Krystalo Hetelekides, &c. v. County of Ontario ( 2023 )

State of New York OPINION
Court of Appeals This opinion is uncorrected and subject to revision
before publication in the New York Reports.
No. 3
Krystalo Hetelekides, &c.,
Appellant,
v.
County of Ontario et al.,
Respondents.
Mary Jo S. Korona, for appellant.
Jason S. DiPonzio, for respondents.
Pacific Legal Foundation, amicus curiae
RIVERA, J.:
Two fundamental legal principles govern our decision in this appeal. First, a tax
foreclosure proceeding is in rem against the “res”—the taxable real property—and not an
action in personam commenced against an individual to establish personal liability.
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Second, New York statutory law and state and federal constitutional guarantees of due
process require that the petitioner in a foreclosure proceeding must attempt notice that is
reasonably calculated to alert all parties with an interest in the property.
Here, defendants commenced an in rem tax foreclosure proceeding and mailed the
statutorily-required notice to the publicly-listed owners of the property, posted and filed
the notice, and publicized the notice in the press. Upon learning that a person listed as an
owner died before the notices were issued, defendant County Treasurer also personally
contacted the sole business located on the property in an effort to identify and personally
inform a manager, owner, or any person in charge of the pending foreclosure proceeding.
Under these circumstances, defendants provided legally adequate notice of a validly
commenced tax foreclosure action. We therefore affirm the Appellate Division’s order.
I.
Plaintiff Krystalo Hetelekides, individually as the owner of the property and as
executor of the estate of her husband, decedent Demetrios Hetelekides (also known as
James Hetelekides), commenced this action against defendants County of Ontario and
County Treasurer Gary G. Baxter for damages plaintiff allegedly incurred as a result of the
tax foreclosure sale of decedent’s property in the Town of Hopewell. At the time of suit,
plaintiff had obtained title to the property after a third party purchased the property at public
auction and assigned the bid to plaintiff, who paid the entire purchase price. Plaintiff
alleged that she was owed the difference between the unpaid tax arrears and the auction
purchase price and interest.
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According to the record of the bench trial, decedent owned the property and—with
plaintiff—operated a restaurant there. Until his death, decedent was responsible for paying
the real property taxes. He had not paid the annual tax by the January 1, 2005 deadline
when a tax lien was created by operation of law.
Defendants took action pursuant to RPTL article 11 to collect the overdue tax. First,
the Treasurer hired a private commercial abstract company to identify the interested
parties; the investigator reported that, as of August 31, 2005, and again on May 31, 2006,
decedent was the publicly-listed property owner.1 Thereafter, on November 14, 2005, the
Treasurer included the property on a list of delinquent taxes and executed and filed the list
with the Clerk of the County in accordance with RPTL 1122.2 The tax remained unpaid
when decedent died on August 1, 2006, a year and a half after the tax became due and
almost a year after the filing of the delinquent taxes list.
1
The abstract also listed Geo-Tas, Inc. as an owner of the property, but noted that it did
not have title. Our resolution of this appeal does not require us to consider whether the
separate notifications to Geo-Tas satisfied due process.
2
RPTL 1122 (1) provides, in relevant part, that at least “one month after the receipt of the
return of unpaid taxes,” and at the first opportunity after 10 months from the lien date, “the
enforcing officer of each tax district shall execute a list of all parcels of real property[ ] . . .
affected by delinquent tax liens held and owned by such tax district.” The list of delinquent
taxes must describe each parcel, list “[t]he name or names of the owner or owners of each
such parcel as appearing on the tax roll,” and state the “amount of each tax lien upon such
parcel” (RPTL 1122 [6]).
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As provided by RPTL 1123, on October 1, 2006—21 months after the lien date—
the Treasurer filed an in rem foreclosure petition in Ontario County Court.3 The same day,
the Treasurer’s Office sent notices of foreclosure and copies of the petition by certified
mail, return receipt requested, and by ordinary first class mail to the property, each
addressed separately to “James Hetelekides”; “Hetelekides, James”; and “Geo-Tas, Inc.”
