author: Pigott, J.

text:
    [915 NE2d 608, 886 NYS2d 663]
    Bloomingdales, Inc., Respondent, v New York City Transit Authority, Appellant. New York City Transit Authority, Third-Party Plaintiff-Appellant, v M-Track Enterprises, Inc., Third-Party Defendant-Appellant. M-Track Enterprises, Inc., Second Third-Party Plaintiff-Appellant, v Judlau Contracting, Inc., Second Third-Party Defendant-Appellant, et al., Second Third-Party Defendant. Judlau Contracting, Inc., Third Third-Party Plaintiff-Appellant, v Janus Industries, Inc., Third Third-Party Defendant-Appellant.
    Argued May 6, 2009;
    decided June 11, 2009

      POINTS OF COUNSEL

      Fabiani Cohen & Hall, LLP, New York City (Lisa A. Sokoloff of counsel), for appellant.
    I. New York City Transit Authority’s conduit did not constitute a continuing trespass because it did not obstruct plaintiffs use of its easement. (Copart Indus, v Consolidated Edison Co. of N.Y., 41 NY2d 564; Kaplan v Incorporated Vil. of Lynbrook, 12 AD3d 410; Zimmerman v Carmack, 292 AD2d 601; Bogan v Town of Mt. Pleasant, 278 AD2d 264; Cranesville Block Co. v Niagara Mohawk Power Corp., 175 AD2d 444; Oliphant v McCarthy, 208 AD2d 1079; Wilson v Palmer, 229 AD2d 647; Utrecht v 142 E. 49th St. Owners Corp., 29 AD3d 363; Curwin v Verizon Communications [LEC], 35 AD3d 645; Mangusi v Town of Mount Pleasant, 19 AD3d 656.) II. Plaintiffs claims for the costs of repair of its drainpipe are time-barred. (Klein v City of Yonkers, 53 NY2d 1011; Nebbia v County of Monroe, 92 AD2d 724, 59 NY2d 603; Matter of Witt v

      Town of Amherst, 17 AD3d 1030; Porcaro v Town of Beekman, 15 AD3d 377; Scarzfava v City of Newburgh, 255 AD2d 436; Stefanis v Town of Middletown, 56 AD3d 980; Stanton v Town of Southold, 266 AD2d 277.)

      Cerussi & Spring, PC., White Plains (Kevin P. Westerman and Deborah R. Brancato of counsel), for third-party defendant-appellant.
    I. The New York City Transit Authority’s conduit in the area of Bloomingdales, Inc.’s apparent easement is not a continuous trespass. (Copart Indus, v Consolidated Edison Co. of N.Y., 41 NY2d 564; Kaplan v Incorporated Vil. of Lynbrook, 12 AD3d 410; Krosky v Hatgipetros, 150 AD2d 344; 509 Sixth Ave. Corp. v New York City Tr. Auth., 15 NY2d 48; Cranesville Block Co. v Niagara Mohawk Power Corp., 175 AD2d 444; Bogan v Town of Mt. Pleasant, 278 AD2d 264, 97 NY2d 638; Oliphant v McCarthy, 208 AD2d 1079; Covington v Walker, 3 NY3d 287; Sears, Roebuck & Co. v Enco Assoc., 43 NY2d 389; Stanton v Town of Southold, 266 AD2d 277.) II. The New York City Transit Authority’s conduit in the area of Bloomingdales, Inc.’s easement did not create a substantial interference in the use and enjoyment of plaintiff’s land and does not qualify as a private nuisance. (Copart Indus, v Consolidated Edison Co. of N.Y., 41 NY2d 564.)

      Biedermann, Reif, Hoenig & Ruff, P.C., New York City (Peter H. Cooper and Peter Hoenig of counsel), for second third-party defendant-appellant and third third-party plaintiff-appellant.
    The majority of the Appellate Division erred in reinstating the trespass and nuisance claims. (Copart Indus, v Consolidated Edison Co. of N.Y., 41 NY2d 564; Congregation B’nai Jehuda v Hiyee Realty Corp., 35 AD3d 311; Ward v City of New York, 15 AD3d 392; 509 Sixth Ave. Corp. v New York City Tr. Auth., 15 NY2d 48.)

      Ahmuty, Demers & McManus, Albertson (Brendan T. Fitzpatrick of counsel), for third third-party defendant-appellant.
    Bloomingdales, Inc.’s trespass and nuisance claims were barred by the applicable statute of limitations, and Janus Industries, Inc. asks this Court to reverse and dismiss the complaint. (Suffolk County Water Auth. v J.D. Posillico, Inc., 267 AD2d 301; Cranesville Block Co. v Niagara Mohawk Power Corp., 175 AD2d 444; Nebbia v County of Monroe, 92 AD2d 724; Rochester Gas & Elec. Corp. v City of Rochester, 258 AD2d 945; 509 Sixth Ave. Corp. v New York City Tr. Auth., 15 NY2d 48; Klein v City of Yonkers, 53 NY2d 1011; Covington v Walker, 3 NY3d 287;
      Copart Indus, v Consolidated Edison Co. of N.Y., 41 NY2d 564; Domen Holding Co. v Aranovich, 1 NY3d 117; Nussbaum v Lacopo, 27 NY2d 311.)

      Lester Schwab Katz & Dwyer, LLP, New York City CHarry Steinberg and Steven B. Prystowsky of counsel), for respondent.
    I. The Appellate Division correctly found that defendants’ placing of a conduit across Bloomingdales, Inc.’s easement was both a trespass and a nuisance and was, therefore, not time-barred. (509 Sixth Ave. Corp. v New York City Tr. Auth., 15 NY2d 48; State of New York v CSRI Ltd. Partnership, 289 AD2d 394; Sutton Investing Corp. v City of Syracuse, 48 AD3d 1141; Beneke v Town of Santa Clara, 45 AD3d 1164; Town of Saranac v Town of Plattsburgh, 218 AD2d 866; Sova v Glasier, 192 AD2d 1069; Matter ofWehlau v Town of Cortlandt, 48 AD2d 901; Nebbia v County of Monroe, 92 AD2d 724; Klein v City of Yonkers, 53 NY2d 1011; Bogan v Town of Mt. Pleasant, 278 AD2d 264.) II. Appellants’ arguments lack merit because they ignore that the conduit was a permanent trespass upon Bloomingdales, Inc.’s easement. (509 Sixth Ave. Corp. v New York City Tr. Auth., 15 NY2d 48; Bogan v Town ofMt. Pleasant, 278 AD2d 264; Cranes-ville Block Co. v Niagara Mohawk Power Corp., 175 AD2d 444; Spier v Horowitz, 16 AD3d 400; Gerbig v Zumpano, 7 NY2d 327; Bertone Commissioning v City of New York, 27 AD3d 222; Matter of Ansong v City of New York, 308 AD2d 333; Miranda v New York City Tr. Auth., 262 AD2d 199; Oliphant v McCarthy, 208 AD2d 1079; Stefanis v Town of Middletown, 56 AD3d 980.)
   OPINION OF THE COURT

Pigott, J.

In September 1999, third-party defendant Janus Industries, Inc., as part of a project undertaken by defendant New York City Transit Authority, began excavation work between 59th Street and 60th Street on the west side of Third Avenue in Manhattan. In the course of the work, Janus cut a working drainpipe that ran down from plaintiff Bloomingdales, Inc.’s roof, believing it to be a “dead” water main. It then installed a conduit encased in concrete in its place. Sometime thereafter, Bloomingdales experienced flooding on the lower level of its store when it rained. In February 2002, Bloomingdales hired a contractor, who excavated the area of the drainpipe, determined that it had been cut and discovered the conduit. Bloomingdales alleges it was required to install a new drainpipe above the conduit costing in excess of $165,000.

After filing a notice of claim, Bloomingdales then commenced an action against the New York City Transit Authority, in January 2003, alleging causes of action for negligence, trespass and nuisance. Third- and fourth-party actions ensued involving various contractors and subcontractors on the project.

The Transit Authority and third-party defendants moved for summary judgment dismissing the complaint, invoking Public Authorities Law § 1212, General Municipal Law §§ 50-e and 50-i and CPLR 214, arguing that Bloomingdales’ claim was barred by the statute of limitations because the action was commenced more than one year and 90 days after the complained-of negligent act—the severing of the drainpipe.

Supreme Court concluded that the moving parties established their entitlement to summary judgment, finding that, pursuant to the controlling statutes, the statute of limitations was triggered when the drainage pipe was severed in September 1999 (13 Misc 3d 1202[A], 2006 NY Slip Op 51642[U]). Blooming-dales appealed.

The Appellate Division reversed and reinstated the trespass and nuisance causes of action (52 AD3d 120 [2008]). The majority held that the concrete conduit “physically interrupted [Bloomingdales’] storm drainpipe and interfered with [Bloomingdales’] easement and right of access to the sewer” {id. at 123-124). Thus, it held that this was a “continuing” tort resulting in successive causes of action and because the claims were not tied to the single negligent act of severing the drainpipe, the actions were timely commenced {id. at 124).

The Appellate Division certified the following question to this Court: “Was the order of this Court, which reversed the order of Supreme Court, properly made?” We now answer the question in the affirmative.

Public Authorities Law § 1212 (2) and General Municipal Law § 50-i both require that an action for damage to real property be commenced within one year and 90 days after the occurrence of the event upon which the claim is based, irrespective of when the action accrued (see Klein v City of Yonkers, 53 NY2d 1011, 1013 [1981]). The Transit Authority and third-party defendants argue that this is the correct time period upon which to measure all of Bloomingdales’ claims.

There is no dispute that if the happening of the event complained of by Bloomingdales was solely the severing of the drainpipe, all of the causes of action would be time-barred. However, another act occurred here—the placement of the conduit.

The essence of trespass to real property is injury to the right of possession, and such trespass may occur under the surface of the ground. A person need not have title to the property, but must simply have sufficient property rights to maintain an action for trespass (see 87 CJS, Trespass § 30). Although Bloomingdales did not have exclusive possession of the area of the drainpipe, it still had legal rights against trespass for an unlawful encroachment to its right-of-way. We have held that a trespass that constitutes an unlawful encroachment on a plaintiffs property will be considered a continuous trespass giving rise to successive causes of action (509 Sixth Ave. Corp. v New York City Tr. Auth., 15 NY2d 48 [1964]). Thus, for purposes of the statute of limitations, suits will only be time-barred by the expiration of such time as would create an easement by prescription or change of title by operation of law (id.).

