In D.P.R Scrap Metal. Inc., v Zoning Board of Appeals of the Town of North Hempstead, __AD3d__, [2d Dept 2020], the Appellate Division affirmed the grant of the Article 78 Petition of D.P.R. Scrap Metal Inc. (DPR) annulling the Zoning Board Appeals (ZBA) determination as arbitrary and capricious and not supported by evidence.

In this case, DPR operated its metal recycling business at 125 Harper Street, Westbury, New York in a largely industrial area of North Hempstead, since 2011.  In June 2016, the Town filed an eight count criminal information against DPR alleging 125 zoning violations. As a result, DPR filed for various permits that were denied by the Town Building Department.  In December 2016, DPR appealed to the ZBA for, among other things, a variance from the requirement of Town Code § 70-187(k), which prohibits storage or baling of scrap paper, iron, bottles, rags, or junk outside the confines of an enclosed building.  At its March 8, 2017 public hearing, the only people to appear were DPR and the Deputy Commissioner of the Town’s Building Department, who opposed the appeal.  Also, an unsigned letter was read into the record, where the author complained about DPR’s using the property to dismantle cars.

In August 2017, the ZBA issued a decision granting a majority of the variances requested but denied that portion of the application dealing with outdoor storage, effectively denying DPR’s ability to operate at the site.  The ZBA opined in its decision, that DPR could build a 40-foot high enclosed structure that would allow DPR to continue to operate in compliance with the Town Code.  One of arguments made on the record by DPR was that the nature of recycling metal is such that it could not be done even in a 40-foot high building.  DPR commenced this proceeding to annul the ZBA’s determination on the grounds that it was arbitrary and capricious.  By judgment entered July 5, 2018, the Supreme Court granted the petition, annulled the determination, and directed the Board to issue the variance.  See, In the Matter of the Application of D.P.R Scrap Metal Inc et al , v. Zoning Board of Appeals of the Town of North Hempstead, Index No. 3461/2017 Dated July 3, 2018.

The Supreme Court found that, other than being able to see piles of scrap metal above the 10-foot high fence line, none of the ZBA’s multiple findings and references to noise, dust and vibrations issues discussed in the decision were supported by any evidence, or even by inference, on the record.  As a result, the Supreme Court held that such conclusory findings of fact are insufficient to support determination by the ZBA, which is required to clearly set forth “how” and “in what manner” the granting of a variance would be improper.  The ZBA appealed.

In affirming the Supreme Court, the Second Department stated:

“[h]ere, we agree with the Supreme Court’s finding that the Board’s determination to deny the variance was arbitrary and capricious and not supported by evidence. The Board’s determination was based on anonymous and unsubstantiated complaints regarding DPR’s metal recycling business, and no evidence was presented at the hearing to demonstrate that granting the variance would lead to an undesirable effect on the character of the neighborhood, adversely impact physical and environmental conditions, or otherwise be detrimental to the health, safety, and welfare of the neighborhood or community.”

The Second Department held that conclusory findings of fact are insufficient to support a determination and that courts may set aside a zoning board decision only where the record reveals that the board acted illegally or arbitrary, or abused its discretion, or that is merely succumbed to generalized community pressure.  Moreover, Second Department concluded that the ZBA’s determination was based on anonymous and unsubstantiated complaints regarding DPR’s metal recycling business, and no evidence was presented at the hearing to demonstrate that granting the variance would lead to an undesirable effect on the character of the neighborhood, adversely impact physical and environmental conditions, or otherwise be detrimental to the health, safety, and welfare of the neighborhood or community.  The Court directed the ZBA to issue the requested variance.

This recent decision reminds both practitioners and municipal boards of the importance to build a record and to substantiate a decision on that record.

