Opinion
Index #2016-459
05-03-2017
LAKEVIEW OUTLETS INC., Plaintiff, v. TOWN OF MALTA, Defendant.
APPEARANCES Goldman Attorneys PLLC Attorneys for Plaintiff 210 Washington Avenue Extension Albany, New York 12203 Miller, Mannix, Schachner & Hafner, LLC Attorneys for Defendant 15 West Notre Dame Street Glens Falls, New York 12801
ORIGINAL
DECISION and ORDER
RJI # 45-1-2016-0284 APPEARANCES Goldman Attorneys PLLC
Attorneys for Plaintiff
210 Washington Avenue Extension
Albany, New York 12203 Miller, Mannix, Schachner & Hafner, LLC
Attorneys for Defendant
15 West Notre Dame Street
Glens Falls, New York 12801 ANN C. CROWELL, J
By Notice of Motion dated January 17, 2017, Lakeview Outlets Inc. ("Lakeview") seeks an order granting summary judgment pursuant to CPLR § 3212 declaring the imposition of mitigation fees illegal and directing the refund of mitigation fees paid. By Notice of Motion dated January 24, 2017, the Town of Malta ("Malta") seeks an order granting summary judgment pursuant to CPLR § 3212 dismissing the complaint. By Notice of Motion dated March 17, 2017, Malta seeks an extension of time to make a motion to dismiss, or in the alternative, leave to amend the Answer pursuant to CPLR § 3025.
On March 7, 2005, Malta adopted a SEQRA Positive Declaration based upon the anticipated growth and development within the Town of Malta over a ten (10) year period. A Town Wide Generic Environmental Impact Statement ("GEIS") was completed. On June 5, 2006, the SEQRA review process culminated in the issuance and adoption of a SEQRA Findings Statement. Based upon the estimated open space, traffic and recreation impacts from anticipated future commercial development over the following ten (10) years in the Town of Malta, defendant mandated monetary SEQRA mitigation fees. Lakeview was the owner of the commercial real property subject to this action. Lakeview subsequently sought approval to further develop its property by building a Panera restaurant and a 107 room Hilton franchise hotel (the "projects").
In July and August of 2014, Lakeview's projects were presented to the Town of Malta Zoning Board of Appeals ("ZBA") seeking various variances. The ZBA, the ZBA legal counsel and the Town Planning Staff stated at the meeting that the projects were consistent with the 2006 Town Wide GEIS and the Statement of Findings. Therefore, the projects were not subject to individual SEQRA review. There is no dispute that Malta did not make any findings of whether or not either of the projects would have any specific impact upon traffic, recreation or open space because the projects were found to be subject to the 2006 Town Wide GEIS and SEQRA Findings Statement. As a result, Lakeview was assessed $144,040 in mitigation fees for the hotel project and $124,366 for the restaurant project. By letter dated July 27, 2015, Lakeview's counsel objected to the imposition of the mitigation fees for the projects based upon the same principals being asserted in this action.
On February 25, 2016, Lakeview commenced the instant action setting forth two causes of action for declaratory judgments seeking judgments declaring the imposed fees illegal and directing repayment. The Complaint does not unequivocally set forth a cause of action for "money had and received." On April 5, 2016, the Court held a conference. A scheduling order was imposed establishing various deadlines. On April 6, 2016, Malta served a Verified Answer. The Answer did not raise the affirmative defenses of Statute of Limitations or unclean hands. The Court subsequently "So Ordered" four letters requesting extensions to the scheduling order. The final So Ordered letter extended Malta's time to file a dispositive motion to January 24, 2017. On January 17, 2017, Lakeview filed a summary judgment motion. On January 24, 2017, Malta filed a summary judgment motion which included a defense based upon the statute of limitations.
Lakeview asserts that the mitigation fees are an unlawful tax with no demonstrated nexus between any identified impacts from the projects and the mitigation fees imposed. Malta contends that mitigation fees required by the 2006 Town Wide GEIS and SEQRA Findings Statement are lawfully imposed pursuant to SEQRA.
The 2006 Town Wide GEIS and SEQRA Findings Statement were constructed based upon estimates of future growth and development over ten years and estimates of the impacts of that growth and development upon recreation, open space and traffic. The 2006 Town Wide GEIS and SEQRA Findings Statement were developed following extensive studies, hearings and deliberation of the Town Board. Malta estimated an overall cost for recreational mitigation over the next ten years and attributed 15% of that cost to future non-residential development. A recreational mitigation fee of $0.89 per square foot was imposed. Malta estimated an overall cost of $6,975,610 for its open space program and found that future development should be responsible for mitigating 38% of that total. An open space mitigation fee of $861 per acre was imposed. Malta estimated an overall cost for traffic impacts over the next ten years of more than $8,000,000. It attributed 70% of those costs to growth and development within the Town totaling $5,617,500 in traffic mitigation fees.
