Second Department Confirms Villages May Add MS4 Illicit-Discharge Cleanup Costs to the Tax Roll Without a Pre-Deprivation Hearing

Introduction

Matter of Harbourview Realty, LLC v. Village of Roslyn (2025 NY Slip Op 05239, Appellate Division, Second Department) arises at the intersection of local environmental enforcement and municipal finance. The case addresses whether a village may, consistent with law and due process, recoup costs incurred in abating illicit discharges into a municipal separate storm sewer system (MS4) by adding those costs to the property’s tax roll as an assessment, without first holding a hearing. It also addresses whether the village’s related civil counterclaims are barred by judicial or collateral estoppel in light of prior summons proceedings.

The petitioner, Harbourview Realty, LLC, owns a shopping center within the Village of Roslyn. Following an EPA-mandated illicit discharge detection and elimination program (IDDE), the Village identified dry-weather, non-stormwater discharges from the shopping center into the MS4 and ultimately into Hempstead Harbor. After notices and continued noncompliance, the Village issued summonses (to which Harbourview pleaded guilty in part), undertook cleanup with an environmental contractor, billed the owner for $49,373.62, and notified that unpaid amounts would be added to the tax roll. A subsequent payment made by Harbourview that it believed to be for property taxes was applied by the Village toward these cleanup costs.

Harbourview commenced a hybrid CPLR article 78 proceeding and plenary action, inter alia, for conversion, challenging the Village’s authority and the lack of a pre-deprivation hearing, and moved to dismiss the Village’s counterclaims seeking additional cleanup costs and a permanent injunction. The Supreme Court, Nassau County, denied the petition, dismissed the proceeding/action, and denied Harbourview’s CPLR 3211 motion to dismiss the counterclaims. The Second Department affirmed.

Summary of the Opinion

The Second Department held:

The Village acted within its authority under Village Code §§ 385-21, 397-21, 397-16, and 353-10 when it required Harbourview to reimburse cleanup costs for illicit discharges and warned that unpaid amounts would be added to the tax roll as an assessment against the land. When Harbourview did not comply and continued discharging, the Village properly assessed those costs on the property’s tax roll (citing Matter of 4M Holding Co. v Town Bd. of Town of Islip, 81 NY2d 1053, 1055; Matter of Sumkin v Town of Babylon, 238 AD2d 430).
The absence of a pre-deprivation hearing did not violate due process (citing Matter of Sumkin v Town of Babylon, 238 AD2d at 430; Matter of Plaza Realty Invs. v New York City Conciliation & Appeals Bd., 110 AD2d 704).
The Supreme Court correctly denied Harbourview’s CPLR 3211(a)(1) and (7) motion to dismiss the Village’s counterclaims for additional cleanup costs and injunctive relief. Harbourview did not show that documentary evidence utterly refuted the counterclaims, nor that judicial or collateral estoppel barred them (citing Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; Leon v Martinez, 84 NY2d 83; Guggenheimer v Ginzburg, 43 NY2d 268; Joseph v Singh, 206 AD3d 982; Altman v Orseck, 235 AD3d 818; Ryan v New York Tel. Co., 62 NY2d 494).
The petitioner’s remaining arguments were without merit.

