                          State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: February 26, 2015                   519007
________________________________

TURTLE ISLAND TRUST et al.,
                    Respondents,
      v
                                            MEMORANDUM AND ORDER
COUNTY OF CLINTON et al.,
                    Appellants,
                    et al.,
                    Defendants.
________________________________


Calendar Date:   January 9, 2015

Before:   McCarthy, J.P., Rose, Egan Jr. and Devine, JJ.

                             __________


      Maynard, O'Connor, Smith & Catalinotto, LLP, Albany (Robert
A. Rausch of counsel), for appellants.

      Murphy Myers, LLP, Orchard Park (Margaret A. Murphy of
counsel), for respondents.

                             __________


McCarthy, J.P.

      Appeal from an order of the Supreme Court (Ellis, J.),
entered March 13, 2014 in Clinton County, which denied
defendants' motions to dismiss the complaint.

      Plaintiffs are Turtle Island Trust, an unincorporated
charitable trust, and its trustees. The Trust was established in
the 1970s to hold land for the purpose of creating a community
for Native Americans who wished to practice a lifestyle in
accordance with their ancestral traditions and to educate the
public about their culture. Over time, the Trust acquired
numerous parcels by lease or deed, 17 of which are located in the
Town of Altona, Clinton County. In 2003, defendant Town of
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Altona determined that most of the Trust's parcels were taxable,
and the Town began to send property tax bills to plaintiffs.
Plaintiffs never paid any property taxes, so, in 2008, defendant
County of Clinton and its treasurer, defendant Joseph W. Giroux
(hereinafter collectively referred to as defendants), filed a
petition to foreclose against some of the parcels held by the
Trust. County Court (Ryan, J.) eventually granted defendants a
default judgment of foreclosure and issued a tax deed giving the
County title to those parcels, which deed was duly recorded. Due
to plaintiffs' continued nonpayment of taxes on the Trust's
parcels, defendants brought two additional foreclosure
proceedings and ultimately gained title by tax deed to 14 of the
Trust's 17 parcels within the Town.

      Plaintiffs admit that they had notice of these proceedings,
the last of which concluded in March 2011, but chose not to
defend themselves against any of them. In November 2012,
plaintiffs commenced this action for declaratory and injunctive
relief, challenging (1) the tax assessments, (2) failure to make
the parcels tax exempt and (3) the foreclosure of the parcels.
Defendants moved to dismiss the complaint based on the statutes
of limitations, res judicata and for failure to state a cause of
action (see CPLR 3211 [a] [5], [7]). The Town and defendant John
Brunell made a similar motion. Supreme Court denied the motions
and defendants appeal.1

      Supreme Court should have dismissed plaintiffs' challenges
to the tax assessments. Under RPTL article 7, a property owner
claiming to be aggrieved by an assessment of real property on the
basis that the assessment is excessive, unequal or unlawful, or
that the property is misclassified, may file a petition
challenging the assessment, but "such a proceeding shall be
commenced within thirty days after the final completion and
filing of the assessment roll containing such assessment" (RPTL
702 [2]; see RPTL 704 [1]; 706 [1]). Where a party is alleging


    1
        The Town and Brunell did not appeal or appear on this
appeal. Inasmuch as they are nonappealing parties, we cannot
grant them any affirmative relief (see Hecht v City of New York,
60 NY2d 57, 60 [1983]).
                              -3-                519007

that the assessment is void – either through a challenge to the
methodology of assessment or the jurisdiction of the taxing
authority to assess particular property – the party may instead
bring a proceeding pursuant to CPLR article 78 or a declaratory
judgment action (see Kahal Bnei Emunim & Talmud Torah Bnei Simon
Israel v Town of Fallsburg, 78 NY2d 194, 204-205 [1991]; Matter
of Adams v Schoenstadt, 57 AD3d 1073, 1074 [2008], lv dismissed
12 NY3d 769 [2009]). Both of those options are governed by a
four-month statute of limitations (see Matter of Adventist Home v
Board of Assessors of Town of Livingston, 83 NY2d 878, 880
[1994]; Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v Town
of Fallsburg, 78 NY2d at 205; see also CPLR 217). The Court of
Appeals has expressly rejected plaintiffs' argument that, because
the property is allegedly mandatorily exempt from taxes, the
assessment is illegal and void and may be challenged at any time
(see Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v Town of
Fallsburg, 78 NY2d at 204). Plaintiffs concede that they had
notice of the Town's determination regarding the taxable status
of the parcels, and filed a grievance to administratively
challenge the tax bills when the property was first listed as not
tax exempt, but they failed to appeal when the Town denied the
grievance. Plaintiffs did not file any further grievances,
actions or proceedings until they commenced this action more than
a year after the final foreclosure proceeding was concluded.
Accordingly, while an action for declaratory judgment was a
proper method, the statute of limitations bars plaintiffs'
challenges to their tax assessments (see Matter of Adventist Home
v Board of Assessors of Town of Livingston, 83 NY2d at 880).

