Opinion
Index No. E2022-321
06-26-2023
LOST LAKE HOLDINGS, LLC and MISHCONOS MAZAH, LLC, Petitioners, v. TOWN OF FORESTBURGH; TOWN BOARD OF THE TOWN OF FORESTBURGH; DANIEL S. HOGUE, JR., in his official capacity as TOWN SUPERVISOR and as an individual; and RICHARD ROBBINS, in his official capacity as PLANNING BOARD CHAIR and as an individual, Respondents.
Unpublished Opinion
Present: David M. Gandin, J.S.C.
DECISION, ORDER AND JUDGMENT
DAVID M. GANDIN, JUDGE
The following papers read and considered on respondents' motion and petitioners' crossmotion for summary judgment:
1. Notice of Motion and Attorney Affirmation in Support;
2. Memorandum of Law in Support;
3. Statement of Material Facts;
4. Hogue Affidavit;
5. Wells Affidavit;
6. Notice of Cross-Motion and Attorney Affirmation in Support with exhibits A-H;
7. Statement of Material Facts;
8. Counter-Statement of Material Facts;
9. Miller Affidavit;
10. Gold Affidavit;
11. Memorandum of Law in Support and in Opposition;
12. Afzali Supplemental Affirmation;
13. Hogue Supplemental Affirmation and
14. NYSCEF filings #147-158.
This matter involves the Lost Lake Resort development project ("the project"). Petitioner developers challenge the amount of professional consulting expenses in the amount of $15,518.00 respondents charged for review of petitioners' applications for building permits. The parties previously moved for summary judgment. In a January 20, 2023 decision and order the Court converted this matter into a CPLR Article 78 special proceeding (see CPLR § 103(c)) and directed respondents to supplement the record to enable it to determine whether the challenged expenses were reasonable and necessary.
Review of an agency's determination pursuant to CPLR § 7803(3) is limited to whether the determination was affected by an error of law or was arbitrary and capricious or an abuse of discretion. Moy v. Bd. of Town Trustees of Town of Southold, 61 A.D.3d 763 (2d Dept 2009). "Arbitrary action is without sound basis in reason and is generally taken without regard to the facts." Pell v. Bd. of Ed. of Union Free School Dist. No. 1 of Towns of Scarsdale and Mamaroneck, Westchester County, 34 N.Y.2d 222, 231 (1974). It is not the job of the Court to second guess an agency's decision. Where there is a rational basis for the determination it will be sustained. See generally 54 Marion Ave., LLC v. City of Saratoga Springs, 175 A.D.3d 1660 (3d Dept 2019).
A municipality may require a building permit applicant to reimburse the reviewing agency for outside consulting services reasonably necessary to determine such application. Jewish Reconstructionist Synagogue of N. Shore, Inc. v. Inc. Vil. of Roslyn Harbor, 40 N.Y.2d 158 (1976). The power to impose fees associated with such tasks on applicants, however, is not unfettered and must be accompanied by standards which guide and contain their use, such as reference to average costs expended in similar applications. Id., at 163. "Without the safeguard of a requirement that fees bear a relation to average costs, a board would be free to incur, in the individual case, not only necessary costs but also any which it, in its untrammeled discretion, might think desirable or convenient, no matter how oppressive or discouraging they might in fact be for applicants." Id.
Respondents incurred $7,643.00 of the disputed amount in consulting engineering expenses and $7,875.00 in attorney fees. The record demonstrates that prior to petitioners submitting their building permit applications, respondents had retained Joseph Gottlieb, P.E., P.C. as Town Engineer who billed at a rate of $110.00 per hour. Due to the scope of the proposed project, respondents subsequently retained the firm of Barton & Loguidice, D.P.C. ("B&L") to act as its primary consultant. In an October 27, 2020 letter, B&L detailed their billing rates and the firm's background qualifications of their staff engineers. B&L also provided a list of comparable project experience for each engineer describing of the scope of the work, project location and the total project cost. On December 3, 2020, respondents hired B&L. In September of 2021,Chuck Voss, the lead engineer working on the project left B&L to join Bergmann, P.C. ("Bergmann"). Because of Voss's familiarity with the project, respondents substituted Bergmann as lead consultants. During his time at Bergmann Voss billed respondents $165.00 per hour for his work on the project. Respondents ended their professional relationship with Bergmann in October of 2021. In total, respondents paid $2,528.00 on August 6, 2021 to B&L and $5,115.00 on November 30, 2021 to Bergmann for 47 hours of consulting services.
Respondents also retained the law firm of Harris Beach, PLLC to review petitioners' building permit applications. Harris Beach billed respondents $225.00 per hour for its work on the project. Prior to engaging Harris Beach, respondents retained Troy Johnstone, Esq. as town attorney to represent and advise the town at a rate of $225.00 per hour. When respondents retained Johnstone they voted to impose a $27,000.00 cap on total legal fees expended in a calendar year. Respondents imposed a similar cap on total legal fees expended with respect to Harris Beach's representation in the amount of $20,500.00. Per the retainer agreement with respondents, Harris Beach itemized its billable hours for its work on the project.
Town Supervisor Daniel Hogue, Jr. states in his affidavit that he reviewed the engineering and legal costs incurred before bringing the matter to the town board for a vote to disburse funds. He found that all of the engineering-related costs were reasonable and necessarily incurred, but determined that several hours of work Harris Beach billed were not directly related to reviewing petitioners' building permit applications. He credited petitioners in the amount of $2,137.50 but concluded that the remaining balance was properly incurred. The town board approved payment of the expenses at an April 7, 2022 meeting.
Petitioners have failed to establish that the challenged expenses were not reasonable and necessarily incurred to review and determine petitioners' building permit applications. A local municipality is vested with implied authority to impose fees, including consultant fees, on applications for land use approvals, as long as the expenses to be reimbursed are reasonable in amount and necessary to the accomplishment of the municipality's legitimate functions. See Municipal Home Rule Law § 10; Twin Lakes Dev. Corp. v. Town of Monroe, 300 A.D.2d 573 (2d Dept 2002), affd, 1 N.Y.3d 98 (2003). Petitioners are correct that at the time the charges were incurred the Town of Forestburgh had not adopted a procedure pursuant to the criteria espoused in Jewish Reconstructionist Synagugue to limit the indiscriminate expenditure of consulting fees. However, respondents remedied any defect by auditing the expenses under the standards of Local Law 2-2022 on April 7, 2022. The new adopted standards comport with state law. Applying these standards to the disputed consulting charges, the Court finds that respondents' actions were not arbitrary and capricious, an abuse of discretion or affected by an error of law. The Court notes that with respect to the attorney fee component of the disputed expenses respondents have a similar retainer agreement with their general town counsel as well as a defined cap on the total amount of legal fees allowed per calendar year. B&L also provided respondents with several examples of prior development projects and the total billable consulting costs for each references to demonstrate the reasonableness of its fee structure on comparable projects. This further demonstrates the reasonableness of the engineering fees incurred. Based on the foregoing, it is
ORDERED that the petition is denied.
The foregoing constitutes the decision, order and judgment of the Court. The signing of this decision and order shall not constitute entry or filing under CPLR §2220. Counsel is not relieved from the applicable provisions of that rule regarding notice of entry.
Pursuant to CPLR §5513, an appeal as of right must be taken within thirty (30) days after service by a party upon the appellant of a copy of the judgment or order appealed from and written notice of its entry, except that when the appellant has served a copy of the judgment or order and written notice of its entry, the appeal must be taken within thirty (30) days thereof.