Town of Orangetown v. Magee

• Decision Date: 30 April 1996
• Parties: , 665 N.E.2d 1061 TOWN OF ORANGETOWN, Appellant, v. John F. MAGEE et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 21

643 N.Y.S.2d 21

88 N.Y.2d 41, 665 N.E.2d 1061

TOWN OF ORANGETOWN, Appellant, v. John F. MAGEE et al., Respondents.

Court of Appeals of New York.

April 30, 1996.

Patrick J. Rohan and John P. Healy, Orangeburg, for appellant.

Dorfman Lynch & Knoebel, Nyack (Dennis E.A. Lynch and Burton I. Dorfman, of counsel), for respondents.

OPINION OF THE COURT

SIMONS, Judge.

This appeal involves a zoning dispute in which the courts below have found that plaintiff Town of Orangetown wrongfully revoked defendants' permit to develop real property in the Town. Defendants have obtained injunctive relief restoring the building permit and an award of substantial damages on a 42 U.S.C. § 1983 cause of action. We now affirm.

I

Defendant Bradley Industrial Park, Inc. is the owner of 34 acres of land located in the Town of Orangetown. It acquired the property in 1979 to construct a 184,000 square foot industrial building at an estimated cost of $3 million. Defendants John and Patrick Magee are the shareholders of the corporation. In 1980 defendants' plans for the improvement were approved and the Building Inspector issued a permit. Defendants began clearing and developing the site shortly thereafter. The trial court found that defendants spent over $4 million on the improvements for the land and building before work was halted by the Town. ¹

Although the permit was limited to "land clearing, footings and foundations," the courts below determined that the permit entitled defendants to construct the entire building as long as the subsequent plans for the walls, ceilings and electrical wiring comported with the plans for the building already approved by the Town's Building Inspector.

As the work on the project progressed, organized resistance to it developed within the community. Ultimately, the opposition became so intense that the Town Supervisor directed the Building Inspector to revoke the defendants' permit and on July 25, 1985 he did so. The Town subsequently amended its Zoning Code to preclude construction of commercial buildings on defendants' land. ² At trial, the Town offered a number of reasons for the revocation. The court concluded that most were not authorized by the Town's ordinances and none were supported by the evidence. It found that the permit was revoked solely to satisfy political concerns.

Defendants had erected a temporary building for use during the preliminary stages of construction and after the permit was revoked, the Town instituted this action to obtain an order compelling its removal. Defendants counterclaimed seeking (1) an order compelling reinstatement of the permit, and (2) damages pursuant to 42 U.S.C. § 1983. After a bifurcated trial, Supreme Court dismissed the complaint and entered a judgment in favor of defendants on their counterclaims ordering reinstatement of the building permit and awarding damages of $5,137,126, costs and attorney's fees. The Appellate Division modified the judgment by remitting the question of attorney's fees and otherwise affirmed. It subsequently granted the Town leave to appeal to this Court. Our review is controlled in large part by factual findings of the trial court, affirmed by the Appellate Division.

II The CPLR Article 78 Claim

In their first counterclaim defendants sought reinstatement of their building permit, alleging they had a "vested right" in the planned construction.

In New York, a vested right can be acquired when, pursuant to a legally issued permit, the landowner demonstrates a commitment to the purpose for which the permit was granted by effecting substantial changes and incurring substantial expenses to further the development (see, Matter of Putnam Armonk v. Town of Southeast, 52 A.D.2d 10, 14-15, 382 N.Y.S.2d 538; see also, People ex rel. Ortenberg v. Bales, 250 N.Y. 598, 166 N.E. 339, aff'g 224 App.Div. 87, 229 N.Y.S. 550; City of Buffalo v. Chadeayne, 134 N.Y. 163, 165, 31 N.E. 443, 443-44; Matter of Caponi v. Walsh, 228 App.Div. 86, 89, 238 N.Y.S. 438). Neither the issuance of a permit (see, Matter of Sibarco Stas. v. Town Bd., 24 N.Y.2d 900, 301 N.Y.S.2d 637, 249 N.E.2d 478; Rice v. Van Vranken, 132 Misc. 82, 229 N.Y.S. 32, aff'd 225 App.Div. 179, 232 N.Y.S 506, aff'd 255 N.Y. 541, 175 N.E. 304; People ex rel. Ortenberg v. Bales, supra ) nor the landowner's substantial improvements and expenditures, standing alone, will establish the right. The landowner's actions relying on a valid permit must be so substantial that the municipal action results in serious loss rendering the improvements essentially valueless (see, People v. Miller, 304 N.Y. 105, 109, 106 N.E.2d 34).

