Case Name: In the Matter of Slewett & Farber, Respondent, v. Board of Assessors of the County of Nassau et al., Appellants. Attorney-General of the State of New York, Intervenor-Appellant
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1982-01-07
Citations: 54 N.Y.2d 547
Docket Number: 
Parties: In the Matter of Slewett & Farber, Respondent, v Board of Assessors of the County of Nassau et al., Appellants. Attorney-General of the State of New York, Intervenor-Appellant.
Judges: 
Reporter: New York Reports
Volume: 54
Pages: 547–556

Head Matter:
In the Matter of Slewett & Farber, Respondent, v Board of Assessors of the County of Nassau et al., Appellants. Attorney-General of the State of New York, Intervenor-Appellant.
Argued November 18, 1981;
decided January 7, 1982
POINTS OF COUNSEL
Edward G. McCabe, County Attorney (Joshua A. Elkin of counsel), for appellants.
I. Subdivision 3 of section 720 of the Real Property Tax Law (as amd by L 1979, ch 126; L 1981, chs 3, 107, 259), which prescribes the type of evidence to be used on the issue of whether an assessment is unequal, applies in all respects in this proceeding and to all other pending proceedings not finally determined as of May 22, 1979. (Matter of Slewett & Farber v Board of Assessors of County of Nassau, 80 AD2d 186; Matter of Lunden v Petito, 30 AD2d 820; Matter of C & S Golf & Country Club Corp. v Stevens, 60 AD2d 841; Congregation Gates of Prayer v Board of Appeals of Vil. of Lawrence, 48 AD2d 679; Matter of Demisay, Inc. v Petito, 31 NY2d 896; Matter of Suddell v Zoning Bd. of Appeals of Vil. of Larchmont, 36 NY2d 312; Matter of Ray A.M., 37 NY2d 619; Strauss v University of State of N.Y., 2 NY2d 464; Guth Realty v Gingold, 34 NY2d 440; 860 Executive Towers v Board of Assessors of County of Nassau, 53 AD2d 463, affd sub nom. Matter of Pierre Pellaton Apts, v Board of Assessors of County of Nassau, 43 NY2d 769; People ex rel. Yaras v Kinnaw, 303 NY 224.) II. Subdivision 3 of section 720 of the Real Property Tax Law (as amd by L 1979, ch 126; L 1981, chs 3, 107, 259) gives rise to no constitutional question and the expense of proving inequality by the methods prescribed therein is not a proper test of the constitutionality of said statute. (Matter of Wolf v Assessors of Town of Hanover, 308 NY 416; Matter of O’Brien v Assessor of Town of Mamaroneck, 20 NY2d 587; Guth Realty v Gingold, 34 NY2d 440; 860 Executive Towers v Board of Assessors of County of Nassau, 53 AD2d 463; Matter of Kolb v Holling, 285 NY 104; Matter of Chrysler Props. v Morris, 23 NY2d 515; San Antonio School Dist. v Rodriguez, 411 US 1; Boddie v Connecticut, 401 US 371; Darweger v Staats, 267 NY 290; Oriental Blvd. Co. v Heller, 27 NY2d 212.) III. Chapter 476 of the Laws of 1978 is a constitutional legislative enactment. (Bennett v County of Nassau, 47 NY2d 535; Gautier v Ditmar, 204 NY 20; Matter of Furey v Graves, 148 Misc 785, 241 App Div 897, 266 NY 415; Guth Realty v Gingold, 34 NY2d 440; 860 Executive Towers v Board of Assessors of County of Nassau, 53 AD2d 463; Matter of Hellerstein v Assessor of Town of lslip, 37 NY2d 1; Terrel v Wheeler, 123 NY 76; Weissinger v Boswell, 330 F Supp 615; Matter of Drelich v Kahn, 60 Misc 2d 227; People v Cook, 34 NY2d 100.)
Adolph Koeppel, Bernard Sommer and William D. Siegel for respondent.