Here, the presence of the concrete conduit interfered with Bloomingdales’ access to its drainpipe and ultimately the city sewer, and as a result, Bloomingdales was required to install a new pipe following a new path over the conduit. Notably, the actual damages sought by Bloomingdales did not arise from the mere severance of its drainpipe, but from the need to install the new drainpipe in a different location. Thus, because the conduit encroached on Bloomingdales’ right-of-way, we find that the Appellate Division correctly concluded that Bloomingdales has a viable cause of action sounding in trespass, for which the statute of limitations has not yet run.

For the same reasons, we find that there is a viable claim for private nuisance, which is, in this case, simply another way of characterizing the trespass claim. There was a continuous interference with Bloomingdales’ right to use and enjoy its property right, and as such the same statute of limitations as the trespass applies.

Accordingly, the order of the Appellate Division should be affirmed, with costs, and the certified question should be answered in the affirmative.

Judges Ciparick, Graffeo, Read, Smith and Jones concur; Chief Judge Lippman taking no part.

Order affirmed, etc.


source: Caselaw Access Project

author: Jones, J. Pigott, J. (dissenting in part).

license: Public Domain

text:
    [915 NE2d 611, 886 NYS2d 666]
    The People of the State of New York, Respondent, v Eric Bailey, Appellant.
    Argued May 6, 2009;
    decided June 11, 2009

      POINTS OF COUNSEL

      Bryan Cave LLP, New York City (John D. Kircher of counsel), and Office of the Appellate Defender (Richard M. Greenberg and Eunice C. Lee of counsel), for appellant.
    I. Mr. Bailey’s conviction for criminal possession of a forged instrument in the first degree should be reversed because the evidence, which established only possession, was legally insufficient to prove that he intended to defraud, deceive or injure another person through the use of a forged instrument. (People v Danielson, 9 NY3d 342; People v Washington, 8 NY3d 565; People v Conway, 6 NY3d 869; People v Castillo, 47 NY2d 270; People v Pena, 50 NY2d 400; People v Lewis, 275 NY 33; People v Vesprey, 183 AD2d 212; People v Stevens, 109 NY 159; People v Atkinson, 21 AD3d 145, 7 NY3d 765; People v Briggins, 50 NY2d 302.) II. Mr. Bailey’s pre-Miranda statement, made while he was in custody and in response to police comments, should have been suppressed as the result of an unlawful interrogation. (Brown v Illinois, 422 US 590; Berkemer v McCarty, 468 US 420; People v Anderson, 69 NY2d 651; Rhode Island v Innis, 446 US 291; People v Velasquez, 68 NY2d 533; People v Maerling, 46 NY2d 289, 64 NY2d 134; People v Ferro, 63 NY2d 316; People v Stoesser, 53 NY2d 648; People v Douglas, 124 AD2d 815, 133 AD2d 167.)

      Robert M. Morgenthau, District Attorney, New York City (Olivia Sohmer and Alan Gadlin of counsel), for respondent.
    I. Defendant’s statement was properly admitted, as it was not the product of interrogation or its functional equivalent. (Miranda v Arizona, 384 US 436; People v Ferro, 63 NY2d 316; Rhode Island v Innis, 446 US 291; People v Rivers, 56 NY2d 476; People v Davis, 32 AD3d 445; People v Lawrence, 25 AD3d 498; People v Atkins, 273 AD2d 12; People v McMickel, 251 AD2d 155; People v McConnell, 233 AD2d 867; People v Wilson, 210 AD2d 520.) II. The totality of the circumstances proved at trial provided legally sufficient evidence that defendant possessed the counterfeit bills with intent to defraud, deceive or injure another. (People v Santi, 3 NY3d 234; People v Cintron, 95 NY2d 329; People v Acosta, 80 NY2d 665; People v Tejeda, 73 NY2d 958; People v Kennedy, 47 NY2d 196; People v Montanez, 41 NY2d 53; People v Steinberg, 79 NY2d 673; People v Barnes, 50 NY2d 375; People v Castillo, 47 NY2d 270; People v Norman, 85 NY2d 609.)
   OPINION OF THE COURT

Jones, J.

The question before the Court is whether the evidence was legally sufficient to convict defendant of criminal possession of a forged instrument in the first degree. We hold that it was not.

Due to reports of increased thefts in Midtown Manhattan, a plainclothes team of officers, including Police Officer Murphy and Sergeant Fressle, was on the lookout for pickpockets. Defendant Eric Bailey caught their attention. The team observed him enter and leave eight fast food restaurants in the 34th Street area. In the various restaurants he entered, defendant walked around the dining area, looked around, but never looked at the menu or made a purchase. In one restaurant, he was observed attempting to take the purse of a female customer by sticking his hand through a partition which separated his seat from this customer. Apparently sensing his hand near her purse, the woman moved the purse and put it on her lap. Defendant was later observed in another restaurant where he sat, back-to-back, with another woman customer. In this encounter, the team observed him extend his arms around his chair in an attempt to reach her handbag. Later, they noticed that her coat pocket had been turned inside out. Following these observations, defendant was placed under arrest. At the precinct, defendant was searched by Sergeant Fressle and three counterfeit $10 bills were recovered from his pocket. When Sergeant Fressle recovered the bills he handed them to Officer Murphy who remarked that the bills were counterfeit. Defendant overheard the remark and reportedly said, “[y]ou got me for the counterfeit money, but I didn’t have my hand near the purse.” Defendant moved prior to trial to suppress the statement. Although defendant had not received Miranda warnings, the trial court denied the motion to suppress his statement on the ground that it was voluntary and not the result of interrogation or police conduct reasonably likely to elicit an incriminating response. The court found that the police officer’s remark to his fellow officer was “merely a interjection of the briefest sort occurring during arrest processing after Fressle found the ten-dollar bills during the search.”

After a jury trial, defendant was convicted of two counts of attempted grand larceny in the fourth degree and possession of a forged instrument in the first degree. Defendant moved to set aside the verdict on the forgery count, arguing that the evidence was insufficient to prove that he had the culpable mental state necessary to commit the crime. Under Penal Law § 170.30, “[a] person is guilty of criminal possession of a forged instrument in the first degree when, with knowledge that it is forged and with intent to defraud, deceive or injure another, he utters or possesses any forged instrument of a kind specified in section 170.15." In support of the motion, defendant argues that the evidence was insufficient to prove his “intent to defraud, deceive or injure another.”

In opposition, the People argue that defendant’s statement was proof of his knowledge that the bills were counterfeit and consequently evidence of his criminal intent. In finding the evidence legally sufficient, the trial court dismissed the motion and concluded, “[w]hy would Bailey, already embarked upon a brazen effort to commit theft, carry currency in his pocket that he knew to be bogus unless his plan was to pass it off to an unsuspecting storekeeper, newsvendor, or fast food worker?”

The Appellate Division affirmed defendant’s conviction on all three counts (50 AD3d 343 [2008]). Relying on People v Daniel-son (9 NY3d 342 [2007]), the court rejected defendant’s challenges to the sufficiency and weight of the evidence supporting the “intent” element of Penal Law § 170.30 of his forged instrument conviction. The court reasoned that the totality of the evidence, including defendant’s statement to the police evincing a consciousness of guilt, and the lack of any reason for the defendant to be carrying counterfeit bills in a shopping district other than to pass them, supported the inference that he possessed the bills with the requisite intent. A Judge of this Court granted defendant leave to appeal (11 NY3d 785 [2008]) and we now modify by dismissing the possession of a forged instrument count.

“A verdict is legally sufficient when, viewing the facts in a light most favorable to the People, there is a valid line of reasoning and permissible inferences from which a rational jury could have found the elements of the crime proved beyond a reasonable doubt” (Danielson, 9 NY3d at 349 [citations and internal quotation marks omitted]). A sufficiency inquiry requires a court “to marshal competent facts most favorable to the People and determine whether, as a matter of law, a jury could logically conclude that the People sustained [their] burden of proof’ {id. at 349). In viewing the facts in this case we hold that the proof was legally insufficient as to intent.

The People argue that it was reasonable for the jury to infer defendant’s intent to defraud, deceive or injure another with counterfeit bills because of his knowledge that he possessed counterfeit bills and his attempt to steal property in a commercial district. The People rely on People v Bracey (41 NY2d 296 [1977]) and People v Dallas (46 AD3d 489 [1st Dept 2007]) for support. However, the People’s reliance on these cases is misplaced.

In Bracey, two defendants, after exiting a car which had its license plate removed, entered a store armed with a gun concealed in a bag. They made a token purchase in the store and looked around. Once they left the store, they split up and exchanged the bag with the gun. One defendant drove the car around the block and parked it down the street from the store. The second defendant entered the store with the gun drawn. In determining that defendants were properly convicted at their jury trial, this Court noted: “Under all the circumstances the jury could well find that the defendants, who acted together throughout, had reconnoitered the store and returned to rob it. In fact the only thing that could have made this intention plainer was an actual demand for money” {Bracey, 41 NY2d at 302). In Dallas, the defendant possessed 12 forged documents including multiple documents in the name of one individual which he admitted that he intended to sell to other persons.

Clearly, Bracey and Dallas are distinguishable from the case at bar. In those cases, the criminal intent is specific to the very crime they committed. Here, the only reasonable inference to be drawn by the juiy is that defendant’s conduct was common to larceny, a crime completely unrelated to possession of a forged instrument.

There is no dispute that defendant’s inculpatory statement proved that he knew the bills were counterfeit. However, knowledge alone is not sufficient to hold defendant criminally liable for possessing a forged instrument. Knowledge and intent are two separate elements that must each be proven beyond a reasonable doubt by the People. Simply put, drawing the inference of defendant’s intent from his knowledge that the bills were counterfeit improperly shifts the burden of proof with respect to intent from the People to the defendant. Stated another way, by ruling that the evidence was sufficient to sustain defendant’s conviction of possession of a forged instrument, the lower courts have effectively stripped the element of intent from the statute and criminalized knowing possession.

In addition, we reject the People’s argument that the requisite intent for possessing a forged instrument can be drawn from defendant’s presence in a shopping district, his possession of counterfeit bills, and his larcenous intent. Both the trial court and the Appellate Division questioned why the defendant was in a shopping area with the bills. They concluded defendant lacked a reason, other than to pass them. However, the intent to commit a crime must be specific to the crime charged (see e.g. People v Morales, 130 AD2d 366 [1st Dept 1987] [where proof of the intent to injure a victim, which is sufficient to establish assault, may not be relied upon to establish the culpability requirements of robbery]).

