State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: February 26, 2015 519007 

________________________________

TURTLE ISLAND TRUST et al.,

Respondents,

v

MEMORANDUM AND ORDER

COUNTY OF CLINTON et al., 

Appellants,

et al.,

Defendants.

________________________________

Calendar Date: January 9, 2015

Before: McCarthy, J.P., Rose, Egan Jr. and Devine, JJ.

__________

Maynard, O'Connor, Smith & Catalinotto, LLP, Albany (Robert

A. Rausch of counsel), for appellants.

Murphy Myers, LLP, Orchard Park (Margaret A. Murphy of

counsel), for respondents.

__________

McCarthy, J.P.

Appeal from an order of the Supreme Court (Ellis, J.),

entered March 13, 2014 in Clinton County, which denied

defendants' motions to dismiss the complaint.

Plaintiffs are Turtle Island Trust, an unincorporated

charitable trust, and its trustees. The Trust was established in

the 1970s to hold land for the purpose of creating a community

for Native Americans who wished to practice a lifestyle in

accordance with their ancestral traditions and to educate the

public about their culture. Over time, the Trust acquired

numerous parcels by lease or deed, 17 of which are located in the

Town of Altona, Clinton County. In 2003, defendant Town of
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Altona determined that most of the Trust's parcels were taxable,

and the Town began to send property tax bills to plaintiffs. 

Plaintiffs never paid any property taxes, so, in 2008, defendant

County of Clinton and its treasurer, defendant Joseph W. Giroux

(hereinafter collectively referred to as defendants), filed a

petition to foreclose against some of the parcels held by the

Trust. County Court (Ryan, J.) eventually granted defendants a

default judgment of foreclosure and issued a tax deed giving the

County title to those parcels, which deed was duly recorded. Due

to plaintiffs' continued nonpayment of taxes on the Trust's

parcels, defendants brought two additional foreclosure

proceedings and ultimately gained title by tax deed to 14 of the

Trust's 17 parcels within the Town. 

Plaintiffs admit that they had notice of these proceedings,

the last of which concluded in March 2011, but chose not to

defend themselves against any of them. In November 2012,

plaintiffs commenced this action for declaratory and injunctive

relief, challenging (1) the tax assessments, (2) failure to make

the parcels tax exempt and (3) the foreclosure of the parcels. 

Defendants moved to dismiss the complaint based on the statutes

of limitations, res judicata and for failure to state a cause of

action (see CPLR 3211 [a] [5], [7]). The Town and defendant John

Brunell made a similar motion. Supreme Court denied the motions

and defendants appeal.1

Supreme Court should have dismissed plaintiffs' challenges

to the tax assessments. Under RPTL article 7, a property owner

claiming to be aggrieved by an assessment of real property on the

basis that the assessment is excessive, unequal or unlawful, or

that the property is misclassified, may file a petition

challenging the assessment, but "such a proceeding shall be

commenced within thirty days after the final completion and

filing of the assessment roll containing such assessment" (RPTL

702 [2]; see RPTL 704 [1]; 706 [1]). Where a party is alleging

1 The Town and Brunell did not appeal or appear on this

appeal. Inasmuch as they are nonappealing parties, we cannot

grant them any affirmative relief (see Hecht v City of New York,

60 NY2d 57, 60 [1983]).
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that the assessment is void – either through a challenge to the

methodology of assessment or the jurisdiction of the taxing

authority to assess particular property – the party may instead

bring a proceeding pursuant to CPLR article 78 or a declaratory

judgment action (see Kahal Bnei Emunim & Talmud Torah Bnei Simon

Israel v Town of Fallsburg, 78 NY2d 194, 204-205 [1991]; Matter

of Adams v Schoenstadt, 57 AD3d 1073, 1074 [2008], lv dismissed

12 NY3d 769 [2009]). Both of those options are governed by a

four-month statute of limitations (see Matter of Adventist Home v

Board of Assessors of Town of Livingston, 83 NY2d 878, 880

[1994]; Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v Town

of Fallsburg, 78 NY2d at 205; see also CPLR 217). The Court of

Appeals has expressly rejected plaintiffs' argument that, because

the property is allegedly mandatorily exempt from taxes, the

assessment is illegal and void and may be challenged at any time

(see Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v Town of

Fallsburg, 78 NY2d at 204). Plaintiffs concede that they had

notice of the Town's determination regarding the taxable status

of the parcels, and filed a grievance to administratively

challenge the tax bills when the property was first listed as not

tax exempt, but they failed to appeal when the Town denied the

grievance. Plaintiffs did not file any further grievances,

actions or proceedings until they commenced this action more than

a year after the final foreclosure proceeding was concluded. 

