State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: October 20, 2016 522214 

________________________________

In the Matter of LEVEL 3

COMMUNICATIONS, LLC,

Appellant,

v

CLINTON COUNTY et al., OPINION AND ORDER

Respondents,

and

VILLAGE OF ROUSES POINT

et al., 

Respondents.

________________________________

Calendar Date: September 6, 2016

Before: Peters, P.J., McCarthy, Lynch, Rose and Clark, JJ.

__________

Ingram Yuzek Gainen Carroll & Bertolotti, LLP, New York

City (John G. Nicolich of counsel), for appellant.

Stafford, Owens, Piller, Murnane, Kelleher & Trombley,

PLLC, Plattsburgh (Brendan P. Owens of counsel), for Village of

Rouses Point and others, respondents.

__________

Peters, P.J.

Appeal from a judgment of the Supreme Court (Ellis, J.),

entered February 27, 2015 in Clinton County, which, in a combined

proceeding pursuant to CPLR article 78 and action for declaratory

judgment, among other things, partially granted respondents'

motions to dismiss the petition/complaint.
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Petitioner, a telecommunications company, owns fiber optic

installations located on private rights-of-way at various

locations within Clinton County. In May 2013, following a

decision of the First Department ruling that petitioner's fiber

optic installations are not taxable real property under RPTL 102

(12) (i) (Matter of RCN N.Y. Communications, LLC v Tax Commn. of

the City of N.Y., 95 AD3d 456 [2012], lv denied 20 NY3d 855

[2012]), petitioner filed applications pursuant to RPTL 556-b

with seven tax-assessing entities within the County seeking

refunds of real property taxes paid on such installations for the

years 2010-2012 and removal of the subject properties from the

tax rolls. When the applications were not granted, petitioner

commenced this combined CPLR article 78 proceeding and action for

declaratory judgment seeking, among other things, a refund of

real property taxes paid during the relevant years and a

declaration that its fiber optic installations are not taxable

real property under the RPTL. Supreme Court partially dismissed

the petition/complaint, concluding that petitioner's fiber optic

installations are taxable real property under RPTL 102 (12) (f)

and that, in any event, petitioner was precluded from recovering

the requested refunds on the ground that it had paid the taxes

voluntarily. Petitioner appeals. 

We first address petitioner's application for a judgment

declaring that its fiber optic installations are not taxable real

property under the RPTL. Resolution of this issue turns upon the

construction of RPTL 102 (12) (f),1 which provides that real

property shall include, among other things, "equipment for the

distribution of heat, light, power, gases and liquids." The

parties agree that the fiber optic cables at issue consist of

filaments of glass through which light beams are used to

transport information and data from one point to another. Yet

1 Supreme Court, relying on Matter of RCN N.Y.

Communications, LLC v Tax Commn. of the City of N.Y. (95 AD3d 456

[2012], supra), ruled that petitioner's fiber optic installations

do not constitute real property under RPTL 102 (12) (i), and none

of the respondents argue otherwise on this appeal as an

alternative ground for affirmance (see generally Parochial Bus

Sys. v Board of Educ. of City of N.Y., 60 NY2d 539, 545 [1983]).
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they sharply disagree as to whether this constitutes the

"distribution" of light within the meaning of RPTL 102 (12) (f). 

For the reasons that follow, we hold that it does not.

It is fundamental that, "[i]n matters of statutory

interpretation, our primary consideration is to discern and give

effect to the Legislature's intention" (Matter of Albany Law

School v New York State Off. of Mental Retardation & Dev.

Disabilities, 19 NY3d 106, 120 [2012]; see Beck Chevrolet Co.,

Inc. v General Motors LLC, 27 NY3d 379, 389-390 [2016]). "As the

clearest indicator of legislative intent is the statutory text,

the starting point in any case of interpretation must always be

the language itself" (Majewski v Broadalbin-Perth Cent. School

Dist., 91 NY2d 577, 583 [1998]; accord Matter of Shannon, 25 NY3d

345, 351 [2015]). Moreover, "[w]hen the particular statute is

one which levies a tax, it is well established that it must be

narrowly construed and that any doubts concerning its scope and

application are to be resolved in favor of the taxpayer"

(Debevoise & Plimpton v New York State Dept. of Taxation & Fin.,

80 NY2d 657, 661 [1993]; see Trump Vil. Section 3, Inc. v City of

New York, 24 NY3d 451, 456 [2014]; Matter of Bloomingdale Bros. v

Chu, 70 NY2d 218, 223 [1987]).

Notably, the RPTL does not define the term "distribution." 

