June 23, 2015

In Ayuda Re Funding, LLC v Town of Liberty, 121 A.D.3d 1474 (3rd Dept. 2014), the Second Department affirmed the Supreme Court’s dismissal of the Petition due to failure to timely name a necessary party. Petitioners commenced a CPLR Article 78 proceeding seeking to annul a local law which made certain changes to the Town’s zoning map. Petitioners originally named the Town, Gary Zalkin (doing business as Liberty Scrap Metal) and Ben Weitsman and Son, Inc. (collectively, “Original Respondents”) but failed to name all property owners within the affected area.

Petitioner served an amended petition adding such property owners as respondents but only after the limitations period had expired. The Supreme Court dismissed the Petition against the later-added respondents as time-barred and, consequently, dismissed the remainder of the Petition against the Original Respondents due to Petitioner’s failure to timely join necessary parties.

Petitioner appealed to the Second Department claiming that the Petition was not time-barred against the later-added respondents pursuant to the relation back doctrine. For the relation back doctrine to apply, Petitioner was required to demonstrate that (1) the claims arose out of the same occurrence; (2) the later-added respondents were united in interest with the Original Respondents; and (3) the later-added respondents knew or should have known that, but for a mistake by Petitioner as to the identity of the proper parties, the proceeding would have been brought against them as well.

The Second Department held that Petitioner failed to meet the second and third prongs of the relation back test. The Original Respondents consisting of the Town which enacted the local law and the entities which purportedly requested it, had different interests than the affected property owners. As to the third prong of the relation back test, Petitioner admitted that it was aware of the existence/identity of the affected property owners but “failed to appreciate that they were legally required to be named in proceedings of this type.” The Court held that this type of error was not encompassed by the relation back doctrine and, consequently, the Second Department affirmed the Supreme Court’s dismissal of the Petition.

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