Third Department Rejects Claim of “Good Cause Shown” in Dismissing Mis-Served Real Property Tax Assessment Petition

Reversing a lower court decision, the Appellate Division, Third Department, dismissed a real property tax assessment petition that had not been properly served against county officials.  While the lower court had accepted Petitioners' excuses for failing to serve the County Treasurer, the appellate court held to the strict letter of the law and found, despite an absence of prejudice to the taxing jurisdictions, that the inadequate service could not be forgiven.

Tribeca Estates LLC v. Town of Fallsburg, 2024 WL 2964455 (3d Dep’t June 13, 2024) concerned a Real Property Tax Law (“RPTL”) Article 7 proceeding commenced by timely filing and serving the Town of Fallsburg. As required by RPTL § 708(3), Petitioners also sent written notification to the school district. But notice to the county went not to County Treasurer as required by the RPTL, but to the Sullivan County Division of Management and Budget and the Sullivan County Real Property Tax Agency. Additionally, Petitioners had failed to timely file their proof of service. The taxing jurisdictions moved to dismiss, while Petitioners opposed that motion and cross-moved for a declaration that they had sufficiently complied with RPTL § 708, along with an extension of time to serve pursuant to CPLR § 306-b. The trial court sided with Petitioners and the taxing jurisdictions appealed.

On appeal, the Third Department noted there was no dispute that Petitioners had not strictly complied with RPTL § 708(3) service on the County Treasurer. The sole issue was whether Petitioners’ failure should be excused for good cause shown. Petitioners rested their arguments “on the affidavit of their counsel’s employee, who avers that she was unable to find the treasurer’s address on Sullivan County’s website and, consequently, she determined that she could send the petition and notice to the local school district's superintendent and two unrelated county agencies based upon her evaluation of the responsibilities of those agencies pertaining to the assessment of properties in Sullivan County.” 2024 WL 2964455 at *2.  But the Court rejected the argument, finding Petitioners’ efforts insufficient to excuse the failure to serve.

To this point, the failure to locate the treasurer’s contact information on the County website neither provides justification for the conclusion that service on a different county office could be made in lieu of the treasurer, nor does it establish that respondents made some affirmative misrepresentation as to the proper location to serve the treasurer. Further, there is no indication that Petitioners undertook any additional action to ascertain the appropriate contact information for the county treasurer before resorting to service on other government officials, thus negating Petitioners’ contention that they engaged in diligent efforts.

2024 WL 2964455 at *2 (citations omitted). The Court also rejected Petitioners’ request that it “consider their proffered excuses in the aggregate to find good cause” because the excuses “lack merit and, therefore, they cannot aggregate those justifications in order to rely on the absence of prejudice to respondents or the contention that respondents had adequate notice of the proceeding by virtue of service being made on officials in the same building.”  Id. (citations omitted).

Because it dismissed the case based on the failure to properly notify the County Treasurer, the Third Department did not reach the issue of the failure to timely file the proof of service.

Hodgson Russ Insights

A significant portion of Petitioners’ defense was that there was no prejudice to the taxing jurisdictions from the misdirected notice and the late failure to file the affidavit of service. But the Court of Appeals has specifically rejected absence of prejudice is sufficient basis for failure to comply with RPTL § 708(3). “RPTL 708(3) requires petitioner to show good cause to excuse its failure to notify the appropriate school district, and not merely to demonstrate the absence of prejudice to the school district.” Bd. of Managers of Copley Ct. Condo. v. Town of Ossining, 19 N.Y.3d 869, 871 (2012). Courts certainly recognize that mistakes happen, and there are instances where good cause is shown, but here the Court did not accept that Petitioners’ counsel could not track down the address of the County Treasurer, when, among other information, it had the address for other county officials.

If you have any questions about this case, property tax assessment challenges, or any real property taxation issue, contact a member of the Hodgson Russ Real Property Tax Assessment & Eminent Domain Practice.

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