For an Order and Judgment Pursuant to CPLR Article 78 and §3001 DECISION AND ORDER ON MOTION TO DISMISS PETITION AND COMPLAINT AGAINST RESPONDENT-DEFENDANT MICHAEL G. GIFFORD On February 11, 2021, Michael G. Gifford (hereinafter “the Treasurer”), by and through his attorneys, The Ayers Law Firm, PLLC, by Kenneth L. Ayers, Esq., filed a motion seeking to dismiss the Petition-Complaint of Johnstown Water Board (hereinafter “the Board”) and Michael Capparello (hereinafter collectively “Petitioners-Plaintiffs”). On March 5, 2021, Petitioners-Plaintiffs filed Opposition to the motion, by and through their attorneys of record, Goldberger and Kremer, by Bryan J. Goldberger, Esq. A reply was filed by the Treasurer, through his counsel, on March 10, 2021. Respondents-Defendants, City of Johnstown (hereinafter “the City”) and Vernon F. Jackson, did not take a position regarding the motion. The Court heard oral arguments on the motion on March 12, 2021 via Microsoft Teams. FACTUAL AND PROCEDURAL BACKGROUND Petitioners-Plaintiffs are the Johnstown Water Board and its president, Michael Capparello. It is undisputed that the Water Board was created through and by the City of Johnstown’s Charter (hereinafter “the Charter”) and the City adopted the Charter in January 2001 (see Ayers Attorney Affirmation at 3 18). The Charter tasks the Board with collecting sewage and water rents and investing the “Water Department funds in such a manner as to gain maximum advantages to the Water Department” (City Charter annexed as Exhibit A to the Petition-Complaint, which is annexed as Exhibit 1 to Ayers Affirmation at C-23-24). Further, it permits the Board to hire a superintendent, pass and manage its own budget, fix salaries for its employees, pay claims and amounts due under contracts, and transmit necessary financial documents to the City Treasurer for him to perform his duties, as specified under the Charter (see generally the Charter, Article 6). The Charter also provides that the Board can lease or purchase property and provide for payment out of the water rents, with the City of Johnstown having the right of first refusal (Charter at C-24). The Water Board is comprised of five elected officials pursuant to the Charter (id. at C-7). Over the course of its existence, the Board has maintained bank accounts at NBT Bank, wherein it collected the funds as specified by the Charter (see Petition annexed as Exhibit A to Ayers Affirmation at 5 23). In September 2020, Respondent-Defendant Michael Gifford, the City Treasurer, took control of said bank accounts and has refused to turn over control to the Board, despite demand having been made1 (id. at 5 24). The type of demand by the Petitioners-Plaintiffs is disputed.2 Plaintiffs-Petitioners brought the pending action pursuant to CPLR §3001 and Article 783. This decision is a result of the Treasurer having filed a motion to dismiss the Petition-Complaint. The portions of the Petition-Complaint against the Treasurer allege that the taking of the bank accounts was in violation of the City Charter and that he failed to perform the duty enjoined upon him by the Charter and/or, further, proceeded in excess of his jurisdiction (see Petition/Complaint at 5
29-30). Furthermore, the Wherefore clause seeks an Order declaring that the Treasurer failed to perform his duty and proceeded in excess of his jurisdiction by failing to comply with the Charter; compelling the return of the bank accounts to the Board; enjoining the Treasurer from interfering with the Board’s operation, modifying the Board’s budget, or interfering with employment relationships, including the hiring of a superintendent and the Board’s relationship with its union (see generally Petition-Complaint Wherefore clause). LEGAL AUTHORITY Civil Practice Law and Rules §3211 states in relevant part (a) Motion to dismiss cause of action. A party may move for judgment dismissing one or more causes of action asserted against him on the ground that: … 2. the court has not jurisdiction of the subject matter of the cause of action; or 3. the party asserting the cause of action has not legal capacity to sue; or … 5. the cause of action may not be maintained because of