The opinion of the court was delivered by: John R. LaCava, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the printed Official Reports.
In this tax certiorari matter, respondent Town of Greenburgh (Town) seeks an order striking the Notes of Issue in each of the pending tax years commencing with 1999 and running through and including 2004, for petitioner (Club)'s alleged failure to comply with its discovery obligations in a timely manner pursuant to the Rules of Court (22 NYCRR 202.59 [b], [d] 1) and, upon the striking of those Notes for said alleged discovery violation, to dismiss the petitions for each of the tax years 1999 through and including 2004, for failure of petitioner to timely file Notes of Issue for each of those tax years. Respondents Village of Dobbs Ferry (Dobbs)and Village of Irvington (Irvington) have likewise moved for the same relief relating to the tax years 1999 through and including 2003.
Respondent asserts that the Club timely filed petitions challenging tax years 1999 through 2004. The petitioner then, in 2002, filed and served a Note of Issue relating to the 1999 petition upon respondents, which failed to state whether the subject was income-producing or not, and which was not accompanied by a statement of income and expenses pursuant to 202.59 of the Uniform Rules for the Supreme Court. Subsequently, respondent further asserts, the Club timely filed and served Notes of Issue relating to tax years 2000, 2001, 2002, 2003, and 2004; on each occasion, petitioner stated, pursuant to 202.59 of the Uniform Rules for the Supreme Court, that the subject was not an income producing property, and also failed to accompany the filing and service with statements of income and expenses. Finally, upon filing and serving the Notes of Issue for 2007 and 2008, petitioner described the property as income-producing.
Subsequently, in November 2008, respondent Town filed the instant motion to strike the Club's Notes of Issue for the tax years 1999 through and including 2004, arguing that petitioner had failed to comply with the mandates of the Uniform Rules of Court (22 NYCRR 202.59 [b], and [d] 1), by failing to timely provide proper income and expense statements for the subject, an income-producing property; and urging that, upon the striking of the Notes for said discovery failures, the petitions for each of the tax years 1999 through 2004 should be dismissed for failure of petitioner to timely file Notes of Issue for those tax years. Respondents Dobbs and Irvington have since moved for similar relief with respect to all of the petitions filed against them, namely tax years 2000 through and including 2003, based on the same alleged failure by petitioner.
Respondents all essentially assert that the recent Second Department decision in Matter of Eastgate Corporate Park, LLC v. Assessor, Bd. of Assessment Review of the Town of Goshen, 54 AD3d 1036 (2nd Dept. 2008) controls here. In Eastgate, this Court (see Matter of Eastgate Corporate Park, LLC v. Assessor, Bd. of Assessment Review of the Town of Goshen, Supreme Court, Orange County, Dickerson, J., November 28, 2006) held that the failure to file income and expense statements as required of income-producing properties pursuant to Rule of Court 202.59 (b), and failure to subsequently serve them, prior to filing a Note of Issue, requires striking of the improperly-filed Note of Issue, and, where more than four years have elapsed since the inception of the case, the matter must be dismissed. The Second Department affirmed that holding, and noted that, while such a failure by a petitioner may be excused for good cause shown, such showing must take place within the four-year limitations period of RPTL 718 (2) d.
Eastgate is in fact only the last in a line of cases dealing with petitioners' failures to file income and expense statements. As several respondents point out, compliance by petitioners with 202.59 is the primary, if not sole, means of respondents' gathering discovery in tax certiorari actions involving income-producing properties, and that therefore the lack of said discovery is highly prejudicial to them. Further, this Court, in Rose Mount Vernon (Rose Mount Vernon Corp. v. Assessor of the City of Mount Vernon, 1 Misc 3d 906(A), 781 N.Y.S.2d 628 [Supreme Court, Westchester County, Dickerson, J., December 29, 2003]) and Midway (Midway Shopping Center v. Town of Greenburgh, 11 Misc 3d 1071(A), 816 N.Y.S.2d 697 [Supreme Court, Westchester County, Dickerson, J., March 29, 2006]); the Second Department in affirming Rose Mt. Vernon (15 AD3d 585 [2nd Dept. 2005]); and the Third Department in Pyramid Crossgates (Pyramid Crossgates Co. v. Board of Assessors of the Town of Guilderland, 302 AD2d 826 [3rd Dept. 2003]), have consistently held that the failure to timely comply with 202.59 requires the striking of a Note of Issue and, where any petition is in excess of four years old, the dismissal pursuant to RPTL 718 (2) d of said petition for untimely filing of the Note of Issue.
Where a proceeding is commenced pursuant to this article to review the assessment of a parcel of real property which solely contains property which is not subject to the provisions of subdivision one of this section, a note of issue shall be filed in accordance with this subdivision.
(d) Should the respondent fail to demand that the petitioner file a note of issue pursuant to paragraph (c) of this subdivision within four years from the date of the commencement of the proceeding, and a note of issue has not otherwise been filed, the proceeding shall be deemed to have been abandoned and an order dismissing the petition shall be entered without notice and such order shall constitute a final adjudication of all issues raised in the proceeding, except where the parties otherwise stipulate or a court or judge otherwise orders on good cause shown within such four-year period.
Rule of Court (22 NYCRR) 202.59 [b], [d] 1 22 NYCRR 202.59 [b], [c], and [d] 1 provide § 202.59 Tax assessment review proceedings in counties outside the City of New York; special rules (b) Statement of income and expenses. Before the note of issue and certificate of readiness may be filed, the petitioner shall have served on the respondent, in triplicate, a statement that the property is not income-producing or a copy of a verified or certified statement of the income and expenses on the property for each tax year under review. For the purposes of this section, a cooperative or condominium apartment building shall be considered income-producing property; an owner-occupied business property shall be considered income-producing as determined by the amount reasonably allocable for rent, but the petitioner is not required to make an estimate of rental income.
(c) Audit. Within 60 days after the service of the statement of income and expenses, the respondent, for the purpose of substantiating petitioner's statement of income and expenses, may request in writing an audit of the petitioner's books and records for the tax years under review. If requested, the audit must be completed within 120 days after the request has been made unless the court, upon good cause shown, extends the time for the audit. Failure of the respondent to request or complete the audit within the time limits shall be deemed a waiver of such privilege. If an audit is requested and the petitioner fails to furnish its books and records within a reasonable time after receipt of the request, or ...