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Rocky Point Drive-In, L.P. v. Town of Brookhaven: The Special Facts Rule
Date: June 27th, 2014    Written by Maureen Liccione, Esq.


In November of last year, the Court of Appeals decided Rocky Point Drive-In, L.P. v. Town of Brookhaven, and affirmed the long-established rule that where a zoning law is amended after the submission of an application for land use approval, but before a decision is rendered on the application, the courts are bound to apply the amended law.[i]

The Court of Appeals has established two exceptions to this general rule. The first is known as the vested rights exception, which was not asserted in Rocky Point. The vested rights exception is applicable where an applicant has established: (1) that it possessed a valid permit prior to the change in the zoning law; (2) substantial construction had been completed in reliance upon the valid permit; and (3) substantial expenditures were made in furtherance of the substantial construction.[ii]

The second exception, which was the centerpiece of the Rocky Point appeal, is known as the "special facts” exception. Under this exception to the general rule, the amended law will be found inapplicable where the amendment was proposed and enacted after the applicant filed an application for a land use approval and two prongs are satisfied.[iii] Specifically, to prove the special facts exception, the applicant must prove: (1) that it was entitled to a permit as a matter of right by virtue of its full compliance with the permit requirements under the law in effect at the time of the application and that proper action upon the permit by the municipal entity would have given the applicant time to acquire a vested right; and (2) that the reviewing municipality or board unduly and deliberately delayed the application as a result of bad faith, malice, oppression, manipulation or corruption.[iv] This two-pronged rule has been applied consistently statewide.[v]

In considering whether the exception applied to the Rocky Point facts, New York’s highest court reaffirmed the principle that an applicant must have a right to a permit under the zoning that existed prior to the amendment.[vi] The Court then declined, on the facts of this case, to consider whether negligence could substitute for malicious or deliberate delay to satisfy the second prong of the exception.

Background Facts

The property which was the subject of the Court of Appeals’ ruling is located on Route 25A in the hamlet of Rocky Point and consists of approximately 17.7 acres. The parcel has been used for recreational purposes for decades, first as a drive-in theatre and then, during the applicable time period, as a golf driving range. It has never been used for retail purposes.

On October 22, 2002, the Brookhaven Town Board voted to apply the Commercial Recreational or CR "floating zone”[vii] designation to the property. The floating CR zone had been created by the Brookhaven Town Board in 1997 in furtherance of the Town’s Comprehensive Plan. The Comprehensive Plan was adopted in 1996 in accordance with N.Y.S. Town Law § 263, which also mandates that zoning laws be enacted in accordance with comprehensive land use plans.

The Comprehensive Plan contained a number of proposals in an attempt to preserve and protect the dwindling supply of land utilized for recreational purposes. To that end, it provided:

The Town contains a number of various private recreational facilities including golf driving ranges, indoor sports facilities and roller rinks. These facilities provide a much needed recreational outlet for Town residents. However, there may be pressure from the private sector to redevelop these recreational properties with more intensive commercial uses such as shopping centers and big box developments which may make for greater use of the parcel and may be more profitable especially if the existing recreational use is seasonal only. Furthermore, the existing recreational use may not be in a zoning district which allows it to remain commercially viable or which provides for all of its needs. Currently these uses would require either commercial or industrial zoning that have no specific regulations for these specific uses. In addition, many people currently go outside the Town to visit many of these types of recreational uses instead of the Town being a destination for visitors, especially tourists. Accordingly the Town may wish to consider the creation of a Commercial/Recreation or Commercial Entertainment zoning district.[viii]

 

On February 15, 2000, the Town Board first proposed to apply the CR zone to the appellant’s property. The next day, the Brookhaven Town Clerk, on behalf of the Town Board, notified the appellant’s predecessor-in-interest that a public hearing was going to be held on March 7, 2000, to consider the adoption of a change of zone for the subject property from J-2 to the CR district, consistent with the then-current use of the property as a driving range and the Comprehensive Plan.

On March 3, 2000, approximately three weeks after the zone change notice[ix] and just prior to the March 7, 2000 public hearing on the CR District proposal, the Appellant submitted a site plan application to the Planning Department staff for site plan approval to construct a Lowe’s Home Improvement Center.

