Opinion
105328/11
09-19-2011
1688 Rojav Realty LLC, Petitioner, v. David M. Frankel, New York City Commissioner of Finance, and the New York City Department of Finance, Respondents.
Jr., J.
The application by petitioner for an order pursuant to C.P.L.R. Article 78, declaring respondents' determination to deny petitioner's benefits under the Industrial and Commercial Abatement Program ("ICAP"), dated May 5, 2011, as arbitrary and capricious is denied and the petition is dismissed. The motion by respondent to dismiss the Article 78 proceeding on the ground that the court lacks subject matter jurisdiction is granted. Petitioner's further cross-motion to deny respondent's motion to dismiss or in the alternative to convert the instant proceeding into an R.P.T.L. Article 7 is also denied without prejudice and with leave to refile as an Article 7 proceeding.
Petitioner 1688 Rojav Realty LLC ("Petitioner" or "Rojav") asserts that it is a "small-time operation" which built a commercial building in specific reliance on receiving ICAP benefits. The instant petition concerns a property located at 1688 Westchester Avenue, Bronx, New York, Block 3748, Lots 1, 2, and 26. On March 2, 2011, the New York City Department of Finance ("DOF") denied petitioner benefits under ICAP.
Petitioner asserts that respondents' determination should be reversed because it was arbitrary, capricious or constituted an abuse of discretion under C.P.L.R. §7803(3). Mr. Rodolfo Fuertes, a member of Rojav, filed the "Preliminary Application" for an abatement of taxes under ICAP in person on or about January 30, 2009. Petitioner further states that Mr. Fuertes was granted an extension by two DOF employees beyond the one year deadline to submit the "Final Application" due to the size of the construction project. On February 2, 2009, petitioner received a letter of acknowledgment from the DOF stating that it had received petitioner's "Preliminary Application for Certification of Eligibility." A building permit was issued on October 14, 2009, but it did not permit construction to proceed because the Department of Buildings required a revised set of drawings for construction. Petitioner filed its "Final Application" on or about January 31, 2011. On March 2, 2011, petitioner was notified by the DOF that because the "Final Application" was not received within the one year deadline, petitioner's application was denied.
In support of its petition, petitioner submits copies of correspondence between Mr. Fuertes and the DOF. Petitioner submits two acknowledgment letters from the DOF dated February 2, 2009 and February 28, 2011 to show the change in language used by the DOF regarding the effective date of eligibility. The letter dated February 2, 2009 reads in pertinent part that the "Final Application" must be filed "as soon as possible after the effective date of eligibility. The effective date of eligibility is the date of the first building permit that allows construction to proceed..." (Verified Petition, Exhibit A). In contrast, the letter dated February 29, 2011 reads that the "Final Application" must be filed "within one (1) year after the building permit is received." (Verified Petition, Exhibit E). Pursuant to the February 2, 2009 letter, Rojav filed its "Final Application" ten months after the date of the first building permit that allowed construction to proceed. The DOF used the date of the first building permit issued, October 14, 2009, in making its determination. Petitioner did not submit any writings memorializing the granting of an extension of the "Final Application" filing deadline. Petitioner argues that the DOF's denial of petitioner's ICAP benefits based upon differing dates of eligibility was arbitrary and capricious.
Respondents oppose petitioner's application in its entirety and move to dismiss the proceeding on the ground that this court lacks subject matter jurisdiction to review an excessive tax assessment. Respondents further argue that petitioner has failed to meet the exhaustion requirement for commencing a proceeding either under C.P.L.R. Article 78 or R.P.T.L. Article 7. Pursuant to C.P.L.R. §7801, a proceeding under Article 78, "shall not be used to challenge a determination which is not final or can be adequately reviewed by appeal to a court or to some other body or officer..." Under R.P.T.L. Arcticle 7, a taxpayer may not seek judicial redetermination of a tax assessment unless he has exhausted administrative remedies. See, Young Men's Christian Ass'n v. Rochester Pure Waters Dist., 37 NY2d 371 (1975); Respondents assert that the earliest in which the property could receive a partial tax exemption is the 2012/13 tax year. Assessments for the 2012/13 tax year will not be finalized until May 2012. Since a final determination for the 2012/13 tax year has not been determined, petitioner has not exhausted all administrative remedies. The fact that assessments for the 2012/13 tax year have yet to be determined renders petitioner's application premature.
