E. Leo Milonas and Andrew C. Smith

We often try to introduce these articles with a note of levity. Sadly, we cannot in these tragic times. We wish our readers good health in the days ahead. This too shall pass.

First Department

Real Property Tax Law. In honor of Tax Day (albeit now extended), we present the First Department's decision in Tax Equity Now NY v. City of New York, 2020 NY Slip Op 01401 (1st Dept. Feb. 27, 2020), rejecting Due Process and Equal Protection challenges to the assessment of real property taxes in New York City.

Real Property Tax Law Article 18 establishes four classes of real property in New York City (e.g., single-family versus condos and co-ops), sets out a formula for apportioning taxes among the classes, and sets caps on yearly tax increases (different for each class). An association of owners and renters sued, claiming the RPTL violates constitutional and statutory mandates by treating similar property differently both within and across the classes. For example, plaintiff alleged that property which appreciated rapidly was subjected to a lesser tax burden than property which appreciated gradually due the cap on annual tax increases. Supreme Court granted defendants' motion to dismiss, but only as to certain claims.

Dashing plaintiff's hopes for lower property taxes, the First Department modified to dismiss all of plaintiff's claims in an opinion by Justice Cynthia S. Kern. The court held the Legislature had a rational basis for making distinctions between certain kinds of similarly-situated properties and that the RPTL provisions "are not arbitrary but are instead grounded in legislative policy determinations to, for example, protect homeowners from sudden spikes in taxes." Ultimately, the court noted that plaintiff's complaints were better put to the Legislature.

Settlement. Lawyers (and clients) who agree to a settlement in open court beware—there is no going back. In Pruss v. Infiniti of Manhattan, 180 A.D.3d 163 (1st Dept. 2020), the First Department reaffirmed "the fundamental principle that parties are bound by stipulations signed in open court by their attorneys."

A pedestrian who was struck by a vehicle owned by a car dealership sued the dealership for negligence. The dealership's attorneys, who were retained by its insurance carriers, stipulated to a $5 million settlement in open court. The attorney for the primary carrier knew that a conservator had recently been appointed for the carrier, but he did not believe it impacted his authority to settle. A year and a half later, the dealership moved to vacate the judgment on the grounds that counsel lacked actual authority to enter into the settlement. Supreme Court denied the motion.

In a unanimous opinion by Presiding Justice Rolando T. Acosta, the First Department affirmed, highlighting that, as a matter of law and public policy, stipulations of counsel who have apparent authority should rarely be disturbed. Otherwise, "[c]ourts would have to conduct colloquies in every case to make sure that the parties, notwithstanding their attorneys' actions in appearing for them on numerous occasions and signing stipulations, acquiesced in the terms of the stipulations." Such a practice would be "unacceptable," particularly where defendant waited so long to object to the stipulation.

Second Department

Open Meetings Law. New York's Open Meetings Law (Public Officers Law Article 7) ensures that citizens may observe the deliberations and decisions that go into making public policy. But if an official violates this law, may any citizen excluded from a meeting bring suit? In McCrory v. Vill. of Mamaroneck Bd. of Trustees, 2020 NY Slip Op. 00864 (2d Dept. Feb. 5, 2020), the Second Department answered in the affirmative.

Mamaroneck residents commenced an action against the Village of Mamaroneck Board of Trustees (Board) alleging it failed to provide proper notice of meetings, improperly entered into a closed "executive session," and failed to accurately record meeting minutes. Supreme Court dismissed for lack of standing on the grounds that plaintiffs failed to demonstrate "some personal damage or injury" to their civil, personal or property rights as a result of the Board's actions.

In an opinion by Justice Reinaldo E. Rivera, the Second Department reversed. Noting that case law on who has standing to enforce the Open Meetings Law is "sparse," the court looked to the Legislature's intent to confer upon the public generally the right to attend meetings of public bodies. The court concluded that "the harm or injury of being excluded from municipal meetings that should be open to the public is sufficient to establish standing … ." Any additional requirement for standing "would undermine, erode, and emasculate the stated objective of th[is] statute … [to] assure the public's right to be informed, and prevent secrecy by governmental bodies."

