Krog v. Village of Ellicottville

1 Misc. 3d 552, 764 N.Y.S.2d 606, 2003 N.Y. Misc. LEXIS 1198
CourtNew York Supreme Court
DecidedSeptember 19, 2003
StatusPublished

This text of 1 Misc. 3d 552 (Krog v. Village of Ellicottville) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Krog v. Village of Ellicottville, 1 Misc. 3d 552, 764 N.Y.S.2d 606, 2003 N.Y. Misc. LEXIS 1198 (N.Y. Super. Ct. 2003).

Opinion

OPINION OF THE COURT

Larry M. Himelein, J.

Transportation Law § 18 gives the Commissioner of the New York State Department of Transportation (DOT) a preferential right to acquire abandoned railroad property. Subdivision (1) of this section prohibits a property owner from “disposing” of abandoned railroad property unless the Commissioner notifies the owner that the preferential right does not apply to the property or the Commissioner releases the preferential right. Any conveyance that violates “this section shall be null and void” (Transportation Law § 18 [1] [emphasis supplied]).

On October 29, 1994, plaintiff Peter Krog and third-party defendant Buffalo Pittsburgh Railroad, Inc. (BPR) entered into a lease agreement whereby Krog paid BPR a onetime payment of $42,000 to lease a parcel of abandoned railroad property for 40 years with an option to purchase the property at any time during the lease term for $1. At that point, the railroad had not sought the release required by the Transportation Law. On January 9, 1995, more than two months later, the railroad requested a release of the preferential right from DOT. In its letter to DOT, the railroad did not mention the fact that it had already leased the property to Krog.

On January 20, 1995, DOT notified the Mayor of the Village of Ellicottville that a request for the release of the department’s preferential right had been made. On January 24, 1995, DOT notified the railroad that the preferential right applied to the property. On February 24, 1995, the Mayor of Ellicottville wrote DOT requesting that the Village be allowed to exercise the preferential right to acquire the property. DOT approved the request and on July 19, 1995, DOT notified BPR that it had assigned its preferential right to the Village.

Plaintiff commenced this action in 2000 seeking to eject the Village from the property. The Village answered and also brought a third-party action against the railroad claiming, inter alia, that the lease between plaintiff and BPR was void as viola[554]*554tive of Transportation Law § 18; that the Village had acquired title to the property by adverse possession; or, alternatively, that the Village had acquired a prescriptive easement over the property. The railroad in turn cross-claimed against Krog.

After other pleadings were filed and depositions conducted, plaintiff moved for summary judgment claiming (1) DOT’s preferential right of acquisition under the Transportation Law had expired; (2) even if the right had not expired, the Village failed to exercise the right and it therefore reverted to DOT; (3) the Village had not established adverse possession; and (4) the Village had not established an easement by prescription. The Village cross-moved for summary judgment (1) voiding the lease for noncompliance with the Transportation Law; (2) granting title to the Village on the basis of adverse possession; or, alternatively, (3) granting the Village an easement by prescription over the property.

The lease at issue was executed on October 29, 1994. At that time, the railroad had not sought the release required by the Transportation Law. Therefore, it appears that the conveyance “shall be null and void” (Transportation Law § 18 [1]). Krog and BPR, however, contend that DOT’s preferential right expired before it was later assigned to the Village and, even if the right did not expire, the Village defaulted by failing to timely exercise the right: Those contentions gloss over the fact that the initial transfer to Krog was void. Apparently, the argument is that either the expiration of the preferential right or the Village’s default in not timely exercising the right somehow restores to validity a transfer the law deems void.

Alternatively, plaintiff and BPR claim that the lease was not a “transfer” of the property. They argue that the lease agreement does not “dispose” of the property under the Transportation Law because the transfer was a 40-year lease with an option to buy for $1 at any time. They suggest that only an outright sale “disposes” of the property. The court declines to split that hair.

Initially, the statute itself does not create such a limitation. Even if it did, the agreement between Krog and BPR is effectively a sale because Krog can purchase the property for $1 any time during the 40-year lease term. The interpretation suggested by Krog and BPR would allow the Transportation Law to be circumvented by simply inserting a $1 purchase option into any property agreement involving abandoned railroad property (see e.g. Matter of Consolidated Rail Corp. v State of New York, [555]*555259 AD2d 814 [1999]). This would defeat the legislative purpose of making abandoned railroad property available for public use whenever feasible (see L 1973, ch 998, § 1).

Krog and BPR next contend that DOT’s preferential right expired “as a matter of law” because DOT did not notify Krog that it had assigned its preferential right to acquire the property until July 19, 1995, which is 191 days after the railroad’s January 9, 1995 letter to DOT. Because Transportation Law § 18 (1-c) requires DOT to notify the property owner within 120 days whether DOT intends to exercise its right or assign it to another agency, Krog and BPR claim that DOT’s preferential right expired. No authority is cited for this proposition and, given the requirements of the Transportation Law, the court does not believe the statute was intended to cut off DOT’s rights on the 121st day.

Transportation Law § 18 (1-c) requires DOT, once the property owner asks for the release of the preferential right, to inform state agencies, every metropolitan or regional transportation authority, and every county, city, town or village in which the railroad property or part of it is located, of the owner’s request for release of the preferential right. Any governmental agency which intends to exercise its own preferential right must then notify DOT. The statute then requires DOT to notify the property owner of its intent within 120 days of the owner’s notification to DOT. However, with all these mandatory notification requirements, the court does not believe the Legislature intended to cut off DOT’s rights immediately after 120 days expired.

Moreover, the court suspects the statute intended the 120 days to apply to governmental agencies rather than the owner of the property. The relevant part of section 18 (1-c) reads as follows:

“Within a reasonable time thereafter, any agency of government which intends to exercise a preferential acquisition right for such property shall notify the department of transportation in writing. Within a reasonable time, not greater than one hundred twenty days after receipt of such notification by the property owner, the department of transportation shall notify the property owner in writing whether the department of transportation intends to exercise its preferential acquisition right under this section or, if not, whether it has determined that any other [556]*556agency of government has been authorized by it to exercise a preferential right to such property” (emphasis supplied).

If the phrase “such notification by the property owner” was replaced by “such notification by the agency of government,” the statute makes far more sense. The sentence immediately before the quoted section refers to government agencies, not the owner of the property, and the court believes a drafting error occurred.

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Bluebook (online)
1 Misc. 3d 552, 764 N.Y.S.2d 606, 2003 N.Y. Misc. LEXIS 1198, Counsel Stack Legal Research, https://law.counselstack.com/opinion/krog-v-village-of-ellicottville-nysupct-2003.