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ALTHOUGH THE STATUTE STATES THAT EMPIRE ZONE REAL PROPERTY TAX CREDITS ARE AVAILABLE WHEN THE TAX PAYER MAKES DIRECT PAYMENTS TO THE TAXING AUTHORITY, PETITIONERS WERE ENTITLED TO THE TAX CREDITS EVEN THOUGH THE PAYMENTS WERE MADE FROM A MORTGAGE TAX ESCROW ACCOUNT (THIRD DEPT).

The Third Department, reversing the Tax Appeals Tribunal, determined petitioners’ were entitled to Empire Zone real property tax credits even though the tax payment were mortgage by Wells Fargo from a mortgage tax escrow account. The Tax Law requires “direct payment” to the taxing authority:

… [A]lthough Tax Law § 15 (e) (3) contemplates a “direct payment” of real property taxes from the lessee to the taxing authority, we find that, under the particular circumstances presented here, [the lessee’s] use of a mortgage tax escrow account for the payment of real property taxes did not preclude petitioners from claiming the subject [Empire Zone] real property tax credits. Matter of Balbo v New York State Tax Appeals Trib., 2018 NY Slip Op 05540, Third Dept 7-26-18​

TAX LAW (EMPIRE ZONE, ALTHOUGH THE STATUTE STATES THAT EMPIRE ZONE REAL PROPERTY TAX CREDITS ARE AVAILABLE WHEN THE TAX PAYER MAKES DIRECT PAYMENTS TO THE TAXING AUTHORITY, PETITIONERS WERE ENTITLED TO THE TAX CREDITS EVEN THOUGH THE PAYMENTS WERE MADE FROM A MORTGAGE TAX ESCROW ACCOUNT (THIRD DEPT))/MUNICIPAL LAW (EMPIRE ZONE, ALTHOUGH THE STATUTE STATES THAT EMPIRE ZONE REAL PROPERTY TAX CREDITS ARE AVAILABLE WHEN THE TAX PAYER MAKES DIRECT PAYMENTS TO THE TAXING AUTHORITY, PETITIONERS WERE ENTITLED TO THE TAX CREDITS EVEN THOUGH THE PAYMENTS WERE MADE FROM A MORTGAGE TAX ESCROW ACCOUNT (THIRD DEPT))/REAL PROPERTY TAX LAW  (EMPIRE ZONE, ALTHOUGH THE STATUTE STATES THAT EMPIRE ZONE REAL PROPERTY TAX CREDITS ARE AVAILABLE WHEN THE TAX PAYER MAKES DIRECT PAYMENTS TO THE TAXING AUTHORITY, PETITIONERS WERE ENTITLED TO THE TAX CREDITS EVEN THOUGH THE PAYMENTS WERE MADE FROM A MORTGAGE TAX ESCROW ACCOUNT (THIRD DEPT))/EMPIRE ZONE (EMPIRE ZONE, ALTHOUGH THE STATUTE STATES THAT EMPIRE ZONE REAL PROPERTY TAX CREDITS ARE AVAILABLE WHEN THE TAX PAYER MAKES DIRECT PAYMENTS TO THE TAXING AUTHORITY, PETITIONERS WERE ENTITLED TO THE TAX CREDITS EVEN THOUGH THE PAYMENTS WERE MADE FROM A MORTGAGE TAX ESCROW ACCOUNT (THIRD DEPT))

Principles of Ademption Applied to Property Transferred Out of the Estate

The Third Department found the doctrine of ademption applicable to the lifetime transfer of property which divested the testator of ownership:

[The principles of ademption] are set forth in EPTL 3-4.3, which states that “[a] conveyance, settlement or other act of a testator by which an estate in his property, previously disposed of by will, is altered but not wholly divested does not revoke such disposition, but the estate in the property that remains in the testator passes to the beneficiaries pursuant to the disposition. However, any such conveyance, settlement or other act of the testator which is wholly inconsistent with such previous testamentary disposition revokes it.” Ademption will not lightly be found under EPTL 3-4.3, which is construed strictly given that its terms permit a testator to nullify dispositions without engaging in the elaborate formalities ordinarily required to revoke his or her will, either in whole or in part … . Matter of Braunstein, 2015 NY Slip Op 01703, 3rd Dept 2-26-15

 

Criteria for “Charitable” Exemption to Real Property Tax for Provider of Housing for the Elderly Explained

In finding there were questions of fact about whether petitioner, a provider of housing for the elderly, qualified for the “charitable” property tax exemption pursuant to Real Property Tax Law (RPTL) 420-a, the Third Department explained the relevant criteria:

