Oorah, Inc. v. Town of Jefferson

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: July 17, 2014 517646
518311
_________________________________

OORAH, INC.,
Appellant,
v

TOWN OF JEFFERSON et al., MEMORANDUM AND ORDER
Respondents,
et al.,
Respondents.

(And Another Related Proceeding.)
_________________________________

Calendar Date: June 3, 2014

Before: Peters, P.J., Garry, Rose, Egan Jr. and Clark, JJ.

__________

McNamee, Lochner, Titus & Williams, PC, Albany (John J.
Privitera of counsel), for appellant.

Roemer, Wallens, Gold & Mineaux, LLP, Albany (Michael R.
Cuevas of counsel), for Town of Jefferson, respondents.

__________

Egan Jr., J.

Appeals (1) from an order and judgment of the Supreme Court
(Devine, J.), entered March 4, 2013 in Schoharie County, which
dismissed petitioner's application, in a combined proceeding
pursuant to CPLR article 78 and action for declaratory judgment,
to, among other things, review three determinations of respondent
Town of Jefferson Board of Assessment Review denying petitioner's
applications for real property tax exemptions, (2) from an order
and judgment of said court, entered June 21, 2013 in Schoharie
County, which, upon reargument, among other things, adhered to
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its prior decision finding that parcel No. 3 is not tax exempt,
and (3) from an order and judgment of said court, entered January
31, 2014 in Schoharie County, which partially dismissed
petitioner's application, in a combined proceeding pursuant to
CPLR article 78 and action for declaratory judgment, to, among
other things, annul three determinations of respondent Town of
Jefferson Board of Assessment Review denying petitioner's
applications for real property tax exemptions.

Petitioner, which is a not-for-profit corporation organized
under the laws of New Jersey and is exempt from federal taxation
pursuant to Internal Revenue Code (26 USC) § 501 (c) (3), owns
three improved parcels of real property located in the Town of
Jefferson, Schoharie County. The parcels in question are known
as 409 State Route 10 (hereinafter parcel No. 1), which is
improved by a single-family residence, 123 Scotch Valley Drive
(hereinafter parcel No. 2), which primarily is comprised of
certain condominium units, and 146 Scotch Valley Drive
(hereinafter parcel No. 3), which includes, among other things, a
synagogue, residential units, office space, athletic fields and
nature trails. Petitioner's submissions reflect that it
"provides a wide range of religious, charitable and educational
support services for families," including – insofar as is
relevant here – utilizing the subject parcels to provide a summer
camp experience for underprivileged children.

In February 2012, petitioner filed applications seeking tax
exemptions for each of the parcels pursuant to RPTL 420-a; those
applications were denied in April 2012 pending the receipt of
additional information by petitioner. Petitioner responded to
the specific inquiries posed and, in May 2012, filed grievances
with respondent Town of Jefferson Board of Assessment Review
regarding the subject parcels. The Board upheld the denial of
the requested exemptions, citing petitioner's alleged failure to
provide the additional information previously requested.
Petitioner thereafter commenced the first of these combined
proceedings pursuant to CPLR article 78 and actions for
declaratory judgment seeking, among other things, to annul the
Board's denial of the requested exemptions and to obtain a
declaration that the subject parcels were tax exempt for the 2012
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tax year. By order entered March 4, 2013, Supreme Court
dismissed the petition, finding that none of the parcels
qualified for the requested tax exemption. In response to
petitioner's subsequent motion to renew/reargue, Supreme Court,
by order entered June 21, 2013, granted reargument, adhered to
its prior decision as to parcel No. 3 and, with respect to parcel
Nos. 1 and 2, granted petitioner's application and declared such
parcels to be tax exempt for tax year 2012. Petitioner now
appeals from the March 2013 and June 2013 orders and judgments.1

In the interim, petitioner filed similar applications
seeking real property tax exemptions for the subject parcels for
tax year 2013. Ultimately, the Board denied the requested
exemptions, again citing an alleged lack of supporting
documentation. Petitioner thereafter commenced the second of
these combined proceedings/actions seeking, among other things, a
declaration that all three parcels were tax exempt for 2013. By
order and judgment entered January 31, 2014, Supreme Court
granted the petition as to parcel No. 1 and denied the requested
exemption as to parcel Nos. 2 and 3. Petitioner now appeals from
this order and judgment as well.

