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Nelson v. Ulster County

March 26, 2010


The opinion of the court was delivered by: Gary L. Sharpe District Court Judge


I. Introduction

Plaintiff Nansi Nelson brought this action individually and as executrix of her late husband Barry Nelson's estate under 42 U.S.C. § 1983, alleging that defendants Ulster County, Ulster County Treasurer Lewis Kirchner, and Ulster County Clerk Nina Postupack (collectively Ulster County defendants) deprived the Nelsons of their real property without due process. (See 2d Am. Compl. ¶¶ 36-57, Dkt. No. 74.) The Nelsons also brought suit against defendant WVD 2906209, LLC, and its members, Mark Delacorte, Daniel Winn,*fn2 and Joseph Vivianni (collectively WVD), alleging conversion, intentional infliction of emotional distress (IIED), and negligent infliction of emotional distress (NIED). (See id. at ¶¶ 58-67.) WVD and Ulster County defendants filed cross-claims against one another for, among other things, contribution or indemnification. (See Dkt. Nos. 78, 83.) Additionally, the Nelsons filed a claim and Ulster County defendants filed a counterclaim for attorneys' fees pursuant to 42 U.S.C. § 1988. (See Dkt. Nos. 74, 83.) Pending are (1) the Nelsons' motion for partial summary judgment on their claims against Ulster County defendants (Dkt. No. 134); (2) Ulster County defendants' cross-motion for summary judgment (Dkt. No. 148); and (3) WVD's cross-motion for summary judgment on the Nelsons' claims (Dkt. Nos. 149, 152). For the reasons that follow, the Nelsons' and Ulster County defendants' motions for summary judgment are denied, and WVD's summary judgment motion is granted in part and denied in part.

II. Background

In October 2002, plaintiff Nansi Nelson and her late husband, Barry Nelson, purchased a piece of real property, the Widow Davis Tavern, located at 2906 Route 209, Marbletown, Ulster County, New York. (See Pl. SMF, ¶¶ 6-7, Dkt. No. 134:1.) The deed for the Tavern was filed in the Ulster County Clerk's Office on October 10, 2002. (See id. at ¶ 11.) The deed listed 134 West 58th Street, New York, New York, as the Nelsons' address. (See Pl. Ex. A, Dkt. No. 134:5.) In purchasing the Tavern, the Nelsons were represented by attorney Jonathan Hoyt, whose name and office address were also listed on the deed. (See id. at ¶¶ 8-10.) In conjunction with the purchase, the Nelsons filed a Real Property Transfer Report (RP-5217) with the Marbletown Assessor's Office, which listed the Tavern as the Nelsons' address and provided Hoyt's phone number.*fn3 (See Pl. Ex. B, Dkt. No. 134:6.)

During the 2003 fiscal year, the property taxes due for the Tavern went unpaid. (See Pl. SMF ¶ 32, Dkt. No. 134:1.) After remaining delinquent for one year, the Tavern property was placed on a delinquent tax list in the Ulster County Clerk's Office. (See id. at ¶ 33.) From 2003 to 2005, the Town of Marbletown sent annual tax bills to the Nelsons, which included a notice in July and a subsequent notice in September of every taxable year. (See Ulster Resp. SMF ¶ 61, Dkt. No. 148:4.) Each of these biannual notices expressly stated, among other things, that "[c]ontinued failure to pay will eventually result in the loss of the property." (Id.) And on October 12, 2005, defendants Lewis Kirschner and Nina Postupack mailed a notice by certified mail to the Tavern property address notifying the Nelsons that the property taxes were delinquent and that Ulster County was commencing a foreclosure proceeding on the Tavern property. (See Pl. Ex. F, Dkt. No. 134:10.) This notice of foreclosure specified the amount of unpaid taxes due and the means of repayment, described the nature and effects of the foreclosure proceeding, and discussed the rights of interested parties. (See id.) In addition, the notification set February 10, 2006, as the last day to redeem the property, after which title would be transferred to Ulster County by way of a court judgment.*fn4 (See id.)

The October 12, 2005 notice of foreclosure was returned to the Ulster County Treasurer's Office as "not deliverable as addressed - unable to forward." (See Pl. SMF ¶ 39, Dkt. No. 134:1; see also Ulster Resp. SMF ¶¶ 39, 67, Dkt. No. 148:4.) Following receipt of the undeliverable notification, Ulster County did not mail a copy of the notification to either the 134 West 58th Street or 120 West 58th Street address. (See Pl. SMF ¶¶ 42-43, Dkt. No. 134:1.) Nor did Ulster County notify the Nelsons' counsel, Jonathan Hoyt, of the foreclosure proceeding. (See id. at ¶ 45.) Prior to the foreclosure, Ulster County did not post a notice of foreclosure on the Tavern property, send a subsequent notification by regular mail to the Tavern address, or attempt to contact the Nelsons by phone. (See id. at ¶¶ 44, 47-48.)