I. The 1979 amendment to subdivision 3 of section 720 of the Real Property Tax Law unconstitutionally violates the doctrine of separation of powers by barring petitioner from submitting evidence which the appellate courts of this State have held to be “competent and material” and by interfering with a court’s inherent power to consider any relevant and material evidence, absent a sound public policy consideration justifying such exclusion. (Guth Realty v Gingold, 34 NY2d 440; Bethlehem Steel Corp. v Board of Educ., 44 NY2d 831; City of Buffalo v Clement Co., 28 NY2d 241; Matter of Roosevelt Raceway v Monaghan, 9 NY2d 293; City of New York v Village of Lawrence, 250 NY 429; Sackler v Sackler, 15 NY2d 40; Matter of Dorn “HH” v Lawrence “II, 31 NY2d 154; Davis v Supreme Lodge, Knights of Honor, 165 NY 159; McGowan v Metropolitan Life Ins. Co., 234 App Div 366, 259 NY 454; People ex rel. Yaras v Kinnaw, 303 NY 224.) II. A taxpayer in an inequality proceeding is entitled to an “effective” remedy; judicial notice may be taken of the prohibitive cost of the actual sales method of proving ratio. (Gibbes v Zimmerman, 290 US 326; Insurance Co. v Glidden Co., 284 US 151; Iowa Cent. Ry. Co. v Iowa, 160 US 389; Worthen Co. v Kavanaugh, 295 US 56; Gilman v Tucker, 128 NY 190; Howard v Moot, 64 NY 262; Sioux City Bridge v Dakota County, 260 US 441; Hillsborough v Cromwell, 326 US 620; Brinkerhoff-Faris Co. v Hill, 281 US 673; Hunter v New York, Ontario & Western R.R. Co., 116 NY 615.) III. The 1978 amendment is an unconstitutional attempt to create a classified taxation system. (People ex rel. Hatch v Reardon, 184 NY 431; Matter of Small v Moss, 279 NY 288; Packer Coll. Inst, v University of State of N. Y., 298 NY 184; Matter of Rego Props. v Finance Administrator of City of N. Y., 102 Misc 2d 641; Weissinger v Boswell, 330 F Supp 615; Gautier v Ditmar, 204 NY 20; L.L.F. Realty Co. v Fuchs, 273 App Div 111; Matter of United States Steel Corp. v Gerosa, 7 NY2d 454; McCarthy v Jones, 449 F Supp 480.) IV. The constitutionally protected right to a refund of the excessive tax payments may not be retroactively eliminated by the Legislature. (People ex rel. Warren v Carter, 109 NY 576; Hillsborough v Cromwell, 326 US 620; Sioux City Bridge v Dakota County, 260 US 441; Louisville & Nashville R.R. v Public Serv. Comm, of Tenn., 389 F2d 247; Clarendon Trust v State Tax Comm., 43 NY2d 933; Matter of Neuner v Weyant, 63 AD2d 290, 48 NY2d 975; Matter of Lacidem Realty Corp. v Graves, 288 NY 354; Matter of Chrysler Props, v Morris, 23 NY2d 515; People ex rel. Beck v Graves, 280 NY 405.) V. Legislative moratoria on full value assessment and the delays on the implementation of “speedy” tax certiorari trials have opened the door in New York State for Federal intervention under the Tax Injunction Act of 1937. (Hurd v City of Buffalo, 34 NY2d 628; Bethlehem Steel Corp. v Board of Educ., 44 NY2d 831; Franchise Realty Interstate Corp. v Srogi, 52 NY2d 496.)
Robert Abrams, Attorney-General (John M. Farrar and Shirley Adelson Siegel of counsel), for intervenor-appellant.
I. No further constitutional attack on subdivision 3 of section 720 of the Real Property Tax Law, as amended, should be permitted. The cost of proof of ratio under the remaining available methods of proof is not a basis for further challenge to the statute on due process grounds; even if it is, due process demands a plenary form of action for such challenge. (Guth Realty v Gingold, 34 NY2d 440; Worthen Co. v Kavanaugh, 295 US 56; Home Bldg. & Loan Assn. v Blaisdell, 290 US 398; Matter of Dudley v Kerwick, 52 NY2d 542; Matter of Hellerstein v Assessor of Town of Islip, 37 NY2d 1; Harriss v Tams, 258 NY 229; Valladares v Valladares, 80 AD2d 244; Matter of Andresen v Rice, 277 NY 271.) II. Subdivision 3 of section 720 of the Real Property Tax Law, as amended, should be retroactively applicable to all pending inequality proceedings. (Sheilcrawt v Moffett, 294 NY 180; Board of Comrs. of Excise of City of Auburn v Merchant, 103 NY 143; Louisville & Nashville R.R. v Melton, 218 US 36; Mobile, J. & K.C.R.R. v Turnipseed, 219 US 34; Farrington v Pinckney, 