In the Matter of Mehran Manouel, et al., Appellants,v.Board of Assessors, et al., Respondents.BriefN.Y.January 15, 2015To Be Argued By: Martin Valk ___________________.T.im.e.R.equested: 15 Minutes {!Court of ~ppeaI5 STATE OF NEW YORK IN THE MATTER OF: MEHRAN & SEPIDEH MANOUEL, Petitioners-Appellant, -against- THE BOARD OF ASSESSORS AND THE ASSESSMENT REVIEW COMMISSION OF THE COUNTY OF NASSAU Respondent-Respondents. BRIEF FOR RESPONDENT-RESPONDENT THE COUNTY OF NASSAU OfCounsel: Brian M. Libert Deputy County Attorney (516) 571-3015 CARNELL T. FOSKEY County Attorney of Nassau County Attorneyfor Respondent-Respondent One West Street Mineola, New York 11501 Court Of Appeals Index No. APL-2014-00035 Table of Contents PAGE Table of Authorities .ii Preliminary Statement. " 1 Counter Statement of Question Presented " 2 Nature of Facts and Case 3 Argument 4 Point I THE OWNER OCCUPIED REQUIREMENT UNDER RPTL §730 MUST BE AFFORDED A PLAIN READING BECAUSE THE STATUTORY LANGUAGE IS CLEAR AND UNAMBIGUOUS 4 Point II PL~SUANTTOTHECANONSOFSTATUTORY CONSTRUCTION THE LANGUAGE OF RPTL §730 SPECIFICALLY INDICATES THAT THE LEGISLATURE INTENDED TO EXCLUDE HOMES THAT ARE NOT "O~ER-OCCUPIED" 9 Conclusion 12 TABLE OF AUTHORITIES PAGE Cases Matter of Barbera v. Assessor of Town of Pelham, 278 A.D.2d 412,413 (2d Dept. 2000) 5 Matter Gershon v. Nassau County Assessment Review Comm., 29 A.D.3d 909, 909 (2d Dept. 2006) 5 Matter of Kline v. City of Rye, 150 A.D.2d 576, 577 (2d Dept. 1989) 8 Matter of Lauer v. Board of Assessors, et al., 51 A.D.3d 926, 927 (2d Dept. 2008) 5 Matter of Masters v. Board of Assessors et aI., 188A.D.2d 471,472 (2d Dept. 1992) 6, 7 Matter of McNamara v. Board ofAssessors of Town of Smithtown, 272 A.D.2d 617,617 (2d Dept. 2000) 5 Novak & Co. Inc. v. Travelers Indemnity Co., 56 A.D.2d 418, 428 (2d Dept. 1977) 11 Pierse v. Zimmerman, 255 A.D. 708 (2d Dept. 1938) 10 Matter of Regenstriefv. Board of Assessors, 20 Misc. 3d 787, 787 (Sup. Ct. Nassau County 2008) 6,9, 10 Matter of Town ofNew Castle v. Kaufmann, 72 N.Y.2d 684, 687 (1988) 6, 8 11 PAGE Statutes RPTL §730 '" passim RPTL §732 5 RPTL §733 '" 5, 7 2012 N.Y. Sess. Laws, 235th Leg. (A4982) 10 NY Statutes s. 94 10 NY Statutes s. 240 11 Other Authorities Association ofTowns of the State ofNew York Letter 7 Governors Memo Letter 1981 7 111 Preliminary Statement This is an appeal from the Appellate Division, Second Department holding that Petitioners-Appellants (the "Petitioners") are not entitled to utilize Small Claims Assessment Review ("SCAR" or Real Property Tax Law ("RPTL"), Article 7, Title I-A, in passim), because the subject property, • Baker Hill, Great Neck, New York (the "Premises"), was not owner-occupied. This appeal presents a most narrow question to this Court: whether the term "owner occupied" as utilized in RPTL 730 should be afforded plain meaning. The term "owner occupied" is clear and unambiguous and, therefore, must be read plainly, not in an expansive and broad manner. The State Legislature has prescribed a very specific group of petitioners to which SCAR is available. The Petitioners in this case simply do not fit into this category. The Appellate Division's holding in this case is quite explicit. The prerequisite for expeditious challenges under SCAR is that the property must be "owner-occupied." RPTL 730(1 )(b)(i). It is axiomatic that when statutory language is clear and unambiguous it must be given only its natural and obvious reading. In this instance, the facts are undisputed. The Premises were not owner-occupied, the Petitioners do not meet the statutory prerequisite and, therefore, a challenge under SCAR is not available to Petitioners. 1 Counter Statement of Question Presented Whether the Petitioners are entitled to challenge their assessment under RPTL §730 when the Premises do not meet the statutory prerequisite of being "owner-occupied"? -No, the term "owner-occupied" is unambiguous and clearly demonstrates the Legislature's intent to limit the jurisdiction of SCAR challenges. 