1. Introduction

This Third Department decision sits at the intersection of two recurring themes in New York real-property tax exemption litigation: (i) the demanding, evidence-driven showing a petitioner must make to obtain an exemption under RPTL 420-a on summary judgment, and (ii) the equally demanding showing a municipality must make—particularly when invoking a zoning-code violation as a “complete defense” to an otherwise qualifying exemption.

Parties and properties. Petitioner, a not-for-profit corporation organized under N-PCL 402, purchased two parcels (approximately 24 and 65 acres) in the Town of Liberty (Sullivan County). Respondents include the Town Assessor and Board of Assessment Review. The Liberty Central School District intervened in the later-year proceedings (2021–2022).

Key issues. The case raised two primary questions on summary judgment:

• Whether petitioner established, as a matter of law, that it satisfied RPTL 420-a’s exemption requirements—particularly the “no pecuniary profit” and related operational elements.
• Whether respondents established, as a matter of law, that petitioner’s property use violated the Town of Liberty zoning code such that the zoning violation would operate as a complete defense to exemption.

The Third Department answered “no” to both—affirming denial of petitioner’s motion and reversing the grant of respondents’ cross-motion.

2. Summary of the Opinion

The Appellate Division modified Supreme Court’s orders by reversing the portion granting respondents’ cross-motion and otherwise affirmed (leaving petitioner without summary judgment and leaving zoning-violation defense unproven as a matter of law on this record).

3. Analysis

3.1 Precedents Cited

The decision is built around two lines of authority: (a) the substantive requirements of RPTL 420-a and a petitioner’s burden to prove them, and (b) the “zoning violation” defense and the municipality’s burden to prove that defense—both filtered through the stringent standards governing summary judgment.

A. Summary judgment standards

• Matter of First United Methodist Church in Flushing v Assessor, Town of Callicoon: Cited for the basic rule that summary judgment is “drastic,” requires a prima facie showing, and fails if the movant’s initial burden is not met. The Third Department uses this as the framing standard and later relies on the same decision (and its affirmance) for the zoning-defense burden allocation.
• Grant v Temple, Cole v Triple M Excavating & Trucking LLC, and Barese v Erie & Niagara Ins. Assn.: Reinforce the “light most favorable to the nonmoving party” lens and the prohibition on credibility determinations at the summary-judgment stage.

B. Substantive RPTL 420-a exemption requirements

• Matter of Sisters of the Presentation of the Blessed Virgin Mary, Albany, N.Y. v Van Wagenen and Matter of Eternal Flame of Hope Ministries, Inc. v King: Provide the foundational proposition that real property owned by a qualifying not-for-profit and used exclusively (or, in the case law’s phrasing, “primarily” for furtherance) for religious/educational purposes can be exempt.
• Matter of Maetreum of Cybele, Magna Mater, Inc. v McCoy: Supplies the familiar four-part test quoted by the court: (1) organized exclusively for enumerated purposes, (2) property used primarily to further those purposes, (3) no pecuniary profit inures to officers/members/employees (beyond reasonable compensation), and (4) not a guise for profit-making operations.
• Oorah, Inc. v Town of Jefferson and Matter of Baldwin Research Inst., Inc. v Assessors of Town of Amsterdam: Used as comparators underscoring that exemption claims—especially on summary judgment—are typically supported by concrete financial proof (income/expense statements, filings, or other documentation) rather than conclusory attestations.
• Matter of Catskill Watershed Corp. v Assessor of the Town of Middletown: Supports the specific point that an IRS determination letter under 26 USC § 501(c)(3) does not, standing alone, create a presumption of entitlement to an RPTL 420-a exemption.
• Matter of Ahavas Chaverim Gemilas Chesed, Inc. v Town of Mamakating and Matter of Pine Harbour, Inc. v Dowling: Reinforce denial of summary judgment where the petitioner fails to carry the prima facie burden for exemption.