All told, six separate mailings were sent to the property. The notice listed January 12, 2007,
as the final day to redeem the property.4 On October 2, the Treasurer also posted a copy of
the notice and petition in the Ontario County Clerk’s Office, published the notice in two
local newspapers, and ran additional publications in the newspapers on October 16 and
November 1. The certified mailings arrived on October 3, and a long-time employee of the
restaurant signed the return receipts, which were then returned to the Treasurer’s Office.
During the bench trial, the Treasurer testified that he first became aware of
decedent’s death and that plaintiff was operating the restaurant in late December 2006 or
early January 2007. Thereafter, on three consecutive days during afternoon business hours,
the Treasurer personally contacted the restaurant to speak with someone regarding the
property. First, on Tuesday, January 9, 2007, the Treasurer called, identified himself, and
3
RPTL 1123 requires an enforcing officer to file a petition of foreclosure, in a specified
form, “[t]wenty-one months after [the] lien date, or as soon thereafter as is practicable”
(RPTL 1123 [1]; see [2]-[4]).
4
In New York, a taxpayer has a statutory right to “redeem” their property—that is, to pay
the delinquent taxes plus any charges in full—before a foreclosure becomes final (see
RPTL 1110). The concept of redemption developed as an equitable principle in the English
courts of chancery (see generally BFP v Resolution Trust Corporation, 511 US 531, 541
[1994]; 5 Tiffany Real Property § 1379 [3d ed, Sept. 2022 update])
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asked to “speak to the owner, the manager, [or] someone that’s in charge of the business.”
When he was told that no one was available, he said that “[i]t’s very imperative or very
important that I talk to somebody that owns the business or manages it or has control over
it,” and asked to be called back. Nobody responded. The Treasurer then called again the
following day and asked to “talk to somebody, the owner, somebody who is in charge, a
manager, anyone that can -- that has any authority [over the] business, please, I need to talk
to somebody.” The person who answered the phone said that no one was available, and the
Treasurer responded that he had “called yesterday” and “[i]t’s very important that I talk to
somebody.” The Treasurer did not hear back and, the next day at roughly 1:30 p.m., he
personally visited the restaurant, identified himself, and repeated to an employee that he
needed to speak with a manager or anyone with authority. He was told a third time that no
one was available. The Treasurer left his business card, asked for a return call, and
reiterated that it was “very important” that he speak with someone. It is undisputed that, at
the time of the Treasurer’s phone calls and visit, plaintiff worked daily at the restaurant.
By plaintiff’s own testimony, the Treasurer’s Office and a Town employee gave her
conflicting information regarding whether the tax was paid in full. According to plaintiff,
after she received her residential tax bill, she went to the Treasurer’s Office in either late
December 2006 or early January 2007, paid that tax, and asked whether the tax on the
restaurant property had been paid. She maintained that a clerk in the Treasurer’s Office
informed her that the property tax had been paid. However, when she checked with the
Town’s offices, she was told by an employee that the tax was unpaid. She spoke to the
clerk at the Treasurer’s Office on two additional occasions and each time was told that the
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property tax was paid. The clerk testified that she did not recall those conversations, and
that, as a matter of course, an in-person inquiry related to a property would have been noted
in the Office’s records, but that no such record existed confirming plaintiff’s visits.
The tax was still unpaid by the redemption deadline and it is undisputed that the
Treasurer declined plaintiff’s late offer to redeem. Thereafter, on February 5, 2007,
defendants successfully moved for a default judgment in the foreclosure proceeding.
Plaintiff, who at that point had retained counsel, did not move to vacate the default and
instead unsuccessfully attempted to persuade the County Board of Supervisors to allow her
to redeem the property. She also filed a petition in Surrogate’s Court, after the default
judgment issued, as the named executor to probate decedent’s will, under which she was
the named heir to the property. Subsequently, in May 2007 an individual purchased the
property at public auction and assigned the bid to plaintiff, who then paid the purchase
price and received title to the property. The following month, Surrogate’s Court issued
letters testamentary to plaintiff.
