Matter of Yeung v Assessor of the Village of Great Neck Estates
Attorneys and Parties
Brief Summary
Real property tax assessment—whether homeowners may challenge the Residential Assessment Ratio (RAR) used to measure unequal assessment in a Small Claims Assessment Review (SCAR) proceeding.
The Supreme Court, Nassau County, upheld the hearing officer’s refusal to consider petitioners’ ratio study, holding that taxpayers lack standing to challenge the RAR in SCAR under RPTL 1218 [confers judicial review of State equalization rate determinations only to the county, city, town, or village for which the rate was established, via an Article 78 in the Appellate Division].
The order and judgment dismissing the CPLR article 78 petition (which had sustained the SCAR denials) and the underlying SCAR determinations denying relief.
RPTL 1218 does not govern or limit SCAR proceedings and does not bar homeowners from impeaching the RAR within SCAR; under RPTL 732(2) [SCAR evidentiary rule requiring consideration of the "best evidence," de novo fact and law determinations, and proceedings conducted to do substantial justice], hearing officers must consider competent ratio evidence. The hearing officer’s refusal to consider petitioners’ ratio study and reliance on an inapplicable standing bar was arbitrary and capricious under CPLR 7803(3) [judicial review limited to whether determination was affected by an error of law or was arbitrary and capricious].
Background
Twenty-one Village of Great Neck Estates homeowners filed 14 SCAR petitions under RPTL 730 [establishes the streamlined SCAR process for one- to three-family owner-occupied residences] challenging 2021–2022 assessments as excessive and unequal. For unequal assessment, they offered a ratio study of recent Village sales supporting an RAR of 94.83% (0.9483), instead of the 100% (1.0) RAR promulgated by the New York State Office of Real Property Tax Services. The SCAR hearing officer denied relief, concluding taxpayers lack standing to challenge equalization metrics, citing Matter of Fair Assessment and RPTL 1218. Petitioners commenced a CPLR article 78 proceeding; respondents cross-moved to dismiss under CPLR 3211(a) [pre-answer motion to dismiss] and CPLR 7804(f) [permits dismissal of an article 78 petition on motion]. The Supreme Court granted the cross-motion, dismissed the petition, and sustained the SCAR denials.
Lower Court Decision
Relying on RPTL 1218 [confers judicial review of State equalization rate determinations only to municipalities], the Supreme Court held that individual taxpayers cannot challenge the RAR directly or collaterally in SCAR, treated the hearing officer’s approach as rational, and dismissed the article 78 petition under CPLR 3211(a) and 7804(f).
Appellate Division Reversal
The Second Department reversed, holding that RPTL 1218 operates independently of SCAR and does not strip homeowners of the ability to impeach the RAR within a SCAR hearing. Under RPTL 732(2) [SCAR evidentiary rule requiring consideration of the "best evidence" and substantial justice], homeowners may submit their own ratio study, and the hearing officer must consider it. Because the hearing officer categorically refused to consider the ratio study and applied an incorrect legal bar, the determinations were arbitrary and capricious under CPLR 7803(3). The court reversed the order and judgment, denied respondents’ cross-motion, granted the petition, annulled the SCAR denials, and remitted for further proceedings (the hearing officer may order a de novo hearing).
Legal Significance
Clarifies in the Second Department that RPTL 1218’s municipality-only review of State equalization rates does not apply to SCAR and does not preclude homeowners from challenging or impeaching the RAR within SCAR. Hearing officers must consider competent alternative ratio evidence under RPTL 732(2), preserving SCAR’s purpose of inexpensive and efficient relief and ensuring viable unequal assessment claims.
In SCAR proceedings, homeowners may present their own ratio studies to challenge the RAR, and hearing officers must consider that evidence; RPTL 1218 does not bar such challenges within SCAR.