Opinion
INDEX NO. 161107/2017
03-26-2019
In the Matter of STATHIS ENTERPRISES, LLC, Petitioner/Plaintiff, v. CITY OF NEW YORK, NEW YORK CITY DEPARTMENT OF BUILDINGS, RICK CHANDLER, JOSEPH BRUNO, MARTIN REBHOLZ, and CALVIN WARNER Respondents/Defendants.
NYSCEF DOC. NO. 55 PRESENT: HON. JOHN J. KELLEY Justice MOTION DATE 01/25/2018 MOTION SEQ. NO. 001
DECISION, ORDER and JUDGMENT
The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 49, 50 were read on this motion to/for ART 78 PROCEEDING/CROSS MOTION TO DISMISS.
I. INTRODUCTION
This is a hybrid CPLR article 78 proceeding seeking judicial review of a New York City Department of Buildings (DOB) determination that revoked a permit for the erection of LED signage on property owned by the petitioner/plaintiff (hereinafter the petitioner), and action for a judgment declaring that the petitioner has a vested right in the erection of the signage. The respondents/defendants (hereinafter the respondents) cross-move to dismiss the petition/complaint on the grounds that the petitioner failed to exhaust its administrative remedies and that the petition/complaint fails to state a cause of action. The cross motion is granted, and the petition/complaint is dismissed.
II. BACKGROUND
In early 2000, the petitioner, which owns property located at 495 Canal Street in Manhattan (the property), applied to the DOB for permission to erect a 523-square-foot LED advertising sign for Polo Electric (Polo) on the exterior of the property. Polo was and is an electrical contractor and distributor of electrical accessories. In its application, the petitioner expressly asserted that the sign was not within 200 feet of an arterial highway. At the time that the application was submitted, the property was situated in an M1-6 zoning district, which permitted certain manufacturing. On April 19, 2000, the DOB issued a work permit for the erection of the sign's supporting structure. On May 12, 2000, the DOB issued a work permit for the erection of the sign.
On August 19, 2003, the lot on which the property is situated was rezoned from an M1-6 manufacturing zoning district to a C6-2A commercial zoning district.
The sign was never erected. The petitioner's property became the subject of a legal dispute between the petitioner and the owner of adjacent property over whether the latter was unlawfully obstructing development of the property, and whether the petitioner acquired ground and air rights to a portion of the adjacent property by adverse possession. The Appellate Division, First Department, ultimately ruled that the petitioner obtained those rights by adverse possession (see Hudson Sq. Hotel, LLC v Stathis Enters., LLC, 140 AD3d 664 [1st Dept 2016]).
On November 22, 2016, the two permits were revoked. The DOB determined that advertising signs were not permitted in a C6-2A zoning district and that the proposed sign was to be located within 200 feet of an arterial highway, namely the Holland Tunnel access and approach lanes, a distance that was not permitted in such a district.
The petitioner alleges that the DOB's permit revocation should be annulled because it constituted an unconstitutional regulatory taking and, hence, was affected by an error of law (first cause of action). It also seeks a judgment declaring that its rights to erect the sign became vested (second cause of action). It further seeks relief in the nature of mandamus to compel the DOB to reissue the permits for the sign (third cause of action). The petitioner also seeks to recover damages for aiding and abetting an alleged conspiracy to "abuse public office for private gain" between DOB officials and the owners of the adjacent property (fourth cause of action). The respondents cross-move to dismiss the petition/complaint, contending that the petitioner failed to exhaust its administrative remedies by appealing the adverse DOB determination to the Board of Standards & Appeals (BSA). They also contend that the pleading fails to state a cause of action, in that the petition/complaint alleges facts insufficient to make out a claim for a regulatory taking, vested rights, and relief in the nature of mandamus, and that no cause of action lies to recover for aiding and abetting a conspiracy to abuse a public office.
III. DISCUSSION
A. First Cause of Action---Regulatory Taking
The DOB may revoke a building or work permit where it determines that the permit was issued in error or was based on material misrepresentations of fact contained in a permit application (see Admin. Code of City of N.Y. §§ 28-104.2.10, 28-105.10.1). An adverse determination by the DOB may be administratively appealed to the BSA (see Charter of City of N.Y. §§ 648, 666.6[a]; 669; Admin. Code of City of N.Y. § 28-103.4; Matter of Perlbinder Holdings, LLC v Srinivasan, 27 NY3d 1, 8 [2016]). Thus, a person allegedly aggrieved by the DOB's revocation of a permit for the erection of a sign must exhaust his or her administrative remedies via an appeal to the BSA before seeking judicial review (see Matter of Sievers v City of New York, 182 AD2d 580 [1st Dept 1992]; see also Matter of Wilkins v Babbar, 294 AD2d 186, 187 [1st Dept 2002]; Matter of Weissman v City of New York, 96 AD2d 454, 456 [1st Dept 1983]; cf. Little Joseph Realty, Inc. v Town of Babylon, 41 NY2d 738, 744 [1977] [a plenary action is the proper vehicle for a claim alleging that a landowner violated a zoning ordinance]). The exhaustion requirement expressly applies to claims of a regulatory taking (see Timber Ridge Homes v State of New York, 223 AD2d 635 [2d Dept 1996]; see also Arbor Hill Partners v New York State Commr. of Hous. & Community Renewal, 267 AD2d 675, 676, n [3d Dept 1999]). Since the petitioner did not administratively appeal the DOB's determination to the BSA in a timely fashion (see 2 RCNY § 1-06[a]), the first cause of action, which seeks to annul the DOB's revocation of the building permit as an impermissible regulatory taking, must be denied for failure to exhaust administrative remedies.
