Vantage Petroleum v. Board of Assessment Review

— In a proceeding pursuant to article 7 of the Real Property Tax Law to review the assessment of petitioner’s real property, the Board of Education, Lindenhurst Union Free School District No. 4, Town of Babylon, appeals from an order of the Supreme Court, Suffolk County (Geiler, J.), dated February 4,1981, which denied its motion for leave to intervene. Order affirmed, without costs or disbursements. Special Term correctly held that intervention by the appellant Board of Education, Lindenhurst Union Free School District No. 4, Town of Babylon (hereinafter the Board of Education) was not warranted in this tax certiorari proceeding pursuant to article 7 of the Real Property Tax Law because of (1) the Legislature’s amendment of the so-called Suffolk County Tax Act (L 1980, ch 837, eff Sept. 1, 1980, amdg L 1920, ch 311, § 3, as amd by L 1958, ch 95) and (2) a decision of Special Term in Matter of Sperry Rand Corp. v Board of Assessors of County of Nassau (Supreme Ct, Nassau County, July 22, 1980, Farley, J., affd 77 AD2d 822, mot for lv to app dsmd 52 NY2d 702). It has been consistently held that intervention should be permitted where the proposed intervener has a real and substantial interest in the outcome of the proceeding (Plantech Housing v Conlan, 74 AD2d 920; Matter of Petroleum Research Fund, 3 AD2d 1; Matter of Raymond v Honeywell, 58 Misc 2d 903). In accordance with that general principle, there exists a body of case law which permits a school district to intervene in a proceeding pursuant to article 7 of the Real Property Tax Law, but only where it has a direct financial interest in the outcome of the proceeding in the form of a potential liability to the petitioner for a tax refund pursuant to section 726 (subd 1, par [c]) of the Real Property Tax Law (Plantech Housing v Conlan, supra; Matter of Xerox Corp. v Sanger, 79 Misc 2d 480; Matter of Stanford Assoc. v Board of Assessors of Town of Niskayuna, 67 Misc 2d 477, affd 39 AD2d 800; Matter of Raymond v Honeywell, supra; Matter of Magee v Board of Assessors of Town of Nelson, 49 Misc 2d 499, affd sub nom. Matter of Fieser v Board of Assessors of Town of Nelson, 24 AD2d 1045). However, those cases are inapplicable to the case at bar by virtue of the Legislature’s amendment of the Suffolk County Tax Act (L 1980, ch 837, § 1). Subdivision 3 of that statute now provides as follows: “§ 3. 1038 Town assessment roll official. The assessment roll prepared by the assessors of each town shall be the official assessment roll for the town and for every school district and other tax district lying within the town for which said assessment roll was prepared so far as it concerns property lying within such school or other tax district. Any final order in a proceeding under article seven of the real property tax law which orders or directs the correction or striking of an assessment appearing on that portion of a town assessment roll applicable to a school district, shall be binding on such town. Any amount of taxes of such school district at any time collected upon such assessment in excess of the amount which would have been paid had such assessment been made as determined by such order, shall be refunded by the county and shall be charged by the county to such town. In no event shall such refund be charged by the town to such school district. The assessors of any town may make copies of any assessment roll or of a portion thereof, or tax roll, which copy when certified by them as correct may be used in all respects as and for an original roll or portion thereof.” Pursuant to the amendment, a school district in Suffolk County is no longer liable for refunds of the school portion of the property tax that is owed a petitioner as a result of tax certiorari proceedings instituted pursuant to article 7 of the Real Property Tax Law. Rather it is the town which must pay the refund. Accordingly, the appellant Board of Education’s attempt to intervene in the case at bar, which is based solely on the speculative theory that a reduction in the assessment of petitioner’s property may result in an undervaluation of the property and a decrease in the school district’s tax base, must be rejected (cf. Matter of Board of Educ. v Parsons, 61 Misc 2d 838, 842-844), We have been made aware of the uncontested fact that even prior to the Legislature’s 1980 amendment of the Suffolk County Tax Act, there was a common practice in Suffolk County to have the towns refund any overpaid taxes and not charge any part of them back to the school district. We are also aware that during the period that this practice was prevalent, one court in Suffolk County stated, in dicta, that intervention by a Suffolk County school district in a tax certiorari proceeding commenced pursuant to article 7 of the Real Property Tax Law would be allowed. Specifically, in Matter of Rapone v Shokey (43 Misc 2d 87), Special Term held that petitioner’s failure to serve notice of the article 7 proceeding on the clerk of the school district, pursuant to former subdivision 2 of section 708 of the Real Property Tax Law, was not a jurisdictional