Opinion
2005-2133.
Decided March 28, 2007.
PETER G. CAFFERTY, Plaintiff Pro Se, Windsor, New York.
WILLIAM C. BRUNNER, Pro Se, Plaintiff Pro Se, Endwell, New York.
JOSEPH SLUZAR, Broome County Attorney, By: Robert G. Behnke, of counsel, Chief Assistant County Attorney, Broome County Attorney's Office, Edwin L. Crawford County Office Bldg., Binghamton, New York.
BUTLER BUTLER, P.C., By: Earl D. Butler, Esq., Attorneys for Defendants, Robert Barbara Hagen, Mark Kovaleski and Corey Real Estate Associates, Vestal, New York.
LEVENE, GOULDIN THOMPSON, LLP, By: Scott R. Kurkoski, Esq., Attorneys for Defendant, Ali A. Marhaba, Binghamton, New York.
McDONOUGH ARTZ, P.C., By: Philip J. Artz, Esq., Attorneys for Defendant, Lawrence Foster, Binghamton, New York.
POPE, SCHRADER SACCO, LLP, By: Kurt Schrader, Esq., Attorneys for Defendant, John Brant, Binghamton, New York.
Plaintiff Peter Cafferty is the former owner of a large amount of real property in Broome County, on which he and his business partner, plaintiff William Brunner, planned to construct a 160-home development. The development project was never completed, and plaintiffs experienced financial difficulties, including difficulty paying property taxes.
In February 1998, in preparation for a tax foreclosure proceeding, the County issued a list of delinquent taxes "for 1995 and other years," which included liens against Cafferty's properties in the following amounts: $27,722.37 plus interest from October 10, 1995, and $414.21 plus interest from October 10, 1996. Cafferty made some payments thereafter, but not, in the County's view, enough to satisfy his entire debt, which included not only the aforementioned sums, but all amounts due on prior installment payment plans (some of which included taxes assessed in 1994 and prior years). According to the County, Cafferty would have had to pay over $250,000 to stave off the pending foreclosure (Affidavit of Peter G. Cafferty, dated December 1, 2006, ¶¶ 9-14).
Plaintiffs opposed the foreclosure petition, to no avail, and a judgment foreclosing the subject liens was granted on October 28, 2003. No written decision was rendered specifically addressing plaintiffs' contentions, but the court did note in the judgment that plaintiffs' submissions had been considered. Neither plaintiff ever perfected an appeal from the judgment, and the properties were sold at auction on November 17, 2003. After the sales were approved by the County Legislature, deeds were delivered to the purchasers (many of whom are named as defendants herein).
The purchasers appear to have been named solely because their interests could be affected by a judgment in plaintiffs' favor; there are no allegations of any wrongdoing by them.
Plaintiffs now bring this action to set aside the foreclosure and sale on various grounds. The County and several of the other defendants have moved to dismiss the complaint, and plaintiffs have cross-moved for permission to amend their complaint (to add claims of fraud, and to add two defendants, spouses of previously-named buyers who were later discovered to be grantees as well), to compel disclosure by one of the buyer-defendants, and to disqualify County Attorney Robert Behnke from acting as counsel, on the ground that he is a necessary witness to the underlying events.
In their first cause of action, plaintiffs essentially contend that the county had no right to take title to the subject properties through foreclosure, because the tax obligations allegedly giving rise to the liens being foreclosed — those for tax years 1995 and 1996 — were fully paid prior to issuance of the judgment of foreclosure. Thus, they assert, the court was "without jurisdiction" to grant the judgment, and the resulting deeds were "a nullity" (Affidavit of Earl Butler, Esq., dated October 25, 2006, Exhibit A [Complaint], ¶¶ 37-39). In opposition to defendants' suggestion that this claim is barred by the doctrines of res judicata and collateral estoppel, because it could and should have been raised in the foreclosure action, plaintiffs urge that they did not have a full and fair opportunity to litigate these issues in that prior action, because the County fraudulently concealed the fact that the prior liens had been satisfied (Cafferty Affidavit, ¶¶ 3, 5, 8).