Accordingly, while an action for declaratory judgment was a

proper method, the statute of limitations bars plaintiffs'

challenges to their tax assessments (see Matter of Adventist Home

v Board of Assessors of Town of Livingston, 83 NY2d at 880). 

Plaintiffs contend that, regardless of the statute of

limitations, the tax assessments are invalid because the Town

failed to provide notice to the Attorney General regarding a

change in the tax exempt status of the Trust's property. As

plaintiffs could have raised this argument in the tax foreclosure

proceedings, for which they were on notice but failed to appear,

the doctrine of collateral estoppel bars plaintiffs from

litigating the issue now (see Cafferty v Cahill, 53 AD3d 1007,

1008 [2008], lv dismissed and denied 11 NY3d 861 [2008]; Culver v

County of Rensselaer, 139 AD2d 853, 854-855 [1988], lv denied 72

NY2d 807 [1988]). 
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Plaintiffs also argue that notice to the Attorney General

is a condition precedent to initiating a tax foreclosure

proceeding. EPTL 8-1.4 (o) does not require that the Attorney

General be given notice of a foreclosure proceeding, only of a

change in tax exempt status. RPTL 1125 provides the notice

requirements for tax foreclosure proceedings. That statute

requires notice to "each owner and any other person whose right,

title, or interest was a matter of public record" as of a certain

date and who will be affected by the proceeding (RPTL 1125 [1]

[a]). While the Attorney General has a duty to enforce the

rights of beneficiaries of charitable trusts through legal

proceedings (see EPTL 8-1.1 [f]), no statutory provision makes

him an owner of the parcels at issue or gives him a right, title

or interest in the property. Hence, he is not a party who is

entitled to notice of tax foreclosure proceedings pursuant to

RPTL 1125. In any event, the record establishes that the

Attorney General did receive notice of the foreclosure

proceedings. Thus, plaintiffs have no cause of action based on

defendants' alleged failure to provide notice of the foreclosure

proceedings to the Attorney General. 

Plaintiffs assert that County Court lacked subject matter

jurisdiction to issue tax foreclosure deeds for parcels held by a

charitable trust. Like any challenge to a judgment based on the

issuing court's lack of subject matter jurisdiction, which

relates to whether the court had the authority to ever consider

the matter, this argument may be raised at any time and is not

subject to any statute of limitations (see Caci v State of New

York, 107 AD3d 1121, 1122 [2013]; see also Matter of Hart Family,

LLC v Town of Lake George, 110 AD3d 1278, 1280 [2013]). In

addition to asserting the statutes of limitations as a defense,

however, defendants assert that plaintiffs failed to state a

cause of action. On a motion based on this ground, courts must

liberally construe the complaint, accept the allegations as true,

provide the plaintiffs with the benefit of every favorable

inference and determine only whether any cognizable legal theory

will support the allegations (see He v Realty USA, 121 AD3d 1336,

1339 [2014]). Documentary evidence and affidavits submitted by

defendants generally are not considered on such a motion, unless

they conclusively establish that the plaintiffs have no cause of

action (see Rovello v Orfino Realty Co., 40 NY2d 633, 636 [1976];
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Allen v City of New York, 49 AD3d 1126, 1127 [2008], lv denied 11

NY3d 705 [2008]). Plaintiffs' claim that County Court lacked

subject matter jurisdiction does not raise any factual questions

but constitutes a question of law in this declaratory judgment

action, such that Supreme Court could have, and this Court can,

render a determination and declare the rights of the parties

without any further proceedings (see Spilka v Town of Inlet, 8

AD3d 812, 813 [2004]). 

