| Way v City of Beacon |
| 2012 NY Slip Op 04737 [96 AD3d 829] |
| June 13, 2012 |
| Appellate Division, Second Department |
| Lawrence Way et al., Respondents, v City of Beacon et al.,Appellants. |
—[*1] Robert N. Isseks, Middletown, N.Y., Bloom & Bloom, P.C., New Windsor, N.Y. (Kevin D.Bloom of counsel), and Drake, Loeb, Heller, Kennedy, Gogerty, Gaba & Rodd, PLLC, NewWindsor, N.Y. (Timothy P. McElduff, Jr., of counsel), for respondents (one brief filed).
In an action for a judgment pursuant to 42 USC § 1983 declaring that the defendants'practice of intentionally miscalculating nonhomestead real property taxes deprives the plaintiffsof their due process and equal protection rights under color of state law, to recover damagespursuant to 42 USC § 1983 for the deprivation of the plaintiffs' due process and equalprotection rights under color of state law, and to recover the overpayment of real property taxes,the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court,Dutchess County (Pagones, J.), dated May 17, 2011, as denied those branches of their motionwhich were pursuant to CPLR 3211 (a) (7) to dismiss the amended complaint and pursuant toCPLR 3211 (a) (5) to dismiss the amended complaint insofar as asserted against the defendantJoseph Braun as time-barred.
Ordered that the order is modified, on the law, by deleting the provision thereof denying thatbranch of the defendants' motion which was pursuant to CPLR 3211 (a) (7) to dismiss the secondcause of action, which alleged a deprivation of the plaintiffs' equal protection rights under colorof state law pursuant to 42 USC § 1983, and substituting therefor a provision granting thatbranch of the motion; as so modified, the order is affirmed insofar as appealed from, withoutcosts or disbursements.
In December 2009 the plaintiffs, who are fee owners of nonhomestead commercial realproperty located within the defendant City of Beacon, commenced this action solely against theCity, asserting five causes of action, and seeking repayment of certain real property taxespremised on alleged miscalculations of the tax rates applied to homestead and nonhomesteadproperties. In a prior order, the Supreme Court directed the dismissal of the original complaint onthe ground that all five causes of action set forth therein were time-barred, but granted theplaintiffs leave to amend the complaint, inter alia, to assert causes of action pursuant to 42 USC§ 1983, based on alleged violations of their federal constitutional rights to equal protectionand due process, and to add former City Administrator Joseph Braun as a party defendant.[*2]
Thereafter, on December 30, 2010, the plaintiffs filed asupplemental summons and an amended complaint against the City and Braun, in which theysought, inter alia, damages and declaratory relief pursuant to 42 USC § 1983 for violationsof their federal constitutional rights to equal protection and due process. They alleged that, for atleast 12 consecutive years, the defendants employed a certain formula to calculate the realproperty tax rates for homestead and nonhomestead properties which was not authorized by theCity Charter or State law. Therefore, they alleged that they were subjected to an unauthorized taxrate. As a result of this unauthorized tax rate, they alleged, nonhomestead property ownersoverpaid their respective property taxes, while homestead property owners underpaid.
The defendants moved, inter alia, pursuant to CPLR 3211 (a) (7) to dismiss the amendedcomplaint, inter alia, for failure to state a cause of action under 42 USC § 1983, andpursuant to CPLR 3211 (a) (5) to dismiss the amended complaint insofar as asserted againstBraun as time-barred. The plaintiffs cross-moved for leave to enter a default judgment against thedefendants. The Supreme Court denied both the City's motion and the plaintiffs' cross motion.
On a motion to dismiss a complaint pursuant to CPLR 3211 (a) (7), the complaint is to beafforded a liberal construction (see CPLR 3026). The facts alleged are presumed to betrue, the plaintiff is afforded the benefit of every favorable inference, and the court is todetermine only whether the facts as alleged fit within any cognizable legal theory (see AG Capital Funding Partners, L.P. vState St. Bank & Trust Co., 5 NY3d 582, 591 [2005]; Goshen v Mutual Life Ins. Co.of N.Y., 98 NY2d 314, 326 [2002]; Landon v Kroll Lab. Specialists, Inc., 91 AD3d 79, 82 [2011]; Thomas v LaSalle Bank N.A., 79AD3d 1015 [2010]; Sonne v Boardof Trustees of Vil. of Suffern, 67 AD3d 192, 200 [2009]). "[E]videntiary material[submitted by the plaintiffs] may be considered to 'remedy defects in the complaint' " (Dana v Shopping Time Corp., 76AD3d 992, 994 [2010], quoting Rovello v Orofino Realty Co., 40 NY2d 633, 636[1976]; see Zorn v Gilbert, 60AD3d 850, 850 [2009]).
