First National Acceptance Co. v. City of Utica

26 F. Supp. 3d 185, 2014 WL 2711797, 2014 U.S. Dist. LEXIS 81390
CourtDistrict Court, N.D. New York
DecidedJune 16, 2014
DocketNo. 6:12-CV-1622
StatusPublished
Cited by4 cases

This text of 26 F. Supp. 3d 185 (First National Acceptance Co. v. City of Utica) is published on Counsel Stack Legal Research, covering District Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First National Acceptance Co. v. City of Utica, 26 F. Supp. 3d 185, 2014 WL 2711797, 2014 U.S. Dist. LEXIS 81390 (N.D.N.Y. 2014).

Opinion

DECISION and ORDER

THOMAS J. McAVOY, Senior District Judge.

Before the court are the motions for summary judgment of Plaintiff First National Acceptance Company (“First National”) and City of Utica, New York, in this matter involving the demolition of a building on property in the City of Utica of which Plaintiff was the mortgagee. See dkt. # s 25, 26. The parties have submitted briefing and evidence on the issues raised in their motions.

1. BACKGROUND1

This case concerns the demolition of' an apartment building on property owned by Defendant John Gosnell2 in the City of Utica, New York. At the times relevant to this action, Defendant John Gosnell pos[189]*189sessed fee simple title to the real property at issue, located at 2102 Highland Avenue, Utica, New York. (Pláintiffs Statement of Material Facts in Support of Motion for Summary Judgment (“Plaintiffs Statement”) at ¶ 1). The property consisted of 9800 square feet. (Id. at ¶ 2). Improvements included a 4,895 square foot multiple dwelling. (Id.). The building contained eight apartments. (Id.).

On September 13, 1999, Gosnell granted Private Mortgage Investment Services, Inc. (“PMISI”) a mortgage security interest in the property and building. (Id. at ¶ 3). The property and building were security for Gosnell’s obligation to repay a $143,200.00 loan pursuant to a mortgage note issued that day. (Id.). PMISI recorded the mortgage and the underlying mortgage note in the Oneida County Clerk’s office on September 15, 1999.(M). The mortgage obligated Gosnell to safeguard the property and the dwelling on the property from waste, damage and loss. (Id. at ¶ 4). Gosnell was required to make payments for as long as the debt remained unpaid. (Id.).

PMISI assigned its rights and interest in the mortgage to Plaintiff First National through two agreements. (Id. at ¶ 5). The first, a statement of collateral assignment of interest as security, was recorded with the Oneida County Clerk on May 1, 2001.(/d). The second, an assignment of seller[s]’s interest in real estate, which was recorded with the Oneida County Clerk on October 10, 2000.3 (Id.). As a result of these agreements, First National assumed and owns all of PMISI’s rights and interests in Gosnell’s mortgage and the underlying mortgage note. (Id. at ¶ 6).

The City of Utica’s official records demonstrate the City’s knowledge of First Nation’s mortgage on the Highland Avenue property. (Id. at ¶ 7). Among those records are a Notice of Redemption issued to First National as a payee on the mortgage of the Property on May 3, 2003. (Id.). The Tax Assessor’s correspondence with First National on September 30, 2005 also demonstrates this knowledge. (Id.). Defendant argues that Plaintiff has produced no evidence that “any City of Utica official, officer or employee had knowledge of the mortgage at the time Plaintiff alleges its constitutional rights were violated.” (Defendant’s Statement of Material Facts (“Defendant’s Statement”), dkt. #29-2, at ¶ 7). Defendant does not cite to the record for this claim. (Id. at ¶ 7).

The building in question was a multiple dwelling as defined by N.Y. Multiple Dwelling Law § 7. (Plaintiffs Statement at ¶ 8). Defendant argues that it was not required to follow this statute in reference to that structure, and that the Multiple Dwelling Law is not relevant to this proceeding. (Defendant’s Statement at ¶¶ 8-17). A proceeding seeking demolition of such a building, Plaintiff contends, is governed by the Multiple Dwelling Law. (Plaintiffs Statement at ¶ 8). Multiple Dwelling Law § 309 is titled “Repairs, vacation and demolition of buildings.” (Id. at ¶ 9). The chapter sets out the criteria and processes to be used by a municipality to determine whether the dwelling constituted an “untenanted hazard,” and whether to order that the building be repaired or demolished. (Id.). The law provides that municipalities may take action to cause the [190]*190repair or demolition of a multiple dwelling unit in two cases: (1) where the municipality has determined a structure to be a public nuisance that is “dangerous to life or health;” or (2) where the municipality has determined the structure to be an “untenanted hazard,” defined as multiple dwelling that had been untenanted for at least 60 days and either is not “guarded continuously by a resident caretaker or has any exterior openings not sealed in a manner approved by the department and is afire hazard or in a condition dangerous or detrimental to human life, health or morals.” (Id. at ¶ 10).

A municipality may order the owner of a multiple dwelling to remove a nuisance within twenty-one days, as long as the owner of the property has been provided notice and an opportunity to be heard. (Id. at ¶ 11). Section 309(l)(b) permits the municipality to seek an order from the New York Supreme Court compelling the property’s owner to do so. (Id.). At no time relevant to this action did the City ever serve Gosnell with notice that the City had determined the building or any part of the building to be dangerous. (Id. at ¶ 12).

Section 309(2)(a) of the Multiple Dwelling Law defines an “untenanted hazard” as “a multiple dwelling ... which has been untenanted for a period of 60 days or more and either is not guarded continuously by the department and is a fire hazard or in a condition dangerous or detrimental to human life.” (Id. at ¶ 13). When municipalities determine that a building is an “untenanted hazard,” the municipality is required to provide written notice of that determination to the owners of the property, as well as any who hold a mortgage on that property “at the address of such owner appearing in the record of such mortgage in the office in which mortgages are registered in the county in which such premises are located.” (Id. at ¶¶ 14-15). The law requires the notice to provide a description of the dwelling, the manner in which the building constituted an untenanted hazard, and to provide an order that the dwelling be demolished. (Id. at ¶ 16). The person named in the notice must certify in 10 days whether that person will carry out the order to demolish. (Id.). If the owner does not carry out the demolition within 21 days after service of notice, the law requires the municipality to serve a second notice on the owner and every mortgage holder. (Id. at ¶ 17). The municipality is to apply to the Supreme Court of the county in which the premises are located for an order declaring that an untenanted hazard exists and providing permission to demolish such premises. (Id. at ¶ 17). Only the Supreme Court can issue such orders, and only after the 'municipality had determined that all required notices and orders had been served on the building’s owners and mortgage holders. (Id. at ¶ 18).

Utica’s City Code also contained provisions addressing standards for housing and buildings and for enforcement of those standards at the relevant times. (Id. at ¶ 19).4 Section 2-12-92 and 2-12-100 address buildings the City has determined are “unsafe buildings” as defined in the Building Code. (Id. at ¶ 20). These codes provide definitions of unsafe buildings and buildings unfit for human habitation. (Id. at ¶21). In addition, only the Commissioner of Codes may declare buildings unsafe. (Id.).

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Bluebook (online)
26 F. Supp. 3d 185, 2014 WL 2711797, 2014 U.S. Dist. LEXIS 81390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-acceptance-co-v-city-of-utica-nynd-2014.