N.Y. Tel. Co. v. Supervisor of Town of North Hempstead

• Decision Date: 03 August 2010
• Citation: 77 A.D.3d 121,908 N.Y.S.2d 401
• Parties: NEW YORK TELEPHONE COMPANY, plaintiff, v. SUPERVISOR OF TOWN OF NORTH HEMPSTEAD, et al., defendants third-party plaintiffs-appellants; County of Nassau, et al., third-party defendants-respondents.
• Court: New York Supreme Court — Appellate Division

908 N.Y.S.2d 401

77 A.D.3d 121

NEW YORK TELEPHONE COMPANY, plaintiff,

v. SUPERVISOR OF TOWN OF NORTH HEMPSTEAD, et al., defendants third-party plaintiffs-appellants;County of Nassau, et al., third-party defendants-respondents.

Supreme Court, Appellate Division, Second Department, New York.

Aug. 3, 2010.

Jaspan Schlesinger LLP, Garden City, N.Y. (Maureen T. Liccione, Stanley A. Camhi, Steven R. Schlesinger, Andrew M. Mahony, John C. Farrell, and Chris J. Coschignano of counsel), for defendants third-party plaintiffs-appellants, and for Glenwood-Glen Head Garbage District and the Syosset Sanitation District, amici curiae.

John Ciampoli, County Attorney, Mineola, N.Y. (Peter J. Clines, Joseph DeMaro, Conal B. Denion, Gil Nahmias, and Carl A. Laske of counsel), for third-party defendants-respondents.

Cullen and Dykman LLP, Garden City, N.Y. (Peter J. Mastaglio, Robert J. Sorge, Jr., Karen I. Levin, Jennifer A. McLaughlin, and Hayley M. Kelch of counsel), for plaintiff, amicus curiae.

Ingerman Smith, LLP, and Guercio and Giercio, LLP, Farmingdale, N.Y. (Raymond G. Keenan of counsel), for Nassau-Suffolk School Boards Association, amicus curiae (one brief filed).

REINALDO E. RIVERA, J.P., ANITA R. FLORIO, HOWARD MILLER, and L. PRISCILLA HALL, JJ.

RIVERA, J.P.

On the instant appeal, we consider whether Nassau County Administrative Code § 6-26.0(b)(3)(c), known as the "County Guaranty," requires the County of Nassau, the Assessor of the County of Nassau (hereinafter the Assessor), and the Nassau County Board of Assessors (hereinafter the BOA), rather than the Town of North Hempstead and several special districts located in the Town, to refund certain special ad valorem levies judicially determined to be invalidly imposed upon the plaintiff's real property. The "County Guaranty" is a special law that expressly survives severalamendments to the Real Property Tax Law where erroneous tax assessments have been made. We conclude that the "County Guaranty" applies to the judicially directed refunds of the subject levies. Accordingly, we reverse the order appealed from, and grant the motion of the Town and the special districts for summary judgment on the first cause of action in the third-party complaint seeking indemnification from, among others, the County, the Assessor, and the BOA.

I. Factual and Procedural Background

A. The Five Initial Actions

Verizon New York, Inc. (hereinafter Verizon), formerly known as New YorkTelephone Company, owns "mass property" within the Town of North Hempstead. This "mass property" is comprised of, inter alia, telephone lines, wires, cables, poles, and supports and enclosures for electrical conductors. The named defendants include the Town, as well as special garbage districts within the Town (hereinafter collectively the Town).

In 1998 Verizon commenced the instant action against the Town challenging the imposition of special ad valorem levies relating to garbage and refuse collection services for its mass property. Specifically, Verizon alleged that the imposition of special ad valorem levies for garbage and refuse collection services was illegal. In this regard, Verizon asserted that Real Property Tax Law § 102(14) provides, in relevant part, that a "special ad valorem levy" may only be "imposed upon benefitted real property" and, since the subject mass property neither required nor received any garbage or refuse collection services, there was no benefit derived therefrom. Accordingly, Verizon sought refunds of the levies it paid in connection with those properties, a judgment declaring that the imposition of the levies was invalid, and injunctive relief.

Verizon moved, inter alia, for partial summary judgment declaring that the imposition of the levies was illegal and void, enjoining the continued imposition of such levies, directing a refund in the sum of $559,991.55 plus interest for the tax years 1994-2002, and directing that the calculation of damages for the levies it paid for the tax years 1992 and 1993 be determined at a trial. In an order dated November 12, 2003, the Supreme Court granted the motion. On appeal, this Court affirmed that order ( see New York Tel. Co. v. Supervisor of Town of N. Hempstead, 19 A.D.3d 465, 796 N.Y.S.2d 715). This Court concluded that the Supreme Court correctly determined that the special ad valorem leviesfor garbage and refuse collection services imposed were "invalid because the properties did not and could not receive any direct benefit from that service" ( id. at 466, 796 N.Y.S.2d 715).