Basically, the parties dispute whether provisions of the

RPTL or EPTL pertaining to jurisdiction prevail here. County

Court is a court of limited jurisdiction, with its authority

defined exclusively by provisions of state law (see NY Const, art

VI, § 11; Judiciary Law § 190; Matter of County of Sullivan

[Congregation Khal Chaside Skwera, Inc.], 86 AD3d 671, 672

[2011]). Supreme Court and County Court have concurrent

jurisdiction in tax foreclosure proceedings, which vests in

County Court all of the same power and authority that Supreme

Court would have in such a matter (see RPTL 1120 [2]; Judiciary

Law § 190-b [1], [2]). Plaintiffs acknowledge this authority,

but argue that it is circumscribed in cases dealing with real

property held by a charitable trust, as only Supreme Court (and,

in instances where a charitable trust disposition is contained in

a will, Surrogate's Court) have jurisdiction over dispositions of

property held in trust for religious, charitable, educational or

benevolent purposes (see EPTL 8-1.1 [c] [1]). The tax

foreclosure provisions are silent regarding charitable trust

property and the EPTL article 8 provisions are silent regarding

tax foreclosures. 

Despite the Legislature having failed to specifically

address the circumstances where a tax foreclosure is sought on

real property held by a charitable trust, we find that County

Court has jurisdiction over all tax foreclosure proceedings,

including under these circumstances. The purpose of RPTL article

11 is to handle foreclosure of tax liens when owners of real

property fail to pay their taxes, while providing certain

safeguards to the property owners. The purpose of EPTL 8-1.1 is

to assure that property placed in trust for charitable purposes

is dealt with in accordance with the trust instrument or, in

certain situations, to further the purposes of the trust or
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protect its beneficiaries. RPTL 1120 grants broad authority to

County Court to handle all tax foreclosure proceedings. The EPTL

power over charitable property is more limited. While EPTL 8-1.1

deals with a trust's use of property entrusted to it, it does not

necessarily deal with another party's assertion of use or control

over such property. For example, a creditor attempting to

collect a debt owed by a charitable trust is not strictly bound

by that statute. Taken to its logical conclusion, plaintiffs'

argument would require small claims or eviction matters

concerning charitable trusts or their property to be handled

exclusively in Supreme Court, under the assertion that no other

court has jurisdiction (except for Surrogate's Court, but only if

the charitable trust disposition was made in a will). We do not

read EPTL 8-1.1 so broadly. Accordingly, we find that County

Court had jurisdiction over the RPTL article 11 proceedings at

issue here. As County Court had subject matter jurisdiction,

plaintiffs' claims relating to the foreclosures are subject to

the applicable statutes of limitations. 

The statutes of limitations bar plaintiffs' challenges to

the foreclosure proceedings and resulting tax deeds. A motion to

reopen a default in a tax foreclosure proceeding "may not be

brought later than one month after entry of the judgment" (RPTL

1131). Even where there is no default, no proceeding to set

aside any deed issued as part of a tax foreclosure proceeding may

be maintained unless it is commenced within two years of the

recording of such deed (see RPTL 1137; Matter of City of Hudson,

114 AD3d 1106, 1106-1107 [2014], appeal dismissed 23 NY3d 984

[2014], lv denied 24 NY3d 903 [2014]). Here, in three separate

judgments entered in 2009, 2010 and 2011, the County was granted

tax foreclosure deeds to various parcels that were held by the

Trust. The most recent deed was recorded in March 2011. The

deeds entered in 2009 and 2010 were filed more than two years

before this action was commenced in November 2012, rendering them

precluded by RPTL 1137. Although plaintiffs' claim that the 2011

deed is invalid is not precluded by RPTL 1137, it is precluded by

RPTL 1131, as plaintiffs did not timely move to reopen the

default judgment and, in any event, never provided a valid excuse

for defaulting. Hence, Supreme Court should have granted

defendants' motion to dismiss the complaint.
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Rose, Egan Jr. and Devine, JJ., concur.

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

costs, by reversing so much thereof as denied the motion of

defendants County of Clinton and Joseph W. Giroux to dismiss the

complaint against them; motion granted, complaint dismissed

against said defendants and it is declared that the tax deeds

conveying 14 parcels from plaintiff Turtle Island Trust to

defendant County of Clinton are valid and the County has clear

title to those parcels; and, as so modified, affirmed.

ENTER:

Robert D. Mayberger

Clerk of the Court