      Plaintiffs contend that, regardless of the statute of
limitations, the tax assessments are invalid because the Town
failed to provide notice to the Attorney General regarding a
change in the tax exempt status of the Trust's property. As
plaintiffs could have raised this argument in the tax foreclosure
proceedings, for which they were on notice but failed to appear,
the doctrine of collateral estoppel bars plaintiffs from
litigating the issue now (see Cafferty v Cahill, 53 AD3d 1007,
1008 [2008], lv dismissed and denied 11 NY3d 861 [2008]; Culver v
County of Rensselaer, 139 AD2d 853, 854-855 [1988], lv denied 72
NY2d 807 [1988]).
                              -4-                519007

      Plaintiffs also argue that notice to the Attorney General
is a condition precedent to initiating a tax foreclosure
proceeding. EPTL 8-1.4 (o) does not require that the Attorney
General be given notice of a foreclosure proceeding, only of a
change in tax exempt status. RPTL 1125 provides the notice
requirements for tax foreclosure proceedings. That statute
requires notice to "each owner and any other person whose right,
title, or interest was a matter of public record" as of a certain
date and who will be affected by the proceeding (RPTL 1125 [1]
[a]). While the Attorney General has a duty to enforce the
rights of beneficiaries of charitable trusts through legal
proceedings (see EPTL 8-1.1 [f]), no statutory provision makes
him an owner of the parcels at issue or gives him a right, title
or interest in the property. Hence, he is not a party who is
entitled to notice of tax foreclosure proceedings pursuant to
RPTL 1125. In any event, the record establishes that the
Attorney General did receive notice of the foreclosure
proceedings. Thus, plaintiffs have no cause of action based on
defendants' alleged failure to provide notice of the foreclosure
proceedings to the Attorney General.

      Plaintiffs assert that County Court lacked subject matter
jurisdiction to issue tax foreclosure deeds for parcels held by a
charitable trust. Like any challenge to a judgment based on the
issuing court's lack of subject matter jurisdiction, which
relates to whether the court had the authority to ever consider
the matter, this argument may be raised at any time and is not
subject to any statute of limitations (see Caci v State of New
York, 107 AD3d 1121, 1122 [2013]; see also Matter of Hart Family,
LLC v Town of Lake George, 110 AD3d 1278, 1280 [2013]). In
addition to asserting the statutes of limitations as a defense,
however, defendants assert that plaintiffs failed to state a
cause of action. On a motion based on this ground, courts must
liberally construe the complaint, accept the allegations as true,
provide the plaintiffs with the benefit of every favorable
inference and determine only whether any cognizable legal theory
will support the allegations (see He v Realty USA, 121 AD3d 1336,
1339 [2014]). Documentary evidence and affidavits submitted by
defendants generally are not considered on such a motion, unless
they conclusively establish that the plaintiffs have no cause of
action (see Rovello v Orfino Realty Co., 40 NY2d 633, 636 [1976];
                              -5-                519007

Allen v City of New York, 49 AD3d 1126, 1127 [2008], lv denied 11
NY3d 705 [2008]). Plaintiffs' claim that County Court lacked
subject matter jurisdiction does not raise any factual questions
but constitutes a question of law in this declaratory judgment
action, such that Supreme Court could have, and this Court can,
render a determination and declare the rights of the parties
without any further proceedings (see Spilka v Town of Inlet, 8
AD3d 812, 813 [2004]).

