HERKIMER COUNTY INDUSTRIAL DEVELOPM v. VILLAGE OF HERKIMER

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
361
CA 10-01845
PRESENT: SCUDDER, P.J., CENTRA, SCONIERS, GORSKI, AND MARTOCHE, JJ.

HERKIMER COUNTY INDUSTRIAL DEVELOPMENT AGENCY,
PLAINTIFF,

V MEMORANDUM AND ORDER

VILLAGE OF HERKIMER, DEFENDANT-RESPONDENT,
AND COUNTY OF HERKIMER, DEFENDANT-APPELLANT.
(APPEAL NO. 2.)

ROBERT J. MALONE, COUNTY ATTORNEY, HERKIMER (LORRAINE H. LEWANDROWSKI
OF COUNSEL), FOR DEFENDANT-APPELLANT.

LONGSTREET & BERRY, LLP, SYRACUSE (MICHAEL LONGSTREET OF COUNSEL), FOR
DEFENDANT-RESPONDENT.

Appeal from an order of the Supreme Court, Herkimer County
(Michael E. Daley, J.), entered April 30, 2010. The order, inter
alia, denied the motion of defendant County of Herkimer seeking leave
to renew its motion for summary judgment on its cross claims, for
leave to serve an amended answer adding a third cross claim, and for
summary judgment on the third cross claim.

It is hereby ORDERED that the order so appealed from is
unanimously modified on the law by granting that part of the motion of
defendant County of Herkimer seeking leave to renew its motion for
summary judgment on its first and second cross claims and granting
that part of the motion seeking leave to serve an amended answer to
assert a third cross claim, upon condition that it shall serve the
amended answer within 20 days of service of a copy of the order of
this Court with notice of entry and as modified the order is affirmed
without costs.

Memorandum: Plaintiff commenced this action seeking a
declaration that the real property taxes levied against it by
defendant Village of Herkimer (Village) are void inasmuch as plaintiff
is exempt from the payment of such taxes. Pursuant to Village Law §
11-1118, the Village added the unpaid water rents owed by plaintiff’s
tenant to the annual tax levies of the Village in 2004 and 2005 and,
when plaintiff failed to pay those amounts, the Village turned the
unpaid tax levies over to defendant County of Herkimer (County)
pursuant to RPTL 1436. Pursuant to RPTL 1442 (4), the County, under
protest, paid the Village the amounts levied against plaintiff for
2004 and refused to pay the Village the amounts levied against
plaintiff for 2005 because plaintiff is a tax-exempt entity. The
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CA 10-01845

Village moved for, inter alia, summary judgment dismissing the
complaint against it and for summary judgment on its cross claim
seeking a declaration that the County is obligated pursuant to RPTL
1442 (4) for the amount owed by plaintiff for unpaid water rents. The
County moved for, inter alia, summary judgment on its cross claims,
alleging that it is not liable to the Village pursuant to RPTL 1442
(4) because plaintiff is exempt from paying property taxes (see
General Municipal Law § 874). In appeal No. 1, the County and
plaintiff each appeal from a judgment granting the Village’s motion
and denying the County’s motion.

While the motions were pending, however, the County Legislature
determined pursuant to RPTL 1138 (6) (a) that there is no practical
method to enforce the collection of the delinquent tax liens against
plaintiff, and the liens were thereafter cancelled. Pursuant to RPTL
1138 (6) (c), “[a] tax district shall not be required to credit or
otherwise guarantee to any municipal corporation the amount of any
delinquent tax lien [that] has been cancelled . . . If such a credit
or guarantee shall have been given before the cancellation of the
lien, the tax district shall be entitled to charge back to the
municipal corporation the amount so credited or guaranteed.” The
County moved for leave to renew its motion for, inter alia, summary
judgment on its cross claims based upon the action of the County
Legislature resulting in the cancellation of the tax liens against
plaintiff. Plaintiff joined in that part of the motion. The County
alleged that the cancellation of those tax liens would affect the
outcome of the prior summary judgment motions. The County also moved
for leave to amend its answer to add a third cross claim alleging
that, pursuant to RPTL 1138 (6) (c), it is not liable to the Village
for the amounts of the tax liens against plaintiff, as well as for
summary judgment on that cross claim. In appeal No. 2, the County
appeals from an order that, inter alia, denied that motion.

Addressing first the order in appeal No. 2, we conclude that
Supreme Court erred in denying those parts of the County’s motion
seeking leave to renew its prior motion for summary judgment and
seeking leave to amend its answer to allege a third cross claim. We
therefore modify the order accordingly. With respect to that part of
the motion seeking leave to renew, we conclude that the County alleged
new facts that would change the prior determination on its motion for
summary judgment (see CPLR 2221 [e]; cf. Cole v North Am. Adm’rs, 11
AD3d 974), and thus that the court abused its discretion in denying
the motion. Although the water rents were based on usage and thus
were not taxes when they were billed to plaintiff’s tenant (see State
Univ. of N.Y. v Patterson, 42 AD2d 328, 329), plaintiff was not billed
for the water rents but, rather, was issued tax notices after those
unpaid amounts were added to the Village tax levy pursuant to Village
Law § 11-1118 (cf. id.). We conclude that the Village was therefore
bound by the provisions of the RPTL when it turned over those unpaid
tax levies to the County for enforcement proceedings (see RPTL 1442
[5]). By alleging that the cancellation of the tax liens relieved the
County from crediting or guaranteeing to the Village the amounts of
its levies against plaintiff (see RPTL 1138 [6] [c]), the County
alleged new facts that would affect the court’s determination on the
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CA 10-01845

prior summary judgment motion.

We further conclude that the court abused its discretion in
denying that part of the County’s motion seeking leave to amend its
answer to include a third cross claim alleging that it is not liable
to the Village for the unpaid amounts of its tax levies against
plaintiff, and we therefore further modify the order accordingly.
Here, “there was no inordinate delay in seeking such relief, and there
was no showing of prejudice to [the Village]” (Torvec, Inc. v CXO on
the GO of Del., LLC, 38 AD3d 1175, 1176-1177; see CPLR 3025 [b]). The
court, however, properly denied that part of the motion for summary
judgment on the third cross claim inasmuch as issue on that cross
claim has not been joined and thus that part of the motion is
premature (see CPLR 3212 [a]).

In light of our determination in appeal No. 2, we conclude with
respect to appeal No. 1 that the court erred in granting the Village’s
motion for, inter alia, summary judgment dismissing the complaint
against it and summary judgment on its cross claim. Further, we
conclude that the court erred to the extent that it dismissed the
County’s cross claims and thus that they should be reinstated. We
therefore modify the judgment accordingly.

Entered: May 6, 2011 Patricia L. Morgan
Clerk of the Court