In 2018, this Blog published “Challenge to Montauk’s Motel Restaurant Fails at Supreme Court Level” discussing the Article 78 petition and plenary action entitled Jane H. Concannon Revocable Trust v. The Building Department of the Town of East Hampton, Town of East Hampton Zoning Board of Appels, and Breakers Motel, Inc., Index No. 4297/2016, dated February 5, 2018.  In this case, the neighboring property owner appealed the Town of East Hampton’s Zoning Board of Appeal’s determination to the Supreme Court. At issue was the neighbor’s appeal of a building permit to the Zoning Board of Appeals issued for the renovation of a restaurant to operate at the Breaker’s Motel in Montauk. The Zoning Board’s determination dated April 5, 2016, denied the application as untimely finding that the applicant had constructive notice of the presence of the restaurant use on the Breakers’ property at the time of the 2010 site plan application and subsequent hearing. The Supreme Court held that the Breakers Motel restaurant use was legal, even under the new Resort District (RS) zoning, and did not require a special permit to be maintained or altered. The Court denied the request for the permanent injunction requested to enjoin the Breakers from taking any further action to construct or operate a restaurant on site and dismissed the proceeding.

By decision dated, December 2, 2020, the Appellate Division, Second Department affirmed the Supreme Court in Jane H. Concannon Revocable Trust, v. Building Department of the Town of East Hampton et al. Reminding us again of the great deference afforded to local zoning board determinations, the Court stated,

“[h]ere the ZBA’s determination that the plaintiff/petitioner had constructive notice of the restaurant use at the premises by 2010, at the time of the site plan application and the hearing on that application, was rational and not arbitrary and capricious. Under the circumstances, the plaintiff/petitioner’s challenges to the 2005 CO and the building permit, which was predicated on the 2005 CO, were untimely (see Matter of Palm Mgt. Corp. v Goldstein, 8 NY3d 337, 341; Matter of Peehl v Village of Cold Spring, 129 AD3d 844, 845).

Furthermore, in light of the dismissal of the CPLR article 78 causes of action on the ground of untimeliness, the plaintiff/petitioner could not demonstrate a likelihood of success on the merits with respect to its claims that the inclusion of the restaurant use on the 2005 CO and the issuance of the building permit were improper in the absence of a special permit. Therefore, we agree with the Supreme Court’s determination denying the plaintiff/petitioner’s motion for a preliminary injunction, and dismissing the cause of action for a permanent injunction (see Parolisi v Slavin, 98 AD3d 488; see also Matter of Figueroa v Maguire, 37 AD3d 829, 832).”

The Court further denied a cross motion made by the Breakers Motel, Inc., to dismiss the appeal from an order and judgment of the Supreme Court.

Tonight, the Incorporated Village of Farmingdale (“Farmingdale“) will consider amending its zoning code to expand permitted uses in its Downtown Mixed-Use Zoning District (“Downtown“). The proposed amendments will allow, among other things, legal and medical offices on the ground level of buildings. The changes  will allow more space for non-retail businesses and help to ensure Farmingdale’s Downtown remains vibrant, especially given the impacts of the COVID-19 pandemic on the retail sector.

Farmingdale established its Downtown in 2011, after its consideration of a Downtown Master Plan. The Downtown is designed to create and sustain an attractive and economically flourishing downtown, with transit-oriented development and an active, pedestrian-friendly Main Street, encouraging walking and bicycling. The Downtown, more or less, is an area running north and south along Main Street, from Melville Road to Route 109; it also includes an area surrounding Farmingdale’s Long Island Railroad Station. The Downtown is a well-known and well-regarded destination replete with restaurants, bars, shops, retailers, and professional offices.

Presently, along the Downtown’s Main Street, the zoning code prohibits ground level offices for doctors, dentists, physical therapists or other medical care providers, as well as those uses which require State or Federal licenses. Administrative, professional, medical and other office uses are permitted only on upper levels.

Farmingdale seeks to amend the Downtown zoning code to expand permitted uses without affecting parking. The proposed amendments will allow, as of right, ground level offices for lawyers, insurance agents, accountants, doctors, dentists, chiropractors or other health care providers licensed by the State. The amendments will also permit professional schools, learning centers, test preparation centers, and other similar uses on the ground level, whereas these uses are also currently limited to upper levels.

Farmingdale’s proposed amendments to its Downtown provide greater flexibility in arrangement of local businesses, and offer more support for brick-and-mortar services within the community.

