Development

AppDiv, Second Dept. (memorandum opinion)

In an action by neighbor to enjoin landowner's alleged violation of the New York City zoning ordinance, landowner appealed from Supreme Court's orders granting a motion by neighbor's counsel to be relieved, and denying landowner's motion to dismiss the complaint for lack of standing and lack of personal jurisdiction. The Appellate Division dismissed the appeal with respect to neighbor's counsel, and affirmed denial of the motion to dismiss, holding that neighbor had established standing and landowner had failed to demonstrate that he was not properly served with the complaint.

In dismissing landowner's appeal from the order relieving neighbor's counsel, the Appellate Division held that landowner was not aggrieved by that order. In affirming denial of landowner's motion to dismiss the complaint, the court emphasized that neighbor's property was in close proximity to landowner's, and neighbor's interests were within the zone of interests protected by the zoning ordinance. As a result, neighbor had standing to bring the action. The court also rejected landowner's claim that Supreme Court lacked personal jurisdiction, noting that landowner failed to submit a sworn denial of receipt of process to rebut the presumption of proper service.

COMMENT

Even if a statute appears to vest exclusive power to enforce an ordinance with the city or its officials, the Court of Appeals has held that a close neighbor may maintain an action to enjoin the continuance of a zoning violation. In Little Joseph Realty v. Town of Babylon, 41 N.Y.2d 738, the court held that a landowner had standing to maintain an action to enjoin the construction of an asphalt plant on a neighboring parcel of land in violation of zoning restrictions despite the language of section 268 of the Town Law, which grants the power to enjoin zoning violations to town authorities, and only extends this power to a group of three taxpayers, acting in concert, when the town fails or refuses to take action within 10 days of receiving written notice of a request to enforce. The court indicated that these provisions could not diminish the right of one who suffers special damages to take legal action. The court suggested that section 268's requirements were directed at resident taxpayers merely suffering from general inconvenience experienced by the public at large.

In order to successfully establish special damages, a neighbor must show that landowner's forbidden activity depreciated in the value of neighbor's premises in some way other than diversion of the neighbor's business. In Cord Meyer Development Company v. Bell Bay Drugs, 20 N.Y.2d 211 , the court held that the owner of a pharmacy lacked standing to enjoin the defendant from operating a nearby pharmacy in violation of town zoning restrictions. The court indicated that property owners have no vested rights in monopolies created by zoning laws and therefore a private action could not be maintained where the sole damage the pharmacy owner would suffer was diversion of business.

Additionally, a neighbor must prove diminution in the value of his or her property by offering specific, detailed evidence. In Marlowe v. Elmwood, 12 A.D.3d 742, the court held that a real estate appraiser's opinion that noise associated with children's activities would detract from the value of nearby properties was insufficient to establish special damages. Without any quantification of specific property values or the diminution attributable to the landowner's operation of a summer camp, the neighbors failed to produce the detailed evidence necessary to establish standing. Similarly, in Camarda v. Vanderbilt, 147 A.D.2d 607, the court held that evidence of special damages was insufficient when it was merely based on round figures, with no attempt at itemization. Thus, the neighbors, who made a general claim that the value of neighboring properties had diminished by approximately $5,000 because of the landowner's actions, lacked standing to enjoin landowner from maintaining flea markets on its property in alleged violation of zoning regulations.

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Constitutional Claims Ripe, Despite Absence of Final Decision

East End Resources, LLC v. Town of Southold Planning Board

NYLJ 1/29/16, p. 27, col. 6

AppDiv, Second Dept. (memorandum opinion)

In landowner's hybrid action against the town for violation of landowner's constitutional rights, and article 78 proceeding to compel the planning board to conduct a hearing on its site-plan application, the town appealed from Supreme Court's denial of its motion for summary judgment dismissing several of landowner's claims. The Appellate Division modified to dismiss the due-process claims on the ground that landowner had no cognizable property interest, to dismiss the state constitutional equal protection claim for failure to serve a notice of claim, and to dismiss the article 78 proceeding as academic because the planning board had conducted a public hearing on the application.

In 2002, landowner contracted to purchase 6.75 acres in the town. The town then imposed a moratorium on all residential site-plan approvals. When the moratorium expired, landowner submitted an application for construction of a 24-unit senior housing development on the parcel. Then, in 2008, landowner submitted an amended site-plan application. Landowner later brought this proceeding alleging that the town planning board and the town board deliberately and systematically delayed review of its site-plan application. Landowner sought to compel the planning board to hear the application, and also sought damages for violation of its due process and equal protection claims. The town defendants sought summary judgment dismissing the claims, but Supreme Court denied the motion. The town defendants appealed.

