author: CIPARICK, J. R.S. Smith, J.

text:
    [806 NE2d 973, 774 NYS2d 860]
    In the Matter of Legion of Christ, Incorporated, Appellant, v Town of Mount Pleasant et al., Respondents.
    Argued January 13, 2004;
    decided February 19, 2004

      POINTS OF COUNSEL

      Shamberg Marwell Hocherman Davis & Hollis, P.C., Mount Kisco (John S. Marwell, Adam L. Wekstein and Geraldine N. Tortorella of counsel), and Bleakley Platt & Schmidt, LLP, White Plains (Hugh D. Fyfe of counsel), for appellant.
    I. In violation of all applicable law and the Constitution, the Appellate Division decision conditioned a bona fide religious organization’s entitlement to the mandatory exemption of RPTL 420-a (3) on the receipt of land use approvals deemed necessary by the local taxing authorities. (Matter of Korean Joong Bu Presbyt. Church of N.Y. v Incorporated Vil. of Old Westbury, 303 AD2d 755; McGann v Incorporated Vil. of Old Westbury, 293 AD2d 581, 98 NY2d 728, 99 NY2d 532; Matter of Colella v Board of Assessors of County of Nassau, 266 AD2d 286, 95 NY2d 401; Congregation K’hal Torath Chaim v Town of Ramapo, 72 AD2d 804; Matter of Board of Foreign Missions of M.E. Church v Board of Assessors of City of Yonkers, 244 NY 42; People ex rel. National Academy of Design v Feitner, 31 Misc 565; Matter of Metropolitan Life Ins. Co. v Boland, 281 NY 357; Williams Institutional Colored M.E. Church v City of New York, 275 App Div 311, 300 NY 716; People ex rel. Doctors Hosp. v Sexton, 267 App Div 736, 295 NY 553; Matter of Brown v Wing, 93 NY2d 517.) II. The proposed use of the property is permitted without a special permit as a “place of worship” under the zoning ordinance and is tax exempt. (Matter of Carroll v Ingram, 59 AD2d 85, 43 NY2d 642, 44 NY2d 948; People v Eulo, 63 NY2d 341; Matter of Stefco Realty Corp. v Commerdinger, 29 Misc 2d 587; Matter of Tonis v Board of Regents of Univ. of State of N.Y., 295 NY 286; Matter of Briar Hill Lanes v Town of Ossining Zoning Bd. of Appeals, 142 AD2d 578; Matter of Kamhi v Planning Bd. of Town of Yorktown, 59 NY2d 385; Matter of Toys “R” Us v Silva, 89 NY2d 411; Matter

      of Allen v Adami, 39 NY2d 275; Jewish Reconstructionist Synagogue of N. Shore v Incorporated Vil. of Roslyn Harbor, 38 NY2d 283, 39 NY2d 744, 426 US 950; Matter of Diocese of Rochester v Planning Bd. of Town of Brighton, 1 NY2d 508.)

      Thacher Proffitt & Wood LLP, White Plains {Lino J. Sciarretta, Kevin J. Plunkett and Stefanie A. Bashar of counsel), for respondents.
    I. The Legion of Christ, Incorporated cannot use the property as proposed without a special permit and is thus not entitled to a real property tax exemption. (Matter of Retail Prop. Trust v Board of Zoning Appeals of Town of Hempstead, 98 NY2d 190; Matter of Oxford Group-Moral Re-Armament, MRA v Sweet, 309 NY 744; Matter of United States Columbarium Co. v Tax Commn. of City of N.Y., 19 Misc 2d 256; Matter of Colella v Board of Assessors of County of Nassau, 266 AD2d 286, 95 NY2d 401; Jewish Mental Health Socy. v Village of Hastings-on-Hudson, 255 App Div 77, 279 NY 764; McGann v Incorporated Vil. of Old Westbury, 293 AD2d 581, 98 NY2d 728; Matter of Korean Joong Bu Presbyt. Church of N.Y. v Incorporated Vil. of Old Westbury, 303 AD2d 755; Town of Mount Pleasant v Legion of Christ, 266 AD2d 532; Congregation K’hal Torath Chaim v Town of Ramapo, 72 AD2d 804; Economic Opportunity Commn. of Nassau County v Village of Hempstead, 148 AD2d 570, 74 NY2d 608.) II. The Legion of Christ, Incorporated’s proposed use is for a “religious institution” under the Town of Mount Pleasant Zoning Code. (People v Finnegan, 85 NY2d 53; People v Correa, 248 AD2d 630, 93 NY2d 821; People v Gaskins, 171 AD2d 272; Matter of OnBank & Trust Co., 90 NY2d 725; McGann v Incorporated Vil. of Old Westbury, 186 Misc 2d 661, 293 AD2d 581.)

      Anthony J. Vlatas, Washington, D.C., and Anthony R. Picarello, Jr., for The Becket Fund for Religious Liberty, amicus curiae.
    I. Requiring local land use permits as a condition of tax exemption for religious groups would needlessly introduce a prolific source of religious discrimination into the administration of the tax laws. (City of Boerne v Flores, 521 US 507; Employment Div., Dept. of Human Resources of Or. v Smith, 494 US 872; Church of the Lukumi Babalu Aye, Inc. v Hialeah, 508 US 520; Board of Trustees of Univ. of Ala. v Garrett, 531 US 356.) II. Religious discrimination in the application of the tax laws would violate multiple, overlapping protections of the First and Fourteenth Amendments to the United States Constitution. (City of Cleburne, Tex. v Cleburne Living Ctr., 473 US 432; Pace Resources, Inc. v Shrewsbury Twp., 808 F2d 1023; Village of

      Willowbrook v Olech, 528 US 562; Wolff v McDonnell, 418 US 539; Dent v West Virginia, 129 US 114; State of Wash. ex rel. Seattle Tit. Trust Co. v Roberge, 278 US 116; Nectow v City of Cambridge, 277 US 183; Village of Euclid, Ohio v Ambler Realty Co., 272 US 365; Moore v City of E. Cleveland, Ohio, 431 US 494; Schad v Borough of Mount Ephraim, 452 US 61.)
   OPINION OF THE COURT

CIPARICK, J.

We are called upon by this appeal to interpret the contemplation in “good faith” component of RPTL 420-a (3) (a), and determine whether the courts below improperly imposed a precondition on the taxpayer before authorizing a religious use tax exemption.

Taxpayer petitioner Legion of Christ, Incorporated is a religious order of the Roman Catholic Church and a nonprofit corporation within the meaning of RPTL 420-a (1). As described in its certificate of incorporation, it was formed to provide religious instruction and education as well as residence, government and direction for its members.

In December 1996, Legion purchased an unimproved 168-acre parcel of land (the subject property) and a contiguous 97-acre parcel improved with structures from its prior owner, International Business Machines (IBM). As described in its application for real property tax exemption, Legion intended to use the subject property “in connection with the training and education of Catholic laity, priests and seminarians at the Legion’s Conference Center on the adjacent” 97-acre parcel. Legion planned to develop the property into a “campus-like environment” where members could enjoy “quiet reflection, meditation, reading, studying and group discussions.” In addition, the property was to be developed “for outdoor religious activities”—including an outdoor chapel, a rosary path, Stations of the Cross and a grotto. There would also be recreational sites such as sport fields, picnic areas and gardens.

The subject property is located in the OB-1 General Office Building District of respondent Town of Mount Pleasant. Pursuant to the Town Zoning Code, the principal use of property within the OB-1 zone for a church or other place of worship is permitted as of right. However, a special use permit is required to develop property in the district for other forms of religious activity.

In May 1997, while the subject property was still unimproved, Legion applied for tax exempt status for the subject property under RPTL 420-a, which governs tax exemption for the real property of nonprofit religious organizations. In support of its application, Legion attached (1) its certificate of incorporation, (2) a site plan prepared by its retained land use planning specialist, (3) a proposed schedule for the plan and (4) a resolution from its Board of Directors—designating $260,000 in corporate funds for the project, authorizing trainees to provide the necessary labor and appointing a project manager. Upon review, the Assessor of the Town of Mount Pleasant denied Legion real property tax exemption.

Thereafter, Legion filed a complaint with respondent Board of Assessment Review. After a hearing, the Board denied the complaint and upheld the taxable status of the property. The Board reasoned that:

“no formal plans, building permits, special permits or other occurrences legally required to make use of the property as described in the Map of the Property submitted with the Complaint have been filed, applied for or undertaken. Mere ownership of the property and proposed plans which are not ‘crystallized’ in the form of an application for approval do not, in and of themselves, mandate tax-exempt status of the property.”

Legion commenced this tax certiorari proceeding pursuant to article 7 of the Real Property Tax Law against the Town of Mount Pleasant, its Assessor and Board of Assessment Review (collectively the Town), seeking to annul the denial of the exemption. It moved for summary judgment declaring the subject parcel tax exempt and for a stay of enforcement of the tax liens placed on the property. The Town cross-moved for summary judgment declaring the property fully taxable and to lift the stay of its enforcement of the tax liens.

Supreme Court denied Legion’s motion and granted the Town’s cross motion, adjudging the subject property fully taxable for the tax years 1997 through 2001, lifting the stay and extending the time for Legion to redeem the tax liens on the property. The court recognized that the exempt nature of Legion was not at issue and “the purposes for which petitioner uses or plans to use the subject property are exempt under the statute.” The court found that the uncompleted parts of the plan— for example, the grotto in honor of Mary and the outdoor open-air chapel—were “contemplated in good faith.” Nonetheless, it concluded that Legion’s “use of the subject parcel for its religious institution’s activities [is] unlawful in the absence of the required special permit.”