arbitration and award, collateral estoppel, discharge in bankruptcy, infancy or other disability of the moving party, payment, release, res judicata, statute of limitations, or statute of frauds; or … 7. the pleading fails to state a cause of action; or (CPLR §3211 [a]). When moving to dismiss for failure to state a cause of action, a defendant may argue that, even if true, the allegations do not state a cognizable claim, or move to dismiss by rebutting the factual claims of Plaintiff. “Regardless of which type of CPLR 3211 (a) (7) motion is made against a complaint, a plaintiff is aided by three rules of decision: (1) give the complaint a liberal construction, (2) accept the allegations as true, and (3) provide the plaintiff with the benefit of every possible favorable inference” (Hon. Mark C. Dillon, Supplementary Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B CPLR C3211:21 at p 40). A motion to dismiss under CPLR §3211 (a) (7) may be granted if a plaintiff fails to identify any cognizable cause of action; fails to plead material elements of the cause of action; fails to state allegations with sufficient particularity to give a defendant notice; or if a defendant submits evidence sufficient to refute the allegations in the complaint (id.). New York is a notice pleading state, allowing for generalized allegations in a complaint (see generally CPLR §3013). Capacity and Standing It is paramount that a party bringing a suit must have both capacity and standing to do so. The reasoning in Community v. Schaffer offers a clear distinction of the two concepts, particularly where the case involves artificial entities, and the Court is hesitant to paraphrase such a clear description: Having concluded that the proceeding need not be dismissed for mootness, we turn now to the question presented by the parties for our review: whether petitioner has capacity to bring this proceeding. We note at the outset that the concept of capacity is often confused with the concept of standing, but the two legal doctrines are not interchangeable (see, Matter of Pooler v. Public Serv. Commn., 58 A.D.2d 940, 397 N.Y.S.2d 425, affd. on mem. below 43 N.Y.2d 750, 401 N.Y.S.2d 1009, 372 N.E.2d 797; see also, Matter of Association of Bds. of Visitors of N.Y. State Facilities for Mentally Disabled v. Prevost, 98 A.D.2d 260, 471 N.Y.S.2d 342). “Standing” is an element of the larger question of “justiciability” (see, Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761, 769, 570 N.Y.S.2d 778, 573 N.E.2d 1034; Matter of Dairylea Coop. v. Walkley, 38 N.Y.2d 6, 9, 377 N.Y.S.2d 451, 339 N.E.2d 865). The various tests that have been devised to determine standing are designed to ensure that the party seeking relief has a sufficiently cognizable stake in the outcome so as to “cast[ ] the dispute ‘in a form traditionally capable of judicial resolution’” (Society of Plastics Indus. v. County of Suffolk, supra, 77 N.Y.2d at 772-773, 570 N.Y.S.2d 778, 573 N.E.2d 1034, quoting Schlesinger v. Reservists to Stop War, 418 U.S. 208, 220-221, 94 S.Ct. 2925, 2932, 41 L.Ed.2d 706; see, Schieffelin v. Komfort, 212 N.Y. 520, 530, 106 N.E. 675). Often informed by considerations of public policy (Society of Plastics Indus. v. County of Suffolk, supra, 77 N.Y.2d at 769, 570 N.Y.S.2d 778, 573 N.E.2d 1034), the standing analysis is, at its foundation, aimed at advancing the judiciary’s self-imposed policy of restraint, which precludes the issuance of advisory opinions (see generally, Cuomo v. Long Is. Light. Co., 71 N.Y.2d 349, 354, 525 N.Y.S.2d 828, 520 N.E.2d 546). “Capacity,” in contrast, concerns a litigant’s power to appear and bring its grievance before the court. The concept of a lack of capacity, which has also occasionally been intermingled with the analytically distinct concept of a failure to state a cause of action, does not admit of precise or comprehensive definition (see, Ward v. Petrie, 157 N.Y. 301, 51 N.E. 1002; 4 Weinstein-Korn-Miller, N.Y.Civ.Prac. 3211.17). Capacity, or the lack thereof, sometimes depends purely upon a litigant’s status. A natural person’s status as an infant, an adjudicated incompetent or, formerly, a felony prisoner, for example, could disqualify