5055 Northern Boulevard LLC v. The Incorporated Village of Old Brookville

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

-------------------------------------X

5055 NORTHERN BOULEVARD LLC,

Plaintiff,

MEMORANDUM & ORDER

-against- 19-CV-3598(JS)(ST)

THE INCORPORATED VILLAGE OF OLD

BROOKVILLE, BERNARD D. RYBA, in his

capacity as the Mayor of the Village

of Old Brookville, JOHN CHASE, in his

capacity as the Attorney for the

Village of Old Brookville, THE

BOARD OF TRUSTEES OF THE INCORPORATED

VILLAGE OF OLD BROOKVILLE, and PETER

ALBINSKI, in his capacity as

Building Inspector for the

Incorporated Village of Old Brookville,

Defendants.

-------------------------------------X

APPEARANCES

For Plaintiff: Katrine Aliha Beck, Esq.

Edward J. Guardaro, Esq.

Fullerton Beck, LLP

One West Red Oak Lane

White Plains, New York 10604

For Defendants: Paul F. Millus, Esq.

A. Thomas Levin, Esq.

Daniel B. Rinaldi, Esq.

Meyer, Suozzi, English, & Klein, P.C.

990 Stewart Avenue, Suite 300

PO Box 9194

Garden City, New York 11530

SEYBERT, District Judge:

Plaintiff 5055 Northern Boulevard LLC (“Plaintiff”)

initiated this removal action by filing an Amended Verified Hybrid

Petition-Complaint (“Amended Complaint”) in Nassau County Supreme

Court against defendants the Incorporated Village of Old

Brookville (the “Village”), Bernard D. Ryba (“Ryba”), in his

capacity as the Mayor of the Village, John Chase (“Chase”), in his

capacity as the Attorney for the Village, the Board of Trustees of

the Village, and Peter Albinski (“Albinski”), in his capacity as

Building Inspector for the Village (collectively, “Defendants”),

seeking damages arising out of various violations of Plaintiff’s

statutory and constitutional rights to property and for an order

pursuant to C.P.L.R. § 3001 directing Defendants to permit

Plaintiff to utilize its property for commercial purposes. (See

Am. Compl., D.E. 1-1, at ECF pp. 23-51.) Currently before the

Court is Defendants’ motion to dismiss the Amended Complaint based

on the doctrine of res judicata. (Mot., D.E. 12; Defs. Br., D.E.

12-7; Pl. Opp., D.E. 13; Defs. Reply, D.E. 14.) For the following

reasons, Defendants’ motion is GRANTED.

FACTUAL BACKGROUND1

I. The Underlying Allegations

Plaintiff is the owner of real estate property at 5055

Northern Boulevard, Glen Head, New York, located within the Village

(the “Property”). (Am. Compl. ¶ 1.) Although the Property is

located within a district zoned for residential use, since 1908,

1 The following facts are drawn from the Amended Complaint and

are assumed to be true for purposes of this Memorandum and

Order.

the Property has been used as a gas service station pursuant to a

variance that runs with the land.2 (Id. ¶ 16.) Plaintiff

purchased the Property with the intent to continue using it as a

gas service station. (Id. ¶ 20.) In November 2013, while ownership

was being transferred to Plaintiff, the prior owners temporarily

suspended the Property’s gas station operations. (Id. ¶ 19.)

Plaintiff submitted an application for a permit to

remove old underground gas storage tanks and to prepare, clean,

and improve the area to install new underground tanks. (Id. ¶ 22.)

The removal and clean-up efforts were completed in December 2014.

(Id. ¶ 22.) On October 22, 2014, while removal and clean-up

efforts were ongoing and within a year of the temporary suspension,

Plaintiff submitted an application to the Village building

inspector, Defendant Albinski, seeking a permit to install updated

underground gas storage tanks. (Id. ¶ 22.)

From 2014 to 2017, multiple meetings and conversations

ensued between Plaintiff, its engineers, and certain Defendants,

namely, Defendants Ryba and Chase, concerning the intended use of

the Property, specifically the desire to continue using the

Property as a gas station or for commercial purposes. (Id. ¶¶ 33-

44.) Plaintiff contends that during these conversations,

2 By order of the Supreme Court, Nassau County dated November 10,

1955, the Village was directed to grant the Property’s prior owners

a variance to use the premises as a commercial gas filling and

service station. (Am. Compl. ¶ 17.)

Defendants misled Plaintiff and “undertook an orchestrated effort

to continuously deter, reject, deny and refuse the Plaintiff from

rightfully using the [Property].” (Id. 35.)