Thereafter, following a nonjury trial on the issue of damages for the 1992 and 1993 tax years, judgment was entered in favor of Verizon and against the Town in various amounts. The Town appealed from the judgment and this Court is affirming that judgment ( see New York Telephone Co. v. Supervisor of Town of N. Hempstead, 76 A.D.3d 517, 906 N.Y.S.2d 319).

B. The Third-Party Action

In December 2005 the Town commenced a third-party action against, among others, the County of Nassau, the assessor, and the BOA (hereinafter collectively the County), seeking, inter alia, indemnification. As relevant to the instant appeal, in the first cause of action in the third-party complaint, the Town alleged, among other things, that pursuant to Nassau County Administrative Code § 6-26.0, the County is required to refund any tax or benefit assessment that is declared to be illegal or erroneous.

The Town moved for summary judgment on the first cause of action in the third-party complaint. In support of its motion, the Town asserted that the County was the "assessing unit," and was responsible for all errors and illegalities in the assessment roll. Relying upon Nassau County Administrative Code § 6-24.0(4), which, as discussed in detail, infra, pertains to property that has been "assessed erroneously or illegally," the Town claimed that the County was obligated to refund the levies. Additionally, the Town asserted that the County Guaranty provides that such refunds are to be a "county charge."

In opposition, the County asserted that the County Guaranty did not apply in thethird-party action, and that the refunds sought by Verizon were not a county charge. The County accused the Town of "misreading" the "relevant statutory provisions" and "misunderstanding" the "underlying statutory scheme." Among other things, the County claimed that Nassau County Administrative Code § 6-24.0 referred only to the "administrative procedure for the correction of errors" and not "refunds arising from judicial proceedings such as the case at bar." Additionally, the County argued that Nassau County Administrative Code § 6-24.0 was "no longer ... an operative section of the administrative code" since it had been "supersededby subsequently enacted general law Title 3 of Article 5 of the RPTL." The County insisted that the Town was the party "ultimately responsible" for the refund generated in this action.

The Supreme Court denied the Town's motion, and, upon searching the record, awarded summary judgment to the County dismissing the third-party complaint. The Supreme Court determined that the County Guaranty was inapplicable, and that RPTL 726(1)(b) governed the instant dispute. We disagree and reverse.

II. Relevant Statutory Scheme

In order to resolve the issues presented on this appeal, we must first analyze the interplay of different statutory provisions and the statutory history of the County Guaranty.

A. History of the Guaranty

Prior to 1938, the Nassau County Tax Act (L. 1916, ch. 541) provided that town boards of assessors were obligated to prepare the local assessment rolls. Refunds of illegally imposed taxes were charged to the towns ( see Letter from G. Burchard Smith Bill to Charles D. Breitel, dated March 8, 1948, Bill Jacket, L. 1948, ch. 851). In 1938 the offices of town assessors were abolished and their powers and duties transferred to the BOA ( see Nassau County Charter §§ 608, 609). The BOA became responsible for assessment of all properties in the County ( see Nassau County Charter §§ 602, 609).

In 1939 the State Legislature enacted the Nassau County Administrative Code (hereinafter NCAC), as a codification and restatement of the existing law with relation to the administration of County affairs (L. 1939, ch. 272).

In 1948 the NCAC was amended to provide that, since the County now assessed all property, tax refunds due to illegal or erroneous assessments would be made a County charge ( see Letter from G. Burchard Smith to Charles D. Breitel, March 8, 1948, Bill Jacket, L. 1948, ch. 851).

As part of the amendment, NCAC § 6-26.0(b)(3)(c) was added, providing for the County Guaranty, with the following language:

"Notwithstanding any provisions of this chapter, or any other general or special law to the contrary, any deficiency existing or hereafter arising from a decrease in an assessment or tax under subdivisionsone, four and seven of section 6-24.0, or sections 6-12.0 or 5-72.0 of the code or by reason of exemption or reductions of assessments shall be a county charge."

Subdivision (4) of NCAC § 6-24.0 provides as follows:

" § 6-24.0 Correction of errors in assessment rolls. Upon the verified petition to the Board of Supervisors by a majority of the Board of Assessors:

...

"4. That any property subject to taxation has been assessed erroneously or illegally, for either the County assessment roll or for the school district assessment roll, the Board of Supervisorsshall cancel on such roll such assessment and the tax or assessment for benefit on such property."

In a related act, the Legislature amended the Nassau County Charter to provide that "deficiencies existing or hereafter arising from the extension of taxes for the adopted budgets shall be a county charge" (Nassau County Charter § 607 [a]; L. 1948, ch. 98). The bill jacket for this amendment indicated that the new provision was meant to cover discrepancies between town budgets and the amount of taxes collected that arise primarily due to...