RPTL 420-a (1) (a) provides, in relevant part, that "[r]eal
property owned by a corporation or association organized or
conducted exclusively for religious [or] charitable . . .
purposes . . . and used exclusively for carrying out thereupon

1
Despite the wording of the June 2013 order and judgment,
it is apparent that Supreme Court actually granted reargument as
to all three parcels, awarded affirmative relief as to parcel
Nos. 1 and 2 and adhered to its prior decision as to parcel No.
3. As a result, the June 2013 order, which is appealable as of
right (see CPLR 5701 [a] [2] [viii]), supersedes Supreme Court's
March 2013 order and judgment, thereby requiring dismissal of
petitioner's appeal therefrom (see People v Parrotte, 267 AD2d
884, 885 [1999], lv denied 95 NY2d 801 [2000]; see also Niagara
Foods, Inc. v Ferguson Elec. Serv. Co., Inc., 111 AD3d 1374, 1375
[2013], lv denied 22 NY3d 864 [2014]; cf. Chittenden Falls Realty
Corp. v Cray Val. Prods., 208 AD2d 1114, 1115-1116 [1994]).
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. . . such purposes . . . shall be exempt from taxation as
[therein] provided." To demonstrate entitlement to this
exemption, "(1) the [petitioning] entity must be organized
exclusively for purposes enumerated in the statute, (2) the
property in question must be used primarily for the furtherance
of such purposes, . . . (3) no pecuniary profit, apart from
reasonable compensation, may inure to the benefit of any
officers, members, or employees, and (4) the [petitioning] entity
may not be simply used as a guise for profit-making" (Matter of
Pine Harbour, Inc. v Dowling, 89 AD3d 1192, 1193 [2011] [internal
quotation marks and citation omitted]; accord Matter of Maetreum
of Cybele, Magna Mater, Inc. v McCoy, 111 AD3d 1098, 1100 [2013],
lv granted 22 NY3d 864 [2014]; Matter of Eternal Flame of Hope
Ministries, Inc. v King, 76 AD3d 775, 777 [2010], affd 16 NY3d
778 [2011]). Notably, "a property owner seeking a real property
tax exemption which demonstrates that it is a not-for-profit
entity whose tax-exempt status has been recognized by the
Internal Revenue Service and whose property is used solely for
[charitable] purposes has made a presumptive showing of
entitlement to [the] exemption" (Matter of Greater Jamaica Dev.
Corp. v New York City Tax Commn., 111 AD3d 937, 939 [2013], lv
granted ___ NY3d ___ [July 1, 2014] [internal quotation marks and
citations omitted]).

Here, upon reviewing, among other things, petitioner's
certificate of incorporation and bylaws, the affidavit submitted
by one of its representatives, the various tax filings and other
financial information provided and the details regarding the
composition and use of the various parcels, we are satisfied that
petitioner met its burden of showing that it was organized
exclusively for religious or charitable purposes and that the
subject parcels, in turn, were used exclusively for carrying out
such purposes. Specifically, petitioner's submissions
demonstrated that the religious and charitable purposes for which
it was organized include, among other things, "[t]he advancement
of religious education" and "support[ing] various outreach
programs for unaffiliated Jews," that petitioner utilized the
subject parcels for the purpose of, among other things, operating
a summer camp "to provide religious, educational, social and
moral enrichment and improvement," including "individualized
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learning opportunities for children interested in beginning or
improving their mastery of Hebrew, or in learning about Jewish
traditions and values" and that petitioner neither profited from
such venture nor otherwise ran or participated in a for-profit
business. Accordingly, to the extent that Supreme Court
determined that certain of the subject properties were not
entitled to the exemption set forth in RPTL 420-a (1) (a) in the
first instance, this was error.2

