Chester Town Hall
Chester Town Hall (thetownofchester.org)

Repetitive and unfair demands that Town of Chester planning officials used to stymie a 385-unit subdivision for a decade preclude the town from claiming the developer failed to obtain a final decision before he could sue, a federal appeals court has ruled.

Reversing a lower court while quoting from the Joseph Heller novel “Catch 22,” the U.S. Court of Appeals for the Second Circuit held that the widow of the late Steven Sherman can pursue a case that Chester violated the Fifth Amendment’s takings clause because it repeatedly moved the goal posts on Sherman’s development.

“The town will likely never put up a brick wall in between Sherman and the finish line,” the court said in Sherman v. Town of Chester, 13-1503-cv. “Rather, the finish line will always be moved just one step away until Sherman collapses.”

Judges Chester Straub (See Profile), Robert Sack (See Profile) and Raymond Lohier (See Profile) decided the appeal after hearing oral arguments on March 18.

Sherman applied to the planning board in March 2000 for subdivision approval to build MareBrook, a project centered on 385 units of housing with equestrian facilities, tennis courts, baseball fields, a restaurant and a golf course.

He spent $2.7 million to complete the purchase of the land in 2001, then another $5.5 million over several years on environmental, planning, zoning, traffic and other studies and making multiple applications and re-submissions to the planning board.

In July 2001, the Town Board imposed a six-month moratorium on major subdivision approvals retroactively, with two board members stating that the moratorium was aimed at Marebrook. The Town Board later extended the moratorium and Sherman was forced to sue to have it lifted.

Over the next several years, the town changed its zoning regulations five times without informing Sherman.

He finally sued in 2008, withdrew the suit, then sued again in state court in a case that was removed to federal court.

In March 2013, Southern District Court Judge Edgardo Ramos (See Profile) dismissed the claims, most of them on ripeness grounds, because Sherman had failed to show that seeking a final decision would be futile.

The judge said Sherman “has jumped through many hoops—more, perhaps than sound policy should require—and there are one or more hoops in the future. The inference that there is a brick wall at the end is hard to establish, and it is not established here, though it is a close case.”

But writing for the Second Circuit on May 16, Straub said, “This analysis does not account for the town’s tactics.”

“For years, every time Sherman submitted or was about to submit a proposal for Marebrook, the town changed its zoning regulations, sending Sherman back to the drawing board,” the judge said. “It retroactively issued a six month moratorium on development that appears to have applied only to Sherman’s property.”

Straub invoked Catch 22′s Capt. John Yossarian, who, every time he came close to flying the requisite number of bombing missions and thus, completing his tour of duty and going home, Colonel Cathcart always raised the number.

“Plaintiff Steven M. Sherman must have felt a lot like Yossarian in his decade of dealing with defendant Town of Chester,” Straub said.

While the appeal was pending, Sherman, who was nearing bankruptcy, died of cancer in 2013. His widow, Nancy Sherman was substituted for him on appeal.

The appeal focused on the dismissal of Sherman’s takings claim under the first prong of Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985)—that a final decision be reached on the denial of an application in order for a suit to be ripe.

While lawyers for Sherman agreed the town had not issued a final decision, they pressed his claim that the suit was ripe for decision because seeking one would be a pointless exercise.

In examining the futility claim, Straub focused on the shifting landscape that Sherman had to deal with in trying to get his project approved and underway.

In December 2009, the court noted, a new planning board chairman, Don Serotta, who Sherman said was “openly hostile” to Marebrook, told Sherman he had to pay $25,000 in consultant fees, insisted he redraw the plans and required that all roads in the subdivision be 24 feet wide instead of 30 feet.

One month later, Serotta cancelled Sherman’s appearance at the monthly planning board and demanded another $40,000 in consultant fees.

Straub said, “At no point could Sherman force the town to give a final ‘yay or nay’ to his proposal. When asked at argument, the town’s counsel could not name one way Sherman could have appealed any aspect of the town’s decades of maneuvers in order to obtain a final decision.”

Straub cautioned that “every delay in zoning approval does not ripen into a federal claim.”

“Unfortunately, it is no simple task to distinguish procedures that are merely frustrating from those that would be unfair or would be futile to pursue,” he said. “But when the government’s actions are so unreasonable, duplicative, or unjust as to make the conduct farcical, the high standard is met.”

Michael Diederich of Stony Point argued for Sherman.

“I’m very pleased the Second Circuit saw the injustice and saw how this town keeps obstructing a landowner” to the point where “this could be a taking in the constitutional sense,” Diederich said. “The rezoning was unprecedented and abusive.”

Anthony Cardoso of Sokoloff Stern in Carle Place argued for the Town of Chester, with Steven Stern on the brief.