The proposed Lowes was not a permitted, "as of right,” use in the J-2 District because it was a commercial center utilizing more than five acres. At the time, such a commercial center was permitted as of right only in the J-3 District or in the D-1 Residential District by special exception permit. A commercial center was defined in Brookhaven Town Code § 85-1 as:

Any building or buildings, structure or structures or premises used by one (1) or more enterprises for a commercial purpose specifically permitted within the particular use district in which this term is applied, where the proposed use occupies a site of five (5) or more acres, whether built at one (1) time as a unit or in two (2) or more construction stages.[x]

 

As a result of these provisions, in order to construct a commercial center within J-2, Rocky Point was required to obtain either a variance from the Board of Zoning Appeals ("BZA") or a change of zone from the Town Board. Additionally, the Town Code required all applicants to submit variance applications to the BZA simultaneously with the filing of a site plan approval application with the Planning Board. A BZA determination approving the variance application, however, was necessary prior to the Planning Board considering any site plan approval application.[xi] In other words, the Planning Board had no jurisdiction to review the Lowes site plan application unless or until the BZA approved a variance application or the Town Board changed the zone.

On March 22, 2000, three weeks after delivery of the Lowes site plan application to the Planning Department and two months prior to the eventual May 18, 2000 Town Board vote to apply the CR designation, planning department staff wrote a letter informing Rocky Point that the proposed Lowes was prohibited in the J-2 District and asking how it wished to proceed. In other words, the staff sought to learn whether the applicant preferred to seek a variance from the BZA or a zone change from the Town Board. Rocky Point never responded to the March 22, 2000 letter.

Notwithstanding the lack of a response, staff presumed the applicant would seek a variance such that the BZA would become the lead agency for purposes of the mandatory SEQRA review. The other involved agencies were informed that the BZA was the intended lead agency. The SEQRA regulations do not require that an applicant be copied on lead agency coordinated review letters, letters that notify the other involved agencies of the intent of one to take lead agency status.[xii] Staff, consistent with the SEQRA regulations and ordinary practice, did not inform the applicant of the notice of intention.

Staff processed the site plan application in good faith as far as possible without an actual BZA application, circulating traffic reports and other information to SEQRA involved agencies.

Crucially, the zone change to CR was of no consequence to the SEQRA and other reviews, since a variance was necessary under either J-2 or CR. In fact, the SEQRA review process would have been the same whether the application needed a BZA variance, a zone change from the Town Board or just site plan approval from the Planning Board.

However, until the Lowe’s application was determined to be either an application for a BZA variance or for a Town Board change of zone from J-2 to J-3, neither the BZA nor that Town board had legal authority to issue a positive or negative declaration. More specifically, the SEQRA regulations at 6 NYCRR § 617.6(3)(b) provide that a lead agency is only authorized to make a determination of significance (i.e., positive or negative declaration) once it receives an application.

On May 18, 2000, five of the seven Town Board members voted to change the parcels zoning and apply the CR floating zone to the subject property. Since, however, the property owner had filed a protest, an affirmative vote of a super majority of the Board was required under Town Law § 265. Five had voted "yes,” one "no,” and the seventh had recused himself. The Town interpreted Town Law § 265 as requiring a super majority of those voting, i.e., 5 out of 6, excluding the Town Board member who recused himself.

The Appellant sued on May 25, 2000, alleging the General Construction Law § 41 required a super majority of the full Board, not merely of those voting. The Appellant was successful in the initial effort and the CR rezoning eventually was declared invalid (for the first time) on March 13, 2001.

On September 22, 2000, counsel for the Town and Rocky Point entered into a court stipulation to apply for a use variance from the CR zoning that was then in effect (the "Stipulation”).

The use variance application was not submitted to the BZA until two and one half months after the Stipulation, on December 1, 2000. The Towns position was that the Appellant was responsible for nine months of delay --- from the March 22, 2000 Planning staff letter asking how it wished to proceed --- until the December 2000 BZA application.