The Appellate Division affirmed. It reasoned that because Legion’s intended principal use of the property was for religious institutional purposes, its proposed use of the property was illegal absent a special use permit and such “illegal” use barred tax exemption (303 AD2d 507, 508 [2003]). We now reverse and remit to the Appellate Division.

Discussion

Real Property Tax Law § 420-a establishes a mandatory tax exemption for real property of nonprofit corporations. To qualify for exemption under section 420-a, a party must demonstrate first, that the nonprofit corporation is “conducted exclusively for religious, charitable, hospital, educational, or moral or mental improvement of men, women or children purposes, or for two or more such purposes” and second, that the property is “used exclusively for carrying out thereupon one or more of such purposes” (RPTL 420-a [1] [a]). Where.the property for which exemption is being sought is unimproved, as it is here, and, therefore, not being used to further any of the enumerated objectives, it is still possible for nonprofit organizations to receive tax exemption for their land. Section 420-a (3) of the Real Property Tax Law provides, in pertinent part:

“Such real property from which no revenue is derived shall be exempt though not in actual use therefor by reason of the absence of suitable buildings or improvements thereon if (a) the construction of such buildings or improvements is in progress or is in good faith contemplated by such corporation or association ...” (RPTL 420-a [3] [emphasis added]).

To demonstrate that the improvements are in “good faith contemplated” within the meaning of section 420-a, the applicant seeking an exemption must have “concrete and definite plans for utilizing and adopting the property for exempt purposes within the reasonably foreseeable future” (Congregation K’hal Torath Chaim v Town of Ramapo, 72 AD2d 804, 805 [2d Dept 1979] [quoting 4 Ops Counsel SBEA No. 52, at 90 (1975)]; see also 10 Ops Counsel SBRPS No. 72 [1998]; Economic Opportunity Commn. of Nassau County v Village of Hempstead, 148 AD2d 570, 572 [2d Dept 1989]).

The parties dispute whether Legion’s improvements were in good faith contemplated to facilitate the religious use of the property. Legion argues that an application for a special use permit, while at times a relevant factor in determining good faith, cannot properly be made a prerequisite to real property tax exemption under section 420-a (3) (a). The Town contends that Legion’s failure to apply for a special use permit for the relevant tax years—1997 through 2001—refutes any claim that it had a “concrete or definite plan” to develop the property for religious institutional purposes. It further argues that Legion’s intended use of the property was illegal absent a special use permit and, therefore, Legion was barred from tax exemption. While generally tax exemption statutes must be construed against the taxpayer, they should not be so narrowly interpreted as to defeat their settled purpose to encourage, foster and protect religious institutions as a public benefit (see Matter of Yeshivath Shearith Hapletah v Assessor of Town of Fallsburg, 79 NY2d 244, 249 [1992]; see also People ex rel. Watchtower Bible & Tract Socy. v Haring, 8 NY2d 350, 358 [1960]).

The Town’s reliance on Matter of Oxford Group-Moral ReArmament, MRA v Allen (309 NY 744 [1955] [arising under the predecessor statute to section 420-a]) is misplaced. Oxford involved land that was already developed and actually being used for exempt purposes in violation of the municipal zoning law, not property that was vacant or otherwise unimproved, as is the case here. Oxford provides no support for the proposition that nonprofit organizations must acquire or apply for special permits to qualify for tax exemption on the basis of good faith. The additional requirement imposed by the Appellate Division that an applicant must possess a special use permit is also not found in section 420-a. We, therefore, reject the proposition that a special use permit is required as a condition precedent to a real property tax exemption pursuant to Real Property Tax Law § 420-a (3) (a).

An application for a special use permit may well be a factor in determining good faith. A zoning authority may look to other criteria to determine if in fact a public benefit improvement is contemplated and is the subject of concrete or definite plans. The inquiry necessarily is fact-specific. Moreover, each taxable year is distinct and separate for purposes of RPTL 420-a (3) (a) exemption eligibility. With each application for renewal, the boundaries of good faith take on new dimensions. As years pass, the taxpayer may reasonably be required to show some concrete act toward developing or otherwise improving the property to carry out the tax exempt purpose. Property must not be allowed to lie idle indefinitely at the expense of the locality and its citizens. This “landbanking” has the effect of diminishing the tax base of a locality and increasing the tax burden for schools and other municipal operations.

The Appellate Division erred in determining that the proposed use was illegal absent the acquisition of a special use permit. The Court therefore did not undertake a review of the issue of “good faith contemplat[ion] ” and instead concluded the principal use of the property was to be for “religious institution [al] purposes, not for worship” (303 AD2d at 508). The proper inquiry should have been whether the development of the property for tax exempt purposes was “in good faith contemplated.” As the Appellate Division never reached that issue, we remit to it for that purpose. In light of our determination, we need not consider Legion’s other arguments.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the case remitted to that Court for further proceedings in accordance with this opinion.

R.S. Smith, J.

(dissenting in part). I agree that the Appellate Division committed an error of law in holding that the absence of a special permit barred petitioner’s application for a real property tax exemption. On my view of the record, however, that error was the sole basis on which the application was or could have been denied. I therefore see no need to remit for further proceedings, and would simply grant petitioner’s motion for summary judgment annulling the denial of the tax exemption.

Petitioner presented to the respondent Board of Assessment Review (BAR) and to the courts below a development plan, prepared by an outside land use planner, to use the property for outdoor religious activities, including'Stations of the Cross, a grotto of Our Lady, an outdoor chapel and a rosary path. It is not disputed that the property, if so used, would be entitled to a tax exemption, so the only possible issue is whether the proposed use was “in good faith contemplated” within the meaning of RPTL 420-a (3) (a). I see no basis in the record for doubting that it was.

No evidence suggests, and no one has advanced the theory, that petitioner’s plan for the property was a sham designed to preserve a tax exemption, and that the petitioner was in fact planning to leave the property unimproved or to develop it in some nonexempt way. The sole fact on which the BAR and the courts below relied in denying the exemption was that petitioner had not fulfilled applicable legal requirements for its proposed use—principally, that it had not applied for or obtained a special permit. But petitioner’s reason for not applying was that it did not believe a special permit to be required; in petitioner’s view, the proposed use would constitute a “[c]hurch [or] other place [ ] of worship” under the applicable zoning ordinance. Whether petitioner is right or wrong about this, its decision not to apply for a special permit does not, under these circumstances, create any doubt about its good faith in contemplating the development described in its submission.

The BAR denied a tax exemption solely because “no formal plans, building permits, special permits or other occurrences legally required to make use of the property . . . have been filed, applied for or undertaken.” The BAR did not find the petitioner was not intending to use the property in the way it said it was, or even suggest there was any doubt about petitioner’s intention. Similarly, the parties’ submissions to Supreme Court contain nothing that places petitioner’s good faith in doubt. Supreme Court specifically found: “whatever parts of the . . . plan [submitted by petitioner] have not been completed . . . are contemplated in good faith.”

This finding was not challenged by respondents on appeal; it was not disturbed by the Appellate Division; and it was not (and could not be) questioned in this Court. Indeed, it seems that the parties and the lower courts have operated on the assumption that petitioner’s right to a tax exemption turns entirely on the issue of whether a special permit is a prerequisite to the exemption. Since we unanimously rule in petitioner’s favor on this issue, I see no basis for denying summary judgment to petitioner.

Accordingly, I would reverse and grant petitioner’s motion for summary judgment, and I respectfully dissent from so much of the Court’s opinion as does otherwise.

Chief Judge Kaye and Judges G.B. Smith, Rosenblatt, Graffeo and Read concur with Judge Ciparick; Judge R.S. Smith dissents in part in a separate opinion.

Order reversed, etc.

       We disagree with the dissent’s conclusion that “the parties’ submissions to Supreme Court contain nothing that places petitioner’s good faith in doubt” and that the Board did not “find the petitioner was not intending to use the property in the way it said it was, or even suggest there was any doubt about petitioner’s intention” (dissenting op at 414). Specifically, in its affidavit in support of its cross motion for summary judgment and its reply affidavit in further support of that cross motion, the Town argued both that a special use permit was a prerequisite to tax exemption and that Legion’s failure to submit an application for a special use permit refuted that Legion had a concrete plan to develop the property. The Town has consistently argued that the improvements proposed by Legion have not been the subject of concrete or definite plans to meet the good faith component of RPTL 420-a (3) (a).


source: Caselaw Access Project

author: R.S. Smith, J.

license: Public Domain

text:
    [807 NE2d 268, 775 NYS2d 219]
    Allstate Insurance Company, as Subrogee of Amy M. Walker, Appellant, v Daniel J. Stein, Respondent. (And Two Other Actions.)
    Argued January 13, 2004;
    decided February 19, 2004

      POINTS OF COUNSEL

      Chelus, Herdzik, Speyer, Monte & Pajak, P.C., Buffalo (Gregory V. Pajak and Kevin E. Loftus of counsel), for appellant.
    The Appellate Division, Fourth Department, incorrectly held that the statute of limitations for Allstate’s additional personal injury protection subrogation action had expired. (Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214; Aetna Life & Cas. Co. v Nelson, 67 NY2d 169; Cardinell v Allstate Ins. Co., 258 AD2d 853; Hartford Acc. & Indem. Co. v CNA Ins. Cos., 99 AD2d 310; Scavone v Kings Craft Corp., 55 AD2d 807.)

