Town of Tupper Lake v. Sootbusters, LLC, 147 A.D.3d 1268

Defendants Michael and Ursula Vaillancourt own property in the Town of Tupper Lake and operate Sootbusters, LLC.
In June 2012 the Vaillancourts applied for and obtained a special use permit/variance to build a two-unit residence with a garage; the 2012 application acknowledged zoning allowed up to four commercial vehicles on the lot.
In 2013 the Planning Board approved an amendment to the special use permit to add four apartment units but imposed conditions: no more than four commercial vehicles and no storage/parking of construction equipment or trailers.
In June 2014 defendants installed two 500-gallon fuel tanks and stored equipment; the Town issued a notice of violation directing removal; defendants did not comply or appeal.
The Town sued for injunctive relief and fines; defendants asserted 10 affirmative defenses and a counterclaim alleging fraud and official misconduct under 42 U.S.C. § 1983; the Town moved to dismiss the counterclaim under CPLR 3211(a)(7).
Supreme Court denied the Town’s motion and granted defendants leave to file a late notice of claim; the Appellate Division reversed, granted the Town’s motion, denied the cross-motion, and dismissed the counterclaim.

Issue	Town's Argument	Defendants' Argument	Held
Sufficiency of fraud counterclaim	Counterclaim fails to plead fraud with particularity; facts show permits and conditions contradict fraud theory	2012 variance was unconditional; 2013 conditions amounted to fraud/official misconduct	Fraud claim dismissed for lack of detailed factual allegations and absence of justifiable reliance
Claim under 42 U.S.C. § 1983 (official misconduct)	No vested property right to park >4 commercial vehicles or install fuel tanks; conditions were discretionary and not a constitutional violation	Planning Board’s conditioned approval deprived them of property rights and amounted to official misconduct	§ 1983 claim dismissed: no vested property interest and no municipal policy/custom showing constitutional deprivation
Leave to file late notice of claim	Leave should be denied where underlying federal/state claims are meritless	Leave should be granted to allow defense against Town enforcement	Cross-motion for late notice denied as counterclaim failed on the merits
Standard for CPLR 3211(a)(7) dismissal	Court must accept pleaded facts and remedial affidavits but may dismiss bare conclusions or claims contradicted by documentary evidence	Defendants relied on pleadings and affidavits asserting misconduct/fraud	Appellate court applied liberal pleading standard but found allegations were conclusory and contradicted by permit application/record; dismissal appropriate

He v. Realty USA, 121 A.3d 1336 (App. Div. 2014) (liberal construction on CPLR 3211(a)(7) motions)
Simkin v. Blank, 19 N.Y.3d 46 (N.Y. 2012) (pleading standards and inferences)
Leon v. Martinez, 84 N.Y.2d 83 (N.Y. 1994) (courts may consider affidavits to remedy pleading defects)
Kreamer v. Town of Oxford, 96 A.D.3d 1130 (App. Div. 2012) (zoning and vested-rights pleading requirements)
DerOhannesian v. City of Albany, 110 A.D.3d 1288 (App. Div. 2013) (conclusory allegations insufficient to survive dismissal)
Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553 (N.Y. 2009) (elements of fraud)
ARB Upstate Communications LLC v. R.J. Reuter, L.L.C., 93 A.D.3d 929 (App. Div. 2012) (fraud pleading particularity)
Monell v. Department of Social Servs. of City of N.Y., 436 U.S. 658 (U.S. 1978) (municipal liability requires policy or custom)
Bower Assoc. v. Town of Pleasant Val., 2 N.Y.3d 617 (N.Y. 2004) (§ 1983 protects property-related due process and equal protection rights)
Eagles Landing, LLC v. N.Y.C. Dept. of Envtl. Protection, 75 A.D.3d 935 (App. Div. 2010) (no vested interest where only expectation of a permit)
Matter of Loudon House LLC v. Town of Colonie, 123 A.D.3d 1406 (App. Div. 2014) (discretionary zoning conditions must be so arbitrary to support § 1983 claim)