The Court of Appeals has determined that SEQRA review may be conducted on a conceptual basis long before any actual project is proposed. Matter of Neville v Koch, 79 NY2d 416 [1992]. The Town of Malta's conceptual SEQRA review in 2006 led to the Town's Form Based Code allowing for the development of projects in the Town in accordance with pre-set regulation rather than the case-by-case exercise of discretion by officials. Id at p. 426. Lakeview proceeded under this pre-set form based code, designed to streamline approvals, to gain approval for its projects, but then challenged the fees imposed by the same regulations. Malta's assessment of mitigation fees pursuant to SEQRA based upon estimated projects and estimated impacts is not unlawful per se. Id. The authority provided by SEQRA provides the reasonable basis to find that the imposition of mitigation fees on Lakeview's projects is not an unlawful tax. Albany Area Bldrs. Assn. v Town of Guilderland, 141 AD2d 293, 299 [3d Dept. 1988], citing Jenad, Inc. v Village of Scarsdale, 18 NY2d 78 [1966]; see also, Twin Lakes Devel. Corp. v Town of Monroe, 1 NY3d 98 [2003]. Having determined that the imposition of a mitigation fee pursuant to SEQRA is not unlawful per se, Lakeview's declaratory judgment actions are dismissed.
A cause of action for moneys had and received is established when: "(1) the defendant receive[s] money belonging to [the] plaintiff, (2) the defendant benefit[s] from receipt of the money, and (3) under principles of equity and good conscience, the defendant should not be permitted to keep the money" Matter of Estate of Moak, 92 AD3d 1040, 1044 [3d Dept. 2012] (internal citations omitted). Lakeview's unpled, purported cause of action based upon monies had and received fails in the absence of any per se unlawful tax. In other words, Lakeview's claim for monies had and received should be limited to a challenge to Malta's authority to impose mitigation fees (Niagara Mohawk Power Corp. v City School Dist. of City of Troy, 59 NY2d 262 [1983], not to whether Malta has provided a sufficient nexus between the projects' impacts and the fees imposed.
Although the dismissal of Lakeview's declaratory judgment action on the merits renders the issue of an amended answer and the statute of limitations moot, the Court will address the outstanding motion. A defense based upon the statute of limitations (CPLR § 3211(a)(5)) is waived unless it is raised in a motion to dismiss or a responsive pleading. CPLR § 3211(e)(5). The Court's scheduling Order establishing the time frame within which to file a dispositive motion cannot reasonably be interpreted to include an extension of the time to assert a statute of limitations defense. The Court also declines to extend the time to assert a statute of limitations defense pursuant to CPLR § 2004.
It is well settled that leave to amend a pleading pursuant to CPLR § 3025(b) should be freely given provided that there is no prejudice and the proposed amendment is not plainly lacking in merit. Nelson v State of New York, 67 AD3d 1142, 1143 [3d Dept. 2009]; Ciarelli v Lynch, 46 AD3d 1039, 1039-1040 [3d Dept. 2007]. The Court should consider "the extent of the delay, whether the opposing party suffered any prejudice, any proof of willfulness, and the strong public policy favoring the resolution of cases on their merits." Anthony DeMarco & Sons Nursery, LLC v Maxim Const. Service Corp., 126 AD3d 1105, 1105 [3d Dept. 2015]. In the absence of an abuse of discretion, a court's decision as to whether to grant leave to amend a pleading shall remain undisturbed. Pagan v Quinn, 51 AD3d 1299, 1300 [3d Dept. 2008].
Depending on the ultimate determination of how Lakeview's claims are characterized (i.e. a challenge to the SEQRA determination in 2006; a challenge to Malta's determination that Lakeview's property was subject to the GEIS and Findings Statement in 2014; or an action for monies had and received upon the payment of the alleged illegal mitigation fees), Malta's statute of limitations defense is not plainly lacking in merit. The determination that the projects were subject to the 2006 GEIS and Findings Statement allowed Lakeview to avoid any SEQRA review for its projects. Lakeview did not challenge this finding and only challenged the mitigation fees imposed when the projects were substantially complete. An unclean hands defense is not plainly lacking in merit.
