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County Not Necessary Party In Suit to Recover Taxes Wrongfully Paid to Town

The Second Department determined plaintiff [Verizon] could seek the refund of wrongfully collected taxes against the town which collected them and the town could then seek reimbursement from the county.  The county was not a necessary party in the action brought by the plaintiff.  Plaintiff was the owner of “mass property” (power lines, poles, transformers, etc) which had been subject to taxes for refuse collection.  The Court of Appeals ruled “mass property,” which produced no garbage, could not be so taxed:

Pursuant to the County Guaranty, the County is liable for refunds of tax payments made in connection with levies for special ad valorem taxes … . However, in the actions at bar, Verizon chose to seek refunds from the Town, to which the payments had been made, rather than from the County directly. That was proper in light of our determination that the County is not a necessary party to actions seeking refunds of tax payments made in connection with levies for special ad valorem taxes … . Accordingly, while the Town may seek indemnification from the County pursuant to the County Guaranty, the Supreme Court correctly determined that the Town is liable for these refunds in the first instance, and can be sued directly by a taxpayer. Thus, the Supreme Court did not err in entering the judgments against the Town defendants.  New York Tel Co v Supervisor of Town of Hempstead, 2014 NY Slip Op 01726, 2nd Dept 3-19-14

 

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Hearsay in Medical Records Should Have Been Redacted/Not Relevant to Diagnosis and Not Clearly Attributable to Plaintiff as an Admission

Although the error was deemed harmless, the First Department determined hearsay statements should have been redacted from the plaintiff’s medical records.  The plaintiff alleged the police had pushed him over a fence, causing injury.  The defendants alleged plaintiff jumped.  The medical records included references to the plaintiff’s “jumping.” The jury found for the defendants.  The court explained how hearsay in a medical report should be handled:

Hearsay entries regarding the cause of an injury contained in a medical record come into evidence under the business records exception if they are germane to the treatment or diagnosis of plaintiff’s injuries … . Alternatively, the entry may be admissible as an admission, but only if there is evidence that connects the party to the entry … . The challenged entries were neither germane to treatment or diagnosis, nor were they admissions.

There was simply no evidence supporting defendants’ position that the medical doctors needed to know whether plaintiff jumped or was pushed from the fence in order for doctors to determine what medical testing he needed upon admission to the hospital. No medical expert provided such testimony … . Defendants’ only expert, a biomechanical engineer and accident reconstruction expert, opined that plaintiff’s injuries were consistent with a jump from a height and not a push to a fall. He did not give any opinion on issues relating to treatment or diagnosis. This is not a case where the conclusion is so obvious that no medical testimony is needed to lay the appropriate evidentiary foundation … .

The particular challenged entries cannot be characterized as admissions. Although the Lincoln Medical and Mental Health Center Admission Assessment form has a box checked that “patient” is the source of the information, the particular entry on that record, “he jumped off the fence,” is not clearly a direct statement attributable to or a quote of plaintiff. The Ambulance Call Report form identifies “PO” or the police officer as the source of the information that plaintiff “jumped off a fence.” No other evidence in the record identifies plaintiff as being the source of this information. Nor is there any evidence connecting plaintiff to the 1/21/97 entry in the Progress Record that “s/p fell from a fence after being chased by police officers” or the 1/23/97 entry “fall from 2 storeys [sic]” to make them admissible as admissions by him. These entries should have been redacted from the medical records received in evidence.  Benavides v City of New York 2014 NY Slip Op 01682, 1st Dept 3-18-14

 

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Taxi Owners Not Entitled to Damages After Ruling by NYC Taxi and Limousine Commission (Which Was Alleged to Have Damaged the Taxi Owners in the Amount of Over $15 Million) Was Found Arbitrary and Capricious

The First Department determined a ruling by the NYC Taxi and Limousine Commission (TLC), which was found to be arbitrary and capricious by the Court of Appeals, did not entitle the petitioners (taxi owners who lease their taxis to drivers) to damages. The court determined the damages were not “incidental” within the meaning of Article 78 and were not available in an Article 78 proceeding (under the facts). The court futher determined the TLC was immune from suit because the ruling at issue was an exercise of discretion . The ruling by the TLC had effectively reduced the amount a taxi owner could charge a driver by requiring that tax payments for which the owner is responsible be included in the amount charged for the lease (called a “lease cap”). After that ruling was found arbitrary by the Court of Appeals, the taxi owners sought “incidental damages” of over $15 million:

