Turtle Island Trust v. Cnty. of Clinton

• Decision Date: 26 February 2015
• Citation: 5 N.Y.S.3d 536,2015 N.Y. Slip Op. 01698,125 A.D.3d 1245
• Parties: TURTLE ISLAND TRUST et al., Respondents, v. COUNTY OF CLINTON et al., Appellants, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

125 A.D.3d 1245

5 N.Y.S.3d 536

2015 N.Y. Slip Op. 01698

TURTLE ISLAND TRUST et al., Respondents

v.COUNTY OF CLINTON et al., Appellants, et al., Defendants.

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

Feb. 26, 2015.

Maynard, O'Connor, Smith & Catalinotto, LLP, Albany (Robert A. Rausch of counsel), for appellants.

Murphy Myers, LLP, Orchard Park (Margaret A. Murphy of counsel), for respondents.

Before: McCARTHY, J.P., ROSE, EGAN JR. and DEVINE, JJ.

Opinion

McCARTHY, J.P.

Appeal from an order of the Supreme Court (Ellis, J.), entered March 13, 2014 in Clinton County, which denied defendants' motions to dismiss the complaint.

Plaintiffs are Turtle Island Trust, an unincorporated charitable trust, and its trustees. The Trust was established in the 1970s to hold land for the purpose of creating a community for Native Americans who wished to practice a lifestyle in accordance with their ancestral traditions and to educate the public about their culture. Over time, the Trust acquired numerous parcels by lease or deed, 17 of which are located in the Town of Altona, Clinton County. In 2003, defendant Town of Altona determined that most of the Trust's parcels were taxable, and the Town began to send property tax bills to plaintiffs. Plaintiffs never paid any property taxes, so, in 2008, defendant County of Clinton and its treasurer, defendant Joseph W. Giroux (hereinafter collectively referred to as defendants), filed a petition to foreclose against some of the parcels held by the Trust. County Court (Ryan, J.) eventually granted defendants a default judgment of foreclosure and issued a tax deed giving the County title to those parcels, which deed was duly recorded. Due to plaintiffs' continued nonpayment of taxes on the Trust's parcels, defendants brought two additional foreclosure proceedings and ultimately gained title by tax deed to 14 of the Trust's 17 parcels within the Town.

Plaintiffs admit that they had notice of these proceedings, the last of which concluded in March 2011, but chose not to defend themselves against any of them. In November 2012, plaintiffs commenced this action for declaratory and injunctive relief, challenging (1) the tax assessments, (2) failure to make the parcels tax exempt and (3) the foreclosure of the parcels. Defendants moved to dismiss the complaint based on the statutes of limitations, res judicata and for failure to state a cause of action (see CPLR 3211[a][5], [7] ). The Town and defendant John Brunell made a similar motion. Supreme Court denied the motions and defendants appeal.¹

Supreme Court should have dismissed plaintiffs' challenges to the tax assessments. Under RPTL article 7, a property owner claiming to be aggrieved by an assessment of real property on the basis that the assessment is excessive, unequal or unlawful, or that the property is misclassified, may file a petition challenging the assessment, but “such a proceeding shall be commenced within thirty days after the final completion and filing of the assessment roll containing such assessment” (RPTL 702[2] ; see RPTL 704 [1 ]; 706[1] ). Where a party is alleging that the assessment is void—either through a challenge to the methodology of assessment or the jurisdiction of the taxing authority to assess particular property—the party may instead bring a proceeding pursuant to CPLR article 78 or a declaratory judgment action (see Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v. Town of Fallsburg, 78 N.Y.2d 194, 204–205, 573 N.Y.S.2d 43, 577 N.E.2d 34 [1991] ; Matter of Adams v. Schoenstadt, 57 A.D.3d 1073, 1074, 868 N.Y.S.2d 369 [2008], lv. dismissed 12 N.Y.3d 769, 879 N.Y.S.2d 26, 906 N.E.2d 1058 [2009] ). Both of those options are governed by a four-month statute of limitations (see Matter of Adventist Home v. Board of Assessors of Town of Livingston, 83 N.Y.2d 878, 880, 612 N.Y.S.2d 371, 634 N.E.2d 972 [1994] ; Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v. Town of Fallsburg, 78 N.Y.2d at 205, 573 N.Y.S.2d 43, 577 N.E.2d 34 ; see also CPLR 217 ). The Court of Appeals has expressly rejected plaintiffs' argument that, because the property is allegedly mandatorily exempt from taxes, the assessment is illegal and void and may be challenged at any time (see Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v. Town of Fallsburg, 78 N.Y.2d at 204, 573 N.Y.S.2d 43, 577 N.E.2d 34 ). Plaintiffs concede that they had notice of the Town's determination regarding the taxable status of the parcels, and filed a grievance to administratively challenge the tax bills when the property was first listed as not tax exempt, but they failed to appeal when the Town denied the grievance. Plaintiffs did not file any further grievances, actions or proceedings until they commenced this action more than a year after the final foreclosure proceeding was concluded. Accordingly, while an action for declaratory judgment was a proper method, the statute of limitations bars plaintiffs' challenges to their tax assessments (see Matter of Adventist Home v. Board of Assessors of Town of Livingston, 83 N.Y.2d at 880, 612 N.Y.S.2d 371, 634 N.E.2d 972 ).