In reply, petitioner submits a cross-motion stating that Article 78 is the proper vehicle for this matter to be heard by the court. In support, petitioner submits an e-mail from the DOF Office of Legal Affairs directing Petitioner to bring an Article 78 proceeding and stating that all administrative remedies had been exhausted. (Rojav Affirmation in Opposition, Exhibit 1). In the alternative, petitioner argues that the matter is ripe for review. Petitioner contends that the DOF increased the market value of the property due to new construction in the amount of $1,051,000 for the 2011/12 tax year. (Rojav Affirmation in Opposition, Exhibit 2). Petitioner asserts that since the City is assessing and taxing Rojav for the new building it should be able to bring an Article 7 proceeding at this time and this court should convert this action to an Article 7 proceeding.
In response, respondents correctly state that subject matter jurisdiction cannot be conferred upon a court by consent or stipulation. See, BLF Realty Holding Corp. v. Kasher, 707 N.Y.S.2d 793 (2000); Robinson Oceanic Steam Nav. Co., 112 NY 315 (1889). Respondents also contend that petitioner has until October 25, 2011 to timely commence a proceeding under Article 7 for the assessed valuation for the 2011/12 tax year. However, at this time, a claim for the 2012/13 tax year is not ripe for adjudication.
It is well established that a tax certiorari proceeding pursuant to R.P.T.L. Article 7 is a taxpayer's exclusive remedy to challenge an allegedly wrongful denial of a partial exemption. See, Stabile v. Half Hollow Hills Central School District of Huntington and Babylon, et. al.,83 AD2d 945 (2nd Dept. 1981); Laurel Hill Farms, Inc. v. Board of Assessors of Nassau County, 51 AD3d 794 (2nd Dept. 2008); Matter of Green 485 Owners LLC v. Tax Commn of the City of New York., 2009 NY Misc. LEXIS 4917 (NY Sup. Ct. Oct. 26, 2009). In Rochdale Village, Inc. v. Finance Adm'r of New York , 159 AD2d 494 (2nd Dept. 1990), plaintiff sought a declaratory judgment that it was entitled to a partial exemption for several non-commercial lots. The court ruled that since a challenge to the denial of a partial exemption fell within the definition of "excessive assessment" as defined in RPTL §701(4)(b), the Article 78 proceeding was barred. There are two exceptions to the general rule. A taxpayer may bring an Article 78 proceeding when the tax is claimed to be unconstitutional or the jurisdiction of the taxing authority is being challenged. Hewlett Associates v. New York , 57 NY2d 356 (1982). In addition, a petitioner may collaterally attack the taxing authority's determination when challenging the method of assessment. Krugman v. Board of Assessors of the Village of Atlantic Beach, 141 AD2d 175 (2nd Dept. 1988). None of these exceptions apply in the instant petition.
This court finds that the crux of petitioner's claim is that it will be subject to an excessive tax assessment due to the denial of ICAP benefits by the DOF. An action to challenge an excessive tax assessment falls solely within the purview of R.P.T.L. Article 7 and not C.P.L.R. Article 78. Petitioner can file a timely action for its 2011/12 tax year claim under Article 7. This court also finds that since final tax assessments have yet to be determined for tax year 2012/13, petitioner's application is premature.
Accordingly, it is hereby,
ADJUDGED, that the petition is denied without prejudice, without costs and disbursements to either party, and with leave to refile as an Article 7 for the 2011/12 tax year. Petitioner's requests to convert this Article 78 proceeding and to change venue from New York County to Bronx County are also denied.
ENTER:
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J.S.C.