Petitioners seek damages based on the Court of Appeals’ determination that the TLC’s effective reduction of the taxi “lease cap” had no rational basis. The Court of Appeals’ determination, however, does not lead to a conclusion that the damages are “incidental to the primary relief sought” (CPLR 7806). Contrary to petitioners’ argument, monetary injury incurred as a result of agency action does not necessarily constitute incidental damages simply because a court later finds the action to have been arbitrary and capricious. Certainly, whether damages are characterized as incidental “is dependent upon the facts and issues presented in a particular case” … . Even so, incidental damages are generally confined to monies that an agency either collected from or withheld from a petitioner and then was obligated to reimburse after a court annulled a particular agency determination. * * *

CPLR 7806 explicitly limits the availability of damages in an article 78 proceeding … . That article 78 permits the court, in certain circumstances, to award damages in an action that also reviews the validity of a government determination does not create a right to damages that does not otherwise exist. * * *…

[T]he TLC’s determination in this case, however unjustified it may have been, was an exercise of discretion; the TLC did consider the issue of imposing the tax rule and decided to impose it. Putting aside the merits of its decision, there is no escaping that the TLC exercised its discretion. Indeed, a governmental function such as rulemaking is necessarily an “exercise of judgment and discretion performed in the public interest,” and is protected as a discretionary act … . Accordingly, in a plenary action, governmental immunity would preclude petitioners from recovering incidental damages. Metropolitan Taxicab Bd of Trade v New York City Taxi & Limousine Commn, 2014 NY Slip Op 01683, 1st Dept 3-18-14

 

Village Ordinance Prohibiting Crematory Not Preempted by State Law Under Either Express or Conflict Preemption Criteria

The Second Department determined that the Not-for-Profit Corporation Law, which includes “crematory” in the definition of cemetery, did not pre-empt a village ordinance prohibiting the construction of a crematory in petitioner’s cemetery.  Both express preemption and conflict preemption were addressed by the court:

The Supreme Court correctly determined that Not-for-Profit Corporation Law article 15 did not preempt any attempt at local regulation of cemeteries under the doctrine of “field preemption.” That doctrine “applies under any of three different scenarios. First, an express statement in the state statute explicitly avers that it preempts all local laws on the same subject matter. Second, a declaration of state policy evinces the intent of the Legislature to preempt local laws on the same subject matter. And third, the Legislature’s enactment of a comprehensive and detailed regulatory scheme in an area in controversy is deemed to demonstrate an intent to preempt local laws” … . * * *

Thus, although Not-for-Profit Corporation Law article 15 governs the operation of corporations which own and manage cemeteries, it does not expressly preempt zoning ordinances relating to land use by cemeteries. Further, there is no declaration of State policy in either Not-for-Profit Corporation Law article 15 or the rules and regulations promulgated under it that evinces any such intent (see N-PCL 1501…). Finally, the regulatory scheme under Not-for-Profit Corporation Law article 15 does not evince the Legislature’s desire to preempt the local zoning law … . Accordingly, the Not-for-Profit Corporation Law did not preempt the field of cemetery regulation.

The Supreme Court properly determined that Not-for-Profit Corporation Law § 1502(d) does not invalidate the Village’s more restrictive definition of “cemetery” under the doctrine of conflict preemption. The Not-for-Profit Corporation Law is addressed to the management of cemetery corporations, and the definition contained in the Not-for-Profit Corporation Law addresses the scope of that law. By contrast, the Village Code’s definition of “cemetery,” which excludes crematories, is addressed to land use, which is another matter entirely. Since the differing definitions of “cemetery” are addressed to differing purposes, they are not in direct conflict … . Matter of Oakwood Cemetery v Village/Town of Mount Kisco, 2014 NY Slip Op 01616, 2nd Dept 3-12-14

 

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Use of Church Property Sufficient to Maintain Tax-Exempt Status

The Third Department determined the City (respondents) did not demonstrate church-owned property was no longer used for religious purposes.  Therefore the City could not revoke the tax-exempt status of the property:

Although the burden of proof in tax exemption matters ordinarily lies with the party seeking an exemption, a municipality seeking to withdraw an existing exemption bears the burden of proving that the real property in question has become subject to taxation … . Here, although it is undisputed that petitioners continue to be organized exclusively for tax-exempt religious purposes, respondents contend that their properties are not entitled to tax exemptions because they are no longer “used primarily for the furtherance of [religious] purposes” … . To meet their burden in this regard, respondents contend that statements made by the Diocese establish that the properties no longer function as churches, that regular worship services and religious activities that were formerly conducted on the properties now take place elsewhere, and that the parcels are now investment properties being marketed for sale for the non-exempt purpose of generating income.