      Basically, the parties dispute whether provisions of the
RPTL or EPTL pertaining to jurisdiction prevail here. County
Court is a court of limited jurisdiction, with its authority
defined exclusively by provisions of state law (see NY Const, art
VI, § 11; Judiciary Law § 190; Matter of County of Sullivan
[Congregation Khal Chaside Skwera, Inc.], 86 AD3d 671, 672
[2011]). Supreme Court and County Court have concurrent
jurisdiction in tax foreclosure proceedings, which vests in
County Court all of the same power and authority that Supreme
Court would have in such a matter (see RPTL 1120 [2]; Judiciary
Law § 190-b [1], [2]). Plaintiffs acknowledge this authority,
but argue that it is circumscribed in cases dealing with real
property held by a charitable trust, as only Supreme Court (and,
in instances where a charitable trust disposition is contained in
a will, Surrogate's Court) have jurisdiction over dispositions of
property held in trust for religious, charitable, educational or
benevolent purposes (see EPTL 8-1.1 [c] [1]). The tax
foreclosure provisions are silent regarding charitable trust
property and the EPTL article 8 provisions are silent regarding
tax foreclosures.

      Despite the Legislature having failed to specifically
address the circumstances where a tax foreclosure is sought on
real property held by a charitable trust, we find that County
Court has jurisdiction over all tax foreclosure proceedings,
including under these circumstances. The purpose of RPTL article
11 is to handle foreclosure of tax liens when owners of real
property fail to pay their taxes, while providing certain
safeguards to the property owners. The purpose of EPTL 8-1.1 is
to assure that property placed in trust for charitable purposes
is dealt with in accordance with the trust instrument or, in
certain situations, to further the purposes of the trust or
                              -6-                519007

protect its beneficiaries. RPTL 1120 grants broad authority to
County Court to handle all tax foreclosure proceedings. The EPTL
power over charitable property is more limited. While EPTL 8-1.1
deals with a trust's use of property entrusted to it, it does not
necessarily deal with another party's assertion of use or control
over such property. For example, a creditor attempting to
collect a debt owed by a charitable trust is not strictly bound
by that statute. Taken to its logical conclusion, plaintiffs'
argument would require small claims or eviction matters
concerning charitable trusts or their property to be handled
exclusively in Supreme Court, under the assertion that no other
court has jurisdiction (except for Surrogate's Court, but only if
the charitable trust disposition was made in a will). We do not
read EPTL 8-1.1 so broadly. Accordingly, we find that County
Court had jurisdiction over the RPTL article 11 proceedings at
issue here. As County Court had subject matter jurisdiction,
plaintiffs' claims relating to the foreclosures are subject to
the applicable statutes of limitations.

      The statutes of limitations bar plaintiffs' challenges to
the foreclosure proceedings and resulting tax deeds. A motion to
reopen a default in a tax foreclosure proceeding "may not be
brought later than one month after entry of the judgment" (RPTL
1131). Even where there is no default, no proceeding to set
aside any deed issued as part of a tax foreclosure proceeding may
be maintained unless it is commenced within two years of the
recording of such deed (see RPTL 1137; Matter of City of Hudson,
114 AD3d 1106, 1106-1107 [2014], appeal dismissed 23 NY3d 984
[2014], lv denied 24 NY3d 903 [2014]). Here, in three separate
judgments entered in 2009, 2010 and 2011, the County was granted
tax foreclosure deeds to various parcels that were held by the
Trust. The most recent deed was recorded in March 2011. The
deeds entered in 2009 and 2010 were filed more than two years
before this action was commenced in November 2012, rendering them
precluded by RPTL 1137. Although plaintiffs' claim that the 2011
deed is invalid is not precluded by RPTL 1137, it is precluded by
RPTL 1131, as plaintiffs did not timely move to reopen the
default judgment and, in any event, never provided a valid excuse
for defaulting. Hence, Supreme Court should have granted
defendants' motion to dismiss the complaint.
                              -7-                  519007

     Rose, Egan Jr. and Devine, JJ., concur.



      ORDERED that the order is modified, on the law, without
costs, by reversing so much thereof as denied the motion of
defendants County of Clinton and Joseph W. Giroux to dismiss the
complaint against them; motion granted, complaint dismissed
against said defendants and it is declared that the tax deeds
conveying 14 parcels from plaintiff Turtle Island Trust to
defendant County of Clinton are valid and the County has clear
title to those parcels; and, as so modified, affirmed.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