In any event, the facts alleged in the petition/complaint are insufficient to make out a cause of action based on a regulatory taking. "Regulation of private property constitutes an unconstitutional taking if it denies an owner economically viable use of the property (a per se regulatory taking), or if it does not substantially advance legitimate State interests [citations omitted]" (Rent Stabilization Assn v Higgins, 83 NY2d 156, 173 [1993]). There is no allegation in the petition/complaint that the revocation of the signage permits denied the petitioner an economically viable use of the property or that the revocation does not advance the legitimate State interests of traffic safety and aesthetics.
B. Second Cause of Action---Vested Rights
A vested right in an administrative approval can only be acquired when, "pursuant to a legally issued permit, the landowner demonstrates a commitment to the purpose for which the permit was granted by effecting substantial changes and incurring substantial expenses to further the development" (Town of Orangetown v Magee, 88 NY2d 41, 47 [1996]; see Matter of Exeter Bldg. Corp. v Town of Newburgh, 26 NY3d 1129, 1130 [2016]; Matter of RC Enters. v Town of Patterson, 42 AD3d 542, 544 [2d Dept 2007]; Matter of Lefrak Forest Hills Corp. v Galvin, 40 AD2d 211, 218 [2d Dept 1972], affd 32 NY2d 796 [1973]). "Neither the issuance of a permit . . . nor the landowner's substantial improvements and expenditures, standing alone, will establish the right. The landowner's actions relying on a valid permit must be so substantial that the municipal action results in serious loss rendering the improvements essentially valueless" (Town of Orangetown v Magee, 88 NY2d at 47-48; see Matter of Exeter Bldg. Corp. v Town of Newburgh, 26 NY3d at 1130; Glacial Aggregates LLC v Town of Yorkshire, 14 NY3d 127, 136 [2010]). The allegations in the petition/complaint are insufficient to state facts which, if true, would establish that the petitioner had a vested right to erect the LED signage.
In the first instance, a claim to vested rights cannot be based on an invalid permit, that is, a permit issued in error or in reliance on material misrepresentations made in the permit application (see Matter of Perlbinder, LLC v Srinivasan, 27 NY3d at 8; Matter of Perrotta v City of New York, 107 AD2d 320, 323-324 [1st Dept 1985]). "When a permit is wrongfully issued in the first instance, the vested rights doctrine does not prevent the municipality from revoking the permit to correct its error" (Matter of Perlbinder, LLC v Srinivasan, 27 NY3d at 8).
The petitioner correctly argues that the absolute prohibition on advertising signs in a C6-2A commercial district (see New York City Zoning Resolution [hereinafter ZR] § 32-63) did not apply to its property in 2000, when it applied for and obtained the work permits, since the property was not then located in such a district, and was rezoned only in 2003. If that were the sole issue, the petitioner would have a strong argument that the permits were "validly issued," and not issued "in error." That restriction, however, was not the only one preventing the petitioner from obtaining valid work permits in 2000.
As of 2000, ZR § 42-533 prohibited illuminated or flashing advertising signs in M1 manufacturing districts. ZR § 42-55(a), applicable to manufacturing districts, including the M1-6 district in which the property was then situated, only permitted the erection of signs within 200 feet of an arterial highway where the signs (1) did not exceed 500 square feet in area and (2) were not advertising signs. For the purposes of ZR § 42-55(a), the term "arterial highways shall include all highways that are shown on the Master Plan of Arterial Highways and Major Streets as 'principal routes,' 'parkways' or 'toll crossings,' and that have been designated by the City Planning Commission as arterial highways" (ZR § 42-55[a]). ZR Appendix H identifies the "Holland Tunnel and Approaches" as a toll crossing designated as an arterial highway. The signage proposed by the petitioner was illuminated, exceeded 500 square feet in area, was to be used for advertising the services of Polo Electric, and was to be located within 200 feet of--- and was visible from---the Holland Tunnel approaches. The express representation in the permit application that the sign was not to be located within 200 feet of that arterial highway was materially untrue, even if the misrepresentation was not intentional. The DOB issued the permits in 2000 based both on that misrepresentation and on the erroneous assumption that the proposed sign conformed with existing zoning restrictions for M1-6 manufacturing districts. Accordingly, any claim to vested rights is defeated by the fact that the petitioner seeks to rely on erroneously issued permits.