In modifying, the Appellate Division first concluded that Supreme Court had properly rejected the town defendants' claim that the constitutional claims were not ripe for judicial review. Although the court acknowledged that a claim against a land use board is not generally ripe until a government entity has made a final decision, the court noted that in this case, landowner had raised a triable issue of fact about whether the town defendants would use repetitive and unfair procedures to avoid making a final decision. Because ripeness was the only ground the town defendants had raised for dismissal of the federal equal protection claim, the court concluded that Supreme Court had properly denied summary judgment on that claim.

With respect to the due process claims, however, the court concluded that although the claims were ripe, Supreme Court should have dismissed because the planning board had significant discretion in reviewing the site plan application. As a result, landowner had no cognizable property interest in approval of the application, so the due process claims should have been dismissed. As to the state constitution equal protection claim, the court held that landowner had not satisfied a condition precedent: service of a notice of claim on the town defendants. Finally, with respect to the article 78 proceeding, the court held that the planning board had, in fact, held a public hearing on landowner's application, rendering the article 78 proceeding academic.

COMMENT

C.P.L.R. ' 7801 precludes a party from challenging a non-final determination. When a landowner applies for site plan approval from a land use board, the landowner may not generally bring an Article 78 proceeding to challenge the board's action until the board has definitively approved or denied the application; a letter from municipal officials indicating that certain conditions may be placed on review of landowner's application does not constitute a final decision. For instance, in Sterling Idea Ventures v. Planning Bd. of Town of Southold, 173 A.D.2d 475, the Second Department dismissed an article 78 proceeding on finality grounds when landowner instituted an Article 78 proceeding after the town planning board notified the landowner by letter that its pending application for site plan approval would now be retroactively reviewed under a zoning code passed after the submission of its application. The court found the letter did not amount to final administrative action, because the letter expressly stated that the application was still under review pending receipt of revised site plans. As a result, the board had taken no definitive position that had a direct, immediate effect on the applicant.

A landowner's federal constitutional challenge to a land use board's determination is not generally ripe unless the landowner establishes finality by applying for, and being denied, variance allowing development. In S&R Development Estates, LLC v. Bass, 588 F.Supp.2d 452, the Southern District granted the zoning board's motion to dismiss, holding that developer's due process and equal protection challenges to a board's determination that landowner's parcel was located in a single-family zoning district were unripe because landowner had never sought a variance to permit a nonconforming use.

Although courts have articulated a futility exception to the finality requirement, they have generally applied the exception only to dismiss landowner's claims on the merits. For instance, in Honess 52 Corp. v. Town of Fishkill, 1 F.Supp.2d 294, the Southern District, while dismissing landowner's substantive due process claims on the merits, found that landowner's allegations of obstruction and delay made its claim ripe for adjudication despite the absence of a final decision on the site plan. In Honess, after originally granting site plan approval, the board endlessly applied conditions and indicated concern over proposed development's density, pressuring landowner into continuously modifying the size of the development. After the board still refused to either approve or deny the application, landowner brought a ' 1983 claim, alleging a due process violation The court rejected the town's ripeness defense, concluding that the board's delay demonstrated that any attempt to continue applying would be futile.

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Landowner Failed to Establish That Retail Use Was Continuation of Pre-Existing Non-Conforming Use

Matter of East End Holdings, LLC v. Zoning Board of Appeals

NYLJ 1/22/16, p. 30, col. 5

AppDiv, Second Dept. (memorandum opinion)

In landowner's article 78 proceeding challenging a determination by the zoning board of appeals (ZBA) that landowner's use of a unit as retail space was not a continuation of a pre-existing nonconforming use, landowner appealed from Supreme Court's denial of the petition and dismissal of the proceeding. The Appellate Division affirmed, holding that the ZBA's determination was not arbitrary or capricious.

Landowner's commercial buildings were constructed in 1976, and contain retail shops. In 1982, the Village of Southampton amended its zoning code to prohibit retail shops smaller than 800 square feet. In 2008, when the village building inspector learned that one of landowner's tenants was operating a 100-square-foot shop, the building inspector notified landowner of the violation of the zoning code. Landowner appealed to the ZBA, contending that the shop was a pre-existing nonconforming use.

Landowner relied on a 1999 appraisal report listing a 100-square-foot shop as occupied and a certificate of occupancy showing that landowner had a right to operate seven shops on the property. In rejecting landowner's appeal, the ZBA relied on the surveys submitted by the building inspector, dating from 1981 and 1999, showing the floor plan and layout of the seven shops. The floor plans did not include the 100-square-foot shop at issue. Landowner then brought this article 78 proceeding, and Supreme Court denied the petition.

In affirming, the Appellate Division noted that the record was devoid of evidence that the 100-square-foot unit was being used as a retail space at the time the zoning code was amended in 1982. As a result, it was not arbitrary or capricious for the ZBA to conclude that landowner's use was not the continuation of a legal nonconforming use.

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