… Petitioners … submitted affidavits from church officials stating that both properties continue to be used for religious services conducted to serve the spiritual needs of the parish faithful, in the form of monthly morning prayers on one of the properties and periodic prayer services that include scripture readings and communion services on the other.  Contrary to respondents’ contention that such occasional or periodic use cannot be deemed to be primary,”[i]t is the actual or physical use of the property” that determines whether it is exempt from real property taxation … . Here, the record reveals that petitioners’ only actual or physical use of their properties is for religious purposes. Absent any showing by respondents that the properties are used for anything other than the religious purposes for which petitioners were organized, the mere fact that this use is now less frequent does not alter the properties’ tax-exempt status … . The record also includes a letter from a Diocese official to the Assessor averring that the properties are used to store religious artifacts and fixtures. Matter of St Williams Church of Troy…, v Dimitriadis…, 516532, 3rd Dept 3-6-14

 

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Criteria for Valuation of Vacant Land Explained

The Second Department determined Supreme Court properly valued the condemned vacant land. Supreme Court rejected the village’s contention that Supreme Court had improperly incorporated the enhancement of value resulting from the inclusion of the property in the village’s urban redevelopment plan. The court explained the criteria for determining the value of vacant land:

In a case involving the taking of property, “[t]he measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time” … .Where an increment is added to the value of vacant land to reflect its development potential, “the specific increment which is selected and applied must be based on sufficient evidence and be satisfactorily explained” … . Moreover “[i]t is … necessary to show that there is a reasonable possibility that the property’s highest and best asserted use could or would have been made within the reasonably near future, and a use which is no more than a speculative or hypothetical arrangement may not be accepted as the basis for an award” … .”[A] condemnee may not receive an enhanced value for its property where the enhancement is due to the property’s inclusion within a redevelopment plan” … . Thus, for example, property zoned for industrial use “should be valued in accordance with the industrial zoning designation which would apply if the redevelopment plan did not exist,” for “[a] condemnee is only entitled to compensation for what it has lost, not for what the condemnor has gained”… . Matter of Village of Haverstraw (AAA Electricians Inc), 2014 NY Slip Op 01332, 2nd Dept 2-26-14

 

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Termination of Petitioner’s Tenancy Based Upon An Isolated Angry Outburst Targeting a Housing Authority Employee Is “Shocking to the Conscience”

The First Department, after finding substantial evidence to substantiate the charges made by the housing authority (NYCHA) against the tenant-petitioner, determined the termination of the tenancy was “shocking to the conscience.” Petitioner had acted out angrily in a confrontation with a housing authority employee:

…[W]e find that termination of petitioner’s tenancy, is, based on the reviewable facts in this record, a penalty that is shocking to the conscience and that must be vacated. We have found this to be so in similar cases of tenants engaging in fits of rage targeted at NYCHA employees, where the conduct was isolated or specifically related to circumstances that gave some explanation for the behavior. For example, in Matter of Winn v Brown …, this Court found that, while NYCHA’s determination of nondesirability was supported by substantial evidence of the petitioner’s actions, which “[included] screaming profanities, racial epithets and making threats to respondent’s employees,” the termination of the petitioner’s tenancy was shocking to the conscience given that the incidents in question occurred when the tenant was having difficulty securing a transfer despite threats being made against the life of her son. In Matter of Spand v Franco …, this Court remanded to NYCHA for imposition of a lesser penalty where the tenant engaged in conduct that was “serious” and “appropriately condemned,” but eviction was disproportionate because the incident was isolated, the tenant was the mother of three small children and there was no evidence of other problems which posed a risk to other people or property. Even where a tenant “accosted” a NYCHA representative, termination was considered too harsh because the incident was isolated and because, like here, the target of the tenant’s wrath was not seriously injured … . Matter of Rock v Rhea, 2014 NY Slip Op 01268, 1st Dept 2-25-14

 

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Public Trust Doctrine Re: Allowing a Restaurant in a Public Park/License and Lease Characteristics Compared