1 NY2d 74; Matter of Boardwalk & Seashore Corp. v Murdock, 286 NY 494; Bradford v County of Suffolk, 257 App Div 777; 860 Executive Towers v Board of Assessors of County of Nassau, 53 AD2d 463, affd sub nom. Matter of Pierre Pellaton Apts. v Board of Assessors of County of Nassau, 43 NY2d 769; Matter of Lome v Tax Comm. of City of N.Y., 19 Misc 2d 803, 11 AD2d 773; McCrory Corp. v Gingold, 52 AD2d 23.) III. Subdivisions 3,4 and 5 of section 307 of the Real Property Tax Law are procedural in nature and are a constitutional exercise of legislative power. (Matter of Hellerstein v Assessor of Town of lslip, 37 NY2d 1; New York Steam Corp. v City of New York, 268 NY 137; Sonmax, Inc. v City of New York, 89 Misc 2d 945, 43 NY2d 253; People v Cook, 34 NY2d 100; San Antonio School Dist. v Rodriguez, 411 US 1; Salsburg v Maryland, 346 US 545; Albie State Bank v Bryan, 282 US 765; Farrington v Pinckney, 1 NY2d 74; Ravensdale Holding Co. v Village of Hastings on Hudson, 156 Misc 777; Preston Co. v Funkhauser, 261 NY 140, affd sub nom. Funkhauser v Preston Co., 290 US 163.) IV. Even if considered a substantive “taxing” statute, the Legislature may ratify formerly illegal assessment practices of local taxing units. (East N. Y. Sav. Bank v Hahn, 293 NY 622, 326 US 230; Teeval Co. v Stern, 301 NY 346; I.L.F.Y. Co. v Temporary State Housing Rent Comm., 10 NY2d 263; United States v Heinszen & Co., 206 US 370; 8200 Realty Corp. v Lindsay, 27 NY2d 124; Martin v State Liq. Auth., 43 Misc 2d 682, 15 NY2d 707; People ex rel. Durham Realty Corp. v La Fetra, 230 NY 429; Montgomery v Daniels, 38 NY2d 41; Paterson v University of State of N. Y., 14 NY2d 432; Matter of Gae Farms v Diamond, 40 AD2d 909.)
Frederick J. Martin, Bleakley Schmidt and Hugh D. Fyfe for Rego Properties Corp., intervenor.
I. Subdivisions 3, 4 and 5 of section 307 of the Real Property Tax Law are unconstitutional. (People ex rel. Yaras v Kinnaw, 303 NY 224; Matter of Wolf v Assessors of Town of Hanover, 308 NY 416; C.H.O.B. Assoc. v Board of Assessors of County of Nassau, 45 Misc 2d 184, 22 AD2d 1015, 16 NY2d 779; Woodhouse, Drake & Carey v Anderson, 61 Misc 2d 951; Matter of Levine v Whalen, 39 NY2d 510; Matter of Small v Moss, 279 NY 288; Weissinger v Boswell, 330 F Supp 615; People v Cook, 34 NY2d 100; Gautier v Ditmar, 204 NY 20; Matter of Mollenhauer, 257 App Div 286.) II. Subdivision 3 of section 720 of the Real Property Tax Law (as amd by L 1979, ch 216) is unconstitutional. (People ex rel. Yaras v Kinnaw, 303 NY 224; Matter of Wolf v Assessors of Town of Hanover, 308 NY 416; C.H.O.B. Assoc. v Board of Assessors of County of Nassau, 45 Misc 2d 184, 22 AD2d 1015, 16 NY2d 779; 860 Executive Towers v Board of Assessors of County of Nassau, 84 Misc 2d 525, 53 AD2d 463, affd sub nom. Matter of Pierre Pellaton Apts. v Board of Assessors of County of Nassau, 43 NY2d 769; Sackler v Sachler, 15 NY2d 40; People ex rel. Woronoff v Mallon, 222 NY 456; Tot v United States, 319 US 463; Leary v United States, 395 US 6; Guth Realty v Gingold, 34 NY2d 440; Matter of O’Brien v Assessor of Town of Mamaroneck, 20 NY2d 587.)

Opinion:
OPINION OF THE COURT
Per Curiam.
The order of the Appellate Division should be modified by deleting therefrom declarations as to the constitutionality of former sections 307 and 721 and former subdivision 3 of section 720 of the Real Property Tax Law. Since those statutes have expired during the pendency of this appeal, we do not address the question of their constitutionality. As so modified, the order of the Appellate Division should be affirmed, and the question certified answered in the negative.
As to the status of this action, we agree with the Appellate Division that petitioners have secured an interlocutory judgment. That judgment, having determined that the State equalization rates are appropriate proof of the rate of fractional assessment in Nassau County for the years in question, allows petitioners to proceed to prove that their property has been assessed in excess of that rate by establishing the property's fair market value, against which the predetermined fractional assessment rate will be applied.