Here, the plaintiffs failed to sufficiently allege a deprivation of their right to equal protection."[S]ubject to constitutional inhibitions, the Legislature has very nearly unconstrained authority inthe design of taxing impositions" (Foss v City of Rochester, 65 NY2d 247, 257 [1985][internal quotation marks omitted]; see Nash v Assessor of Town of Southampton, 168AD2d 102, 105 [1991]). "The integrity of any system of taxation, and particularly real propertytaxation, rests upon the premise that similarly situated taxpayers pay the same share of the taxburden" (Foss v City of Rochester, 65 NY2d at 254). "[T]he creation of different classesfor purposes of taxation is permissible as long as the classification is reasonable and the taxesimposed are uniform within the class" (id. at 256). "[A] tax classification will onlyviolate constitutional equal protection guarantees if the distinction between the classes ispalpably arbitrary or amounts to invidious discrimination" (Nash v Assessor of Town ofSouthampton, 168 AD2d at 105 [internal quotation marks omitted]; see Terminello v Village of Piermont,92 AD3d 673, 674 [2012]; Giovannetti v Dormitory Auth. of State of N.Y., 115AD2d 851, 853 [1985], affd 69 NY2d 621 [1986]). "[T]he classification of properties ashomestead or non-homestead, and the imposition of different tax rates on each, is reasonable"(Terminello v Village of Piermont, 92 AD3d at 675, citing Foss v City ofRochester, 65 NY2d at 257).
The purported equal protection violation alleged herein is premised on the classification ofproperties within the City as homestead or nonhomestead. The plaintiffs' allegations with respectto the defendants' unauthorized tax rate do not describe invidious discrimination (see Nash vAssessor of Town of Southampton, 168 AD2d at 105; Terminello v Village ofPiermont, 92 AD3d at 674).
However, the plaintiffs sufficiently alleged a due process violation. When taxpayerschallenge state taxation, a section 1983 due process cause of action is stated upon an allegation of"an aggravated pattern of misuse of the taxing power" (423 S. Salina St. v City ofSyracuse, 68 NY2d 474, 484 [1986] [internal quotation marks omitted], cert denied481 US 1008 [1987]; see Abbott v Town of Delaware, 238 AD2d 868, 869-870 [1997];Corvetti v Town of Lake Pleasant, 227 AD2d 821, 823 [1996]).
Here, the plaintiffs annexed to the amended complaint certain minutes from City Councilmeetings and a letter from the City's Mayor acknowledging that the City's nonhomestead [*3]property owners were overtaxed for a period of at least 12 years.The plaintiffs also submitted affidavits from the City's Mayor and the City's Director of Finance,in which they stated that the miscalculation was done deliberately at the direction of the formerCity Administrator Braun. Further, the plaintiffs submitted an affidavit from the Director of RealProperty Tax Services for the County of Dutchess who acknowledged that, in 2008, it wasdiscovered that the "Base Proportions certified by the City Council for the prior year were not thesame as those used by the [City] to apportion the tax levy." As such, presuming that all of theallegations set forth in the complaint are true for the purpose of the motion, and affording theplaintiffs the benefit of every favorable inference with respect to those allegations, the complaint,as amplified by the supporting affidavits, alleged an aggravated pattern of misuse of the City'staxing power.
Further, contrary to the defendants' contention, the Supreme Court correctly determined thatthe plaintiffs' cause of action pursuant to 42 USC § 1983 that alleged deprivation of theirdue process rights was not time-barred insofar as asserted against Braun. Causes of actionasserted pursuant to section 1983 have a three-year statute of limitations in New York (seeCPLR 214; Matter of Greenfield vTown of Babylon Dept. of Assessment, 76 AD3d 1071, 1073-1075 [2010]), and accrue"when the plaintiff knows or has reason to know of the injury which is the basis of [the] action"(Pearl v City of Long Beach, 296 F3d 76, 80 [2002] [internal quotation marks omitted],cert denied 538 US 922 [2003]; see Rimany v Town of Dover, 72 AD3d 918, 921 [2010]; Palmer v State of New York, 57 AD3d364 [2008]). Here, the Supreme Court correctly determined that the plaintiffs commencedthe instant action against Braun within the applicable three-year limitations period.
The defendants' remaining contention is without merit.
Accordingly, the Supreme Court improperly denied that branch of the defendants' motionwhich was pursuant to CPLR 3211 (a) (7) to dismiss the second cause of action, which alleged adeprivation of the plaintiffs' equal protection rights under color of state law pursuant to 42 USC§ 1983, but properly denied those branches of the motion which were pursuant to CPLR3211 (a) (7) to dismiss the balance of the complaint and pursuant to CPLR 3211 (a) (5) todismiss the due process cause of action insofar as asserted against Braun. Dillon, J.P., Eng,Austin and Sgroi, JJ., concur. [Prior Case History: 31 Misc 3d 1227(A), 2011 NY Slip Op50863(U).]