      Bouvier, O’Connor, LLP, Buffalo (Norman E.S. Greene of counsel), for respondent.
    I. Institution by Allstate of the subrogation action against Daniel J. Stein is barred by the statute of limitations as untimely, given the background facts and circumstances of this action. (Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214; Matter of Allstate Ins. Co. [Clarendon Natl. Ins. Co.], 259 AD2d 971; Matter of Prudential Prop. & Cas. Ins. Co. [Bacchus], 226 AD2d 384; Nationwide Mut. Ins. Co. v Schwartz, 172 Misc 2d 503; Aetna Life & Cas. Co. v Nelson, 67 NY2d 169; Country Wide Ins. Co. v Osathanugrah, 94 AD2d 513; Liberty Mut. Ins. Co. v Clark, 296 AD2d 442; Seven Sixty Travel v American Motorists Ins. Co., 98 Misc 2d 509; State Farm Mut. Auto Ins. Co. v Regional Tr. Serv., 79 AD2d 858; Blacharsh v Hartford Ins. Group, 104 AD2d 839.) II. Since Allstate’s insureds provided an unrestricted general release to the defendant Stein which was acquiesced in by Allstate, any alleged subrogation right by Allstate has been waived and is otherwise barred by execution of the release. (Weinberg v Transamerica Ins. Co., 62 NY2d 379; Matter of Allstate Ins. Co. [Liberati], 280 AD2d 922; New York Cent. Mut. Fire Ins. Co. v Danaher, 290 AD2d 783.)
   OPINION OF THE COURT

R.S. Smith, J.

This appeal concerns the timeliness of an action by an insurance company as subrogee of an accident victim to whom the insurance company has paid additional personal injury protection (APIP) benefits. The question presented is whether the statute of limitations runs from the date of the accident or the date when the first APIP benefits were paid. We hold that the statute runs from the date of the accident, and that the insurer’s action is therefore time-barred.

Factual Background

On May 24, 1995, a vehicle operated by Daniel Stein struck a vehicle being operated by Amy Walker and injured her. New York’s No-Fault Law required that Walker have insurance coverage providing “[flirst party benefits” consisting of reimbursement, to the extent specified by statute, for “[bjasic economic loss” (health expenses, loss of earnings, and other reasonable and necessary expenses) (Insurance Law § 5102 [a], [b]; § 5103 [a]). As the term “no-fault” implies, these first party benefits were payable to Walker regardless of who was at fault, and neither Walker nor her insurer could recover them from Stein (Insurance Law § 5104 [a]).

As authorized by New York Insurance Department Regulations (11 NYCRR) § 65-1.3 (though not required by statute), Walker had also purchased an APIP endorsement from Allstate Insurance Company covering her for “extended economic loss”—i.e., economic loss exceeding the time and dollar limits of the “basic economic loss” that is subject to mandatory no-fault coverage. Recovery of “extended economic loss” from third parties is not restricted by the no-fault statute.

On August 2, 1996, Walker began an action against Stein in Supreme Court, alleging that she had sustained a serious injury, which would permit her to recover noneconomic loss without violating the no-fault statute (Insurance Law § 5104 [a]), and also seeking to recover economic loss other than her basic economic loss. Thus, Walker sought to recover from Stein the same “extended economic loss” that was covered by the APIP endorsement in her Allstate policy.

By June 29, 1998, Walker’s basic no-fault coverage had evidently been exhausted, and Allstate made its first payment of APIP benefits to Walker. Allstate alleges that by May of 2001 it had paid more than $42,000 to Walker in APIP benefits. By making those payments, Allstate became subrogated to a portion of Walker’s claim against Stein.

On February 20, 2001, counsel for the parties in Walker’s action against Stein appeared, along with counsel for Allstate, at a conference before Supreme Court. Walker’s counsel stated that Walker and Stein had agreed on a $300,000 settlement of the action. Counsel for Stein stated that the release Stein expected to get from Walker “cuts off any rights that Allstate would have against either Mr. Stein or [Stein’s insurance carrier]” and requested a “clarification ... to that effect” from Allstate’s counsel. Allstate’s counsel, without commenting directly on the request for clarification, stated that Walker “has been made aware of the possible subrogation claim in the amount of 43 thousand dollars . . . and that she understands that in entering into this release.” Counsel for Walker added his own “clarification” stating that Walker is “giving a general release to the defendant [and] ... is reserving whatever rights or obligations or defenses she or her husband may have to any party to this proceeding, including Allstate Insurance Company, and I’m not conceding on the record that there’s a right of subrogation or anything else.”

Thus, it seems that the three parties represented at the conference had three different, and inconsistent, understandings of the settlement: Stein understood that he was getting a complete release, good against both Walker and Allstate; Allstate understood that it was preserving what it called a “subrogation claim,” though its counsel’s statement may be read as implying a claim against Walker for part of the $300,000, rather than against Stein for some additional amount; and Walker apparently understood that she would keep the whole $300,000, and did not recognize that Allstate was entitled to anything. Walker’s counsel added that “[W]e’re all going to let the law . . . determine what rights and obligations, if any, anyone has,” and the court echoed this comment: “[I]t’s clear on the record that all three parties are saying that they intend to fully enforce their rights to the full extent of the law and defenses that they might have.”

On February 23, 2001, Walker’s counsel delivered to Stein’s counsel an unqualified general release in Stein’s favor, executed by Walker and her husband, but not by Allstate. Stein resisted paying Walker the full $300,000 in return for this release. He paid Walker $200,000, and sought to require Walker and Allstate to resolve the allocation of the remaining $100,000 between themselves: first, Stein offered a $100,000 draft payable to both Walker and Allstate; he later began an interpleader action. Walker rejected the $100,000 draft and caused a judgment in the amount of $100,000 to be entered against Stein. Stein moved to vacate the judgment.

Despite its counsel’s comments at the settlement hearing, Allstate apparently made no effort to recover from Walker any portion of the $300,000 settlement. However, on May 4, 2001 Allstate, “as Subrogee of Amy M. Walker,” began its own action against Stein. This action, the third to be brought (after Walker’s original lawsuit and Stein’s interpleader action), is the one whose timeliness is now in issue. Allstate’s complaint alleged that Walker had been injured through Stein’s negligence; that as a result of those injuries, she had suffered losses for which Allstate paid her compensation in the form of APIP benefits; that Allstate had become Walker’s subrogee under the terms of its policy and the applicable insurance regulations; and that Allstate was therefore entitled to recover from Stein the APIP benefits it had paid. Stein moved to dismiss Allstate’s action based on, among other grounds, the statute of limitations.

Supreme Court resolved the three-cornered dispute by allowing Walker’s judgment against Stein to stand, dismissing Stein’s interpleader complaint and denying Stein’s motion to dismiss Allstate’s action. Stein appealed to the Appellate Division, which, by a three-two vote, reversed the denial of Stein’s motion to dismiss, holding that Allstate’s claim was barred by the statute of limitations. Allstate appeals as of right (CPLR 5601 [a]).

Discussion

Stein contends that Allstate, as Walker’s subrogee, stands in Walker’s shoes and was therefore required to bring suit by May 24, 1998, three years after the date of Walker’s accident, and almost three years before Allstate in fact sued. Allstate contends that, by making APIP payments to Walker, it acquired a new cause of action against Stein on June 29, 1998 and was permitted to sue until three years after that date.

In deciding the issue in Stein’s favor, the Appellate Division majority analyzed the question, we think correctly, as follows:

“Allstate’s subrogation action is governed by the same statute of limitations applicable to action No. 1, the personal injury action commenced by the Walkers against Stein. That is consistent with the principles that a subrogation claim is derivative of the underlying claim and that the subrogee possesses only such rights as the subrogor possessed, with no enlargement or diminution. It is likewise consistent with the principle that a defendant in a subrogation action has against the subrogee all defenses that he would have against the subrogor, including the same statute of limitations defense that could have been asserted against the subrogor” (305 AD2d 972, 974 [2003] [citations omitted]).

Allstate does not dispute that the above quotation correctly states the law applicable to subrogation generally. It contends, however, that the right asserted by Allstate in this case is not an ordinary subrogation right, but a creature of statute (as implemented by Insurance Department regulation), and that this case is therefore analogous to Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co. (89 NY2d 214 [1996] [MVAIC]) and Aetna Life & Cas. Co. v Nelson (67 NY2d 169 [1986]).

MVAIC concerned the right of the Motor Vehicle Accident Indemnification Corporation (MVAIC) to recover from the insurer of a vehicle no-fault benefits that MVAIC had paid after the vehicle’s insurer denied coverage. In that case, the defendant insurer claimed that MVAIC’s right was “in the nature of subrogation” and that MVAIC thus had no greater rights than its insured and was subject to the same statute of limitations (MVAIC, 89 NY2d at 220). This Court held otherwise, stating that MVAIC’s entitlement to reimbursement was “created or imposed by statute, but for which [it] would not exist” (id. at 221).