In response to a resolution passed by the Oyster Bay Town Board on October 6, 2020, that purports to create rules of decorum at Town Board meetings and seeks to prohibit inappropriate behavior during board meetings, a Town resident commenced an action in the United States District Court for the Eastern District of New York challenging the resolution’s constitutionality. The complaint was filed by Kevin McKenna, who describes himself as a citizen advocate and editor in chief of the Town of Oyster Bay News, and is a person who regularly comments at Town Board meetings. Mr. McKenna claims that Resolution No. 567-2020 is a violation of the United States and New York State Constitutions’ protection of free speech, freedom of association, and freedom of the press, and seeks declaratory and injunctive relief, as well as monetary damages against the Town.

The resolution states, in part, that “[s]peakers shall observe the commonly accepted rules of courtesy, decorum, dignity and good taste and shall not use foul language, display unacceptable behavior or be disruptive of the proceedings. Speakers may not make personal comments about public officials, town residents or others. Members of the public and Board members shall be allowed to state their positions in an atmosphere free of slander, threats of violence or the use of the Board meeting as a forum for politics . . . Any person making offensive insulating, threatening, insolent, slanderous or obscene remarks or gestures, or who becomes boisterous, or who makes threats against any person or against public order and security while in the Board Room, either while speaking at the podium or as a member of the audience, shall be forthwith removed at the direction of the presiding office[r]. Any person removed from a public meeting at the direction of the presiding officer may be charged with disorderly conduct in accordance with New York State Penal Law Section 240.20.” Those who violate the resolution face a sentence of up to 15 days in jail.

On November 16, 2020, U.S. District Judge Gary R. Brown granted McKenna’s motion for a temporary restraining order and issued an injunction preventing the Town of Oyster Bay from enforcing the recently adopted rules. Judge Brown scheduled a court conference on December 2, and directed the Town’s attorneys to either rewrite the resolution prior to that date or face a hearing on its constitutionality a few days later. A statement issued by the Town suggests that it will “slightly alter verbiage while maintaining the same intent” prior to the upcoming conference.

The injunction drew praise from journalists and other advocates for free speech who said the resolution has a chilling effect on the First Amendment. The Town, on the other hand, characterized the lawsuit as being frivolous and an attempt to hamper good government, and the obligation to defend against its claims a waste of taxpayer money. In a recent Newsday story, Nassau County District Attorney Madeline Singas expressed doubt that charges for violations of the new rules would lead to prosecution.

This case will undoubtedly be monitored closely by those who regularly appear at public hearings and use that forum to voice criticisms of actions by their local government.

Last year, the New York County Supreme Court heard an Article 78 challenge by Preserve Our Brooklyn Neighborhoods (“POBN”), a civic organization dedicated to maintaining the unique character and historical significance of the Fort Greene area of Brooklyn, New York.  This lawsuit, which I discussed in a previous post, turned on whether a resolution passed by the New York City Council (the “City”) constituted unconstitutional spot zoning.

As a refresher, in the Supreme Court action, POBN sought to annul and vacate the City’s 2018 resolution to rezone part of the Fort Greene area to allow for, inter alia, commercial and mixed residential development.  POBN brought causes of action alleging constitutional violations and violations of the State Environmental Quality Review Act (“SEQRA”) and the City Environmental Quality Review (“CEQR”).

Although the SEQRA and CEQR claims were dismissed on procedural grounds, the Supreme Court would have also dismissed them on the merits.  Such challenges can only succeed if the petitioner demonstrates that the administrative agency rendering the underlying determination acted arbitrarily.  The Supreme Court held that the New York City Planning Commission appropriately followed the requirements of SEQRA and CEQR and did not act in an arbitrary and capricious manner.  The First Department agreed and affirmed the dismissal on those same grounds.

POBN’s other cause of action alleged unconstitutional spot zoning, which the New York State Court of Appeals has defined “as ‘the process of singling out a small parcel of land for a use classification totally different from that of the surrounding area, for the benefit of the owner of such property and to the detriment of other owners” (Rodgers v. Tarrytown, 302 N.Y. 115, 123, 96 N.E.2d 731, 734 [1951]).”  As previously discussed, constitutional challenges to zoning legislation are subject to a high bar and are successful only if the petitioner is able to prove its claim beyond a reasonable doubt.

In denying POBN’s petition, the Supreme Court pointed out that POBN was only concerned with how the development may negatively impact its own interests, while ignoring the fact that it would create new affordable apartments and community space in the area.  POBN’s sole concern that the development would damage the character of the neighborhood was insufficient to overcome its heavy burden of proving unconstitutional spot zoning, and the First Department agreed.

