Town of Tupper Lake v. Sootbusters, LLC

Citations: 147 A.D.3d 1268; 47 N.Y.S.3d 778; 2017 NY Slip Op 01428Docket: 523002

Court: Appellate Division of the Supreme Court of the State of New York; February 22, 2017; New York; State Appellate Court

Original Court Document: View Document

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The New York Supreme Court, Appellate Division addressed an appeal from the Town of Tupper Lake regarding a June 26, 2015, order that denied the Town's motion to dismiss a counterclaim filed by defendants Michael and Ursula Vaillancourt, who own property in Tupper Lake. In June 2012, the Vaillancourts applied for a special use permit to build a two-unit residential structure with a garage for their business, Sootbusters, LLC. They acknowledged the property’s zoning allowed for the storage of up to four commercial vehicles. The Planning Board referred their application to the Zoning Board of Appeals, which approved a use variance in August 2012. 

Subsequently, the Vaillancourts sought to amend their special use permit to add four more apartment units, which the Planning Board granted in October 2013, with conditions limiting the number of commercial vehicles and prohibiting the storage of construction equipment. In June 2014, the Vaillancourts installed fuel tanks for their commercial vehicles, prompting the Town's Code Enforcement Officer to issue a notice of violation for non-compliance. The Town then initiated legal action, seeking a restraining order and fines against the Vaillancourts and Sootbusters for failing to remove the tanks and equipment.

Defendants responded with ten affirmative defenses and one counterclaim. The Town moved to dismiss the counterclaim under CPLR 3211 (a)(7), while the defendants cross-moved to file a late notice of claim. The Supreme Court denied the Town's motion and granted the defendants' cross-motion, leading to the Town's appeal. The appellate court emphasized the need to liberally interpret pleadings, accepting all allegations as true and granting every favorable inference to the defendants. It noted that while a liberal standard applies, allegations that are mere legal conclusions or contradicted by documentary evidence cannot be saved. The defendants asserted that they had initially obtained a variance without conditions and claimed that the conditions imposed in 2013 constituted misconduct and fraud.

A cause of action for fraud requires a material misrepresentation, knowledge of its falsity, intent to induce reliance, justifiable reliance, and damages. Defendants' fraud claim is based on their belief that the 2012 special use permit was unconditional, preventing the Planning Board from imposing conditions during the 2013 amendment approval. However, the 2012 application acknowledged compliance with Town Code allowing four commercial vehicles, and the 2013 amendment continued this condition. Michael Vaillancourt was present during the 2013 discussions, and defendants did not claim reliance on any misrepresentation nor appealed the Planning Board's decision. Consequently, the court found insufficient factual support for the fraud allegation, warranting dismissal of the counterclaim.

Regarding the claim of "official misconduct," a government official could be liable under 42 USC 1983 if a party proves deprivation of constitutional rights. Defendants needed to show a deprivation of a vested property interest beyond mere expectation, and a municipal body could only be liable if the deprivation arose from official policy or custom. Defendants lacked a permit for more than four commercial vehicles or fuel tanks and did not demonstrate a vested interest in such a permit. The conditions imposed by the Planning Board did not amount to a constitutional violation, and even a Planning Board member's comment about "making an example" of defendants did not indicate an official policy. The Supreme Court should have denied the defendants' motion for a late notice of claim, leading to the reversal of the order and dismissal of the counterclaim.