2 Nature of Facts and Case At all relevant times, the Petitioners were the owners of the Premises; designated on the Nassau County Tax Map as Section 1, Block 113, Lot 50. (R.9 ~2 & R.19). The Premises is comprised of a single-family residence. (Pet. Br. on Appeal at 4). The Petitioners do not reside at the Premises. (R.1 0 ~9). Petitioner Mehran Manouel's mother occupied the Premises at all relevant times herein. (R.1 0 ~9). She did not pay rent in exchange for the use of the Premises. It is also undisputed that the Petitioners owned at least two other properties at the time they filed the relevant SCAR petition. (R.22) The tax status date in Nassau County for the 2010111 tax year was January 2, 2009. The Petitioners filed a petition (the "SCAR Petition") on or around April 17,2010 to challenge their 2010 /11 property tax assessment. Petitioners' representative certified in the SCAR Petition that the Premises was "owner-occupied," (R.17 at Part V(b)), although, Petitioner Mehran Manouel attested in his sworn affidavit to that very same SCAR Petition that his mother lived in that home. (R.19). A hearing was held before a SCAR Hearing Officer, Katherine Nerko, Esq. (the "SCAR Hearing Officer"), on December 1, 2010. On December 17, 2010, the SCAR Hearing Officer denied the SCAR Petition on the grounds that the Premises was not "owner occupied." (R.24-25). The SCAR Hearing Officer explained that "the legislature has made a judgment to restrict SCAR jurisdiction over improved properties to ones that are 'owner-occupied.' Whether this statutory requirement should be modified is the 3 province of the legislature." (R.25). The Petitioners then instituted an Article 78 proceeding by petition dated April 18, 2011, seeking to vacate the determination of the SCAR Hearing Officer (R.7-13). On December 16, 2011, Hon. Antonio Brandveen, Acting Justice of Supreme Court, Nassau County, issued an order dismissing the Petition. (R.6) The court reasoned that any changes broadening SCAR jurisdiction to homes occupied by relatives of owners was the province of the Legislature. (Id.) The Petitioners' then appealed to the Second Department where the trial court decision was affirmed on November 15, 2013. (R.v). The Petitioners then moved for leave to appeal to this Court. Leave to appeal was granted on February 20th 2014. (R.iv). Ar2ument POINT I THE OWNER OCCUPIED REQUIREMENT UNDER RPTL §730 MUST BE AFFORDED A PLAIN READING BECAUSE THE STATUTORY LANGUAGE IS CLEAR AND UNAMBIGUOUS RPTL §730(1) states that property owners may only utilize SCAR challenges to grieve their property tax assessments if: (b) the property is: (i) improved by a one, two or three family owner-occupied structure used exclusively for residential purposes.... emphasis added. The only issue presented in this litigation is the interpretation of the term "owner-occupied." The burden to establish entitlement to SCAR jurisdiction lies solely with the Petitioners. ("The Petitioner shall have the burden of proving entitlement to the relief 4 sought") RPTL §732(2). Petitioners here were not without remedy to challenge the Premises' assessment. Petitioners were free to pursue the assessment protest through the ordinary procedures established by the Legislature. RPTL §733(3) permits Petitioners to file a petition under Title 1 of the RPTL within 30 days after receiving the Judicial Hearing Officer's ("JHO") determination. A SCAR Hearing Officer is equivalent to a JHO. In reviewing a determination of a JHO, a court is limited to examining only whether the JHO's determination had a rational basis. Matter of Lauer v. Board of Assessors, et al., 51 A.D.3d 926, 927 (2d Dept. 2008) citing Matter Gershon v. Nassau County Assessment Review Comm., 29 A.D.3d 909, 909 (2d Dept. 2006); Matter of Barbera v. Assessor of Town of Pelham, 278 A.D.2d 412, 413 (2d Dept. 2000) and Matter ofMcNamara v. Board ofAssessors ofTown ofSmithtown , 272 A.D.2d 617,617 (2d Dept. 2000). The basis of the SCAR determination emanates from the plain language of RPTL §730(1)(b). In order to use SCAR proceedings, the Premises must be "owner-occupied." It is self-evident that "owner-occupied" means "the owner lives there." It is undisputed that the Premises was occupied by Petitioners' mother, rather than Petitioners. Petitioners do not occupy the Premises, thus it is not owner-occupied and SCAR proceedings are not available to them. Petitioners argue that the trial court's interpretation of the term "owner occupied" contradicts case precedent suggesting a liberal construction of the jurisdictional