defect. However, the court in Rapone went on to note that the legislative intent was to give reasonable notice to a school district of a proceeding by which it might be affected and that the school district would, therefore, be permitted to intervene if it so desired. Nevertheless, it must be stressed that despite the existence of an unofficial practice in Suffolk County at the time of the Rapone decision, by which school districts in that county were relieved of the necessity of making tax refunds, those school districts were nevertheless liable, by law, for such refunds (see Real Property Tax Law, § 726, subd 1, par [c], and its predecessor, Real Property Tax Law, former § 1316, subd 5). It is therefore fair to assume that the dicta in Rapone regarding intervention by a school district was based upon the potential tax liability of the school district for tax refunds and not merely because its tax base might be affected by a reduction in the assessment of the taxpayer’s property. Finally, in Matter of Sperry Rand Corp. v Board of Assessors of County of Nassau (supra) the corporate petitioner commenced a proceeding pursuant to article 7 of the Real Property Tax Law to review the tax assessments on its property for the years 1972-1979. The petitioner claimed there had been an overvaluation and that it was entitled to a tax refund. The school district, on the eve of trial, sought leave to intervene in the proceeding. The Sperry Rand court was confronted with a statute which also 1039 relieved the school district of liability for tax refunds in tax certiorari cases (Nassau County Administrative Code, § 6-26.0, subd b, par 3, cl [c]; see L 1948, ch 851, § 2). In addition, section 6-17.3 of said code specifically provided that in any proceeding to review an assessment, it was not necessary to deliver a copy of the petition or notice to the clerk of any school district, notwithstanding the provisions of any other general or special law to the contrary. In denying the motion to intervene in Sperry Rand, Special Term held that the legitimate interest that school districts have in their tax base when preparing budgets was not a ground for intervention in a proceeding to review a tax assessment pursuant to article 7 of the Real Property Tax Law and that the “right to be forwarned of impending changes in valuation affecting its tax base [existed] only when the school district [was itself] entitled to notice of the tax review proceeding” (Real Property Tax Law, § 708), because the requirement for notice is based on the school district’s liability for the payment of refunds. On appeal to this court, the school district in Sperry Rand specifically argued, inter alia, that it had standing to intervene in a proceeding to review a tax assessment, even if it could not be held liable for a tax refund. This court affirmed without opinion (Matter of Sperry Rand Corp. v Board of Assessors of County of Nassau, 77 AD2d 822, supra), thereby rejecting the proposition that a school district can intervene in a proceeding to review a tax assessment pursuant to article 7 of the Real Property Tax Law, when the school district cannot be held liable for any tax refund. It is true that Sperry Rand can be distinguished from the case at bar in two areas: (1) the motion to intervene in Sperry Rand was made on the eve of trial and (2) pursuant to section 6-17.3 of the Nassau County Administrative Code, the petitioner in that case was relieved of the obligation to deliver a copy of the petition in the tax review proceeding to the clerk of the school district. We do not find either of these distinctions to be persuasive. With regard to the lateness of the motion to intervene in Sperry Rand, suffice it to say that this issue played no real part in the reasoning of Special Term in that case. With respect to the notice factor, it is true that the Legislature, in relieving school districts in Suffolk County from liability from tax refunds by the enactment of chapter 837 of the Laws of 1980, did not simultaneously eliminate the requirement of section 708 of the Real Property Tax Law that notice of the tax review proceeding be given to those districts. However, it is our view that the Legislature’s failure to relieve petitioners in proceedings pursuant to article 7 of the Real Property Tax Law of the duty to give Suffolk County school districts notice of tax certiorari proceedings pursuant to section 708 of that law, was merely an oversight and does not indicate a legislative intent to allow intervention by Suffolk County school districts in tax certiorari proceedings despite the fact that chapter 837 of the laws of 1980 ended the potential tax refund liability of those school districts. Finally, we do not agree with the dissenters’ view that the interests of the school district which is seeking to intervene, and those of the town, which is defending the underlying proceeding, are so divergent so as to render the town’s representation of the school district’s interests as “inadequate” within the meaning of CPLR 1012 (subd [a], par 2). Accordingly, the order appealed from is affirmed. Mangano, Weinstein and Niehoff, JJ., concur.