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May 6, 1983

CITY OF SYRACUSE, a Municipal Corporation, Robert Z. Srogi, Individually and as Commissioner of Assessment of the City of Syracuse, Frank L. Canino, Individually and as Commissioner of Finance of the City of Syracuse, Lee Alexander, Individually and as Mayor of the City of Syracuse, and Jacob Benderson, Individually and as Chairman, Assessment Board of Review of the City of Syracuse, Defendants

The opinion of the court was delivered by: MUNSON


 MUNSON, Chief Judge.

 Plaintiff, the former owner of real property located in downtown Syracuse, New York, has brought this action for damages against the City of Syracuse and some of its major officials. According to plaintiff's complaint, defendants have been engaged in a longstanding conspiracy to deliberately overassess real property in the downtown area. In furtherance of this conspiracy, plaintiff alleges, defendants overassessed plaintiff's property and then purposefully delayed any and all efforts by plaintiffs to have the overassessment corrected in the state court system. Plaintiff's property was subsequently seized by the City for failure on the part of plaintiffs to pay their tax bills. A tax sale was conducted by the City and the City "bought" the property for the amount of unpaid taxes plus interest.

 This action was brought by plaintiff under 42 U.S.C. § 1983 (Supp. IV 1980) to remedy what it perceived as a deprivation of its property without due process of law, without just compensation, and without equal protection of the laws. In addition, plaintiff alleges that the conspiratorial conduct of defendants violated 42 U.S.C. § 1985(3) (Supp. IV 1980), and that the failure of defendants to prevent such conspiracy when each defendant had the power to do so violated 42 U.S.C. § 1986 (Supp. V 1981). Jurisdiction is predicated upon 28 U.S.C. §§ 1331, 1343(3) (1976 & Supp. V 1981).

 Presently before the Court is defendants' motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Defendants assert that plaintiff has failed to state a claim upon which relief can be granted. In addition, defendants argue that the Tax Injunction Act, 28 U.S.C. § 1341 (1976), and principles of comity preclude this Court from entertaining plaintiff's action for damages. Defendant Benderson has also moved to dismiss the complaint on his own motion. Benderson moves to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), or in the alternative, moves for summary judgment pursuant to Fed.R.Civ.P. 56.

 As noted by the courts of the State of New York, the City of Syracuse has been a "hotbed of tax litigation." W.T. Grant Co. v. Srogi, 52 N.Y.2d 496, 506, 420 N.E.2d 953, 956, 438 N.Y.S.2d 761, 764 (1981). The real property that is the subject of this litigation has already been subject to various real estate assessment review proceedings and the instant case appears to be an attempt to turn much of the attendant frustration from those proceedings into an award of damages. In order to place this proceeding in its proper perspective, the Court finds that a review of the state court proceedings is in order.


 The property involved herein is located in the easterly half of the 400 block of South Salina Street, and is found in Block Number 116 of the Onondaga County Clerk's Index of Blocks. Originally owned by the University of Rochester, the property was leased to the W.T. Grant Company in 1944. The lease to Grants was for a term of 30 years, later extended to 1982 with an option to renew until 2043. Pursuant to the terms of the lease, Grants was required to pay annual rental charges in the amount of $77,322.32, plus all taxes, utilities and building maintenance expenses. The Grant tenancy ended in 1976 when Grants went bankrupt.

 Following the Grant bankruptcy in 1976, the building was sold by the University of Rochester to plaintiff 423 South Salina Street, Inc. Plaintiff purchased the property for $25,000.00 and took it subject to the unpaid taxes for the year 1976. Accordingly, when one considers the total amount of taxes due together with interest and penalties, the full consideration given to the University of Rochester totaled $175,774.32. Plaintiff was of course free to pursue real estate assessment review procedures in an attempt to reduce the outstanding tax bills.

 For the years 1964-78 inclusive, the City placed an assessed value on the property of $1,135,700.00. The City placed an assessed value on the property of $1,054,450.00 for the years 1979-80 inclusive. Having received what it considered to be outrageous real property assessments, Grants and later plaintiff instituted assessment review proceedings every year from 1964 through 1980.