that individual from seeking relief in court (see, Kittinger v. Churchill Evangelistic Assn., 239 App.Div. 253, 267 N.Y.S. 719; Garner v. Garner, 59 Misc.2d 29, 297 N.Y.S.2d 463; CPLR 1201; but see, Civil Rights Law §79[2]; §79-a[2] [removing disqualification of felony prisoners to sue in court] ). Additionally, the capacity question has often arisen in connection with controversies involving trustees (see, Siegel, N.Y.Prac. §261 [2d ed] ). Another category of capacity problems — the category at issue here — arises in the context of suits brought by artificial entities. Business corporations, for example, are creatures of statute and, as such, require statutory authority to sue and be sued (see, Business Corporation Law §202 [a][2]; see also, §1005[a][1]; §1006[a][4] [dissolved corporations]; §1312 [foreign corporations doing business in New York] ). Similarly, unincorporated associations, which are voluntary congregate entities, are accorded the capacity to bring suit through their presidents or treasurers by statute (General Association Law §12); see, Ayew v. Hawes & Co., 250 App.Div. 596, 295 N.Y.S. 49. Governmental entities created by legislative enactment present similar capacity problems. Being artificial creatures of statute, such entities have neither an inherent nor a common-law right to sue. Rather, their right to sue, if it exists at all, must be derived from the relevant enabling legislation or some other concrete statutory predicate (Matter of Pooler v. Public Serv. Commn., supra; see, Matter of Flacke v. Freshwater Wetlands Appeals Bd., 53 N.Y.2d 537, 444 N.Y.S.2d 48, 428 N.E.2d 380 [analyzing agency's capacity to sue, although using the term "capacity" interchangeably with "standing"] ). The principle is a well-known one, originating in the more general canon that “a creature of the State * * * has no power other than that given it by the Legislature, either explicitly or by necessary implication” (Matter of B.T. Prods. v. Barr, 44 N.Y.2d 226, 236, 405 N.Y.S.2d 9, 376 N.E.2d 171, citing Matter of Pooler v. Public Serv. Commn., supra; see, e.g., Matter of Department of Personnel v. New York City Civ. Serv. Commn., 79 N.Y.2d 806, 807, 580 N.Y.S.2d 173, 588 N.E.2d 71). In a recent discussion on the subject, Matter of City of New York v. City Civ. Serv. Commn., 60 N.Y.2d 436, 470 N.Y.S.2d 113, 458 N.E.2d 354, we considered both the standing and the capacity of a governmental agency to bring an article 78 proceeding against another governmental entity. With respect to the capacity question, we stated that the authority of a government agency to bring suit does not require “that in every instance there be express legislative authority” (id., at 444-445, 470 N.Y.S.2d 113, 458 N.E.2d 354). Rather, the capacity to sue may also be inferred as a “necessary implication from [the agency's] power[s] and responsibilit[ies],” provided, of course, that “there is no clear legislative intent negating review” (id., at 443, 444, 470 N.Y.S.2d 113, 458 N.E.2d 354). The Court indicated in City of New York that the power to bring a particular claim may be inferred when the agency in question has “functional responsibility within the zone of interest to be protected” (id., at 445, 470 N.Y.S.2d 113, 458 N.E.2d 354, distinguishing Matter of Pooler v. Public Serv. Commn., supra ). Notably, this “ zone of interest” test is related but not identical to the “zone of interest” analysis that is traditionally applied in the allied area of standing (see, Matter of Dairylea Coop. v. Walkley, supra; see also, Matter of Bradford Cent. School Dist. v. Ambach, 56 N.Y.2d 158, 451 N.Y.S.2d 654, 436 N.E.2d 1256). It is the City of New York “zone of interest” test that also distinguishes this case from Community Bd. No. 4 v. Board of Estimate, 88 A.D.2d 832, 451 N.Y.S.2d 140, affd. on mem. below 57 N.Y.2d 846, 455 N.Y.S.2d 768, 442 N.E.2d 65), on which respondents place considerable reliance. In that case, the Court held that local community boards created pursuant to New York City Charter §2800 lack the power to challenge substantive zoning determinations made by the responsible administrative authorities. Here, unlike the situation in Community Bd. No. 