The following numbered papers read on this petition to annul the final determination of a Small Claims Assessment Review petition and cross motion by respondents for denial and dismissal of the petition. PAPERS NUMBERED Notice of Petition-Verified Petition-Exhibits EF 1-11 Notice of Cross-Motion-Affidavits-Exhibits EF 14-24 Answering Affidavits-Exhibits EF 26-28 Upon the foregoing cited papers, and after Microsoft Teams conference, it is ordered that the petition on behalf of Connie Yeung and all others similarly situated, pursuant to Article 78 of the Civil Practice Law and Rules (“CPLR”), for an Order reviewing, annulling, and rescinding the determinations of Small Claims Assessment Review Hearing Officer Barry Clarke; appointing a new hearing officer; and remanding the matters to the new hearing officer for a de novo hearing and respondents’ cross motion, pursuant to CPLR 3211(a)(1), (7), (10), and 7804(g) for denial and dismissal of the petition are consolidated for disposition and determined as follows: Background and Statutory Framework Nassau County, both historically speaking and in the present moment, is among the leaders in the State of New York in Small Claims Assessment Review (“SCAR”) proceedings. As will be more fully discussed below, SCAR proceedings are an informal proceeding, statutorily venued in the Supreme Court, which permit an aggrieved taxpayer to seek a reduction in their property taxes. To date in 2023, over 35,000 SCAR petitions have been filed in the Nassau County Supreme Court, representing nearly 50 percent of all court filings for this calendar year. As a result of this high volume of cases, the Court has a particular interest in ensuring that these hearings are resolved expeditiously and accurately, with an eye toward minimizing the need for Article 78 review of the resulting decisions of SCAR hearing officers. The Statutory Scheme New York State has always made efforts to treat all real property taxpayers within the State equally, that is, to create, as much as possible, a fair and equal system of real property taxation despite the disparate values of parcels of real property throughout the State. One of the more important tools developed by the State to achieve this is the Residential Assessment Rate (“RAR”) promulgated by the Office of Real Property Tax Services (“ORPTS”). The RAR is established in Article 7 of the Real Property Tax Law (“RPTL”), specifically, §738. The statute provides that the RAR “shall be equal to the level of assessment of residential property in the assessing unit as determined in the market value survey used or to be used to calculate the state equalization rate for that assessment roll.” Practically speaking, the RAR is the percentage multiplier used by the municipal assessing unit (i.e., county, town, village, etc.) to calculate the amount of property tax to be assessed. As noted in the petition herein, the RAR is the “mechanism set…for converting a fractional assessment on the assessment roll in order to arrive at the full equalized rate.” (Petition 7). In addition to establishing the RAR, Article 7 of the RPTL also provides the mechanism for aggrieved taxpayers to challenge the assessment on their real property. Aggrieved residential taxpayers may seek review of their assessments on residential real property on the grounds that the assessment is either unequal or excessive. Prior to filing a petition, taxpayers must first exhaust their administrative remedies by filing a grievance with the County Department of Assessment (RPTL §730[1]). Once the grievance route is exhausted, a SCAR proceeding (“SCAR”) may be held. RPTL §732(2) specifies the procedures for SCARs and the standard to be applied. A SCAR is to be conducted on an “informal basis,” in order to do “substantial justice between the parties according to the substantive law” (RPTL §732[2]). Petitioners seeking relief under these statutes are not “bound by statutory provisions or rules of practice, procedure, pleading or evidence.” (Id.). The hearing officer is to consider “the best evidence” presented in each individual case, which may include, but is not limited to, the most recent equalization rate established for such assessing unit, the residential assessment ratio promulgated by the commissioner pursuant to section seven hundred thirty-eight of this title, the uniform percentage of value stated on the latest tax bill, and the assessment of comparable residential properties within the same assessing unit (Id.). In challenging an assessment as being “unequal,” which the underlying SCAR petitions herein did, a taxpayer must demonstrate that they have disproportionately been assessed taxes