Upon receipt of the variance application, the matter promptly was moved up from the originally scheduled February 7, 2001 semi-monthly meeting and placed on the BZA calendar for January 24, 2001. At that meeting the BZA issued a resolution assuming lead agency status, issuing a positive declaration and resolving that a Draft Environmental Impact Statement ("DEIS”) was required.

The Applicant submitted its DEIS on August 2, 2001, almost eight months from the date of the positive declaration. Staff completed the DEIS review, notwithstanding that the second resolution to zone the property to CR was enacted on June 16, 2001 and another successful lawsuit to vacate the rezoning was filed on July 2, 2001.[xiii]

Ultimately, the BZA accepted the DEIS on March 13, 2002 and the required public hearing was held at the next semi-monthly BZA meeting on April 24, 2002. The DEIS hearing was held twenty days earlier than required under the SEQRA regulations.

The FEIS was submitted by the Appellant and had been accepted by the BZA on October 2, 2002, unaffected by the fact the CR zoning was vacated for the second time on July 17, 2002. The Town Board rezoned the Subject Property to CR for the third time twenty days later, on October 22, 2002. By this time the Town Board had enacted local superseding Town Law § 265, requiring only a simple majority vote to rezone when a protest was filed.

Lower Court Proceedings

The property owner brought a declaratory judgment action challenging the rezoning. After extensive discovery, the Town was awarded summary judgment by the Suffolk County Supreme Court (Emerson, J.) on the special facts issue because, inter alia, the plaintiff had no right to construct a commercial center under the J-2 zoning, i.e., it failed to meet the first prong of the special facts test.[xiv]

The Second Department reversed, finding there were questions of fact as to selective enforcement and malicious delay, even though the unanimous panel acknowledged that the proposed Lowes fell within the definition of a commercial center.[xv]

A non-jury trial ensued and the Suffolk Supreme Court (Sweeney, J.) held for the property owner, finding that the plaintiff had established bad faith by "the repeated attempts to rezone” and delays prior to the positive declaration and "had selectively enforced the J-2 zoning prohibition.”[xvi] The trial court presumably substituted selective enforcement for the first prong of the special facts test and eliminated the need to show a permitted use because it believed selective enforcement of the commercial center designation had been demonstrated.

The Town appealed the trial judgment to the Second Department and, this time, prevailed. The Second Department reversed on the law and the facts, finding no evidence of selective enforcement.[xvii]

Rocky Point was granted leave to appeal by way of motion to the Court of Appeals. The Court of Appeals (Rivera, J.) affirmed the Second Department.[xviii]

Selective Enforcement

The unanimous Court focused on the fact that Rocky Point had not met "the threshold requirement that it was entitled to the requested land use permit under the law as it existed when it filed its application.”[xix]

As to selective enforcement obviating the need for an "as of right” entitlement to a permit under the first prong, the Court of Appeals found the Second Departments ruling that there was insufficient evidence of selective enforcement was the finding which "more nearly comported with the weight of the evidence.”[xx] Judge Rivera further found that "[t]he record clearly demonstrate[d] that similarly situated applicants . . . were not similarly situated at all; they either fell within an exception or were within compliance with the J-2 zoning classification.”[xxi]

The Appellant made its case for selective enforcement by arguing that the "commercial center prohibition had not been raised as an impediment” to a number of other land use applications approved by the Town, suggesting that fact proved there must have been selective enforcement with respect to the Lowes application.[xxii] The Appellant cited fourteen examples of applications which it argued had not been subjected to the J-2 prohibition against 5 acre plus shopping centers.[xxiii] For each of Appellant's cited examples, Respondents argued that Appellant had either: (1) presented insufficient evidence to determine how the application had been treated, because it was 25 years or more prior to the trial; (2) did not fit the Town Code definition of a commercial center; (3) was exempt from zoning; (4) involved a pre-existing use; or (5) was treated in a manner similar to the Appellants application.