Defendants held a public hearing on May 22, 2017 to

address Plaintiff’s outstanding permit application and took the

position that the Property’s non-conforming use as a commercial

property had been abandoned. (Id. ¶ 54.) On August 29, 2017,

Albinski ratified this position in his denial of Plaintiff’s

request for a permit, which stated: “[I]t has been determined that

the previously existing non-confirming [sic] use of the property

as a service station was discontinued in or about November 2013

for more than one year and was not thereafter resumed within one

year.” (Id. ¶ 29.)

II. The Hybrid Article 78 Action

On September 8, 2017, Plaintiff commenced a hybrid

Article 78 proceeding action against the Village, the Board of

Trustees of the Village, and Albinski, as building inspector, (the

“Hybrid Article 78 Defendants”) in Nassau County Supreme Court

(the “Hybrid Article 78 Action”). (Am. Compl. ¶ 61.) In the

Hybrid Article 78 Action, Plaintiff asserted that: (1) the failure

to grant or respond to Plaintiff’s application constituted an

improper constructive denial which was erroneous, arbitrary, and

capricious; (2) the constructive denial of the permit constituted

an unconstitutional taking; (3) the Article 78 Defendants violated

the Freedom of Information Act; and (4) the inadequate response to

the information requests entitled Plaintiff to costs,

disbursements, and attorneys’ fees. (Am. Hybrid Petition/Compl.,

Millus Decl., Ex. A, D.E. 12-2, at ECF pp. 9-16.) Additionally,

Plaintiff sought declaratory judgment stating, inter alia, that

(1) a variance and/or special use permit allows Plaintiff to use

the Property as a commercial property, (2) the Property was not

abandoned by temporary cessation of use, and (3) the Hybrid Article

78 Defendants’ conduct constituted an unconstitutional taking.

(Am. Hybrid Petition/Compl. at ECF p. 17.)

On April 13, 2018, the Nassau County Supreme Court

(Parga, J.) denied the Hybrid Article 78 Defendants’ motion to

dismiss the Hybrid Article 78 Action. Justice Parga concluded

that the decision to deny Plaintiff’s application was “arbitrary

and capricious” and directed the Village to issue Plaintiff a

permit as requested in the October 22, 2014 application. (Apr.

13, 2018 Decision and Order, Millus Decl., Ex. B, D.E. 12-3, at

4.) Importantly, Justice Parga rejected Plaintiff’s requests for

additional relief, which included a request for injunctive relief

or money damages, stating “[a]ny portion of the petitioner’s hybrid

petition/complaint not granted is denied,” and again, “[a]ny

relief not expressly granted herein in [sic] denied.” (Id. at 4.)

On July 10, 2018, the Supreme Court entered a judgment consistent

with the decision (the “Judgment”). (Judgment, Millus Decl., Ex.

C, D.E. 12-4.)

Defendants appealed the Judgment to the Appellate

Division, Second Department. (Defs. Reply at 5.) The appeal is

fully briefed and awaiting determination.

Procedural History

On May 13, 2019 Plaintiff commenced this action against

Defendants in Nassau County Supreme Court and on May 24, 2019,

filed the Amended Complaint. On June 19, 2019, Defendants removed

this action to this Court pursuant to 28 U.S.C. §§ 1331 and 1367.

The Amended Complaint asserts: (1) a claim against all Defendants

for the deprivation of Plaintiff’s constitutional rights to

property pursuant to 42 U.S.C. § 1983; (2) a claim against all

Defendants for unlawful seizure of Plaintiff’s property in

violation of the Fourth Amendment; (3) a claim against all

Defendants for unlawful taking of Plaintiff’s property rights and

a de facto taking of Plaintiff’s property in violation of the Fifth

Amendment; and (4) a request for a declaratory judgment pursuant

to C.P.L.R. § 3001 to enforce Plaintiff’s rights under the

variance, permit, and Supreme Court order and Judgment, including

an Order directing Defendants to issue a permit allowing Plaintiff

to install new underground gas tanks. (See generally Am. Compl.)

Plaintiff seeks compensatory damages for lost rental

incomes/profits, property taxes, and carry costs, punitive damages

for Plaintiff’s loss of use and enjoyment of the Property, lost

profits, and attorneys’ fees and costs.

DISCUSSION

I. Legal Standard

To withstand a motion to dismiss, a complaint must

contain factual allegations that “state a claim to relief that is

plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570

(2007)). This plausibility standard is not a “probability

requirement” and requires “more than a sheer possibility that a

defendant has acted unlawfully.” Id. (internal quotation marks

and citation omitted).

