HAMPSHIRE RECREATION LLC v. VILLAGE OF MAMARONECK (2026)

DECISION & ORDER

In an action, inter alia, to recover damages for a regulatory taking of property without just compensation, the defendants appeal from an order of the Supreme Court, Westchester County (William J. Giacomo, J.), dated May 3, 2022.  The order denied the defendants’ motion pursuant to CPLR 3211(a)(1) and (7) to dismiss the complaint.

ORDERED that the order is affirmed, with costs.

In May 2021, the plaintiff commenced this action against the defendants, asserting, among other things, a cause of action to recover damages for a regulatory taking of property without just compensation on the basis that the defendant Village of Mamaroneck Planning Board (hereinafter the Planning Board) denied the plaintiff's proposal for a residential development on land that it purchased in 2010.  The complaint alleged that the plaintiff had purchased the property, which was zoned for residential purposes, with the reasonable expectation that it could construct a residential development consisting of approximately 105 single-family units.  However, in May 2020, after adopting the findings of a State Environmental Quality Review Act statement and considering the plaintiff's primary proposal and 16 alternative proposals, the Planning Board denied the plaintiff's proposal and declined to issue the necessary permits, approvals, and variance for the proposed project.  Before answering the complaint, the defendants moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the complaint.  In an order dated May 3, 2022, the Supreme Court denied the motion.  The defendants appeal.

“[W]hen considering a motion to dismiss pursuant to CPLR 3211(a)(7), the court must accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” (Cabrera v. Deadwood Constr., Inc., 226 AD3d 743, 743–744;  see Leon v. Martinez, 84 N.Y.2d 83, 87–88).  “Where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one and, unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate” (Red Target, LLC v. Kun Resources, 244 AD3d 1147, 1148 [internal quotation marks omitted];  see Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275).  Further, “[a] motion to dismiss on the ground that the action is barred by documentary evidence pursuant to CPLR 3211(a)(1) may be granted only where the documentary evidence utterly refutes the plaintiff's factual allegations, conclusively establishing a defense as a matter of law” (Red Target, LLC v. Kun Resources, 244 AD3d at 1148 [internal quotation marks omitted];  see Goshen v Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326).

“There is a ‘heavy burden placed upon one alleging a regulatory taking’ ” (Matter of Master Built Homes II Corp. v New York City Dept. of Bldgs., 220 AD3d 867, 873, quoting Keystone Bituminous Coal Assn. v DeBenedictis, 480 U.S. 470, 493).  “If the contested regulation falls short of eliminating all economically viable uses of the encumbered property, the Court looks to several factors to determine whether a taking occurred, including the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations, and the character of the government action”(id. [internal quotation marks omitted];  see Penn Central Transp.  Co. v. New York City, 438 U.S. 104, 124).  “With regard to the economic impact of the regulation, the claimant must show by dollars and cents evidence that under no use permitted by the regulation under attack would the properties be capable of producing a reasonable return;  the economic value, or all but a bare residue of the economic value, of the parcels must have been destroyed by the regulations at issue” (Matter of Master Built Homes II Corp. v New York City Dept. of Bldgs., 220 AD3d at 873 [internal quotation marks omitted];  see Greenport Group, LLC v Town Bd. of the Town of Southold, 167 AD3d 575, 578).  “The mere diminution in the value of property, however serious, is insufficient to demonstrate a taking, as is the fact that a regulation deprives the property of its most beneficial use” (Greenport Group, LLC v Town Bd. of the Town of Southold, 167 AD3d at 578 [alteration and internal quotation marks omitted];  see Blue Is. Dev., LLC v. Town of Hempstead, 131 AD3d 497, 502).

Here, accepting the allegations in the complaint as true and according the plaintiff the benefit of every possible favorable inference, the complaint sufficiently alleged the elements of a cause of action to recover damages for a regulatory taking (see Blue Is. Dev., LLC v. Town of Hempstead, 131 AD3d at 502).  Among other things, the complaint alleged that by limiting the future use of the property to only its current recreational use, the value of the property decreased from approximately $63.5 million to approximately $5.4 million, which is a 91% decrease in value of the property (see Matter of New Cr. Bluebelt, Phase 3 [Baycrest Manor, Inc.,-City of New York], 156 AD3d 163, 176–177;  Blue Is. Dev., LLC v. Town of Hempstead, 131 AD3d at 502).  Further, the complaint alleged that although the property was zoned for residential purposes, the Planning Board denied all proposals that included a residential component and thereby interfered with the plaintiff's reasonable investment-backed expectations (see Sherman v. Town of Chester, 752 F3d 554, 565 [2d Cir] ).  In addition, the complaint, as supplemented by the submission of transcripts of deposition testimony and emails of a Planning Board member, sufficiently alleged that the Planning Board was biased against the proposed project and acted in bad faith (see id. at 565–566).

The evidence submitted by the defendants in opposition failed to establish that a material fact claimed by the plaintiff was not a fact at all and that no significant dispute exists regarding it (see Red Target, LLC v. Kun Resources, 244 AD3d at 1148).  Moreover, the defendants failed to offer evidence that utterly refuted the plaintiff's factual allegations and conclusively established a defense as a matter of law (see CPLR 3211[a][1];  Johnson v. 275 Clermont, LLC, 235 AD3d 731, 732;  Blue Is. Dev., LLC v. Town of Hempstead, 131 AD3d at 502).

The defendants’ remaining contentions are without merit.

Accordingly, the Supreme Court properly denied the defendants’ motion pursuant to CPLR 3211(a)(1) and (7) to dismiss the complaint.

LASALLE, P.J., CONNOLLY, TAYLOR and GOLDBERG VELAZQUEZ, JJ., concur.