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In A&F Scaccia Realty Corp. v. New York City Department of Environmental Protection (DEP), the concrete manufacturing plant challenged a Water Board determination (dated June 12, 2018), which affirmed an $88k bill issued by the DEP. Seeking to annul that outcome, Scaccia filed an administrative review proceeding – pursuant to CPLR Article 78 – with the Queens County Supreme Court. And after DEP and the City of New York failed to appear in opposition to the application, relief was granted in Scaccia’s favor.

When the defendants later moved to vacate their default, that request was rebuffed. But, on appeal, the Appellate Division, Second Department, thought that denial was improvident due, in large part, to the absence of a “necessary party” to the dispute – the New York City Water Board – which had neither been named in, nor served with, the case’s pleadings.

To that end, the AD2 noted in pertinent part:

“Since the instant petition challenged the Water Board's June 12, 2018 final determination, and the Water Board is the entity which promulgates the rate schedule of sewer rents and wastewater allowances … in the discharge of its duties to fix and collect water and sewer charges in order for the City to maintain the water system …, the Water Board was a necessary party to this proceeding. Indeed, the Water Board would be prejudiced by the judgment purporting to bind its rights when it had no opportunity to be heard.”

Because it also thought the defendants’ mis-calendaring of the matter was excusable, and that there was no demonstrable prejudice to Scaccia, the AD2 vacated the default and the underlying judgment and sent the matter back to the Queens County Supreme Court for “further proceedings.”

Looks like the defendants’ arguments held water.

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Matter of A&F Scaccia Realty Corp. v New York City Dept. of Envtl. Protection