4, petitioner board is not challenging a substantive decision by the City to approve or disapprove a land development proposal. Rather, it is contesting a decision by the City Planning Department to deny it access to certain documents which, arguably, might be useful in carrying out its statutorily mandated responsibility to study the land use proposal and to make appropriate recommendations to the Borough President and Planning Department (see, N.Y. City Charter §197-c[d], [e], [m]; §197-d[b][2]; §668[a][1], [2], [7] ). Given that fundamental mandate, it cannot be said that petitioner board does not have “functional responsibility” within the sphere to be protected by ULURP, the law on which this particular judicial challenge is primarily based (see, Matter of City of New York v. City Civ. Serv. Commn., supra, 60 N.Y.2d at 445, 470 N.Y.S.2d 113, 458 N.E.2d 354). Nonetheless, petitioner’s lack of capacity to bring this suit may readily be inferred from the terms and history of its own enabling legislation, as well as from its limited role in the land use planning process. Petitioner does not dispute that neither New York City Charter §2800 nor the relevant ULURP provisions expressly authorize community boards to bring suit. Nor can such authority be constructed as a “necessary implication” of petitioner’s other powers, since there are clear indications in the legislation that no authority to sue for document disclosure was, in fact, intended. (Community v. Schaffer, 84 NY2d 148 [1994] [emphasis added]). Where an artificial entity is looking to bring action against an officer, courts have determined capacity to sue is implied where specific markers of autonomy exist, combined with a lack of legislative intent negating review (see Matter of Citizens v. Syracuse Police Dept, 150 AD3d 121, 2017 Ny Slip Op 02181 [4th Dept 2017]; Craine v. NYSARC, 88 AD3d 1105, 2011 NY Slip Op 07329 [3d Dept 2011]). The concept of standing is part of the larger requirement of justiciability of controversy and is based on the “judiciary’s self-imposed policy of restraint, which precludes the issuance of advisory opinions” (Matter of Citizens supra at 126, citing Community supra). The Court of Appeals has held that in order for a plaintiff to have standing to challenge the actions or inactions of an officer, plaintiff must (1) have suffered an injury in fact and (2) the injury must fall within the zone of interest sought to be promoted by the enabling statute (Matter of Graziano, v. County of Albany, 3 NY3d 479, 2004 NY Slip Op 08782 [2004], citing NYS Assn. of Nurse Anesthetists v. Novello, 2 NY3d 207, 2004 NY Slip Op 02292 [2004]). Particularly on point is the Court of Appeals decision in New York v. City Civil Service, 60 NY2d 436 (1983). In that case, the court held that an artificial entity created through a city charter was a separate municipal body, and therefore, had standing to bring an Article 78 proceeding (City Civil Service at 444-45). The court reasoned that the duties assigned to the municipal body by the city Charter placed the challenged harmful decision in its zone of interest and there was no clear legislative intent negating review denying it standing to sue (id.). The entity’s authority to commence an Article 78 proceeding was, therefore, found to be “a necessary implication from its power and responsibility” (id. at 441). Declaratory Action pursuant to CPLR §3001 “The supreme court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justiciable controversy whether or not further relief is or could be claimed” (CPLR §3001). When entertaining a motion to dismiss a cause of action seeking a declaratory judgment, the Court must only decide “whether a proper case is presented for invoking the jurisdiction of the court to make a declaratory judgment, and not whether the plaintiff is entitled to a declaration favorable to him” (County of Monroe v. Clough Harbor, 154 AD3d 1281, 1282, 2017 NY Slip Op 07033 [4th Dept 2017]; see also Hallock v. State of New York, 32 NY2d 599 [1973]). In other words, the motion to dismiss should be denied if the pleadings are “sufficient to invoke the court’s power to render a declaratory judgment…as to the