Horner v. State
| Citation | 485 N.Y.S.2d 595,107 A.D.2d 64 |
| Parties | Jay HORNER, Respondent, v. STATE of New York et al., Appellants. |
| Decision Date | 21 February 1985 |
| Court | New York Supreme Court Appellate Division |
Robert Abrams, Atty. Gen., Albany , for appellants.
Herzog, Nichols, Engstrom & Koplovitz, P.C., Albany (James M. Reilly and Marjorie A. Brown, Albany, of counsel), for respondent.
Before MAHONEY, P.J., and MAIN, CASEY, YESAWICH and LEVINE, JJ.
Plaintiff's complaint in this declaratory judgment action alleges: that he is the owner of 48 shares of the 200 authorized and issued shares of corporate stock of PJG Gasoline, Inc.; that he was not an officer of that corporation from 1978 to 1983, the period covered by the tax assessment herein; that he has never been an employee of the corporation; that his only other connection with the corporation during the years in question was several short-term loans that he made to the corporation, some of which still remain unpaid; and that he has not otherwise been involved in either the operation or management of the corporation in any way. The complaint was prompted by plaintiff's receipt from the Department of Taxation and Finance of two notices of determination and demand for payment of sales and use taxes on November 18, 1983, in the amount of $185,619.65, covering the period from June 1978 through August 1983 and seeking to hold plaintiff personally liable for the payment thereof pursuant to Tax Law § 1131(1) and § 1133, in accordance with Tax Law § 1138(a). These notices further informed plaintiff that the determination could be challenged by filing a petition within 90 days under Tax Law § 1138.
Plaintiff declined administrative review, commenced this declaratory judgment action and moved at Special Term for a preliminary injunction to restrain the Department from assessing or attempting to collect the taxes from him personally. Plaintiff elected to proceed in this manner, contending that an appeal from an adverse administrative hearing determination would require his posting a bond in the amount of $185,619.65, plus interest, penalties and charges, in comparison to his original corporate investment of only $3,360. Prior to service of their answer, defendants moved for dismissal of the complaint for failure to state a cause of action and failure to exhaust administrative remedies. Special Term denied defendants' motion and granted plaintiff's motion for a preliminary injunction. 125 Misc.2d 1, 478 N.Y.S.2d 467.
The critical issue is whether the administrative procedures for review are exclusive, prohibiting plaintiff from maintaining this declaratory judgment action. We hold that in these circumstances plaintiff has a right to resort to declaratory judgment relief and, accordingly, affirm Special Term. The allegations of the complaint, accepted as true, which at this stage of the action they must be (Rovello v. Orofino Realty Co., 40 N.Y.2d 633, 389 N.Y.S.2d 314, 357 N.E.2d 970), would, if sustained, put plaintiff beyond the authority of respondents under the Tax Law. It has been held that when the taxing authority's jurisdiction is challenged as unconstitutional or as inapplicable, as herein, review in a manner other than that prescribed in the tax statute is appropriate (Slater v. Gallman, 38 N.Y.2d 1, 4, 377 N.Y.S.2d 448, 339 N.E.2d 863; Matter of First Nat. City Bank v. City of...
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Ouziel v. State
...such a circumstance confronted the plaintiff in the case of Horner v. State of New York, 125 Misc.2d 1, 478 N.Y.S.2d 467, affd. 107 A.D.2d 64, 485 N.Y.S.2d 595 (see also, Two Twenty East Limited Partnership v. New York State Dept. of Tax. and Fin., 185 A.D.2d 202, 586 N.Y.S.2d 596). Horner ......
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Herzog Bros. Trucking, Inc. v. State Tax Com'n
...action. "[W]hen the taxing authority's jurisdiction is challenged as unconstitutional or as inapplicable" (Horner v. State of New York, 107 A.D.2d 64, 65, 485 N.Y.S.2d 595), or when the constitutionality of a statute is challenged (see, Allstate Ins. Co. v. Tax Commn. of State of N.Y., 115 ......
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Pyramid Co. of Auburn v. Chu
...to dismiss the complaint because his challenge raises only the issue of the statute's constitutionality (see, Horner v. State of New York, 107 A.D.2d 64, 65, 485 N.Y.S.2d 595; National Merchandising Corp. v. New York State Dept. of Taxation & Fin., 63 A.D.2d 785, 786, 404 N.Y.S.2d 1009; see......
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Castino v. Commissioner of Taxation & Fin., 2005 NY Slip Op 52214(U) (NY 11/28/2005)
...a corporate obligation. That issue was before the Court in Horner v. State of New York, 125 Misc 2d 1, 478 N.Y.S.2d 467, affd. 107 AD2d 64, 485 N.Y.S.2d 595 (see also, Two Twenty East Limited Partnership v. New York State Dept. of Tax. and Fin., 185 AD2d 202, 586 N.Y.S.2d 596). In Horner v.......