NEW YORK TELEPHONE COMPANY v. NASSAU COUNTY

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Supreme Court, Appellate Division, Second Department, New York.

NEW YORK TELEPHONE COMPANY, Respondent, v. NASSAU COUNTY, et al., Appellants.  (Matter No. 1)

IN RE: New York Water Service Corporation, Respondent, v. Nassau County, et al., Appellants.  (Matter No. 2)

IN RE: Long Island Water Corporation, Respondent, v. Nassau County, et al., Appellants.  (Matter No. 3)

Decided: September 16, 2002

CORNELIUS J. O'BRIEN, J.P., WILLIAM D. FRIEDMANN, LEO F. McGINITY and HOWARD MILLER, JJ. Lorna B. Goodman, County Attorney, Mineola, NY, (Elizabeth Botwin of counsel), and Ross & Cohen, LLP, New York, NY, (Michael L. Chartan and Susan M. Chagrin of counsel), for appellants (one brief filed). Cullen and Dykman, LLP, Brooklyn, NY, (Peter J. Mastaglio, Karen I. Levin, and Robert J. Sorge of counsel), for respondent in Matter No. 1. Huber Lawrence & Abell, New York, NY, (Theodore S. Duver of counsel), for respondents in Matter No. 2 and Matter No. 3.

In an action, inter alia, for a judgment declaring that RPTL article 18, as applied in Nassau County for the purpose of assessing the value of certain real property and imposing ad valorem levies in non-Countywide special districts during certain tax years, violated the RPTL and the equal protection clauses of the United States and New York State Constitutions, and two proceedings pursuant to CPLR article 78, inter alia, to annul determinations of the respondents setting the equalization rates and assessed values of the petitioners' respective special franchise property in the same special districts during the same tax years, all of which were joined for the purpose of discovery and trial, Nassau County, the Nassau County Department of Assessment, the Nassau County Board of Assessors, Abe Seldin, as the Chairman of the Nassau County Board of Assessors, and the Nassau County Legislature, appeal in the action, and appeal, by permission, in the proceedings, from so much of an order of the Supreme Court, Nassau County (McCabe, J.), entered October 5, 2000, as granted the plaintiff's motion for summary judgment and the petitioners' requests for relief to the extent of declaring that their assessment of real property in non-Countywide special districts in reliance on RPTL article 18 was invalid, enjoined them and their officials, employees, attorneys, and agents from assessing real property in non-Countywide special districts in reliance on RPTL article 18, directed that a trial be held with respect to the calculation of the damages sustained by the plaintiff and the petitioners as a result of the improper assessment of real property in non-Countywide special districts, directed that all necessary discovery in the action and proceedings be completed within 60 days, and denied their cross motion in the action for summary judgment dismissing the complaint, and their motion to dismiss the proceedings.   The appeal from the order entered October 5, 2000, brings up for review so much of an order of the same court, dated July 5, 2001, as, upon reargument, adhered to the above portions of the original determination (see CPLR 5517[b] ).

ORDERED that the appeal from the order entered October 5, 2000, is dismissed, without costs or disbursements, as that order was superseded by the order dated July 5, 2001, made upon reargument;  and it is further,

ORDERED that the order dated July 5, 2001, is modified by deleting the provisions thereof adhering (1) to the original determination directing that a trial be held with respect to the calculation of the damages sustained by the plaintiff and the petitioners as a result of the improper assessment of real property in non-Countywide special districts, and (2) directing that all necessary discovery in the action and proceedings shall be completed within 60 days, and adding provisions thereto granting (1) the defendants' cross motion in the action for summary judgment dismissing the complaint and (2) the respondents' motion to dismiss the proceedings to the extent of precluding the payment of tax refunds;  as so modified, the order dated July 5, 2001, is affirmed insofar as reviewed, without costs or disbursements, and the order entered October 5, 2000, is modified accordingly.

In April 1997, the New York Telephone Company (hereinafter NYNEX) commenced an action (hereinafter the Action) against Nassau County and various government officials (hereinafter collectively referred to as Nassau County) seeking a judgment, inter alia, declaring that Nassau County's method of assessing real property in non-Countywide special districts during certain tax years violated the Real Property Tax Law and the equal protection clauses of the United States and New York State Constitutions.   At the same time, the New York Water Service Corporation and the Long Island Water Corporation (hereinafter collectively referred to as the Water Companies) commenced separate proceedings pursuant to CPLR article 78 (hereinafter Proceedings Nos. 1 and 2) against the same parties named in the Action, inter alia, to annul the equalization rates and assessed values as determined by Nassau County for their respective special franchise property in the same special districts during the same tax years.   In addition to declaratory and injunctive relief, NYNEX and the Water Companies sought refunds of the tax overpayments. In March 1999, when the Supreme Court joined the Action with Proceedings Nos. 1 and 2 for the purposes of discovery and trial, there were several motions for various relief pending before it.

