Ofenloch v. Gaynor

• Decision Date: 14 May 1970
• Parties: Gerard J. OFENLOCH et al., Plaintiffs, v. Edward J. GAYNOR, Director, Department of Buildings and Zoning of the Town ofOyster Bay, et al., Defendants.
• Court: New York Supreme Court

Page 362

320 N.Y.S.2d 362

66 Misc.2d 185

Gerard J. OFENLOCH et al., Plaintiffs, v. Edward J. GAYNOR, Director, Department of Buildings and Zoning of the Town ofOyster Bay, et al., Defendants.

Supreme Court, Special Term, Nassau County, Part I.

May 14, 1970.

Conroy, Giorgio, dePoto & Merritt, Syosset, for plaintiffs.

Bernard F. McCaffrey, Town Atty., Town of Oyster Bay.

Seymour H. Kligler, New York City, for defendant.

Halpern, Somers & Goldstick, New York City, for defendants Dalebass and another.

MEMORANDUM

JOSEPH A. SUOZZI, Justice.

Defendants Dalebass Realty Inc. and Bass & D'Alesandro, Inc. (hereinafter referred to as 'Dalebass') and Board of Cooperative Educational Services of Nassau County (hereinafter referred to as 'BOCES') move to dismiss the complaint herein pursuant to CPLR 3211(a)(3), (5) and (7) on the grounds of lack of standing, collateral estoppel and failure to state a cause of action, respectively.

In the first cause of action plaintiffs, who are resident taxpayers and voters of the Town of Oyster Bay, seek a permanent injunction against the Town to restrain the issuance of building permits for certain improvements which are the subject of an agreement, the validity of which is challenged in the second cause. The injunction is sought on the ground that the structures would violate the zoning ordinance of the Town. The second cause of action challenges the validity of an agreement made between BOCES and Dalebass and charges that the execution of said agreement is illegal and constitutes a 'waste of public funds.'

As to the first cause of action, the holding in Matter of Board of Cooperative Educational Services of Nassau County v. Gaynor, 60 Misc.2d 316, 303 N.Y.S.2d 183, aff'd 33 A.D.2d 701, 306 N.Y.S.2d 216, leave to appeal den. 26 N.Y.2d 612, 310 N.Y.S.2d 1025, 258 N.E.2d 729, is determinative. The Court in that case held that the facilities to be operated by BOCES constituted a school within the ambit of the Town's zoning ordinance, and that the Town may not prevent the location of a school within its borders. This Court is bound by that determination, and accordingly dismisses the first cause of action. (Cf. Molenaor v. Watson Estates, Inc., 265 App.Div. 928, 38 N.Y.S.2d 561.)

As to the second cause of action, it is undisputed that BOCES contracted with Dalebass to construct three buildings on its property for use by BOCES. BOCES would lease the premises at a 'net annual rental' of $153,060.00 for a five-year term, with an option to renew for an additional five years, and at the expiration of the 10-year period BOCES had an additional option to purchase the property and buildings for the sum of $100,000.00, subject to a referendum of the voters approving the purchase as prescribed by law. In addition to the 'net annual rental', BOCES obligated itself to pay an 'additional rental' consisting of all taxes and assessments levied by any government and any other cost, charge or fee against the property.

Section 1958 of the Education Law permits BOCES to rent buildings 'for a period not to exceed five years' (subd. 4( p)) and to purchase or otherwise acquire buildings only when authorized by the qualified voters (subd. 4(t)). In this case the qualified voters are the voters of the 56 school districts in the County of Nassau which are the component members of defendant BOCES.

This same issue as to the validity of the lease agreement between BOCES and Dalebass was also raised in the prior proceeding. After a trial the trial judge held that the Town lacked standing to question the validity of the agreement between BOCES and Dalebass and observed that in his opinion the agreement was valid. On appeal the Appellate Division, in concurring with the trial judge as to the Town's standing to question the agreement's validity, stated that '* * * it (was) unnecessary to decide whether the agreement between petitioners is valid; and we express no opinion on that question.' (Matter of BOCES, supra, 33 A.D.2d at p. 702, 306 N.Y.S.2d at p. 218.)

It is well established and agreed that BOCES has no authority to purchase real property absent a public referendum, and that a municipal body should not be permitted '* * * to accomplish by indirection what they are forbidden to do directly' (Gerzof v. Sweeney, 22 N.Y.2d 297, 304, 292 N.Y.S.2d 640, 642, 239 N.E.2d 521, 523). Whether or not the plaintiffs can establish at a trial by competent testimony that the value of the land and the cost of construction have in fact been amortized over the term of the lease in the form of rental, and that the lease agreement is not a bona fide rental arrangement but rather a device to obviate a referendum for the expenditure of more than two million dollars cannot be decided on the papers or on this motion. Certainly the economics of the transaction and the discussions during the negotiations would bear examination to determine the intention of the parties as to whether this was a bona fide lease or a constructive sale.

In this Court's opinion a cause of action is stated, and the plaintiffs ought not to be deprived of the opportunity to sustain their burden of proof unless, as the defendants contend, this Court is mandated to dismiss this action because the plaintiffs lack the right or standing to pursue it.

In all candor the right of the plaintiffs to maintain this action does present a troublesome and difficult question. Since the action is brought as a taxpayer's action pursuant to Section 51 of the General Municipal Law, the right to pursue it in its present form must be found in that statute. A board of Cooperative Educational Services is designated in the Education Law (Sec. 1958, subd. 1) as a political subdivision--which is the same designation applicable to trustees and boards of education of various types of school districts (see Education Law Sections 1601, 1701, 2502, subd. 1). Since a Board of Education is not a municipal corporation within the provisions of Section 51 of the General Municipal Law (Schnepel v. Board of Education of the City of Rochester 302 N.Y. 94, 96 N.E.2d 617), then neither is a board such as BOCES here. Whether the exemption of officials of boards of education and boards such as BOCES from the safeguards provided by Section 51 is intentional or an oversight by the legislature is not now material. Until there is an extension of the statutory right by legislative amendment to Section 51 to include boards of education and of cooperative educational services, this Court must agree with the defendants that this action cannot be pursued in the form in which it has been commenced.

Apparently the plaintiffs have recognized the weakness of their position and urge that the action should not be dismissed because of improper form, and that the Court should make whatever order is required for its proper prosecution.

BOCES and Dalebass contend that even assuming that the execution of the subject agreement was Ultra vires and exceeded the powers granted by the legislature, the plaintiffs have no greater right than the Town, or even a school district which is a component member of BOCES, to seek a review of any executed or accomplished action of BOCES. In support of this contention these defendants rely upon the holding of the Court of Appeals in Board of Cooperative Educational Services, etc. v. Buckley, 15 N.Y.2d 971, 259 N.Y.S.2d 858, 207 N.E.2d 528, which denied to a Town the right to question the action of a Westchester board in acquiring property, and upon Board of Education, etc. v. Board of Cooperative Educational Services, 25 A.D.2d 864, 270 N.Y.S.2d 109, in which a school district which was a component part of a Board of Cooperative Educational...