Plaintiff commenced this action in Supreme Court alleging that the in rem
foreclosure proceeding was a nullity and that defendants had violated her due process
rights; she also asserted additional claims under 42 USC §§ 1983 and 1988, contending
that the County had adopted a policy, custom, or practice precluding the Treasurer from
providing adequate due process to persons with interests in real property. Following a
bench trial, Supreme Court rendered a verdict in plaintiff’s favor, except as to the federal
statutory claims, concluding that the Treasurer’s mailings failed to comply with RPTL
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1125 because they were addressed to decedent rather than his estate or plaintiff and that
the foreclosure proceeding was a nullity because it was brought against a deceased person.
The Appellate Division modified the judgment, on the law, by vacating those parts
that declared the foreclosure proceeding a nullity and granted plaintiff monetary relief, and,
as so modified, affirmed (193 AD3d 1414 [4th Dept 2021]). The Court concluded that the
evidence presented at the bench trial established compliance with all statutory and due
process requirements (see id. at 1417). The Court also held that, assuming, arguendo, that
defendants were required to take additional steps to ensure that plaintiff received due
process, defendants took sufficient steps because the Treasurer made “three personal
attempts to talk to someone with authority” and could not have further determined who
owned the property because plaintiff had not yet filed a petition in Surrogate’s Court (id.
at 1419). Finally, the Court rejected the Second Department’s reasoning in Matter of
Foreclosure of Tax Liens (165 AD3d 1112 [2d Dept 2018] [Goldman], appeal dismissed
& lv denied 35 NY3d 998 [2020])—which had held that a tax foreclosure proceeding may
not be maintained against a deceased person—because the proceeding was in rem against
the property and not in personam against decedent personally. Plaintiff appealed as of right
on constitutional grounds and alternatively moved for leave to appeal. We denied the
motion for leave as unnecessary (37 NY3d 1103 [2021]).
II.
Plaintiff, relying on Goldman, first alleges that the in rem foreclosure proceeding
was a nullity, and that County Court therefore lacked jurisdiction to enter a default
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judgment, because defendants had brought the action against a deceased person.
Defendants respond that the in rem foreclosure proceeding was brought against the
property, not against the owner, and thus County Court had jurisdiction.
Plaintiff’s contention that the foreclosure proceeding was a nullity is based on a
misunderstanding of the difference between in rem and in personam jurisdiction, and a
conflation of those differences with respect to notice requirements. “Distinctions between
actions in rem and those in personam are ancient and originally expressed[,] in procedural
terms[,] what seems really to have been a distinction in the substantive law of property
under a system quite unlike our own” (Mullane v Central Hanover Bank & Trust Co., 339
US 306, 312 [1950]; see generally 2 Joseph Story, Commentaries on Equity Jurisprudence
as Administered in England and America § 1007 at 273-274 [1836]; J. Inst. 4.6.1; G. Inst.
4.2-4.3). In New York, the CPLR makes clear that those distinctions continue to exist: “A
court may exercise such jurisdiction over persons, property, or status as might have been
exercised heretofore” (CPLR 301). In their modern form, those distinctions rest upon the
nature of the action and the source of a court’s authority to enter judgment (see generally
Vincent C. Alexander, Prac Commentaries, McKinney’s Cons Laws of NY, CPLR
C301:1).