There is no dispute that defendants' permit was legally issued. Whether defendants had sufficiently committed the land to the use authorized by the permit prior to revocation is a question of fact and the determination of the courts below that they had is supported by evidence in the record (see, Matter of Caponi v. Walsh, supra; see generally, 1 Anderson, New York Zoning Law and Practice § 6.18, at 231 [3d ed]. Inasmuch as the permit was revoked for unlawful reasons, the revocation resulted in an unconstitutional deprivation of defendants' property rights (see, People v. Miller, supra ). Accordingly, defendants are entitled to reinstatement of the building permit in conformity with the zoning ordinances in effect at the time of the revocation.

III The Civil Rights Claim

Defendants' second counterclaim asserted a cause of action under 42 U.S.C. § 1983 for damages suffered as a result of the Town's actions. Defendants claimed that plaintiff's actions resulted in an unconstitutional taking of their property and that the Town denied them substantive and procedural due process guaranteed by the United States Constitution.

Section 1983 provides:

"Every person who, under color of any statute, ordinance, regulation, custom or usage, of any State * * *, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress".

Municipalities are "persons" subject to suit under section 1983 for the deprivation of constitutionally protected rights caused by actions which "implement[ ] or execute[ ] a policy statement, ordinance, regulation, or decision officially adopted and promulgated by [its] officers" (Monell v. New York City Dept. of Social Servs., 436 U.S. 658, 690, 98 S.Ct. 2018, 2035-2036, 56 L.Ed.2d 611; Pembaur v. Cincinnati, 475 U.S. 469, 479-480, 106 S.Ct. 1292, 1298-1299, 89 L.Ed.2d 452). The municipality may not be held vicariously liable under the doctrine of respondeat superior for employing a careless tortfeasor, however: the injury must arise from acts of municipal officers or employees in the course of executing municipal policy or custom (id.). Liability may even be imposed for a single act, as long as it is the act of an official authorized to decide policy in that area (Pembaur, supra, at 480, 482-483, 106 S.Ct. at 1299-1300; St. Louis v. Praprotnik, 485 U.S. 112, 123-124, 108 S.Ct. 915, 924-925, 99 L.Ed.2d 107; see also, Comer, Municipal Liability Under Section 1983: The Rationale Underlying the Final Authority Doctrine, 44 Vand.L.Rev. 341 [1991].

In the context of land use, section 1983 provides protection against municipal actions which violate a landowner's rights under the Just Compensation Clause of the Fifth AMendment or the Due Process Clauses of the Fifth and Fourteenth Amendments to the United States Constitution. Under the former, the claimant must establish that the governmental action amounts to a taking without just compensation. The Supreme Court has also identified, although not yet recognized, a substantive due process claim under the Fifth and Fourteenth Amendments based upon a regulatory taking, i.e., regulation of property that goes so far it has effectively destroyed the economic value of the property (see, Williamson Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 185, 197-200, 105 S.Ct. 3108, 3115-3116, 3122-3124, 87 L.Ed.2d 126).

The trial court rested its decision on a third ground--that the acts of the Town in revoking defendants' permit denied them substantive due process of law because the revocation and subsequent zoning change were arbitrary and capricious (156 Misc.2d 881, 893-895, 594 N.Y.S.2d 951, supra; and see, Southview Assocs. v. Bongartz, 980 F.2d 84, 96, 102 [2d Cir.1992], cert denied sub nom. Southview Assocs. v. Individual Members of Vt. Envtl. Bd., 507 U.S. 987, 113 S.Ct. 1586, 123 L.Ed.2d 153 [1993]; Brady v. Town of Colchester, 863 F.2d 205, 215 [2d Cir.1988]; Wheeler v. City of Pleasant Grove, 664 F.2d 99 [5th Cir.1981]; see generally, Stein, Regulatory Takings and Ripeness in the Federal Courts, 48 Vand.L.Rev. 1, 80 [1995]. ³ This type of claim challenges a particular land-use decision--here, the revocation of plaintiff's building permit--as a single decision with its own consequences, rather than as one in a series of action--resulting in a taking (see, Harris v. County of Riverside, 904 F.2d 497, 501, supra ). The key factor in such cases is not whether the State was justified in depriving the individual of his or her property, but rather whether the State obeyed the strictures of the Constitution in doing so (see, Weissman v. Fruchtman, 700 F.Supp. 746, 756 [S.D.N.Y.].

A Plaintiff's Ripeness Defense

In contesting the trial court's determination, the Town first contends that the revocation was not "final" and therefore not ripe for judicial review, until reviewed by the Orangetown Zoning Board of Appeals. Defendants, on the other hand, assert that the Building Inspector constitutes a Town official with final policy-making authority and that requiring an appeal to the Town Zoning Board of Appeals would impose an impermissible...