Ulster County published the notice of foreclosure in the Kingston Daily Freeman newspaper on October 12, November 4, and December 2, 2005, and in the Ulster County Townsman on October 20, November 3, and December 1, 2005.*fn5 (See Ulster Resp. SMF ¶ 62, Dkt. No. 148:4.) In addition, Ulster County checked the Ulster County Surrogate's Court for any death notice of the Nelsons. (See id. at ¶ 76.)

Following the Nelsons' failure to redeem, and the consequent foreclosure on the Tavern property, Ulster County published a public auction brochure in the Kingston Daily Freeman on March 31, 2006, which included a listing for the Tavern property. (See id.) During the weeks leading up to the public auction, photographs of the Tavern property were posted in the Ulster County Office Building. (See id. at ¶ 65.) The Ulster County Real Property Tax Service Agency sent notices by regular mail to owners of properties adjoining the Tavern to advise them of the proposed auction. (See id. at ¶ 66.) After the foreclosure and transfer of title to Ulster County, Hoyt, the Nelsons' attorney, learned of the foreclosure and public auction and attempted to contact the Nelsons without success. (See id. at ¶¶ 77-80.) On April 21, 2006, the Tavern property was offered in a tax foreclosure public auction, which Hoyt attended. (See id. at ¶ 62, 80.) And on May 24, 2006, Ulster County transferred title and possession of the Tavern property to defendant WVD 2906209, LLC, for $152,000.00. (See Pl. SMF ¶ 51, Dkt. No. 134:1.) At no point prior to the sale did Hoyt contact an Ulster County official on the Nelsons' behalf. (See Ulster Resp. SMF ¶ 81, Dkt. No. 148:4.)

On June 12, 2006, WVD filed an action against the Nelsons in the New York State Supreme Court, Ulster County, to quiet title to the Tavern property. (See Notice of Removal, Dkt. No. 1.) On August 31, 2006, the Nelsons, as Pennsylvania residents, removed this action to the United States District Court for the Northern District of New York based on diversity jurisdiction under 28 U.S.C. § 1332(a)(1).*fn6 (See id.). The Nelsons concurrently filed a § 1983 action in this court against Ulster County defendants for allegedly depriving them of their property without due process by failing to provide adequate notice of the foreclosure and tax sale proceedings.*fn7 (See 2d Am. Compl. ¶¶ 36-52, Dkt. No. 74.) In addition, the Nelsons sought a declaratory judgment under 28 U.S.C. §§ 2201 and 2202 to invalidate the tax sale and reconvey the Tavern property to the Nelsons. (See id. at ¶¶ 50-51.) The Nelsons also asserted claims against WVD and its members, Mark Delacorte and Joseph Vivianni, for conversion, IIED, and NIED, and demanded actual, special, and punitive damages. (See id.) On January 23, 2007, WVD's action to quiet title and the Nelsons' action against the Ulster County and WVD defendants were consolidated. (See Dkt. No. 5.)

In their answer to the Nelsons' second amended complaint, WVD brought cross-claims against Ulster County, first, for repayment of all sums paid for the Tavern property with interest if the sale is invalidated, and second, for contribution or indemnification for any alleged removal or conversion of the Nelsons' personal property. (See WVD Answer ¶¶ 19-21, Dkt. No. 78.) In response, Ulster County defendants filed a similar cross-claim against WVD for contribution or indemnification. (See Ulster Answer ¶¶ 19-20, Dkt. No. 83.) Additionally, Ulster County defendants filed a counterclaim against the Nelsons for attorneys' fees pursuant to 42 U.S.C. § 1988.*fn8 (See id. at ¶¶ 21-22.)

On June 9, 2009, the Nelsons moved against Ulster County defendants for partial summary judgment on the § 1983 and declaratory judgment claims. (See Dkt. No. 134). On July 20, 2009, Ulster County defendants responded with a cross-motion for summary judgment, contending that notice of the foreclosure and tax sale proceeding was consistent with due process requirements and that municipal liability should not attach.*fn9 (See Dkt. No. 148.) WVD also cross-moved for summary judgment on the Nelsons' conversion, IIED, and NIED claims. (See Dkt. Nos. 149, 152.)

III. Standard of Review

The standard for the grant of summary judgment is well established, and will not be repeated here. For a full discussion of the standard, the court refers the parties to its previous opinion in Bain v. Town ...

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