the Town's denial of its application. In its petition/complaint, Blue Island sought CPLR article 78 relief, invalidation of the restrictive covenant pursuant to RPAPL 1951, and relief pursuant to the takings clauses of the state and federal constitutions. The Town interposed a pre-answer motion to dismiss the matter pursuant to CPLR 3211, and Blue Island cross-moved for summary judgment on the petition/complaint.

In an order entered August 11, 2014, the Supreme Court determined that Blue Island's challenge to the zoning action could not be entertained as a CPLR article 78 proceeding because it challenged a legislative act, and converted that claim to a CPLR 3001 declaratory judgment cause of action pursuant to CPLR 103(c). The court then determined that each of Blue Island's claims stated a cause of action and, consequently, denied the Town's motion to dismiss them pursuant to CPLR 3211(a). The court denied Blue Island's cross motion for summary judgment as premature. The Town moved for leave to

131 A.D.3d 500

reargue its dismissal motion and, in an order entered November 25, 2014, the court granted reargument. Upon reargument, the court directed the dismissal of Blue Island's third cause of action, which was to recover damages for an alleged unconstitutional taking, and otherwise adhered to its prior determination. The Town appeals, asserting that the court should have granted those branches of its motion which were to dismiss the CPLR 3001 and RPAPL 1951 causes of action. Blue Island cross-appeals, asserting that the court should have granted its cross motion for summary judgment and denied that branch of the Town's motion which was to dismiss the unconstitutional taking cause of action.

The power to zone “is not a general police power, but a...