Kese Indus. v. Roslyn Torah Found.

• Decision Date: 17 November 2010
• Parties: In the Matter of KESE INDUSTRIES et al., Respondents, v. ROSLYN TORAH FOUNDATION et al., Appellants, et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

914 N.Y.S.2d 704
15 N.Y.3d 485
940 N.E.2d 530

In the Matter of KESE INDUSTRIES et al., Respondents,
v.
ROSLYN TORAH FOUNDATION et al., Appellants, et al., Respondents.

Court of Appeals of New York.

Nov. 17, 2010.

914 N.Y.S.2d 705

Kenneth Cooperstein, Centerport, for appellants.

Pryor & Mandelup, L.L.P., Westbury (John H. Hall, Jr., of counsel), for respondents.

15 N.Y.3d 487

940 N.E.2d 531

OPINION OF THE COURT

Chief Judge LIPPMAN.

This appeal requires us to interpret whether the term "legal representative," which ordinarily denotes the executor or administrator of an estate, may encompass a party's retained legal counsel in a pending action. This question comes to us in

15 N.Y.3d 488

the context of Nassau County Administrative Code § 5-51.0, which sets out the duty of a tax lien purchaser to provide notice that a tax deed will be issued unless the right to redeem the lien is exercised. We conclude that the mortgagee's attorney in a pending foreclosure action concerning the same property is not a "legal representative" within the meaning of section 5-51.0, and that the court-appointed referee in a foreclosure action is not an interested party entitled to notice under section 5-51.0.

Roslyn Torah Foundation (RTF), a not-for-profit corporation that operates an orthodox synagogue and high school, purchased property in Roslyn, Nassau County, from the Theodore Roosevelt Council of the Boy Scouts of America (the Boy Scouts) in January 1998. At the time, RTF and the Boy Scouts executed a purchase money mortgage on the property for the principal amount of $1.2 million. RTF maintained a synagogue and high school on part of the parcel and the rest remained undeveloped. Three years later, RTF defaulted on its mortgage payments, causing the Boy Scouts to commence a foreclosure action in May 2002. At the time, notice of pendency was filed on the property, which expired no later than May 2005 and was not renewed. In October 2002, the Boy Scouts assigned the note and mortgage to respondent Kese Industries (Kese). Kese retained a foreclosure attorney to prosecute the foreclosure action begun by the Boy Scouts. Supreme Court entered a judgment of foreclosure and sale against RTF in March 2005 and appointed a referee to conduct the foreclosure sale. The sale was thereafter delayed by RTF's bankruptcy filings, which were ultimately dismissed by federal court.

In December 2003, RTF transferred all its property except for the lot that housed the synagogue and school to Roslyn Gate Corporation (Roslyn Gate). RTF failed to make any additional mortgage payments to Kese for several years and also defaulted on property taxes for the 2003-2004 school year and 2004 general tax year, when it neglected to file for tax exempt status.

In response to the default on property taxes, in February 2005, Nassau County issued a tax lien to appellant Gillen Living Trust, doing business as Jumbo Investments, for $67,596.67. Because of a delay in recording the prior subdivision and sale of part of RTF's property to Roslyn Gate, the tax lien was on the entire parcel of land. That is, both RTF's and Roslyn Gate's lots were subject to the tax lien.

914 N.Y.S.2d 706, 940 N.E.2d 532

Thomas Gillen, as trustee of the Gillen Living Trust, served a notice to redeem the tax lien on Kese, Roslyn Gate, RTF and

15 N.Y.3d 489

others in November 2006. However, it is uncontested that Gillen did not serve either Kese's foreclosure attorney or the foreclosure referee. Neither Kese nor Roslyn Gate exercised their right to redeem the property from the tax lien. Consequently, Nassau County issued a tax deed to Gillen, who then transferred ownership of the entire parcel of land to Siat Foundation by quitclaim deed for $444,000. Siat Foundation is a charitable organization affiliated with RTF that allowed RTF to continue operating its school and synagogue.

Kese and Roslyn Gate commenced this hybrid action/CPLR article 78 proceeding in June 2007 seeking an order (1) enjoining Siat from transferring the tax deed, (2) declaring the conveyance of the tax deed void, (3) declaring the tax deed void because Gillen did not adhere to the notice requirements of the Nassau County Administrative Code, (4) declaring the tax deed void because no taxes were due, (5) declaring that any real estate taxes owed be allocated to each of the lots separately and not as a single parcel, (6) declaring the sale of the original tax lien void, (7) directing the Nassau County Treasurer to rescind the tax deed, and (8) directing the Nassau County Treasurer to allow petitioners to redeem the tax lien.

Finding for Kese and Roslyn Gate, Supreme Court (1) voided and vacated the tax deed issued to Gillen, (2) vacated the quitclaim deed Gillen transferred to Siat because the notice to redeem was defective, (3) denied Gillen's motion seeking to dismiss the petition, (4) denied Kese's application for a tax exemption and other tax relief on the subject property because the time to apply for this relief had expired, and (5) held that Kese or Roslyn Gate or both might redeem the tax liens by paying any or all taxes...