in relation to the value of other property within the taxing unit. Because of the informal nature of the proceeding, RPTL §735 provides that no transcript of the testimony is to be made and that “the hearing officer’s decision of a petition for small claims assessment review shall not constitute precedent for any purpose or proceeding involving the parties or any other person or persons” (RPTL §735). The Instant Article 78 Petitioner, on behalf of herself and thirteen (13) other similarly situated taxpayers seeks to have certain underlying SCAR decisions and orders annulled and vacated as being based on an error of law and therefore arbitrary and capricious. During a series of SCAR hearings that took place on June 16, 2022, Petitioner and the other taxpayers attempted, through their counsel, to introduce evidence of a competing RAR that was prepared, presumably at the direction of their counsel, to “impeach the credibility” of the RAR developed by ORPTS. This evidence, however, was rejected by the Hearing Officer. In a series of decisions, each issued on July 15, 2022, the Hearing Officer concluded that the petitioner and those similarly situated to her did not have standing to challenge the RAR as developed by ORPTS. The Hearing Officer based this determination on his reading of RPTL §1218, specifically as that statute was interpreted by an Order of the Supreme Court, Nassau County (Steinman, J.) dated September 27, 2021 in The Matter of Costigan v. The Assessor of the Village of Garden City (Sup Ct, Nassau County, Index No. 610725/2020) (hereinafter “Costigan 1″), wherein the Court concluded that “class ratios are ‘species or subsets’ of state equalization rates” and are therefore covered by RPTL §1218.” In so doing, the Court in Costigan 1 relied on the Second Department’s decision in Matter of Fair Market Assessment Comm., LLC v. New York State Off. of Real Prop. Tax Servs., 65 AD3d 1143 [2d Dept 2009]). In reliance on this precedent, the Hearing Officer concluded, citing Costigan 1 as the “best evidence,” that a “taxpayer does not have standing to challenge an equalization rate (or class ratio).” Petitioner then filed the instant Article 78 proceeding, on behalf of herself and similarly situated taxpayers, challenging the Hearing Officer’s determinations. In so doing, Petitioner primarily argues that the decisions should be set aside because following Costigan 1, in an Order entered October 5, 2022, the Supreme Court, Nassau County (Steinman, J.) granted reargument to the petitioners, and upon reargument, concluded it was mistaken in its determination that those petitioners did not have standing to challenge the RAR (hereinafter “Costigan 2″). In Costigan 2, the Court found that “[a]n analysis of the applicable statutes and case law — including Fair Assessment — reveals that nothing in the law limits a petitioner’s proof of the appropriate percentage of value solely to the RAR promulgated by ORPTS.” Petitioner contends, then, that the Decisions of the Hearing Officer should be vacated and a new Hearing Officer, should, in effect, be compelled to follow Costigan 2 because petitioner and the others similarly situated, have the right to mount a “collateral attack to impeach ORPTS’ RAR” by commencing a SCAR. Petitioner asserts that there is no prejudice to Respondent in directing this outcome, because a SCAR decision “has the sole effect of changing the measuring tool in which one evaluates the taxpayer’s assessment at that particular SCAR proceeding” and otherwise “has no probative or precedential value” (Petition 12). The Motion to Dismiss Respondents move to dismiss the petition. In so doing, Respondents first argue that this Article 78 proceeding was commenced against the wrong entities. According to Respondents, the underlying SCAR proceedings were commenced against the Incorporated Village of Great Neck Estates whereas this petition was filed against the “Assessor of the Village of Great Neck” and the “Board of Assessment Review of the Village of Great Neck Estates,” and not the Village itself. Respondents assert that since the Village itself is a necessary party to this proceeding, the proceeding should be dismissed. Respondents also argue that the Article 78 should be dismissed because the Petitioners failed to submit, with their petition, an affidavit by an individual with personal knowledge of the underlying proceedings. On the merits of the petition, Respondents assert that the decision of the Hearing Officer was neither arbitrary nor capricious. Respondents argue that the Hearing Officer correctly determined that Petitioner did not have standing to challenge the RAR, and that, even if that