Second Department Finds Denial Of Subdivision Application Based Upon Watershed Regulations Did Not Constitute a Taking

In 2005, Claimant/Appellant acquired title to a 16.81 acre parcel of undeveloped real property in the Village and Town of Monroe.  The property was located in the RR 1.5 ac zoning district, a designation that included “single family detached dwellings on lots of 3 or more acres in size” as a permitted use. In 2006, Claimant applied for approval to develop the property by subdividing it into three lots and then constructing a single-family dwelling on each lot.  The proposal also included installation of a separate septic system for each of the proposed dwellings.  However, as the property was located within the Lake Mombasha watershed, it was subject to watershed protection regulations promulgated by the New York State Department of Health (“DOH”) pursuant to article 11 of the Public Health Law. These regulations prohibited placement of a subsurface sewage disposal system within 300 feet of the lake. Relying on this provision, the Town Planning Board denied Claimant's subdivision application in November 2008, as the necessary septic systems would violate the watershed regulations. After the denial, Claimant brought several actions against the State of New York, including the instant action, wherein Claimant alleges that application of the watershed regulations constituted a per se taking entitling it to compensation. The Court of Claims denied Claimant’s motion for summary judgment and granted the summary judgment motion for the State.  Claimant appealed.

On appeal, the Appellate Division, Second Department found that Claimant failed to establish that the subject property had suffered a complete elimination of value as a result of the watershed regulations. Moreover, the court noted that “a threshold inquiry in any regulatory takings claim is whether the proscribed use was part of the landowner's title to begin with.”  Here, Claimant acquired title to the subject property 85 years after the watershed regulations went into effect, and therefore there was no interest in installing a septic system to have been “taken.” Finally, Defendant submitted evidence that the claimant's parcel was once joined with abutting lands that were split into separate parcels in 1989. Therefore, “the right to install a septic system was never part of the ‘bundle of rights’ the claimant acquired with title to the property.”  Thus, Claimant could not succeed on its takings claim. Accordingly, the Court affirmed the decision of the Court of Claims denying Claimant's motion for summary judgment and dismissed the claim.

The case was Monroe Equities, LLC v. State, 145 A.D.3d 680 (2d Dep’t 2016).

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