New York Law Review

Tag: Special Damages

  • Rosenbaum v. City of New York, 8 N.Y.3d 1 (2006): Sufficiency of Notice of Claim for Tort Actions Against Municipalities

    Rosenbaum v. City of New York, 8 N.Y.3d 1 (2006)

    A letter from an attorney to a city agency suggesting unmet demands might lead to litigation does not satisfy the requirements of General Municipal Law § 50-e for a valid notice of claim, particularly when special damages are an element of the cause of action and are not adequately described.

    Summary

    Rosenbaum sued the City of New York for slander of title, alleging that improperly filed liens caused him to lose a sale of his property. The City moved to dismiss, arguing Rosenbaum failed to comply with General Municipal Law § 50-e’s notice-of-claim requirements. Rosenbaum argued a letter from his attorney to HPD served as adequate notice. The Court of Appeals held the letter was insufficient because it was tentative, did not specify damages, and appeared as routine correspondence rather than a formal notice of claim, failing to provide the City with adequate information to investigate the claim.

    Facts

    Rosenbaum purchased an apartment building in the Bronx in 1993. He entered into an in rem installment agreement with the City to pay delinquent taxes. Prior to Rosenbaum’s purchase, HPD had loaned money for repairs to the building and subsequently filed liens. Rosenbaum disputed the validity of these liens. His attorney sent a letter to an HPD attorney on August 18, 1994, complaining about the liens and stating that Rosenbaum “may lose his current sale” if the liens weren’t removed, and that “if an action is brought” the owner would be entitled to costs and legal fees.

    Procedural History

    Rosenbaum sued the City in October 1994 for, among other things, slander of title. He served a notice of claim in January 1995 related to a tax foreclosure proceeding. The City moved to dismiss the slander of title claim for failure to comply with notice-of-claim requirements. Supreme Court granted the City’s motion. The Appellate Division reversed, finding the August 18, 1994 letter sufficient notice. The Court of Appeals reversed the Appellate Division, holding the letter was insufficient.

    Issue(s)

    Whether a letter from an attorney to a city agency, suggesting that unmet demands might lead to litigation, satisfies the notice-of-claim requirements under General Municipal Law § 50-e for a tort action against a municipality.

    Holding

    No, because the letter was tentative, did not specify the items of damage or injuries claimed, and did not alert the recipient to the imminence of litigation, thus failing to provide the City with sufficient information to investigate the claim as required by General Municipal Law § 50-e.

    Court’s Reasoning

    The Court emphasized that the purpose of General Municipal Law § 50-e is to enable the city to investigate claims. The Court stated, “[t]he test of the sufficiency of a Notice of Claim is merely whether it includes information sufficient to enable the city to investigate…” The Court found the August 18, 1994 letter insufficient because it used tentative language (“may lose,” “if an action is brought”), making it appear as routine correspondence rather than a formal notice of claim. The letter also failed to specify the items of damage, particularly the special damages required for a slander of title claim. The Court noted that special damages, such as a lost sale, must be identified with sufficient detail (e.g., the name of the prospective purchaser, the purchase price) to allow the city to investigate. The Court distinguished between ongoing negotiations and a clear notice of an impending lawsuit seeking specific damages. The Court directly quoted Brown v. City of New York, 95 N.Y.2d 389, 393 (2000) stating that courts should focus on “whether based on the claimant’s description municipal authorities can locate the place, fix the time and understand the nature of the [claim].” The court concluded, “Section 50-e does not abet notice of claim by stealth.”

  • Cord Meyer Development Co. v. Bell Bay Drugs, Inc., 20 N.Y.2d 214 (1967): Standing to Sue for Zoning Violations Based on Special Damages

    Cord Meyer Development Co. v. Bell Bay Drugs, Inc., 20 N.Y.2d 214 (1967)

    A property owner does not have standing to sue for a zoning violation based solely on economic harm from business competition; special damages require a showing of depreciation in the value of the real property itself due to the violation, not merely lost profits.

    Summary

    Cord Meyer, a shopping center owner, and Crestview Chemists, a pharmacy renting space in the center, sued Bell Bay Drugs, a competing pharmacy located in a nearby medical building, alleging that Bell Bay’s operation violated zoning ordinances. The plaintiffs sought an injunction and damages, claiming that Bell Bay’s presence diverted business from Crestview. The New York Court of Appeals held that the plaintiffs lacked standing to sue because they failed to demonstrate special damages beyond mere business competition. The court emphasized that special damages require proof of a decrease in the real property’s value caused by the zoning violation, not just a loss of profits.

    Facts

    Crestview Chemists rented a pharmacy in a shopping center owned by Cord Meyer in a commercially zoned area. Bell Bay Drugs operated a pharmacy in a nearby professional medical building owned by 212-26 Realty Co., Inc., located in a zoning district that permitted medical offices but excluded commercial businesses like pharmacies. Crestview’s lease with Cord Meyer included a fixed rental fee plus a percentage based on sales volume. Crestview claimed that Bell Bay’s operation violated the zoning ordinance and diverted customers, causing financial harm.

    Procedural History

    The trial court dismissed the complaint, finding no zoning violation. The Appellate Division reversed, holding that Bell Bay’s pharmacy violated zoning restrictions and ordered a new trial to determine if the plaintiffs had standing to sue. Bell Bay and Realty appealed to the New York Court of Appeals, stipulating for judgment absolute.

    Issue(s)

    Whether a property owner and its tenant have standing to sue a competitor for violating a zoning ordinance based solely on the claim of lost business and reduced rental income due to competition, without demonstrating a decrease in the value of the real property itself.

    Holding

    No, because to have standing, the property owner and tenant must demonstrate special damages, which requires showing a depreciation in the value of the real property due to the zoning violation, not merely a loss of business profits due to competition.

    Court’s Reasoning

    The court held that property owners do not have vested rights to monopolies created by zoning laws, and these laws are not enforced to prevent competition. The court emphasized that a competitor cannot obtain an injunction merely because they are a competitor. To establish standing, the plaintiffs must demonstrate “special damage” resulting from the zoning violation. The court distinguished between a decrease in property value due to competitors and depreciation resulting from other factors. The court stated that loss of business volume due to competition is insufficient to establish special damage. The court reasoned that the plaintiffs failed to demonstrate that the value of their property had decreased due to the presence of Bell Bay’s pharmacy, regardless of whether Bell Bay was operating in compliance with the zoning ordinance. The court emphasized that, “In order to sue, a private property owner has to show that his real estate has been damaged by the nonconforming use which he seeks to restrain in some other manner than by interfering with his business.” The Court cited with approval the holding in Circle Lounge & Grille v. Board of Appeals of Boston, 324 Mass. 427, stating that “a proprietor in a less restricted zone is not a ‘person aggrieved’ within the meaning of the statute by the introduction into a more restricted zone of any use permitted in the zone in which the proprietor’s property is located.” The court found the evidence offered by the plaintiffs related solely to lost business due to competition, and was therefore, irrelevant to the issue of whether the plaintiffs sustained special damage.