Matter of ISCA Enterprises v. City of New York, 77 N.Y.2d 861 (1991)
A property owner who fails to redeem property after being granted the opportunity to do so by the city waives the right to complain about a deprivation of due process in the tax foreclosure proceedings.
Summary
ISCA Enterprises, the property owner, challenged a default judgment in a tax foreclosure action, claiming the city’s administrative code denied due process by not providing actual notice prior to foreclosure. After learning of the judgment, ISCA requested relief from the City, which was granted on the condition that ISCA pay the outstanding taxes, interest, and penalties within a specified timeframe. ISCA failed to make these payments for nearly two years. The New York Court of Appeals held that ISCA, having failed to avail itself of the opportunity to redeem the property, could not later claim a deprivation of due process. The Court affirmed the Appellate Division order without reaching the constitutional issue.
Facts
ISCA Enterprises owned property in New York City.
The City initiated an in rem tax foreclosure action against the property due to unpaid taxes.
A default judgment was entered against ISCA in the foreclosure action.
ISCA claimed the City’s Administrative Code (sections D17-16.0, D17-17.0) was unconstitutional because it did not mandate actual notice to property owners before tax foreclosure.
After the judgment, ISCA requested relief from the City, seeking to set aside the judgment and redeem the property.
The City agreed to release its interest in the property if ISCA paid the taxes, interest, and penalties within a given timeframe.
ISCA did not make the required payments or redeem the property for nearly two years.
Procedural History
The trial court entered a default judgment against ISCA in the tax foreclosure action.
ISCA appealed, arguing the City’s Administrative Code violated due process.
The Appellate Division’s order was appealed to the New York Court of Appeals.
The Court of Appeals affirmed the Appellate Division’s order, effectively upholding the foreclosure, without addressing the constitutional question.
Issue(s)
Whether a property owner who is granted the opportunity to redeem property after a tax foreclosure judgment, but fails to do so, can later challenge the foreclosure proceedings on due process grounds.
Holding
Yes, because having failed to avail himself of the right to redeem granted upon his request, appellant cannot now be heard to complain of a deprivation of due process in the forfeiture of the property.
Court’s Reasoning
The Court of Appeals avoided addressing the constitutional question of whether the City’s Administrative Code provided sufficient notice in tax foreclosure proceedings. Instead, the Court based its decision on the principle of waiver. The Court reasoned that ISCA, by requesting and receiving the opportunity to redeem the property by paying the outstanding taxes, interest, and penalties, and then failing to act on that opportunity for nearly two years, had effectively waived its right to challenge the foreclosure on due process grounds. The Court cited Selzer v. Baker, 295 NY 145, 149, reinforcing the principle that a party cannot accept a benefit (the chance to redeem) and then later challenge the process by which that benefit was offered. The court stated, “Having failed to avail himself of the right to redeem granted upon his request, appellant cannot now be heard to complain of a deprivation of due process in the forfeiture of the property.” The decision highlights the importance of timely action and the potential consequences of failing to pursue available remedies. This case serves as a reminder that courts may decline to address constitutional issues if a case can be resolved on narrower, non-constitutional grounds, such as waiver.