Fed. Dist. Court in NY Finds that Board’s Failure to Approve an Application to Eliminate Covenants and Restrictions did Not Constitute a Denial of the Application

This post was authored by Matthew Loeser, Esq.

 

Plaintiff Village Green at Sayville, LLC intended to build a housing project on its property. In 2006, the Town Board granted Plaintiff’s application to re-zone the property from Business One to Residence CA. A Residence CA zoning district generally allows rental properties as a matter of right; however, this re-zoning was conditioned on Plaintiff accepting certain covenants and restrictions (“C&Rs”) including that the permitted condominiums would be owned by those dwelling in the units, and accordingly not a rental property. The C&Rs also required connection to an off-site sanitary treatment plant (“STP”). Plaintiff alleged that connection to an STP “became impossible, in part due to the Town and local school district’s refusal to grant a required easement and the Town’s subsequent approval of a project that utilized the remaining capacity of the only off-site STP to which Plaintiff could connect.” As a result, Plaintiff filed an application with the Town Board to modify the C&Rs to eliminate the covenants requiring condominiums owned by the unit dwellers and an off-site STP.

 

A month after the Town Board meeting on Plaintiff’s application in which the motion to approve did not pass, Plaintiff’s attorney, Joseph Buzzell, had a conversation with the Town Attorney, John DiCioccio, who stated “the Town is treating the failed motion to approve as a denial of the Plaintiff’s application, and that no further proceedings before the Town Board, Planning Board, or any other Town Agency would be held.” As a result, Plaintiff commenced an Article 78 action against Defendants in state court asking the court to: declare that the covenants are illegal and unenforceable; order the Town to review and approve Plaintiff’s application and site plan; and issue the necessary building permits. That matter was scheduled for trial in November 2019. While that case was pending, Plaintiff brought this case, and subsequently filed an Amended Complaint alleging violations of:  the FHA; 42 U.S.C. § 1981; 42 U.S.C. § 1982; 42 U.S.C. § 1983 and the Equal Protection Clause of the Fourteenth Amendment; NYSHRL § 296(6); substantive due process under the Fourteenth Amendment; and the takings clause of the Fifth and Fourteenth Amendments.

 

At the outset, the court found Plaintiff did not have standing to bring its FHA claim because there was no final decision, and therefore no injury, as Plaintiff did not have a “final, definitive position” from the municipal entity. Here, Plaintiff’s claim relied on a non-vote and an alleged statement by the Town attorney absent any citation to binding precedent suggesting either constituted a final decision, or was otherwise binding on the Town Board. For this same reason, the court dismissed the fourth cause of action for violations of 42 U.S.C. § 1983 and the Equal Protection Clause of the Fourteenth Amendment; the sixth cause of action for violations of substantive due process under the Fourteenth Amendment; and the seventh cause of action for violations of the takings clause of the Fifth and Fourteenth Amendments.

 

Notwithstanding the above, Defendants did not mention whether a final decision was required to have standing to bring a § 1981 or § 1982 claim, and failed to cite any authority in support of their argument. Here, Plaintiff brought suit against Defendants for allegedly refusing to amend Plaintiff’s C&Rs on the basis of racial discrimination while amending the C&Rs of another project that was in a minority neighborhood. The court noted that “under § 1981, a plaintiff does not have to be a member of a racial minority to bring a claim; rather, a non-minority plaintiff can allege personal injury stemming from a defendant’s discriminatory conduct against a racial minority.” As precedent existed for allowing a corporation to bring a § 1981 claim, Defendants’ motion to dismiss Plaintiff’s § 1981 and § 1982 claims was denied. Defendants were directed to file a renewed motion to dismiss on the limited question of whether a final decision was required for standing and ripeness for § 1981 and § 1982 claims. Likewise, Defendants motion to dismiss Plaintiff’s NYSHRL was denied with the same instruction.

 

Village Green at Sayville, LLC v Town of Islip, 2019 WL 4737054 (EDNY 9/27/2019)