First Sovereign Equity Group, Inc. v Town of Smithtown
Attorneys and Parties
Brief Summary
Municipal property enforcement and constitutional claims arising from a town's unsafe-building remediation charges and resulting tax assessment lien.
The Supreme Court, Suffolk County, denied the Town's summary judgment motion seeking dismissal of the plaintiff's claim under 42 USC § 1983 [federal civil-rights statute authorizing damages for constitutional violations committed under color of law] for alleged denial of procedural due process.
The Appellate Division reversed the order insofar as appealed from and granted summary judgment dismissing the 42 USC § 1983 procedural due process cause of action against the Town.
The plaintiff lacked standing to assert any due process violation belonging to its predecessor in interest, Dermot Parsley, and as to the plaintiff's own property interest affected by the special assessment and lien, any risk of erroneous deprivation was adequately remedied by the availability of a CPLR article 78 proceeding [New York special proceeding for judicial review of administrative action], defeating the procedural due process claim.
Background
After code-enforcement summonses were issued to Dermot Parsley concerning property at 427 Lake Avenue South in Nesconset, a 2017 fire led the Town to have a private contractor secure the property. The Town then pursued an unsafe-building proceeding before the Town Board, which found violations, determined that Parsley had failed to remediate unsafe conditions after notice, and authorized the Town to remove or remediate those conditions. The Town later accepted Watral Brothers, Inc.'s bid to demolish unsafe structures, and Watral performed debris and asbestos work in 2017. In January 2018, the plaintiff acquired the property through a referee's deed in a mortgage foreclosure action. The Town agreed to allow the plaintiff to remediate the violations and avoid demolition, but then sought payment of Watral's invoice. When the plaintiff refused, the Town paid Watral and imposed a special assessment that became a lien on the property taxes for December 2018 through November 2019. The plaintiff paid the lien and later sued, including on a procedural due process theory.
Lower Court Decision
The Supreme Court denied the Town's motion for summary judgment on the plaintiff's procedural due process claim under 42 USC § 1983, allowing that claim to proceed against the Town.
Appellate Division Reversal
The Appellate Division held that the Town was entitled to summary judgment dismissing the procedural due process claim. The court ruled that the plaintiff could not base its claim on alleged due process violations suffered by Parsley. It further held that, although the plaintiff had a property interest affected by the special assessment and lien, due process was satisfied because an article 78 proceeding was available as a post-deprivation remedy to challenge the assessment.
Legal Significance
The decision reinforces two recurring limits on municipal due process claims under 42 USC § 1983: a later-acquiring property owner generally cannot assert a predecessor's personal due process rights, and a procedural due process claim will often fail where New York provides an adequate judicial remedy through CPLR article 78 to review the challenged municipal action.
A purchaser who acquires property after municipal enforcement activity cannot recover under 42 USC § 1983 based on the predecessor owner's alleged lack of notice or hearing, and even the purchaser's own procedural due process claim may be barred when an article 78 proceeding offered an adequate avenue to challenge the town's assessment or lien.