The “critical factor” in determining whether a facility used for housing the elderly qualifies for an exemption by virtue of being “charitable” is whether the facility subsidizes rent or charges less than fair market rental rates … . Consideration is given to whether the facility retains the ability to terminate a resident’s lease for nonpayment, whether residents are charged for supplemental services and the number of residents who are dependent on government benefits … . Simply providing housing for elderly low-income individuals does not constitute a charitable purpose … . Matter of The Church Aid of the Prot Episcopal Church in the Town of Saratoga Springs Inc v Town of Malta Assessor, 2015 NY Slip Op 01689, 3rd Dept 2-26-15

 

Question of Fact Re: the “Hostility” Element of a Prescriptive Easement

In finding that the prescriptive easement cause of action should not have been dismissed, the Third Department explained the proof requirements:

A party claiming a prescriptive easement must show, by clear and convincing evidence, that the use of the easement was open, notorious, hostile and continuous for a period of 10 years … . Although the element of hostility is presumed upon a showing of the other elements, where “the relationship between the parties is one of neighborly cooperation and accommodation,” no such presumption arises and, rather, permission will be inferred … . “Generally, the question of implied permission is one for the factfinder to resolve” … .

Here, the evidence submitted on the summary judgment motions indicates that a neighborly relationship existed between plaintiff, individually, the Trust’s tenants and defendants’ predecessors in title. However, inasmuch as there is no evidence of express permission granted to use defendants’ property, and the relevant parties are not “related by blood or part of a select group of friends,” summary judgment dismissing the claim for a prescriptive easement on the ground that plaintiff was unable to establish hostility was not warranted … . Gulati v O’Leary, 2015 NY Slip Op 01693, 3rd Dept 2-26-15

 

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Charitable Trust’s Challenge to Tax Foreclosure Time-Barred—Four-Month Statute of Limitations Applies to Action for Declaratory Judgment—RPTL, not the EPTL, Controls

The Third Department determined the action challenging the tax foreclosure on parcels of land owned by a charitable trust set up to hold land for Native Americans must be dismissed as time-barred.  The court further determined that County Court had subject matter jurisdiction because the matter was subject to the Real Property Tax Law (RPTL), not the Estates Powers and Trust Law (EPTL), and there was, therefore, no requirement that the Attorney General be notified of the tax foreclosure proceedings:

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 … . Both of those options are governed by a four-month statute of limitations … . 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 … . 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 … . Turtle Is Trust v County of Clinton, 2015 NY Slip Op 01698, 3rd Dept 2-26-15

 

Extraordinary Circumstances Justified Award of Primary Physical Custody to Nonparent–Criteria Described

In affirming Family Court’s award of primary physical custody to the grandmother, the Third Department explained the “extraordinary circumstances” criteria for awarding primary physical custody to a nonparent:

Family Court’s finding of extraordinary circumstances is supported by the record. It is clear and settled that a “parent has a claim of custody of his or her child, superior to that of all others, in the absence of surrender, abandonment, persistent neglect, unfitness, disruption of custody over an extended period of time or other extraordinary circumstances” … . “It is the nonparent’s burden to establish extraordinary circumstances and, when that burden is met, custody is determined based upon the child’s best interests” … . The pertinent factors to be considered in determining whether extraordinary circumstances exist “include the length of time the child has lived with the nonparent, the quality of that relationship and the length of time the biological parent allowed such custody to continue without trying to assume the primary parental role” … , an analysis that considers “the cumulative effect of all issues present in a given case” … . Matter of Curless v McLarney, 2015 NY Slip Op 01680, 3rd Dept 2-26-15

 

Damage to Building Caused by Silica Dust Excluded from Coverage Under “Pollutants” and “Faulty Workmanship” Policy Exclusions

The Third Department determined the insurer was entitled to summary judgment based upon the exclusions of coverage in the policy. The insured sought coverage of damage caused by silica dust disbursed throughout the insured’s building.  The Third Department held that the “pollutants” and “faulty workmanship” exclusions in the policy precluded coverage, and the “ensuing loss exception” did not apply:

“[A]n insurer seeking to invoke a policy exclusion ‘must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case'” … . To determine whether a policy provision is ambiguous, courts are guided by “the reasonable expectations of the average insured upon reading the policy” … . The meaning of any part of such a policy must be determined upon consideration of the policy as a whole … . In addition, “[a]n insurance contract should not be read so that some provisions are rendered meaningless” … . Upon applying these rules of construction, if “an insurance policy’s meaning is not clear or is subject to different reasonable interpretations,” such an ambiguity must be resolved in favor of the insured … . Because we find that both policy exclusions apply to bar coverage here, we grant defendants’ motion and dismiss the complaint.

