New York Law Review

Tag: Presumption of Receipt

  • Matter of Twin Bar & Grill, Inc. v. State Tax Commission, 55 N.Y.2d 1024 (1982): Rebutting Presumption of Notice in Sales Tax Assessments

    Matter of Twin Bar & Grill, Inc. v. State Tax Commission, 55 N.Y.2d 1024 (1982)

    Under New York Tax Law § 1147(a)(1), the presumption that a notice of sales tax determination is received can be rebutted by evidence that the notice was not, in fact, received, entitling the taxpayer to a hearing despite missing the initial deadline.

    Summary

    Twin Bar & Grill sought a hearing regarding a sales tax assessment after the 90-day deadline, arguing they never received the notice. The State Tax Commission contended that mailing the notice was sufficient, regardless of receipt, relying on a case concerning income tax. The Court of Appeals distinguished the income tax statute from the sales tax provision, which specifically states mailing is only “presumptive evidence” of receipt. Because the notice was returned unclaimed, the Court held Twin Bar & Grill was entitled to a hearing to challenge the assessment, as they successfully rebutted the presumption of receipt.

    Facts

    The State Tax Commission mailed a notice of determination of sales tax liability to Twin Bar & Grill, Inc.

    The notice was returned to the Commission marked “unclaimed.”

    Twin Bar & Grill claimed it never received the notice.

    Twin Bar & Grill requested a hearing to contest the sales tax assessment more than 90 days after the notice was mailed.

    Procedural History

    The lower court ruled in favor of Twin Bar & Grill, holding they were entitled to a hearing.

    The Appellate Division affirmed the lower court’s decision.

    The State Tax Commission appealed to the New York Court of Appeals.

    Issue(s)

    Whether the mailing of a notice of sales tax determination, which is returned unclaimed, is sufficient to establish receipt and preclude a taxpayer from obtaining a hearing to contest the assessment if the request for a hearing is made more than 90 days after the mailing date.

    Holding

    No, because under Tax Law § 1147(a)(1), mailing is only presumptive evidence of receipt, which the taxpayer can rebut; since the notice was returned unclaimed, the taxpayer is entitled to a hearing despite the late request.

    Court’s Reasoning

    The Court distinguished this case from Matter of Kenning v. State Tax Comm., which concerned income tax. The sales tax provision (Tax Law, § 1147, subd [a], par [1]) states that mailing the notice “shall be presumptive evidence of the receipt of the same by the person to whom addressed.” The Court emphasized that the statute uses the term “receipt” and qualifies mailing as only “presumptive evidence.” This language, according to the Court, establishes the taxpayer’s right to rebut the presumption of receipt. Because the Commission conceded that the notice was returned marked “unclaimed” and not received by the petitioner, the lower courts were correct in holding that Twin Bar & Grill was entitled to a hearing on the sales tax assessment. The Court reasoned that the statute’s specific language regarding presumptive evidence of receipt allows taxpayers to demonstrate non-receipt and thereby preserve their right to a hearing, even if the standard 90-day deadline has passed. The practical effect is that the Tax Commission cannot rely solely on mailing a notice if it has evidence the notice was not actually received. This ensures fairness and due process in tax assessments.

  • Nassau Insurance Co. v. Murray, 46 N.Y.2d 828 (1978): Establishes the Presumption of Receipt of Mailed Notice

    Nassau Insurance Co. v. Murray, 46 N.Y.2d 828 (1978)

    When an insurer presents evidence of a routine office practice that ensures the proper addressing and mailing of cancellation notices, a presumption arises that the insured received such notice, which is not rebutted solely by the insured’s denial of receipt unless accompanied by evidence of a flawed office practice.

    Summary

    This case addresses the issue of proving receipt of a cancellation notice from an insurance company. The Court of Appeals held that proof of a regular office practice and procedure, demonstrating proper addressing and mailing of cancellation notices, creates a presumption of receipt by the insured. A mere denial of receipt by the insured is insufficient to overcome this presumption; the insured must also present evidence suggesting that the insurer’s routine office practice was not followed or was so careless that proper mailing was unlikely. The Court emphasized that the office practice must be designed to ensure the consistent and accurate mailing of cancellation notices.

    Facts

    The Nassau Insurance Company sought to establish that it had properly canceled insurance policies for the defendants, Murray and Eberhardt, due to non-payment. In both cases, the insurance company presented evidence of its standard office procedures for addressing and mailing cancellation notices. The defendants claimed they never received the notices of cancellation.

    Procedural History

    The lower courts ruled in favor of the insurance company, finding that the evidence presented established a presumption of receipt of the cancellation notices. The insureds appealed to the New York Court of Appeals.

    Issue(s)

    Whether proof of an insurer’s standard office practice for mailing cancellation notices creates a presumption of receipt by the insured, and if so, whether the insured’s denial of receipt, without more, is sufficient to rebut that presumption.

    Holding

    Yes, because when the insurer presents proof of an office practice and procedure followed in the regular course of their business, which shows that the notices of cancellation have been duly addressed and mailed, a presumption arises that those notices have been received by the insureds. No, because denial of receipt by the insureds, standing alone, is insufficient to rebut the presumption.

    Court’s Reasoning

    The Court of Appeals relied on established New York precedent regarding the presumption of receipt of mailed items when a regular office practice is demonstrated. The court stated, “Where, as here, the proof exhibits an office practice and procedure followed by the insurers in the regular course of their business, which shows that the notices of cancellation have been duly addressed and mailed, a presumption arises that those notices have been received by the insureds.” Citing News Syndicate Co. v Gatti Paper Stock Corp., 256 NY 211, 214 and William Gardam & Son v Batterson, 198 NY 175, 178, the court reaffirmed the principle that routine and consistent mailing practices give rise to a rebuttable presumption of delivery. The court distinguished this situation from cases where there is a lack of evidence or challenge to the mailing process itself. The Court emphasized that a mere denial of receipt is insufficient to overcome this presumption. The insured must present evidence suggesting that the insurer’s routine office practice was flawed or carelessly executed. The court clarified: “In addition to a claim of no receipt, there must be a showing that routine office practice was not followed or was so careless that it would be unreasonable to assume that the notice was mailed (see Trusts & Guar. Co. v Barnhardt, 270 NY 350, 354-355).” This ensures that the presumption is not easily defeated by unsubstantiated claims of non-receipt, while still allowing an insured to challenge the validity of the mailing process. The Court also added a caveat, stating, “We would hasten to add, however, that in order for the presumption to arise, office practice must be geared so as to ensure the likelihood that a notice of cancellation is always properly addressed and mailed.” This reinforces the importance of a well-defined and consistently applied mailing procedure for the presumption to be valid.