Dudley v. Kerwick, 1

• Decision Date: 30 April 1981
• Docket Number: No. 2,No. 1,1,2
• Citation: 52 N.Y.2d 542,439 N.Y.S.2d 305,421 N.E.2d 797
• Parties: , 421 N.E.2d 797 In the Matter of James DUDLEY, Appellant, v. Robert KERWICK, as Assessor of the Town of Hardenburgh, et al., Respondents. (Proceeding) In the Matter of the STATE of New York, Appellant, v. Robert KERWICK, as Assessor of the Town of Hardenburgh, et al., Respondents. (Proceeding)
• Court: New York Court of Appeals Court of Appeals

Page 305

439 N.Y.S.2d 305 52 N.Y.2d 542, 421 N.E.2d 797 In the Matter of James DUDLEY, Appellant,
v.
Robert KERWICK, as Assessor of the Town of Hardenburgh, et
al., Respondents. (Proceeding No. 1.)
In the Matter of the STATE of New York, Appellant,
v.
Robert KERWICK, as Assessor of the Town of Hardenburgh, et
al., Respondents. (Proceeding No. 2.) Court of Appeals of New York. April 30, 1981.

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Peter H. Bouman and George L. Ingalls, Binghamton, for appellant in the first above-entitled proceeding.

Robert Abrams, Atty. Gen. (Shirley Adelson Siegel, Sol. Gen. and George M. Thorpe, Asst. Atty. Gen. of counsel), for appellant in the second above-entitled proceeding.

Stephen L. Oppenheim, Monticello, for respondents.

OPINION OF THE COURT

WACHTLER, Judge.

The main issue on this appeal is whether individual taxpayers may, by way of an article 78 proceeding, challenge wholesale religious exemptions from taxation granted to other property owners. The Appellate Division 72 A.D.2d 224, 424 N.Y.S.2d 533 held that in this situation the exclusive procedure for the challenge was article 7 of the Real Property Tax Law.

The instant litigation, as well as the litigation involved in two related appeals (see Town of Hardenburgh v. State of New York, 52 N.Y.2d 536, 439 N.Y.S.2d 303, 421 N.E.2d 795 and Matter of State Bd. of Equalization & Assessment v. Kerwick, 52 N.Y.2d 557, 439 N.Y.S.2d 311, 421 N.E.2d 803 came about as a result of the dramatic increase in the number of parcels of land accorded tax-exempt status by respondent Kerwick, the Assessor of the Town of Hardenburgh, in 1977. It is undisputed that this increase was due to the enrollment, en of 88% of the town's landowners as officers in an allegedly religious denomination known as the Universal Life Church. It appears that all Universal Life Church members who sought an exemption received one. The facts in the petition, which for present purposes are assumed to be true, state that on April 27, 1977 Kerwick telephoned petitioner James Dudley and informed him that if he failed to become a Universal Life Church follower he, along with 12% of the remaining landowners, would have to pay the full $500,000 annual governmental expense of the town. Allegedly Kerwick also represented that as assessor, he intended to accept and approve all exemption applications filed by members of the Universal Life Church and that should petitioner Dudley desire to join he could do so at the town supervisor's house. Dudley refused.

Within four months of the filing of the assessment roll, Dudley commenced this article 78 proceeding seeking to challenge Kerwick's actions. Shortly thereafter, petitioner State of New York, a substantial landowner and taxpayer in the town, also bought an article 78 proceeding seeking essentially the same relief. In both proceedings, petitioners sued on behalf of themselves and other taxpayers similarly situated. Respondents moved to dismiss in both cases on various grounds including failure to state a cause of action, failure to join necessary parties and untimeliness. Special Term, treating the proceedings in a joint opinion, denied respondents' motions to dismiss and allowed the matter to proceed as a class action on behalf of all nonexempt

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property owners. The Appellate Division reversed, based on its conclusion that article 7 of the Real Property Tax Law was petitioners exclusive method to challenge the exemptions, and that the 30-day Statute of Limitations contained in section 702 of the Real Property Tax Law had run. We disagree.

Historical background and a practical construction of article 7 of the Real Property Tax Law indicate that it was designed by the Legislature as a remedy for the taxpayer who wishes to challenge an excessive or illegal assessment on property in which he has an ownership interest (Matter of Board of Educ. v. Parsons, 61 Misc.2d 838, 842, 306 N.Y.S.2d 833). It was not designed to reach the unusual situation encountered here, where taxpayers concede the propriety of their own assessments, but seek instead to challenge the assessor's action in granting wholesale exemptions to other properties within the town.

The ancestry of what is now article 7 can be traced back to the common-law writ of certiorari which allowed review of tax assessments only upon the limited grounds of an assertion of want of jurisdiction, or some basic illegality, as distinguished from errors in judgment on questions of fact or law (History of Certiorari Proceedings, Fifteenth Ann. Report of N.Y. Judicial Council, 1949, pp. 324, 325). The function of the common-law writ, however, was not broad enough to provide review of assessments on the grounds that they were excessive or unequal (People ex rel. Kendall v. Feitner, 51 App.Div. 196, 199, 64 N.Y.S. 675) and to remedy this perceived defect in the common law, the first statutory certiorari proceeding to review tax assessments was enacted in 1880 (L.1880, ch. 269). The tax certiorari proceeding subsequently was made a part of the Tax Law in 1896 (L.1896, ch. 908, §§ 250-264), and in 1909 it was enacted as article 13 of the Tax Law...