“An action in personam, giving the persons all the rights and remedies incident to a
judgment in such action, is very different from a proceeding by special process in rem,
either against specified property, or the property at large of the debtor” (Lowry v Inman,
46 NY 119, 128 [1871]). “An action or proceeding in rem has for its subject specific
property which is within the jurisdiction and control of the court to which application for
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relief is made” (Hanna v Stedman, 230 NY 326, 335 [1921]). “The foundation of [in rem]
jurisdiction is physical power” (McDonald v Mabee, 243 US 90, 91 [1917]), and in an
action in rem, a court obtains jurisdiction over the “res”—the property at issue in the
proceeding (see Hanson v Denckla, 357 US 235, 246 [1958] [“The basis of jurisdiction is
the presence of the subject property within the territorial jurisdiction of the forum (s)tate”];
see generally David D. Siegel & Patrick M. Connors, New York Practice § 101 [6th ed,
Dec. 2022 update]). Thus, “[an] action [in rem] proceeds against such specific property
and its object is to have the court define the rights therein of various and conflicting
claimants” (Hanna, 230 NY at 335; see e.g. Freeman v Alderson, 119 US 185, 187 [1886]
[“Actions in rem, strictly considered, are proceedings against property alone treated as
responsible for the claims asserted by the libelants or plaintiffs. The property itself is in
such actions the defendant . . .”]; Black’s Law Dictionary [11th ed 2019], action in rem).
“The result of such an action is a judgment which operates upon the property and which
has no element of personal claim or personal liability” (Hanna, 230 NY at 335; see Hanson,
357 US at 246 n 12 [“A judgment in rem affects the interests of all persons in designated
property”]).
In contrast, an action in personam is initiated against a person to determine their
personal rights and obligations (see e.g. Lowry, 46 NY at 128; Black’s Law Dictionary
[11th ed 2019], action in personam). Thus, “[a] judgment in personam imposes a personal
liability or obligation on one person in favor of another” (Hanson, 357 US at 246 n 12). In
such an action, “a state court base[s] its jurisdiction upon its authority over the defendant’s
person” (Mennonite Bd. of Missions v Adams, 462 US 791, 796 n 3 [1983]).
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This Court has long recognized that “an action for foreclosure ‘is in the nature of a
proceeding in rem to appropriate the land’ ” (Jo Ann Homes at Bellmore v Dworetz, 25
NY2d 112, 122 [1969], quoting Reichert v Stilwell, 172 NY 83, 89 [1902]; see Dudley v
Congregation of Third Order of St. Francis, 138 NY 451, 458 [1893]; see generally 59A
CJS, Mortgages § 873). Indeed, this Court has clearly described tax foreclosure
proceedings as being governed by a “detailed . . . in rem foreclosure procedure” set forth
in RPTL article 11 (Sonmax, Inc. v City of New York, 43 NY2d 253, 256 [1977]).5 The
legislative history of article 11—originally enacted as article 7-a of the Tax Law by chapter
692 of the Laws of 1939—confirms that tax foreclosure proceedings involve “proceed[ing]
directly against the land” instead of the owner of the taxable real property (Mem of George
Xanthaky, Councilmember, City of Long Beach, Bill Jacket, L 1939, ch 692 at 12, 14
[emphasis added]; see Arnold Frye, The Tax Foreclosure Procedure Problem—a Solution,
Bill Jacket, L 1939, ch 692 at 22-27).
Nevertheless, plaintiff, relying on Goldman’s reasoning, contends that decisions of
the United States Supreme Court and this Court have eroded the distinction between actions
in rem and in personam. That argument is meritless as it proceeds from a misunderstanding
of fundamental legal principles regarding jurisdiction and notice. First, the assumption that
a civil action or proceeding must be brought against a person is ahistorical and contrary to
5
Alternatively, the legislature has approved of an in personam method allowing a tax
collector to “impose personal liability for . . . unpaid taxes” (City of Buffalo v Cargill, Inc.,
44 NY2d 7, 11 [1978]; see RPTL 926; Kennedy v Mossafa, 100 NY2d 1, 7 n 1 [2003];
Goldman, 165 AD3d at 1125-1126 [Scheinkman, P.J., dissenting]; see also Matter of Ueck,
