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Decision No. 16,072

Appeal of the BOARD OF EDUCATION OF THE MANHASSET UNION FREE SCHOOL DISTRICT from action of the Board of Education of the Port Washington Union Free School District relating to school taxes.

Decision No. 16,072

(May 31, 2010)

Frazer & Feldman, LLP, attorneys for petitioner, James H.Pyun, Esq. of counsel

Bond, Schoeneck & King, PLLC, attorneys for respondent, John A. Miller, Esq. of counsel

STEINER, Commissioner.--Petitioner, the Board of Education of the Manhasset Union Free School District (“Manhasset”), seeks an order directing respondent Board of Education of the Port Washington Union Free School District (“Port Washington”) to turn over tax monies levied and collected with regard to property intersected by the boundary line of the two school districts.  The appeal must be dismissed.

By letter dated November 5, 2004, the attorney for the resident of 183 Crabapple Road, a property intersected by the boundary line between the Manhasset and Port Washington school districts, designated Manhasset as the school district of attendance for the owner’s children pursuant to Education Law §3203.  The children attended school in Manhasset for the 2004-2005 and 2005-2006 school years.

In April 2005, Port Washington remitted a “purchase order” for the payment to Manhasset of taxes owed under Education Law §3203 for the 2004-2005 school year that did not include any payment for the Crabapple Road property.  In January 2006, Manhasset billed Port Washington for §3203 taxes for the 2005-2006 school year that did not include that property.

In October 2007, Manhasset became aware that Port Washington did not remit the taxes for the property for those two school years when its new treasurer reviewed the records maintained by Manhasset’s prior treasurer.  Thereafter, by invoice dated October 9, 2007, Manhasset sought payment from Port Washington for the taxes for the 2004-2005 and 2005-2006 school years.  By letter dated February 29, 2008, Port Washington refused payment, citing that its books for those years were closed and Manhasset’s request was untimely.

By letter dated June 17, 2008 Manhasset’s attorney again sought payment of the taxes from Port Washington within 30 days of receipt of the letter.  Port Washington did not respond.  This appeal ensued.

Manhasset asserts that Education Law §3203 requires Port Washington to remit the taxes collected on the Crabapple Road property for the 2004-2005 and 2005-2006 school years and that by retaining taxes Port Washington has been unjustly enriched.  Manhasset further argues that pursuant to “the doctrine of moneys had and received”, or quasi-contract principles, Port Washington should not be permitted to keep the taxes, and that its actions are arbitrary and capricious.  Port Washington maintains that the appeal is untimely and is also barred by laches.

Education Law §3203 (1) provides in pertinent part,

The owner of taxable property that is so located that the boundary line between two school districts intersects (a) the dwelling on said property or (b), in the case of an owner-occupied single family dwelling unit, the property on which the dwelling unit is located may designate the school in either of such districts to which the children lawfully residing in said dwelling on said property shall attend ... such children shall be deemed to be resident children of the district designated and shall be entitled to the school privileges of such district as resident pupils without the payment of tuition.

Section 3203(2) further provides:

School taxes on such property shall continue to be levied and collected without reference to the aforesaid designation, but the school authorities of the district that levies and collects a tax upon such property and does not furnish instructional service to the children residing on such property shall pay to the district designated, in which such children are received and instructed, the amount of the tax on such property so levied and collected.  If any such district shall fail or refuse on demand to pay the amount of any tax so collected, the school authorities of the district designated and furnishing the instructional service may recover the amount in an action therefor. 

An appeal to the Commissioner must be commenced within 30 days from the making of the decision or the performance of the act complained of, unless any delay is excused by the Commissioner for good cause shown (8 NYCRR §275.16; Appeal of Proctor, 46 Ed Dept Rep 575, Decision No. 15,599; Appeal of Henley, 46 id. 556, Decision No. 15,594).  Payments owed pursuant to Education Law §3203 become due at the completion of the applicable school year and an appeal brought pursuant to Education Law §310 to collect such tax payments must be commenced within 30 days from the end of that school year (Appeal of the Sole Trustee of the Hickory-South Mountain Common School District No. 1, 38 Ed Dept Rep 577, Decision No. 14,097).  Manhasset did not commence this appeal until August 28, 2008, more than three years after the end of the 2004-2005 school year and two years after the end of the 2005-2006 school year.

A delay in commencing an appeal within the required 30 day period has been excused where a timely demand for payment was made within the 30 days and the district that owed the taxes failed to provide a written response to the demand for payment (Appeal of the Board of Education of the Harborfields Central School District, 41 Ed Dept Rep 15, Decision No. 14,597).  However, unlike Harborfields, here Manhasset did not seek payment of the taxes owed from Port Washington for the 2004-2005 and 2005-2006 school years until its invoice of October 9, 2007, more than two years after the end of the 2004-2005 school year and 15 months after the end of the 2005-2006 school year. 

Manhasset avers that it did not become aware of the unremitted 2004-2005 and 2005-2006 taxes until its current treasurer reviewed the records maintained by its prior treasurer.  Nevertheless, Manhasset always had access to the information necessary to make a timely demand and the oversight by its prior treasurer is not a sufficient basis to excuse any delay in doing so (seeAppeal of Board of Education of the Hilton Central School District, 38 Ed Dept Rep 497, Decision No. 14,079). 