Thus, in the absence of a controlling statutory definition, we

"construe words of ordinary import with their usual and commonly

understood meaning, and in that connection have regarded

dictionary definitions as useful guideposts in determining the

meaning of a word or phrase" (Yaniveth R. v LTD Realty Co., 27

NY3d 186, 192 [2016] [internal quotation marks and citation

omitted]; see McKinney's Cons Laws of NY, Book 1, Statutes § 232

at 392-393; People v Finley, 10 NY3d 647, 654 [2008]). 

"Distribute" is commonly defined as "to divide among several or

many," "to spread out so as to cover something" and "to give out

or deliver especially to members of a group" (Merriam—Webster

Online Dictionary, http://www.merriam-webster.com/dictionary/

distribute). Here, petitioner's fiber optic cables do not

"distribute" light within these commonly understood meanings of

the term. Rather, the light signals transmitted over the fiber

optic cables terminate in an optical receiver, which reads the

light, decodes the signals and sends electric signals to other
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sources such as computers, televisions and telephones. Thus,

while the fiber optic cables at issue undeniably transmit light

signals from one end of the network to the other, such

transmission does not result in the "distribution" of light, but

rather data. 

In ruling otherwise, Supreme Court reasoned that there is

no meaningful distinction between the words "transmit" and

"distribute" as those words are commonly defined and applied to

the telecommunications industry. Yet, the commonly understood

meaning of the word "distribute" incorporates concepts of

apportionment, allocation or spreading that are absent from the

commonly understood meaning of the word "transmit" – which

plainly embraces the function to which the fiber optic cables are

put vis-à-vis the light signals.2 Moreover, Supreme Court's

interpretation fails to take into account the fact that the terms

"distribution" and "transmission" are independently used in

separate subdivisions of RPTL 102 (12) (compare RPTL 102 [12] [f]

[defining real property to include "equipment for the

distribution of heat, light power gases and liquids"], with RPTL

102 [12] [i] [defining real property to include certain "lines,

wires, poles, supports and inclosures for electrical conductors

. . . used in connection with the transmission or switching of

electromagnetic voice, video and data signals"]).3 Where "the

2 "Transmit" is commonly defined as to "cause (as light or

force) to pass or be conveyed through space or a medium"

(Merriam-Webster Online Dictionary, http://www.merriamwebster.com/dictionary/transmit).

3 Indeed, the Legislature regularly enacts legislation that

uses both the words "distribution" and "transmission" in the same

sentence, phrase or subdivision – a circumstance lending

additional support to our conclusion that a distinction between

the terms was intended here (see e.g. RPTL 1801 [c] [referring to

certain property "used in the generation, storage, transmission,

distribution or sale of gas, electricity, steam, water,

refrigeration, cable television, telephone or telegraph

service"]; Tax Law § 186-a [2] [c] [repeatedly referring to the

"transmission or distribution" of gas or electricity]; Public
-5- 522214 

Legislature uses different terms in various parts of a statute,

courts may reasonably infer that different concepts are intended"

(Rangolan v County of Nassau, 96 NY2d 42, 47 [2001]; see

McKinney's Cons Laws of NY, Book 1, Statutes § 236 at 403; Orens

v Novello, 99 NY2d 180, 187 [2002]; People v Brancoccio, 83 NY2d

638, 642 [1994]). To attribute the same meaning to

"distribution" and "transmission" would render one of these terms

superfluous, an outcome that is to be avoided (see Matter of

Springer v Board of Educ. of the City Sch. Dist. of the City of

N.Y., 27 NY3d 102, 107 [2016]; Nostrom v A.W. Chesterton Co., 15

NY3d 502, 508 [2010]; Majewski v Broadalbin-Perth Cent. Sch.

Dist., 91 NY2d at 587). We therefore treat the Legislature's

distinct use of those terms as evincing a separate meaning for

each. Construing RPTL 102 (12) (f) narrowly and resolving any

doubt as to its scope in favor of petitioner (see Trump Vil.

Section 3, Inc. v City of New York, 24 NY3d at 456; Debevoise &

Plimpton v New York State Dep't of Taxation & Finance, 80 NY2d at

661), we conclude that the fiber optic cables at issue do not

constitute equipment for the "distribution . . . of light" within

the meaning of the statute.

