Herkimer Cnty. Indus. Dev. Agency v. Vill. of Herkimer, 168
| Decision Date | 22 August 2019 |
| Docket Number | CA 18–01072,168 |
| Citation | 175 A.D.3d 857,108 N.Y.S.3d 564 |
| Parties | HERKIMER COUNTY INDUSTRIAL DEVELOPMENT AGENCY, Plaintiff–Appellant, v. VILLAGE OF HERKIMER, Defendant–Respondent, et al., Defendant. (Action No. 1.) In the Matter of Herkimer County Industrial Development Agency, Petitioner–Respondent, v. Village of Herkimer and John Spanfelner, as Codes Officer for Village of Herkimer, Respondents-Appellants. (Action No. 2.) |
| Court | New York Supreme Court — Appellate Division |
It is hereby ORDERED that the amended judgment so appealed from is modified on the law by granting in part the motion of defendant-respondent Village of Herkimer (Village) and respondent John Spanfelner, as Codes Officer for the Village, dismissing the petition insofar as it sought to prohibit the Village and Spanfelner from enforcing the New York State Uniform Fire Prevention and Building Code against plaintiff-petitioner and vacating the second decretal paragraph to the extent that it granted such relief, and by granting judgment in favor of the Village as follows:
It is ADJUDGED AND DECLARED that plaintiff Herkimer County Industrial Development Agency is liable to defendant Village of Herkimer for the subject unpaid water rents,
and as modified the amended judgment is affirmed without costs.
Memorandum: Plaintiff-petitioner, Herkimer County Industrial Development Agency (HCIDA), as part of an industrial development project, leased a facility to a corporation (tenant) on properties located in defendant-respondent Village of Herkimer (Village). The tenant operated its business at the facility and incurred charges for water supplied by the Village, but subsequently went bankrupt and left two years of unpaid water rents. As we explained on the prior appeals in this matter, HCIDA commenced action No. 1 seeking a declaration that the real property taxes levied against it by the Village as a means of collecting the unpaid water rents are void inasmuch as HCIDA is exempt from the payment of such taxes ( Herkimer County Indus. Dev. Agency v. Village of Herkimer, 124 A.D.3d 1298, 1 N.Y.S.3d 644 [4th Dept. 2015] [ Herkimer II ]; Herkimer County Indus. Dev. Agency v. Village of Herkimer, 84 A.D.3d 1707, 922 N.Y.S.2d 701 [4th Dept. 2011] [ Herkimer I ] ). As relevant here, we declared in Herkimer II that the assessment of such taxes was unlawful based on HCIDA's tax exempt status and that defendant County of Herkimer had properly cancelled the tax lien against properties owned by HCIDA ( 124 A.D.3d at 1298, 1 N.Y.S.3d 644 ). We concluded, however, that Supreme Court erred in dismissing the Village's counterclaim against HCIDA, alleging that HCIDA is responsible for the unpaid water rents as the owner, and we therefore reinstated the counterclaim ( id. at 1300–1301, 1 N.Y.S.3d 644 ).
Thereafter, inasmuch as the vacant properties had fallen into a state of disrepair, the Village issued an order to remedy to HCIDA directing that it remedy various violations of the New York State Uniform Fire Prevention and Building Code (Building Code) ( 19 NYCRR 1219.1 et seq. ; see Executive Law § 377 ). After HCIDA failed to comply, respondent John Spanfelner, as Codes Officer for the Village, issued an appearance ticket charging HCIDA criminally for violations of the Building Code. HCIDA commenced a proceeding pursuant to CPLR article 78 in action No. 2 seeking several forms of relief including, in effect, a writ of prohibition barring the Village and Spanfelner (collectively, respondents) from enforcing the Building Code against it.
HCIDA appeals and respondents cross-appeal from an amended judgment that, inter alia, granted that part of the Village's motion in action No. 1 for partial summary judgment on the issue of liability on the counterclaim and, in action No. 2, denied respondents' motion to, among other things, dismiss the petition and granted HCIDA's petition by, inter alia, prohibiting respondents from enforcing the Building Code against HCIDA.
HCIDA contends on its appeal in action No. 1 that the Village has no authority to recover directly from it for the unpaid water rents. We reject that contention.
As a general matter, "[w]here a person applies for water for his [or her] premises[,] a contract to pay the rates charged therefor arises" ( Security Bldg. & Loan Assn. v. Carey, 259 App.Div. 42, 47, 18 N.Y.S.2d 511 [4th Dept. 1940], affd 286 N.Y. 646, 36 N.E.2d 690 [1941] ; see generally State Univ. of N.Y. v. Patterson, 42 A.D.2d 328, 329, 346 N.Y.S.2d 888 [3d Dept. 1973] ). When "the charge ... depends solely upon the quantity of water used[,] ... there is merely a voluntary purchase by the consumer from the [municipality] of such quantity of water as [the consumer] chooses to buy ..., and the obligation to pay therefor must primarily rest upon [the consumer] who buys and consumes the article" ( New York Univ. v. American Book Co., 197 N.Y. 294, 297, 90 N.E. 819 [1910] ).
