| Albany Eng'g Corp. v Hudson River/Black Riv. RegulatingDist. |
| 2013 NY Slip Op 06766 [110 AD3d 1220] |
| October 17, 2013 |
| Appellate Division, Third Department |
| Albany Engineering Corporation, Respondent, v HudsonRiver/Black River Regulating District, Appellant. |
—[*1] Matthew C. Hug, Troy, for respondent.
Rose, J.P. Appeals (1) from an order of the Supreme Court (Teresi, J.), entered April13, 2012 in Albany County, which, among other things, granted plaintiff's motion forsummary judgment, and (2) from the judgment entered thereon.
Plaintiff is the owner of a hydropower plant on the Hudson River, and defendant is apublic benefit corporation that operates and maintains upstream dams and reservoirs forthe purpose of regulating the river's flow. Pursuant to state law, defendant has, since the1920s, levied annual assessments against plaintiff and its predecessors, among others, torecover its capital, maintenance and operating costs (see e.g. ECL 15-2121). In2002, defendant obtained a license from the Federal Energy Regulatory Commission(hereinafter FERC) for its Great Sacandaga Lake Storage Project, a major reservoir anddam impounding certain headwaters of the Hudson River. Despite becoming a licenseeof FERC, defendant continued to employ the state assessment scheme to assessdownstream entities such as plaintiff for its costs in connection with the Great SacandagaLake Storage Project. Claiming that the assessments imposed by defendant conflictedwith the Federal Power Act, plaintiff initiated a proceeding before FERC in 2006.Ultimately, the United States Court of Appeals for the District of Columbia Circuitagreed with plaintiff that the Federal Power Act preempted state law and precludeddefendant from recovering any of its costs that conflicted with the federal assessmentscheme administered by FERC (Albany Eng'g Corp. v Federal Energy RegulatoryCommn., 548 F3d 1071, 1076-1079[*2][2008]).
On remand from the Circuit Court, FERC concluded that it did not have authority toorder defendant to refund the precluded assessments and ultimately ordered a headwaterbenefits investigation to determine, among other things, the appropriate amount ofassessments that defendant should have imposed for the years in question under theFederal Power Act. FERC also concluded that it would consider applying the improperassessments as a credit in determining the assessments owed by plaintiff in the future andindicated that, in the alternative, plaintiff was free to seek a refund in state court based onthe Circuit Court's determination that the assessments were unauthorized.
Plaintiff then commenced this action for a full refund of the assessments it had paidto defendant pursuant to state law for 2003 through 2007, arguing that they had beenjudicially determined to be unauthorized and, therefore, defendant had been unjustlyenriched. Following joinder of issue, plaintiff moved for summary judgment anddefendant cross-moved, claiming that the action was unripe and premature given theongoing administrative proceedings before FERC and the unresolved headwater benefitsinvestigation. Supreme Court denied defendant's cross motion and granted plaintiff'smotion, ordering that plaintiff was entitled to a judgment on the full amount requested of$516,655.62, plus interest. A judgment was entered and defendant appeals from the orderand judgment.[FN*]
On appeal, defendant makes none of the arguments raised in connection with themotions before Supreme Court. Instead, defendant now argues that plaintiff failed tostate a cause of action for a refund by failing to allege that it paid the unauthorizedassessments under protest. However, "[a]n appellate court should not, and will not,consider different theories or new questions, if proof might have been offered to refute orovercome them had they been presented at the trial [level]" (Rentways, Inc. v O'NeillMilk & Cream Co., 308 NY 342, 349 [1955]; see Bingham v New York City Tr.Auth., 99 NY2d 355, 359 [2003]). By raising this issue for the first time on appeal,defendant has deprived plaintiff of the opportunity to provide evidence of any protest.The issue is, therefore, not properly before us, and we decline to consider it (seeCPLR 5501 [a] [3]; Kamp vFiumera, 69 AD3d 1168, 1170 [2010]; Bender v Peerless Ins. Co., 36 AD3d 1120, 1121 [2007];Healthcare Capital Mgt. v Abrahams, 300 AD2d 108, 109 [2002]; Vitale vFowler Oil Co., 238 AD2d 794, 795 [1997]; see also McLearn v [*3]Cowen & Co., 60 NY2d 686, 688-689 [1983]; Zeldin v Interboro Mut. Indem. Ins.Co., 44 AD3d 652, 653 [2007]). Similarly, defendant's contention that equitydoes not support a finding of unjust enrichment is also fact-intensive and, as such, it toowas required to be raised before Supreme Court in order to be preserved for appellatereview (see e.g. Matter of Lee vAlbany-Schoharie-Schenectady-Saratoga Bd. of Coop. Educ. Servs., 69 AD3d1289, 1291 [2010]; Savagev Desantis, 56 AD3d 1013, 1015 [2008], lv denied 12 NY3d 709[2009]; Capitaland United Soccer Club v Capital Dist. Sports & Entertainment,199 AD2d 626, 629 [1993]).