Analysis

1) Precedents Cited and How They Guided the Decision

Matter of 4M Holding Co. v Town Bd. of Town of Islip (81 NY2d 1053, 1055): The Court of Appeals recognized a municipality’s authority to recover abatement or remediation costs by assessing them against offending property. By invoking 4M Holding, the Second Department aligned Roslyn’s cost-recovery measures—charging the land and using the tax roll as the collection vehicle—with established precedent validating municipal special assessments for code-related cleanup costs.
Matter of Sumkin v Town of Babylon (238 AD2d 430): The Second Department relied on Sumkin both to affirm the municipality’s ability to add cleanup costs to the tax roll and to hold that the lack of a pre-deprivation hearing did not offend due process. Sumkin confirms that where a local code authorizes cost recovery and assessment procedures, due process is satisfied by notice and the availability of post-deprivation judicial review (e.g., via Article 78), particularly in the context of abatement of public health or environmental conditions.
Matter of Plaza Realty Invs. v New York City Conciliation & Appeals Bd. (110 AD2d 704): Cited for the due process proposition that a hearing is not invariably required before certain administrative actions, especially when the statutory framework offers adequate means to challenge the assessment after the fact. Here, the principle supported the conclusion that Roslyn’s failure to conduct a pre-assessment hearing did not deprive Harbourview of due process.
Goshen v Mutual Life Ins. Co. of N.Y. (98 NY2d 314, 326); Leon v Martinez (84 NY2d 83, 88); Guggenheimer v Ginzburg (43 NY2d 268, 275): These bedrock CPLR 3211 cases set the standards for dismissing claims at the pleading stage. The court applied them to uphold the denial of Harbourview’s motion to dismiss the Village’s counterclaims, emphasizing that dismissal is improper unless documentary evidence utterly refutes the allegations or the pleader has no cause of action as a matter of law.
Stewart v Fein Such & Crain, LLP (236 AD3d 959, 961); Twitchell Tech. Prods., LLC v Mechoshade Sys., LLC (227 AD3d 45, 50): Recent Second Department applications of CPLR 3211(a)(7) reinforce liberal construction of pleadings and the “cause of action” test when evidentiary materials are considered without converting the motion to summary judgment. They buttress the decision to let the Village’s cost-recovery and injunctive counterclaims proceed.
Joseph v Singh (206 AD3d 982, 982–983); Archer v Beach Car Serv., Inc. (180 AD3d 857, 861): These cases define and limit judicial estoppel. The Second Department found no inconsistent position taken by the Village in prior summons proceedings that would estop its counterclaims here.
Altman v Orseck (235 AD3d 818, 819); Ryan v New York Tel. Co. (62 NY2d 494, 500); Barker v Amorini (121 AD3d 823, 825); Li v Wisteria Gardens Condominium (234 AD3d 897, 898): These authorities articulate collateral estoppel’s prerequisites: identity of issue and a full and fair opportunity to litigate it. The court concluded Harbourview failed to show that the issues raised by the Village’s counterclaims were previously raised and decided in the summons matters.

2) Legal Reasoning

The court’s reasoning proceeds along three principal lines: municipal authority under local law, due process in special assessments for environmental abatement, and pleading-stage standards for counterclaims.

Municipal authority to assess cleanup costs: The Village Code sections identified (385-21, 397-21, 397-16, 353-10) collectively provide the legal basis for Roslyn to demand reimbursement for cleanup tied to illicit discharges and to add unpaid amounts to the tax roll as assessments against the land. The court emphasized that Roslyn provided notice to Harbourview, identified the illicit discharges established by its IDDE program, and warned that nonpayment would result in tax-roll assessment. When noncompliance persisted, the Village lawfully used the assessment mechanism, consistent with 4M Holding and Sumkin.
Due process and the absence of a pre-deprivation hearing: Relying on Sumkin and Plaza Realty, the court concluded that no pre-deprivation hearing was required before assessing cleanup costs. This tracks a familiar due process principle: where the governmental interest is significant (here, preventing pollution of public waters through the MS4) and the statutory scheme offers notice and adequate post-deprivation remedies (e.g., an Article 78 proceeding to test legality and reasonableness), due process does not invariably mandate a hearing before assessment. Harbourview exercised that remedy by commencing this hybrid Article 78/proceeding-action, which the court found sufficient to satisfy due process under the circumstances.
Counterclaims survive CPLR 3211 scrutiny: The Village’s counterclaims sought (a) additional cleanup costs attributable to ongoing illicit discharges and (b) a permanent injunction. Applying CPLR 3211(a)(7), the court construed the counterclaims liberally and accepted their allegations as true, holding they fit within cognizable legal theories of cost recovery and injunctive relief tethered to the Village Code and nuisance-like environmental harms. Under CPLR 3211(a)(1), Harbourview did not present documentary evidence that “utterly refuted” the counterclaims or conclusively established a defense. Finally, judicial estoppel and collateral estoppel were rejected because Harbourview showed neither inconsistent positions by the Village in prior proceedings nor identity of issues previously decided in the summons context.

3) Impact on Future Cases and the Law

MS4 enforcement and municipal finance: This decision fortifies municipal authority to implement IDDE programs and to leverage special assessments via the tax roll to recover cleanup costs stemming from illicit discharges. It provides clear appellate support for New York municipalities, especially those subject to Clean Water Act MS4 permit conditions, to recoup abatement costs without first conducting a hearing, so long as local codes authorize assessments and property owners receive notice and post-deprivation judicial review.
Incentives for prompt compliance: Property owners face enhanced incentives to remediate illicit discharges swiftly. Failure to do so may lead not only to summonses and fines but also to the municipality performing cleanup, billing the owner, and securing reimbursement through the tax roll—effectively treating the costs as a charge against the land.
Limited preclusive effect of summons dispositions: Pleas to code-violation summonses (or dismissals in satisfaction) will not typically preclude civil counterclaims for additional costs or injunctive relief. This preserves municipal flexibility to pursue comprehensive remedies to halt ongoing environmental harms.
Due process contours in special assessments: The case underscores that due process does not guarantee a pre-deprivation hearing in every assessment scenario. Where notice is provided and robust post-deprivation review is available, courts are likely to sustain municipal use of the tax roll to collect environmental abatement costs.
Litigation posture: On CPLR 3211 motions, challengers face a high bar. Unless they can present unambiguous documentary evidence that defeats the municipality’s claim as a matter of law, counterclaims for cost recovery and injunctive relief will commonly proceed to discovery.