Prior to this court's decision in Matter of Heller stein v Assessor of Town of lslip (37 NY2d 1), fractional assessment was a common practice. In that case, we held that section 306 of the Real Property Tax Law required all property be assessed at full value. In the wake of that decision, the Legislature passed several provisions allow ing local taxing authorities to continue fractionalized assessments while they conducted the physical revaluation of real property that would be necessary to implement full value assessment. Since our decision in Hellerstein was specifically prospective in its application and because the Legislature subsequently suspended the requirements of full valuation for those taxing districts undergoing revaluation, assessments for the years in question could continue to be challenged, as in the past, on the ground that the assessments were unequal. Special Term, pursuant to the provisions of section 307 of the Real Property Tax Law, then in effect, found that Nassau County was not required to comply with the requirements of full valuation for the years in question, 1965-1966 through 1977-1978. It further determined that the applicable ratio between assessed and full value, for the purposes of this proceeding, was the State equalization rate. Since section 307 has expired during the pendency of this appeal, we only pass on whether the State equalization rates could be used in this proceeding as proof of the ratio between assessed value and full value.
In addition to the legislative provisions deferring application of our decision in Hellerstein, the Legislature, in related action, also enacted an amendment of subdivision 3 of section 720 and a new section 721 of the Real Property Tax Law which substantially limited the use of State equalization rates to establish assessment ratios in inequality review proceedings which had been approved in Guth Realty u Gingold (34 NY2d 440). The hearing and decision at Special Term in this case preceded these legislative enactments. The enactments had become effective, however, and were considered on the cross appeals to the Appellate Division. Now, again, in consequence of their expiration these enactments have no application to the case as it stands before us on the present appeal. Accordingly, we review the determination at the Appellate Divi sion on the basis of the statutory and case law now in effect, and hold that under the applicable common law, the determination that the State equalization rate was the appropriate ratio between assessed value and full value was correct. (Guth Realty v Gingold, 34 NY2d 440, supra.)
Such a tax review proceeding is necessarily bifurcated, the first part establishing the applicable ratio of assessment and the second determining the fair market value of the property in question against which the ratio is applied to determine whether the assessment is unequal. In this proceeding, the grant of partial summary judgment fixing the appropriate percentage of full value at the level set by the State Board of Equalization and Assessment has adjudicated the issue of ratio. It is, therefore, in the nature of an interlocutory judgment. (860 Executive Towers v Board of Assessors of County of Nassau, 53 AD2d 463, 475, affd sub nom. Matter of Pierre Pallaton Apts. v Board of Assessors of County of Nassau, 43 NY2d 769.) When the remaining question of the fair market value of the property is determined, a simple mathematical application of the ratio to that fair market value will indicate whether or not the assessment is equal.
Furthermore, our affirmance of the Appellate Division in 860 Executive Towers (43 NY2d 769, supra) means that once the validity of the State equalization rate has been adjudicated, the county is collaterally estopped in other proceedings from further challenges of that rate.
It remains to address the contention advanced by the County of Nassau that, notwithstanding the expiration on October 30,1981 of former subdivision 3 of section 720, the new subdivision 3 of that section, which became effective on December 3, 1981 when the Legislature enacted S-7000A over the Governor's veto (L1981, ch 1057) and which again limits the use of State equalization rates in inequality review proceedings, should be held applicable to the present proceeding. We note that while the former amendment of subdivision 3 was expressly made applicable to proceedings commenced on or after January 1, 1970 and not finally determined (L 1979, ch 126, § 4; L 1979, ch 127, §3) no such provision for retroactivity is contained in S-7000A, section 17 of which provides only that: "This act shall take effect immediately." In this circumstance we perceive no indication of legislative intent that the new enactment is to have retrospective application. Whatever may be the current and prospective applicability of new subdivision 3 to other pending proceedings, we hold that in the present proceeding in which the hearing with respect to assessment ratios has been concluded and an interlocutory judgment has been entered determining the rate of fractional assessment in Nassau County for the years in question, new subdivision 3 has no application. The procedural stage to which the new subdivision might otherwise have applied has long since been concluded.
Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer concur in Per Curiam opinion.
Order modified, without costs, in accordance with the opinion herein and, as so modified, affirmed. Question certified answered in the negative.
. Section 2 of chapter 126 of the Laws of 1979 to expire December 31, 1980 extended to May 15, 1981 by section 1 of chapter 3 of the Laws of 1981, and further extended to June 15, 1981 by section 1 of chapter 107 of the Laws of 1981, and finally extended to October 30, 1981 by section 1 of chapter 259 of the Laws of 1981.
. Section 2 of chapter 127 of the Laws of 1979 to expire December 31,1980 extended to May 15, 1981 by section 2 of chapter 3 of the Laws of 1981.