MATTER OF NIAGARA MOHAWK POWER CORPORATION v. State of New York

• Decision Date: 26 December 2002
• Citation: 753 N.Y.S.2d 541,300 A.D.2d 949
• Court: New York Supreme Court — Appellate Division
• Parties: In the Matter of NIAGARA MOHAWK POWER CORPORATION, Appellant,<BR>v.<BR>STATE OF NEW YORK et al., Respondents. (Proceeding No. 1.)<BR>In the Matter of ERIE BOULEVARD HYDROPOWER, L.P., Appellant,<BR>v.<BR>BOARD OF HUDSON RIVER-BLACK RIVER REGULATING DISTRICT et al., Respondents. (Proceeding No. 2.)

300 A.D.2d 949

753 N.Y.S.2d 541

In the Matter of NIAGARA MOHAWK POWER CORPORATION, Appellant,

v.STATE OF NEW YORK et al., Respondents. (Proceeding No. 1.)

In the Matter of ERIE BOULEVARD HYDROPOWER, L.P., Appellant,

v.BOARD OF HUDSON RIVER-BLACK RIVER REGULATING DISTRICT et al., Respondents. (Proceeding No. 2.)

Spain, J.

Decided December 26, 2002.

Cardona, P.J., Mercure, Lahtinen and Kane, JJ., concur.

Spain, J.

Pursuant to ECL article 15, respondent Hudson River-Black River Regulating District (hereinafter HRBRRD) is responsible for the maintenance and operation of dams, reservoirs and appurtenant facilities in the Hudson and Black River basins for the purpose of regulating the flow of those rivers (see ECL 15-2103, 15-2105). HRBRRD has the authority to apportion and assess its construction, operation and maintenance costs "among the public corporations and parcels of real estate benefited, in proportion to the amount of benefit which will inure to each such public corporation and parcel of real estate by reason of such reservoir" (ECL 15-2121 [2]). Petitioners own property within the relevant river basins and have been assessed by HRBRRD for its operation and maintenance costs associated with the annual period ending on June 30, 2001 in accordance with the budget adopted by HRBRRD at its June 2000 meeting for the three-year period beginning July 1, 2000.

In separate CPLR article 78 proceedings, petitioners challenge their liability for HRBRRD's 2000-2001 costs on the grounds that HRBRRD has failed to comply with statutory procedures for apportioning costs between the parcels benefitted; that the calculation and apportionment of the 2000-2003 budget is arbitrary and capricious; and that the assessment of costs violates their constitutional due process and equal protection rights and constitutes an unlawful taking and an impermissible interference with interstate commerce. In lieu of an answer, HRBRRD moved to dismiss each petition for failure to state a claim. Petitioner Niagara Mohawk Power Corporation (hereinafter Niagara Mohawk) cross-moved for discovery. Supreme Court granted HRBRRD's motions. In a thorough opinion, the court held that petitioners' claim that HRBRRD failed to comply with statutory apportionment procedures was based on an erroneous interpretation of the relevant statutes and petitioners failed to allege facts sufficient to raise a bona fide issue that the current assessment was arbitrary and capricious. In addition, the court held that the petition of petitioner Erie Boulevard Hydropower, L.P. (hereinafter Erie) was untimely. In light of its decision to dismiss the petitions, the court denied Niagara Mohawk's cross motion for discovery. Petitioners appeal.

The Legislature created HRBRRD in 1959 when it consolidated the former Hudson River Regulating District and the Black River Regulating District (see ECL 15-2103, 15-2137) and charged HRBRRD with, among other things, the management and maintenance of the Sacandaga Reservoir, or Great Sacandaga Lake. ECL article 15 establishes a process whereby, when a reservoir is created, its river regulating district will identify the parcels of land benefitted and make an appropriate percentage apportionment among those parcels (see ECL 15-2121 [2], [4]). The last time an apportionment was conducted with respect to the costs associated with the Sacandaga Reservoir was in 1925. The statute specifically provides that "[s]uch apportionment and determination, when finally made, * * * shall be deemed to fix and determine the apportionment and the basis of apportionment of all subsequent expenses to be incurred in the maintenance and operation of such reservoir" (ECL 15-2121 [6]), and the only statutory authority for reapportionment consists of permissive language providing that "a subsequent apportionment may be made" by HRBRRD (ECL 15-2121 [7] [emphasis added]). Using the most recent apportionment, HRBRRD assesses and levies costs to the benefitted property owners on an annual basis in accordance with an estimated budget of expenses determined by HRBRRD every three years (see ECL 15-2123, 15-2125). Thus, for the 2000-2001 year, HRBRRD levied its budgeted costs for the 2000-2001 fiscal year using the 1925 apportionment.

