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Volume 7 - Opinions of Counsel SBEA No. 117

Opinions of Counsel index

Assessment review (tax certiorari proceeding) (consolidation) (refund - assessment reduction of $10,000 or less) - Real Property Tax Law, §§ 710, 726:

In consolidated assessment review proceedings, the city or town which assessed the property is responsible for the county portion of the tax refund due each parcel for which the assessment reduction is $10,000 or less. That the total of all reductions in such proceedings may exceed $10,000 does not change this liability.

In a consolidated proceeding for judicial review of several assessments pursuant to title one of Article 7 of the Real Property Tax Law (§ 710), a court ordered reductions in the assessments of ten of twelve parcels. The cumulative reductions exceeded $20,000 in assessed value, although the greatest single reduction was just above $4,000. We are asked whether the county or the assessing unit is responsible for the county share of the tax refunds due under these circumstances.

The refund of taxes as a result of a final order in an Article 7 proceeding is the subject matter of section 726 of the Real Property Tax Law. In general, each municipal corporation and special district is liable for its proportionate share of any refund (subd. l(a)). However, “if the assessment is reduced . . . by an amount not in excess of [$10,000]”, the city or town is liable for the county’s share of the refund (id.).

The courts have held that section 726 furnishes a complete and exclusive method for obtaining a refund of taxes paid upon illegal, erroneous or unequal assessments following certiorari proceedings and that its provisions are mandatory and must be complied with (Hedges v. Craig, 194 App.Div. 786, 185 N.Y.S. 122 (1st Dept., 1920), aff’d, 231 N.Y. 513, 132 N.E. 868 (1921), construing Tax Law, § 296, predecessor to RPTL, § 726). In regard to the $10,000 threshold, the courts have merely had to decide whether certain charges are town or county levies (People v. Matthias, 84 App.Div. 122, 81 N.Y.S. 1105 (3d Dept., 1903)).

The proceeding here involved twelve separately assessed parcels, assessments of ten of which were reduced. The reductions ranged from a high of $4,190 to a low of $240. While the total of all reductions was $20,010, no single reduction was greater than $10,000.

We know of no case law considering the issue of the $10,000 limitation in consolidated proceedings. However, we believe that a logical reading of the statute leads to the conclusion that each assessment is a separate proceeding for review and, notwithstanding the consolidation of two or more proceedings, the reduction of the assessment of each parcel must be considered separately in order to determine which local government bears responsibility for the county share of any tax refund.

The language of section 726(l)(a) refers to the reduction of an “assessment”. In the event that a taxpayer has been illegally, erroneously or unequally assessed on two or more parcels, a separate proceeding lies for each assessment, and the $10,000 limitation would be applied separately to each parcel (see, 23 Op. State Compt. 580, where a city was considered liable for the county’s share of a tax refund due to assessment reductions of “less than $10,000 in each case” (id., at 582; emphasis added)).

Reaching any other conclusion simply because of the consolidation of these proceedings runs counter to the purpose of consolidation which is to “reduce the costs of litigation, make more economical use of court time[,]. . . speed the disposition of cases . . . [and] assure more uniform consideration and determination of the issues” (City of Rochester v. Levin, 57 A.D.2d 700, 395 N.Y.S.2d 773, at 774 (4th Dept., 1977)). Thus, in section 602 of the Civil Practice Law and Rules, and section 710 of the Real Property Tax Law, the Legislature has provided for, and the courts have encouraged the liberal consolidation of actions.

If each case here had been tried separately, there would be no question as to the liability of the city or town for the refund of county taxes, since in not one case was there an assessment reduction of more than $10,000. The fact that they were tried together should not alter this result. Consolidation is a calendar clearing device to be utilized only where it would not result in prejudice to a substantial right (Amatulli v. Board of Assessors of County of Nassau, 78 A.D.2d 550, 432 N.Y.S.2d 28 (2d Dept., 1980)). The aggregation of reduced assessments for purposes of exceeding the $10,000 threshold would certainly qualify as prejudice to the county.

Accordingly, it is our opinion that since none of the parcels in this case received a reduction in assessment greater than $10,000, the city or town responsible for the assessment is liable for the county portion of the tax refund due each parcel. Of course, the city or town is also liable for the city or town’s own portion of the refund (RPTL, § 726(1)(a)).

December 15, 1982