Furthermore, when the Legislature intends for there to be a presumption or inference of intent by mere possession, it so specifies in the statute. In Penal Law § 170.27, which relates to forged credit and debit cards, the statute provides that a person who possesses two or more such cards is “presumed to possess the same with knowledge that they are forged and with the intent to defraud, deceive or injure another.” Similar statutory presumptions of intent are found in other Penal Law statutes (see e.g. Penal Law § 158.00 [2] [a] [relates to welfare fraud—“A person who possesses five or more public benefit cards in a name or names other than his or her own is presumed to possess the same with intent to defraud, deceive or injure another”]; Penal Law § 235.10 [2] [relates to promotion of obscene articles—“A person who possesses six or more identical or similar obscene articles is presumed to possess them with intent to promote the same”]). Unlike these statutes, there is no statutory presumption regarding counterfeit bills. The Legislature could have easily created such a presumption. Instead, it required the People to prove not only that defendant knew the bills were counterfeit but that he intended to use them to defraud, deceive or injure another.

Defendant’s remaining argument regarding the admission of the statement lacks merit.

Accordingly, the order of the Appellate Division should be modified by dismissing the count of the indictment charging criminal possession of a forged instrument in the first degree and remitting to Supreme Court for resentencing and, as so modified, affirmed.

Pigott, J. (dissenting in part).

Although the majority has set forth the proper standard of review to be applied in this case, I nevertheless respectfully dissent because I believe both the trial court and the Appellate Division correctly applied that standard and reached the correct decision.

In my view, the majority’s analysis is clouded by the fact that defendant was charged with the two purse-snatching misdemeanors in addition to felony possession of a forged instrument. The majority seems to conclude that because defendant was up to a different larcenous escapade at the time of his arrest, the sufficiency of the evidence with respect to the forgery is weakened or lacking. I disagree. Indeed, had the People elected not to pursue the two attempted purse-snatching charges, the intent element of the possession of a forged instrument charge becomes clear.

The People were required to prove that defendant knowingly possessed the counterfeit bills with the “intent to defraud, deceive or injure another” (Penal Law § 170.30). As the majority notes, the defendant’s intent must be specific to the crime (see majority op at 72), but the specific intent required for possession of a forged instrument is a state of mind that may be inferred from defendant’s actions and the surrounding circumstances (see e.g. People v Barnes, 50 NY2d 375, 381 [1980]). The intent to defraud or deceive need not be targeted to any specific person; a general intent to defraud suffices (see People v Dallas, 46 AD3d 489, 491 [1st Dept 2007]). Nor does the statute require the People to prove that defendant attempted to use the counterfeit bills. They need only show that defendant possessed the counterfeit bills with the requisite mental state.

Here, the relevant evidence shows that defendant was going from one fast food restaurant to another in a busy shopping district. He was carrying the counterfeit bills in his pants pocket—where one would ordinarily carry spending money. All the while, he was engaging in larcenous behavior. Upon his arrest, he admitted “[y]ou got me for the counterfeit money,” and then stated “but I didn’t have my hand near the purse.” The majority, as well as the defendant, concede that this statement proves that defendant knew the bills were counterfeit. But it does more—it shows that defendant had a guilty mind with respect to his possession of the bills. Under these circumstances, it was reasonable for the jury to conclude that there was no other logical explanation for defendant’s possession of the bills, except to pass them when the opportunity arose.

Accordingly, viewing the evidence in the light most favorable to the People, I believe the evidence was legally sufficient to permit the charge to be submitted to the jury and I would therefore affirm the order of the Appellate Division.

Chief Judge Lippman and Judges Ciparick, Graffeo and Read concur with Judge Jones; Judge Pigott dissents in part and votes to affirm in a separate opinion in which Judge Smith concurs.

Order modified, etc.

      . Penal Law § 170.15 provides in relevant part that
      “A person is guilty of forgery in the first degree when, with intent to defraud, deceive or injure another, he falsely makes, completes or alters a written instrument which is or purports to be, or which is calculated to become or to represent if completed: “1. Part of an issue of money . . . .”

      . In fact, it can be argued that the evidence proves the lack of intent to pass counterfeit bills. The police observed defendant for at least IV2 hours, in which he never made a purchase, looked at a menu, stood in line nor did he approach a counter. If anything, we can infer that his sole intent was to steal real currency from unsuspecting customers. The evidence provided by the People only gives rise to suspicion and conjecture that defendant intended to pass or utter the counterfeit bills (see People v Lewis, 275 NY 33 [1937]).


author: Pigott, J. Smith, J. (dissenting).

text:
    [913 NE2d 387, 885 NYS2d 1]
    In the Matter of Faith Ann Peaslee and Others. George M. Reiber, Appellant, v GMAC, LLC, et al., Respondents.
    Argued June 2, 2009;
    decided June 24, 2009

      POINTS OF COUNSEL

      Law Office of George M. Reiber, Rochester (George M. Reiber of counsel), for appellant, and George M. Reiber, appellant pro se.
    I. Negative equity is not part of the obligation incurred to acquire collateral under UCC 9-103 (a) (2). II. Negative equity represents an obligation which existed before the collateral was obtained. It is a separate debt which, whether secured or unsecured under the prior transaction, is certainly an unsecured debt from the prior transaction which is being included in the current transaction. It is not a similar obligation that a seller would incur. (In re Graupner, 537 F3d 1295.) III. If the District Court’s decision is allowed to stand, then there is no limit to what antecedent debt may be included for payment under its expanded definition of purchase-money security interest. IV Value must be used to acquire the collateral which is the subject of the new lien. The check that is written to the lienholder on the trade-in vehicle is not value in fact so used to purchase the subject collateral. V The Motor Vehicle Retail Instalment Sales Act cannot be used to interpret the Uniform Commercial Code. (Matter of Dutchess County Dept, of Social Servs. v Day, 96 NY2d 149; Becker v Huss Co., 43 NY2d 527; H. Kauffman & Sons Saddlery Co. v Miller, 298 NY 38; Bluebird Partners v First Fid. Bank, 97 NY2d 456; Matter of Plato’s Cave Corp. v State Liq. Auth., 68 NY2d 791; Meegan v Progressive Ins. Co., 43 AD3d 182.)

      Stinson Morrison Hecker LLP (Barkley Clark and Katherine M. Sutcliffe Becker, of the District of Columbia bar, admitted pro hac vice of counsel), and Peter N. Cubita, New York City, for GMAC LLC and another, respondents.
    I. The Uniform Commercial Code definition of a “purchase-money obligation” includes the net negative equity obligation financed under a motor vehicle retail instalment sale contract. (Fidelity & Deposit Co. of Md. v Chemical Bank N.Y. Trust Co., 62 Misc 2d 509, 65 Misc 2d 619; In re Yale Express Sys., Inc., 370 F2d 433; United States v Ron Pair Enterprises, Inc., 489 US 235; In re Graupner, 537 F3d 1295; C. Bean Lbr. Transp., Inc. v United States of Am., 68 F Supp 2d 1055; In re Freeman, 956 F2d 252; General Elec. Capital Commercial Auto. Fin. v Spartan Motors, 246 AD2d 41; National Cash Register Co. v Mishkin’s 125th St., 65 Misc 2d 386; General Motors Acceptance Corp. v Stotsky, 60 Misc 2d 451.) II. The Motor Vehicle Retail Instalment Sales Act is not principally a financial disclosure statute. (In re Graupner, 537 F3d 1295; Matter of Plato’s Cave Corp. v State Liq. Auth., 68 NY2d 791.) III. Pandora’s box is firmly locked by the Uniform Commercial Code “close nexus” test and the Motor Vehicle Retail Instalment Sales Act restriction on amounts that may be financed in connection with motor vehicle retail instalment sales. IV The Federal Truth in Lending Act precludes “manipulation” by regulating the disclosure of negative equity financed under a retail instalment sale contract. V If the Court concludes that the net negative equity obligation is not a “purchase-money obligation,” the dual status rule should be applied to the purchase-money portion of the obligation. (Pristas v Landaus of Plymouth, Inc., 742 F2d 797; National Cash Register Co. v Mishkin’s 125th St, 65 Misc 2d 386; In re Freeman, 956 F2d 252.) VI. The trustee’s remaining arguments, which are unsupportable and/or fanciful, cannot withstand minimal scrutiny. (Bucyrus-Erie Co. v Casey, 61 F2d 473.)

      Law Offices of David B. Shaev, New York City (David B. Shaev of counsel), for Ingrid M. Hillinger and others, amici curiae.
    I. The price of collateral is relevant only when determining a debtor’s purchase-money obligation to a seller: value given to enable the acquisition of rights in collateral applies when determining a debtor’s purchase-money obligation to a lender. II. Negative equity is antecedent debt. III. UCC 9-103’s “purchase-money obligation” does not include antecedent debt and, therefore, does not include negative equity. IV According to the case law, “purchase-money obligation” does not include antecedent debt. (In re Harper, 516 F3d 1180.) V UCC 9-103, Comment 3’s reference to obligations for expenses incurred in acquiring rights in the collateral including sales taxes, duties, finance charges “and other similar obligations” does not include obligations incurred to satisfy antecedent debt. (Bucyrus-Erie Co. v Casey, 61 F2d 473; In re Halferty, 136 F2d 640.) VI. The pre-Uniform Commercial Code purchase-money concept did not include antecedent debt. (United States v New Orleans R. Co., 12 Wall [79 US] 362; Venner v Farmers’ Loan & Trust Co. of N.Y., 90 F 348; Westinghouse Elec. & Mfg. Co. v Brooklyn R.T. Co., 276 F 152; Harris v Youngstown Bridge Co., 90 F 322.) VII. The doctrine of in pari materia does not require reading the New York Motor Vehicle Retail Instalment Sales Act and the Uniform Commercial Code together. (Brooks v Avery, 4 NY 225; Morris Plan Indus. Bank of Schenectady v Faulds, 269 App Div 238; Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., 66 NY2d 298; 81 Franklin Co. v Ginaccini, 149 Misc 2d 124.) VIII. Interpreting “purchase-money obligation” to include antecedent debt would alter its well-established meaning and upset carefully calibrated federal and state loss allocation principles based on that well-established meaning.
   OPINION OF THE COURT

Pigott, J.

The United States Court of Appeals for the Second Circuit, by certified question, asks us to decide whether “the portion of an automobile retail instalment sale attributable to a trade-in vehicle’s ‘negative equity’ [is] a part of the ‘purchase-money obligation’ arising from the purchase of a new car, as defined under New York’s U.C.C.?” (547 F3d 177, 186 [2d Cir 2008].) We find that it is.