As an initial matter, we must address the threshold inquiry of whether Erie's petition was timely filed. Relying on this Court's decision in Matter of Spinnenweber v New York State Dept. of Envtl. Conservation (120 AD2d 172), Supreme Court applied the 60-day time limitation set forth in ECL 15-0905, which provides, in relevant part, as follows: "1. The applicant or any person or public corporation, who or which has filed a notice of appearance in the proceedings before the department and is affected by a decision made pursuant to this article, may review such decision under the provisions of article 78 of the Civil Practice Law and Rules. 2. A special proceeding for such review must be commenced within sixty days after service in person or by mail of a copy of the decision * * *" (emphasis added). Erie does not dispute that it failed to commence this proceeding within the aforementioned 60 days, but argues that ECL 15-0905 does not apply here because, while it "is affected by a decision made pursuant to [art. 15]," it never appeared in "proceedings before [respondent Department of Environmental Conservation]" (hereinafter DEC), as the challenged decision was not made by DEC but, rather, by HRBRRD (see ECL 15-0905 [1]; 1-0303 [11]). Therefore, Erie contends, this proceeding is governed by CPLR 217, which permits any proceeding against a body or officer to be commenced within four months "[u]nless a shorter time period is provided" (CPLR 217).

In Spinnenweber, we stated that "the predecessor section of ECL 15-0905 (2) was intended to make the 60-day limit uniform for proceedings under former Conservation Law article V [and] [n]othing in the * * * recodification of that article as ECL article 15 evidences an intent to restrict the uniform applicability of the 60-day time limit for proceedings arising under that article" (Matter of Spinnenweber v New York State Dept. of Envtl. Conservation, supra at 175; see L 1960, ch 7, § 4, as repealed by L 1972, ch 664). Thus, we held that the 60-day limitation applied to challenges to determinations regarding permits taken pursuant to ECL 15-0515, although that section, unlike ECL 15-0905 (2), contains no such express restriction. Spinnenweber, however, is factually dissimilar in a crucial respect. There, the proceedings involved were clearly before DEC; thus, the statutory language suggesting that the 60-day limitations period applies to proceedings before DEC was not at issue. Although we continue to appreciate the desirability —recognized in Spinnenweber—of uniform applicability of the limitations period to proceedings commenced pursuant to ECL article 15, applying "that liberal interpretation of the statute in favor of [petitioners] which reason and authority compel us to employ" (Matter of Steinway's Estate, 174 Misc 554, 557-558; see National Sur. Co. v Ruffin, 242 NY 413, 418-419; Olcott v Tioga R.R. Co., 20 NY 210, 223; Clark v Abbott Labs., 155 AD2d 35, 45), we conclude that the statutory language, on its face, is too narrow to give a petitioner fair notice that the 60-day limitations period applies to determinations of river regulating districts. Accordingly, the 60-day limitations period does not apply to challenges to HRBRRD's determinations and Erie's petition should not have been dismissed on that basis.

Turning to petitioners' substantive arguments, they first assert that, in analyzing and ultimately dismissing their claims, Supreme Court improperly converted HRBRRD's motion to dismiss into a motion for summary judgment without first providing the required notice to the parties (see CPLR 3211 [c]). In deciding a motion to dismiss for failure to state a cause of action, a court must liberally construe the allegations to determine if a bona fide justiciable controversy exists (see Matter of Schulz v New York State Legislature, 230 AD2d 578, 582, lv denied 95 NY2d 769). A court may consider factual materials to remedy defects in the allegations made in the complaint or petition, but should not make determinations regarding whether a claim is supported by evidence (see Rovello v Orofino Realty Co., 40 NY2d 633, 635). Here, Supreme Court considered the factual materials submitted on the motion, but only with an eye toward remedying defects in the petition (see id.; Bansbach v Zinn, 258 AD2d 710, 713 n 2). The court did not delve into a summary judgment analysis, but focused on whether the facts alleged stated any justiciable controversy. Accordingly, we perceive no error in this regard.

Next, we must consider whether the petitions were properly dismissed for failing to state a claim (see CPLR 3211 [a] [7]; 7804 [f]). In so doing, we must "accept the facts as alleged in the [petition] as true, accord [petitioners] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88; see Virgem Enters. v City of New York, 290 AD2d 708, 708-709; Matter of Schulz v New York State Legislature, supra at 582). More is needed to state a claim, however, than factual allegations which are conclusory, vague or inherently incredible (see McNeary v Niagara Mohawk Power Corp., 286 AD2d 522, 524; Four Seasons Hotels v Vinnik, 127 AD2d 310, 318).

Both petitions allege four causes of action. The first cause of action in Niagara Mohawk's petition states that HRBRRD acted arbitrarily in failing to conduct a reapportionment of the parcels benefitted by its facilities because (1) HRBRRD is statutorily required to do so, (2) the existing apportionment does not include all benefitted parcels, and (3) Niagara Mohawk, having divested itself of its hydroelectric generating facilities, is no longer a benefitted...