| NYCTL 1998-2 Trust v T. Jan Realty Corp. |
| 2009 NY Slip Op 04879 [63 AD3d 810] |
| June 9, 2009 |
| Appellate Division, Second Department |
| NYCTL 1998-2 Trust et al., Appellants, v T. Jan RealtyCorp., Respondent, et al., Defendants. |
—[*1] Davidoff Malito & Hutcher, LLP, Garden City, N.Y. (Michael G. Zapson and Frank L.Perrone of counsel), for respondent.
In an action to foreclose a tax lien, the plaintiffs appeal from an order of the Supreme Court,Kings County (Balter, J.), dated August 2, 2007, which granted the motion of the defendant T.Jan Realty Corp. to confirm a referee's report (Clarke, R.) dated April 20, 2007, which, after ahearing, recommended that the plaintiffs be directed to refund certain water and sewageoverpayments made by that defendant, and directed the plaintiffs to refund the overpayments.
Ordered that the order is reversed, on the law, with costs, the motion is denied, and thematter is remitted to the Supreme Court, Kings County, for a determination of the amount due tothe plaintiffs pursuant to the tax lien certificate in accordance herewith.
The defendant T. Jan Realty Corp., the owner of the subject property (hereinafter theproperty owner), failed to pay certain water and sewer charges assessed against the property bythe defendant City of New York. The City sold the resulting tax lien to the plaintiff Bank of NewYork, as collateral agent and custodian of the NYCTL 1998-2 Trust, which brought the instantaction to foreclose on the lien, and obtained a judgment of foreclosure and sale upon the propertyowner's default in appearing and answering. The property owner then moved to vacate thejudgment of foreclosure and sale, and the Supreme Court referred the matter to a referee tocompute the amount due the plaintiffs. After a hearing, the referee found that certain assessmentsunderlying the lien were invalid, recalculated the amount due on the lien based on past meterreadings for the property, and recommended that the plaintiffs be directed to refund to theproperty owner the portion of the water and sewer payments it made under protest during thependency of the action which exceeded the new amount due on the lien. The Supreme Courtgranted the property owner's motion to confirm the report, and ordered the plaintiffs to refundthe overpayments. The plaintiffs appeal. We reverse and remit the matter to the Supreme Court,Kings County, for a determination of the amount due to the plaintiffs pursuant to the tax liencertificate.
Challenges to the City's water and sewer assessments must be brought in timely CPLR [*2]article 78 proceedings (see CPLR 217; NYCTL 1996-1Trust v Andrew-Zuck Realty Corp., 305 AD2d 157 [2003]; Yonkers Racing Corp. v Cityof Yonkers, 301 AD2d 592 [2003]). Moreover, subject to certain exceptions not applicablehere, "one who objects to the act of an administrative agency must exhaust availableadministrative remedies before being permitted to litigate in a court of law" (Watergate IIApts. v Buffalo Sewer Auth., 46 NY2d 52, 57 [1978]). The property owner failed to pursueadministrative remedies available during a portion of the lien period (see 15 RCNYAppx A, part VI), and failed to commence a timely CPLR article 78 proceeding to challenge theCity's final determination regarding the disputed assessments. Accordingly, the property owneris precluded from challenging the amounts of the assessments in this action (see NYCTL 1999-1 Trust v Stark, 21AD3d 402 [2005]; NYCTL 1996-1 Trust v Andrew-Zuck Realty Corp., 305 AD2d157 [2003]).
The Supreme Court therefore erred in granting the property owner's motion to confirm thereferee's report, which was based upon recalculated assessments, and the matter must be remittedto the Supreme Court, Kings County, for a determination of the amount due to the plaintiffsbased on the original assessments underlying the tax lien certificate. Skelos, J.P., Florio,Dickerson and Chambers, JJ., concur.