286 NY 1, 7 [1941]).
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established law. Both this Court and the Supreme Court have continued to recognize the
“usefulness of distinctions between actions in rem and those in personam in many branches
of law” (Mullane, 339 US at 312; see Matter of McCann v Scaduto, 71 NY2d 164, 173
[1987]; see also e.g. United States v Bajakajian, 524 US 321, 329-334 [1998] [asset
forfeiture proceedings]; Thyssen, Inc. v Calypso Shipping Corp., 310 F3d 102, 106-107 [2d
Cir 2002] [admiralty proceedings]; Geary v Geary, 272 NY 390, 399 [1936] [matrimonial
actions]). Indeed, CPLR 301 provides that a court may maintain jurisdiction over property
as had been done under the common law, including through an action in rem (see
Alexander, Prac Commentaries, CPLR C301:1). The legislature did not abrogate this
common understanding of foreclosure law and in rem jurisdiction when it enacted RPTL
article 11 (see Arbegast v Board of Educ. of S. New Berlin Cent. School, 65 NY2d 161, 169
[1985]; see also NY Const, art I, § 14; Matter of Carnegie Trust Co., 206 NY 390, 397-
398 [1912]). Of course, a dead person cannot be sued but, as long understood, an action in
rem, like the tax foreclosure proceeding here, is not an action against a person, but rather
the subject property on which the tax was charged and due. Put another way, the County
did not sue the owner of the property; it merely took steps to notify the owner and others
with a potential interest in the property so that they could protect their interests if they so
chose.
Second, plaintiff and Goldman’s reliance on due process and notice by publication
case law is misplaced. Before Mullane, “notice by publication was good enough” to satisfy
due process in proceedings in rem (Matter of McCann, 71 NY2d at 173, citing Longyear v
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Toolan, 209 US 414 [1908], Ballard v Hunter, 204 US 241 [1907], and Leigh v Green, 193
US 79 [1904]).
“Several justifications were commonly advanced for the
sufficiency of constructive notice in in rem proceedings. First,
nonresident landowners—who themselves could not be
served—often had local caretakers to watch over their land and
advise them of published notices affecting their property.
Second, all landowners were charged with a duty to keep
informed about the status of their land and presumed to know
the consequences of nonpayment of taxes. Third, in in rem
proceedings, only ‘the land itself’ was in issue; affected
individuals did not have to be present. Finally, costly notice
requirements impeded the State’s vital interest in collecting its
revenues quickly and inexpensively, making constructive
notice a reasonable balance of the competing interests” (id.
[citations omitted]; see e.g. Picquet v Swan, 19 F Cas 609, 612-
615 [D Mass 1828, No. 11,134, Story, C.J.]).
Mullane and subsequent case law, however, recognized that “[s]ervice by publication
amounts only to a gesture[,] and ‘when notice is a person’s due, process which is a mere
gesture is not due process’ ” (New York Practice § 107, quoting Mullane, 339 US at 315;
see e.g. Mennonite Bd., 462 US at 796 n 3 [1983]; Matter of McCann, 71 NY2d at 173-
176). That case law “marked a departure from the early justifications underlying the
conclusion that published notice was due notice, and a recognition that the ‘caretaker’
theory, the presumption that every landowner read every newspaper of general circulation,
and the notion that only ‘the land itself’ was affected, had become increasingly unrealistic”
(Matter of McCann, 71 NY2d at 174). Contrary to Goldman’s conclusion that “the United
States Supreme Court has explicitly rejected the fiction that an in rem proceeding is not
asserted against any individuals, but only against the property itself” (165 AD3d at 1120,
citing Shaffer v Heitner, 433 US 186, 216 [1977]), the Court has merely recognized that
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property owners and interested parties are owed adequate process where their property
rights are at stake through an in rem foreclosure proceeding. Put another way, case law
relating to notice and due process set forth “requirements of service imposed in the modern
era to address concerns of due process. These are not matters which go to the jurisdiction
of the court to entertain the action on its merits” (Goldman, 165 AD3d at 1127
[Scheinkman, P.J., dissenting]).
In sum, we reject plaintiff’s claim that the tax foreclosure proceeding is a nullity.
Goldman rests on an erroneous legal premise and should not be followed.6
III.
Plaintiff’s alternative claim that defendants failed to provide her with adequate
notice is similarly without merit. Defendants satisfied both their statutory and
constitutional notice obligations.
A.