The MVAIC court relied on Aetna Life & Cas. Co. v Nelson, which concerned the attempt of a no-fault insurer to enforce a statutory lien pursuant to Insurance Law § 673 (2) (now § 5104 [b]). Noting that the statute of limitations contained in CPLR 214 (2) “only governs liabilities which would not exist but for a statute” (67 NY2d at 174), this Court in Aetna held that the liability there at issue was in that category. We stated that the statute creating that liability

“does not codify common-law principles; it creates new and independent statutory rights and obligations in order to provide a more efficient means for adjusting financial responsibilities arising out of automobile accidents” (id. at 175 [citation omitted]).

This case is different from MVAIC and Aetna because it involves a traditional equitable subrogation, not a liability created by statute. Indeed, no statute even refers to APIP benefits, much less a subrogation claim by an APIP carrier against a tortfeasor. Allstate relies not on a statute but on an Insurance Department regulation, 11 NYCRR 65-1.3, which sets forth a form of APIP endorsement which is “approved and promulgated” by the Department of Insurance (§ 65-1.3 [a]). The APIP endorsement approved by the Department includes a subrogation clause, as follows:

“In the event of any payment for extended economic loss, the Company is subrogated to the extent of such payments to the rights of the person to whom, or for whose benefit, such payments were made. Such person must execute and deliver instruments and papers and do whatever else is necessary to secure such rights. Such person shall do nothing to prejudice such rights.”

The regulation, however, does not create a new right which did not exist at common law, but merely prescribes the form of a clause that declares Allstate’s pre-existing right. On the facts of this case, Allstate would have a right of subrogation against Stein if there were no applicable regulation, and indeed even if there were no explicit subrogation clause in the insurance policy. Subrogation is a venerable equitable doctrine, not a recent invention of the Insurance Department. Almost 80 years ago, our Court explained the doctrine of subrogation as follows:

“It is so well settled as not to require discussion that an insurer who pays claims against the insured for damages caused by the default or wrongdoing of a third party is entitled to be subrogated to the rights which the insured would have had against such third party for its default or wrongdoing. This right of subrogation is based upon principles of equity and natural justice. We recognize at once the fairness of the proposition that an insurer who has been compelled by his contract to pay to or in behalf of the insured claims for damages ought to be reimbursed by the party whose fault has caused such damages . . .” (Ocean Acc. & Guar. Corp. v Hooker Electrochemical Co., 240 NY 37, 47 [1925]; see also Aetna Cas. & Sur. Co. v Jackowe, 96 AD2d 37, 44 [2d Dept 1983] [quoting, in the context of an APIP carrier’s subrogation rights, the statement in Kozlowski v Briggs Leasing Corp., 96 Misc 2d 337, 342 (Sup Ct, Kings County 1978): “subrogation is equitable in nature, not dependent on contract”]).

Allstate protests that, if the statute of limitations on its subrogation claim runs from the date of the accident, the claim may be time-barred before the right of subrogation exists, so that the subrogee would never have an opportunity to bring suit on the claim. But this sort of risk is inherent in subrogation; the subrogee acquires only the rights that the subrogor had, and so any subrogee may find its claim defeated by a defense based on the subrogor’s action or inaction. In such a case, the subrogee’s remedy is against the subrogor, for conduct that has prejudiced the subrogee’s right. The APIP endorsement quoted above specifically provides that the subrogor shall “do nothing to prejudice” the insurer’s rights of subrogation. This provision too is merely declaratory of longstanding equitable principles (see e.g. Ocean, 240 NY at 47).

As the Appellate Division majority pointed out, Allstate’s plight here results from its own failure “to insist on the resolution of its subrogation claim against the tortfeasor for APIP payments as part of a global settlement of the personal injury claims” (305 AD2d at 975). Nothing required Allstate to acquiesce, as it did, in a settlement between Walker and Stein in which all the consideration went to Walker and none to Allstate. Allstate was, by virtue of subrogation, entitled to the portion of Walker’s recovery that is allocable to her claim for “extended economic loss.” At the February 20, 2001 conference Allstate’s counsel seemed to recognize this, stating to the court that “the plaintiff has been made aware of the possible subrogation claim in the amount of 43 thousand dollars.” But Allstate never followed up the implied threat to recover its $43,000 from the settlement proceeds that Walker received, choosing instead to bring a time-barred action against Stein.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt, Graffeo and Read concur.

Order affirmed, with costs.

      . CPLR 214 (5) imposes a three-year statute of limitations for most personal injury actions.

      . Allstate relies on CPLR 214 (2), providing a three-year limitation period for “an action to recover upon a liability, penalty or forfeiture created or imposed by statute.”


author: Chief Judge Kaye. Read, J.

text:
    [806 NE2d 979, 774 NYS2d 866]
    John Chambers et al., Respondents, v Old Stone Hill Road Associates et al., Appellants.
    Argued January 13, 2004;
    decided February 24, 2004

      POINTS OF COUNSEL

      Snyder & Snyder, LLP, Tarrytown (David L. Snyder and Leslie J. Snyder of counsel), for New York SMSA Limited Partnership, appellant.
    I. Because the decisions below are contrary to well-established public policy, they must be reversed. (Matter of Cellular Tel. Co. v Rosenberg, 82 NY2d 364; Omnipoint Communications, Inc. v City of White Plains, 175 F Supp 2d 697; Crane Neck Assn. v New York City/Long Is. County Servs. Group, 92 AD2d 119, 61 NY2d 154, 469 US 804; Quinones v Board of Mgrs. of Regalwalk Condominium I, 242 AD2d 52; Board of Mgrs., Artist Lake Condominium v Rios, 166 Misc 2d 381; Bell v Gitlitz, 65 Misc 2d 998, 38 AD2d 656; Reno v American Civ. Liberties Union, 521 US 844; Lucas v Planning Bd. of Town of LaGrange, 7 F Supp 2d 310; Memphis Light, Gas & Water Div. v Craft, 436 US 1; Burgess v City of Houston, 718 F2d 151.) II. The tower is not a “building” and hence is not prohibited by the covenant. (Matter of Bell Atl. NYNEX Mobile v Lonergan, 172 Misc 2d 317, 251 AD2d 660; Proper v Southwestern Bell

      Mobile Sys., 266 AD2d 607; Matter of Jaffee v RCI Corp., 119 AD2d 854; Thrun v Stromberg, 136 AD2d 543; Kaufman v Fass, 302 AD2d 497; Blueberries Gourmet v Aris Realty Corp., 291 AD2d 520; E.M.R. Mgt. Corp. v Halstead Harrison Assoc., 299 AD2d 393; Sunrise Plaza Assoc. v International Summit Equities Corp., 152 AD2d 561, 75 NY2d 703; Battista v Pine Is. Park Assn., 28 AD2d 714; Premium Point Park Assn. v Polar Bar, 306 NY 507.) III. The decisions below should be reversed because, in refusing to grant relief from the covenant under RPAPL 1951, the court applied an incorrect standard, relied on impermissible evidence and failed to perform the requisite balancing test. (Orange & Rockland Util. v Philwold Estates, 52 NY2d 253; Deak v Heathcote Assn., 191 AD2d 671; Matter of Zimmerman v Seven Corners Dev., 237 AD2d 892; Board of Educ., E. Irondequoit Cent. School Dist. v Doe, 88 AD2d 108; Rosenman Colin Freund Lewis & Cohen v Edelman, 165 AD2d 533; Town of Tonawanda v Ayler, 68 NY2d 836; Clintwood Manor v Adams, 29 AD2d 278, 24 NY2d 759; Bardach v Mayfair-Flushing Corp., 49 Misc 2d 380, 26 AD2d 620, 18 NY2d 580; Goldstein v Rosenberg, 191 App Div 492; Pulitzer v Campbell, 146 Misc 700.) IV As a matter of law and equity, plaintiffs-respondents were not entitled to a mandatory injunction requiring removal of the tower. (Goodfarb v Freedman, 76 AD2d 565; Forstmann v Joray Holding Co., 244 NY 22; Village Greens Residents Assn. v Karolewicz, 83 AD2d 550; Syracuse Supply Co. v Railway Express Agency, 45 Misc 2d 1000, 27 AD2d 635, 20 NY2d 718; DiMarzo v Fast Trak Structures, 298 AD2d 909; Bell v Gitlitz, 38 AD2d 656; Sunrise Plaza Assoc. v International Summit Equities Corp., 288 AD2d 300; Medvin v Grauer, 46 AD2d 912; Generalow v Steinberger, 131 AD2d 634; Horton v Niagara, Lockport & Ontario Power Co., 231 App Div 386.)

