NY Appellate Court Finds That All Property Owners are Not Automatically Necessary Parties to Rezoning Challenge

Following a reclassification by the Town of the permitted use of nine contiguous parcels from residential-agricultural use to industrial use, petitioners commenced a proceeding seeking to annul the local law based on, among other things, allegations that the procedures used to adopt the ordinance violated the State Environmental Quality Review Act. The Respondents moved to dismiss the petition/complaint on the basis that petitioners failed to join necessary parties, namely, the property owners of all of rezoned parcels whose property rights were affected by the ordinance. The trial court denied the motion but determined that the other property owners were necessary parties and ordered petitioners to serve those property owners with a notice of petition and petition. Petitioners filed an amended petition/complaint that added as respondents the additional parcel owners (hereinafter the newly-added respondents). Thereafter, respondents and several of the newly-added respondents, separately moved to dismiss petitioners’ amended petition/complaint on the ground that the amended petition/complaint was time-barred as to the newly-added respondents under the four-month statute of limitations (see CPLR 217 [1]). Petitioners conceded that they did not timely add the necessary parties, but reserved their right to challenge on appeal the prior determination that the newly-added respondents were necessary parties The trial court then dismissed the amended petition/complaint on the ground that it was time-barred.

On appeal, the Court reversed, finding that the newly-added respondents were not necessary parties merely because the ordinance at issue affected their property rights. The court stated, “it is notable that the Court of Appeals and this state’s appellate courts, including this Court, have long entertained challenges to municipalities’ legislative actions in regard to zoning ordinances without requiring the joinder of every property owner whose rights are affected by the ordinance at issue.” (citations omitted) The Court continued, “Although this Court has, in limited cases, found property owners to be necessary parties in regard to legal challenges to municipal ordinances that affect the property owners’ rights, it has only done so in cases where the owners had obtained an actual approval pursuant to the challenged zoning ordinance that would be adversely impacted by a judgment annulling that ordinance.” (citations omitted) The Court agreed with the petitioner’s argument that “the newly-added respondents do not fall into that previously recognized category and that those cases do not stand for the principle that persons affected by a municipality’s ordinances are de facto necessary parties when those ordinances are challenged.” Since the record did not establish that the newly-added parties are in the limited category that this Court has previously recognized as necessary parties, the Court declined the opportunity to adopt a new rule that those affected by an ordinance are necessary parties when that ordinance is challenged, and that therefore the newly-added respondents are not necessary parties and the petition was not time-barred.

Hudson River Sloop Clearwater, Inc v Town Board of the Town of Coeymans, 2016 WL 6636927 (NYAD 3 Dept. 11/10/2016)