C. Zoning-violation defense as a “complete defense” and proof required

• Matter of First United Methodist Church in Flushing v Assessor, Town of Callicoon: The cornerstone for two propositions: (i) a zoning violation can be a complete defense to an exemption otherwise available under RPTL 420-a, and (ii) critically, the municipality bears the burden of establishing the zoning violation when using it to defeat an exemption.
• Matter of Geneva Gen. Hosp. v Assessor of Town of Geneva: Supports both the zoning-defense concept and the rejection of petitioner’s argument that the Town’s failure to cite a zoning violation forecloses reliance on zoning noncompliance in exemption litigation.
• Congregation Or Yosef v Town of Ramapo: Another authority recognizing the zoning-violation defense in the exemption context.
• Community Humanitarian Assn., Inc. v Town of Ramapo and Oorah, Inc. v Town of Jefferson: Cited to demonstrate what happens when the municipality’s proof is inadequate; the Third Department uses them to conclude respondents did not meet their prima facie burden here.
• Bradt v John Hancock Mut. Life Ins. Co. and Carey v Campbell: Invoked for the evidentiary principle that an attorney affirmation can transmit admissible attachments, but cannot substitute for admissible proof; here, the attachments did not supply the missing evidentiary foundation.

D. Unpleaded affirmative defenses raised on summary judgment

• Sheils v County of Fulton: Provides the rule that an unpleaded affirmative defense may be raised in connection with summary judgment—either to defeat the adversary’s motion or as a basis for affirmative relief—so long as the opposing party suffers no surprise or prejudice and has a full opportunity to respond.
• Liberty Mut. Ins. Co. v PMI Newco, LLC: Reinforces the same procedural principle applied to reject petitioner’s waiver argument.

3.2 Legal Reasoning

A. Why petitioner did not obtain summary judgment

The court treated petitioner’s submission as insufficient to satisfy the “prima facie entitlement” requirement. Although petitioner provided: (i) corporate governance documents (articles/bylaws), (ii) an IRS exemption letter, (iii) an affirmation from its executive director describing religious and educational programming (including Kashrut and agricultural principles set forth in the Talmud), and (iv) affirmations from attendees, the court pinpointed a crucial evidentiary gap: petitioner offered only a conclusory assurance that no officer or employee received pecuniary profit, without financial documentation.

By anchoring its analysis in Oorah, Inc. v Town of Jefferson and Matter of Baldwin Research Inst., Inc. v Assessors of Town of Amsterdam, the court signaled that, at least on summary judgment, petitioners should expect to substantiate “non-pecuniary” operation with objective financial proof—particularly where the exemption claim depends on operational facts not self-proving from organizational documents alone.

The court also rejected any shortcut based on federal tax status, relying on Matter of Catskill Watershed Corp. v Assessor of the Town of Middletown for the proposition that a 501(c)(3) letter does not itself create a presumption of exemption under RPTL 420-a. The result: petitioner failed to meet the threshold burden, so its motion was properly denied “regardless of the sufficiency of the opposing papers.”

B. Why respondents were not entitled to summary judgment on zoning-violation grounds

The court divided respondents’ path to summary judgment into two gates: (1) procedural availability of the defense, and (2) evidentiary sufficiency.

(1) Procedural gate—no waiver on this record. Even assuming respondents did not plead zoning violation as an affirmative defense, the Third Department held it could be asserted on summary judgment under Sheils v County of Fulton, absent surprise or prejudice. Because petitioner had “ample opportunity” to oppose the cross-motion, the defense was not barred.

(2) Evidentiary gate—proof was inadequate. The court reaffirmed that a zoning violation can be a “complete defense” to an RPTL 420-a exemption (Matter of First United Methodist Church in Flushing v Assessor, Town of Callicoon) and reiterated the allocation of burdens: the municipality asserting the violation must prove it. On this record, respondents did not do so.

The key deficiency was foundational: respondents’ attorney affirmation alleged each parcel’s zoning district (agricultural conservation and service commercial) but attached only a schedule describing the purposes and permitted uses of those districts. The record lacked:

• a zoning map identifying the zoning classification of each parcel,
• an affidavit from an assessor or other competent witness with personal knowledge establishing the classification, and
• competent proof tying petitioner’s actual uses to a specific prohibited use under the applicable district regulations.

