Stone Bridge Farms Inc. v. County of D.C.

• Decision Date: 27 October 2011
• Parties: STONE BRIDGE FARMS, INC., et al., Appellants,v.COUNTY OF COLUMBIA et al., Respondents.In the Matter of the Foreclosure of Tax Liens by County of Columbia.County of Columbia, Respondent;Stone Bridge Farms, Inc., Appellant.
• Court: New York Supreme Court — Appellate Division

88 A.D.3d 1209

931 N.Y.S.2d 449

2011 N.Y. Slip Op. 07551

STONE BRIDGE FARMS, INC., et al., Appellants,

v.COUNTY OF COLUMBIA et al., Respondents.In the Matter of the Foreclosure of Tax Liens by County of Columbia.County of Columbia, Respondent;Stone Bridge Farms, Inc., Appellant.

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

Oct. 27, 2011.

William J. Better, Kinderhook, for appellants.Rob Fitzsimmons, County Attorney, Hudson (Tal G. Rappleyea of counsel), for respondents.Before: MERCURE, J.P., PETERS, STEIN, GARRY and EGAN JR., JJ.PETERS, J.

Appeal from an order of the Supreme Court (McGrath, J.), entered September 16, 2010 in Columbia County, which granted a motion by the County of Columbia, in a proceeding pursuant to RPTL article 11 and action for declaratory judgment, for summary judgment declaring that the County is entitled to foreclosure upon a certain tax lien and granting it a judgment of foreclosure.

Stone Bridge Farms, Inc.'s sole asset is a certain parcel of real property located in the Town of Greenport, Columbia County. Fred Mazzacano, the sole shareholder of Stone Bridge, died in 1991 and bequeathed equal shares of stock in Stone Bridge to plaintiff Gary Mazzacano (hereinafter Mazzacano) and his brother. Thereafter, Stone Bridge was dissolved by Proclamation/Annulment of Authority by the Department of State. Due to Stone Bridge's failure to pay taxes on the property, the County of Columbia commenced a foreclosure proceeding in 2000. Subsequently, the County withdrew the subject property from the foreclosure proceeding pursuant to RPTL 1138 because it was concerned about possible liability for the remediation and clean up of an alleged environmental issue associated with the property.

Both prior to the commencement of the foreclosure proceeding and after its withdrawal, the County engaged in discussions with Mazzacano, who had been managing the property, regarding the creation of an installment payment plan that would allow Stone Bridge to pay its past-due taxes over time. Ultimately, defendant Kenneth Wilber, the treasurer and tax enforcement officer for the County, orally agreed to accept monthly payments of what Mazzacano could afford after he paid Stone Bridge's operating expenses. Between 2002 and 2009, the County accepted and sent Mazzacano receipts for Stone Bridge's monthly payments. During this same time period, the County engaged in discussions with Jan Exman, who was interested in obtaining the County's environmentally challenged properties with outstanding tax liens, remediating and cleaning up any such environmental issues and reselling the properties. In January 2006, the County entered into a contract with Exman with respect to Stone Bridge's property. Litigation ensued when the County failed to perform under the contract and, eventually, a settlement agreement was entered into between the County and Exman whereby the County agreed to recommence foreclosure proceedings on the Stone Bridge property and convey the property to Exman.

In April 2009, Mazzacano and Stone Bridge (hereinafter collectively referred to as plaintiffs) commenced an action seeking a declaration that the installment payment plan was valid and barring foreclosure of the tax liens. Shortly thereafter, the County began rejecting the payments made by Mazzacano and reinstated the foreclosure proceeding against the property. After the action and foreclosure proceeding were combined for joint trial, the County moved for summary judgment declaring that it was entitled to foreclose upon the liens and granting it a judgment of foreclosure. Supreme Court granted the motion and plaintiffs now appeal.

Supreme Court did not err in granting the County a judgment of foreclosure. In support of its summary judgment motion, the County demonstrated that Stone Bridge failed to pay the full amount of taxes on the subject parcel for several years, that the property appeared on the list of delinquent taxes every year since 1996, and that it followed all proper procedures in reinstating the property to foreclosure pursuant to RPTL 1138(4). The County also established that Stone Bridge had not entered into an installment payment plan that complies with RPTL 1184 or Local Law No. 3 (1995) of the County of Columbia.¹ Thus, the burden shifted to plaintiffs to raise a triable issue of fact regarding a viable defense to foreclosure ( see CPLR 3212[b]; Matter of Village of Fleischmanns [Delaware Natl. Bank of Delhi], 77 A.D.3d 1146, 1147, 909 N.Y.S.2d 564 [2010]; Matter of County of Orange [Al Turi Landfill, Inc.], 75 A.D.3d 224, 236, 903 N.Y.S.2d 60 [2010] ).

While acknowledging that the partial payments made to the County were not in compliance with RPTL 1184 or Local Law No. 3, plaintiffs allege that the County could validly enter into an alternative repayment plan outside of this statutory framework. We disagree. Because “a local municipality may not act in excess of the powers conferred upon it by the Legislature[,] efforts to carve out settlements of real property tax disputes in fashions not falling within the statutory framework are invalid” ( Matter of County of Sullivan v. Town of Tusten, 72 A.D.3d 1470, 1471, 899 N.Y.S.2d 455 [2010] [internal quotation marks and citation omitted]; see Rose v. Eichhorst, 42 N.Y.2d 92, 95, 396 N.Y.S.2d 837, 365 N.E.2d 868 [1977]; Sawicki v. County of Suffolk, 4 A.D.3d 465, 466, 771 N.Y.S.2d 672 [2004]; People ex rel. Beard's Erie Basin, Inc. v. Sexton, 247 App.Div. 754, 754–755, 285 N.Y.S. 786 [1936] ). Thus, inasmuch as the oral installment agreement for the payment of delinquent taxes neither complied with the requirements of RPTL 1184 or Local Law No. 3, it is invalid and does not constitute a defense to foreclosure ( see Matter of County of Sullivan v. Town of Tusten, 72 A.D.3d at 1472, 899 N.Y.S.2d 455).

Even if such an agreement were valid and enforceable, plaintiffs have failed to show that it would preclude foreclosure under these circumstances. To that end, plaintiffs failed to submit any competent proof that the installment payment plan allowed for reduced payments of current taxes, rather than just delinquent taxes....