Appellate Division Vacates Default Judgment Against the Board of Appeals and the De Jure Denial of a Special Exception Permit

Following a public hearing to consider applications for area variances and a special exception permit to construct an oversized self-storage facility abutting a residential district in Franklin Square, the Board of Appeals failed to render a determination on the applications within the requisite 62 days.  Thereafter, the applicant commenced a CPLR Article 78 proceeding contending that all applications had been denied by default under Town Law §267-a(13)(b) and sought to have that determination reversed as arbitrary and capricious.  The Supreme Court granted the applicant’s motion for default judgment and directed the Board to issue the special exception permit and area variances.  The Appellate Division reversed the order on two distinct grounds: (i)  incorrect default judgment standard applied, and (ii) the lack of subject matter jurisdiction.

Unlike the default judgment standard applicable to most actions and parties under CPLR §3215 (i.e. a reasonable excuse and meritorious defense), Berkman Henoch argued and the Appellate Division determined that a proceeding to annul the determination of the Board (or any other administrative body) must be held to a higher default judgment standard – the proceeding “should not be concluded in the petitioner’s favor merely upon the basis of a failure to answer the petition on the return date thereof, unless it appears that such failure to plead was intentional and that the administrative body has no intention to have the controversy determined on the merits.”  As the applicant could not demonstrate a deliberate default by the Board, the Appellate Division reversed the trial court’s determination.

Furthermore, Berkman Henoch reasoned and the Appellate Division agreed that while the default denial provisions of Town Law applied to the area variance applications, the trial court lacked the subject matter jurisdiction to grant a special exception permit to construct this self-storage facility because exclusive original jurisdiction to determine such an application resided solely in the Board of Appeals: “The Board exercises its original jurisdiction in special exception cases, and thus, there was no denial by default of the petitioner’s application for a special exception permit. With no final determination having been rendered on the application for a special exception permit, that issue was not ripe for judicial review, and the Supreme Court lacked subject matter jurisdiction over that issue.”

The Town of Hempstead Board of Appeals was represented by Joseph E. Macy, Esq. and Daniel J. Evers, Esq., members of the Firm’s Litigation Department.

A copy of the decision:  Matter of 999 Hempstead Turnpike, LLC v. Board of Appeals of the Town of Hempstead.