In a full-fledged opinion by Judge Graffeo, the Court of Appeals determined that a the city’s allowing a restaurant to operate in a public park did not violate the public trust doctrine and the arrangement between the city and the restaurant was a valid license, not a lease (which would have required approval by the legislature):

Under the public trust doctrine, dedicated parkland cannot be converted to a non-park purpose for an extended period of time absent the approval of the State Legislature … . * * * … [A]lthough it is for the courts to determine what is and is not a park purpose, … the Commissioner enjoys broad discretion to choose among alternative valid park purposes. Observing that restaurants have long been operated in public parks, we [in 795 Fifth Ave Corp v City of New York, 15 NY2d 221] rejected plaintiffs' public trust claim, holding that they could show only a “difference of opinion” as to the best way to use the park space and that this “mere difference of opinion [was] not a demonstration of illegality”… . * * *

We have stated that parkland cannot be leased, even for a park purpose, absent legislative approval … . * * *

A document is a lease “if it grants not merely a revocable right to be exercised over the grantor's land without possessing any interest therein but the exclusive right to use and occupy that land” … . It is the conveyance of “absolute control and possession of property at an agreed rental which differentiates a lease from other arrangements dealing with property rights” …. . A license, on the other hand, is a revocable privilege given “to one, without interest in the lands of another, to do one or more acts of a temporary nature upon such lands” … . That a writing refers to itself as a license or lease is not determinative; rather, the true nature of the transaction must be gleaned from the rights and obligations set forth therein. Finally, a broad termination clause reserving to the grantor “the right to cancel whenever it decides in good faith to do so” is strongly indicative of a license as opposed to a lease … . Union Square Park Community Coalition Inc v New York City Department of Parks and Recreation, 17, CtApp 2-20-14

 

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Elements of False Arrest and Malicious Prosecution Explained

The Second Department reversed Supreme Court and dismissed plaintiff’s false arrest and malicious prosecution action. The court explained the elements of the two intentional torts:

“In order to prevail on a cause of action seeking to recover damages for false arrest or imprisonment, a plaintiff must prove that: (1) the defendant intended to confine the plaintiff; (2) the plaintiff was aware of the resulting confinement; (3) the plaintiff did not consent to the confinement; and (4) the confinement was not otherwise privileged” … . “The existence of probable cause serves as a legal justification for the arrest and an affirmative defense to the claim of false imprisonment or false arrest”… . Generally, information provided by an identified citizen accusing another individual of a specific crime is legally sufficient to provide the police with probable cause to arrest'” … . * * *

“The elements of the tort of malicious prosecution are: (1) the commencement or continuation of a criminal proceeding by the defendant against the plaintiff, (2) the termination of the proceeding in favor of the accused, (3) the absence of probable cause for the criminal proceeding and (4) actual malice” … . “Once a suspect has been indicted, . . . the indictment creates a presumption of probable cause to believe that the suspect committed the crime” … . “The presumption may be overcome only by evidence establishing that the police witnesses have not made a complete and full statement of facts either to the Grand Jury or to the District Attorney, that they have misrepresented or falsified evidence, [or] that they have withheld evidence or otherwise acted in bad faith” … . Williams v City of New York, 2014 NY Slip Op 01165, 2nd Dept 2-19-14

 

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County Could Not Shift Obligation to Pay Property Tax Refunds to Taxing Districts

In a full-fledged opinion by Judge Abdus-Salaam, which includes extensive historical, theoretical, constitutional and statutory discussions of the issues involved, the Court of Appeals determined Nassau County could not shift its obligation to pay real property tax refunds from the county to its individual taxing districts. The county’s attempt to supersede a special state tax law exceeded its statutory and constitutional authority:

As limited by the State and Federal Constitutions' protection of individual rights and restriction of State power, the State Constitution establishes the State government as the preeminent sovereign of New York, and the three coordinate branches of the State government may exercise the entire legislative, executive and judicial power of the State, as entrusted to them by the people … .Given that the authority of political subdivisions flows from the State government and is, in a sense, an exception to the State government's otherwise plenary power, the lawmaking power of a county or other political subdivision “can be exercised only to the extent it has been delegated by the State”… .. Furthermore, because the Constitution expressly imbues the State government, rather than any locality, with “[t]he power of taxation” (NY Const art XVI, § 1), State law governs the tax field unless the State Legislature or the Constitution unambiguously delegates certain taxation authority to a political subdivision… . Matter of Baldwin Union Free School District v County of Nassau, 9, CtApp 2-18-14

 

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