Ultimately, the First Department held that the resolution was not “enacted solely for the benefit of the lot in question to the detriment of other owners.”  Rather, “the rezoning [was] part of ‘a well-considered and comprehensive plan calculated to serve the general welfare of the community’ (Collard v Incorporated Vil. of Flower Hill, 52 NY2d 594, 600 [1981]).”  For these reasons, the First Department also affirmed the dismissal of POBN’s cause of action alleging unconstitutional spot zoning.

The Covid-19 health crisis has sent widely-discussed shockwaves through the real estate industry that could have long-reaching impacts on the future of land use on Long Island. For starters, the pandemic shutdown hit the brick-and-mortar retail industry like a bomb. In addition to devastating small businesses everywhere, the pandemic forced under several long-struggling (and some not-so-struggling) retail giants. The pandemic also caused an urban diaspora of people fleeing New York City with a corresponding surge in residential home purchases throughout the tri-state area. And finally, the pandemic has forcibly introduced the work-from-home business model into many industries that probably had no intention of transitioning to a remote workforce (the practice of law included).

So, what will happen if these trends do not reverse, or at least slow, once this is all over? What will become of vacant “big box” and anchor-tenant spaces? Amazon probably won’t need that many “last-mile” warehouses on Long Island. (Or will it?) What will happen to office buildings and corporate parks if businesses switch to at-home work permanently? Where will former city-dwellers and existing residents alike find housing on an island that was already struggling with a massive housing shortage? The answers to these questions will depend, in part, on the comprehensive land use plans of Long Island’s towns and incorporated villages.

By statute, towns and incorporated villages in New York State are required to exercise their zoning powers in accordance with a “comprehensive plan” that is an expression of the community’s long- and short-term planning goals. (See Town Law § 272-a; Village Law § 7-722). A town or village’s comprehensive plan need not be contained in a single, written document (although it is encouraged), it can also be synthesized from their local zoning code, resolutions and/or zoning maps. (Id.). But regardless of what form a comprehensive plan takes, it is universal that a zoning action that is not consistent with or that directly contradicts a town or village’s comprehensive plan is vulnerable to legal challenge and potential invalidation. (See e.g. Udell v Haas, 21 NY 463 [1968]). For that reason, towns and villages are required to periodically revisit their plans (see Town Law § 272-a[10]; Village Law § 7-722[10]), which can lead to desired and/or necessary amendments to local zoning laws.

The reality is that the real estate industry on Long Island was already in a state of transition when the pandemic struck. Concepts like “mixed use” developments, “transit-oriented” developments, “walkability,” and “downtown revitalization” were already working their way into Long Island communities, with widely varied degrees of success. At the same time, the retail industry was already shrinking and looking for ways to reinvent the in-person shopping experience to compete with online sales. However, the zoning codes of some of Long Island’s towns and villages reveal that some parts of the Island have been slow or even reluctant to embrace redevelopment to meet evolving real estate trends. Indeed, some zoning codes simply do not contemplate or address the evolving trends mentioned above. Consequently, these same areas may not be as equipped as others to deal with the pandemic’s yet-unknown permanent impacts on Long Island real estate.

Admittedly, the process of updating a comprehensive plan is a time-consuming and potentially expensive one. Most often, the process involves the formation of a formal committee, retention of professional consultants, and months (or longer) of in-depth analysis and planning. And by law, the process must include a public hearing and appropriate environmental study in accordance with the State Environmental Quality Review Act (SEQRA). (See Town Law § 272-a[6], [8]; Village Law § 7-722[6], [8]),  However, updating a comprehensive plan also gives towns and villages a tool to actively embrace change and to help shape it rather than having change creep in solely, or break down the doors. For all these reasons, it is important for every town and village on Long Island to be aware of their comprehensive plans and to consider whether a comprehensive plan update is on the horizon.

 

On September 21, 2020, the Supreme Court, Nassau County in Town of Oyster Bay v. 120 Westend LLC, Supreme Court, Suffolk County, Index No. 608065/2020 granted a preliminary injunction to the Town of Oyster Bay (“Town”) halting the use of an existing hotel as an emergency homeless shelter stating that there is no pre-emption by the State of New York that allows a property owner to convert a facility to a potential non-conforming use without local review and approval.  This is a cautionary tale relating to the risks associated with multi-jurisdictional approvals.