In deciding a motion to dismiss, the Court is confined

to “the allegations contained within the four corners of [the]

complaint,” Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 71

(2d Cir. 1998), but this has been interpreted broadly to include

any document attached to the complaint, any statements or documents

incorporated in the complaint by reference, any document on which

the complaint heavily relies, and anything of which judicial notice

may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147,

152–52 (2d Cir. 2002); Kramer v. Time Warner, Inc., 937 F.2d 767,

773-74 (2d Cir. 1991).

II. Analysis

Defendants move to dismiss the Amended Complaint in its

entirety. Specifically, Defendants argue that Plaintiff’s claims

are barred by the doctrine of res judicata, because they initiated

the Hybrid Article 78 Action as a hybrid proceeding based on the

same facts asserted here. (Defs. Br. at 4-6.) Defendants also

argue that Plaintiff cannot recover damages for their failure to

issue a building permit because enforcement of the Judgment is

stayed pending their appeal. (Id. at 7-9.) Plaintiff responds

that it does not seek damages for Defendants “exercising their

right to the automatic stay” (Pl. Opp. at 14), but requests

“monetary damages caused by Defendants’ delay in issuing the

permit” (id. at 12). Additionally, Plaintiff argues res judicata

does not bar this action because the requests for non-Article 78

relief were not litigated in the Hybrid Article 78 Action.

A. Automatic Stay Pursuant to C.P.L.R. § 5519(a)(1)

The Amended Complaint’s fourth cause of action seeks a

declaratory judgment that Defendants are required to issue

Plaintiff a permit as ordered by the state court Judgment. (See

Am. Compl. ¶ 108.) Indeed, throughout the Amended Complaint,

Plaintiff suggests that Defendants are not complying with the state

court Judgment. (See, e.g., id. ¶¶ 73, 77, 81, 88, 93, 98.) Under

CPLR § 5519(a)(1), however, enforcement of a judgment is

automatically stayed pending appeal where the appellant is “the

state or any political subdivision of the state.” The Village, a

subdivision of the state, appealed the Judgment to the Appellate

Division, Second Department. Where, as here, the appeal remains

pending, enforcement of the Judgment is automatically stayed and

the Court is unable to issue an order enforcing the Judgment. As

such, the request is DENIED. M.S.B.A. Corp. v. Markowitz, 806

N.Y.S.2d 77, 77 (N.Y. App. Div. 2d Dep’t 2005).

As Plaintiff concedes, it is not entitled to “damages

for Defendants’ exercising their right to the automatic stay.”

(Pl. Opp. at 14; see also id. (“[Plaintiff] does not argue that

the defendants’ are not entitled to its stay. . . . Plaintiff

does not plead in the amended complaint that it seeks damages for

Defendants’ [sic] exercising their right to the automatic

stay.”).) Therefore, to the extent Plaintiff seeks a declaratory

judgment or other relief based on Defendants’ decision to exercise

their right to appeal the Judgment, such request is without merit

and is DENIED. See M.S.B.A. Corp., 806 N.Y.S.2d at 77 (holding

defendant city was not required to issue a license to plaintiff as

ordered under a state court judgment because “[t]he provisions of

the judgment directing the [city] to issue a license to the

[plaintiff] were automatically stayed upon the [city’s] filing of

a notice of appeal” (citing CPLR § 5519(a)(1))).

B. Applicability of Res Judicata

Res judicata prevents a party from re-litigating issues

that were or could have been brought in a prior action. See Brown

v. Felsen, 442 U.S. 127, 131 (1979). In New York,3 “[t]o prove

the affirmative defense” of res judicata “a party must show that

(1) the previous action involved an adjudication on the merits;

(2) the previous action involved the plaintiffs or those in privity

with them; (3) the claims asserted in the subsequent action were,

or could have been, raised in the prior action.” Monahan v. N.Y.C.

Dep’t of Corr., 214 F.3d 275, 283 (2d Cir. 2000) (citations

omitted).

Here, all three factors are satisfied. As for the second

factor, it is undisputed that Plaintiff, the Village, and Albinski

were parties to the Hybrid Article 78 Action. Although Plaintiff

added two defendants here, Ryba and Chase, they are named in their

official capacities, rendering them agents of the Village, a

municipality. Kentucky v. Graham, 473 U.S. 159, 166 (1985);

Monahan, 214 F.3d at 285 (“It is well settled in this circuit that

literal privity is not a requirement for res judicata to apply.”).

Accordingly, this action and the Hybrid Article 78 Action involve

the same parties.

3 To determine whether res judicata bars Plaintiff’s Amended

Complaint, the Court applies the rules and laws of the state in

which the Judgment was rendered. See Matsushita Elec. Indus. Co.

v. Epstein, 516 U.S. 367, 373 (1996).

