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Decision in Steve Aaron Case

Decision in Steve Aaron Case

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Published by Daily Freeman
Regarding assessment of Birchwood Village apartments in Kingston, N.Y.
Regarding assessment of Birchwood Village apartments in Kingston, N.Y.

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Published by: Daily Freeman on May 01, 2012
Copyright:Attribution Non-commercial


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State of New York Supreme Court, Appellate Division Third Judicial Department
Decided and Entered: April 26, 2012513131________________________________In the Matter of BIRCHWOOD VILLAGE LP, Appellant,vMEMORANDUM AND ORDER ASSESSOR OF THE CITY OFKINGSTON et al.,Respondents.________________________________Calendar Date: March 23, 2012Before: Rose, J.P., Spain, Malone Jr., Kavanagh andMcCarthy, JJ.__________Hacker Murphy, L.L.P., Latham (Patrick L. Seely Jr. ofcounsel), for appellant. Van DeWater & Van DeWater, L.L.P., Poughkeepsie (Kyle W.Barnett of counsel), for respondents.__________McCarthy, J. Appeal from an order of the Supreme Court (Work, J.),entered May 28, 2010 in Ulster County, which, in a proceedingpursuant to RPTL article 7, granted respondents' motion todismiss the petition.Petitioner is the lessee of property located in the City ofKingston, Ulster County, which is owned by the Ulster CountyIndustrial Development Agency (hereinafter UCIDA), a publicbenefit corporation (see General Municipal Law § 923).Petitioner and UCIDA entered into a payment in lieu of taxes(hereinafter PILOT) agreement that provided, among other things,
-2-513131that the property's value for purposes of determining paymentsdue thereunder would be determined by the local assessors. ThePILOT agreement provided that if petitioner were dissatisfiedwith an assessment and gave written notice to respondent Assessorof the City of Kingston and UCIDA, petitioner could protest theassessment. If the Assessor, UCIDA and petitioner could notreach an agreement as to the proper assessed value of theproperty, each would select one arbitrator – a qualified realestate appraiser – in accordance with the rules of the American Arbitration Association and the arbitrators would then determinewhether the property was properly assessed.In 2009, petitioner protested the property's tentativeassessment and applied for a reduction from respondent Board of Assessment Review for the City of Kingston. The Board denied thereduction. Petitioner commenced this proceeding pursuant to RPTLarticle 7 alleging that the assessment was unequal, excessive andunlawful. Respondents moved to dismiss pursuant to CPLR 3211 (a)(2) and (7), arguing that Supreme Court lacked subject matterjurisdiction and that the petition failed to state a cause ofaction. The court granted the motion, finding that the disputeis subject to arbitration as provided for in the PILOT agreement.Petitioner appeals.Initially, respondents did not waive their right toarbitration. Respondents filed a notice of appearance and movedto dismiss the action five months later, before any disclosurehad taken place. These actions were "consistent with anassertion of the right to arbitrate," and did not constitute anunreasonable delay or "an affirmative acceptance of the judicialforum" (De Sapio v Kohlmeyer, 35 NY2d 402, 405 [1974]; see AlliedBldg. Inspectors Intl. Union of Operating Engrs., Local Union No.211, AFL-CIO v Office of Labor Relations of City of N.Y., 45 NY2d735, 737-738 [1978]). Respondents' procedural moves in court didnot waive their right to arbitration.Nevertheless, respondents were not entitled to dismissal ofthe petition. Supreme Court has subject matter jurisdiction overRPTL article 7 proceedings (see RPTL 702 [1]), and the petitionstated a cause of action under that article (see RPTL 706).Thus, neither basis for dismissal raised by respondents entitles
-3-513131them to that relief. Although an agreement to arbitrate is not adefense to an action or proceeding (see Allied Bldg. InspectorsIntl. Union of Operating Engrs., Local Union No. 211, AFL-CIO vOffice of Labor Relations of City of N.Y., 45 NY2d at 738; DeSapio v Kohlmeyer, 35 NY2d at 404 n 1), it was improper forpetitioner to commence this proceeding rather than seekarbitration (see Matter of Metropolitan Life Ins. Co. v Harlow,14 AD3d 848, 849 [2005]). Because respondents' motion sought, inaddition to dismissal, such other relief as the court deemed justand proper, the court could consider an appropriate remedy,namely whether to compel arbitration (see CPLR 7503 [a]; see also Allied Bldg. Inspectors Intl. Union of Operating Engrs., LocalUnion No. 211, AFL-CIO v Office of Labor Relations of City ofN.Y., 45 NY2d at 738). As Supreme Court has already determinedthat arbitration was the proper forum for this dispute under thePILOT agreement, and we have determined that dismissal isimproper, "the appropriate remedy is a stay of the judicialproceeding" (Allied Bldg. Inspectors Intl. Union of OperatingEngrs., Local Union No. 211, AFL-CIO v Office of Labor Relationsof City of N.Y., 45 NY2d at 738; see CPLR 7503 [a]; Matter ofTown of Wallkill Indus. Dev. Agency v Assessor of Town of Wallkill, 270 AD2d 494 [2000], lv denied 95 NY2d 764 [2000]).
Rose, J.P., Spain, Malone Jr. and Kavanagh, JJ., concur.To the extent that our decision in Matter of
Metropolitan Life Ins. Co. v Harlow (14 AD3d at 848-849) suggeststhat the proper remedy is dismissal of the petition rather than astay of the proceeding, that aspect of the decision should not befollowed because it conflicts with the Court of Appeals' holdingin Allied Bldg. Inspectors Intl. Union of Operating Engrs., LocalUnion No. 211, AFL-CIO v Office of Labor Relations of City ofN.Y. (45 NY2d at 738).

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