Civil Procedure. CPLR 306-b permits a court to grant an extension of time for plaintiff to serve a summons and complaint "for good cause shown or in the interest of justice." May a plaintiff establish such grounds after a complaint has already been dismissed? The Second Department considered this peculiar circumstance in State of New York Mortg. Agency v. Braun, 2020 NY Slip Op. 01107 (2d Dept. Feb. 13, 2020), and held that an extension was warranted.

Plaintiff commenced a foreclosure action against defendant by serving his wife at the subject property. The day before the foreclosure sale, defendant moved to dismiss the complaint for lack of personal jurisdiction. Plaintiff was unable to present testimony from the process server who died prior to the hearing, and Supreme Court granted defendant's motion. Supreme Court denied plaintiff's subsequent request for an extension of time to serve defendant, and plaintiff appealed.

A divided panel of the Second Department reversed. In an opinion by Justice John M. Leventhal, the majority noted that CPLR 306-b did not impose any time limitations on such a motion and concluded that plaintiff's waiting until after the motion to dismiss was granted did znot bar its motion. Rather, that delay was one factor the court may consider: "The better rule is to allow flexibility for a plaintiff to seek justice rather than rigidly slamming shut the courthouse door … ."

Third Department

N.Y. Constitution. Jets and Bills fans may see Tom Brady's move to Tampa Bay as a stroke of good luck. For the Third Department, however, the question was whether fantasy football, or any other interactive fantasy sport (IFS), is a game of chance. In White v. Cuomo, 2020 N.Y. Slip Op. 895 (3d Dept. Feb. 6, 2020), a divided panel answered in the affirmative and struck down a law legalizing IFS contests as violating the New York Constitution's prohibition on gambling.

In August 2016, the Legislature amended the Racing, Pari-Mutuel Wagering and Breeding Law to provide that IFS contests were not "gambling" within the meaning of N.Y. Constitution Article 1, Section 9 and to permit regulated IFS contests. Plaintiffs, "taxpayers … affected by the negative impacts of gambling," sued to block the law. Supreme Court granted summary judgment for plaintiffs.

The Third Department affirmed. In an opinion by Justice Robert C. Mulvey, the majority explained that "allowing the Legislature unfettered discretion to determine what is not gambling would render meaningless the constitutional prohibition" on gambling. The majority looked to Penal Law §225.00's definition of gambling as risking something of value upon the outcome of a "contest of chance," meaning where the outcome depends "in a material degree upon an element of chance." Even assuming that skill is required in picking a team, the majority concluded that because participants "cannot control how the athletes on their IFS teams will perform in the real-world sporting events," the outcome of an IFS contest depends upon chance to a material degree.

Fourth Department

Domestic Relations Law. In Tomeka N.H. v. Jesus R. and Brenda S., 2020 N.Y. Slip Op. 2015 (4th Dept. March 20, 2020), the Fourth Department concluded that the same-sex partner of a child's biological mother lacked standing to seek a tri-custodial arrangement with the biological father.

Petitioner and respondent mother were engaged in 2009 but did not marry, and after their relationship ended the mother conceived a child with respondent father. However, the father did nothing to establish his status as such and saw the child rarely. Petitioner renewed her relationship with the mother, and the child took a hyphenated last name that combined those of her mother and petitioner. In 2013, the mother filed a paternity petition against the father, and the court entered a joint custody and visitation order. In 2017, petitioner (who had ended her romantic relationship with the mother), sought custody and visitation rights. Family Court granted the father's motion to dismiss the petition for lack of standing.

In a majority opinion by Justice John V. Centra, the Fourth Department affirmed. Petitioner was applying for custody and visitation as a "parent" under Domestic Relations Law §70. Because that law provides that "either parent" may apply, and because "either" means one of two, the majority concluded that the law does not permit three parents to simultaneously have standing to seek custody.

Leo Milonas is a litigation partner at Pillsbury Winthrop Shaw Pittman. He is a former Associate Justice of the Appellate Division, First Department, and the former Chief Administrative Judge of the State of New York. Andrew C. Smith is also a litigation partner at the firm. Pillsbury counsel Jay D. Dealy and Joshua I. Schlenger and associate Brian L. Beckerman assisted in the preparation of this column.