      Banks Shapiro Gettinger Waldinger & Brennan, LLP, Mount Kisco (Mona D. Shapiro of counsel), for Old Stone Hill Road Associates, appellant.
    I. As a matter of law, because enforcement of the restrictive covenant would frustrate an important state and federal policy, it should not be enforced. (Crane Neck Assn. v New York City/Long Is. County Servs. Group, 61 NY2d 154; Matter of Cellular Tel. Co. v Rosenberg, 82 NY2d 364; Quinones v Board of Mgrs. of Regalwalk Condominium I, 242 AD2d 52; Matter of Consolidated Edison Co. of N.Y. v Hoffman, 43 NY2d 598; Cellular Phone Taskforce v Federal Communications Commn., 205 F3d 82, 531 US 1070; Sprint Spectrum, L.P. v Willoth, 176 F3d 630; Town of Amherst v Omnipoint Communications Enters., Inc., 173 F3d 9; Nextel Partners, Inc. v Town of

      Amherst, 251 F Supp 2d 1187.) II. As a matter of law, the restrictive covenant may not be enforced to the extent that its enforcement would violate 47 USC § 332 (c) (7). (Hillsborough County v Automated Med. Labs., Inc., 471 US 707; Gibbons v Ogden, 9 Wheat [22 US] 1; Jones v Rath Packing Co., 430 US 519; Fidelity Fed. Sav. & Loan Assn. v de La Cuesta, 458 US 141; English v General Elec. Co., 496 US 72; Hines v Davidowitz, 312 US 52; Freightliner Corp. v Myrick, 514 US 280; Free v Bland, 369 US 663; Town of Amherst v Omnipoint Communications Enters., Inc., 173 F3d 9; Sprint Spectrum, L.P. v Willoth, 176 F3d 630.) III. As a matter of law, the restrictive covenant may not be enforced to the extent that its enforcement would violate 47 USC § 253. (TCG N.Y., Inc. v City of White Plains, 305 F3d 67; New Jersey Payphone Assn., Inc. v Town of W. N.Y., 299 F3d 235; City of Auburn v Qwest Corp., 260 F3d 1160; Cippollone v Liggett Group, Inc., 505 US 504; Shaw v Delta Air Lines, Inc., 463 US 85; Medtronic, Inc. v Lohr, 518 US 470; Matter of Friends of Shawangunks v Knowlton, 64 NY2d 387.)

      Wilson, Elser, Moskowitz, Edelman & Dicker LLP, White Plains (Steven M. Silverberg and Katherine Zalantis of counsel), for respondents.
    I. Wireless telecommunications providers (not municipalities) select locations for wireless telecommunications facilities by entering into private agreements with landowners. Consequently, landowners (and not municipalities) are the first step in the process of locating wireless telecommunications facilities. (Omnipoint Communications Enters., L.P. v Township of Nether Providence, 232 F Supp 2d 430; Matter of Consolidated Edison Co. of N.Y. v Hoffman, 43 NY2d 598; Matter of Consolidated Edison Co. of N.Y. v Lindsay, 24 NY2d 309.) II. The Town Board’s granting of the special permit does not prevent plaintiffs from enforcing the restrictive covenant. (Matter of Friends of Shawangunks v Knowlton, 64 NY2d 387.) III. The restrictive covenant does not violate a statutory or general public policy. (Crane Neck Assn. v City of New York/Long Is. County Servs. Group, 61 NY2d 154, 469 US 804; Quinones v Board of Mgrs. of Regalwalk Condominium I, 242 AD2d 52; Board of Mgrs., Artist Lake Condominium v Rios, 166 Misc 2d 381; Sprint Spectrum, L.P. v Willoth, 176 F3d 630; Omnipoint Communications Enters., L.P. v Zoning Hearing Bd. of Easttown Twp., 331 F3d 386; Second Generation Props., L.P. v Town of Pelham, 313 F3d 620; Matter of Cellular Tel. Co. v Rosenberg, 82 NY2d 364; Kemp v Rubin, 298 NY 590; Bell v Gitlitz, 65 Misc 2d 998, 38 AD2d 656.) IV The premises (the Adams Lane site) is not the only site for the facility. Consequently, removal of the facility is not equivalent to a prohibition of service. (New York SMSA Ltd. Partnership v Town of Clarkstown, 99 F Supp 2d 381; Airtouch Cellular v City of El Cajon, 83 F Supp 2d 1158; Sprint Spectrum, L.P. v Board of County Commrs. of Jefferson County, 59 F Supp 2d 1101; SiteTech Group Ltd. v Board of Zoning Appeals of Town of Brookhaven, 140 F Supp 2d 255; Cellular Tel. Co. v Town of Oyster Bay, 166 F3d 490; Suffolk Outdoor Adv. Co. v Hulse, 43 NY2d 483.) V The restrictive covenant is not vague. (Goodfarb v Freedman, 76 AD2d 565; Matter of Bell Atl. NYNEX Mobile v Lonergan, 172 Misc 2d 317, 251 AD2d 660; Proper v Southwestern Bell Mobile Sys., 266 AD2d 607; Jaffee v RCI Corp., 119 AD2d 854; Mambretti v Poughkeepsie Galleria Co., 288 AD2d 443; Battista v Pine Is. Park Assn., 28 AD2d 714; Sprint Spectrum, L.P. v Board of Zoning Appeals of Town of Brookhaven, 244 F Supp 2d 108; Premium Point Park Assn. v Polar Bar, 306 NY 507; Verstandig’s Florist v Board of Appeals of Town of Bethlehem, 229 AD2d 851; Mairs v Stevens, 294 NY 806.) VI. The restrictive covenant is not unenforceable under RPAPL 1951. (Farr v Newman, 14 NY2d 183; Southwestern Bell Mobile Sys., Inc. v Todd, 244 F3d 51; Second Generation Props., L.P. v Town of Pelham, 313 F3d 620; Orange & Rockland Util. v Philwold Estates, 52 NY2d 253; Deak v Heathcote Assn., 191 AD2d 671; Garrett v Village of Asharoken, 185 AD2d 873; Cody v Fabiano & Sons, 246 AD2d 726, 91 NY2d 814; Fanning v Grosfent, 58 AD2d 366; Matter of Zimmerman v Seven Corners Dev., 237 AD2d 892; Pulitzer v Campbell, 146 Misc 700.) VII. Plaintiffs are entitled to a mandatory injunction requiring demolition of the facility. (Goodfarb v Freedman, 76 AD2d 565; Westmoreland Assn. v West Cutter Estates, 174 AD2d 144; Jones v Fowler, 201 AD2d 878.) VIII. A court’s enforcement of the restrictive covenant would not have the effect of prohibiting service. (Omnipoint Communications Enters., L.P. v Township of Nether Providence, 232 F Supp 2d 430; Anderson v Regan, 53 NY2d 356; People ex rel. Burby v Howland, 155 NY 270; Shelley v Kraemer, 334 US 1; Cippollone v Liggett, Inc., 505 US 504; New York SMSA Ltd. Partnership v Town of Clarkstown, 99 F Supp 2d 381; Cellular Tel. Co. v Town of Oyster Bay, 166 F3d 490; Metronic, Inc. v Lohr, 518 US 470; Sprietsma v Mercury Mar., 537 US 51.) IX. The Town cannot protect its purported interests through its amicus brief. (Russell v Board of Plumbing Examiners of County of Westchester, 74 F Supp 2d 349, 242 F3d 367; Rochdale Vil. v Harris, 172 Misc 2d 758; First Citizens Bank & Trust Co. v Saranac Riv. Power Corp., 246 App Div 672; Central Hanover Bank & Trust Co. v Saranac Riv. Power Corp., 243 App Div 843; Matter of Glenel Realty Corp. v Worthington, 4 AD2d 702; Matter of Greater N.Y. Health Care Facilities Assn. v DeBuono, 91 NY2d 716; 15 E. 11th Apt. Corp. v Elghanayan, 232 AD2d 289.)

      Bleakley Platt & Schmidt, LLP, White Plains (Robert D. Meade of counsel), for Town of Pound Ridge, amicus curiae.
    Any removal of the facilities at issue in this action should be coordinated with the replacement of emergency communications apparatus of the Town of Pound Ridge located thereon.
   OPINION OF THE COURT

Chief Judge Kaye.

Starting in 1957, nearly 50 years ago, the owner of a large tract of land in the Town of Pound Ridge, Westchester County, began conveying parcels with restrictive covenants to limit development on this land to single-family homes. Plaintiffs and defendant Old Stone Hill Road Associates are the current owners of several of these lots that are subject to covenants in a deed within the chain of title, duly recorded, prohibiting “any building except detached residential dwelling houses each for the occupancy and use of one family” and “any trade or business whatsoever.” Appellants, Stone Hill and its lessee, now seek to avoid enforcement of these covenants.

In November 1998, Stone Hill leased about 2,000 square feet on one lot, with a right of access on an adjacent lot, to defendant New York SMSA Limited Partnership doing business as Verizon Wireless. The purpose was for SMSA to construct a facility—an antenna mounted on a 120-foot monopole with a two-story, 660-square-foot equipment storage shed disguised as a barn located at the base and parking space for maintenance vehicles—to provide cellular telephone service in the town and surrounding area. The lease to SMSA touched off a series of events leading to the present litigation, which essentially pits private contractual rights against what defendants claim is the public policy of the Telecommunications Act of 1996 (TCA) (47 USC § 151 et seq., as added by Pub L 104-104, 110 US Stat 56) regarding wireless telecommunications facilities.

In April 2000, after considering 18 alternative sites over a period of 15 months, the Town Board approved SMSA’s application for a special permit to construct the facility on Stone Hill’s property. Several of these sites had been evaluated in combination with other locations so that they could be compared with the proposed single site on Stone Hill’s property. Since the Stone Hill site was in an exclusively residential area, the Town Board initially expressed a preference for the Town’s own “Highway Garage/DPW” site. In fact, the Stone Hill site was taken off the Town Board agenda during the review process, but placed back on the agenda for consideration just before the Board issued the special permit.

Regardless, the Board ultimately rejected all of the alternatives, in part because adequate coverage could not be secured on a single site and might in the future require construction at an additional location. Plaintiffs initiated two lawsuits: the present action to enforce the restrictive covenants brought in March 2000, and a CPLR article 78 proceeding to challenge the Town’s approval of the special permit brought in May 2000.