Formerly a Howard Johnson’s and then a Hampton Inn hotel, the subject property is located at 120 Jericho Turnpike, Jericho, New York, and has been used continuously as a hotel/motel by special permit issued by the Town since 1965.  On July 6, 2020, the Defendant entered into a 10-year lease with non-party, Community Housing Innovations (“CHI”), a state and federally funded non-for-profit corporation, which operates and provides emergency housing assistance to homeless families and individuals. Having operated for decades in Nassau County, CHI obtained permission from the Nassau County Department of Social Services (“NCDSS”) to utilized the subject property as a homeless shelter as part of a 2017 Memorandum of Understanding (“MOU”).  As part of the contract with NCDSS, the existing facility passed a health and safety inspection performed by Nassau County and New York State.

On July 23, 2020, Defendants disclosed at a school board meeting, its intention to convert the hotel to a homeless shelter.  Following this meeting, the Town issued various summons and stop-work orders.  The Town then sought and obtained a temporary restraining order (“TRO”) in August of 2020.

In opposition to the Town’s preliminary injunction motion, the  Defendant’s main arguments focused on the alleged preemption of Article 7 of the New York’s Social Services Law, which comprehensively regulates residential care facilities so as to prohibit a local municipality from imposing conditions on their operations.  The Court found that although the State has the authority to license and to grant operating certificates for homeless shelters, as well as the regulation of such operations, this licensing authority cannot be stretched to preclude a local government from requiring that a proposed facility comply with local zoning laws.  The Court stated that Article 7 of Social Services Law, “while extremely comprehensive, does not make any reference, nor can it be reasonably read to imply such authority.”

Turning to the pre-emption caselaw relied upon by the Defendant, the Court found controlling the distinction that the proposed operations had no operating history at the location.  Because there was no homeless shelter currently operations at the subject property, the court determined that the Town was not attempting to control the operations of the potential shelter, but merely seeking to determine whether such a use is permitted under its building code.  Additionally, in defeating Defendant’s reliance on its prior approval by the State and contract with Nassau County, the Court found the language in various documents requiring “local approvals” as confirmation that the State had not occupied the field.

Although the Court acknowledged the State’s interest in preventing local municipalities from interfering with the day-to-day operations of homeless facilities, it found no authority to support Defendant’s argument that the State’s Social Services Law allows a facility operator to locate a facility anywhere it obtains a contract to operate without complying with local zoning and land use laws.  As a result, the Court found there is no pre-emption by the State of New York that allows a property owner to convert a hotel to an emergency homeless facility without local review and approval.

In July of 2016, Lisa and Robert Gerbino (hereinafter “Gerbinos”) made an application to the Town of East Hampton Zoning Board of Appeals (“ZBA”) for setback relief to allow an existing patio that was built without a permit to remain 10.2 feet from the southern property line where 20 feet is required at their property located at 3 Old Station Place, Amagansett. The Gerbinos purchased their property with the subject patio which is located next to their legally constructed pool. They discovered the patio was built without a permit and in violation of setbacks when they sought a certificate of occupancy for a legally constructed pool house.

At the ZBA hearing held on February 28, 2017, the applicant submitted that (i) the patio was built by the prior owner and the Gerbinos believed it was constructed legally along the southern side of the pool, (ii) the patio is entirely screened by large evergreen trees along the southern side of the property and (iii) there would be no adverse impact on the neighbors or community. The applicant further submitted a letter from the neighboring property to the east, 52 Atlantic Avenue, in support of the application.

A representative for the vacant property owner at 5 Old Station Place, which shares the lot line from which the variance is requested, testified in opposition to the application. Citing Town Code §255-11-89, which requires accessory structure setbacks for pool patios to be doubled, the opposition asserted that the purpose of the law is to protect property owners’ use and enjoyment of their back yards since pools are active recreational structures. The doubled setback requirement creates adequate buffer and transitional yards for pools. Moreover, the representative in opposition stressed that the construction on the lot was maxed out by constructing an approximate 6,000 square foot house (she included the finished basement in her calculation) on a lot shy of ½ acre with the pool placed at a maximum distance from the house in an effort to extend the back yard, negatively impacting her client’s design flexibility with respect to his vacant parcel. Finally, she submitted that the neighbor’s letter in support was submitted from the prior owner of the subject property that constructed the pool and pool patio at issue and was not impacted by the requested variance.

