Dudley v. Kerwick, 52 N.Y.2d 542 (1981)
Individual taxpayers can challenge wholesale religious exemptions from taxation granted to other property owners through an Article 78 proceeding when alleging a broad perversion of the exemption process, not just errors in individual assessments.
Summary
Dudley, a taxpayer, challenged the mass granting of religious tax exemptions by Kerwick, the town assessor, to members of the Universal Life Church. Dudley claimed this dramatically increased his tax burden. The New York Court of Appeals held that Dudley could bring an Article 78 proceeding to challenge the assessor’s actions because the challenge involved a broad abuse of the exemption process, not merely an assessment of his own property. The court emphasized that Article 7 proceedings are designed for individual assessment challenges, while Article 78 is appropriate for challenging systemic abuse.
Facts
In 1977, Kerwick, the assessor for the Town of Hardenburgh, granted tax-exempt status to 88% of the town’s landowners as officers in the Universal Life Church. Kerwick allegedly told Dudley that if he did not become a member of the Universal Life Church, he would have to pay a disproportionate share of the town’s expenses. Dudley refused to join the church.
Procedural History
Dudley commenced an Article 78 proceeding challenging Kerwick’s actions. The State of New York also filed a similar Article 78 proceeding. Special Term denied the respondents’ motion to dismiss and allowed the matter to proceed as a class action. The Appellate Division reversed, holding that Article 7 of the Real Property Tax Law was the exclusive method to challenge the exemptions, and the statute of limitations had run. The Court of Appeals reversed the Appellate Division’s decision.
Issue(s)
Whether individual taxpayers may challenge wholesale religious exemptions from taxation granted to other property owners by way of an Article 78 proceeding, or whether Article 7 of the Real Property Tax Law provides the exclusive procedure for such a challenge.
Holding
No, because Article 7 of the Real Property Tax Law is designed for individual challenges to property assessments, not broad challenges to the exemption process, thus an Article 78 proceeding is appropriate in cases of alleged systemic abuse of tax exemptions.
Court’s Reasoning
The court reasoned that Article 7 of the Real Property Tax Law was designed for taxpayers challenging their own assessments, not for challenging the wholesale granting of exemptions to others. The court emphasized that Article 7 provides an expeditious procedure for resolving challenges by taxpayers of their own assessments. The court stated, “It is clear then that the tenor of article 7 is to provide an expeditious procedure by which the numerous and expectable challenges by taxpayers of their own assessments can be resolved.” The court distinguished this case from cases like Matter of Hellerstein v. Assessors of Town of Islip where the challenge, even though wholesale, was still derived from the taxpayer’s own assessment. The court held that the petitioners alleged a broad perversion of the exemption process, which falls within the ambit of CPLR Article 78. The court noted that if assessors could grant exemptions in a wholesale fashion, they would effectively be creating new grounds for exemption, which is the purview of the legislature, not the assessor. The court expressly disapproved of Van Deventer v. Long Is. City to the extent that it suggested taxpayers have no remedy beyond appealing to public opinion when property is omitted from the assessment roll. The Court also held that the persons who enjoyed the religious exemptions were necessary parties to the proceeding and the Appellate Division should determine the appropriateness of class action status on remittal.