Opinion
711379/20
10-14-2020
In the Matter of the Application of CONDOMINIUM BOARD OF the PEAR TREE PLACE CONDOMINIUM, Plaintiff, for a Judgment under Article 78 of the Civil Practice Law and Rules v. NEW YORK CITY WATER BOARD and New York City Department of Environmental Protection, Defendants.
The following numbered papers read on this hybrid Article 78 proceeding and plenary action for declaratory judgment and other relief, brought by petitioner/plaintiff Condominium Board of the Pear Tree Place Condominium, (Pear Tree), and motion pursuant to CPLR 3211 (a) (7) to dismiss the hybrid Article 78 petition and verified complaint by respondent/defendants New York City Water Board, (Water Board), and New York City Department of Environmental Protection (DEP). Due to an e-filing anomaly, both seq 1 and seq 2 include the same papers filed for the above proceeding and motion, and as such, both shall be determined herein.
Papers/Numbered
Notice of Petition and Petition - Exhibits EF 7-23
Answer and Answering Affidavits- Exhibits EF 24-60
Reply Affidavits EF 61
Upon the foregoing papers it is ordered that the petition and motion are determined as follows:
In this hybrid Article 78 proceeding and plenary action for declaratory judgment and other relief, the petitioner Condominium Board of the Pear Tree Condominium, (Pear Tree), seeks to reverse the administrative decision of DEP, upheld on appeal by the Water Board, which determined that the water and sewer charges, servicing the property designated as 105 3rd Avenue, including late payment charges, fine for illegal removal of a water meter, theft of services and ACC charges due to use of water without a meter, are the obligations of Pear Tree. Pear Tree alleges that, while it does own 109 3rd Avenue and the affiliated address of 203 East 13th Street, it does not own, nor have any affiliation with the property located at 105 3rd Avenue. In addition to challenging these charges, in its plenary action, Pear Tree also demands that the water lien be removed from its property, having been placed without a hearing or opportunity to be heard. Its plenary § 1983 action, also seeks attorney's fees and other relief for violation of its constitutional rights.
The Water Board has served and filed its answer to the petition and complaint, and has simultaneously filed a motion to dismiss pursuant to CPLR § 3211 (a) (7). Since the respondent has filed its answer to the Article 78 proceeding, and both parties have filed all supporting documentation, the court will render a determination on the merits of the Article 78 proceeding. The Water Board's motion is therefore denied, as it is subsumed in this determination on the merits.
In its petition, Pear Tree alleges that it is a condominium formed in 1987. It includes two buildings, one 4 story building located at 109 3rd Avenue consisting of one commercial unit and 13 residential units, and a 4 story building with a commercial unit and one residential unit. Pear Tree claims that as of 1994, neither the owners, nor their managing agents, received any water billing invoices from the Water Board. Pear Tree contends that it became aware of the subject water charges being assessed against it, for the first time, on April 16, 2016 when it received a notice of a lien on its property for water charges incurred at the service address of 105 3rd Avenue. On April 22, 2016, Sandberg Management Corp., (Sandberg), nonparty managing agent for Pear Tree, responded by letter to DEP, seeking explanation and clarification, emphasizing that they are not affiliated with 105 3rd Avenue and provided the correct address of its client Pear Tree. In its reply, DEP asserted that Account No. XXXXXXXXX2001, (hereinafter Acct No 2001), with a balance of $65,876.71 was due and owing for water and sewer charges for the period 10/13/94-9/14/07. DEP also stated that a responding letter was sent to JSP Realty Co., a nonparty entity, in response to a "customer call". Petitioner claims it had no knowledge of JSP Realty Co., until such reference, and that it had no affiliation or involvement with that entity whatsoever.
Petitioner further contends that on or about June 23, 2016, Sandberg filed a customer dispute form that again advised DEP that Pear Tree's proper address is 109 3rd Avenue, or 203 East 13th Street. Pear Tree continued its contention that the subject water service charges were incurred by the property owner of 105 3rd Avenue, and not Pear Tree. In response, DEP stated that after its review of "Pear Tree's account", it found that the service address was 105 3rd Avenue, that DEP inadvertently stopped billing the property (listed as 105 3rd Avenue, but with Block and Lot of 469/7501), that the balance was $34,909 plus late payment charges of $33,957 totaling $68,897.31, that no payments were ever made on this account, that DEP sent the bill to all addresses on record with DEP for this water service, (without stating which addresses these were), that an inspection took place on May 19, 2016 whereby it was discovered that the water meter originally installed was not in place (without stating the address for where this water meter was previously located), that such was in violation of the Water Board regulations, and that Pear Tree had 120 days to dispute these findings.