The Zoning Board of Appeals denied the variance request by determination dated May of 2017, stating that, “granting the requested variance will create a detriment to nearby properties. The reason setbacks are doubled for pool patios are to mitigate the noise impact to neighbors caused by the use of the pool and patio. Applicant is requesting a 51% variance along the entire length of the patio. Moreover, the applicants have not presented the Board with any unique circumstances explaining why they cannot comply with the Town Code. There is area along the north side of the pool that can accommodate the same amount of pool patio without requiring a variance from the Board. The Board notes that the neighbor most affected by the patio spoke out against granting the variance.”

The Gerbinos appealed, and the Supreme Court, Suffolk County in Gerbino, et al., v. Whelan, Supreme Court, Suffolk County, Index No. 2987-2017, overturned the ZBA determination and granted the Article 78 Petition. The Court held that the decision of the ZBA was not supported by a rational basis and as such, was arbitrary and capricious. The Court stated, “except for an unsupported objection by one adjoining property owner, there was no evidence proffered that the requested variance would have an undesirable effect on the character of the neighborhood … [f]urthermore, a patio 10.2 feet from the southern border of the property as opposed to the 20 feet required, clearly does not impact the adjoining property owners or neighbors.” The Town appealed.

By decision dated August 19, 2020, the Appellate Division, Second Department overturned the Supreme Court decision and upheld the ZBA’s denial of setback relief. Noting the broad discretion afforded to local zoning boards in considering applications for variances, the Court found that, the Supreme Court should have denied the petition and dismissed the proceeding as the Zoning Board’s determination had a “rational basis in the record.” The Court stated that “the record supports the Zoning Board’s determination that the variance is substantial, that granting the variance would have a detrimental impact upon neighboring properties, that feasible alternative locations exist to situate a pool patio on the property, and that any hardship was self-created (see Matter of Kramer v Zoning Bd. of Appeals of Town of Southampton, 131 AD3d at 1172; Matter of Sacher v Village of Old Brookville, 124 AD3d 902, 904). Accordingly, the Supreme Court should have denied the petition and dismissed the proceeding on the merits.”

As a result, the Gerbinos are faced with having to either (i) remove the existing noncompliant patio, (ii) relocate the pool patio to a conforming location, or (iii) go back to the ZBA with a proposed patio in a new location should that new location require zoning relief.

 

 

Failure to name a necessary party when challenging a land use determination may result in dismissal, and leave a challenger without further recourse. CPLR 1003 provides that the nonjoinder of a party who should be joined under CPLR 1001 (i.e. a person ought to be a party if he or she might be inequitably be affected by a judgment in the proceeding), is a ground for dismissal without prejudice. Although such dismissal is technically “without prejudice,” it may actually be prejudicial in practice; if the statute of limitations has lapsed when the petition is amended to join the missing party, then the petitioner’s challenge may be barred by the statute of limitations. The amended pleading might find refuge in the relation back doctrine, but a petitioner should not hope to rely on fixing this problem after the fact.

This month, in MMSI Props., LLC v City of Glens Falls, 2020 N.Y. Slip Op. 51193(U) [Sup Ct Warren County, Oct. 13, 2020], the Supreme Court, Warren County, dismissed a neighbor’s challenge to a planning board decision approving construction of a 29-unit apartment complex for chronically homeless individuals and families, those suffering from mental illness, and victims of domestic violence (“Project”), because the neighbor failed to name the owner of the subject property in its petition. The Court also rejected the petitioner’s attempt to rely upon the relation back doctrine to salvage its challenge.

The Project

Respondent Warren-Washington Association for Mental Health, Inc. (“WWAMH”), a not-for-profit corporation formed to improve the quality of life for those affected by mental illness and to promote the importance of mental health in the community, planned to construct the Project within the light industrial district of the City of Glens Falls (“Glens Falls”). The subject site is owned by respondent AMH Resources Corp. (“AMH”), which purchased the site in 2018 for WWAMH to utilize for the Project. WWAMH and AMH Resources share many of the same officers, directors and key personnel, and are represented by the same counsel.

