County Acquisitions, LLC v Cruz
Attorneys and Parties
Brief Summary
Whether a village treasurer’s deed conveying title to a private tax-lien purchaser under former Real Property Tax Law (RPTL) article 14, title 3 [village tax‑lien sale and redemption scheme allowing the lien buyer to obtain a deed after notice and non‑redemption] violates the Takings Clause or the Excessive Fines Clause after Tyler v Hennepin County.
Granted plaintiff summary judgment under CPLR 3212 [permits summary judgment when no triable issue of fact] and declared title in plaintiff under CPLR 3001 [authorizes declaratory judgments], finding due process satisfied and rejecting defendants’ Executive Law § 296(5)(a)(1) claim [prohibits housing discrimination based on, among other things, national origin] as inapplicable and unsupported.
Reversed the order and judgment granting summary judgment and the declaration quieting title in plaintiff; remitted for further proceedings.
In light of Tyler v Hennepin County and related developments, defendants’ newly raised Takings Clause and Excessive Fines Clause challenges present constitutional issues potentially affecting Village Code § 119-19 and former RPTL title 3. The Attorney General and the Village must receive notice under CPLR 1012(b) [requires notice to the Attorney General when a statute’s constitutionality is challenged] and Executive Law § 71 [authorizes the Attorney General to defend the constitutionality of state statutes], and the Supreme Court should address these issues in the first instance.
Background
The Village of Hempstead adopted Village Code § 119-19 to continue enforcing village tax liens under former RPTL article 14, title 3 [village tax‑lien sale and redemption scheme allowing the lien buyer to obtain a deed after notice and non‑redemption], notwithstanding the Legislature’s 1993 repeal that allowed certain villages to opt in via local law. In May 2019, County Acquisitions, LLC purchased a village tax lien on defendants’ property at public auction (former RPTL 1454). In June 2021, after more than two years, plaintiff mailed a redemption notice (former RPTL 1464), defendants did not redeem, and the Village Treasurer issued and recorded a treasurer’s deed to plaintiff. Plaintiff brought an RPAPL article 15 action [quiet title remedy] to declare it the owner free and clear. Defendants opposed, arguing national‑origin discrimination under Executive Law § 296(5)(a)(1) due to English‑only notices and, on appeal for the first time (post‑judgment), asserted that the deed process effects an uncompensated taking and an excessive fine under the federal and state constitutions, invoking Tyler v Hennepin County.
Lower Court Decision
The Supreme Court, Nassau County, granted plaintiff’s motion, in effect, for summary judgment on the complaint and a declaration that plaintiff is the record holder and owner free and clear of all liens and encumbrances. It found the notice regime constitutionally and statutorily compliant, and rejected the Executive Law § 296(5)(a)(1) claim as inapplicable to tax enforcement and unsupported by admissible evidence.
Appellate Division Reversal
The Appellate Division reversed on the law and remitted. Although affirming that plaintiff made a prima facie showing (due process‑compliant notices) and that the housing discrimination claim fails, the court held that defendants’ post‑Tyler Takings Clause and Excessive Fines Clause challenges raise constitutional questions about Village Code § 119-19 and former RPTL title 3. Under CPLR 1012(b) [requires notice to the Attorney General when a statute’s constitutionality is challenged] and Executive Law § 71 [authorizes the Attorney General to defend the constitutionality of state statutes], the Attorney General and the Village must be notified and heard. The court declined to decide whether relief would entail invalidating the deed or allowing a just‑compensation remedy, and remitted for further briefing, argument, and any hearing, with a new determination of plaintiff’s motion thereafter.
Legal Significance
Post‑Tyler, New York courts must reassess tax‑enforcement schemes that allow the government (or a private lien purchaser via a treasurer’s deed) to capture a property’s surplus value beyond the tax debt. This decision flags a live constitutional question—whether issuing a treasurer’s deed to a private purchaser that results in a windfall constitutes a taking or an excessive fine—and mandates Attorney General involvement before adjudicating the statutes’ constitutionality. It signals potential limits on village tax‑lien deed practices and preserves the possibility that remedies could include just compensation rather than deed invalidation.
Summary judgment quieting title in a tax‑lien purchaser was reversed and remitted because, after Tyler v Hennepin County, the constitutionality of the village treasurer’s deed scheme must be addressed with Attorney General notice; due process and housing‑discrimination claims do not resolve the new Takings and Excessive Fines issues.