On May 10, 2018, we blogged about a tax certiorari decision handed down by the Appellate Division, Second Department, Matter of Larchmont Pancake House v Board of Assessors, 153 AD2d 521 (Aug. 2, 2017). The decision caused great concern to the bar because it held that while a tenant who is responsible for the payment of real estate taxes is an aggrieved party within the meaning of the RPTL because the assessments had a direct adverse affect on its pecuniary interests. The tenant may not proceed because RPLT articles require that the property owner file a complaint or grievance to obtain administrative review of a tax assessment. The Pancake House never owned the property and, therefore, the Second Department held, the Court lacked subject matter jurisdiction. This questionable decision will be reviewed by the Court of Appeals which granted leave of appeal. 31 NY3d 907 (2018).
Along comes Matter of LIPA v Assessor of the Town of Huntington, ___ AD3d ___ decided August 8, 2018 where the same Second Department ruled completely the other way. In LIPA, the Supreme Court granted motion to dismiss tax certiorari proceedings filed by LIPA for lack of standing. The petitioner entered into a contract to buy the energy produced from LILCO’s power generating facilities. Pursuant to the agreement, LIPA was to make monthly payments to LILCO which included property and all other taxes. Here, the Court reversed the dismissal of the petitions, holding, Article 7 of the Real Property Tax Law “confers upon ‘aggrieved’ persons standing ‘to review an assessment of real property’” (Matter of Steel Los III/Goya Foods Inc. v Board of Assessors of County of Nassau, 10 NY3d 445, 452 [emphasis omitted], quoting RPTL 700[1]; 704[1]). “A person is ‘aggrieved’ when an assessment has ‘a direct adverse affect on the challenger’s pecuniary interests’” (Matter of Steel Los III/Goya Foods Inc. v Board of Assessors of County of Nassau, 10 NY3d 452-453, quoting Matter of Waldbaum, Inc. v Finance Adm’r of City of N.Y., 74 NY2d 128, 132). Here, since the PSA required LIPA to pay all of the taxes levied against the property, any tax assessment of the property directly affects LIPA’s pecuniary interest and, thus, LIPA has standing to challenge the assessments (see Matter of Malik v Tax Commn. of the City of N.Y., 68 AD3d 870, 871; Matter of EFCO Prods. v Cullen, 161 AD2d 44, 46-47; Matter of Big V Supermarkets, Store #217 v Assessor of Town of E. Greenbush, 114 AD2d 726, 727-728).
Maybe, the bench in the Larchmont case did not like pancakes.
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