In May 2019 WWAMH filed an application with the Glens Falls Planning Board (“Planning Board”) to construct the Project. On September 3, 2019, the Planning Board resolved to approve the Project. On October 2, 2019, the petitioner, a neighboring business owner (“Petitioner”), commenced this Article 78 proceeding to vacate the Planning Board’s approval of the Project. The Petitioner, however, failed to name AMH – the owner of the subject site.

The Challenge and Petitioner’s Amendment

WWAMH and other respondents answered and asserted several objections in point of law, including that the Court must dismiss the petition because Petitioner failed to name AMH as a necessary party (2020 NY Slip Op 50677[U] [Sup Ct Warren County, Jun. 8, 2020]). In response, Petitioner moved to amend its petition to include AMH as a respondent, and the respondents opposed arguing that the statute of limitations had lapsed so Petitioner could not amend. The Court granted Petitioner’s motion to amend the petition pursuant to CPLR 1001(b) – finding that the expiration of the statute of limitations does not deprive the Court of jurisdiction over a necessary party, and so the Court must order AMH summoned. Significantly, the Court also noted that the statute of limitations constituted a defense which AMH, once summoned, would be free to assert in its answer.

Objection in Point of Law to Dismiss for Nonjoinder, and Relation Back

Upon being joined, AMH asserted the statute of limitations defense and argued the petition must be dismissed because the statute of limitations expired before filing and service of the amended petition. Petitioner did not dispute the expiration of the limitations period, but sought to apply the relation back doctrine. The doctrine permits a petitioner to amend a petition to add a respondent beyond the limitations period if he or she can demonstrate: (i) the claims arose from the same occurrence; (ii) the added respondent is united-in-interest with a previously named respondent; and (iii) the added respondent knew or should have known that, but for a petitioner’s mistake as to the added respondent’s identity, the petition would have been brought against him or her.

The Court held that Petitioner satisfied the first two elements, but failed to satisfy the third: “There is no question that the claims arose out of the same occurrence, nor that [AMH] is united in interest with WWAMH. As such, petitioner has succeeded in demonstrating the first and second prongs.

***

[However,] [P]etitioner has failed to demonstrate that diligent efforts were made to ascertain [AMH] identity as owner of the property prior to expiration of the statute of limitations. Petitioner therefore has not satisfied third prong of the inquiry based upon its alleged mistake of identity in believing that WWAMH owned the property.”

Petitioner’s Failure to Satisfy the Relation Back Doctrine

Petitioner claimed that its failure to name AMH was due to an inadvertent omission because the site plan application named WWAMH as the owner of the Project site, and that due to WWAMH’s and AMH’s interconnectedness, AMH knew or should have known that – but for the inadvertent omission – AMH would have been named as a respondent. The Court agreed that AMH knew or should have known about its inclusion in the proceeding, but denied Petitioner the benefit of the relation back doctrine because its failure to include AMH was not inadvertent.

With respect to Petitioner’s purported omission, the Court noted: “Inasmuch as petitioner fails to offer any explanation for its inadvertent omission, the Court is left to surmise — based upon the content of its argument — that it believed WWAMH owned the property. This constitutes a mistake of identity, which is entitled to the benefit of the doctrine — provided the petitioner can demonstrate that diligent efforts were made to ascertain the unknown party’s identity prior to expiration of the statute of limitations.” The Court held the Petitioner failed to show it made diligent efforts to ascertain AMH’s identify.

First, although WWAMH’s application to the Planning Board left the “owner” space blank, indicating that the applicant is the owner, the application included a copy of the deed for the Project site. The deed clearly indicated AMH is the owner. Second, the application cover letter stated that the Project would be owned by AMH, and operated by WWAMH. Third, the pertinent meeting minutes show that discussions of the application before the Planning Board apprised all attendees of AMH’s existence and interest in the Project (even though WWAMH’s engineer erroneously described AMH as the applicant, and not the owner). Petitioner’s principal member and its counsel attended and participated in the meeting, offering remarks in opposition to the Project.