Nonetheless, where, as here, an owner "consents to the tenant's using water in [a] building, supplied through pipes installed by the owner, or continued by the owner, for the purpose of connecting the building with the [municipality's] water main, the owner assents to the [municipality's] supplying water to the tenant for use in the building" ( Dunbar v. City of New York, 177 App.Div. 647, 649, 164 N.Y.S. 519 [1st Dept. 1917], affd 223 N.Y. 597, 119 N.E. 1039 [1918], affd 251 U.S. 516, 40 S.Ct. 250, 64 L.Ed. 384 [1920] ). In the case before us, it appears that the water pipes of the facility that were connected to the Village's water mains "were installed by the owner of the [facility], if not by the present owner, [HCIDA], then by [its] predecessor in title and the connection was never shut off or disconnected by [HCIDA]," and we note that "[t]he only purpose of maintaining a connection between [the facility] and the [Village's] water mains [was] to have the [Village] supply the [facility] with water" ( id. at 648, 164 N.Y.S. 519 ). Moreover, the lease contemplated that the tenant would incur utility charges as part of its operation, use, and occupancy of the leased facility. "When such assent [to] or arrangement [for the tenant's use of water] is made, it must be deemed to be made with a view to the existing law" ( id. at 649, 164 N.Y.S. 519 ). We therefore must evaluate the existing law at the time of HCIDA's assent to the Village supplying water to the tenant in order to determine whether liability for the unpaid water rents may be imposed upon HCIDA.
Village Law § 11–1116 provides that "[t]he board of water commissioners may adopt rules, regulations and local laws not inconsistent with law, for enforcing the collection of water rents and relating to the use of the water, and may enforce observance thereof by cutting off the supply of water." The Village adopted regulations for enforcing the collection of water rents and relating to the use of water in 1958 (regulations). It is well settled that the language of a regulation is to be construed in light of the regulation as a whole and according to the ordinary and plain meaning of its words (see Rodriguez v. Joseph, 149 A.D.2d 14, 18, 544 N.Y.S.2d 592 [1st Dept. 1989], lv dismissed 75 N.Y.2d 809, 552 N.Y.S.2d 111, 551 N.E.2d 604 [1990] ; Matter of Parker v. Kelly, 140 A.D.2d 993, 993, 529 N.Y.S.2d 662 [4th Dept. 1988] ; see also McKinney's Cons. Laws of N.Y., Book 1, Statutes §§ 94, 97). Here, under the section entitled "Liability for Water Service," Rule No. 7 of the regulations provides that "[a]ll bills, whether for use of water or repairs to water service, are a charge against the owner of the premises or property where the water is used, and said bills will be rendered to the owner or occupant of said premises." Under the same section, Rule No. 8 provides, in pertinent part, that "[a]ll bills for the use of water become due and payable and are a lien on the premises where the water is used" and that "[f]ailure to receive bills for said water services ... does not relieve the owner and/or consumer from liability to pay." Consistent therewith, Rule No. 22 provides the duration and measure of the owner's liability, stating that "[t]he property owner will be held liable for all water bills rendered" from the setting of the meter until 48 hours (excluding Sundays and holidays) after receipt of written notice of discontinuation of service as measured by the meter or estimated by the Village from the best available information if the meter has incorrectly registered actual consumption. Upon construing the regulations as a whole and according to the ordinary and plain meaning of the words therein, we conclude that the regulations provide for the imposition of liability on property owners for water consumed on such property and supplied by the Village.
HCIDA attempts to rebut the effect of the regulatory language imposing liability on property owners by referencing the language of Rule No. 8 and that part of Rule No. 9 authorizing the Village to discontinue and shut off the water supply for nonpayment. Those attempts are unavailing. Rule Nos. 8 and 9 are consistent, respectively, with Village Law § 11–1118 in providing that unpaid water bills constitute a lien on the property by operation of law and with Village Law § 11–1116 in providing that the collection of water rents may be enforced by shutting off the water supply. Those remedies, however, are available in addition to, and not exclusive of, direct liability against property owners (see City of New York v. Idlewild Beach Co., Inc., 182 Misc. 205, 207–208, 43 N.Y.S.2d 567 [N.Y. City Ct. 1943], affd 182 Misc. 213, 50 N.Y.S.2d 341 [App. Term, 1st Dept. 1944] ).
Based on the foregoing, we conclude that HCIDA assented to the Village supplying water to the tenant for use in the facility at a time when the existing law imposed liability on property owners for municipal water service, thereby giving rise to an implied contract for such service between...
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