rights and other legal relations of the parties to a justiciable controversy” (North Oyster Bay v. Town of North Oyster Bay, 130 AD3d 885, 890, 2015 NY Slip Op 06225 [2d Dept 2015]). Liberal construction is afforded to the pleadings and plaintiff is usually allowed the benefit of every possible inference (EBC I v. Sachs, 5 NY3d 11 [2005]). While a declaratory judgment merely pronounces who among the parties has the better right, it can, and it should also include coercive relief to ensure that a party is given all the relief that it is entitled to and obviate the need for a subsequent second independent suit (see Silverstein v. Continental, 23 AD2d 801 [4th Dept 1965]); see also Patrick M. Connors, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B CPLR C3001:1 at p 257-58; C3001:5 at p 261-62). The Court of Appeals has noted that cases involving issues of law are ideal for declaratory judgment and a declaratory judgment may be granted only if a justiciable controversy exists (see Dun & Broadstreet v. City of New York, 276 NY 198 [1937]; see generally Save Our Forest v. City of Kingston, 246 AD2d 217, 1998 NY Slip Op 07174 [3d Dept 1998]]). Moreover, a Complaint for declaratory judgment will not be dismissed if a justiciable controversy exits, regardless of whether the declaration to be given is what the plaintiff was looking for (Strauss v. University, 280 AD 1017 [3d Dept 1952]). An action is justiciable when the controversy presented touches the legal relations of the parties having adverse interests from which harm is presently flowing or could flow in the future in the absence of a court determination of the parties’ rights. The controversy must be capable of disposition and be presented in an adversarial context with a set of concrete facts (Goodwill Adv. Co. v. State Liq. Auth., 14 AD2d 658 [3d Dept 1961") (Initiative for Competitive Energy v. Long Island Power, 178 Misc2d 979, 989 [Suffolk Co 1998]; see i.e., New York State Bankers Association v. Wetzler, 81 NY2d 98 [1193] [questioning the authority of a legislative body to enact a law adversely affecting a party was found to be a justiciable controversy, not subject to dismissal). Article 78 An Article 78 proceeding is limited in scope by the provisions of CPLR' 7803, which states in pertinent part: The only questions that may be raised in a proceeding under this article are: 1. whether the body or officer failed to perform a duty enjoined upon it by law; or 2. whether the body or officer proceeded, is proceeding or is about to proceed without or in excess of jurisdiction; or (CPLR' 7803 [1-2]). Further, CPLR §217 provides, in relevant part, that a proceeding against a body or officer must be commenced within four months after the determination to be reviewed becomes final and binding upon the petitioner or the person whom he represents in law or in fact, or after the respondent’s refusal, upon the demand of the petitioner or the person whom he represents, to perform its duty (CPLR §217 [1]). Article 78 essentially codifies previously cognizable common law claims for writs of certiorari, mandamus and prohibition (Vincent C. Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B C7801:1 at p 27). The first question corresponds to the common law writ of mandamus to compel, while the second is associated with either a writ of prohibition, or a mandamus to review agency determinations that are purely administrative in nature (as opposed to judicial or quasi-judicial in nature), regardless of the decision’s appearance in a record or a hearing (Vincent C. Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B C7803:1 at p 9-11; see Scherbyn v. Wayne-Finger Lakes Bd, 77 NY2d 753 [1991]). In order for an action to be characterized as mandamus to compel, the petitioner must show a clear legal right to relief, and there must be a “corresponding nondiscretionary duty on the part of administrative agency to grant that relief” (see Scherbyn supra at 757). Generally, mandamus to compel is an “‘extraordinary’” remedy, available only in “‘limited circumstances’” in which a government officer or organization has failed to perform a ministerial, nondiscretionary duty” (Vincent C. Alexander, 