Reconsidering the Special Facts Exception

Rocky Poin t involved a 17-acre parcel that had once been used as a drive-in movie, and more recently as a golf driving range. At essentially the same time in early 2000, the town initiated proceedings to rezone the property to a “commercial recreation” category that prohibited non-recreational uses, and the plaintiff's predecessor in title filed a site plan application for a commercial retail “big box.” Court rulings ultimately set aside that rezoning and a subsequent one on procedural grounds. Absent the rezonings, the property reverted to its original “J-2″ zoning classification. Commercial developments occupying sites of five acres or more were deemed “commercial centers” and prohibited in the J-2 zone. Approximately two and a half years after the original site plan application was filed, the town properly rezoned the parcel.

The plaintiff experienced a variety of delays between 2000 and late 2002 as it attempted to move its site plan to a public hearing while the invalid rezonings were being litigated. Throughout this time the site plan application never appeared on the Planning Board's agenda. The zoning board of appeals (ZBA) was made lead SEQRA agency although it had no pending application, and did not require an environmental impact statement until 10 months later. Although a 1996 comprehensive plan envisioned town-wide rezonings to the commercial recreation category, only the plaintiff's property had been so rezoned at the time it filed its special facts case at the end of 2002.

In 2004, the town successfully moved for summary judgment dismissing the case on the grounds that the plaintiff could not rely on the special facts doctrine because even under the J-2 zoning classification, its proposed big-box development was not an as-of-right use. In 2007, the Second Department modified the lower court's order, and reinstated the complaint, in view of the plaintiff's showing that it could prove selective enforcement by the town, because many other commercial site plans for properties exceeding five acres in size had received site plan approval without benefit of variances from the ZBA. 37 A.D.3d 805.

The town never appealed this ruling. The case was ultimately tried; the trial court found that the town had intentionally delayed the application and that plaintiff was entitled to have its site plan proceed to a public hearing under the J-2 zone without the need for any variances. In 2010, the Second Department reversed and dismissed the complaint, finding that plaintiff's proof below had not established malicious delay by the town. 93 A.D.3d 655.

The plaintiff successfully petitioned the Court of Appeals for leave, to address what it claimed was an erroneous requirement by the Second Department that a special facts plaintiff prove malice in connection with any delay. The plaintiff opined that this was a significant departure from the original quartet of Court of Appeals cases decided in the 1970s, which indicated that proof of merely negligent and unexplained delay is sufficient to justify special acts relief, if the plaintiff could also show that but for the delay, the plaintiff landowner would have been able to vest in its use before the zoning was changed. Our Lady of Good Counsel, Roman Catholic Church & School v. Ball, 45 A.D.2d 66, aff'd on opn. below, 38 N.Y.2d 780; Matter of Pokoik v. Silsdorf, 40 N.Y.2d 769; Amsterdam-Manhattan Associates v. Joy,'42 N.Y.2d 941; Matter of Faymor Development Co., Inc. v. Board of Standards and Appeals of the City of New York, 45 N.Y.2d 560.

The Court of Appeals Decision

The decision addresses both prongs of what a special facts plaintiff must prove in order to prevail, but leaves open a host of questions. The court described the as-of-right threshold for special facts this way: “In order for a land owner to establish entitlement to the request as a matter of right, the land owner must be in “full compliance with the requirements at the time of the application,” such that “proper action upon the permit would have given [the land owner] time to acquire a vested right” [citations omitted]. But what exactly does “full compliance” mean? We can all agree that an application that could not be approved absent a use variance would not satisfy this standard. But what about an application that requires only a de minimis or pro forma area variance?

The town in Rocky Point contended that plaintiff's application proposed a use that was prohibited in the J-2 zone and required a use variance, but it was undisputed that several years before, a supermarket site plan was approved on an over-five-acre J-2 parcel after the owner applied for and received a pro forma area variance; the ZBA did not require proof of the elements specified by N.Y. Town. L. ' 267-b for area variances.

The court's decision questions whether proof of malice is required or whether the plaintiff's “significant reliance on our decision in Faymor Dev.Co., Inc. v Bd. of Standards and Appeals of City of New York” [45 N.Y.2d 560 ] was justified. Faymor held that special facts doctrine applied when a governmental agency “intentionally or even negligently delayed action on an application for a permit or license until after the law had been amended to authorize denial of the application,” id. at 565 (emphasis supplied). The amicus curiae brief filed in support of the plaintiff's appeal by the Long Island Builders Institute urged that requiring proof of malice was an impossible real-world standard because “the overall [land use approval] process is typically so complicated that it can be hard to pinpoint which municipal actors are responsible for delays, and impossible to ferret out statements from such persons acknowledging that delay was intentional.”

Conclusion

The Court of Appeals left the question it posed unanswered. In this author's opinion, the appellate courts of this state need to return to Faymor's holding and eliminate the additional requirement that a special facts plaintiff prove governmental malice. Otherwise, the “court-created engine of justice” (Matter of Pokoik v. Silsdorf, 40 N.Y.2d 769,773) envisioned by the Court of Appeals almost 40 years ago will cease to have any vitality in New York.

Linda Margolin is a member of Bracken Margolin Besunder LLP, and was the lawyer for the landowner in the Rocky Point case.

Special facts is a court-created equitable doctrine that allows a land use applicant to avoid the impact of a change of zone enacted while the application is pending, by showing significant governmental delay of the application together with proof that but for the delay, the landowner would have been able to vest in its use before the zoning was changed. In November 2013, the Court of Appeals decided Rocky Point Drive-In v. Town of Brookhaven (Rocky Point), a case that the plaintiff (represented by the author) hoped would not only allow it to prevail, but would also clarify the special facts doctrine.

