Preclusive Effect of an Article 78 Determination on a Subsequent Federal Section 1983 Claim

The Underhill Facts

Before buying property in 2022, landowner asked town officials whether the access road to the property would require any permits or renovations in order to develop the property in accordance with the town’s zoning and building code. According to landowner, the building inspector stated that he did not think a permit was necessary and that a direct drive over an existing road would not be a problem. Landowner then bought the property and obtained permits from the town to begin developing four houses on the property. The town inspected the buildings during construction without raising concerns about the access road. When construction was complete on the first two homes, landowner requested certificates of occupancy (COs), but the town denied the requests, citing concerns about the adequacy of the access road. The town also issued stop work orders on the last two houses. Landowner then brought an article 78 proceeding challenging the denial of the COs and seeking rescission of the stop work orders on the last two houses. At a settlement conference, the parties reached an agreement to grant the COs, but landowner contended that the town then changed the terms to require landowner to pay legal fees and sign a general release. Landowner then moved for an order directing specific performance of the agreement reached at the settlement conference. The court ultimately denied landowner’s petition in January 2024.