limits and the legislature's intent of SCAR. 5 They situate their arguments in the decision of Matter ofMasters v. Board ofAssessors et aI., 188A.D.2d 471,472 (2d Dept. 1992), and the decision of Matter ofRegenstriefv. Board ofAssessors, 20 Misc. 3d 787, 787 (Sup. Ct. Nassau County 2008). In Masters, the court held that because the homeowner was unable to sell the home in which he had previously resided, his father-in-law's residing there temporarily until the sale of the property did not exempt the homeowner from SCAR. Masters, 188A.D.2d at 472. Masters, however, did not expand the SCAR jurisdiction as Petitioner suggests. Rather, the court in Masters gave a reprieve to a homeowner that would otherwise have satisfied a plain reading of the statute if it had not been for his temporary hardship in selling his house. In this case, the Petitioners submitted no evidence that they ever lived at the premises or that their mother was living there temporarily. These two crucial facts, relevant to the court's ruling in Masters, are absent here. The Masters court reasoned "to hold that [the home] lost its owner-occupied character because of the owner's temporary inability to sell would run counter to the clearly-expressed intent of the Legislature." Id. at 472. emphasis added. Thus, this case is completely distinguishable from Masters. This interpretation is also supported by this Court's ruling in Matter of Town ofNew Castle v. Kaufmann, holding that SCAR could be utilized by a homeowner who practiced psychiatry out of his home for 10 hours during a 7-month period because the use was deemed occasional and incidental. New Castle, 72 N.Y.2d at 687 (1988). No similar occasional use or incidental use is alleged here. 6 According to the undisputed facts in this case, Petitioners could never have satisfied an essential element of the statute. Petitioners never lived in the home; even in a periodic manner. In addition, Petitioners' mother was not just temporarily living at the Premises for a short tenn period. Petitioners in this matter are not asking for a reprieve from a mere fonnality. Rather, they ask this Court to expand a statute beyond its intended purpose. In discussing the purposes of the original bill enacting the SCAR procedure, fonner Lieutenant Governor, Mario Cuomo, stated that the bill would "provide a small claims judicial review procedure for owner-occupiers of one, two or three family residential property." Letter from Mario M. Cuomo, Lieutenant Governor, to Hugh L. Carey, Governor of N.Y. (Oct. 29, 1981) (On file with the Nassau County Supreme Court Library). Further, a 1981 letter from the Association of Towns of the State ofN.Y. asks the State Legislature to disapprove the bill on the basis "The remedy under this bill is limited to owner-occupied dwellings and is not available to small dwellings which are not owner-occupied." Letter from The Association of Towns of the State of N.Y., to Hugh L. Carey, Governor of N.Y., (Jul, 20, 1981) (On file with the Nassau County Supreme Court Library). It certainly appears that Petitioners' are attempting to "short circuit" the typical procedure prescribed by RPTL §733(3). Additionally, Masters was decided twenty years ago. 188 A.D.2d at 471. Since that time, the Legislature has reviewed the jurisdictional limitations in RPTL §730 several times and has never opted to expand the "owner occupied" requirement to 7 include owner's relatives. As discussed in more detail below, most recently, in July 2012, the Legislature clarified that persons who own their residences through limited partnerships, or residences held in trust, may qualify as owner-occupied only if they "serves as the primary residence" of the partner or trust beneficiary. Petitioners cite this Court's holding in Kaufmann that a "broad definition" should be used for interpreting the owner-occupied requirement. Relying on the proposition from that decision which states "When such a [narrow] construction would thwart the settled purpose of the statute, however, literal and narrow interpretations should be avoided." Kaufmann, 72 N.Y.2d at 686. In this instance, Petitioners urge this Court not give a broad interpretation but to expand upon the Legislature's intended purposes. Further, in addition to the clear intent of the