determination was in error, the Hearing Officer nonetheless properly concluded, based upon the evidence, that the Petitioners had not met their burden of establishing their claims of unequal assessment. In opposition to Respondents’ motion, Petitioner argues that: (1) it was proper to have its attorney verify the petition since the material allegations are legal issues, not factual issues; (2) that the proper entities, which are political subdivisions of the Village of Great Neck Estates, have been sued herein; and, (3) that because the Hearing Officer incorrectly relied on the “admittedly flawed decision,” in Costigan 1, which was superseded by Costigan 2, the determinations, on their face, are unsustainable (Petitioner’s Memorandum of Law in Opposition to the Motion to Dismiss, p.9). Analysis Turning first to the procedural arguments, this Court finds them unavailing. The verification by Petitioner’s attorney is, in this limited instance, appropriate. Here, the verification by Petitioner’s counsel is appropriate because the material facts underpinning the petition are fundamentally unchallenged and well within the attorney’s personal knowledge (see CPLR 3020[d][3]). Next, insofar as Respondents assert that by naming only the Assessor of the Village of Great Neck and the Board of Assessment Review of the Village of Great Neck as Respondents, Petitioners have not named a necessary party to the action, the Court finds this argument to be unavailing in that there can be no serious question that in naming the Assessor and the Board of Assessment Review of the Village, the parties in interest have been named herein and placed on proper notice of the proceeding. The Rules of Precedent and SCAR Proceedings Turning to the merits of the Petition, the Court notes, as a threshold matter, that the rules of precedent need to be clarified as they pertain to Orders issued by judges of coordinate, or the same, jurisdiction. It is well settled law that decisions of judges of coordinate jurisdiction are not binding precedential authority on their fellow judges within the same jurisdiction. Courts of coordinate authority are not obligated to follow one another (31 Carmody-Wait 2d §172:91). Courts of coordinate jurisdiction, may, of course, be persuaded by decisions issued by their coordinate justices, but they are not bound by them. Applying these rules of precedent to the two decisions issued in Costigan, the Court concludes that it is neither bound by them, nor does it find them persuasive authority. The Court concludes that Costigan 2 was based on a misinterpretation of other orders issued by this Court, the Second Department, and other published decisions around the state, particularly in Leone v. Board of Assessors (100 AD3d 635 [2d Dept 2012]), cited with approval in Costigan 2. A deeper analysis of the orders in Leone reveals that the question of Petitioner’s standing to challenge the RAR was not the reason why the Article 78 was filed in the first instance. While it does appear that the petitioners in Leone sought to impeach the RAR, the Article 78 was ultimately granted because the Hearing Officer denied the underlying SCAR petitions without providing a basis for the decisions (RPTL §733[4]), not because the Hearing Officer concluded that the petitioners did not have standing to challenge the RAR. Given the nature of the Article 78 in Leone, it cannot be cited to as authority or guidance to support a petitioner having standing to challenge an RAR. Moreover, in other cases cited in Costigan 2, it was the municipality that was permitted to impeach the RAR, not the individual taxpayer (see, e.g., Matter of Agosh v. Cicero Board of Assessment Review, 150 Misc 2d 756 [Sup Ct, Onondaga County 1991] and Katz v. Assessor of Vill. of Southampton, 131 Misc 2d 552 [Sup Ct, Suffolk County 1986]). As more fully discussed below, this may indeed be permissible under the statutory scheme (although it seems contrary to RPTL §1218) because if a municipality challenges the RAR, it would then presumably be applying the new RAR throughout the municipality, whereas using an RAR only for a select few taxpayers creates inherently unequal assessments. Understanding the rules of precedent is also important because they highlight a major contradiction in Petitioner’s arguments concerning the applicability of statutes and precedent in SCAR proceedings. Petitioner argues that she may be permitted to, in the words of its petition to this Court, mount a “collateral attack to impeach ORPTS’ RAR” because such efforts “have no probative or precedential value for other taxpayers or SCAR hearings” (see, RPTL §735). Moreover, petitioners seeking