Former and current RPTL 1125 (1) require that notice of a tax foreclosure
proceeding be provided to “each owner and persons whose right, title, or interest was a
matter of public record as of the date the list of delinquent taxes was filed, which right, title
or interest will be affected by the termination of the redemption period, and whose name
6
Matter of City of Schenectady (Permaul) (201 AD3d 1 [3d Dept 2021], appeal dismissed
& lv denied 38 NY3d 994 [2022]) is also abrogated to the extent that it relied upon
Goldman.
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and address are reasonably ascertainable from the public record” (emphasis added). The
“public record” includes “the records in the offices of the surrogate of the county” (id.).
RPTL 1125 former (1) provided for notice to owners by certified mail and to interested
persons by first class mail, whereas the current RPTL 1125 (1) (b) (i), as amended effective
November 23, 2006 (see L 2006, ch 415, § 2), requires both types of mailings for all
notices. Moreover, RPTL 1125 (1) (b) (i) provides that “notice shall be deemed received
unless both the certified mailing and the ordinary first class mailing are returned . . . within
forty-five days after being mailed.”
Here, it is undisputed that on the date the list of delinquent taxes was filed, plaintiff
was not a publicly-listed owner or person with an interest in the property. Indeed, plaintiff
did not file a petition in Surrogate’s Court until after the redemption deadline and letters
testamentary were issued to plaintiff as the named executor over seven months after the
notices had been served and well after the court entered a default judgment for lack of
appearance of an interested party. When defendants performed the required search of
public records, decedent was alive and listed as an owner under the name “James
Hetelekides.” The notices were sent by certified mail and first class mail to him at the
property address, the mailings were not returned, and the return receipts were signed for
by a restaurant employee. Thus, the notice was sent in compliance with the statutory
requirements.
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B.
Plaintiff contends that defendants’ compliance with the statute is insufficient
because defendants failed to provide notice consistent with the requirements of due
process. We disagree. Here, defendants complied with the statutory notice requirements,
including publication (see RPTL 1124), and, upon learning of decedent’s death, determined
that they would take additional steps to provide notice to potential interested parties. We
therefore reject plaintiff’s argument that defendants’ actions, under the totality of the
circumstances, were constitutionally deficient.
The standard for determining whether notice is adequate under the Due Process
Clauses of the Fourteenth Amendment to the United States Constitution and article I, § 6
of the New York Constitution is well settled:
“Due process is a flexible concept, requiring a case-by-case
analysis that measures the reasonableness of a municipality’s
actions in seeking to provide adequate notice. A balance must
be struck between the State’s interest in collecting delinquent
property taxes and those of the property owner in receiving
notice (see Kennedy, 110 NY2d at 9; see also Matter of
Zaccaro v Cahill, 100 NY2d 884, 890 [2003]). In striking such
a balance, the courts may take ‘into account the status and
conduct of the owner in determining whether notice was
reasonable’ (Kennedy, 100 NY2d at 11, citing Matter of ISCA
Enters. v City of New York, 77 NY2d 688, 700 [1991])” (Matter
of Harner v County of Tioga, 5 NY3d 136, 140 [2005]).
“The means employed [to effect service] must be such as one desirous of actually
informing the absentee might reasonably adopt to accomplish it” (Mullane, 339 US at 315).
In other words, actual notice is not required, but any attempted notice must be reasonably
calculated to provide the recipient with the intended advisement under the particular
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circumstances of the case, taking into account the recipient’s conduct and the demands that
may be fairly imposed on a municipality to effectuate service given the government’s
interests (see e.g. Jones v Flowers, 547 US 220, 230 [2006]; Covey v Town of Somers, 351
US 141, 145-146 [1956]; see also e.g. Robinson v Hanrahan, 409 US 38, 39-40 [1972]).
As discussed, a municipality is required to notify “each owner and persons whose
right, title, or interest [would] be affected by the termination of the redemption period”
(RPTL 1125 [1]). However, once defendants learned of decedent’s death, due process
mandated that they consider whether that “unique information” about decedent, obtained
after the notices were sent, required additional efforts “regardless of whether [the] statutory
scheme is reasonably calculated to provide notice in the ordinary case” (Jones, 547 US at
230). Otherwise, a municipality could rely on notification efforts that it knows have failed
and without determining whether due process requires additional efforts to identify and
inform those persons with interests in the property (see Covey, 351 US at 145-146).