Also unpreserved is defendant's alternative argument that the action is time-barred(see Matter of Steele, 85AD3d 1375, 1376 [2011]; Matter of LaBarbera v Town of Woodstock, 55 AD3d1093, 1094 [2008]). Although listed as an affirmative defense in the answer,defendant did not pursue dismissal of the action on this ground (see Matter of TroySand & Gravel Co. v New York State Dept. of Transp., 277 AD2d 782, 783 [2000],lv denied 96 NY2d 708 [2001]; compare Matter of McDonald v Board of the Hudson Riv.-BlackRiv. Regulating Dist., 86 AD3d 844, 846 [2011] [affirmative defense preservedin the context of CPLR article 78 proceeding because it was asserted in the respondent'sonly submission to the trial court]). Nor is this an issue of law that may be addressed forthe first time on appeal, as plaintiff responds that it would be entitled to a toll of thestatute of limitations based on the ongoing administrative proceedings and we must agreethat the question of whether a statute of limitations is tolled raises factual issues (see e.g. Zaborowski v Local 74,Serv. Empls. Intl. Union, AFL-CIO, 91 AD3d 768, 769 [2012]; LPP Mtge. Ltd. v Gold, 44AD3d 718, 719 [2007]). Inasmuch as there are steps that plaintiff might have takento counter the statute of limitations defense if it had been raised before Supreme Court,the issue is not properly before us and, again, we decline to consider it (see First Intl.Bank of Israel v Blankstein & Son, 59 NY2d 436, 447 [1983]; Telaro vTelaro, 25 NY2d 433, 439 [1969]; Nichols v Diocese of Rochester, 42 AD3d 903, 905[2007]; Matter of Town of Minerva v Essex County Indus. Dev. Agency, 173AD2d 1054, 1055 [1991], lv denied 78 NY2d 857 [1991]).
We do agree, however, that the matter should be remitted to Supreme Court todetermine defendant's entitlement to an offset of the amount owed based on the outcomeof the headwaters benefit investigation completed by FERC. This argument waspreserved for review by defendant's claim that plaintiff's summary judgment motion waspremature given the impending determination by FERC setting the allowable assessmentamounts. We take judicial notice of the fact that, after Supreme Court's order, FERCissued an order determining headwater benefits that included a corrected calculation ofplaintiff's authorized annual headwater benefits assessments for the years at issue here(see e.g. Matter of Town ofAmsterdam v Amsterdam Indus. Dev. Agency, 95 AD3d 1539, 1540 n 2[2012]). As a matter of judicial economy, the determination of whether plaintiff'srecovery should be offset by the allowable assessment amounts for those years should bemade in the context of this action.
Spain, Garry and Egan Jr., JJ., concur. Ordered that the order and judgment aremodified, on the facts, without costs, by reversing so much thereof as awarded plaintiff$516,655.62, plus interest; matter remitted to the Supreme Court for further proceedingsnot inconsistent with this Court's decision; and, as so modified, affirmed. [Prior CaseHistory: 2012 NY Slip Op 30814(U).]
Footnote *: While there is nodispute that the notice of appeal from the final judgment was timely filed and served, itdid not bring the final order up for review (see CPLR 5501 [a] [1]; see e.g.Burke v Crosson, 85 NY2d 10, 15 [1995]; Shah v State of New York, 212AD2d 876, 877 [1995]). Although the affidavit of service in the record reflects thatdefendant timely served the notice of appeal from the final order on May 22, 2013, 35days after service of notice of entry by regular mail (see CPLR 2103 [b] [2];5513 [a]; General Construction Law § 20), there is no indication in the record thatthis notice of appeal was timely filed. In the absence of any prejudice to plaintiff,however, we excuse the presumably late filing (see CPLR 5520 [a]; see e.g.Peck v Ernst Bros., 81 AD2d 940, 941 [1981]; Messner v Messner, 42 AD2d889, 890 [1973]).