As for the third factor, courts analyze “whether the

facts are related in time, space, origin, or motivation, whether

they form a convenient trial unit, and whether their treatment as

a unit conforms to the parties’ expectations . . . .” Xiao Yang

Chen v. Fischer, 810 N.Y.S.2d 96, 98 (N.Y. 2005) (citations

omitted). Here, the Amended Complaint is almost identical to the

Hybrid Article 78 Action complaint and both relate to the same set

of factual circumstances: Defendants’ decision to deny Plaintiff’s

application for a permit. As such, the third factor is met.

Plaintiff argues that the two actions are factually

distinct because the Hybrid Article 78 Action litigated the

“building permit issue” whereas this action seeks redress for “the

harm Defendants caused Plaintiff in denying the permit.” (Pl.

Opp. at 17-18.) The Court finds this a distinction without a

difference. While Plaintiff may be seeking damages different from

those sought in the Hybrid Article 78 Action, the fact remains

that the damages requested in both actions are based on the same

set of facts. Davidson v. Capuano, 792 F.2d 275, 278 (2d Cir.

1986). Accordingly, Plaintiff’s claims are the same as those

brought in the Hybrid Article 78 Action for res judicata purposes.

See id. (holding plaintiffs civil rights action and Article 78

proceeding were “based on the same cause of action” even where

plaintiff raised “a different theory of recovery” or sought

“different relief”); Smith v. Russell Sage Coll., 54 N.Y.2d 185,

192 (N.Y. 1981) (holding under New York law that claims arise out

of the same factual grouping “even when ‘several legal theories

depend on different shadings of the facts, or would emphasize

different elements of the facts or would call for different

measures of liability or different kinds of relief’” (quoting

Restatement (Second) of Judgments § 61 cmt. c)).

To the extent argued, Plaintiff is correct that pure

Article 78 proceedings do not, as a general matter, preclude

subsequent Section 1983 actions “because the type of damages sought

pursuant to [Section] 1983 are typically not available in Article

78 proceedings, which allow only recovery of incidental damages.”

Corbett v. City of New York, 816 F. App’x 551, 554 (2d Cir. 2020)

(summary order) (citations omitted). But Plaintiff did not bring

a pure Article 78 action. Instead, Plaintiff commenced a hybrid

petition/complaint and sought both Article 78 and non-Article 78

relief that the state court adjudicated on the merits, as discussed

infra.4 (Apr. 13, 2018 Decision and Order at 4.) As Corbett

instructs, res judicata bars courts in this Circuit from

entertaining follow-on Article 78 actions where the plaintiff

initiated a hybrid Article 78 action that sought non-Article 78

relief that was addressed by the state court. Furthermore, as in

4 There is no dispute as to the nature of the underlying proceeding

because Plaintiff styled the Hybrid Article 78 Action complaint as

a “Hybrid Petition-Complaint.” (See Am. Hybrid Petition/Compl.)

Corbett, Plaintiff could have raised its Section 1983 and other

constitutional claims in the hybrid proceeding, see Corbett, 816

F. App’x at 554, and even asserted a claim under the Fifth

Amendment’s Takings Clause, as it does here. (Compare Am. Hybrid

Petition/Compl. at ECF pp. 11-14, with Am. Compl. ¶¶ 95-104.)

Consequently, Plaintiff is barred from litigating claims that

could have been, or were, raised in the Hybrid Article 78 Action.

See Corbett, 816 F. App’x at 554 (finding appellant’s claims barred

by res judicata where he “could have raised his § 1983 claim, based

on the same transaction, in” the underlying hybrid Article 78

proceeding); Sheffield v. Sheriff of Rockland Cnty. Sheriff Dep’t,

393 F. App’x 808, 813 (2d Cir. 2010) (holding that the state

court’s dismissal of a hybrid proceeding precluded a subsequent

federal action for money damages, even though a pure Article 78

proceeding would not have precluded the federal action).

The final factor the Court considers is whether the

Hybrid Article 78 Action, including Plaintiff’s requests for non-

Article 78 relief, was decided on the merits. Plaintiff’s Hybrid

Article 78 Action was decided in an order that expressly granted

or denied all requested forms of relief. (Apr. 13, 2018 Decision

and Order at 4 (granting Plaintiff’s request to direct the Village

to issue Plaintiff’s permit and explicitly stating that “[a]ny

portion of [Plaintiff’s] hybrid petition/complaint not granted is

denied”).) As Plaintiff concedes, its “[c]onstitutional claims

were readily apparent in the prior suit as alternative relief”

(Pl. Opp. at 13), and the state court denied them. Thus,

Plaintiff’s Hybrid Article 78 Action, including the requests for

non-Article 78 relief, was adjudicated on the merits. Inmate M.

v. State, 84 N.Y.S.3d 633, 633 (N.Y. App. Div. 4th Dep’t 2018)

(holding res judicata precluded an inmate from litigating his claim

that he was sexually assaulted during an authorized pat frisk where

inmate’s prior Article 78 proceeding alleging that the pat frisk

procedure violated his rights under Eighth Amendment and state law

was dismissed).