Plaintiffs' claims of fraud or lack of jurisdiction, as grounds for this attempt to collaterally attack the foreclosure judgment, are unavailing. Their allegations that the foreclosure court did not have "jurisdiction" to issue a judgment amounts to nothing more than an argument that the court's decision was wrong; they allege no facts that could support a finding that the court was without personal or subject matter jurisdiction. Even if the court's decision in the foreclosure action was erroneous, in that plaintiffs should have been deemed to have paid the 1995 and 1996 taxes, and the action against them dismissed on that basis (rather than a judgment entered foreclosing the liens at issue), those arguments cannot be made here, in a collateral attack on the judgment. Rather, they are issues of law that could have been raised in a motion for reargument or renewal, in County Court; by a motion to vacate the judgment, in County Court; or on appeal from County Court's judgment of foreclosure.
As for the fraud claim, even if all the facts alleged by plaintiffs in their complaint, and in opposition to the motion, are accepted as true, they do not provide a basis for relief from the judgment or consequential sale. The information that plaintiffs contend was "concealed" from them by the County consists essentially of statutes and rules (and the "fact" that the County did not comply with those standards) (Cafferty Affidavit, ¶¶ 24-40), and the list of delinquent taxes issued in 1998. Plaintiffs have not suggested any reason why they could not have discovered those matters during the original foreclosure action, by the same means used to uncover them more recently (e.g., Internet searches, which revealed a 1995 press release). Plaintiffs had access to the factual information, including the amounts they had paid and the amounts of taxes levied each year, at all relevant times. Accordingly, plaintiffs have not demonstrated that they have a viable cause of action for fraud, nor have they established that they did not have a full and fair opportunity, in the prior action, to litigate the issues raised here in regard to the alleged defects in the judgment of foreclosure.
Plaintiffs' second cause of action challenges the validity of the sale of several parcels of property, arguing, inter alia, that one parcel was sold to an individual who worked for the County, who should not have been permitted to bid at the sale, and that other parcels should not have been sold if the amount of unpaid taxes had been recouped by the sale of other parcels. The former claim essentially charges defendants with violating ethical standards, intended to protect the public from abuses of power. If plaintiffs were to prevail on that claim, the remedy would be to set aside the sale and return title to the property to the County. This is in the nature of a taxpayers' action, pursuant to General Municipal Law § 51 ( cf., Iocolano v City of Geneva, 26 Misc 2d 848, 848-849), which must be brought within one year of the alleged wrongdoing ( see, Clowes v Pulver, 258 AD2d 50, 55). It is therefore untimely, and must be dismissed on that ground.
The remainder of the allegations comprising the second cause of action do not state any claim upon which relief could be granted. Once title to the subject properties was vested in the County, by the judgment of foreclosure, the County was not constrained to sell only so much of the property as necessary to cover the underpayment of taxes (as plaintiffs suggest). Even if it had done so, plaintiffs would still have no right to recover the remainder of the property or any portion of it, all of their right, title and interest having been divested by the judgment.
The third cause of action charges violation of plaintiffs' civil rights, pursuant to 42 U.S.C. § 1983. Again, the record belies plaintiffs' assertion that they were denied due process in connection with the tax foreclosure and sale. Moreover, as defendants note, a municipality may only be held liable for a deprivation of civil rights, under the cited statute, if the challenged actions were undertaken pursuant to a municipal "policy or custom" ( see, Carattini v Grinker, 178 AD2d 307, 307-308, lv denied 80 NY2d 752; Simpson v New York City Transit Auth., 112 AD2d 89, 91, affd 66 NY2d 1010). Plaintiffs' failure to allege, or demonstrate, the existence of such a policy or custom, compels dismissal of that claim.
The fourth cause of action, which seeks to impose vicarious liability upon the County for the same acts of defendant Cahill that form the basis for the preceding three claims, must fall for the same reasons.
Accordingly, the motion to dismiss the complaint must be granted, and the cross-motion denied. This decision shall constitute the order of the court.
With plaintiff's proposed amended complaint consisting of over 60 pages and 404 paragraphs and, for the most part, restating the causes of action set forth in the original complaint (which has 13 pages and 76 paragraphs), while adding facts and some conclusory allegations of intentional or reckless conduct, bad faith or "evil motive" on the part of the County defendants, the court would not be inclined to permit the amendment, even if plaintiffs had demonstrated that their claims, as amended, had merit ( see, Bassim v Halliday, 234 AD2d 628, 630 [1996]).