We conclude that defendants’ efforts were sufficient. Defendants publicized the
notice and petition in two local newspapers—including the same newspaper where
decedent’s obituary was published—on three different days. Defendants also mailed six
copies of the notice to the property, four of which were addressed to “James Hetelekides.”
Once defendants learned that decedent had died, the Treasurer decided to make additional
efforts to notify living interested parties before the time to redeem had expired, visiting the
business located on the property three days in a row during midweek, regular business
hours. On the first two days, the Treasurer called the restaurant—the sole business situated
on the property and the business decedent and plaintiff ran together when decedent was
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alive—identified himself, and made clear that “[i]t’s very imperative or very important that
[he] talk to somebody that owns the business or manages it or has control over it.” When
no one returned his calls, he visited the restaurant in person on the third day during regular
business hours, identified himself, and asked to speak with the manager or owner about an
important matter. When he was again told that no one was available, he left his business
card and reiterated that it was “very important” that the owner or a person in control of the
restaurant contact him. It is undisputed that throughout this period plaintiff worked at the
restaurant seven days a week and that she handled its mail. Under these circumstances, the
publications and the Treasurer’s personal efforts were reasonably calculated to ascertain
and notify any persons who might have had a legal interest in the property that might have
been affected by the pending foreclosure action and redemption period.
Plaintiff’s “status and conduct” is also relevant to our analysis (Kennedy, 100 NY2d
at 11). First, even though defendants did not know that plaintiff was the executor of
decedent’s estate and his heir, they could make the reasonable assumption that the
executor—whoever that might be—would seek to apprise themself of any issue with the
property and preserve any heirs’ interests. As the Second Circuit has recognized, “if the
mail contains a notice that the government is taking some action against property of the
decedent, it is reasonable to assume that the administrator will take steps to preserve the
property,” and thus a taxing authority “[is] entitled to expect that those appointed to
administer estates that include real property would place something on the land record to
put the world on notice of the owner’s death and would also obtain mail addressed to their
decedent” (Bender v City of Rochester, 765 F2d 7, 12 [2d Cir 1985]). Moreover, by calling
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and visiting the restaurant in person during its hours of operation, the Treasurer went to a
presumably readily available source for information about persons with an interest in the
property at a time when a manager or the owner would likely be present.
Second, plaintiff, who was represented by counsel before defendants sought a
default judgment, failed to avail herself of recourse under RPTL article 11. Plaintiff was
aware before the last day to redeem that there was a potential outstanding tax on the
property, given the conflicting information from the County Treasurer and Town office
employees, and yet she did not take actions to ensure that the Treasurer was aware of her
status, nor did she attempt to pay the tax to avoid foreclosure. Section 1126 (1) provides
that “[a]ny mortgagee, lienor, lessee or other person having a legally protected interest in
real property who wishes to receive copies of the notices required by this article may file
with the enforcing officer a declaration of interest,” which “shall include the name and
mailing address of the person submitting such declaration, a description of the parcel or
parcels in which such person claims an interest, and a description of the nature of such
interest.” Even though decedent’s will named plaintiff as executor of his estate and
inheritor of the property, plaintiff did not file such a declaration. Nor did she seek to vacate
the default judgment, even though RPTL 1131 provides up to one month after entry of
judgment to reopen a default. Instead, she sought extra-statutory relief from the County by
requesting to pay the taxes after the redemption deadline.
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C.