I.

On August 28, 2004, Faith Ann Peaslee entered into a retail instalment contract for the purchase of a 2004 Pontiac Grand Am. As part of the transaction, Peaslee traded in her vehicle, which had a negative trade-in value, or negative equity, of $5,980. That amount was rolled into the financing of her new car along with other charges, resulting in financing totaling $23,180. The lien against the trade-in was paid off by the dealer, and the dealer’s security interest in the new vehicle was assigned to GMAC, LLC.

Nearly two years after purchasing her new vehicle, Peaslee filed for chapter 13 bankruptcy and a trustee was appointed to handle the estate. As part of her bankruptcy plan, Peaslee proposed that she retain possession of the vehicle and that, pursuant to United States Bankruptcy Code (11 USC) § 506 (a) (l), GMAC’s secured claim would be reduced to $10,950, representing the alleged retail value of the vehicle. Under Peas-lee’s proposal, the remaining amount owed to GMAC, $6,954.95, would be treated as an unsecured claim.

GMAC objected to this characterization of its claim and argued that, pursuant to the “hanging paragraph” set forth in Bankruptcy Code § 1325 (a), it was entitled to have the entire $17,904.95 treated as a secured claim. The “hanging paragraph,” which was enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, states, in pertinent part, that

“[f]or purposes of paragraph (5), [Bankruptcy Code] section 506 shall not apply to a claim described in that paragraph if the creditor has a purchase money security interest securing the debt that is the subject of the claim, the debt was incurred within the 910-day [szc] preceding the date of the filing of the petition, and the collateral for that debt consists of a motor vehicle (as defined in section 30102 of title 49) acquired for the personal use of the debtor” (emphasis supplied).

The trustee moved to have the Bankruptcy Court determine that GMAC had a secured claim of $10,950 and only an unsecured claim for the balance. The Bankruptcy Court did just that, and held that the term “purchase money security interest” (PMSI), as set forth in New York’s Uniform Commercial Code, did not include negative equity (358 BR 545, 558 [WD NY 2006]). The United States District Court for the Western District of New York reached the opposite conclusion (373 BR 252, 258-261 [WD NY 2007]). The Second Circuit, noting that Congress failed to provide a definition of purchase-money security interest either in the hanging paragraph or elsewhere, concluded “that state law governs the definition of PMSI in the hanging paragraph” and certified to us the question of whether the New York Uniform Commercial Code considers that portion of a retail instalment sale attributable to the negative equity of a trade-in vehicle to be part of the purchase-money obligation arising from the sale of a new car (547 F3d 177, 184, 186 [2008]).

For the reasons that follow, we answer the question in the affirmative.

II.

“A security interest in goods is a purchase-money security interest ... to the extent that the goods are purchase-money collateral with respect to that security interest” (UCC 9-103 [b] [1]). Purchase-money collateral is defined as “goods or software that secures a purchase-money obligation incurred with respect to that collateral” (UCC 9-103 [a] [1]). A purchase-money obligation is “an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used” (UCC 9-103 [a] [2] [emphasis supplied]). The UCC therefore establishes two ways that a purchase-money obligation may arise: (1) where the obligor—the debtor—incurs an obligation as all or part of the “price” of the collateral, or (2) where “value” is given to enable the debtor to acquire the collateral. We conclude that the “negative equity” here fits within either definition.

III.

Addressing “price” first, although that term is not defined by New York’s UCC, the expansive examples given in an official comment concerning what items constitute the “price of the collateral” indicate that the term “price” should be afforded a broad interpretation. Specifically, with respect to a purchase-money obligation,

‘price’ of collateral or the ‘value given to enable’ includes obligations for expenses incurred in connection with acquiring rights in the collateral, sales taxes, duties, finance charges, interest, freight charges, costs of storage in transit, demurrage, administrative charges, expenses of collection and enforcement, attorney’s fees, and other similar obligations” (UCC 9-103, Comment 3 [emphasis supplied]).

The list of examples in Comment 3 that clarify “price” is representative, not exhaustive, and cannot be read to limit those “other similar obligations” to the 10 items preceding that term, all of which are clearly either transaction costs and/or components of price. Indeed, the phrase “and other similar obligations” intimates that “price” under New York’s UCC is broad enough to encompass negative equity financing. For instance, just as “finance charges” and “interest” constitute obligations that are paid over and above the vehicle’s actual cost (such charges being incurred as part of the overall financing of the vehicle), negative equity is likewise part of the overall price of a new vehicle. Moreover, negative equity constitutes an obligation that fits comfortably within the “other similar obligations” language in Comment 3, particularly in regard to automobile sales because the negative equity from the trade-in is often “rolled in” as part of the overall price of the newer vehicle to facilitate the transaction. It follows, then, that under New York’s UCC negative equity constitutes “an obligation . . . incurred as all or part of the price of the collateral.”

This broad interpretation of the term “price” to include negative equity furthers New York’s policy that the UCC “be liberally construed and applied to promote its underlying purposes and policies,” including “the continued expansion of commercial practices through custom, usage and agreement of the parties” (UCC 1-102 [1], [2] [b]). After all, the parties to the instant transaction agreed that the negative equity from the older vehicle would be “rolled-in” as part of the purchase price of the newer vehicle, not an uncommon practice in the realm of automobile sales (see In re Graupner, 537 F3d 1295, 1303 [11th Cir 2008]), thereby furthering the policy of facilitating commercial transactions. Indeed, to exclude negative equity as part of the “price” would serve to hinder commercial practices rather than facilitate them.

Additionally, and not inconsequentially, New York has defined “price” in its Motor Vehicle Retail Instalment Sales Act (MVRISA) to include negative equity {see Personal Property Law § 301 [6]). Under the MVRISA, “cash sale price” can “include the unpaid balance of any amount financed under an outstanding motor vehicle loan agreement or motor vehicle retail instalment contract or the unpaid portion of the early termination obligation under an outstanding motor vehicle retail lease agreement” {id.).

IV

Turning to “value given,” we likewise disagree with the trustee’s contention that negative equity is not related to the acquisition of collateral because it is merely a payoff of an antecedent debt such that it cannot be deemed “value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used” (UCC 9-103 [a] [2]).

By paying off the outstanding debt on the trade-in, a lender is giving “value” to the debtor in order to allow, or “enable,” the debtor to purchase, or “acquire rights in,” the vehicle (see In re Price, 562 F3d 618, 625 [4th Cir 2009]). When a lender finances the purchase of a new vehicle and a portion of that financing pays off the negative equity owed on the trade-in (i.e., “the value is in fact so used” [UCC 9-103 (a) (2)]), that loan constitutes a purchase-money obligation of the buyer, the purchased vehicle constitutes purchase-money collateral, and the security interest obtained by the lender is a PMSI.

V

Finally, Comment 3 instructs that the existence of a PMSI also “requires a close nexus between the acquisition of collateral and the secured obligation” (UCC 9-103, Comment 3); and that requirement has plainly been met here. Without a payoff of the trade-in debt, the buyer will generally not be able to consummate the purchase of the newer car, and the financing of the negative equity is thus integral to the completion of the sale (see generally Graupner, 537 F3d at 1302).

Here, Peaslee’s debt to GMAC was incurred at the time of the trade-in, under the same retail instalment contract and for the same purpose of purchasing the Grand Am. Simply put, the financing of the negative equity was “inextricably linked to the financing of the new car” (In re Petrocci, 370 BR 489, 499 [ND NY 2007]), thereby satisfying the “close nexus” requirement under the New York UCC.

Accordingly, the certified question should be answered in the affirmative.

Smith, J. (dissenting).

The majority interprets the term “purchase-money security interest” (PMSI) in the Uniform Commercial Code (UCC) without considering what a PMSI is or why it exists. When the nature and purpose of a PMSI are understood, I think it becomes apparent that the majority’s interpretation is wrong.

I

Before turning to the nature and function of a PMSI, I will discuss the language of UCC 9-103 and of Comment 3 accompanying it—considering this language, as the majority does, essentially in a vacuum. Even from that viewpoint, I do not find the majority’s interpretation convincing.

As the majority explains, the UCC definitions of a PMSI, “purchase-money collateral” and “purchase-money obligation” interlock (see majority op at 80). The critical definition is of “purchase-money obligation”: “an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used” (UCC 9-103 [a] [2]). The question the Second Circuit has asked us is, in substance, whether “price” or the more cumbersome term “value given to enable the debtor to acquire” includes the obligation of an automobile purchaser to a seller, or money borrowed by such a purchaser from a lender, when that seller or lender, in connection with the purchase of a new car, refinances the purchaser’s “negative equity”—i.e., the amount the purchaser owes on her old car in excess of the old car’s value. “Price” and “value given to enable” are not defined in the statute but are explained in Comment 3 to UCC 9-103:

“As used in subsection (a) (2), the definition of ‘purchase-money obligation,’ the ‘price’ of collateral or the ‘value given to enable’ includes obligations for expenses incurred in connection with acquiring rights in the collateral, sales taxes, duties, finance charges, interest, freight charges, costs of storage in transit, demurrage, administrative charges, expenses of collection and enforcement, attorney’s fees, and other similar obligations.”

Simply from reading this language, I find it a stretch to say that an obligation for refinanced negative equity is among the “expenses incurred in connection with acquiring” a new car. A refinanced loan is not, in accounting terms, properly speaking, an “expense” at all; it is the substitution of a new liability for an old one. The majority finds that negative refinancing is included in the catchall phrase “other similar obligations.” But the items listed in the comment are essentially transaction costs (see In re Mitchell, 379 BR 131,137 n 8 [Bankr, MD Tenn 2007]), and refinanced negative equity is not “similar” to them; it will typically be larger, and more readily separable from the purchase transaction itself, than such things as sales taxes, duties and finance charges.

Still, I am willing to concede that the terms “price” and “value given” in UCC 9-103 (a) (2), as explained by Comment 3, are ambiguous if read without reference to the purpose for which that statute was enacted. When that purpose is considered, however, the ambiguity disappears.