2019 Supplemental Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B C7801:3 at 8-9; see Alliance to End Chickens as Kaporos v. NYC Police Dept, 32 NY3d 1091, 2018 NY Slip Op 07694 [2018]; Gimprich v. Board of Educ, 306 NY 401 [1954]). Further, if there is any reasonable doubt or controversy regarding the petitioner’s entitlement to performance, the petition for mandamus to compel must be denied (see Ass’n of Surrogate and Supreme Court reporters v. Bartlett, 40 NY2d 571 [1976]). The petitioner seeking a mandamus to compel bears the initial burden to “present[ ] factual allegations of an evidentiary nature or other competent evidence tending to establish his or her entitlement to the requested relief” (Matter of Cumberland v. Commissioner, 131 AD3d 735, 736, 2015 NY Slip Op 06451 [2015] [internal quotations omitted]; see also Walker v. Sullivan, 148 AD3d 1379, 1380, 2017 NY Slip Op 01926 [2017] [holding that "petition fail[ed] to state a cause of action due to the absence of any specific allegations tending to establish that petitioner ha[d] ‘a clear legal right to the relief sought’”]; Matter of Horan, 43 Misc2d 62 [Suffolk Co 1964] [holding that the petition was legally insufficient where it failed to contain the requisite allegation of a mandated duty owed by the respondents]). Two threshold considerations must be present if a mandamus for writ of prohibition is sought by a petitioner: (1) the petitioner must challenge the act of an officer acting in a judicial or quasi-judicial capacity and (2) the error being challenged must be one of jurisdictional nature (Vincent Alexander, Practice Commentaries, Practice Commentaries, Book 7B C8701:4 at p 38). Additionally, a “clear legal right” to the relief sought must be shown (see Molea v. Marasco, 64 NY2d 718 [1984]). Courts have great discretion in refusing to entertain prohibition proceedings, even when the activity in question exceeds an officer’s jurisdiction (Schumer v. Holtzman, 60 NY2d 46 [1983]). In exercising this discretion, courts look to the gravity of the harm caused by the act of the official; whether the harm can be adequately addressed by any other proceeding at law or in equity; and whether the prohibition would be more efficient than any other method technically available (see Rush v. Mordue, 68 NY2d 348 [1986]). A mandamus to review is a review of a purely administrative action involving the exercise of discretion (Alexander at C7803:1 at p 10-11). “The standard of review in such a proceeding is whether the agency determination was arbitrary and capricious or affected by an error of law” (id.). Finally, when reviewing petitions for mandamus, the courts have great discretion, which is recommended to be exercised sparingly, particularly when doing so would interfere with the functions of coequal branches of government (Williams v. Bryant, 57 AD2d 717 [4h Dept 1977]). In making such a determination, courts may consider the strength of the position established by the petitioner, as well as the availability and adequacy of other possible remedies (Knight v. Gerosa, 4 AD2d 176 [1st Dept 1957]). LEGAL ANALYSIS A review of the City Charter does not present an expressed authority on the part of the Board to bring legal action, although it is permitted to sue in situations involving collection of water rents (see generally Charter, Article 6). However, the capacity of the Board to sue is implied in its responsibilities to manage the collection of money for water and sewage rents; invest the money received for water rents, while remitting the sewage rents to the City; being able to sell property; pay claims; and sue for collection of rents (id.; see City Civil Service supra). Those actions are not only responsibilities designated to the Board by the Charter, but markers of autonomy, as discussed above in Citizens and Craine supra. Additionally, it is inconsistent for the Treasurer to allude to the fact that Article 78 would authorize him to bring a proceeding against the Board for maintaining bank accounts in contravention of the powers granted by the Charter, while asserting that the Board would not have the capacity to sue the Treasurer (c.f. Ayers Affirmation at 10
