Motion in limine; Amortization; Zoning laws; Article 78
By: Nandini Chowdhury | Staff Writer
Plaintiff. acquired a parcel of real property, which has operated as an asphalt plant since the 1940s. Prior to Plaintiff’s acquisition of the property, Defendant amended the village zoning code to prohibit the use of the property as an asphalt plant. In June 2000, the Board of Trustees adopted a local law which provided that Plaintiff’s right to operate the asphalt plant would terminate within one year. Plaintiff was free to apply for an extension of the termination date with the Village Zoning Board of Appeals (the “ZBA”), which was not to exceed five years from the date the local law was adopted. Plaintiff applied for and successfully obtained an extension. Subsequently, ZBA gave Plaintiff until July 2005 to terminate its asphalt operation. As a challenge to the ZBA’s determination, Plaintiff commenced a CPLR Article 78 proceeding. The court denied and dismissed the proceeding based upon a finding that Plaintiff had received all the relief to which it was entitled under the local law.
Subsequently, Plaintiff commenced a separate action in which it sought a judgment declaring the local law invalid and unconstitutional. Prior to proceeding to trial, the Court dealt with three threshold issues on motions in limine: (1) the adequacy of the period of time prescribed by the local law under constitutional standards for amortization laws, (2) the proper measure of amortization in assessing the constitutional adequacy of the time period allowed by the local law and, (3) the inclusion of Plaintiff’s litigation expenses in amortization. Plaintiff asserted three arguments: the Court should consider (1) the period between July 2000 to July 2005 as it is the maximum period of amortization, (2) factors such as Plaintiff’s ability to relocate the asphalt plant, and, (3) the period of time from 2005 to the present for Plaintiff’s claim for litigation expenses.
In opposition, Defendants argued that the Court should also consider (1) the period after 2005 during which litigation has been pending, (2) inquiry on the proper measure of amortization should be solely limited to whether Plaintiff has been able to recoup its investment in the nonconforming asphalt plant, and, (3) precluding Plaintiff from including its litigation expenses because such costs are “soft costs” and not recoverable through amortization.
The Court held the proper period of time was 2000 to the present in determining whether Plaintiff has recouped its investment. A court is empowered to consider that a property owner has had more than the maximum amount of time for which the law provides to amortize its investment in a nonconforming use. Here, the Court found that Plaintiff had more years than was intended by the local law to recoup its investment in the nonconforming asphalt plant.
Second, the Court ruled for Defendants in determining the proper measure for amortization. The Court particularly focused on whether Plaintiff has been given a fair opportunity to recoup its investment in the plant. Here, the Court held that it should be allowed to conduct a balancing test and consider factors such as the amount invested in the plant, the value of the buildings and equipment, and the cost of relocation to determine whether Plaintiff has been given an opportunity to recoup its investment and avoid substantial financial loss.
Lastly, the Court found that Plaintiff’s litigation expenses were costs that should be considered in determining whether Plaintiff has recouped its investment. A court is empowered to allow for reasonable costs sustained by Plaintiffs to be included. Here, Plaintiff could not stay in business without challenging the local law in court and as such, the Court determined that litigation expenses should be considered an investment into the plant and used to determine whether or not Plaintiff as suffered a substantial financial loss.
Suffolk Asphalt Supply, Inc. v. Board of Trustees of the Vil. of Westhampton Beach, Index No. 26005/2016, 01/11/16 (Emerson, J.)