II

The reason why a PMSI is defined in article 9 of the UCC is that certain sections of that article “provide special priority rules for purchase-money security interests” (UCC 9-103, Comment 2). Most important, under UCC 9-324 (a), a PMSI has, with certain exceptions, “priority over a conflicting security interest in the same goods.” This means that someone who sells goods on credit, or lends money to finance their purchase, can get a lien on the goods that is superior to the lien of a previous lender, even if that lender has a perfected security interest in all of the buyer’s property, whenever acquired. The general idea is that someone who provides the credit that makes possible the purchase of goods should have the first claim to them. As the Bankruptcy Appellate Panel of the Ninth Circuit has explained:

“Holders of PMSIs in goods or software can obtain priority over a prior-filed lien; this is an exception to the general ‘first in time is first in priority’ structure used by the UCC. UCC § 9-324. This exception has generally been justified on equitable notions: it protects vendors of goods from after-acquired property clauses generally used by banks and financiers. See [2 GRANT] GILMORE [Security Interests in Personal Property § 28.1], at 779 (‘What might be called the “Don’t be a Pig” school of advice to Article 9 lenders has a fashionable currency and may be expected to have some influence on lending patterns.’); James J. White, Reforming Article 9 in Light of Old Ignorance and the New Filing Rules, 79 MINN. L.REV. 529, 562 (1995) (‘[T]he most persuasive claim for purchase money priority is the fairness argument—that reasonable businesspeople expect to have priority when they sell goods from their own stock.’)” (In re Penrod, 392 BR 835, 845-846 [BAP 9th Cir 2008]; see also Gilmore, The Purchase Money Priority, 76 Harv L Rev 1333 [1963].)

Thus, the Second Circuit’s question—whether a “purchase-money obligation” (i.e., an obligation secured by a PMSI) includes “the portion of an automobile retail instalment sale attributable to a trade-in vehicle’s ‘negative equity’ ”—may be rephrased in this way: “Is a lien resulting from the refinancing of a trade-in vehicle’s ‘negative equity’ entitled to the special priority given PMSIs over other liens by UCC article 9?” When the question is asked that way, I do not see how the answer can be yes. The whole idea of a PMSI is that a seller or lender who finances the purchase of goods has a unique interest, superior to the interest of other lenders, in the goods thus purchased. I can imagine no reason to enlarge the priority lien of that seller or lender because, as part of the same transaction, it refinances the debt remaining from another purchase that took place years ago. As an Appellate Division case interpreting UCC article 9 recognizes, “a loan procured to satisfy a pre-existing debt” is inconsistent with the basic idea of a PMSI, which secures “an advance ‘enabling] the debtor to acquire rights in . . . the . . . collateral’ (UCC 9-107 [b])” (General Elec. Capital Commercial Automotive Fin. v Spartan Motors, 246 AD2d 41, 50 [2d Dept 1998] [brackets and ellipses in original]).

Seen in this light, the question the Second Circuit has asked us must be answered no.

Ill

It may well be that the answer the majority gives to the Second Circuit’s question, though wrong as a matter of state law, will produce a just result in this case—or, at least, a result more consistent with Congress’s purpose in enacting the “hanging paragraph” as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). The purpose of the hanging paragraph, as I understand it, is to protect sellers and other financiers of automobile purchases against buyers who go bankrupt shortly after buying cars, and then use the “cram down” provision of the Bankruptcy Code to keep the cars without paying all of the debt they incurred to purchase them. This abuse may well extend to transactions that include “negative equity,” and I can understand the rationale for adopting an interpretation of the hanging paragraph that reaches such transactions.

But we have not been asked to interpret, and in this federal case have no power to interpret, the hanging paragraph or any other provision of federal law. The Second Circuit has already decided, as have many other federal courts, that the words “purchase money security interest” in the hanging paragraph must be interpreted according to state law—in other words, according to article 9 of the UCC, which was written long before BAPCPA or the hanging paragraph existed. I believe the majority may have overlooked this point, and adopted an interpretation better suited to the purposes of BAPCPA than to the purposes of the UCC.

If my surmise is correct, we are not the first court to suffer this confusion. In In re Graupner (537 F3d 1295, 1302 [11th Cir 2008]), a Federal Court of Appeals, interpreting the UCC as the majority here has, defended its interpretation as comporting “with what Congress intended in enacting BAPCPA.” Even more recently, in In re Price (562 F3d 618, 628 [4th Cir 2009]), another Federal Court of Appeals defended the same result as coinciding “with Congress’s intent in enacting the hanging paragraph.” Neither court explained how Congress’s intent in enacting BAPCPA could be relevant to the correct interpretation of the UCC.

But the apparent confusion of the Graupner and Price courts in interpreting the UCC is of less consequence than the majority’s error today. Our interpretations of state law are binding precedents. If the scope given to a PMSI by the UCC becomes important in some future case involving the sort of issue the UCC was written to resolve—a priority dispute between creditors under state law—today’s decision may present a significant problem. Perhaps a future court will solve the problem by limiting the majority’s holding to the peculiar context that produced it. Until and unless that happens, today’s decision will becloud the clarity and predictability that the authors of article 9 were seeking in enacting the statutes governing PMSIs.

Judges Graffeo, Read and Jones concur with Judge Pigott; Judge Smith dissents and votes to answer the certified question in the negative in a separate opinion in which Chief Judge Lippman and Judge Ciparick concur.

Following certification of a question by the United States Court of Appeals for the Second Circuit and acceptance of the question by this Court pursuant to section 500.27 of the Rules of Practice of the New York State Court of Appeals (22 NYCRR 500.27), and after hearing argument by counsel for the parties and consideration of the briefs and the record submitted, certified question answered in the affirmative.

      . Although this lawsuit involves five different debtors, the Second Circuit chose to relate the facts pertaining to only one debtor—Peaslee—as representative of each of the cases. We do the same.

      . In automobile industry parlance, “negative equity” occurs when the trade-in vehicle is subject to a lien that exceeds the vehicle’s value.

      . This provision states, in pertinent part, that
      “[a]n allowed claim of a creditor secured by a lien on property in which the estate has an interest ... is a secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such property . . . and is an unsecured claim to the extent that the value of such creditor’s interest ... is less than the amount of such allowed claim.”


author: Ciparick, J. Chief Judge Lippman (dissenting in part).

text:
    [913 NE2d 394, 885 NYS2d 8]
    Buffalo Crushed Stone, Inc., Appellant, v Town of Cheektowaga, Respondent.
    Argued June 4, 2009;
    decided June 30, 2009

      POINTS OF COUNSEL

      Harter Secrest & Emery LLP, Buffalo (John G. Horn of counsel), for appellant.
    I. Seen in the unique context of quarrying activities, the conduct of Buffalo Crushed Stone, Inc. and its predecessors unquestionably constitutes a manifest intent to quarry the entirety of their land. (Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278; Matter of Fairmeadows Mobile Vil. v Shaw, 16 AD2d 137; Matter of Rudolf Steiner Fellowship Found. v De Luccia, 90 NY2d 453; United Citizens of Mount Vernon v Zoning Bd. of Appeals of City of Mount Vernon, 109 Misc 2d 1080; Village of Sands Point v Sands Point Country Day School, 2 Misc 2d 885, 2 AD2d 769.) II. Indian Road does not render the portion of Buffalo Crushed Stone, Inc.’s property east of Indian Road “physically separate” for purposes of a nonconforming use analysis. (Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278; Town of Somers v Camarco, 308 NY 537; Matter of Dolomite Prods. Co. v Kipers, 23 AD2d 339; New York Trap Rock Corp. v Town of Clarkstown, 1 AD2d 890.)

      David J. Seeger, Buffalo, and Alison L. Odojewski for respondent.
    I. The written agreement between Buffalo Crushed Stone, Inc. (BCS) and the Town of Cheektowaga bars all of BCS’s claims. (Guishard v General Sec. Ins. Co., 9 NY3d 900; Harris v Niagara Falls Bd. of Educ., 6 NY3d 155; Frehe v Schildwachter, 289 NY 250; Putnam v Otsego Mut. Fire Ins. Co., 45 AD2d 556; Post v Thomas, 212 NY 264; Sundstrom v State of New York, 213 NY 68; Dimmers v Armitage, 33 App Div 626; Mencher v Weiss, 306 NY 1; Brunner-Booth Fotochrome Corp. v Kaufman, 18 AD2d 160; Turkish Socy. of Rochester v Cimino, 192 AD2d 1121.) II. Buffalo Crushed Stone, Inc. may not advance a new theory and argument for the first time on appeal that could have been obviated or cured through factual showing or legal argument in the courts below. (Bingham v New York City Tr. Auth., 99 NY2d 355; Post v 120 E. End Ave. Corp., 62 NY2d 19; Matter of Richardson v Fiedler Roofing, 67 NY2d 246; Cibro Petroleum Prods, v Chu, 67 NY2d 806; Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278; Matter of Harbison v City of Buffalo, 4 NY2d 553; Matter of Crossroads Recreation v Broz, 4 NY2d 39; People v Miller, 304 NY 105; Matter of Pisicchio v Board of Appeals of Vil. of Freeport, 165 Misc 156; Matter of Rudolf Steiner Fellowship Found. v De Luccia, 90 NY2d 453.) III. Parcel 5, east of Indian Road, is not entitled to lawful nonconforming use status. (Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278; People v Miller, 304 NY 105; Matter of Harbison v City of Buffalo, 4 NY2d 553; Matter of Dolomite Prods. Co. v Kipers, 23 AD2d 339, 19 NY2d 739; New York Trap Rock Corp. v Town of Clarkstown, 1 AD2d 890, 3 NY2d 844; Matter of McQuade v Zoning Bd. of Appeals of Town of Huntington, 248 AD2d 386; Speonk Sand & Gravel Co. v Town of Southampton, 127 AD2d 828; Matter of Keller v Haller, 226 AD2d 639; Martino v Town of Bergen, 98 AD2d 968; Marra v State of New York, 61 AD2d 38.) IV Mining on any of the remaining disputed parcels would unlawfully extend Buffalo Crushed Stone, Inc.’s former nonconforming use rights. (Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278; Goulding v Town of Tonawanda, 282 App Div 321; Smith v Town of Sandy Creek, 12 Misc 2d 916; City of Buffalo v Delaware, Lackawanna & W. R.R. Co., 190 NY 84; Kayner v Brown, 167 App Div 958; Dotsko v Littlejohn, 31 AD2d 245; Suffolk County Natl. Bank of Riverhead v State of New York, 60 AD2d 679; De Cuyper v Gonzales, 214 AD2d 764; Daetsch v Taber, 149 AD2d 864; Pless v Town of Royalton, 185 AD2d 659, 81 NY2d 1047.)

