Upon the foregoing papers, the Defendants, TOWN OF NORTH HEMPSTEAD and TOWN OF NORTH HEMPSTEAD DEPARTMENT OF BUILDING, SAFETY, INSPECTION & ENFORCEMENT's ("Defendant" or "Town") motion ^[FN1], pursuant to CPLR § 3211 (a) (7), seek dismissal of the Plaintiff's complaint upon the grounds that (i) the Plaintiff failed to meet a condition precedent to the commencement of an action based upon its failure to appear for a hearing pursuant to General Municipal Law § 50-h; (ii) the Plaintiff failed to exhaust its administrative remedies; (iii) the Plaintiff has no property right in erroneously issued permits; (iv) the causes of action stated in the Complaint are not legally cognizable; and (v) the Complaint alleges theories of recovery not supported by the Notice of Claim, is decided as hereinafter provided. In the event the Court denied the Defendant's motion to dismiss, the Defendant sought an order, pursuant to CPLR § 3211 (f), permitting the Town to serve its answering papers thirty (30) days after service of the Court's Order with Notice of Entry.

On or about January 13, 2006, the Building Department of the Defendant, Town, erroneously issued Use Permit No. 2006-0141, permitting the Plaintiff to operate its limousine business at a property located at 1990 Jericho Turnpike, Garden City Park, New York. On or about January 31, 2006, the Building Department of the Defendant, Town, also erroneously issued Use Permit No. 2006-0351, permitting the Plaintiff to operate its limousine business at a property located at 16 Davis Avenue, Port Washington, New York.It was later discovered by the Defendant that the Building Department is not authorized by the Town Code to issue said Use Permits. Pursuant to the Town Code § 2-14 (B), the Building Department Commissioner has the authority to revoke permits in the event permits are issued in error.

On July 23, 2009, a revocation hearing was held to determine whether the Use Permits were properly issued to the Plaintiff. At that hearing, the Deputy Commissioner of the Building Department stated that the Use Permits were issued in error as there was no provision within the Town Code that authorized the Deputy Commissioner to produce such a document or issue it to the public. (See Minutes of Proceedings, dated July 23, 2009, attached to the Defendant's Notice of Motion as Exhibit "C"). On September 16, 2009, the Commissioner of the Building Department revoked the two Use Permits.

Thereafter, on November 20, 2009, pursuant to CPLR Article 78, the Plaintiff commenced a special proceeding to challenge the revocation of the Use Permits upon the basis that the determination was arbitrary, capricious and an abuse of discretion. Shortly [*2]thereafter, the Plaintiff caused a Notice of Claim, dated December 9, 2009, to be served upon the Town of North Hempstead, alleging, in pertinent part, that the revocation of the Use Permits by the Town was reckless, intentional and/or negligent. The Notice of Claim further alleges that the Town acted in an arbitrary and capricious manner and with abuse of discretion in its issuance and subsequent revocation of the Use Permits.

By previous Order of this Court, the Plaintiff's Article 78 proceeding was dismissed for its failure to exhaust administrative remedies by appealing to the Board of Zoning and Appeals. See Short Form Order (Cozzens, J., July 8, 2010). Specifically, the Order states, " It is hornbook law that one who objects to the act of an administrative agency must exhaust available administrative remedies before being permitted [to] litigate in a court of law' [citations omitted]." Aliano v. Oliva, 72 AD3d 944 (2d Dept. 2010).

Thereafter, on December 15, 2010, the Plaintiff commenced this action by the filing of a summons and complaint. The complaint alleges four separate causes of action, all of which arise out of the Town's conduct in issuing and revoking the Use Permits to the Plaintiff. The Plaintiff seeks damages for injury to its trade or business, including lost sales of services due to the Town's alleged arbitrary, capricious and negligent actions in issuing the Use Permits erroneously and subsequently revoking same.

The Defendant, Town, moves to dismiss the Plaintiff's complaint for failure to state a claim on several grounds. At the outset, the Defendant contends that the Plaintiff failed to comply with General Municipal Law § 50-h (5) in failing to appear for the hearing and requesting adjournments or postponements beyond the statutory time period. The Defendant posits that the Plaintiff's failure to comply with the foregoing section of the General Municipal Law prior to commencing an action is fatal to the Plaintiff's claims. In opposition to the motion to dismiss, the Plaintiff claims that it was entitled to commence this action due to numerous agreements amongst the parties to adjourn the hearing. The Plaintiff contends that all the adjournments were "bilateral".