In any event, the allegations of the second cause of action state only that the petitioner invested money in developing the property, not that it effected substantial changes to its property or expended significant amounts of money solely to erect the signage. Nor is there proof in the parties' submissions showing that the petitioner effected substantial changes to the property in reliance on the permits; in fact, it appears from the submissions that the sign never was erected. Moreover, the second cause of action does not, and cannot, allege that the revocation of the permit for the signage rendered the property essentially valueless.
A cause of action to establish vested rights in an administrative land-use approval may be prosecuted as a declaratory judgment cause of action (see Matter of Exeter Bldg. Corp. v. Town of Newburgh, 114 AD3d 774, 779 [2d Dept 2014], affd 26 NY3d 1129 [2016]). Regardless of the form of the proceeding, however, a landowner must still exhaust administrative remedies before it may seek judicial intervention to address the issue of vested rights (see Matter of Perrotta v City of New York, 107 AD2d at 323-324). In this regard, the issue of whether a landowner relied in good faith on the issuance of a permit must be determined by the relevant land-use agency, here, the BSA (see Matter of Perlbinder, 27 NY3d at 8; Matter of Jayne Estates, Inc. v Raynor, 22 NY2d 417 [1968]; cf. Matter of Oakwood Cemetery v Village/Town of Mount Kisco, 115 AD3d 749, 752 [2d Dept 2014] [exhaustion of remedies is required in order to pursue a judgment declaring that a proposed use is a pre- existing, nonconforming use that remains permissible despite a change in zoning restrictions that would otherwise prohibit that use]).
Inasmuch as the petitioner failed to exhaust its administrative remedies in connection with its claim to vested rights by appealing the permit revocation to the BSA, and the allegations supporting this claim are insufficient to state a cause of action, that branch of the respondents' motion seeking to dismiss the second cause of action must be granted.
C. Third Cause of Action—Mandamus to Compel
"A CPLR article 78 proceeding seeking mandamus to compel the performance of a specific duty applies only to acts that are ministerial in nature and not those that involve the exercise of discretion" (Matter of Maron v Silver, 14 NY3d 230, 249 [2010]). "Mandamus is available . . . only to enforce a clear legal right where the public official has failed to perform a duty enjoined by law" (New York Civil Liberties Union v State of New York, 4 NY3d 175, 185 [2005]). The municipal respondents correctly contend that, in exercising their independent judgment, they have not failed to perform a duty enjoined upon them by law within the meaning of CPLR 7803(1), and that the petitioner has not made proper allegations that he has a clear legal right to compel them to reissue permits allowing for the erection of the sign in violation of the ZR, as it applied to the property in 2000.
Hence, that branch of the respondents' motion seeking to dismiss the third cause of action must be granted.
D. Fourth Cause of Action—Conspiracy To Abuse Public Office for Private Gain
In the context of a CPLR 3211(a)(7) motion to dismiss made on the ground that New York law does not recognize a cause of action, the inquiry is whether the proponent of the pleading has a cause of action (see Davis v South Nassau Communities Hosp., 26 NY3d 563, 572 [2015]). New York does not recognize an independent cause of action sounding in civil conspiracy (see Mamoon v Dot Net Inc., 135 AD3d 656, 658 [1st Dept 2016]; Shared Communications Servs. of ESR, Inc. v Goldman Sachs & Co., 23 AD3d 162, 163 [1st Dept 2005]; Thome v Alexander & Louisa Calder Found., 70 AD3d 88 [1st Dept 2009]; Zachariou v Manios, 50 AD3d 257 [1st Dept 2008]). "[A] mere conspiracy to commit a [tort] is never of itself a cause of action. Allegations of conspiracy are permitted only to connect the actions of separate defendants with an otherwise actionable tort" (Alexander & Alexander, Inc. v. Fritzen, 68 NY2d 968, 969 [1986] [citations and internal quotation marks omitted])
"Official misconduct" is a class A misdemeanor that prohibits a public official's unauthorized act or knowing failure to perform a ministerial act, made with intent to gain a benefit or deprive another thereof (see Penal Law § 195.00). That statute, however, creates no private right of action to recover from a person who violates it, and none may be implied therefrom (see Rennix v Jackson, 152 AD3d 551 [2d Dept 2017]). Since official misconduct in the nature of abuse of public office is not a civilly actionable offense, one may not assert a cause of action to recover for conspiracy to commit official misconduct, let alone a cause of action for aiding and abetting such a conspiracy. The fourth cause of action is thus dismissed.
In light of the foregoing, it is
ORDERED that the respondents' cross motion to dismiss the petition/complaint is granted; and it is,
ADJUDGED that the petition/complaint is dismissed.
This constitutes the Decision, Order, and Judgment of the court. 3/26/2019
DATE
/s/ _________
JOHN J. KELLEY, J.S.C.