      Gilberti Stinziano Heintz & Smith, P.C., Syracuse (Adam J. Schultz, Kevin G. Roe and Patricia S. Naughton of counsel), for New York State Construction Materials Association, Inc., amicus curiae.
    I. Matter of Syracuse Aggregate Corp. v Weise (51 NY2d 278 [1980]) does not support the fragmentation approach to nonconforming use analysis adopted by the majority opinion below. (.People v Miller, 304 NY 105; Ilasi v City of Long Beach, 38 NY2d 383; Glacial Aggregates LLC v Town of Yorkshire, 57 AD 3d 1362.) II. The lower court’s exclusion of the eastern reserves (parcel 5) on the theory that it was physically separate from the remainder of the quarry not only threatens to create a per se rule not intended by Matter of Syracuse Aggregate Corp. v Weise (51 NY2d 278 [1980]) but is clearly contrary to both facts and law. (New York Trap Rock Corp. v Town of Clarkstown, 1 AD2d 890; Matter of Dolomite Prods. Co. v Kipers, 23 AD2d 339, 19 NY2d 739.)
   OPINION OF THE COURT

Ciparick, J.

In this zoning case, the issue is whether Buffalo Crushed Stone, Inc. (BCS) established a prior nonconforming use to quarry certain subparcels of its 280-acre property, thereby relieving it from the Town of Cheektowaga’s zoning ordinances. Applying the analysis set forth in Matter of Syracuse Aggregate Corp. v Weise (51 NY2d 278, 284-287 [1980]), we hold that the long and exclusive quarrying operation of BCS and its predecessors and their preparations to use areas left as aggregate mineral reserves—consistent with the nature of quarrying— established a right of prior nonconforming usage on the disputed subparcels. We conclude, however, that this right does not extend to subparcel 25D and to the thoroughfares, or roadway subparcels (28A/28B, 29A/29B, 30A/30B and 31-33), because there are factual issues remaining as to whether BCS’s predecessors acquired these areas prior to the 1969 zoning ordinance.

I

BCS owns approximately 280 acres of property in the Town of Cheektowaga, where it operates a hard-rock quarry. For the past 80 years, BCS and its predecessors, including Federal Crushed Stone Corporation (Federal), have devoted the land exclusively to quarrying. The quarry consists of mineral extraction sites located primarily in the center of the property, along with processing areas, buffer zones and roads. BCS and its predecessors acquired the land in a number of transactions, either by purchase or lease, between 1929 and 1992. Only some of these subparcels—comprising four geographic regions located in the east, south and west—are relevant in this case. The disputed subparcels are mainly areas that BCS maintained as mineral reserves, which have not been quarried.

Before 1942, there were no zoning ordinances or other limitations on the property’s usage. The Town then enacted ordinances, demarcating the property into certain zones or districts, and denominating such zones as residential, industrial and an airport. Federal’s land was classified within the Second Industrial District. The ordinance allowed gravel pits and stone quarries to be constructed in this zone, provided that the quarry company procure a permit. The ordinance explicitly permitted nonconforming uses to continue unabated upon the condition that no buildings in the Second Industrial District be enlarged or destroyed.

In 1969, the Town repealed the 1942 ordinance, enacting the 1969 zoning ordinance that divided Federal’s lands into four zoning districts: a residential district, a business district, a manufacturing district and a “special” district. Article VII of the ordinance, entitled “NON-CONFORMING USE REGULATIONS,” permitted the continuation of nonconforming activities on the property, but prohibited their extension or enlargement. Thus, this ordinance permitted Federal to continue its mining operation within the “AG—Special Aggregates District” (AG district) in what is now the center of BCS’s operation. In 1992, the Town repealed its 1969 zoning ordinance, adopting new zoning laws that were amended in 1996 and 1997; none of these ordinances altered the boundaries and relevant regulations of the AG district.

In 1998, BCS commenced this action, seeking a declaratory judgment that zoning restrictions applicable to the unexcavated areas of its property were void, and a judgment to enjoin the Town from enforcing its zoning regulations as to those areas. The Town moved for summary judgment and for a declaration that its zoning ordinances were enforceable. BCS then cross-moved for summary judgment on its claims.

Supreme Court, declaring the rights of the parties, held that subparcels within the Town’s AG district are entitled to nonconforming use status, and thus quarrying in those subparcels was permissible. The court further held that subparcels 17C/25C and 25I/12B, south of the AG district—in a residential zone—were entitled to prior nonconforming usage because they were subject to quarrying permits issued by the Town before the 1969 ordinance. However, the court did not grant such status to parcels located to the east (subparcel 5), to the west (subparcel 25D) and to certain remaining parcels. Both parties appealed.

The Appellate Division considered whether BCS had established a nonconforming use for four geographic subparcels: (1) the large eastern area (subparcel 5); (2) the western area (sub-parcel 25D); (3) the southern and eastern thoroughfares or roadways (subparcels 28A/28B, 29A/29B, 30A/30B and 31-33); and (4) the southern parcels adjacent to the AG area (subparcels 17C/25C, 12B/25I).

Subparcel 5 is a relatively large area, located in the northeastern portion of the property, immediately adjacent to the AG district. Most of this area is divided from the AG district by Indian Road, a relatively narrow roadway of approximately 49.5 feet in width, extending south to north. Indian Road then turns eastward, dividing this subparcel into a northern portion and a southern portion. BCS’s predecessors in interest acquired this area in 1931, but did not quarry it.

Indian Road once extended further north, separating all of subparcel 5 from the AG district. Prior to 1951, the northernmost portion of the road was rerouted over Federal’s property, rendering it inaccessible to the public. BCS claims that five million tons of aggregate material suitable for excavation is available for appropriation in subparcel 5.

Subparcel 25D is situated in the westernmost region of BCS’s property. BCS contends that, in 1959, Federal leased the area from a Dr. Reinstein for the explicit purpose of quarrying and mining limestone. The Town asserts, however, that BCS did not acquire a possessory interest or legal title to the area until 1991—long after the enactment of its zoning ordinances. It is undisputed that neither BCS nor its predecessors obtained a permit to quarry the area before 1969.

Subparcels 28A/28B, 29A/29B, 30A/30B and 31-33 are thoroughfares or roadways located in the southern and eastern portions of the AG district. BCS avers that these roads are long abandoned. They are part of the property leased and conveyed to Federal, contiguous to the AG district, and have been actively mined by BCS and its predecessors for several decades. BCS’s predecessors received quarrying permits for portions of these areas in 1955 and 1960.

Subparcels 17C/25C and 12B/25I were leased in approximately 1952, and the Town issued Federal a permit to quarry parts of these subparcels at that time. They are also contiguous to the AG district. Although Federal cleared this area by stripping it of topsoil before 1969, it has not been actively quarried.

The Appellate Division modified Supreme Court’s decision by additionally granting the Town summary judgment as to sub-parcels 17C/25C and 12B/25I. The court held that these subparcels were not entitled to prior nonconforming usage because BCS’s predecessors had not mined them prior to 1969 (55 AD3d 1228, 1231-1232 [4th Dept 2008]). Two Justices dissented as to these subparcels, stating that BCS should not be required to demonstrate actual quarrying activities on each contested sub-parcel, because such a predicate is not required under controlling prior nonconforming use precedent on quarrying enterprises, and these subparcels should generally be viewed in the context of the entire property as a whole (see id. at 1232-1234). The dissent further stated that BCS and its predecessors had engaged in substantial quarrying activities on the entire 280-acre property for many years; had never utilized the land for any other purpose; and these subparcels were contiguous to BCS’s excavation sites. Thus, the dissenters concluded that BCS satisfied the prior nonconforming use standard (see id. at 1232-1234).

Addressing subparcel 5, the Appellate Division stated that this subparcel’s physical separation by Indian Road from other parts of the property prevents prior nonconforming use status for that area (see id. at 1230-1231). The entire panel was unpersuaded by BCS’s evidence that it manifested an intent to use this area for quarrying.

Regarding subparcel 25D, the Appellate Division held that BCS did not demonstrate its right to quarry that subparcel before 1969 because Federal’s lease of the property contained a description of the land that could be quarried that did not expressly include this area (see id. at 1231). Further, the court noted that BCS’s predecessors had not conducted substantial quarrying activities on subparcel 25D before 1969 (see id.). In response, the dissenters stated that summary judgment was inappropriate because an issue of fact remained as to whether BCS’s predecessors acquired rights to quarry this subparcel in 1969 (see id. at 1232). They cited an affirmation from a title examiner and attorney concluding that subparcel 25D was acquired in fee or by lease prior to 1969, as well as an affidavit submitted by a BCS executive vice-president, stating that this subparcel was leased in 1959 by plaintiffs predecessor in interest (see id.).

Finally, as for the thoroughfares, subparcels 28A/28B, 29A/ 29B, 30A/30B and parcels 31-33, the Appellate Division held that although they are contiguous to the AG district and they had been abandoned as roadways—having not been traveled or used as a highway for six years (see Highway Law § 205 [1])— BCS is not entitled to quarry those areas because it did not conduct mining operations on them before the adoption of the zoning ordinances (see id. at 1231). However, the court found that the northern part of parcel 31 is located within the AG district, rendering quarrying a permitted use there (see id.). The dissenters agreed that the streets were abandoned as a matter of law, but disagreed with the majority on the ground that Syracuse Aggregate (51 NY2d at 285-287) does not require every inch of the property be mined to trigger prior nonconforming use (see 55 AD3d at 1232-1233). BCS appeals as of right, pursuant to CPLR 5601 (a), and we now modify.

II

As a preliminary matter, the Town contends that BCS is barred from bringing this action by a 1997 settlement agreement. But the dispute ending in that settlement arose from an action brought by BCS seeking a tree removal permit—it did not encompass the more extensive claims brought in this action. Additionally, the settlement reveals that BCS stipulated to narrow terms as to its quarrying operation—“(c) BCS will adhere to the mining restrictions contained in Section 82-28 of the Town Zoning Law (i.e., setbacks).” The only mining restriction contained in Town of Cheektowaga Code (Zoning Law) § 260-38 is subdivision B, which provides for excavation setbacks from areas used by the public. More specifically, it provides that no structure, use or excavation “shall be closer than 200 feet from a public right-of-way or adjacent property line” (see id.). Hence, the 1997 agreement does not prevent BCS’s action from going forward, as it does not affect any quarrying rights disputed in this case.