Our holding is also supported by the "well-established rule

of statutory construction . . . that a prior general statute

yields to a later specific or special statute" (Matter of

Dutchess County Dept. of Social Servs. v Day, 96 NY2d 149, 153

[2001] [internal quotation marks and citation omitted]; see

Matter of Brusco v Braun, 84 NY2d 674, 681 [1994]). "[W]here the

Legislature enacts a specific provision directed at a particular

class, and a more general provision in the same statute which

might appear to encompass that class, the specific provision will

be applied" (Matter of Robert Bruce McLane Assoc. v Urbach, 232

AD2d 826, 828 [1996] [internal quotation marks and citation

omitted]; see McKinney's Cons Laws of NY, Book 1, Statutes § 238

at 406; Matter of Rayshawn P., 103 AD3d 31, 41-42 [2012]; New

York State Crime Victims Bd. v T.J.M. Prods., 265 AD2d 38, 46

[2000]; Matter of Jeremy VV., 202 AD2d 738, 739 [1994]). RPTL

102 (12) (f) – the provision at issue here – was enacted in 1958

Service Law §§ 5 [1] [c]; 44 [5]; Rural Electric Cooperative Law

§ 14 [d], [g]).
-6- 522214 

in connection with the recodification of various tax statutes

(see L 1958, ch 959). Nearly three decades later, the

Legislature enacted RPTL 102 (12) (i) for the specific purpose of

addressing real property taxation of telecommunications equipment

(see L 1985, ch 71, § 3). As the First Department noted in

finding that petitioner's fiber optic cables do not constitute

taxable real property under RPTL 102 (12) (i), "[t]he legislative

history, including the 1985 reports by the Tax Commission and the

State Board of Equalization and Assessment, reveals that the

Legislature was aware of fiber-optic technology and that

fiber-optic cables transmit light and do not conduct electricity. 

Yet, the Legislature chose to limit assessments under RPTL 102

(12) (i) to wires and other related property 'for electrical

conductors'" (Matter of RCN N.Y. Communications, LLC v Tax Commn.

of the City of N.Y., 95 AD3d at 457). Inasmuch as subdivision

(i) of RPTL 102 (12) specifically addresses the taxability of

property used for telecommunication services, that subdivision –

not subdivision (f) of the statute – would control in the event

of a conflict between the two provisions. For all of these

reasons, we modify the judgment of Supreme Court and declare that

petitioner's fiber optic installations are not real property

taxable under RPTL 102 (12). 

With respect to its refund applications, we find that

petitioner failed to demonstrate its entitlement to such relief

for the tax years under review. To obtain a refund of taxes paid

under a mistake of law, "it is incumbent upon the taxpayer to

establish appropriate legal protest prior to or at the time of

payment as a prerequisite to recovery" (Corporate Prop. Invs. v

Board of Assessors of County of Nassau, 153 AD2d 656, 660 [1989],

affd 80 NY2d 961 [1992]; see City of Rochester v Chiarella, 58

NY2d 316, 323 [1983], cert denied sub nom. Quality Packaging

Supply Corp. v City of Rochester, 464 US 828 [1983]; Regional

Economic Community Action Program, Inc. v Enlarged City School

Dist. of Middletown, 79 AD3d 723, 724 [2010], affd 18 NY3d 474

[2012]).4 "This requirement ensures that governmental entities

4 To the extent that petitioner argues that it was improper

for Supreme Court to rely on the voluntary payment doctrine

inasmuch as it was not cited by the tax levying bodies as a basis
-7- 522214 

have notice that they may need to provide for tax refunds"

(Matter of Level 3 Communications, LLC v Essex County, 129 AD3d

1255, 1257 [2015] [citation omitted], lv denied 26 NY3d 907

[2015]; see Video Aid Corp. v Town of Wallkill, 85 NY2d 663, 667

[1995]). Here, it is undisputed that petitioner paid all of the

relevant taxes, and there is nothing in the record indicating

that such payments were made under protest or were otherwise

involuntary (see Matter of Level 3 Communications, LLC v Essex

County, 129 AD3d at 1257; Community Health Plan v Burckard, 3

AD3d 724, 725 [2004]). Accordingly, Supreme Court properly

denied that portion of the petition which sought a refund of

taxes paid.

Petitioner's remaining contentions have been reviewed and

found to be without merit. 

McCarthy, Lynch, Rose and Clark, JJ., concur.

ORDERED that the judgment is modified, on the law, without

costs, by reversing so much thereof as dismissed that part of the

petition/complaint seeking a declaratory judgment; it is declared

that petitioner's fiber optic installations do not constitute

taxable real property under RPTL 102 (12); and, as so modified,

affirmed.

ENTER:

Robert D. Mayberger

Clerk of the Court

for denying the refund applications, we have previously reviewed

and rejected this claim (see Matter of Level 3 Communications,

LLC v Essex County, 129 AD3d 1255, 1257 [2015]).