Defendants were entitled to summary judgment based on the pollution exclusion clause. Pursuant to that exclusion in the policy, defendants will not cover loss resulting from the “[d]ischarge, dispersal, seepage, migration, release or escape of ‘pollutants.'” As defined in the policy, “‘[p]ollutants’ means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, waste and any unhealthy or hazardous building materials (including but not limited to asbestos and lead products or materials containing lead).” The record contains unrebutted evidence that silica dust can cause lung disease and respiratory problems, placing such dust within the policy definition of a pollutant as “unhealthy or hazardous building material[],” as well as a “solid . . . irritant or contaminant” … . Broome County v The Travelers Indem Co, 2015 NY Slip Op 01697, 3rd Dept 2-26-15

 

Interpreter Working for Office of Court Administration Was an Employee, Not an Independent Contractor

The Third Department determined claimant, a Spanish interpreter working for the Office of Court Administration (OCA), was an employee, not an independent contractor, but declined to extend the holding to others similarly situated:

Whether an employer-employee relationship exists “is a factual issue for the Board to resolve and its decision will be upheld if supported by substantial evidence” … . “While no single factor is determinative, control over the results produced or the means used to achieve those results are pertinent considerations, with the latter being more important” … . We find that substantial evidence supports the Board’s decision that OCA exercised sufficient supervision, direction and control over this claimant’s work activities to establish an employer-employee relationship, but decline to extend this holding to others “similarly situated.”

During the nearly 2½ years that claimant worked at the Bronx Family Court, she was required to work a set schedule from 9:30 a.m. to 4:30 p.m. … . When first assigned to that court, she was scheduled to report for a few weeks, but it was not long before claimant was scheduled monthly in advance … . Although claimant did not have to accept assignments, once she was on the schedule, she could not take time off, nor was she allowed to send someone in her place … ; if she knew she needed time off, she was expected to tell her supervisor in advance so she would not be put on the schedule … . Upon arriving at work each morning, claimant reported to the senior court interpreter, who told her where to report. OCA set claimant’s rate of pay … and, upon reporting to the court, she was paid — by direct deposit into her personal checking account — whether or not she actually provided interpreting services … . * * * Matter of Viau…, 2015 NY Slip Op 01691, 3rd Dept 2-26-16

 

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Rules of Evidence Properly Relaxed to Allow Hearsay In Proceeding to Modify Guardian’s Power to Control the Social Environment of the Incapacitated Person

In affirming the denial of a petition to modify the court-appointed guardian’s power to control the social environment of Mary WW, the incapacitated person (to compel the guardian to allow petitioner to visit Mary WW), the Third Department agreed with Supreme Court that hearsay was admissible in the proceeding:

…. [P]etitioner contends that, in denying her motion, Supreme Court improperly relied upon the hearsay statements of witnesses who had contact with Mary WW. We disagree. Although the rules of evidence are generally applicable to proceedings brought under Mental Hygiene Law article 81, Mental Hygiene Law § 81.12 (b) provides that the court may waive such rules “for good cause shown.” Here, we note that Mary WW. initially consented to the guardianship, it was recommended by the court evaluator and none of Mary WW.’s children, except for petitioner, objected. Moreover, it is undisputed that Mary WW. now suffers from severe dementia and was unable to attend the modification hearing, which occurred nearly four years after the guardianship was established. In view of this, it was necessary for other witnesses to testify concerning her interactions with petitioner. Significantly, petitioner was not prejudiced, as she was present at the hearing and denied the allegations. Under these circumstances, we find that Supreme Court had good cause for relaxing the rules of evidence and considering the hearsay statements of witnesses who had contact with Mary WW. Matter of Mary WW…, 2015 NY Slip Op 01704, 3rd Dept 2-26-15

 

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Department of Environmental Conservation’s Finding that the Owners of Land on Either Side of a Creek Also Owned a Dam Across the Creek, and Therefore Were Responsible for Making the Dam Safe, Was Not Supported by Substantial Evidence—Dam Had Been Conveyed to the City in Condemnation Proceeding

The Third Department determined that the Department of Environmental Conservation’s (DEC’s) finding that the owners of parcels of land bordering a creek also owned the dam spanning the creek between the parcels, and therefore the landowners were responsible for the work necessary to make the dam safe, was not supported by substantial evidence. The Third Department concluded the land under the water where the dam was located had been transferred to the City of Hudson in a condemnation proceeding:

We recognize that a riparian owner’s right to the natural flow of water along its land is properly classified as real property, equally with the land … . As such, a party could acquire an interest in the water flow separate and distinct from the land under the water … . The controlling point here, however, is that the “real estate” acquired in the condemnation, in conjunction with the indenture and agreement, is as defined under the WSA [Water Supply Act]. The comprehensive statutory definition for “real estate” embraces both the water and the “lands under water.” Because the [DEC] considered only the “rights” that the City acquired by the condemnation and not the “property,” the ALJ’s conclusion that petitioners own the dam is not supported by substantial evidence in the record. Berger v New York State Dept of Envtl Conservation, 2015 NY Slip Op 01496, 3rd Dept 2-19-15

 

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