On January 17, 2017, Sandberg requested a statement of the charges for the Pear Tree property at 109 3rd Avenue, 203 East 13th Street. In reply, DEP stated the service address was 105 3rd Avenue, and provided billings from June 1995-January 10, 2017.
On March 15, 2017 Pear Tree timely filed its appeal to the Water Board decision dated November 16, 2016. In its appeal, Pear Tree again explained its contention that there is a discrepancy of address designation which resulted in the incorrect billing to Pear Tree of another property's water services. Pear Tree pointed out that all along the process, it had insisted that its address was 109 3rd Avenue, or 203 East 13th Street, that, its Block and Lot designation was 469/7501, whereas the Block and Lot for 105 3rd Avenue was 468/7, and that each property is separate and distinct. Most notably, Pear Tree explained that its property is located on the northeasterly corner of 3rd Avenue and East 13th Street, while 105 3rd Avenue is located on the southeasterly corner of the same intersection, across the street.
In its denial of Pear Tree's appeal, the Water Board stated that "City records reflect that petitioner is the owner of the property designated as Tax Block 469/Lot 7501." The Water Board observed, and relied upon notations on records of the Office of Registrar indicating 105 3rd Avenue as the address associated with the subject property, the DOB property profile overview indicating the range of 105-107 3rd Avenue and 203 East 13th Street, the DOF property information indicating 105 3rd Avenue as the address associated with the subject property, and the Land Use Map indicating 105 3rd Avenue as the address associated with the subject property. Cryptically, a copy of the denial was mailed to 99-105 3rd Avenue Realty Corp., not a party to this proceeding or action, but the name of the entity includes the address to which water service was provided and for which the bills were incurred.
In an Article 78 proceeding involving a decision made by an administrative agency without a hearing, the scope of the court's review is limited to a determination as to whether the agency used improper procedure, error in law, or was an arbitrary and capricious decision. (See Kripalani v. State Div. Of Housing & Community Renewal, 126 AD3d 904 [2d Dept 2015.) The courts have the power to review the New York Water Board's determinations and may overturn determinations if the action is arbitrary and capricious, in that, it lacks a rational basis. (See Citylights at Queens Landing, Inc., v. New York City Department of Environmental Protection , 62 AD3d 871 [2d Dept 2009] ; Westmoreland Apt. Corp., v. New York City Water Bd, 294 AD2d 587 [2d Dept 2002] ; Matter of Amalgamated Warbasse Houses, Inc. v. Tweedy , 33 AD3d 794 ; Matter of Village of Scarsdale v. New York City Water Bd., 15 AD3d 590, CPLR 7803[3].) An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts. (See Matter of Pell v. Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County , 34 NY2d 222 [1974].)
PAL § 1045-j (5), states in its pertinent part, that water charges, "if not paid when due shall constitute a lien upon the property served and a charge against the owners thereof." In addition, in the Water Board's regulations, Part VI of the Rate Schedule states that all such charges are the legal responsibility of the owner of a property receiving water and wastewater treatment. Since the Water Board has made a conclusive determination that the water service was provided to 105 3rd Avenue, the question before the court is limited to whether the Water Board's determination that Pear Tree is the property owner of 105 3rd Avenue is rationally based. For the reasons stated below, the Water Board's decision is not rational and is not based on relevant facts.
