The Appellate Division of the Supreme Court of the State of New York has ruled in favor of the Town of Smithtown in a case involving procedural due process rights. The decision affects First Sovereign Equity Group, Inc., which claimed that the Town violated its rights when it levied a special assessment on its property. This ruling clarifies the standards for procedural due process in property-related disputes.
The case, known as First Sovereign Equity Group, Inc. v. Town of Smithtown (Docket No. 2024-09867), stems from a series of events that began in 2016 when the property's previous owner, Dermot Parsley, faced legal issues regarding the maintenance of a property located at 427 Lake Avenue South in Nesconset. Parsley was issued summonses for failing to maintain the property, which ultimately led to the Town taking action after a fire occurred there in 2017.
Following the fire, the Town of Smithtown hired a private company to secure the property and charged the costs to the Town. The Town then initiated unsafe building proceedings against Parsley. After a hearing, the Town Board declared the property unsafe and authorized its demolition. Although Parsley was notified of the hearing, he did not attend. The Town later accepted a bid to demolish the unsafe structures on the property.
In January 2018, the property was transferred to First Sovereign Equity Group through a referee's deed after a mortgage foreclosure. The Town allowed the new owner to address the violations instead of proceeding with the demolition. However, when First Sovereign Equity Group refused to pay the invoice for the work done by the private company, the Town paid the bill directly and placed a special assessment on the property taxes, which became a lien.
In March 2020, First Sovereign Equity Group filed a lawsuit against the Town, claiming a violation of its procedural due process rights under 42 USC § 1983. The Town subsequently sought summary judgment to dismiss this claim, arguing that the plaintiff did not have standing to sue based on the alleged due process violation.
The Supreme Court of Suffolk County issued an order on May 21, 2024, denying the Town's motion for summary judgment. The Town then appealed this decision to the Appellate Division.
The Appellate Division, in its ruling, reversed the lower court's decision. The court stated, "The Town demonstrated, prima facie, that it did not deprive the plaintiff of due process." The judges on the panel included Francesca E. Connolly, Barry E. Warhit, Helen Voutsinas, and Donna-Marie E. Golia.
The ruling emphasized that while the plaintiff's property interest was affected by the special assessment, the risk of erroneous deprivation was mitigated by the availability of a legal proceeding for review. The court noted that the plaintiff failed to raise a triable issue of fact to challenge the Town's position.
This decision is significant as it reinforces the standards for procedural due process in property disputes. It clarifies that property owners must demonstrate standing and provide evidence of due process violations to succeed in such claims. The ruling also highlights the importance of available legal remedies, such as a proceeding under CPLR article 78, which can address grievances related to government actions.
The impact of this ruling extends beyond the immediate parties involved. It sets a precedent for future cases involving procedural due process claims related to property assessments and government actions. Property owners in similar situations may need to consider the legal avenues available to them before pursuing claims based on due process violations.
Going forward, this ruling may deter similar claims against municipalities unless property owners can clearly demonstrate standing and substantive due process violations. It also underscores the importance of participating in administrative hearings and utilizing available legal remedies to address disputes with local governments.
As for next steps, the Town of Smithtown's victory in this appeal may discourage further litigation from First Sovereign Equity Group regarding this matter. However, details were not available in the court filing regarding whether the plaintiff plans to pursue additional legal action or if there are related cases pending.