The Court held that “[u]nder the circumstances . . . [P]etitioner has failed to demonstrate that diligent efforts were made to ascertain [AMH’s] identity as owner of the property prior to expiration of the statute of limitations. Petitioner therefore has not satisfied third prong of the inquiry based upon its alleged mistake of identity in believing that WWAMH owned the property.” The Court also held that “[t]o the extent that [P]etitioner was perhaps aware that [AMH] owned the property and simply failed to name it as a respondent in the original petition — which is the more likely scenario given the record before the Court — this would constitute a mistake of law, which also fails to satisfy the third prong of the inquiry.”

Dismissal for Nonjoinder

Ultimately, the Court declined to permit Petitioner to rely upon the relation back doctrine, and held AMH was entitled to dismissal of the petition as against it as time-barred. Furthermore, because AMH was no longer a party, the entire proceeding must be dismissed for nonjoinder (i.e. failure to name a necessary party). To avoid this procedural pitfall and reach the merits of an Article 78 challenge, a petitioner must be sure to identify and name all necessary parties when commencing his or her proceeding.

As the popularity of short-term rentals continues to grow and many local governments are adopting restrictions to keep their use in check, the authors of the Long Island Land Use and Zoning blog are closely monitoring how these restrictions are faring in the courts.  As you will see from the recent case entitled Churchill v. Town of Hamburg, 2020 N.Y. Slip Op. 05356 (4th Dep’t 2020), short-term rental restrictions may be ineffective if they are not properly placed within a municipality’s zoning ordinance.

Petitioners, Michael Churchill and Diana Stirling, sought to operate their residence in the Town of Hamburg, New York, as an Airbnb rental.  In 2017, they made application to the Planning Board requesting a special use permit to allow their residence to be used as a “tourist home.” The Petitioners claimed that “tourist homes” are a permitted principal use in the R-1 District with a special use permit from the Planning Board because Town Code § 280-31 states that all uses (except for golf clubs and hospitals) that are permitted in the R-E District are permitted in the R-1 District.  They also pointed out that the R-1 District regulations do not exclude “tourist homes.”

With respect to allowable uses in the R-E District, Town Code § 280-24 expressly provides:

Permitted uses and structures.

Uses and structures permitted in the R-E District are as follows:

A.  Principal uses and structures:

*  *  *

(6)   The following uses by special use permit authorized by the Planning Board (see Article XLVI):

*  *  *

(b)   Bed-and-breakfast establishments and tourist homes.

The Town’s Code Enforcement Official (“CEO”) concluded that a “tourist home” is not a permitted principal use in an R-1 District and denied the application.  Under the CEO’s interpretation of the Town Code provisions, the Petitioners would first have to obtain a use variance before applying for a special use permit from the Planning Board in order to operate their residence as an Airbnb rental.

The Petitioners requested an interpretation of the relevant Town Code sections and a review of the CEO’s determination from the Zoning Board of Appeals (“ZBA”).  Following a public hearing, the ZBA affirmed the CEO’s interpretation and determination.  The Petitioners then commenced an Article 78 proceeding seeking to annul the ZBA’s determination.  The Erie County Supreme Court denied the petition and an appealed ensued.

The Appellate Division, Fourth Department, agreed with the Petitioners that the ZBA’s interpretation of the Town Code lacked a rational basis and that the Supreme Court erred in sustaining the ZBA’s determination.

At the outset, the Court concluded that the Supreme Court failed to apply the clear language of the Town Code’s relevant provisions.  In the court’s own words, “a plain reading of sections 280-24 and 280-31 . . . unambiguously demonstrates that special uses are permitted principal uses, subject to authorization by the Planning Board.”

Contrary to the ZBA’s determination and the interpretation advocated by Town, the Appellate Division concluded that the Town Code establishes that special uses are permitted uses in specific districts.  However, in such cases, the burden is on an applicant for a special use permit to show that the proposed use is allowable within that district by establishing that the use has the requisite individual characteristics.

While it is obvious from its position in the litigation that the Town Board clearly did not intend “tourist homes” to be permitted uses, the Court was constrained to apply the plain language of the relevant code sections.  However, in pointing out that “if the Town Board had intended for special uses to be separate from principal uses, it would have separated them into their own category as it did with accessory uses,” the Court gratuitously provided the Town with a roadmap for amending its ordinance, if it wished to do so.