Also, unlike Harborfields, Port Washington replied to the October 2007 invoice by letter dated February 29, 2008, stating that its account for the invoices was settled, its books for the years in question were closed and that the billing was untimely.  Manhasset argues that the February 29, 2008 letter did not formally deny the payment.  I disagree.  The statements in the letter clearly constitute a refusal to pay.  Even were I to excuse Manhasset’s failure to commence this appeal within 30 days respectively of the end of the 2004-2005 and 2005-2006 school years, Manhasset also failed to commence an appeal within 30 days from its receipt of Port Washington’s February 29, 2008 letter.

Manhasset asserts that, upon receipt of the February 29, 2008 letter it investigated Port Washington’s claim and sought the advice of counsel.  Thereafter, by letter dated June 17, 2008, Manhasset’s attorney demanded payment of the taxes.  Port Washington did not respond.  Manhasset maintains that the 30 day statute of limitations should run from Port Washington’s constructive denial of the June 17, 2008 letter.  However, having been refused payment by Port Washington’s February 29, 2008 letter, Manhasset’s June 17, 2008 demand letter merely constitutes a request for reconsideration.  A reconsideration request does not extend the time within which an appeal must be commenced (Appeal of Business Systems of CNY, Inc., 46 Ed Dept Rep 464, Decision No. 15,564; Appeal E.B. and J.B., 46 id. 338, Decision No. 15,526).

Manhasset also argues that Port Washington’s failure to remit the taxes from the 2004-2005 and 2005-2006 school years constitutes a continuing wrong.  The continuing wrong doctrine applies when the ongoing action is itself an unlawful action, such as the unlawful employment of an uncertified teacher (Appeal of Brown, 39 Ed Dept Rep 343, Decision No. 14,255), unlawful appointments to a district’s shared decision-making team (Appeal of Sadue-Sokolow, 39 Ed Dept Rep 6, Decision No. 14,155), an improperly constituted professional development team (Appeal of Copenhagen Teachers’ Association, et al., 45 Ed Dept Rep 459, Decision No. 15,381) or certain ongoing expenditures under an austerity budget that did not comply with the law (Appeal of Aarseth, 32 Ed Dept Rep 506, Decision No. 12,901).  The doctrine does not apply where the specific action being challenged is a single action, inaction or decision and the resulting effects are not intrinsically unlawful (Appeal of a Student with a Disability, 46 Ed Dept Rep 407, Decision No. 15,548; Appeal of Smalls, et al., 46 id. 246, Decision No. 15,496).  In this instance, the appeal relates to taxes payable for a specific property for two specific school years that had long since passed, there is no evidence of a continuing practice on respondent’s part, and the effect of denying a claim for remitting of taxes based upon an unreasonable delay in presenting the claim is not intrinsically unlawful (seeAppeal of Board of Education of the Hilton Central School District, 38 Ed Dept Rep 497, Decision No. 14,079).  Accordingly, I find the appeal to be untimely.

Moreover, Manhasset’s claim is barred by laches.  As noted, Manhasset maintains that its time to appeal did not commence until Port Washington’s constructive denial of its attorney’s June 17, 2008 letter, arguing that the letter constituted the demand required by Education Law §3203(2).    Assuming arguendo that the June 17, 2008 letter constitutes the demand from which the time to appeal should run, Manhasset waited too long to make such demand.

In analogous contexts where the statute of limitations is not triggered until a formal demand has been rejected (e.g., mandamus proceedings against school districts), the courts have refused to allow petitioners to delay unreasonably in making such a demand.  The Court of Appeals has held that a party may not “extend indefinitely the period during which he is required to take action.  If he does not proceed promptly with his demand he may be charged with laches.”  (Austinv. Board of Higher Education of the City of New York, 5 NY2d 430, 442).

Contrary to Manhasset’s contention, the doctrine of laches applicable here is not an ‘equitable doctrine’ that requires Port Washington to prove prejudice.  Rather, the laches at issue in this case is the legal doctrine that precludes a party from unreasonably sitting on its rights, irrespective of any corresponding prejudice to the adverse party.  As stated by the Appellate Division, Third Department:      

where a petitioner does not make a reasonably prompt demand and there is no excuse for the elapsed time, the courts have denied the relief sought on the basis of laches... This position is premised on the rationale that a petitioner should not be able to ‘indefinitely postpone the time to seek relief by delaying the demand.’... Furthermore, the doctrine of laches involved is not the equitable doctrine of laches and thus ‘it is immaterial whether or not the delay caused any prejudice.’... The sole test as we see it is thus whether, under the circumstances of the case, the delay in making the demand was unreasonably protracted (citations omitted).

Matter of Central School District No. 2 of Towns of Coeymans, et al., v. New York State Teachers’ Retirement System, et al., 27 AD2d 265, 268; seealsoDevens v. Gokey, et al., 12 AD2d 135. 

Manhasset’s delay in demanding payment of the 2004-2005 and 2005-2006 school years taxes was unreasonable.  Moreover, even if Port Washington were required to show that it has been prejudiced by the delay, Port Washington has done so.  Respondent’s accounts for the school years at issue have long been closed and it asserts that it has no longer budgeted funds for this purpose.  Manhasset’s claim is, thus, also barred by laches.

In light of this disposition, I need not address the parties’ remaining contentions.