 Under New York law, persons challenging real property tax assessments must continue to pay their taxes during the pendency of assessment review procedures. W.T. Grant Co. v. Srogi, 52 N.Y.2d at 516-17, 420 N.E.2d at 962, 438 N.Y.S.2d at 770. See also First United Methodist Church of Syracuse v. City of Syracuse, 489 F. Supp. 185, 188 (N.D.N.Y.1980). Mere institution of assessment review proceedings will not serve to stay either the collection of real property taxes or enforcement procedures by the taxing authority. W.T. Grant Co. v. Srogi, id. (citing N.Y. Real Prop. Tax Law § 704(3) (McKinney 1972); People ex rel. Manhattan Ry. Co. v. Coleman, 48 Hun. 602, 1 N.Y.S.2d 112; People ex rel. New York El. Ry. Co. v. Coleman, 48 Hun. 620, 1 N.Y.S.2d 551). While taxpayers who ultimately succeed in having their assessments reduced are given refunds of the amounts overpaid, this is small consolation considering the fact that the City need only pay 3% interest on the overpayments. N.Y.Gen.Mun.Law § 3-a(1) (McKinney 1977 & Supp. 1982-83). *fn1"

 As noted above, the City continually assessed the Grant property at $1,135,700.00. In December of 1972, Grants obtained a judgment against the City for $276,400.19 representing overassessments for the years 1964 through 1970. The City did not pay the judgment, but rather instituted an appeal to the Appellate Division. *fn2" By following this course, the City was able to take advantage of a statutory stay pending appeal. N.Y.Civ.Prac.Law § 5519(a)(1) (McKinney 1978). Despite the fact that the trial court found the proper assessments to be in the range of $632,100.00 to $742,000.00, the City continued to assess the property at the old rate of $1,135,700.00 for the years after 1970.

 The next round of assessments to receive judicial review were those for the tax years 1971 through 1976. These proceedings were tried to the Honorable Henry A. Hudson beginning in May of 1976. While it was anticipated that the proof in the proceedings which covered upwards of 40 parcels of property would be completed by September 1, 1976, delays caused largely by the City resulted in the proceedings running until the end of the year.

 Justice Hudson rendered his decision in late February of 1978. In a judgment dated April 21, 1978, the City was ordered to refund $239,933.20 for overpayments on assessments for 1971 through 1975. Although Justice Hudson found overassessments for the tax year 1976 as well, no refund was ordered because neither Grants nor plaintiff paid any taxes during that year. The proper assessments ranged from $604,000.00 to $823,500.00 for the years 1971 through 1976. Once again, the City chose not to pay the refund and exercised its right to appeal.

 During the course of the City's appeal of the 1971 through 1976 assessments, the City took a tax deed on plaintiff's property for non-payment of the 1976 taxes. The deed was recorded in the Onondaga County Clerk's Office on April 9, 1979. According to the terms of the deed, the City was the highest bidder on the property at a "tax sale" conducted on April 6, 1977. Thus, plaintiff was divested of its property as of April 9, 1979. Although Justice Hudson found that the City had overassessed the property for the tax year 1976 by over 100%, plaintiff did not pay taxes on either the full assessment of $1,135,700.00 or the reduced assessment of $604,000.00. *fn3"

 On May 17, 1979, the Honorable Richard Aronson enjoined the City from transferring title to the property to any third party pending a final appellate decision on the assessments. *fn4" The Appellate Division, Fourth Department, affirmed Justice Hudson's decision on the assessments and further reduced the total assessed values to the point where the refund due was $353,734.81; plus interest and costs, for the years 1971 through 1976. In addition, the Appellate Division affirmed Justice Aronson's grant of the injunction, finding that

we do not suggest that injunctive relief is available in ordinary tax review proceedings or even in unusual ones. We do hold, however, that this taxpayer has demonstrated a long and aggravated pattern of conduct by the City from which the taxpayer cannot ...

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