Malta's failure to assert the defenses in its April 6, 2016 Answer and its delay in asserting them was not willful. On January 24, 2017, Malta asserted a statute of limitations defense in its motion for summary judgment. When Lakeview raised Malta's pleading omission, Malta promptly filed a motion to amend its Answer. Malta's counsel's error is akin to law office failure. Malta's counsel explains this error based upon a mistaken belief that the Court's scheduling Order for dispositive motions somehow permits the assertion of a statute of limitations defense which was not raised in the Answer. Malta should not be precluded from asserting a meritorious statute of limitations defense based upon its counsel's error in the absence of prejudice to the plaintiff. Lakeview's first mention of a monies had and received equity action was contained within its papers in opposition to Malta's motion based upon the statute of limitations. This factor alone provides a sufficient basis to allow Malta to interpose an unclean hands affirmative defense. Notably, Lakeview has not moved to amend its complaint to assert a monies had and received cause of action.
Lakeview contends an amendment to include the two affirmative defenses causes substantial prejudice. Asserting that the unjustified failure to include the defenses in the Answer costs plaintiff "tens of thousands of dollars in attorney's fees over the last year." However, Lakeview does not specify how the delay in asserting these defenses caused any additional attorney's fees to be incurred. Lakeview does not concede that its action is untimely. The costs of discovery, the preparation of motions and opposition to motions would have been very similar if the defenses were asserted in the original Answer. Mushatt v Tompkins Comm. Hosp., 228 AD2d 925 [3d Dept. 1996]. Lakeview's claims of prejudice are unavailing. In the exercise of discretion, Malta's motion to amend its Answer is granted. McCaskey, Davies and Assoc., Inc. v NYC Health & Hospitals Corp., 59 NY2d 755 [1983]; Fahey v County of Ontario, 44 NY2d 934 [1978]; Endicott Johnson Corp. v Konik Industries, Inc., 249 AD3d 744 [3d Dept. 1998]. The Amended Verified Answer attached to Leah Everhart's April 17, 2017 Reply Affirmation is deemed served as of April 17, 2017.
While Lakeview's complaint is drafted as a declaratory judgment action seeking to declare the mitigation fees illegal and unlawful, Lakeview also argues that its property should not be subject to the 2006 Town Wide GEIS and the Statement of Findings because the map underlying the findings labeled its property as "Non Developable." Malta's determinations in July and August of 2014 that the projects were consistent with the 2006 Town Wide GEIS and the Statement of Findings established the accrual date for any challenge to the projects being considered under that streamlined process with its attendant mitigation fees. Lakeview suffered a concrete injury at that time with respect to the required mitigation fees. Any type of challenge to the projects being considered under the 2006 Town Wide GEIS and the Statement of Findings are precluded by the four month statute of limitations. Eadie v Town Board of the Town of North Greenbush, 7 NY3d 306 [2006]; Properties of New York, Inc. v Planning Bd. of the Town of Stuyvesant, 35 AD3d 941 [3d Dept. 2006]; Trager v Town of Clifton Park, 303 AD2d 875 [3d Dept. 2003]. Any challenge to the sufficiency of the 2006 SEQRA review, the underlying studies, the amount of the mitigation fees imposed, and the nexus of the mitigation fees to the projects at hand are similarly time-barred.
Lakeview's motion for summary judgment is denied. Malta's motion for summary judgment is granted and the Complaint is dismissed. Any relief not specifically granted is denied. No costs are awarded to any party. This decision shall constitute the Order of the Court. The original Decision and Order shall be forwarded to the attorney for defendant for filing and entry. The underlying papers will be filed by the Court. Dated: May 3, 2017
Ballston Spa, New York
/s/_________
ANN C. CROWELL, J.S.C. Papers Received and Considered: Plaintiff's Notice of Motion, dated January 17, 2017 Affirmation of Paul J. Goldman, Esq., dated January 17, 2017, with Exhibits Affidavit of Donald MacElroy, sworn to January 20, 2017 Defendant's Notice of Motion, dated January 24, 2017 Affirmation of Leah Everhart, Esq., dated January 24, 2017, with Exhibits 1-5 Defendant's Memorandum of Law, dated January 24, 2017 Affirmation of Leah Everhart, Esq., dated February 10, 2017, with Exhibits 1-3 Defendant's Memorandum of Law, dated February 10, 2017 Affirmation of Paul J. Goldman, Esq., dated February 24, 2017, with Exhibits A-D Plaintiff's Memorandum of Law, dated February 24, 2017 Affirmation of Paul J. Goldman, Esq., dated March 1, 2017, with Exhibits 30-31 Affirmation of Leah Everhart, Esq., dated March 17, 2017, with Exhibits 1-3 Defendant's Memorandum of Law, dated March 17, 2017 Defendant's Notice of Motion, dated March 17, 2017 Affirmation of Leah Everhart, Esq., dated March 17, 2017, with Exhibit 1 Affirmation of Erika C. Browne, Esq., dated April 10, 2017, with Exhibits 1-6 Affirmation of Leah Everhart, Esq., dated April 17, 2017, with Exhibit 1