 The Supreme Court properly determined that Nassau County's method of assessing real property in non-Countywide special districts during the tax years in question violated the relevant provisions of the Real Property Tax Law. It is undisputed that the classification and apportionment provisions of RPTL article 18 apply to Nassau County, as a special assessing unit, and to the statutorily-defined “portions” within its borders (see RPTL 1801[d], 1802, 1803[1], 1803-a, 1803-b).   During the tax years in question, however, those provisions did not apply for the purpose of imposing special ad valorem levies in non-Countywide special districts, which did not fall within the definition of a “portion” (see RPTL 102[14], 102[16], 102[20], 1801[j] ).  Although the Legislature subsequently amended RPTL article 18 to include non-Countywide special districts, those amendments did not become effective until August 17, 2001 (see L. 2001, ch. 191).

 Where, as here, the language of a statute is clear and unambiguous, there is no need to resort to the rules of statutory construction (see McKinney's Consolidated Laws of NY, Book 1, Statutes, § 92[b] ).  Moreover, a tax statute should not be extended by construction beyond its express terms or the reasonable implications of its language (see Matter of Grumman Aircraft Eng. Corp. v. Board of Assessors of Town of Riverhead, 2 N.Y.2d 500, 510, 161 N.Y.S.2d 393, 141 N.E.2d 794, cert. denied 355 U.S. 814, 78 S.Ct. 14, 2 L.Ed.2d 31;  Matter of Crystal v. City of Syracuse, Dept. of Assessment, 47 A.D.2d 29, 30, 364 N.Y.S.2d 618, affd. 38 N.Y.2d 883, 382 N.Y.S.2d 745, 346 N.E.2d 546;  McKinney's Consolidated Laws of N.Y., Book 1, Statutes, § 94).   As the Supreme Court properly determined that the challenged assessment method was not authorized by the governing statute, it is not necessary to decide the constitutional questions raised by the parties (see Matter of Syquia v. Board of Educ., 80 N.Y.2d 531, 535, 591 N.Y.S.2d 996, 606 N.E.2d 1387;  Matter of Beach v. Shanley, 62 N.Y.2d 241, 254, 476 N.Y.S.2d 765, 465 N.E.2d 304;  People v. Felix, 58 N.Y.2d 156, 161, 460 N.Y.S.2d 1, 446 N.E.2d 757;  McKinney's Consolidated Laws of N.Y., Book 1, Statutes, § 150).

 Although the tax assessments were invalid, NYNEX and the Water Companies are not entitled to retroactive monetary relief.   The record reveals that the payment of tax refunds will have a significant financial impact in many non-Countywide special districts, where taxes have been paid, tax liens matured, budgets adopted, and expenditures made, all in reliance on the ad valorem levies.   Under these circumstances, the courts should exercise restraint and not act so as to “cause disorder and confusion in public affairs even though there may be a strict legal right” (Matter of Andresen v. Rice, 277 N.Y. 271, 282, 14 N.E.2d 65;  see also Hellerstein v. Assessor of Town of Islip, 37 N.Y.2d 1, 14, 371 N.Y.S.2d 388, 332 N.E.2d 279;  Foss v. City of Rochester, 65 N.Y.2d 247, 260, 491 N.Y.S.2d 128, 480 N.E.2d 717;  Hurd v. City of Buffalo, 41 A.D.2d 402, 405, 343 N.Y.S.2d 950, affd. 34 N.Y.2d 628, 355 N.Y.S.2d 369, 311 N.E.2d 504;  Matter of Bauer v. Board of Assessment Review, 114 Misc.2d 640, 643-644, 452 N.Y.S.2d 186, affd. 91 A.D.2d 1097, 1098, 458 N.Y.S.2d 296;  Matter of Teuchtler v. Board of Assessors of Town of Cape Vincent, 94 Misc.2d 167, 171, 404 N.Y.S.2d 498).   Accordingly, the Supreme Court improvidently exercised its discretion in authorizing tax refunds and directing a trial to determine their amount.

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