Plaintiff argues that the state court “did not deny or

otherwise determine, on the merits, Plaintiff’s claims beyond

Defendants’ Article 78 argument as to the failure to issue the

permit.” (Pl. Opp. at 16; see also id. (“Defendants ignore the

fact that the issues they seek to bar were never litigated in the

prior action.”); id. at 17 (“the prior State action never decided,

on the merits, the issues raised in this action”).) According to

Plaintiff, “[b]y ordering Defendants to issue the permit, the Court

rendered the issues moot at the time.” (Id. at 16.) However, the

state court addressed Plaintiff’s additional claims for relief and

explicitly rejected them. Further, Plaintiff conflates issue

preclusion with claim preclusion. Res judicata renders “a final,

valid determination on the merits . . . conclusive on the parties

and those in privity with them, not only as to the matters

adjudicated but those which could have been litigated in the prior

action,” and is thus “distinguished from collateral estoppel where

a prior judgment operates as an estoppel against a party only where

there was an actual litigation and determination of the issue now

in controversy.” Stolberg v. Members of Bd. of Trs. for State

Colls. of State of Conn., 541 F.2d 890, 892 (2d Cir. 1976)

(emphasis added). Although Defendants filed an appeal, the

Judgment is final because “the pendency of an appeal from [a]

judgment does not alter the finality or enforceability of that

judgment . . . unless and until it is overturned.” Yan Ping Xu v.

City of New York, 612 F. App’x 22, 26 (2d Cir. 2015) (internal

quotations and citations omitted).

Moreover, the state court did not render certain issues

“moot” as Plaintiff suggests. Under New York law, mootness is

typically invoked “where a change in circumstances prevents a court

from rendering a decision that would effectively determine an

actual controversy.” Citineighbors Coalition of Historic Carnegie

Hill ex rel. Kazickas v. N.Y.C. Landmarks Preservation Comm’n, 778

N.Y.S.2d 740, 742 (N.Y. 2004). The state court explicitly

rejected, albeit tersely, Plaintiff’s requests for non-Article 78

relief. While Plaintiff may be dissatisfied with the state court’s

level of analysis, it does not necessarily follow that the issues

“were never litigated.” Rather, the state court’s denial of

Plaintiff’s non-Article 78 relief satisfies the “adjudication on

the merits” requirement. See Sheffield, 393 F. App’x at 812-13

(concluding that plaintiff’s Title VII claims were barred by res

judicata even where the state court “did not specifically mention”

the Title VII claims in dismissing the entire action); see also

Winters v. Lavine, 574 F.2d 46, 61 (2d Cir. 1978) (“[I]t is

entirely possible for a court to consider and reject a particular

claim presented to it without any express discussion of or allusion

to that claim.”).

Lastly, while the resolution of a declaratory judgment

action will not typically bar a subsequent lawsuit for money

damages arising out of those same facts, see, e.g., Harborside

Refrigerated Servs., Inc. v. Vogel, 959 F.2d 368, 372-73 (2d Cir.

1992), that is not the case where, as here, the previous action

sought both declaratory relief and money damages. (See Hybrid

Petition/Compl. at ECF pp. 13-20); Duane Reade, Inc. v. St. Paul

Fire & Marine Ins. Co., 600 F.3d 190, 196-97 (2d Cir. 2010)

(holding that the resolution of a declaratory judgment action will

bar a subsequent lawsuit based on the same facts where the

plaintiff brought suit for money damages or injunctive relief as

well).

Accordingly, this action is barred by res judicata and

must be DISMISSED.5

CONCLUSION

For the reasons stated above, Defendants’ Motion is

GRANTED. The Clerk of the Court is directed to enter judgment

accordingly and mark this case CLOSED.

SO ORDERED.

/s/ JOANNA SEYBERT______

Joanna Seybert, U.S.D.J.

Dated: November 6, 2020

Central Islip, New York

5 Nothing in this Opinion precludes Plaintiff from seeking fees

and costs associated with its Hybrid Article 78 Proceeding in state

court.