Having concluded that petitioner met its burden as to the
cited exemption, our inquiry distills to whether – as Supreme
Court found – petitioner's purported violation of certain
provisions of the local building and fire code operated to
deprive it of its tax-exempt status as to the subject parcels.
In this regard, the case law makes clear that a property owner's
actual use of a parcel in violation of a municipality's zoning
law – such as where the subject parcel is not zoned for its
intended use or the property owner fails to obtain the special
use permit required in order to effectuate the intended use –
such violation will deprive the property owner of the exemption
otherwise afforded by RPTL 420-a (1) (a) (see Matter of Geneva
Gen. Hosp. v Assessor of Town of Geneva, 108 AD3d 1043, 1045
[2013]; Matter of Ahavas Chaverim Gemilas Chesed, Inc. v Town of
Mamakating, 99 AD3d 1156, 1158-1159 [2012]; Congregation Or
Yoself v Town of Ramapo, 48 AD3d 731, 732 [2008], lv denied 10
NY3d 711 [2008]). Here, however, nothing in the record suggests
that petitioner's property is not zoned for use as, among other
things, a summer camp or that petitioner otherwise is in
violation of the zoning laws promulgated by respondent Town of
Jefferson. Rather, the record reflects – at best – that
petitioner was in possession of several open building permits

2
In proceeding No. 1, Supreme Court denied the requested
exemption as to parcel No. 3. In proceeding No. 2, Supreme Court
found that petitioner satisfied the statutory elements of RPTL
420-a (1) (a) as to all three parcels, but denied the requested
exemption as to parcel Nos. 2 and 3 due to petitioner's alleged
noncompliance with certain local building and fire code
provisions.
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pertaining to ongoing work on the affected parcels for which no
corresponding certificate of occupancy or certificate of
completion had yet been issued. Even assuming that the
affidavits tendered by the Town's code enforcement officer are
sufficient to establish that petitioner operated the camp during
the 2012 and 2013 tax years while "technically in violation" of
certain provisions of the Town's building and fire code (again,
based upon petitioner's asserted failure to obtain the required
certificates of occupancy or completion), the claimed violations
in no way undermine – or even substantially impair – petitioner's
otherwise legal use of the property and, therefore, do not afford
a basis upon which to deny petitioner the requested tax
exemption. Stated another way, because the alleged violations do
not divest petitioner of its ability to use the affected parcels
for religious or charitable purposes, such violations cannot
operate to deprive petitioner of a tax exemption to which it
otherwise has demonstrated entitlement. To the extent that
respondents believe that petitioner is not in compliance with all
relevant provisions of the Town's building and fire code, their
remedy is to issue a stop work order or pursue whatever
enforcement proceedings may be available.

Peters, P.J., Garry, Rose and Clark, JJ., concur.

ORDERED that the appeal from the order and judgment entered
March 4, 2013 is dismissed, without costs.

ORDERED that the order and judgment entered June 21, 2013
is modified, on the law, without costs, by reversing so much
thereof as dismissed that part of the petition seeking to annul a
determination by respondent Town of Jefferson Board of Assessment
Review as to parcel No. 3 for tax year 2012; petition granted to
that extent, said determination annulled and it is declared that
parcel No. 3 is tax exempt for tax year 2012; and, as so
modified, affirmed.
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ORDERED that the order and judgment entered January 31,
2014 is modified, on the law, without costs, by reversing so much
thereof as dismissed that part of the petition seeking to annul a
determination by respondent Town of Jefferson Board of Assessment
Review as to parcel Nos. 2 and 3 for tax year 2013; petition
granted to that extent and it is declared that parcel Nos. 2 and
3 are tax exempt for tax year 2013; and, as so modified,
affirmed.

ENTER:

Robert D. Mayberger
Clerk of the Court