Opinion
December 14, 1995
Appeal from the Supreme Court, Clinton County (Ryan, Jr., J.).
In 1990 petitioner moved two mobile homes onto his property in the Town of Beekmantown, Clinton County, which he joined to form a single dwelling. His subsequent application for a building permit was denied by respondent Town Code Enforcement Officer on the ground the dwelling did not meet the requirements of the State Uniform Fire Prevention and Building Code (9 N.Y.CRR part 600). Petitioner appealed this determination to respondent Uniform Code Board of Review (hereinafter the Board) which affirmed, relying on the regulation defining "mobile homes" (9 NYCRR 606.3 [former (a) (129)]). Supreme Court annulled the Board's determination in a CPLR article 78 proceeding on the ground that the aforementioned regulation was improperly promulgated. Thereafter, it awarded petitioner $3,240 for counsel fees and other expenses pursuant to CPLR article 86. This appeal by the State and Board (hereinafter collectively referred to as respondents) ensued.
We reverse. Pursuant to CPLR 8601 (a), "a court shall award to a prevailing party * * * fees and other expenses incurred by such party in any civil action brought against the state, unless the court finds that the position of the state was substantially justified or that special circumstances make an award unjust". The issue to be determined in this case is whether respondents' position in the underlying CPLR article 78 proceeding was substantially justified. Even though respondents did not prevail in the underlying proceeding, their position can be deemed substantially justified if they can show that it had a reasonable basis, both in law and fact ( see, Matter of New York State Clinical Lab. Assn. v Kaladjian, 85 N.Y.2d 346, 356-357; Matter of Serio v New York State Dept. of Correctional Servs., 215 A.D.2d 835, 836). We also note that since CPLR article 86 is in derogation of common law, it should be strictly construed ( see, Matter of Scibilia v Regan, 199 A.D.2d 736, 737).
Here, based upon our review of the record, we conclude that Supreme Court abused its discretion when it determined that respondents' position in the underlying proceeding was not substantially justified ( see, Matter of Centennial Restorations Co. v Abrams, 202 A.D.2d 721, 722, lv dismissed 83 N.Y.2d 952). Notably, respondents have shown that in reaching its determination the Board applied the seemingly unambiguous language of a previously unchallenged regulation, which it was bound to follow, that had been promulgated by an unrelated State agency ( see, Matter of Frick v Bahou, 56 N.Y.2d 777, 778; Matter of Degnan v Constantine, 189 A.D.2d 423, 424). Under these circumstances, we conclude that respondents' position had a reasonable basis and thus was substantially justified.
Cardona, P.J., Mikoll, Crew III and Yesawich Jr., JJ., concur. Ordered that the judgment is reversed, on the law, without costs, and application denied.