relief in a SCAR proceeding, and the SCAR hearing officers granting it, are not “bound by statutory provisions or rules of practice, procedure, pleading or evidence” (RPTL §732[2]). If, however, as petitioner argues, there are no statutory or precedential bounds on a SCAR hearing officer in considering the granting of a petition for property tax relief, as specifically set forth in the statutes, how then can a hearing officer’s decision to be persuaded by certain Court decisions as the best evidence in SCAR be found arbitrary or capricious? Nonetheless, given the fact that the hearing officer made his determinations, in part, on the basis of Appellate Division precedent finding that Petitioner and those similarly situated to her have no standing to challenge an RAR, Petitioner seeks to challenge that determination, and the Respondents have moved to dismiss the petition in support of the Hearing Officer’s conclusion, the Court will consider the issue. An Individual Taxpayer’s Standing to Challenge an RAR Here, after a thorough consideration of the arguments, statutory scheme, and Appellate Division precedent concerning the issue, this Court concludes that an individual taxpayer does not have standing to challenge the RAR directly in a plenary or other action against ORPTS (RPTL §1218; Matter of Fair Assessment Comm., LLC 65 AD3d 1143; Matter of West End Neighborhood Taxpayers, Inc. v. NYS Bd. of Real Prop. Tax Servs., 39 AD3d 764 [2d Dept 2007]); Matter of Brimberg v. Commissioner of Finance of the City of New York, 49 AD3d 298 [1st Dept 2008]; Matter of Feiner v. New York State Office of Real Prop. Tax. Servs., 25 AD3d 1005 [3d Dept 2006]; Matter of Rokowsky v. State Bd. of Equalization & Assessment, 172 AD2d 93 [3rd Dept 1991]) and neither can a petitioner be found to have standing to mount a “collateral attack” on the RAR in a SCAR proceeding.1 Concluding otherwise and permitting this Petitioner and the others similarly situated to raise a “collateral attack” on the RARs in SCAR proceedings, would, were this Court to do it, raise numerous concerns. The first is that it would be contrary to the plain language of the Second Department’s decision in Fair Assessment, which expressly states “[a] taxpayer does not have standing to challenge an equalization rate” (Fair Assessment, 65 AD 3d at1143-1144 [2d Dept 2009]). The second concern, as mentioned above, is that were this Court to (a) find that a petitioner has standing to challenge the RAR set by ORPTS, or (b) to grant the relief sought by those petitioners and use the RAR suggested by them, all but guarantees that there will be an unequal assessment in, in this case, the Village of Great Neck Estates (i.e., a class of individuals whose taxes are set using the “new” RAR and a class of individuals who are taxed using the RAR promulgated by ORPTS). Even assuming, without therefore deciding, that the new “RAR” argued for by Petitioner and those similarly situated to her would be the “correct” one, this Court is not inclined to accept that the end result of a SCAR proceeding should be to create the very inequity that the proceeding is supposed to remedy. Here, it is instructive to consider RPTL §1218, “the sole statute authorizing judicial review of equalization rates” (Matter of West End Neighborhood Taxpayers, Inc. 39 AD3d 764) which permits “only the municipality whose equalization rate was established” to seek judicial review (Id.). This makes logical sense. The municipality may challenge ORPTS so that any equalization rate change is applied fairly to all taxed property within its jurisdiction, not merely to the handful of taxpayers that have decided to challenge the equalization rate. Third, concluding that Petitioners have standing to challenge the RAR in a SCAR proceeding would seem to permit a form of litigation to proceed without a necessary party, ORPTS. CPLR 1001(a) defines a necessary party as “[p]ersons who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment in the action shall be made plaintiffs or defendants.” Here, there can be no serious question that the State of New York, as represented by ORPTS, would be “inequitably affected” by not being given the chance to defend the RAR it developed and by having, in its stead, the municipality that did not develop the RAR be required to defend it. Accordingly, it is ORDERED that the Petition is DENIED; and it is further ORDERED that Respondent’s cross-motion to dismiss the petition is GRANTED; and the petition DISMISSED; and it is further ORDERED that all requests for relief not specifically addressed herein are DENIED. This shall constitute the Decision and Order of the Court. Dated: July 24, 2023
