The Supreme Court, Suffolk County (Hon. Martha L. Luft) has dismissed a proceeding seeking to shut down a small restaurant in a Montauk motel, in JHCR Trust v. East Hampton, Index No. 4297/2016. One issue decided in the action is whether a neighbor can challenge the issuance of a Certificate of Occupancy (CO) years after it was issued, if the neighbor claims not to have received notice of the CO’s issuance. Challenges to COs by appeal to a zoning board are ordinarily governed by a 60-day statute of limitations, but the neighbor in this case argued that it had no notice of the 2005 CO in question, and therefore had the right to challenge the restaurant use authorized by the CO when the owner later obtained a building permit in 2015. The zoning board found, however, that the neighbor had constructive notice of 2005 CO dating back to at least 2010 and 2011, when the property underwent a site plan review. The Supreme Court upheld the zoning board’s decision as consistent with New York law, further noting that the subsequent issuance of a building permit in 2015 would not “re-start the clock” on the statute of limitations. The Supreme Court then addressed — and dismissed — the neighbor’s claim for an injunction against the restaurant, finding that the restaurant was a lawful use of the property and had obtained all of its required permits.
The Supreme Court, Suffolk County (Hon. Joseph C. Pastoressa) has dismissed an action claiming the violation of a restrictive covenant in Birch Tree Partners v. Windsor Digital Studio, Index No. 10-1350. The action involved the interpretation of a 1956 covenant that restricted a strip of land by prohibiting the erection of any “building or structure” and by restricting the removal of desirable trees or vegetation. One question resolved by the court was whether a fence was a building or structure, and the court found that, under the circumstances, the terms were meant to apply to buildings like those that existed in 1956, rather than to a mere fence. The other question resolved was how to interpret the concept of “desirable” trees. The court found that the purpose of the covenant was to maintain a “screen” between the properties and further concluded that the plaintiff failed to prove that the defendant violated the covenant when it removed older trees that were no longer serving as an effective screen between the properties.
After conducting a non-jury trial, the Supreme Court, Suffolk County (Hon. W. Gerard Asher) has upheld an owner’s title to beachfront lands in Schulz v. Gilmore, Index No 23198/2003. The title claim at issue involved a private beach area in South Jamesport, NY, where the lands had grown over time through a process known as “accretion.” The plaintiff, a neighboring owner, claimed title to all of the accreted lands as against the defendant, who was the direct upland owner. After hearing the evidence at trial, the trial judge concluded that the defendant was the owner of the accreted lands based on longstanding principles of law. The trial judge adopted a “straight-line” approach to demarcating the boundary line between the plaintiff and defendant, and thus the pre-existing boundary between the parties’ upland properties was continued in a straight line through the later-formed accreted lands, up to the high water line. The trial court’s decision illustrates a modern application of ancient doctrines of title law applicable to waterfront properties.
The Appellate Division, Second Department has upheld a contested dredging permit issued by the Town of Southold, in Perry v. PABQPR Trust, 2017 NY Slip Op 05955 (2017). The decision addresses the question of whether a board can issue a permit to an applicant whose title to the land in question is challenged by another. In this case, the town’s Board of Trustees heard conflicting evidence as to the applicant’s title to the underwater lands that were the subject of the dredging permit application, so the board issued a permit but did not make any determination as to the question of title. On appeal, the neighbor who claimed title to the underwater lands argued that the board’s decision should have been overturned because the applicant allegedly did not own the lands in question. The Appellate Division disagreed. The court noted that it was undisputed that the board had “no authority to resolve the issue of ownership of the land” in question, but since the applicant had presented proof of ownership, the court held that the board “was within its authority to grant the permit to the ostensible owner…, without making any further determination as to who owned the area to be dredged.”
The Appellate Division, Second Department has upheld a purchaser’s claim for a refund of a $560,000 downpayment made toward a real estate purchase, in Mineroff v. Lonergan. The contract at issue contained a clause in which the sellers represented that the house was “free and clear of any mold or evidence of existing mold remediation….” After the parties went into contract, the purchasers’ inspection revealed that there was mold in several rooms. The purchasers canceled the contract and demanded a refund of the downpayment, but the sellers refused and commenced their own action claiming a right to retain the downpayment as liquidated damages, based on the theories that the mold clause only applied to “toxic” mold and that, if there was a mold problem, they were deprived of the right to “cure.” After the Supreme Court had granted summary judgment to the purchasers, the sellers appealed. The Appellate Division rejected both of the sellers’ arguments, finding that the contract required the premises to be free from “any” mold, not just toxic mold, and that the mold problem was an incurable one, because the contract prohibited not only mold, but mold remediation.