Legislature to limit SCAR jurisdiction, no policy reason exists for this Court to expand the jurisdictional scope of RPTL §730. See Matter ofKline v. City ofRye, 150 A.D.2d 576, 577 (2d Dept. 1989). ("While we fully appreciate that the aim of the legislative provision is to afford homeowners a speedy and inexpensive procedure to review assessments claimed to be erroneous ...the words of RPTL §730(5) leave no room for judicial innovation"). To do so would merely result in opening a Pandora's Box of hearing officers making factual inquiries regarding the degree of familial relations. Thus frustrating the entire purpose of SCAR, which is to be a quick and efficient process. As the SCAR hearing officer, the lAS court, and the Appellate Division reasoned, this type of jurisdictional expansion is the purview of the Legislature. 8 POINT II PURSUANT TO THE CANONS OF STATUTORY CONSTRUCTION THE LANGUAGE OF RPTL §730 SPECIFICALLY INDICATES THAT THE LEGISLATURE INTENDED TO EXCLUDE HOMES THAT ARE NOT "OWNER-OCCUPIED" In their brief, Petitioners urge this court to adopt dicta from the Nassau County Supreme Court case Regenstreif stating "the clear import of the term 'owner-occupied' was to exclude from consideration those properties which were held for their ability to generate income from rental." 20 Misc. 3d at 787, 791 (LaMarca, J., dictum). As Petitioners point out in their brief, that court held that the petitioner had not exhausted his administrative remedies and affirmed dismissal of that action. The language cited in that decision is not a holding of that court, but dicta and, thus, not before this court as authority. Further, the Regenstreif decision has, for all intents and purposes, been superseded by statutory amendment. As discussed above, in 2012, a new closing paragraph was added to RPTL §730(l) which states in pertinent part: An owner of real property who qualifies under paragraphs (a) through (d) of this subdivision shall also include: (i) a person or persons whose real property is held in trust solely for the benefit of such person or persons if the property serves as the primary residence of such person or persons and the trust which holds title to the property was lawfully created to hold title solely for estate planning and asset protection purposes. (ii) a person or persons who reside in real property which is owned by a limited partnership if the property serves as the primary residence of such person or persons and said limited partnership does not engage in any commercial 9 activity, was lawfully created to hold title solely for estate planning and asset protection purposes and the partner or partners who primarily reside thereon personally pay all of the real property taxes and other costs associated with the property's ownership. The Sponsor's Memo for this amendment explains that under the new amendment SCAR qualification required that the home must serve as the primary residence of one of the partners, and the partner or partners who primarily reside in the home must personally pay all of the real property taxes and cost associated with the property's ownership. 2012 N.Y. Sess. Laws, 235th Leg. (A4982). The instant case, is therefore, also distinguishable from Regenstreif. Even in Regenstreij, although the property was owned by an LLC, the principal of the LLC lived at that location and paid all property taxes and costs associated with property's ownership. 20 Misc. 3d at 792. The property was functionally owner occupied. Id. Pursuant to NY Statutes §94, "The legislative intent is to be ascertained from the words and language used, and the statutory language is generally construed according to its natural and most obvious sense, without resorting to an artificial or forced construction." The comments to that section expand that "Ordinarily the courts are not at liberty to hold that the Legislature had an intention other than its language imports, and new language cannot be imported into a statute to give it a meaning not otherwise found therein." N.Y. Stat. Law § 94 comment, citing Pierse v. Zimmerman, 255 A.D. 708 (2d Dept. 1938) ("The courts must take the language of the statute as they find it and may not read into a meaning not expressed by the Legislature.") Petitioners invite this court 10 to do just that. The