Plaintiffs contend that, regardless of the statute of limitations, the tax assessments are invalid because the Town failed to provide notice to the Attorney General regarding a change in the tax exempt status of the Trust's property. As plaintiffs could have raised this argument in the tax foreclosure proceedings, for which they were on notice but failed to appear, the doctrine of collateral estoppel bars plaintiffs from litigating the issue now (see Cafferty v. Cahill, 53 A.D.3d 1007, 1008, 863 N.Y.S.2d 119 [2008], lv. dismissed and denied 11 N.Y.3d 861, 872 N.Y.S.2d 66, 900 N.E.2d 548 [2008] ; Culver v. County of Rensselaer, 139 A.D.2d 853, 854–855, 527 N.Y.S.2d 874 [1988], lv. denied 72 N.Y.2d 807, 533 N.Y.S.2d 56, 529 N.E.2d 424 [1988] ).

Plaintiffs also argue that notice to the Attorney General is a condition precedent to initiating a tax foreclosure proceeding. EPTL 8–1.4(o ) does not require that the Attorney General be given notice of a foreclosure proceeding, only of a change in tax exempt status. RPTL 1125 provides the notice requirements for tax foreclosure proceedings. That statute requires notice to “each owner and any other person whose right, title, or interest was a matter of public record” as of a certain date and who will be affected by the proceeding (RPTL 1125[1][a] ). While the Attorney General has a duty to enforce the rights of beneficiaries of charitable trusts through legal proceedings (see EPTL 8–1.1[f] ), no statutory provision makes him an owner of the parcels at issue or gives him a right, title or interest in the property. Hence, he is not a party who is entitled to notice of tax foreclosure proceedings pursuant to RPTL 1125. In any event, the record establishes that the Attorney General did receive notice of the foreclosure proceedings. Thus, plaintiffs have no cause of action based on defendants' alleged failure to provide notice of the foreclosure proceedings to the Attorney General.

Plaintiffs assert that County Court lacked subject matter jurisdiction to issue tax foreclosure deeds for parcels held by a charitable trust. Like any challenge to a judgment based on the issuing court's lack of subject matter jurisdiction, which relates to whether the court had the authority to ever consider the matter, this argument may be raised at any time and is not subject to any statute of limitations (see Caci v. State of New York, 107 A.D.3d 1121, 1122, 967 N.Y.S.2d 440 [2013] ; see also Matter of Hart Family, LLC v. Town of Lake George, 110 A.D.3d 1278, 1280, 974 N.Y.S.2d 154 [2013] ). In addition to asserting the statutes of limitations as a defense, however, defendants assert that plaintiffs failed to state a cause of action. On a motion based on this ground, courts must liberally construe the complaint, accept the allegations as true, provide the plaintiffs with the benefit of every favorable inference and determine only whether any cognizable legal theory will support the allegations (see He v. Realty USA, 121 A.D.3d 1336, 1339, 996 N.Y.S.2d 734 [2014] ). Documentary evidence and affidavits submitted by defendants generally are not considered on such a motion, unless they conclusively establish that the plaintiffs have no cause of action (see Rovello v. Orfino Realty Co., 40 N.Y.2d 633, 636, 389 N.Y.S.2d 314, 357 N.E.2d 970 [1976] ; Allen v. City of New York, 49 A.D.3d 1126, 1127, 855 N.Y.S.2d 279 [2008], lv. denied 11 N.Y.3d 705, 866 N.Y.S.2d 609, 896 N.E.2d 95 [2008] ). Plaintiffs' claim that County Court lacked subject matter jurisdiction does not raise any factual questions but constitutes a question of law in this declaratory judgment action, such that Supreme Court could have, and this Court can, render a determination and declare the rights of the parties without any further proceedings (see Spilka v. Town of Inlet, 8 A.D.3d 812, 813, 778 N.Y.S.2d 222 [2004] ).

Basically, the parties dispute whether provisions of the RPTL or EPTL pertaining to jurisdiction prevail here. County Court is a court of limited jurisdiction, with its authority defined exclusively by provisions of state law (see N.Y. Const., art. VI, § 11 ; Judiciary Law § 190 ; Matter of County of Sullivan [Congregation Khal Chaside Skwera, Inc.],

86 A.D.3d 671, 672, 926 N.Y.S.2d 737 [2011] ). Supreme Court and County Court have concurrent...