Masi Management, Inc. v. Town of Ogden

• Decision Date: 25 February 1999
• Citation: 691 N.Y.S.2d 706,180 Misc.2d 881
• Parties: , MASI MANAGEMENT, INC., Plaintiff, v. TOWN OF OGDEN et al., Defendants.
• Court: New York Supreme Court

Page 706

691 N.Y.S.2d 706

180 Misc.2d 881, MASI MANAGEMENT, INC., Plaintiff, v. TOWN OF OGDEN et al., Defendants.

Supreme Court, Monroe County, New York.

Feb. 25, 1999.

Chamberlain, D'Amanda, Oppenheimer & Greenfield, Rochester (J. Michael Wood of counsel), for defendants.

Gates & Adams, Rochester (Douglas S. Gates of counsel), for plaintiff.

KENNETH R. FISHER, J.

In this action pursuant to 42 U.S.C. § 1983, and under the N.Y. Constitution, plaintiff alleges that defendants violated its substantive due process, and equal protection, rights by causing it to expend effort and money to secure approval of a land use project defendants never intended to approve. Defendants move to dismiss the complaint for failure to state a cause of action, CPLR 3211(a)(7).

A. The Facts

Plaintiff is a "contract-vendee" of land in the Town of Ogden near the Village of Spencerport. Plaintiff alleges that defendants intentionally delayed action on plaintiff's proposal until it could obtain submission and approval of a competing senior citizen housing project proposed by a well-liked local developer who hired an attorney married to a town councilwoman. Giving the complaint, as supplemented by affidavits submitted by the plaintiff, an exceedingly liberal construction, the following salient facts are alleged. Plaintiff approached defendants informally in the late Spring of 1997 with a subdivision proposal for senior citizen housing on property zoned for R-2 uses, which allow duplex housing. According to the complaint, plaintiff abandoned this original plan in response to defendants' entreaties, and Plaintiff does not now appear to have any interest in the property, although the record is inconclusive on the point; it did not challenge defendants' delay and denial of the subdivision application in an Article 78 proceeding or in an action for a declaratory judgment; it does not in this action seek to overturn the Town's decision; and it does not join the owner of the land in this lawsuit. The owner is nowhere mentioned in the pleadings and it is not revealed whether the owner believes that defendants unconstitutionally restricted or infringed any ownership rights in the parcel. ¹ Instead, plaintiff seeks damages for its "opportunity cost" borne because defendants led it to believe that its project eventually would be approved within the time specified in its purchase contract when, all along, defendants planned to reject plaintiff's project in favor of a proposal for senior citizen housing presented by a locally favored developer.

formally submitted a proposal in August of 1997 for approval of a subdivision plat involving large lot single-family homes and free-standing patio homes without inclusion of duplexes. Subsequently, when faced with defendants' apparent preference for a competing senior citizen proposal submitted by another local developer, Michael LoPresti, plaintiff withdrew its proposal in frustration sometime in February, 1998. Plaintiff substituted a duplex subdivision proposal for a R-2 district with some minor portions calling for uses not permitted in R-2 districts. Defendants eventually denied plaintiff's application and plaintiff did not seek review of the denial in an Article 78 proceeding. Instead, plaintiff filed this § 1983 action alleging a deprivation of its constitutional rights.

In particular, plaintiff contends that he would have submitted a formal proposal for two-family duplexes early on that defendants virtually would have been required to approve under the town zoning code then in existence, which clearly permitted such uses, but for its knowledge that defendants, for a long time, wished to change the zoning code to prohibit duplexes in the area of the subject property, and defendants' request for plaintiff's cooperation in carrying out such wish. Plaintiff alleges that, when it broached the subject of duplex development, defendants begged off, and induced it to enter into "an oral agreement" with certain of defendants which called upon plaintiff to change its project to one involving construction of large-lot single-family and "patio homes." In return, according to plaintiff, defendants would change the zoning code to permit the multiple uses on the subject parcel that plaintiff desired to incorporate into the project, and, presumably (because such presumption is all that is alleged) approve the project in time for the deadline set in plaintiff's purchase and sale contract. The long and the short of plaintiff's claim is that it expended large sums, for which it seeks compensatory damages, to satisfy the particular demands of defendants in regard to the alternative large-lot single-family and patio home project design desired by defendants, when it could have, without a bureaucratic run-around, easily submitted the original duplex plan for swift approval under the existing code.