Thereafter, in June 2000, SMSA obtained a building permit and immediately began construction, which was substantially complete in September 2000. Plaintiffs meanwhile moved for partial summary judgment on their claims for an injunction based on the restrictive covenants. Supreme Court on November 19, 2001, decided both cases. The court issued a permanent injunction against violation of the restrictive covenants, ordered removal of the facility and dismissed defendants’ counterclaim to extinguish the restrictive covenants pursuant to RPAPL 1951 (Chambers v Old Stone Hill Rd. Assoc., Sup Ct, Westchester County, Nov. 19, 2001, Cowhey, J., Index No. 00-04475). Separately, the court dismissed the article 78 proceeding, holding that the Town had acted properly; in the court’s words, “upon a review of the record, it is plain that the DPW site [the alternative site urged by plaintiffs] cannot provide the necessary adequate coverage and adequate capacity to the Town” (Matter of Sorkin v Simpkins, Sup Ct, Westchester County, Nov. 19, 2001, Cowhey, J., Index No. 7498/00).

On defendants’ appeal, the Appellate Division affirmed, concluding that the restrictive covenants evinced an intent to limit the area to residential use, and rejecting defendants’ hardship claim because “[w]here, as here, the servient property owner’s hardships are largely self-created, they do not tip the balance of the equities in favor of extinguishing the restrictive covenants” (303 AD2d 536, 537 [2d Dept 2003]). The Court also rejected defendants’ public policy arguments, stating that the TCA “does not expressly or impliedly preempt the power of private citizens to enforce restrictive covenants or otherwise limit the judicial enforcement of those private agreements” (id. at 538).

Defendants now place two arguments before us. First, they assert that enforcement of the restrictive covenants offends public policy, which should trump plaintiffs’ contractual rights. Second, they claim that the hardships to defendants outweigh the benefits to plaintiffs, and that the restrictive covenants must therefore be extinguished under RPAPL 1951. We conclude that Supreme Court and the Appellate Division correctly rejected both arguments.

Restrictive covenants will be enforced when the intention of the parties is clear and the limitation is reasonable and not offensive to public policy (see e.g. Reed, Roberts Assoc. v Strauman, 40 NY2d 303, 307 [1976]; Silverstein v Shell Oil Co., 33 NY2d 950, 950-951 [1974], affg 40 AD2d 34, 36 [3d Dept 1972]; Bovin v Galitzka, 250 NY 228, 231-232 [1929]). Here, the intention of the restrictive covenants was clearly to preserve the residential character of the neighborhood by limiting the area to residential use, which limitation is reasonable. Plainly too, these covenants do not offend public policy.

Public Policy

Congress enacted the Telecommunications Act of 1996 to encourage development and reduce regulation of telecommunications technologies (47 USC § 151). Section 332 of the TCA furthers this purpose by making it unlawful to prohibit wireless services: “The regulation of the placement, construction, and modification of personal wireless service facilities by any State or local government or instrumentality thereof . . . shall not prohibit or have the effect of prohibiting the provision of personal wireless services” (47 USC § 332 [c] [7] [B] [i] [II]). Asserting that the restrictive covenants offend the public policy embodied in the statute, defendants claim that enforcing the covenants will essentially prohibit personal wireless services in the Town of Pound Ridge. Additionally, defendants urge that, if the Appellate Division is affirmed and the tower removed, the Town’s authority will be negated. Neither argument has merit.

Upholding plaintiffs’ contractual rights in no way denies wireless telecommunications services in the Town of Pound Ridge. The Town Resolution stated that the Stone Hill site “has the best chance of being the only site necessary to meet the needs and demands for wireless telecommunication services for the Town of Pound Ridge.” But despite defendants’ insistence, the Town’s determination that the Stone Hill site might be the best single-site solution is not a determination that the Stone Hill site was the only site for the facility (see e.g. SiteTech Group Ltd. v Board of Zoning Appeals of Town of Brookhaven, 140 F Supp 2d 255, 264-265 [ED NY 2001] [upholding a zoning board’s denial of a special permit on the ground that there were alternative sites even though the alternative sites would not have completely closed the gaps in service and would have required additional antennas]). The Town, as amicus, concedes the existence of another site or sites on which to locate the facility. Indeed, up to the very day the Town Board selected Stone Hill, alternative sites like the Highway Garage/DPW site were under active consideration. In short, these covenants do not prohibit or have the effect of prohibiting the provision of wireless telecommunications services in the Town of Pound Ridge.

Additionally, defendants assert that the Town’s authority to grant the special permit will be negated if the restrictive covenants are enforced and the tower removed. The Town’s issuance of the special permit to construct the facility is, however, separate and distinct from plaintiffs’ right to enforce the restrictive covenants, a right only plaintiffs can enforce. As we observed in Matter of Friends of Shawangunks v Knowlton (64 NY2d 387, 392 [1985]):

“The use that may be made of land under a zoning ordinance and the use of the same land under an easement or restrictive covenant are, as a general rule, separate and distinct matters, the ordinance being a legislative enactment and the easement or covenant a matter of private agreement.”

The Court went on to make clear that “a particular use of land may be enjoined as in violation of a restrictive covenant, although the use is permissible under the zoning ordinance and the issuance of a permit for a use allowed by a zoning ordinance may not be denied because the proposed use would be in violation of a restrictive covenant” (id. [citations omitted]; see also 2 Salkin, New York Zoning Law and Practice § 34:02 [4th ed] [“enforcement (of a zoning ordinance) will be enjoined for a violation of a restrictive covenant”]). In approving a special permit, a municipality determines only that the application complies with the municipality’s standards and conditions contained in the zoning ordinance (see Matter of North Shore Steak House v Board of Appeals of Inc. Vil. of Thomaston, 30 NY2d 238, 243-244 [1972]; Matter of Mobil Oil Corp. v Oaks, 55 AD2d 809, 809-810 [4th Dept 1976]; 2 Salkin, New York Zoning Law and Practice § 30:01 [4th ed]).

Thus, in separately dismissing the article 78 proceeding challenging the Town’s permit and enforcing the restrictive covenants—both on the same day—Supreme Court correctly refused to allow the Town Board’s decision that the Stone Hill lot was an appropriate site for the facility to override plaintiffs’ right to enforce the restrictive covenants. Defendants and the Town cannot negate the restrictive covenants by ignoring them and proceeding with the permit process and construction.

Finally, in arguing that the restrictive covenants offend public policy, defendants misread Crane Neck Assn. v New York City/Long Is. County Servs. Group (61 NY2d 154 [1984]). In Crane Neck, the property in issue—leased to the government for use as a home for mentally disabled adults—was subject to a restrictive covenant that allowed only single-family dwellings. There, however, Mental Hygiene Law § 41.34 (f) explicitly preempted local laws and ordinances, defining a community residence for this purpose as a family unit. This Court extended the statute’s explicit preemption to private covenants restricting the use of property to single-family dwellings because those agreements posed the same deterrent to effective implementation of the state policy favoring residences for the mentally disabled as the preempted local laws and ordinances. By contrast, Congress expressly recognized the importance of local land use authority in TCA § 332 (c) (7) (A), which makes clear that nothing in the Act “shall limit or affect the authority of a State or local government . . . over decisions regarding the placement ... of personal wireless service facilities.” Thus, here there is no comparable public policy being transgressed, indeed no preemption that might motivate the Court to extend a statutory mandate to extinguish private rights.

Balancing the Equities

Similarly, we reject defendants’ argument that the restrictive covenants should be extinguished under RPAPL 1951 (2), which provides:

“When relief against such a restriction is sought in an action to quiet title or to obtain a declaration with respect to enforceability of the restriction . . . if the court shall find that the restriction is of no actual and substantial benefit to the persons seeking its enforcement or seeking a declaration or determination of its enforceability, either because the purpose of the restriction has already been accomplished or, by reason of changed conditions or other cause, its purpose is not capable of accomplishment, or for any other reason, it may adjudge that the restriction is not enforceable by injunction . . .

As we underscored in Orange & Rockland Util. v Philwold Estates (52 NY2d 253, 266 [1981]), “the issue is not whether [the party seeking the enforcement of the restriction] obtains any benefit from the existence of the restriction but whether in a balancing of equities it can be said to be, in the wording of the statute, ‘of no actual and substantial benefit’ ” (emphasis in original). Equally clear is that the party claiming that a restriction is unenforceable bears the burden of proving it (see e.g. Deak v Heathcote Assn., 191 AD2d 671, 672 [2d Dept 1993]).

Here, Supreme Court found, and the Appellate Division agreed, that “defendants have failed to meet their burden of proof and no credible evidence has been put forward by defendants that the landowners do not derive any actual and substantial benefit from restricting the land to solely residential use. To the contrary, plaintiffs have shown that the properties have benefitted from such restriction.” Given ample support in the record, this affirmed factual finding is beyond the scope of our review.

Nor do defendants’ alleged hardships tip the balance of equities in favor of extinguishing plaintiffs’ rights. Here too, Supreme Court and the Appellate Division properly balanced the equities. In particular, the courts discounted SMSA’s alleged hardship because it proceeded with construction of the facility with knowledge of the restrictive covenants and of plaintiffs’ intention to enforce them. Its difficulty was thus “largely self-created” (303 AD2d at 537). As for defendant Stone Hill’s argument that it was unable to sell the property for residential use, Supreme Court found that the “[defendants have failed to show that the restrictions^] purpose in retaining the residential nature of the area was not capable of being accomplished or that there were any changed conditions that would warrant granting defendants relief from the restrictive covenant.” These affirmed findings, too, are supported by the record and beyond the scope of our review.