Plaintiff argues that the Treasurer could have done more to attempt to effect service
on her, in particular, by posting the notice and petition on the restaurant’s door or another
public-facing location, mailing additional copies to plaintiff, or leaving copies during his
personal visit to the restaurant. None of those specific actions were required as a matter of
due process. Due process requires only that attempts to provide notice be reasonably
calculated to inform an interested party of pending action against the property (see
Mennonite Bd. of Missions, 462 US at 795, quoting Mullane, 339 US at 314; Matter of
McCann, 71 NY2d at 173-176). “The key word is ‘reasonably,’ which balances the
interests of the State against the rights of the parties” (Kennedy, 110 NY2d at 9). Posting
the notice and petition on the door or hand-delivering additional copies to the restaurant
would have provided no greater certainty of notice since the certified and first class
mailings were not returned and an employee signed for them (see Jones, 547 US at 235;
Mullane, 339 US at 314; Mac Naughton v Warren County, 20 NY3d 252, 257 [2012]; see
also RPTL 1125 [1] [b] [i]). Likewise, mailing additional copies to plaintiff would not have
been reasonably calculated to provide service to a known interested party in the
circumstances presented here. Defendants did not know whether plaintiff was a person with
an ownership interest in the property since she did not probate the will until after the default
judgment was issued. Finally, when the Treasurer visited the restaurant to ascertain the
identity of the property’s new owner, he identified himself and made clear to plaintiff’s
employees that the matter was important. Despite the Treasurer’s efforts, plaintiff did not
immediately return his calls.
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We reject plaintiff’s additional argument that a taxing authority should seek
appointment of an administrator where the taxpayer is deceased, as that would impose an
undue burden on municipalities; extend the time of proceedings, where the taxes have
usually been outstanding for at least two years; and disincentivize executors or other
interested parties from timely disposing of the estate and preserving the property. Here,
defendants struck an appropriate balance between the government’s interest in collecting
the delinquent tax and the interests of persons connected to the property in receiving notice
when it publicized and mailed the notice and contacted the restaurant several times.
In sum, under the circumstances presented here, defendants made an adequate
attempt at service, satisfying due process requirements.
IV.
Plaintiff’s federal statutory claims under sections 1983 and 1988 were properly
dismissed. To establish a policy or custom, plaintiff was required to show “an official
policy or custom of the [County] government itself [that] caused the [Treasurer or his
employees] to violate her constitutional rights” (De Lourdes Torres v Jones, 26 NY3d 742,
768 [2016]). “Under Monell v New York City Dept. of Social Servs. (436 US 658 [1978])
and its progeny, ‘official municipal policy includes the decisions of a government’s
lawmakers, the acts of its policymaking officials, and practices so persistent and
widespread as to practically have the force of law’ ” (id. [alterations omitted], quoting
Connick v Thompson, 563 US 51, 61 [2011]).
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As Supreme Court held, even assuming that plaintiff made out a case that defendants
denied her due process, the record fails to establish an official policy or custom that caused
a violation of her constitutional rights. Plaintiff did not provide evidence that defendants
routinely failed to notify estate administrators or parties who informed defendants of their
interests or an owner’s death. Indeed, as discussed, once defendants learned of decedent’s
death, the Treasurer took steps to identify and provide notice to parties with a legal interest
in the property that would be affected by the foreclosure and redemption deadline by
personally contacting the restaurant to identify an owner or manager. Thus, plaintiff failed
to carry her burden since nothing in the record establishes an official policy or a widespread
custom violative of due process.
V.
A tax foreclosure proceeding is an action against the real property. In such a
proceeding, the taxing authority has a statutory and constitutional obligation to attempt to
provide adequate notice to owners and persons with an interest in the property who may be
affected by a foreclosure action or the redemption deadline. If the authority learns of the
death of an owner, the authority must determine whether, in the unique circumstances of
each case, due process requires additional reasonable efforts to identify interested parties
and, if so, attempt to provide those interested parties with notice of the pending foreclosure.
Courts should assess those efforts based on the totality of the authority’s actions and the
status and conduct of the potential interested party. Defendants’ efforts here were
sufficient.
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Accordingly, the order of the Appellate Division should be affirmed, with costs.
Order affirmed, with costs. Opinion by Judge Rivera. Acting Chief Judge Cannataro and
Judges Garcia, Wilson, Singas and Troutman concur.
Decided February 14, 2023
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