Ill

Turning to the merits, prior nonconforming uses in existence when a zoning ordinance is adopted are, generally, constitutionally protected even though an ordinance may explicitly prohibit such activity (see People v Miller, 304 NY 105, 107 [1952]). Courts and municipal legislators have shown a “grudging tolerance” towards this doctrine, disfavoring its broad application, as “[t]he law . . . generally views nonconforming uses as detrimental to a zoning scheme, and the overriding public policy of zoning in New York State and elsewhere is aimed at their reasonable restriction and eventual elimination” (Matter of Toys “R” Us v Silva, 89 NY2d 411, 417 [1996] [internal quotation marks omitted]). Although nonconforming uses are “generally permitted to continue, they may not be enlarged as a matter of right” (Matter of Rudolf Steiner Fellowship Found. v De Luccia, 90 NY2d 453, 458 [1997]). However, property owners engaging in a particular activity may have secured a “vested right” to use their land accordingly (Miller, 304 NY at 107-108). Courts strive to see that “the public interest in eliminating nonconforming uses at a legally opportunistic time is placed in reasonable balance with the owner’s interest in not having a property investment abruptly altered or terminated” (Matter of Pelham Esplanade v Board of Trustees of Vil. of Pelham Manor, 77 NY2d 66, 72 [1990]).

A party advancing a prior nonconforming use exception to a zoning ordinance must establish specific actions constituting an overt manifestation of its intent to utilize the property for the ascribed purpose at the time the zoning ordinance became effective; a mere contemplation of purpose, lacking supportive evidence of undertakings to effectuate such intentions, will not suffice (see Syracuse Aggregate, 51 NY2d at 284-285, citing Matter of Harbison v City of Buffalo, 4 NY2d 553, 559-560 [1958]). Every inch of the land need not have been employed for the asserted purpose, but utilizing just a portion of the property will not necessarily trigger the protections of this doctrine (see id. at 285). Central to this standard is “an examination of the nature of the particular nonconforming use in issue as well as the activities engaged in by the landowner in effectuating that use prior to the adoption of the restrictive ordinance” (id.).

In Syracuse Aggregate, we held that a quarrying company was entitled to prior nonconforming use status because its activities sufficiently demonstrated an intent to appropriate an entire parcel of land for excavation and quarrying prior to the passage of a restrictive zoning law (see 51 NY2d at 286). There, the landowner purchased a 25-acre parcel of land in 1978 that had been used as a quarry for more than 50 years (see id. at 282). The land was zoned as a residential district in 1961 (see id.). In discussing the nature and character of quarrying, we stated:

“By its very nature, quarrying involves a unique use of land. As opposed to other nonconforming uses in which the land is merely incidental to the activities conducted upon it, quarrying contemplates the excavation and sale of the corpus of the land itself as a resource. Depending on customer needs, the land will be gradually excavated in order to supply the various grades of sand and gravel demanded. Thus, as a matter of practicality as well as economic necessity, a quarry operator will not excavate his entire parcel of land at once, but will leave areas in reserve, virtually untouched until they are actually needed” (id. at 285 [citations omitted]).

Consequently, a prior nonconforming use for quarrying cannot be limited solely to the land that was actually excavated before the zoning law, because—in this unique type of industry— landowners commonly leave portions of their land as mineral reserves to be excavated at a future time (see id.). A landowner who engages in substantial quarrying activities within its property and demonstrates an intention to do so in other portions of the land may sufficiently establish a prior nonconforming use extending to the boundaries of that property, notwithstanding the fact that quarrying may not have actually begun in that specific area.

Conversely, merely preparing to engage in a quarrying enterprise or “undertaking a few self-serving acts of a very limited nature” will not satisfy the requisite standard (see id. at 286). Nor does prior nonconforming use status extend to adjoining parcels separated by physical boundaries (see id.). In this regard, Syracuse Aggregate does not afford quarrying companies “carte blanche” to engage in future excavation of their lands contrary to zoning regulations (see id. at 286-287).

As in Syracuse Aggregate, BCS and its predecessors acquired the property exclusively for mining and quarrying operations— “no part of the land was ever dedicated to a use other than . . . quarrying” (id. at 286). Similar to Syracuse Aggregate, BCS constructed a processing structure in the center of the 280-acre property, where bulk materials were removed for decades, and service roads constructed to move the materials after they are processed (see id.). Further, the processing plant contains a building for packaging materials, a repair shop and offices. In Syracuse Aggregate, we determined that “[g]iven such outward manifestations of intent and in light of the unique character of the business engaged in, it can only be concluded that the nonconforming use extends throughout the property even though the principal excavation was limited to a five-acre portion of the parcel” (id. at 286). The same pertinent factors are present here.

IV

We now analyze the four specific geographic areas in dispute, applying the rationale of Syracuse Aggregate.

Subparcel 5:

As noted, because of the nature and character of the quarrying industry, landowners commonly quarry one portion of their land at a time and leave other areas as reserves (see id. at 285-286). Reviewing BCS’s quarrying activity both in the center of its property and in the respective subparcels, it is clear that it manifested an intent to quarry subparcel 5. BCS and its predecessors have (1) prepared maps of the area to survey potential materials that could be extracted from the land; (2) put in place 6,000 feet of 16-inch piping from the property to the pumping station; (3) negotiated, from 1963 to 1969, with the Town to relocate Indian Road for unfettered use of its entire parcel for mining, thereby providing the Town with notice of its intent to use the area accordingly; (4) sent letters to the Town expressing an intent to mine the area in 1963; (5) made preparations to have a company remove dirt from the region to allow for excavation; and (6) drilled “auger holes,” which are used to identify areas for quarrying.

Although Indian Road separates subparcel 5 from the aggregate zone, this relatively narrow roadway (49.5 feet) is not a physical impasse that cuts off subparcel 5 from the contiguous parcels. Nor does it substantially alter the nature and character of the property as a whole, as BCS and its predecessor companies have long manifested their intent to mine both sides of the road, and jointly with the Town have maintained the road, using the same for trucks and pipelines incident to their quarrying operation.

In this regard, the dissent’s reliance on Matter of Dolomite Prods. Co. v Kipers (23 AD2d 339, 343-345 [4th Dept 1965])—a pre-Syracztse Aggregate case—is misplaced (see dissenting op at 104, 106). In Dolomite, the Appellate Division considered whether a quarrying company could extend its enterprise from one parcel of land to two southern parcels physically separated from the quarrying area by railroad tracks (see id.). Although the northern portion of the land had been used for quarrying, the two areas below the railroad tracks had been used, for 40 years, as a farm and a nursery (see 23 AD2d at 341). During that time, thousands of homeowners purchased homes in the area encircling the two parcels (see id.). The Appellate Division held that the quarrying company could not extend its nonconfoming use to the two separate regions that had been used for entirely different purposes, especially given the patent unfairness to the multitude of residents now living in those areas who would be deleteriously affected by the quarrying operations so close to their homes (see id. at 342-343).

Here, in contrast, BCS has appropriated subparcel 5 as a reserve for quarrying and no other purpose—it is not extending its nonconforming use, but seeking to realize its vested right to use the land in accord with a long-standing manifested intent to quarry this area. Significantly, because most of subparcel 5 borders a landfill, fairness concerns, arising in Dolomite, for people moving into properties constructed adjacent to the quarry, are not raised here. Further, BCS does not dispute that there are 200-foot setbacks in place, pursuant to its 1997 settlement agreement with the Town, prohibiting it from excavating within 200 feet from a public right-of-way or adjacent property lines. Finally, there is no evidence that Indian Road is a physical separation that alters the nature and character of the property, such that it would render a quarrying operation as foreign, unexpected or adverse to that area.

Contrary to the dissent, the mere fact that a roadway runs through a portion of a property, later classified as a subparcel by a town attempting to impose zoning restrictions on its usage, is not a per se barrier to the recognition of prior nonconforming use rights to that area. An easement, a roadway or any other narrow area does not necessarily create a physical separation of the land, divesting it of its character so as to prevent a vested right to use that land for its intended purpose. This was also true in Dolomite, where the court based its holding—not on the per se basis of the railroad tracks traversing the land—but on the patent unfairness to property owners who had come to live in the area abutting the lands and on the fact that the land south of the railroad tracks had been used for entirely different purposes for many years. Similarly, in this quarrying case, our analysis must take into account the nature of the easement and the character of the land in relation to the areas already quarried.

Subparcel 25D:

Federal leased this subparcel from a Dr. Reinstein for the sole purpose of mining. It is undisputed that this region is contiguous with areas that have been extensively quarried. BCS has not quarried nor acquired a permit to quarry this subparcel before the 1969 ordinance.

The dissent’s claim that permits are a prerequisite to establishing prior nonconforming use rights is without authority (see dissenting op at 105-106). As we held in Syracuse Aggregate, a quarrying company may hold lands in reserve, instead of mining them immediately. Such a company would not necessarily seek a permit for lands that it did not intend to excavate immediately, or at least not until sometime in the future. Imposing this requirement in a quarrying case is a very narrow reading of Syracuse Aggregate, and fails to consider the realities of the industry. Nevertheless, mining permits are strong evidence of a manifestation of intent to mine a given area. They are an important piece of evidence in analyzing the standard set forth in Syracuse Aggregate, though not necessary in determining the manifested intent of the quarrying company.

Given all of these factors, we hold that an issue of fact remains as to when BCS received legal title to this land. BCS asserts that it acquired a possessory interest in this parcel before the 1969 zoning ordinance. At that time, Federal received a permit to quarry its then-existing mining operations on the Reinstein estates. Although the permits do not specifically cover this subparcel, Federal extensively mined an area contiguous to that section before 1969.

The issue of fact relates to whether subparcel 25D was acquired by BCS’s predecessors. If the parcel was part of a sub-parcel actively quarried, then it would be entitled to prior nonconforming use. On the other hand, if it was not, and BCS acquired it in 1991, as the Town contends, then it would not be so entitled.

Subparcels 28A/28B, 29A/29B, 30A/30B and 31-33 (the roadway parcels):

Highway Law § 205 (1), in pertinent part, states that if a highway has not “been traveled or used as a highway for six years [it] shall cease to be a highway.” These subparcels are small dead end streets that abut property controlled by BCS’s predecessors since at least 1967. The Appellate Division found no evidence that these thoroughfares have been used for a period of six years. However, the issue is whether they were left abandoned at least six years prior to the 1969 zoning ordinance so that BCS may demonstrate that it controlled these areas and had an ability to quarry there before the adoption of the ordinance. It is unclear from the record whether these areas were either abandoned or in use prior to 1969. If the Town abandoned these thoroughfares for six years preceding the zoning ordinance, then BCS would be entitled to prior nonconforming use of these areas, since deeming them abandoned does not curtail any long-standing right of enjoyment that the public may have to these areas, but rather creates a property right for the abutting owners, here BCS, in the form of an easement of access to the abutting streets. In addition, we note that for at least 40 years quarrying has occurred on the property abutting the roadways.