Addressing the dissent, for at least three reasons, the Second Circuit’s decision in Sprint Spectrum, L.P. v Willoth (176 F3d 630 [1999])—the nub of the dissent—is inapposite. First, at issue here is the enforceability of the restrictive covenants, not the “separate and distinct” authority of the Town to grant the permit (Matter of Friends of Shawangunks v Knowlton, 64 NY2d 387, 392 [1985]). Second, the TCA’s ban applies to “State or local government [s] or instrumentalit [ies], ” not individual citizens’ efforts to enforce their rights.

Third, Sprint involved a conflict between the TCA’s ban on prohibiting service by state and local governments on the one hand and a town’s rejection of an application on the other. Sprint did not implicate private contract rights. Indeed, the Second Circuit made clear that it did “not read the TCA to allow the goals of increased competition and rapid deployment of new technology to trump all other important considerations” (176 F3d at 639). That there are relatively large setbacks, few dwellings and considerable topographic relief in the Stone Hill area (dissenting op at 440)—a consequence of the longstanding bargained-for covenants—is not a reason for now situating a 120-foot monopole, 660-square-foot equipment shed and parking space for maintenance vehicles in the neighborhood. On this record, neither “least intrusive means” nor the Restatement of Property supports such a result. As Supreme Court and the Appellate Division correctly concluded, the TCA does not preempt the power of private citizens to enforce their contractual rights, or limit judicial enforcement of those rights.

Finally, we note that the Town urges that it would need time to relocate the antenna without interruption of service vital to public health and safety. Plaintiffs have consented to “a reasonable time period” for relocation.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Read, J.

(dissenting). The Town Board of the Town of Pound Ridge has determined that siting a wireless telecommunications tower at the Stone Hill site provides the least intrusive means to close a significant gap in personal wireless services in the town. Under these circumstances, the restrictive covenant limiting development on the Stone Hill site to a single-family residence must yield to public policy as expressed in the Telecommunications Act of 1996 (TCA), codified at 47 USC § 151 et seq. For this reason, I respectfully dissent, and would reverse the order of the Appellate Division.

I view this case from the essential standpoint of section 332 of the TCA (47 USC § 332). The relevant language of this provision makes it unlawful for state or local authorities to regulate the placement, construction or modification of personal wireless service facilities in such a way as to “prohibit or have the effect of prohibiting the provision of personal wireless services” (47 USC § 332 [c] [7] [B] [i] [II] [emphasis added]). In considering whether to grant New York SMSA Limited Partnership, doing business as Verizon Wireless, (SMSA) a special permit for the Stone Hill site or for the Highway Garage/DPW site alone or in combination with another site, the Town Board and the Town Planning Board were properly guided (in fact, constrained) by the interpretation given to the TCA’s antiprohibition ban by the United States Court of Appeals for the Second Circuit in Sprint Spectrum, L.P. v Willoth (176 F3d 630 [2d Cir 1999]).

In that case, Sprint filed three separate applications with the Planning Board for the Town of Ontario, New York, asking for site plan approval to construct three separate cell sites, each accommodating a 150-foot tall monopole tower. During a 17-month review period punctuated by public hearings and the submission and consideration of draft and final environmental impact statements, Sprint consistently resisted entertaining alternatives with respect to the number, height and placement of towers. Confronted with a choice between three towers or none, the Ontario Planning Board denied all three applications on environmental grounds. Sprint sued, asserting federal and state claims, lost in the District Court and appealed.

Sprint claimed a right by virtue of the antiprohibition clause to construct as many towers as were, in its business judgment, necessary for its effective competition with other telecommunications carriers, wireless or not. The Town interpreted the clause as prohibiting only general bans, never individual decisions on specific applications. In an opinion by Circuit Judge (currently, Chief Judge) Walker, the Second Circuit rejected both “extreme positions” (Sprint, 176 F3d at 641) as obviating the meaning of many of the TCA’s other provisions and as inconsistent with the statute’s public policy goals: to promote the rapid deployment of new technology and foster competition and innovation in the telecommunications marketplace while at the same time preserving local land use control, subject to certain limitations.

Commenting that “[i]t would be [a] gross understatement to say that the [TCA] is not a model of clarity” (Sprint, 176 F3d at 641, quoting AT & T Corp. v Iowa Util. Bd., 525 US 366, 397 [1999]), Judge Walker next engaged in a “detailed parsing of the statutory language, including layers of highly technical definitions” (Sprint, 176 F3d at 641). At the end of this exegesis, he concluded that the antiprohibition clause prevents localities from regulating personal wireless service facilities in such a way as to preclude users in a remote location from connecting to the national telephone network. “In other words, local governments must allow service providers to fill gaps in the ability of wireless telephones to have access to land-lines” (id. at 643).

In view of the foregoing, the Second Circuit held in Sprint that “the [TCA]’s ban on prohibiting personal wireless services precludes denying an application for a facility that is the least intrusive means for closing a significant gap in a remote user’s ability to reach a cell site that provides access to land-lines” (id. [emphasis added]). Applying this holding to the facts, the Court determined that Sprint’s applications were not for the least intrusive facilities and therefore the Town’s denial of them did not violate the TCA.

Under the Second Circuit’s holding in Sprint, a provider must therefore make two showings in order to demonstrate that a permit denial prohibits or effectively prohibits service within the meaning of the TCA: that there is a significant gap in service coverage that the application seeks to fill, and that the application implements the least intrusive means necessary to fill the gap and provide the service. Put in another way, when a provider makes these showings, the TCA requires the locality to issue any necessary permits; a locality that nonetheless denies the necessary permits thereby effectively prohibits the provision of personal wireless services in violation of section 332 of the TCA.

In this case, it is undisputed that there was a significant gap in wireless coverage needing to be closed when SMSA filed its application. Further, the record fully supports the Town Board’s conclusion that siting a tower at the Stone Hill site represented the least intrusive means for closing this significant gap.

Specifically, in January 1999, SMSA applied for a special permit under the Town’s local law entitled “Wireless Telecommunications Services Facilities,” which amended the zoning law to establish special standards and requirements for such uses, subject to special permit approval. The Town Board subsequently requested additional information, held a public hearing and, in April 1999, forwarded SMSA’s application to the Town Planning Board, as required by the zoning law.

The Town Planning Board discussed the application at numerous meetings, solicited additional information from SMSA and engaged special counsel as well as technical consultants to assist in its review. As part of that review, the Planning Board studied alternative sites.

In November 1999, the Town Planning Board issued an “Advisory Review and Recommendation.” At the outset, the Board noted that siting a wireless communications facility in Pound Ridge, while necessary, was made particularly difficult by certain “givens”: “Pound Ridge is overwhelmingly residential, topographically varied, and relatively rural in character”; and “[m]uch of the Town’s minimal commercial area, normally more compatible for [wireless telecommunications services facility] locations, is either low in elevation or within 2500 feet of an historic district, both of which make siting problematic.”

In light of these factors, the Board made findings as follows:

“In its effort to identify the least intrusive means of closing the existing gap in wireless service, the [Planning] Board evaluated not only [the Stone Hill site] as proposed and as modified through the proceedings, but also a number (18) of alternative sites, eventually narrowed down to eight” (emphasis added).

Further, “[o]n balance, the [Stone Hill site], having been given more thorough consideration by [SMSA], seems to meet many of the Town’s criteria, except in one glaring area—residential location on a residential lot” (emphasis in original). Based on its evaluation of alternatives, the Planning Board recommended a preferred ranking of the DPW/Highway Garage site alone; followed by the DPW/Highway Garage site in combination with another site; and, finally, the Stone Hill site, “but only with all of the [Planning Board’s] suggested mitigation.”

Based on the Town Planning Board’s findings and recommendations, the Town Board amended its site inventory list and received and reviewed an application from SMSA for a special permit for the DPW/Highway Garage site. SMSA thus made two special permit applications—one for the Stone Hill site; one for the DPW/Highway Garage site—with the understanding that only one application would be approved and that the other would be withdrawn as a condition of this approval. The Board then undertook a detailed review of SMSA’s application for the DPW/Highway Garage site, just as it had already done for the Stone Hill site. At the end of this review, the Board held a joint public hearing on the applications for both sites.

In April 2000, the Town Board adopted a resolution, including a negative declaration under the State Environmental Quality Review Act, with respect to the Stone Hill site. The Board identified the Stone Hill site as “the technologically best available site” in the town in terms of coverage, and therefore as the site with the “best chance of being the only site necessary to meet the needs and demands for [the town’s] wireless telecommunication services.” The Board also noted that most of the tower would not be directly visible from adjoining residences; and that the Stone Hill site “enjoys relatively large setbacks and few neighbors and is also separated from residences on adjoining lots by considerable topographic relief.” Indeed, the Stone Hill site was the potential site with the fewest existing dwellings within a 1,000-foot radius. The Stone Hill site’s only disadvantage was that “with the exception of the primary electric distribution lines which cross [it] within a 100 foot wide utility easement, the property is a vacant residential parcel in a residential area.” Finally, the Board required SMSA to undertake numerous mitigation steps as a condition of the special permit, including landscaping and other aesthetic measures. The tower and its nearby equipment building, disguised as a barn, occupy roughly 2,000 square feet on 9.5 acres of land otherwise undeveloped except for the primary electric distribution lines and telephone poles.

