Posted by: Patricia Salkin | April 11, 2019

NY Trial Court Dismisses Takings, Vested Rights, and Conspiracy Claims Related to Revoked Sign Permit

This post was authored by Amy Lavine, Esq,

 

A New York trial court case decided in March affirmed the revocation of a sign permit that had been granted in error and dismissed various claims brought by the property owner, including takings, vested rights, mandamus, and conspiracy challenges. The petitioner acquired permits to construct a 523 square foot LED advertising sign in early 2000, prior to a zoning amendment passed in 2003 that changed the property’s classification from M1-6 manufacturing to C6-2A commercial. The sign was never erected, however, and in 2016 the department of buildings revoked the permits after determining that an advertising sign would be prohibited in the C6-2A zone, as well as under a 200 foot distance restriction from arterial highways that applied in under both the current and prior zoning designations.

The court first dismissed the petitioner’s regulatory takings claim, noting that the department of buildings was authorized under the city code to revoke any permit that was issued in error. Because an administrative appeal was available in these situations, and because the petitioner hadn’t taken advantage of this appeal procedure, the court concluded that the petitioner’s takings claim had to be denied for failure to exhaust administrative remedies. And even if the claim was ripe, the petition still would have been insufficient to state a cause of action for regulatory takings because it failed to include any allegation that the permit revocation denied all economically viable uses of the property.

The court also denied the petitioner’s vested rights claim on the basis that vested rights don’t attach to an invalid permit. The sign permits in this case were issued illegally, the court explained, because they failed to comply with regulations in the industrial district that prohibited illuminated or flashing advertising signs and that restricted signs located within 200 feet of any arterial highway. The error in issuance, moreover, was at least partially caused by false representations in the petitioner’s permit applications stating that the property wasn’t within 200 feet of an arterial highway. Because the permits violated this rule under both the commercial and industrial district zoning, it was also irrelevant that they were issued before the property was rezoned. Finally, the petitioner’s vested rights claim also failed because there was no evidence that it had made substantial expenditures in reliance on the permits.

The petitioner’s third cause of action sought an order of mandamus to compel the department of buildings to reissue its sign permits. This claim was also denied, as the court found that the municipal respondents hadn’t failed to perform any duty required of them by law, nor had the petitioner established that it had a clear legal right to reissuance of the permits.

In the last claim at issue, the petitioner sought damages for aiding in “an alleged conspiracy to ‘abuse public office for private gain’ between [department of buildings] officials and the owners of the adjacent property.” But as the court explained, New York law only recognizes civil conspiracy claims to the extent that the challenged conduct would be actionable on some other legal basis. In this case, the penal law did include a provision for “official misconduct” that encompassed unauthorized acts of public officials intended for personal gain or to deprive others of some benefit, but the statute didn’t create a private cause of action. Accordingly, since there was no civilly actionable offense for official misconduct, the court denied the petitioner’s conspiracy challenge.

 

Matter of Stathis Enters., LLC v City of New York, 2019 NY Slip Op 30790(U) (N.Y. Cty. 3/26/19).


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