B. First & Third Causes of Action: Substantive Due Process

In the first and third causes of action, plaintiff alleges, respectively, a violation of the federal and state constitutional guarantee that the state not deprive it of property As a preliminary matter, the court merely "assume[s] without determining the issue" that a contract-vendee "shares" with the property owner the property rights of the landowner. DLC Management Corp. v. Town of Hyde Park, 163 F.3d 124, 129-30 (2d Cir.1998). Whether the owner was deprived of a property right in violation of the substantive due process principle "begins" with the question whether the property right asserted is cognizable under the federal constitution. Id. 163 F.3d at 130. "In this regard, a property right will not be recognized as cognizable under the due process doctrine if the person claiming the right has a mere abstract need or desire for, or unilateral expectation of the claimed right. Rather, the person claiming the right must have a 'legitimate claim of entitlement' to it." Id. 163 F.3d at 130 (quoting Board of Regents of State Colleges v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972)). In determining whether such a legitimate claim of entitlement is asserted, the court must identify precisely what plaintiff claims it was entitled to, and then determine whether New York zoning law conferred such a legitimate claim of entitlement on plaintiff. Id. 163 F.3d at 130.

without due process of law. U.S. Const.Amdt. XIV; N.Y. Const. Art. I § 6. Most of the discussion in this section concerns the Fourteenth Amendment. At the end of this section, however, the court concludes that, although the New York Court of Appeals has for some purposes given the state due process clause a broader interpretation than the federal guarantee, no such rule covers the circumstances of this case.

In this case, the allegations of plaintiff's complaint suggest two theories of entitlement. First, plaintiff claims that it had a legitimate claim of entitlement to continued positive consideration of the large-lot single-family and patio home project, or at least the right to be free from defendants' misleading representations causing it to pursue the single-home and patio home approach, and to enactment of amendments to the local zoning ordinance defendants stated that they desired, which would accommodate plaintiff's subdivision proposal. The second theory of relief a liberal construction of the complaint yields is that plaintiff had a legitimate claim of entitlement to the existing R-2 zoning classification of the land to accommodate the original proposal to build two-family duplexes, an allowable use in an R-2 district. The latter claim of entitlement appears to be the more concrete theory of the case, and therefore it is considered first.

As very recently summarized by the Second Circuit,

Under New York law, a property owner has no right to the existing zoning status of his land unless his right has become "vested." See, e.g., In the Matter of Ellington Construction Corporation v. Zoning Board of Appeals of the Incorporated Village of New Hempstead, 77 N.Y.2d 114, 122, 566 N.E.2d 128, 132, 564 N.Y.S.2d 1001, 1005 (1990). In order for a right in a particular zoning status to vest, a property owner must have undertaken substantial construction and must have made substantial expenditures prior to the enactment of the more restrictive zoning ordinance. Id. "Where ... there has been no construction or other change to the land itself," a property owner has no right to complete a project permitted under an earlier zoning classification. In the Matter of Pete Drown, Inc. v. Town Board of the Town of Ellenburg, 229 A.D.2d 877, 879, 646 N.Y.S.2d 205, 206 (3rd Dept.1996). In instances in which construction has been improperly delayed by town officials in an attempt to prevent vesting, the right to an existing zoning status may also vest by equitable estoppel. See In the Matter of Lawrence School Corp. v. Morris, 167 A.D.2d 467, 468, 562 N.Y.S.2d 707, 708 (2d Dept.1990); In the Matter of Faymor Dev. Co. v. Board of Standards &amp DLC Management Corp., 163 F.3d at 130-31. Plaintiff does not claim that it began construction and expended, in connection therewith, substantial sums. Compare Town of Orangetown v. Magee, 88 N.Y.2d 41, 47-48, 52-53, 643 N.Y.S.2d 21, 665 N.E.2d 1061 (1996). Nor does it contend that defendants gave it an approval or a permit upon which it could peg a property interest. Compare id. 88 N.Y.2d at 52-53, 643 N.Y.S.2d 21, 665 N.E.2d 1061; Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 379 (2d Cir.1995), cert. denied, 519 U.S. 808, 117 S.Ct. 50, 136 L.Ed.2d 14 (1996). Instead, plaintiff argues that its interest in the existing R-2 zoning classification of the land, which permitted construction of two-family duplexes, "vested" by the operation of equitable estoppel because defendants, by means of securing an agreement to delay consideration of the project and setting plaintiff off on another course, induced plaintiff to believe that the alternative project for...