In short, SMSA, unlike Sprint, did not resist alternative sites or mitigation measures put forward by the local authorities, and, in fact, went so far as to apply for a special permit for a suggested alternative site. The Stone Hill site—the best site technologically; the site with the fewest residential neighbors; the only site with the potential to function as a sole site— represented the least intrusive means to close the acknowledged significant gap in the town’s personal wireless services. The Board’s denial of the special permit, under these circumstances, would have effectively prohibited the provision of personal wireless services within the meaning of section 332 of the TCA, as interpreted by the Second Circuit in Sprint. A restrictive covenant—a private contract—cannot thwart a land use that federal law carrying out national telecommunications policy requires local authorities to approve.

In Crane Neck Assn. v New York City/Long Is. County Servs. Group (61 NY2d 154, 166 [1984]), we addressed a restrictive covenant the enforcement of which would have “frustrated” a state policy encouraging placement of the mentally disabled in the community. We focused on Mental Hygiene Law § 41.34 (f), which deems a community residence a “family unit[ ] for the purposes of local laws and ordinances.” This provision was prompted by resistance to the siting of group homes in the form of injunctive actions based upon local ordinances limiting the use of property to single-family residences. In light of the State’s purpose in enacting the statute and because “[p]rivate covenants . . . pose the same deterrent to the effective implementation of the State policy as the local laws and ordinances that had actually been the subject of . . . legal challenges” (id. at 164), we concluded that the covenant could not be equitably enforced as a matter of public policy.

Similarly, the proliferation of cell towers has prompted resistance and legal challenges on the grounds of unsightliness, perceived health risks and decreased property values. Indeed, respondents in this case have, at one time or another, opposed placement of the tower on the Stone Hill site for each of these reasons. As the Second Circuit recognized in Sprint, while not allowing “the goals of increased competition and rapid deployment of new technology to trump all other important considerations, including the preservation of the autonomy of states and municipalities” (Sprint, 176 F3d at 639), the Congress in the TCA chose to compromise and accommodate competing aims. Specifically, Congress preserved local control over the placement, construction and modification of personal wireless service facilities, but subject to important limitations intended to make sure that rational siting decisions were not checked or delayed by local zoning regulation or litigation. These limitations include the antiprohibition ban. The majority suggests that Crane Neck is inapposite because Mental Hygiene Law § 41.34 (f) “explicitly preempted local laws and ordinances, defining a community residence . . . as a family unit” (majority op at 433) while the TCA preserves local land use control. Congress, however, expressly and completely preempted local land use regulation insofar as it prohibits or effectively prohibits the provision of personal wireless service facilities. As was the case in Crane Neck, private individuals are here attempting to accomplish by restrictive covenant that which a statute (in this case, a federal statute implementing our national telecommunications policy) unequivocally forbids a locality from doing in the exercise of its police powers to regulate local land use.

Of course, as I noted at the outset, the majority and I disagree as to whether enforcement of the covenant would effectively prohibit delivery of wireless services in the town within the meaning of section 332 of the TCA. The majority does not consider the antiprohibition ban implicated here because alternative locations for siting the tower exist, even though no single site can replace the Stone Hill site, and any other potential site (18 sites were reviewed originally; one alternative site—the DPW/Highway Garage site—was reviewed intensively) is less optimal technologically, less secluded and otherwise less beneficially suited to the use. This reading of section 332 verges on limiting it to general bans. In any event, the majority’s interpretation plainly conflicts with Sprint.

Finally, unlike the majority, I find merit in SMSA’s related argument that enforcement of the covenant would impermissibly nullify the Town’s ability to regulate local land use. The Town Board thoroughly examined and balanced the interests and concerns of the affected property owners with those of the entire town before issuing the special permit to SMSA. When respondent challenged the permit in an article 78 proceeding, Supreme Court held in the Town’s favor. While as a general rule restrictive covenants and zoning comfortably coexist and zoning does not destroy a preexisting private covenant (see generally Matter of Friends of Shawangunks v Knowlton, 64 NY2d 387 [1985]), this case is unusual. The covenant directly conflicts with a special permit issued to provide a public utility in a way that takes into account the best interests of the community as a whole and furthers national telecommunications policy. As a consequence of this covenant’s enforcement, multiple (and more intrusive) towers will now have to be sited in order to replace the Stone Hill site and serve the community’s needs for personal wireless services. In line with the approach advanced in the Restatement (Third) of Property (Servitudes), which considers public policy, broadly defined, as an independent basis for invalidating servitudes, I would hold that this restrictive covenant violates public policy and so is invalid and therefore unenforceable (see Restatement [Third] of Property [Servitudes] § 3.1, Comments e, f\ see also Restatement [First] of Property [Servitudes] § 568, Comment d).

Accordingly, I would reverse the order of the Appellate Division.

Judges G.B. Smith, Ciparick, Rosenblatt, Graffeo and R.S. Smith concur with Chief Judge Kaye; Judge Read dissents and votes to reverse in a separate opinion.

Order affirmed, with costs.

      . Supreme Court additionally rejected defendants’ laches argument, finding no credible evidence that plaintiffs unreasonably delayed bringing their action. Neither that argument, nor mootness, was advanced in our Court.

      . See Restatement (Third) of Property (Servitudes) § 3.1, Comment i (“The policies favoring freedom of contract, freedom to dispose of one’s property, and protection of legitimate-expectation interests nearly always weigh in favor of the validity of voluntarily created servitudes.”).

      . There is no question that the local authorities were aware of and conducted their review of SMSA’s applications so as to conform with Sprint: when making its recommendations to the Town Board concerning SMSA’s application for a special permit for the Stone Hill site, the Planning Board cited Sprint and quoted its operative language when explaining the Town’s obligations under the TCA.

        . Sprint is a leading case nationally, although its holding is not universally accepted. The Third Circuit shares the Second Circuit’s interpretation of the antiprohibition clause (see APT Pittsburgh Ltd. Partnership v Penn Twp. Butler County of Pa., 196 F3d 469, 480 [3d Cir 1999] [The provider must show “that the manner in which it proposes to fill the significant gap in service is the least intrusive on the values that the denial sought to serve.” In order to make this showing, the provider must demonstrate that “a good faith effort has been made to identify and evaluate less intrusive alternatives, e.g., that the provider has considered less sensitive sites, alternative system designs, alternative tower designs, placement of antennae on existing structures, etc.”]). The Fourth Circuit has declined to adopt the Second and Third Circuits’ interpretation, although it now seems to accept, at least in theory, that an individual zoning decision is capable of violating the antiprohibition ban (compare 360° Communications Co. of Charlottesville v Board of Supervi

        sors of Albemarle County, 211 F3d 79, 86, 87 [4th Cir 2000] [noting that “whether a single denial of a site permit could ever amount in effect to the prohibition of wireless services is a . . . difficult question” and expressing the view that “(a) community could rationally reject the least intrusive proposalin favor of a more intrusive proposal that provides better service or that better promotes commercial goals of the community”] with AT & T Wireless PCS, Inc. v City Council of City of Va. Beach, 155 F3d 423 [4th Cir 1998] [the anti-prohibition ban applies only to blanket prohibitions and general bans or policies, and not to individual zoning decisions]). The Seventh Circuit has declined to adopt the Second and Third Circuits’ least-intrusive-means formulation (see VoiceStream Minneapolis, Inc. v St. Croix County, 342 F3d 818, 834 [7th Cir 2003] [“(T)he provider must show that its ‘existing application is the only feasible plan’ and that ‘there are no other potential solutions to the purported problem’ ” (quoting Second Generation Props., L.P. v Town of Pelham, 313 F3d 620, 630, 635 [1st Cir 2002])]). The Seventh Circuit “agree[s] with the First Circuit’s formulation of the statutory requirement and hold[s] that, so long as the service provider has not investigated thoroughly the possibility of other viable alternatives, the denial of an individual permit does not ‘prohibit or have the effect of prohibiting the provision of personal wireless services’ ” (VoiceStream, 342 F3d at 834-835, quoting 47 USC § 332 [c] [7] [B] [i] [II]).

      . The majority stresses that the Stone Hill site was, in fact, “taken off’ the Town Board’s “agenda” during the review process only to be “placed back on the agenda” shortly before the Board issued the special permit (majority op at 430). Plaintiffs did not mention the restrictive covenant until the very end of the Board’s tandem review of SMSA’s two applications. When plaintiffs sued, defendants accordingly asserted laches as a defense. To counter this defense, plaintiffs protested that they had “believed” that the Stone Hill site “was no longer being considered” and “therefore . . . felt no need to take any action” any sooner than they did; and that the DPW/Highway Garage site was “the only application outstanding” or “on the table” as late as February 2000. The record belies these “beliefs,” insofar as they may be interpreted to suggest that the Board resurrected the Stone Hill site at the eleventh hour after having previously abjured any continuing interest in it. The Stone Hill site may have dropped off the Board’s “agenda” between November 1999 and February 2000, but only in the sense that the Board was reviewing SMSA’s application for the DPW/Highway Garage site during this time period, having already reviewed SMSA’s application for the Stone Hill site.

      . The original Stone Hill site is a 4.5-acre parcel. Access to the tower and equipment shed is over an adjacent five-acre parcel, owned by the same landowner. In approving the special permit, the Town Board directed SMSA and the landowner to record a restrictive covenant limiting the adjacent parcel’s use to open space and passive recreation.