The Court of Appeals decided that the plaintiff had no case, in a decision that highlights, but unfortunately does not clarify, New York's policy on when plaintiffs may take advantage of the special facts doctrine.

Factual Background

Rocky Poin t involved a 17-acre parcel that had once been used as a drive-in movie, and more recently as a golf driving range. At essentially the same time in early 2000, the town initiated proceedings to rezone the property to a “commercial recreation” category that prohibited non-recreational uses, and the plaintiff's predecessor in title filed a site plan application for a commercial retail “big box.” Court rulings ultimately set aside that rezoning and a subsequent one on procedural grounds. Absent the rezonings, the property reverted to its original “J-2″ zoning classification. Commercial developments occupying sites of five acres or more were deemed “commercial centers” and prohibited in the J-2 zone. Approximately two and a half years after the original site plan application was filed, the town properly rezoned the parcel.

The plaintiff experienced a variety of delays between 2000 and late 2002 as it attempted to move its site plan to a public hearing while the invalid rezonings were being litigated. Throughout this time the site plan application never appeared on the Planning Board's agenda. The zoning board of appeals (ZBA) was made lead SEQRA agency although it had no pending application, and did not require an environmental impact statement until 10 months later. Although a 1996 comprehensive plan envisioned town-wide rezonings to the commercial recreation category, only the plaintiff's property had been so rezoned at the time it filed its special facts case at the end of 2002.

In 2004, the town successfully moved for summary judgment dismissing the case on the grounds that the plaintiff could not rely on the special facts doctrine because even under the J-2 zoning classification, its proposed big-box development was not an as-of-right use. In 2007, the Second Department modified the lower court's order, and reinstated the complaint, in view of the plaintiff's showing that it could prove selective enforcement by the town, because many other commercial site plans for properties exceeding five acres in size had received site plan approval without benefit of variances from the ZBA. 37 A.D.3d 805.

The town never appealed this ruling. The case was ultimately tried; the trial court found that the town had intentionally delayed the application and that plaintiff was entitled to have its site plan proceed to a public hearing under the J-2 zone without the need for any variances. In 2010, the Second Department reversed and dismissed the complaint, finding that plaintiff's proof below had not established malicious delay by the town. 93 A.D.3d 655.

The plaintiff successfully petitioned the Court of Appeals for leave, to address what it claimed was an erroneous requirement by the Second Department that a special facts plaintiff prove malice in connection with any delay. The plaintiff opined that this was a significant departure from the original quartet of Court of Appeals cases decided in the 1970s, which indicated that proof of merely negligent and unexplained delay is sufficient to justify special acts relief, if the plaintiff could also show that but for the delay, the plaintiff landowner would have been able to vest in its use before the zoning was changed. Our Lady of Good Counsel, Roman Catholic Church & School v. Ball , 45 A.D.2d 66, aff'd on opn. below, 38 N.Y.2d 780; Matter of Pokoik v. Silsdorf , 40 N.Y.2d 769; Amsterdam-Manhattan Associates v. Joy, '42 N.Y.2d 941; Matter of Faymor Development Co., Inc. v. Board of Standards and Appeals of the City of New York , 45 N.Y.2d 560.

The Court of Appeals Decision

The decision addresses both prongs of what a special facts plaintiff must prove in order to prevail, but leaves open a host of questions. The court described the as-of-right threshold for special facts this way: “In order for a land owner to establish entitlement to the request as a matter of right, the land owner must be in “full compliance with the requirements at the time of the application,” such that “proper action upon the permit would have given [the land owner] time to acquire a vested right” [citations omitted]. But what exactly does “full compliance” mean? We can all agree that an application that could not be approved absent a use variance would not satisfy this standard. But what about an application that requires only a de minimis or pro forma area variance?

The town in Rocky Point contended that plaintiff's application proposed a use that was prohibited in the J-2 zone and required a use variance, but it was undisputed that several years before, a supermarket site plan was approved on an over-five-acre J-2 parcel after the owner applied for and received a pro forma area variance; the ZBA did not require proof of the elements specified by N.Y. Town. L. ' 267-b for area variances.

The court's decision questions whether proof of malice is required or whether the plaintiff's “significant reliance on our decision in Faymor Dev.Co., Inc. v Bd. of Standards and Appeals of City of New York” [45 N.Y.2d 560 ] was justified. Faymor held that special facts doctrine applied when a governmental agency “intentionally or even negligently delayed action on an application for a permit or license until after the law had been amended to authorize denial of the application,” id. at 565 (emphasis supplied). The amicus curiae brief filed in support of the plaintiff's appeal by the Long Island Builders Institute urged that requiring proof of malice was an impossible real-world standard because “the overall [land use approval] process is typically so complicated that it can be hard to pinpoint which municipal actors are responsible for delays, and impossible to ferret out statements from such persons acknowledging that delay was intentional.”

Conclusion

The Court of Appeals left the question it posed unanswered. In this author's opinion, the appellate courts of this state need to return to Faymor's holding and eliminate the additional requirement that a special facts plaintiff prove governmental malice. Otherwise, the “court-created engine of justice” ( Matter of Pokoik v. Silsdorf , 40 N.Y.2d 769,773) envisioned by the Court of Appeals almost 40 years ago will cease to have any vitality in New York.

Linda Margolin is a member of Bracken Margolin Besunder LLP, and was the lawyer for the landowner in the Rocky Point case.