A substantial indication that Pear Tree may not be the owner of 105 3rd Avenue, is that the Block/Lot for 105 3rd Avenue is 468/7, whereas the Pear Tree property Block and Lot is 469/7501, clearly identifying its location in Block 469, not Block 468. The fact that the properties are on different blocks indicate they are on opposite sides of the street as Pear Tree contends. Usually, real estate tax designations as Lot 7501, is a designation made for real estate tax purposes to indicate the property was converted to a condominium. The tax lots for the condominium are given to each individual unit as a separate tax lot, for example, "1001, et seq." However, the newly created "7501" replaced the former "dropped lot", and now consists of the common areas of the condominium property. The former dropped lots would likely have a designation indicating the Block, here 469 and Lot as perhaps 1. The former tax lot, when viewed on ACRIS should contain all the property ownership documents that were filed on that property. Real property ownership issues of real property are usually determined by deeds and other historical documents commonly on record with ACRIS. (See O'Brien v. Town of Huntington, 66 AD3d 160 [2d Dept 2009] ; Morganteen v. Brenner, 28 AD3d 725 [2d Dept 2006] ; see also Watson v. Colwell, 2008 WL 11215 [Sup Ct, Schuyler Cty 2008].) However, instead of relying upon legally accepted forms of proof of ownership of real property, the Water Board asserts that it based its conclusion upon notations made by the Department of Buildings, Department of Finance and the Department of Community Planning in their records ascribing addresses to both properties as "105 3rd Avenue". In addition, the Water Board points to a declaration by one of its inspectors in his inspection report dated March 27, 2018 that the properties were owned by the same entity, (Pear Tree). For the purposes of demonstrating whether a party owns real property, mere notations in a city record are legally insufficient to provide any probative value. (See O'Brien, 66 AD3d 160 ; Morganteen, 28 AD3d 725.) Furthermore, despite the conclusory statement by one of its inspectors, a review of all the inspection reports submitted by the Water Board in support of its motion, revealed several indications of confusion which raised, rather than resolved the address and property ownership issue. Notably, the May 4, 2017 inspection report indicated that both 105 3rd Avenue and 109 3rd Avenue are separate and distinct condominium buildings, and verified that each have their own separate and distinct water services as seen in each of their respective basements. This report describes 105 3rd Avenue having a 3" water pipe with no meter, and 109 3rd Avenue having a 2" water pipe with no meter. Even the March 27, 2018 inspection report stated that both properties have separate basements and separate water services. A bare conclusory statement by a water inspector is not a statement made by an individual with knowledge of whether the real property is owned by one entity or another. It is noted that the water bills sent out by the Water Board refer to only one account which had a prior meter attached to what appears to be the 3" water pipe, and nothing is mentioned regarding the water service through the 2" water pipe. These bills referred only to 105 3rd Avenue, and were sent to JPS Realty Co, or Sandberg Management Corp.
Here, the evidence submitted by the Water Board demonstrates confusing and conflicting facts that makes any determination of real property ownership arbitrary and capricious and not based on any relevant facts to support its conclusion. (See Amerino v. State, 35 Misc 3d 1239 (A) [Ct of Claims, 2012].) Under these circumstances, where conflicting evidence between the inspectors shows the existence of two separate water pipes, two separate services, two separate condominium buildings with two separate ownerships severely complicate this matter. Attributing water service to the proper owner is the duty of the Water Board, and it must do so in a manner that is not arbitrary and capricious. The rationale that administrative notations of addresses on record must be taken as authoritative truth, definitively demonstrating ownership of real property is not legally supported, and is seriously flawed, and incorrect. Historical title records, such as deeds, especially involving dropped lots, provide the only reliably accurate and definitive basis to ascertain real property ownership. (See O'Brien, 66 AD3d 160 ; Morganteen, 28 AD3d 725.)
At this time, it is clear that neither party has, as of yet, submitted the sufficient evidentiary documents necessary to clarify ownership of the subject property, nor has DEP differentiated the two separate water services. The very nature of this confusion leaves the impression that even the present water account and water meter may be billing to the wrong property. It is noted that once the billing is clarified, it seems likely that there will be two accounts, one for each of the two separate properties, and that the Water Board will be able to accurately bill the proper owners for the water services received.
Therefore, it is ordered that the petition is granted only to the extent that the matter is remanded for further proceedings to determine legal ownership of the property located at 105 3rd Avenue, and until such time a determination is made, the plenary action is to be held in abeyance, and, in the event it is found that the petitioners are not the legal owners of 105 3rd Avenue, the action may be restored upon motion.