statute is clear and unequivocal; affording any additional meaning to the statute would fly in the face of the Legislature's presumed intent. Moreover, the Legislature has never opted to amend this statue to permit non occupying homeowners, such as Petitioners, to proceed through SCAR grievances. The rules of statutory construction are quite clear: the inclusion of things on a list serves to intentionally exclude things not so included. NY Statutes §240. In other words, "inclusion unius est exlusio alterius." See Novak & Co. Inc. v. Travelers Indemnity Co., 56 A.D.2d 418,428 (2d Dept. 1977). As applied in this case, the Legislature's enactment of two exceptions to RPTL §730(1) and exclusion of any other exceptions can only mean that the Legislature's intent was not to exclude any additional exceptions. 11 CONCLUSION Respondents respectfully request that the Petition for property tax assessment review under the SCAR program be dismissed in its entirety because the Petitioners do not live in the Premises. As such, they are not owner-occupiers as required by statue. Thus, the Appellate Division's decision confirming the hearing officer's determination and dismissing the Petition as jurisdictionally defective should be affirmed. Dated: Mineola, New York June 24,2014 Respectfully submitted, CARNELL T. FOSKEY Nassau County Attorney Attorney for Respondent-Respondent Board 0/Assessors and Assessment Review Commission o/Nassau County By: slBrian M. Libert Brian M. Libert Deputy County Attorney Nassau County One West Street Mineola, New York 11501 (516)571-3015 12 ·W: \lUI: .l.\ /)UII . I \ I \ 1'1 ." \\ \ (Ill f; )1,\~'~J.\1 (10"10 filII· .1 l~. " I I'.' IIll' :l.~f11 t -1'\\" III'f L.ll·'" l~ilJ:\l C ;l~1 fit ..." a~tober 29, 1981 TO: "overnor Hu,l L. c;>ey :FROH: :.1.:'11: io M. cu~~~ Smilll Clai,1ils Assessment Revie,. This i.s to indicate my support of Senate Bill li287 -fl. ~:hich \.Iould create a special proc:e(~ding for smnll cl.:\·lm::: ns~cssment review, l~cccr..t :=;t:udies by the Division of Equlllizf1tion cedure \.;rhich we believe ...,ould provide a simple, efficient "nd inexoensive method for the residential prop erty owner to obtain prompt review of his real property tax assess ment, We were pleased that the Legislature, tn ].1ne with our report's reconmendation. amended che real property t.a)t law by adding a new Title I-A, entitled "Special Proceeding for Sma.Il Claims Assessment Review". The Gommi!l8 ion. therefore, respectfully urges that: you sign S, 6287-A in~o law. ~espectfully submitted, {f;~JZfI~ Chairman GSG/cg ~ I -"•••_------------ ,," N. Y. 'lIIAlOA ~UIUlt'1 ~ l~JI)l":'l 'J" " ~.' . 1lLI.. "!'" ~IP8lR1 D.II~twlfi IIAYOA OIIlfU r lUll' • .'.' ,,1 ',l"l'd ,'",I-I':, ........ " ... K, 1I11J:',nA",,1l "Al1lII~IJlI16' .flm I, 'I. I. III ~~Iur~l :lllpH. ".' -,: .. III , ,\~ I ~A" liS tOMM'Mr. lM~ "A~K fllAHOII A "l'rlOM 'I' ,',. ,I' II "'ltAI.~ 'ill-,',l .1'1'" M~11111 Rnl1tll1 J. rIAr;llC~ HAYlm ROIIAI Gr.U !ooi.. \"tu:n I: /Yt"l1I1:\'U•••:fl l \1 \.1 "tt,lIWh; STATE OF NEW YORK 1'\(:11.\1\(1.\ 1-\:"r.:'1:, " .. _00 ' ... , \,I.I.'U'" 1lI"'n~JI;I"I'> 1.\)"I".'itl IdrlJ,'W,II.lII:AI1f.11 IMI Slat. St,,,,,, ! ~~. t;. '''bU.' M;UH.\Ut;., "lhn"Y, N, Y. 12l1O'! A.'\;OIlf.W SI/loUI"""'~f>i. JII.,..,.,1'......1-." " 'Il~ I' tU" '~1 , ..... ,.',."11""·'''., .;: I "\.I 1: ~,S"j"l1J) .\"1',",11' ,....,.. ~ijill.", .• I ~:, " \ \1 I' Uti· If)lI\ ~ ~llftSIR. lit July 20thi,.-·198l His Excellency l-lugh L. Carey E:xecutiv.: Ch<:lmber Albany, ~ew York 12224 Memorandum in relation to f;enate 6287-A, Assembly 9004 By Mr. ~lynn Sir: Senate 6287-A adds a new Title l-A to Article 7 of the Real Property Tax Law establishing e. sepa~ate procedure for the revi~w of small cl£.ims involving the aSSt:ssment of real property. A9004 is a Chapter amendment to Senate 62f:17-A. Une er this bill, hearing .)fficers are to be appointed by th~ chief a':ministrato-r of CClurts -':0 hear and determine complaints of assessmE:nts 011 1, 2 or 3-falail'l owner-occupied residential propet·ty. The heaI'ing officer would be required to meet certain basic qualific:ations and have familiarity with assessing units in whil:h the real pn1perty is to be located.. Th(! State Board of f:quaJ. i;~ation Clnd Assessment would be reQuired to establish a residenti