Subparcels 17C/25C and 12B/25I:

These areas were leasehold interests before the 1969 ordinance, and are located directly contiguous to the immediate south of the AG district. Aerial maps demonstrate that these areas were cleared, grubbed and stripped of topsoil before 1969. Further, they were the subject of quarrying permits before 1969. Applying the principles announced in Syracuse Aggregate, we hold that BCS made clear its intent to quarry these areas at a future time, as it was already making preparations to undertake quarrying activity by 1969. Thus, we would confer prior nonconforming use rights to these subparcels, as well.

V

In conclusion, under our holding in Syracuse Aggregate, and given the peculiar nature of quarrying, it is unrealistic and unreasonable to require BCS to have actively mined all areas within its 280-acre property prior to the passage of the 1969 zoning ordinance to establish prior nonconfoming use protection for its mining operation. Quarrying contemplates a gradual unearthing of the minerals in the land, and so excavation of portions of the land may be sufficient to manifest an intention to conduct quarrying on the property as a whole. Of crucial importance is the fact that BCS and its predecessors, quarrying companies, have exclusively, and for decades, utilized the land for quarrying. Additionally, they have exhibited the usual indicia of a quarrying enterprise, showing preparations to quarry the subparcels in dispute. Therefore, we hold that BCS is entitled to a declaration that the subparcels at issue are subject to prior nonconforming usage, except for subparcel 25D and the thoroughfare properties, where issues of fact remain unresolved.

Accordingly, the order of the Appellate Division should be modified, without costs, in accordance with the opinion herein and, as so modified, affirmed.

Chief Judge Lippman (dissenting in part).

While we agree with the majority that parcels 17C/25C and 12B/25I are entitled to nonconforming use status under our decision in Matter of Syracuse Aggregate Corp. v Weise (51 NY2d 278 [1980]), and while we further agree that remittal for a determination of when the roadway parcels were abandoned is appropriate, we conclude that the nonconforming use principles outlined in Syracuse Aggregate and Matter of Dolomite Prods. Co. v Kipers (23 AD2d 339 [4th Dept 1965], affd 19 NY2d 739 [1967]) mandate a different result for parcels 5 and 25D. Therefore we respectfully dissent.

Prior to today’s decision, our nonconforming use analysis was straightforward and well settled. The “overriding policy of zoning is aimed at the ultimate elimination of nonconforming uses,” but “a zoning ordinance cannot prohibit an existing use to which the property has been devoted at the time of the enactment of the ordinance” (Syracuse Aggregate, 51 NY2d at 284). Necessarily, the owner seeking to use property in a manner that is inconsistent with a zoning ordinance must not only have been able to legally use the property in that manner prior to the passage of the zoning ordinance, but the owner must also have actually used the property in that manner or manifested an intent to so use the property prior to the zoning ordinance becoming effective (id. at 284-286). The inquiry may be succinctly stated as a two-step process: (1) could the property lawfully be used in the manner desired at the time the restrictive zoning ordinance became effective, and (2) did the property owner either actually use the property in that manner or manifest an intention to so use the property. If the answer to both questions is yes, then the owner is entitled to nonconforming use status; if the answer to either is no, then the owner is not entitled to nonconforming use status. We have further explained that it is not “possible to extend the protection of a permitted nonconforming use established on one parcel of land to physically separate though adjoining parcels” (id. at 286, citing, inter alia, Matter of Dolomite Prods. Co. v Kipers, 23 AD2d 339 [1965]).

The majority, without saying so, casts aside our prior straightforward analytical framework for nonconforming uses but fails to replace it with any coherent new framework. With respect to parcel 5, on this record (which includes detailed maps as well as aerial photographs of the land), it is plain that Indian Road separates parcel 5 from the land that has been actively quarried. Parcel 5 is, very simply, a “physically separate though adjoining” parcel that under a straightforward application of well settled law should be subject to the zoning ordinance (id.). Instead, the majority creates an entirely new test and tells us that, despite the fact that parcel 5 “is divided from the AG District by Indian Road” (majority op at 94), the road should not be understood to separate parcel 5 from the rest of BCS’s property because the road “is not a physical impasse” and it “does [not] substantially alter the nature and character of the property as a whole” (majority op at 100). It seems fairly clear, however, that BCS itself did not see the road as insubstantial; as the majority notes, BCS’s predecessor “negotiated, from 1963 to 1969, with the Town to relocate Indian Road for unfettered use of its entire parcel for mining” (majority op at 100). Rather than just demonstrating BCS’s intent to mine parcel 5, as the majority concludes, these negotiations demonstrate that BCS itself recognized the reality that Indian Road separated parcel 5 from the remainder of its land such that it did not have “unfettered use” of parcel 5.

The majority has concluded that a factual question exists as to when BCS acquired parcel 25D and therefore does not decide today whether parcel 25D is entitled to nonconforming use status. It is certainly true, as the majority explains, that if BCS did not acquire parcel 25D until 1991 BCS would not be entitled to mine parcel 25D. There is, however, no need to determine whether parcel 25D was in fact acquired as part of the 1959 Reinstein lease because, even if it was acquired then, it still could not have been lawfully mined at the time the zoning ordinance went into effect in 1969. After the 1942 zoning ordinance, there is no dispute that the owner or lessee of parcel 25D would have been required to obtain a permit to use parcel 25D as a quarry. It is further undisputed that parcel 25D was not covered by the permits BCS and/or its predecessors obtained from the Town. Thus, again applying our previously straightforward framework for nonconforming uses, because parcel 25D could not be lawfully mined at the time the 1969 zoning ordinance became effective, it cannot now be entitled to nonconforming use status.

The majority conflates the manifestation of intent to mine with the lawful ability to mine. The majority explains that “mining permits are strong evidence of a manifestation of intent to mine a given area” and that permits “are an important piece of evidence in analyzing the standard set forth in Syracuse Aggregate” (majority op at 101-102). There is no question here that BCS and its corporate predecessors intended to mine parcel 25D; the question is whether or not they could have lawfully done so at the time the 1969 zoning ordinance became effective, a question the majority never squarely addresses. Intent to mine and lawful ability to mine are two separate issues. Although BCS’s predecessor manifested an intention to mine parcel 25D, until today that alone was not enough: it also must have been lawful to mine parcel 25D at the time the ordinance went into effect. As BCS concedes, no mining permit was issued for parcel 25D as of 1969, therefore it was not lawful to mine parcel 25D at that time.

It is not, as the majority states, that we conclude that “permits are a prerequisite to establishing prior nonconforming use rights” (majority op at 101) in all nonconforming use cases or even in all nonconforming use cases involving quarrying. Rather, the touchstone in our case law has been lawful use, and, in the Town of Cheektowaga, the lawful way to mine at the time the ordinance went into effect (outside of certain districts delineated for mining) was to first obtain a permit to mine from the Town. Because a mining permit was not issued for parcel 25D it could not have been lawfully mined. In remitting as to parcel 25D, the majority opens up the possibility that BCS will be able to mine parcel 25D now, some 40 years after the passage of the 1969 zoning ordinance restricting such usage, despite the fact that BCS’s predecessor could not have lawfully mined the property.

By failing to adhere to our prior analytical framework in this context, the majority today muddies an area of law that ought to be predictable for a host of practical purposes. For instance, residents of the Town purchased homes near land that, until today, BCS had no right to mine and this development undoubtedly affects those properties in a variety of ways {see Matter of Dolomite, 23 AD2d at 342-343 [“Such a philosophy of planning could stunt or kill the growth of substantial areas of property surrounding the parcels in question, for abutting owners would be required to wait, as in the instant case, for decades to determine the use which could be made of the property”]).

Moreover, local governments are particularly well-positioned to plan for the physical and economic development of the communities and constituencies that they serve. Here, since 1942 when the Town first enacted a zoning ordinance, the Town has sought to control the development of town land used for quarrying purposes. The very fact that, outside certain districts, a permit was required in order to mine land in the Town means that the Town might disallow that use in certain instances. When and in what manner the Town can do so should be predictable and subject to clear rules. Before today, these rules were simple: if a landowner could lawfully use property in a manner restricted by a new zoning ordinance and either actually used the property in that manner or manifested an intent to do so at the time the new zoning ordinance became effective, that landowner could still use the land in that manner after the passage of the ordinance. This, apparently, is no longer the framework we will apply in nonconforming use cases.

Finally, we agree with the majority that it is unclear on this record when the roadway parcels ceased to be used as roadways by the public. BCS suggests that by at least 1967 they were not used as roadways. If the roadway parcels were used as roadways as late as 1967, then they could not have been abandoned under section 205 of the Highway Law by 1969, and if they were not abandoned, then they could not have been mined lawfully. On the other hand, if the roadway parcels were not traveled upon for the six years prior to the effective date of the zoning ordinance in 1969, then they would have been abandoned pursuant to the Highway Law at the time the 1969 ordinance became effective. If the roadways within the special quarrying district created by the Town were abandoned as of 1969, it appears BCS could have lawfully mined them at the time the 1969 zoning ordinance became effective and the roadway parcels would be eligible for nonconforming use status. When the roadway parcels were abandoned is an open question. Therefore, we agree with the majority’s remittal for a determination as to when the roadway parcels ceased to be used by the public as roadways.

In sum, we agree with the majority as to parcels 17C/25C and 12B/25I and would reverse the Appellate Division as to those parcels. We further agree that we should remit for a determination as to when the roadway parcels were abandoned. However, we disagree with the majority as to parcels 5 and 25D and would affirm the Appellate Division as to those parcels for the reasons we have stated.

Judges Read, Smith, Pigott and Jones concur with Judge Ciparick; Chief Judge Lippman dissents in part in a separate opinion in which Judge Graffeo concurs.

Order modified, etc.

      . Federal was previously known as Cheektowaga Crushed Stone Corporation. It later merged with Bituminous Products Corporation to form Buffalo Slag Company. In 1983, BCS purchased Buffalo Slag and acquired its land.

      . BCS does not challenge Supreme Court’s order with respect to certain subparcels that it deemed not integral to its mining operation. Also, the Town has conceded that BCS enjoys lawful nonconforming use of certain other sub-parcels.

      . Moreover, it is entirely unclear how Indian Road may be characterized as a “relatively narrow roadway (49.5 feet)” (majority op at 100). The maps and photographs in the record make clear that Indian Road is just that—a road—and at a width of 49.5 feet, it is a roadway wide enough to accommodate several lanes of traffic.

      . It appears, at least with respect to the roadway parcels, that the majority agrees that both lawful use and a manifestation of intent at the time the restrictive ordinance became effective are required and that a manifestation of intent alone will not suffice.