The Appellate Division, Second Department has upheld certain developers’ right to proceed on a claim for a refund of over $775,000 in “fees” they paid to the Town of Riverhead toward an 87-lot subdivision that was later abandoned, in Harriman Estates v. Town of Riverhead. The fees at issue included a park fee, an engineering review fee, and a water fee, none of which, the developers claimed, were expended toward the subdivision before it was abandoned. The Town argued that the developers were not entitled to a refund of any of the fees regardless of whether the subdivision was developed. The Supreme Court had denied the Town’s motion to dismiss and motion for summary judgment. On appeal from the denial of summary judgment, the Appellate Division affirmed. The Appellate Division explained that a “fee charged by a municipality … must be reasonably necessary to the accomplishment of the statutory command” and “cannot be charged to generate revenue or to offset the cost of other governmental functions.” In this case, the Appellate Division concluded that the Town failed to prove on its motion “that the fees charged were reasonably necessary to cover costs associated with the developers’ subdivision project….”
In separate decisions, the Supreme Court, Suffolk County has rejected a school district’s attempt to set aside a jury verdict or limit the amount of interest to be paid on the verdict to a construction manager who claimed the district breached a contract, in East Hampton Union Free School District v. Sandpebble Builders, Inc., Index No. 2007/1113. The jury had rendered a verdict and awarded $755,767.41 in breach of contract damages to the construction manager on May 26, 2016. The District then filed two motions challenging the verdict. The first motion sought to set aside the verdict in its entirety, based on an argument that the evidence at trial purportedly demonstrated that the claims were not timely filed. The court denied this motion because there was “viable, if not conclusive evidence” supporting the jury’s verdict that the claims were timely. The second motion sought to limit the amount of interest that would be imposed on the verdict from the usual 9% to 4.6% (pre-verdict) and 2.8% (post-verdict). The court denied this motion after finding that 9% is a “presumptively fair and reasonable” rate by law, and the district had not persuaded the court to depart from that rate. Based on this decision, the interest awarded to Sandpebble (for a ten-year period) nearly doubled the amount of the jury’s verdict.
The Supreme Court, Suffolk County has upheld a challenge to the East Hampton Village Zoning Board of Appeals’ attempt to impose an unreasonable condition on the granting of an area variance, in Lee Avenue Lot 1 LLC v. ZBA of Village of East Hampton, Index No. 5690/2015. The case involved the issue of how far can a zoning board go in imposing conditions on variances. The zoning board had granted a variance but tried to condition the variance on the owner addressing issues over a separate scenic easement area that was not involved in the underlying application. Although a zoning board may impose reasonable conditions on variances that “are directly related to and incidental to the proposed use of the property,” the court concluded in this case that the “condition imposed is totally unrelated to the variances granted, and is not aimed at minimizing the adverse impact to an area that might result from the grant of the variances requested by the petitioner.” The condition was therefore “vacated and annulled.”
The firm is pleased to welcome Amanda Star Frazer to the firm’s civil litigation practice group. After practicing title litigation, real estate litigation, and commercial litigation in Florida, Amanda has returned to the South Fork to serve her home community.
The Honorable John H. Rouse of the Supreme Court, Suffolk County has dismissed a purchaser’s action to recover a $1,000,000 downpayment in Matrix Investment Group LLC v. Two Trees Farm Development LLC. The plaintiff had deposited the downpayment toward the purchase of property in Bridgehampton, but in exchange for extensions of the closing date, the plaintiff agreed to release the downpayment from escrow and make it “nonrefundable.” After the plaintiff’s principal died, it refused to close and sought a refund anyway, arguing that defendant’s retention of the downpayment would constitute “unjust enrichment” and that the death of the plaintiff’s principal rendered the transaction impossible to perform. Justice Rouse disagreed, explaining that New York law routinely enforces a seller’s retention of a downpayment as liquidated damages and that even if the purchaser’s principal was a “key man” to its operations, the “Plaintiff did not bargain for the Defendant to be the insurer of the risks that might attend his death.”