On June 9, 2016, the New York Court of Appeals unanimously ruled that noncompliance with the RPTL § 708(3), which requires a taxpayer filing a tax certiorari petition serve notice to any affected school district within 10 days of serving the municipal assessment authority, cannot be corrected through the extension of time to recommence provided by CPLR § 205(a) absent good cause for the failure to serve.
The case arose when Westchester Joint Water Works (“Taxpayer”), owner of a water supply and pipe system in the City of Rye (“City”), challenged its tax assessments for 2002 through 2010 by commencing nine tax certiorari proceedings against the City Assessor (“Assessor”). Pursuant to Real Property Tax Law (RPTL) § 708(3), the Taxpayer is required to serve the municipality and the superintendent of any school district where a portion of the real property whose assessment is at issue is. Here, the Taxpayer served the municipality, but mistakenly served only one of the two school districts.
After serving late notice to the second school district (“School”), the School intervened and moved to dismiss the proceeding. The City also moved to dismiss. The Taxpayer requested leave to recommence the proceeding under CPLR § 205, which provides a six-month grace period to recommence an action despite the statute of limitations for actions dismissed on grounds other than the merits. The trial court dismissed the petition as to that parcel for the School, but held the City lacked standing to move for dismissal City as it was properly served. On appeal, the Appellate Division, Second Department upheld the School’s dismissal, while reversing with respect to the City, against whom the proceeding was almost dismissed. This was affirmed on intermediate appeal.
When the issue reached the Court of Appeals, the Court unanimously held that noncompliance with the RPTL § 708(3) cannot be corrected through the extension of time to recommence provided by CPLR § 205(a). In so holding, the Court noted the legislative history of concern that school districts receiving notice, as well as the amendments creating the 10-day service window and requirement that failure to serve notice “shall result in the dismissal of the petition, unless excused for good cause shown.” Reading this provision together with CPLR § 205(a), the Court found RPTL § 708(3)’s express language addressing dismissal precluded using the more general CPLR provision. The Court also noted that the lower court’s did not find good cause for Taxpayer’s failure to serve the School notice.
Finally, the Court discussed the policy underlying the provision, emphasizing the importance of allowing school districts the opportunity to intervene in tax certiorari cases. Specifically, the Court noted that in the event that the school has to satisfy a judgment awarded to a taxpayer, which can be quite substantial, the outcome of the proceeding could create a budget deficit or other fiscal problems for the school.
In conclusion, school districts involved in tax certiorari proceedings should be acutely aware of whether timely notice has been received. If not, the courts will now be required to dismiss the proceeding if there was no good cause for the failure to serve notice.
The case was Westchester Joint Water Works v. Assessor of City of Rye, No. 77, 2016 WL 3189055 (N.Y. June 9, 2016).