Complex Concepts Simplified

MS4 (Municipal Separate Storm Sewer System): A network of storm drains and related infrastructure designed to collect and convey stormwater. Under federal and state permits, MS4 operators must implement programs—like IDDE—to prevent non-stormwater (illicit) discharges that can pollute surface waters.
IDDE (Illicit Discharge Detection and Elimination): A mandated program to identify and eliminate “illicit discharges,” typically defined as non-stormwater flows entering the MS4 through unauthorized connections or direct/indirect releases during dry weather. Here, the Village Code defined illicit discharge as “[a]ny discharge through an unauthorized connection and any direct or indirect nonstormwater discharge to the MS4.”
Special assessment added to the tax roll: A municipal mechanism to charge specific properties for costs incurred to abate conditions attributable to those properties. Once added to the tax roll as an assessment against the land, the amount is collected in the same manner as property taxes and may become a lien on the property.
CPLR article 78 proceeding: A New York procedural vehicle to challenge actions of state and local agencies, boards, and officers. Courts review whether the action was arbitrary and capricious, affected by an error of law, or otherwise in violation of lawful procedure. It is a standard post-deprivation remedy for assessing the legality of administrative actions.
Pre-deprivation vs. post-deprivation due process: Due process sometimes requires a hearing before the government deprives a person of property. But courts balance interests; when quick action is necessary or the government provides adequate post-deprivation review (e.g., Article 78), a pre-deprivation hearing is not always required, particularly for remedial assessments tied to public health or environmental protection.
CPLR 3211(a)(1) and (7): These are New York’s pleading-stage dismissal rules. Subsection (a)(7) tests whether the pleading states a cognizable claim, with allegations taken as true and all inferences in the pleader’s favor. Subsection (a)(1) allows dismissal where “documentary evidence” (e.g., unambiguous contracts, official documents) conclusively refutes the claim or establishes a complete defense as a matter of law.
Judicial estoppel: Prevents a party from asserting a position in litigation that is contrary to a position successfully asserted in earlier litigation. It requires a clear inconsistency. The court found no such inconsistency by the Village.
Collateral estoppel (issue preclusion): Bars relitigation of an issue that was actually litigated and necessarily decided in a prior proceeding against the same party (or its privy), provided there was a full and fair opportunity to litigate. The summons proceedings here did not clearly decide the issues raised by the Village’s counterclaims.
Conversion (in this context): A civil tort requiring unauthorized dominion over another’s property to the exclusion of the owner’s rights. Because the Village acted under code authority to apply Harbourview’s payment toward assessed cleanup costs, the conversion theory could not succeed.

Practical Takeaways

Municipalities: Ensure local codes explicitly authorize cost recovery for environmental abatement, including adding unpaid amounts to the tax roll as assessments against the land. Provide clear written notice of violations, demanded corrective actions, and the consequences of nonpayment. Maintain documentation of IDDE findings and cleanup invoices to support assessments and future counterclaims for additional costs or injunctions.
Property owners: Treat IDDE notices and illicit discharge allegations with urgency. Remediate promptly or risk municipal cleanup and assessment on the tax roll. Be attentive to how payments are applied; if a village has noticed an assessment for cleanup costs, payments labeled as property taxes may be applied toward those assessments. Preclusive effect from summons dispositions is limited; civil liability and injunctive exposure may remain.
Litigants: On CPLR 3211 motions, be prepared with truly dispositive documentary evidence if seeking dismissal. For estoppel defenses, develop a record showing exact positions taken and issues necessarily decided in prior proceedings; generalized references to summons pleas or dismissals are unlikely to suffice.

Conclusion

Harbourview solidifies a straightforward but powerful rule for New York municipalities operating MS4 programs: when authorized by local code, they may recover illicit-discharge cleanup costs by assessing them against the land on the tax roll, without a pre-deprivation hearing, provided property owners receive notice and have access to post-deprivation judicial review. The decision also clarifies that prior summons dispositions neither judicially estop municipalities from pursuing civil cost recovery and injunctive remedies nor collaterally estop such claims absent identity of issues and actual prior adjudication.

In the broader legal context, this opinion integrates environmental compliance imperatives with established municipal finance tools. It encourages proactive remediation by property owners and equips local governments with a clear pathway to fund abatement efforts necessary to protect public waters. As MS4 enforcement remains a regulatory priority, this case will likely be frequently cited to defend special assessments for environmental cleanup and to sustain related counterclaims past the pleading stage.