The court also rejected the idea that a website address, without a zoning map or parcel designations, could substitute for admissible proof. Citing Bradt v John Hancock Mut. Life Ins. Co. and Carey v Campbell, it underscored that attorney affirmations cannot fill evidentiary gaps where the attachments themselves do not establish the necessary facts in admissible form.

C. The practical “double message” of the decision

The opinion delivers a symmetrical lesson: exemption litigation under RPTL 420-a is not decided on labels (religious, charitable, 501(c)(3)) or on asserted defenses (zoning noncompliance) in the abstract. At summary judgment, both sides must marshal admissible, property- and parcel-specific proof.

3.3 Impact

A. Impact on petitioners seeking RPTL 420-a exemptions

• Operational proof matters as much as organizational form. Even where an entity is organized as a not-for-profit and describes religious/educational programming, conclusory statements about finances and non-inurement may be insufficient on summary judgment.
• Federal tax exemption is not a safe harbor. The decision reinforces that a 501(c)(3) determination letter may be relevant but is not presumptive proof of entitlement under RPTL 420-a.
• Expect documentation. The court’s reliance on cases referencing income/expense statements and filings signals that petitioners should anticipate producing financial records to establish non-inurement and non-profit operation, especially when moving for summary judgment.

B. Impact on municipalities and school districts opposing exemptions

• Zoning defense remains powerful—but evidence must be precise. The court reaffirmed that a zoning violation can be a complete defense, but it demanded concrete proof of the parcel’s zoning designation and how the use violates that code.
• Attorney-only submissions are risky. A municipality seeking summary judgment must provide admissible evidence (maps, official records, affidavits with personal knowledge), not merely legal argument plus generalized code excerpts.
• Unpleaded defenses may still be usable on summary judgment. The waiver discussion clarifies that municipalities can, in appropriate circumstances, raise the zoning defense on summary judgment without having pleaded it—so long as the petitioner has a fair chance to respond and suffers no prejudice.

C. Impact on future litigation and motion practice

The decision is likely to shape summary-judgment motion practice in two ways: (1) petitioners will frontload financial and operational evidence to satisfy Maetreum of Cybele, Magna Mater, Inc. v McCoy’s non-inurement and anti-guised-profit criteria; and (2) municipalities will treat zoning-violation defenses as requiring a mini-record: a certified zoning map (or equivalent official proof), parcel identification, and a clear linkage between actual uses and prohibited uses in the correct district.

4. Complex Concepts Simplified

RPTL 420-a exemption (in plain terms)

RPTL 420-a is New York’s primary statute granting property tax exemptions to certain nonprofit entities (including religious and educational organizations) when the property is used for those exempt purposes. Courts look beyond the organization’s name and stated mission to how it actually operates and uses the property.

“Prima facie burden” on summary judgment

“Prima facie” means the moving party must present enough admissible evidence to win as a matter of law if the other side offered nothing. If the movant fails at this first step, the motion is denied—even if the opposing papers are weak.

“No pecuniary profit inures”

This refers to the rule that officers, members, or employees cannot personally profit from the organization’s operations (other than reasonable compensation for actual work). Courts often expect objective financial proof—budgets, statements, filings—rather than assurances.

Zoning violation as a “complete defense”

Even if an organization otherwise qualifies for a tax exemption, a proven violation of the local zoning code can defeat the exemption entirely. But the municipality must prove the violation with competent evidence.

Unpleaded affirmative defense raised on summary judgment

Normally, defenses must be pleaded early. But New York practice allows a defense not pleaded to be raised on summary judgment if the opponent is not unfairly surprised and has a full opportunity to respond.

5. Conclusion

Matter of Congregation Yeshiva Yoreh Deah Inc. v Ozomek reinforces a disciplined, evidence-centric approach to RPTL 420-a exemption disputes at the summary-judgment stage. Petitioners cannot rely on organizational documents, program descriptions, or a 501(c)(3) letter without substantiating key operational elements—especially non-inurement—with concrete proof. Conversely, municipalities cannot obtain summary judgment denying an exemption based on zoning noncompliance without admissible, parcel-specific proof of the zoning classification and the manner of violation. The decision thus preserves the zoning-violation defense’s doctrinal force while requiring rigorous evidentiary support before it can dispose of exemption claims as a matter of law.