Court Holds All Property Owners Not Automatically Necessary Parties To Rezoning Challenge

Respondent Town Board of the Town of Coeymans passed Local Law No. 4, which reclassified the permitted use of nine contiguous parcels from residential-agricultural use to industrial use.  Petitioners commenced a hybrid Article 78 / declaratory judgment action to annul the local law based on, among other things, allegations that the procedures to adopt the ordinance violated the State Environmental Quality Review Act (“SEQRA”).  Respondents moved to dismiss on the grounds Petitioners failed to join necessary parties, specifically all property owners of rezoned parcels who had their rights affected by the law. The trial court denied the motion, but held that the property owners were necessary parties and ordered they be served with a notice of petition and petition, and Petitioners filed an amended petition adding the owners as respondents (“newly-added respondents”). Afterwards, Respondents and some newly-added respondents separately moved to dismiss on the grounds that the amended petition was time-barred as to the newly-added respondents under CPLR § 217(1), which provides a four-month statute of limitations. Petitioners conceded untimely service, but reserved their right to challenge on appeal the prior determination that the newly-added respondents were necessary parties. The trial court then dismissed the amended petition as time-barred.

On appeal, the Appellate Division, Third Department reversed, finding the newly-added respondents were not necessary parties simply because the ordinance affected their property rights, writing “it is notable that the Court of Appeals and this state's appellate courts, including this Court, have long entertained challenges to municipalities' legislative actions in regard to zoning ordinances without requiring the joinder of every property owner whose rights are affected by the ordinance at issue.” The Court continued that “[a]lthough this Court has, in limited cases, found property owners to be necessary parties in regard to legal challenges to municipal ordinances that affect the property owners' rights, it has only done so in cases where the owners had obtained an actual approval pursuant to the challenged zoning ordinance that would be adversely impacted by a judgment annulling that ordinance.” Here, the Court found that the newly-added respondents did not fall into that previously recognized category, and further declined to adopt a new rule stating that those affected by an ordinance are necessary parties when that ordinance is challenged.  Accordingly, the Court reversed the trial court’s decision to dismiss the amended petition on the grounds that the the newly-added respondents were not necessary parties, and thus the amended petition was not time-barred.

The case was Hudson River Sloop Clearwater, Inc. v. Town Board of the Town of Coeymans, 144 A.D.3d 1274 (3d Dep’t 2016).

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