The Plaintiff's arguments in opposition to the Defendant's motion to dismiss based upon his failure to appear for the municipal hearing are unavailing. The record establishes that pursuant to General Municipal Law § 50-h, a hearing was timely noticed, that it was adjourned multiple times at the Plaintiff's request, and that the Plaintiff served a summons and complaint upon the Defendant before the hearing was held. The law is well established that a potential plaintiff who has not complied with General Municipal Law § 50-h (1) is precluded from commencing an action against a municipality. See, Heins v. Board of Trustees, 237 AD2d 570 (2d Dept. 1997); Arcila v. Incorporated Vil. of Freeport, 231 AD2d 660 (2d Dept. 1996); Schrader v. Town of Orangetown, 226 AD2d 620 (2d Dept. 1996). The Plaintiff's proffered excuses for delaying the hearing mandated by statute are insufficient to overcome the requirement.

In addition to the Plaintiff's failure to comply with the requirements of General Municipal Law § 50-h, the Plaintiff's complaint fails to state a claim upon which relief may be granted. [*3]

On a motion to dismiss for failure to state a cause of action, pursuant to CPLR § 3211 (a) (7), the court must determine whether, from the four corners of the pleading, "factual allegations are discerned, which taken together, manifest any cause of action cognizable at law". Salvatore v. Kumar, 45 AD3d 560 (2d Dept. 2007), lv to app den. 10 NY3d 703 (2008), quoting Morad v. Morad, 27 AD3d 626, 627 (2d Dept. 2006).

The Plaintiff claims that the first cause of action set forth in the complaint is one alleging negligence and other tortious conduct on the part of the Town in issuing the Use Permits. The Plaintiff's first cause of action alleges that the Town acted intentionally, recklessly and/or negligently in wrongfully issuing the Use Permits and later revoking same. Further, as stated in the Plaintiff's opposition to the motion to dismiss, a violation of 42 U.S.C § 1983 is not being alleged. The Plaintiff's second, third and fourth causes of action also sound in negligence.

The Court finds that the Defendant is correct in its assertion that erroneously issued permits do not create property rights for which the Plaintiff can seek damages. "In New York, a vested right can be acquired when, pursuant to a legally issued permit, the landowner demonstrates a commitment to the purpose for which the permit was granted by effecting substantial changes and incurring substantial expenses to further the development". Town of Orangetown v. Magee, 88 NY2d 41, 47 (1996); see Matter of RC Enters. v. Town of Patterson, 42 AD3d 542, 544 (2d Dept. 2007). However, vested rights cannot be acquired in reliance upon an invalid permit. Matter of Natchev v. Klein, 41 NY2d 833, 834 (1977); Incorporated Vil. of Asharoken v. Pitassy, 119 AD2d 404, 416-417 (2d Dept. 1986). Additionally, "[t]he mistaken or erroneous issuance of a permit does not estop a municipality from correcting errors, even where there are harsh results". Matter of Parkview Assoc. v. City of New York, 71 NY2d 274, 282 (1988); see Town of Putnam Val. v. Sacramone, 16 AD3d 669, 670 (2005).

While the instant matter is not an instance where the Plaintiff was involved in the building or construction of a structure, the reasoning from the aforementioned cases may be applied here. The Town has the right to revoke erroneously issued permits.

Moreover, as succinctly stated in Yan Shou Kong v. Town of Huntington, 4 AD3d 419 (2d Dept. 2004), "[the] Town may not be held liable to the plaintiff in damages for the acts of its building inspector in erroneously issuing a building permit, or for the subsequent decision to revoke the permit".

In the instant matter, the former Deputy Commissioner, Joseph Madden, executed the Use Permits issued to the Plaintiff. As adduced from the Revocation Hearing, dated July 23, 2009, there is no provision in the Town Code that authorized the former Deputy Commissioner to issue the Use Permits to the Plaintiff. See Exhibit "C" annexed to the Defendant's Notice of Motion, page 4. Further, pursuant to Town Code § 2-14, "The Building Commissioner shall have the authority to revoke any permits theretofore issued or withhold or revoke any certificate issued pursuant to the completion of the permitted work in the following instances...[w]here he finds that the permit was issued in error and should [*4]not have been issue in accordance with the applicable law". See Exhibit "C" annexed to the Defendant's Notice of Motion, pages 6-7.

The Plaintiff fails to proffer any legal authority that confers upon it the right to recover for damages allegedly sustained from the erroneous issuance and subsequent revocation of the Use Permits. As such, after according every possible inference in favor of the Plaintiff, a close review of the complaint reveals that it does not manifest any cause of action cognizable at law.

The Court has reviewed Plaintiff's remaining contentions and find them to be meritless.

Accordingly, it is hereby

ORDERED, that the Defendant's motion, pursuant to CPLR § 3211 (a) (7), seeking dismissal of the Plaintiff's complaint, is GRANTED.

This constitutes the decision and order of the Court.

Dated:Mineola, New York

July 7, 2011

___________________________

Hon. Randy Sue Marber, J.S.C.

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