NY Appellate Court Affirms Holding Denying Recovery of Escrow Money Set Aside to Reimburse the Town for the Cost of Services Incurred in Connection with an Application to Annul a Certificate of Occupancy

In this small claims action, plaintiff sought to recover the $2,500 that he had placed into an escrow account, at the Town’s request. These escrow monies were to be used to “reimburse the Town for the cost of professional consultant review services incurred” in connection with the review of plaintiff’s application to the Zoning Board of Appeals to annul a certificate of occupancy which plaintiff claimed was improperly approved by a building inspector. Defendant counterclaimed to recover monies that plaintiff owed in excess of the amount deposited into escrow. By decision and order, the Justice Court dismissed plaintiff’s cause of action and awarded defendant the principal sum of $1,667 on its counterclaim.

In the case at bar, contrary to plaintiff’s contention, the record supported the determination of the Justice Court that New Castle Town Code § 60–560(A)(3) was not ambiguous and that, besides the types of applications to the ZBA listed in New Castle Town Code, the application plaintiff filed with the ZBA to annul a certificate of occupancy fell within the “other applications” referred to in New Castle Town Code § 60–560(A)(3). As such, the applicable New Castle Town Code § 60–560(A)(7)(b) and (d) stated that an applicant “shall reimburse the Town for the costs of professional staff services upon the Town’s submission of an invoice and that the costs shall be limited to those that are reasonable in amount and necessary for the Town’s review of the application.” Accordingly, the court held that plaintiff was properly instructed to deposit monies into an escrow account from which the Town could be reimbursed for the costs it incurred in the review of plaintiff’s application.

Stein v. Town of New Castle, 2016 WL 6304979 (NYAD 2 Dept. Spec. Term 10/21/16)