The burden to establish selective enforcement is a heavy one.[xxiv] Selective enforcement is essentially an Equal Protection violation claim and "forbids a public authority from applying or enforcing an admittedly valid law ‘with an evil eye and an unequal hand, so as practically to make unjust and illegal discriminations between persons in similar circumstances.’”[xxv]

In Bower Associates v. Town of Pleasant Valley, the Court of Appeals reiterated this high burden:

But even different treatment of persons similarly situated, without more, does not establish a claim. What matters is impermissible motive: proof of action with intent to injure—that is, proof that the applicant was singled out with an "evil eye and an unequal hand, so as practically to make unjust and illegal discriminations between persons in similar circumstances.”[xxvi]

 

As the Court of Appeals explained in Plattekill v. Dutchess Sanitation:

We find [no] merit to the defendants "selective enforcement" argument. Defendant, at most, has alleged previous nonenforcement and this is not enough. To prevail and thus render the ordinance unenforceable on this principle, it must be demonstrated that its provisions were enforced against the challenger here and not enforced as to others and that there was "arbitrary and intentionally unfair discrimination," "invidious discrimination." No such discrimination has been alleged or demonstrated and the "selective enforcement" argument must fail.[xxvii]

 

Negligence Standard

The Rocky Point Court did not reach the question of whether negligence could substitute for malice or deliberate delay. Judge Rivera noted that Rocky Points brief had placed "significant reliance on [the] decision in Matter of Faymor Dev. Co. v. Board of Stds. & Appeals of City of N.Y. in support of its [negligence] argument.”[xxviii] In rejecting the argument, the Court distinguished Faymor:

In Faymor the applicant would have had, in the absence of municipal wrongdoing, a vested right. Here, as Rocky Point concedes, it cannot meet the zoning requirements and did not have a vested right. Rocky Point has failed to meet the threshold requirement of entitlement as of right, and we have no reason to upset the Appellate Divisions factual findings of a lack of record support for selective enforcement by the Town, because the special facts exception is inapplicable to his case, under any standard.[xxix]

 

As a practical matter, it is difficult for this author to fathom how mere negligence in processing a land use application could continue for any meaningful period of time, without the applicant demanding action. If an application were to be accidentally lost or misplaced, a diligent applicant would bring that fact to a staff persons attention. Then, if the municipality still procrastinated, it would open itself to claims of "malice” or "bad faith.[xxx] Moreover, it is unclear whether under the reduced negligence standard, as was advocated by the Rocky Point appellant, a municipality would be deemed "negligent” if it failed to move every application potentially affected by an impending change of law to the head of the line, no matter when filed.

Nevertheless, even if a hypothetical negligence scenario were to result in delay, in this authors view, several sound public policy reasons militate against adoption of a negligence standard. First, the special facts exception implicitly acknowledges that zoning laws are legislative enactments which are presumptively constitutional and that presumption "is not rebutted if the . . . classification is even ‘fairly debatable.’”[xxxi] Legislative enactments are not to be overturned lightly and a negligence standard would do just that.

Second, there are "no assurances[s] that . . . zoning regulations [will] remain unchanged. '. . . If there is one thing that the history of zoning regulation has established it is that as time passes and population increases (or decreases) the zoning restrictions change.'”[xxxii] As a result, the heightened malice standard has been established for voiding zoning laws, even if they are enacted while an application under a prior zoning classification is pending.

Third, as acknowledged in Salkin, New York Zoning Law and Practice, land use controls have a "profound impact” upon the value of land if for no other reason that they are capable of shaping the character of an entire new and extensive area of a community, dictating the pace of development, influencing the economic and racial character of the community and affecting the kind and amount of development within a specific zone.[xxxiii] It is for good reason then that the New York State Legislature has mandated that all land use regulations be established in accordance with a comprehensive plan pursuant to Town Law § 263 and that this Court has required such regulations to be exercised in precise compliance with the powers given to towns under the Town Law.[xxxiv] A negligence standard would disrupt the comprehensive planning process by enhancing the ability of an applicant to impede implementation of a zone change intended to implement the comprehensive plan for an entire municipality.

Fourth, in analogous circumstances, the Court of Appeals has refused to estop municipalities from correcting their own mistakes or negligence even in egregious instances.[xxxv]

Allowing a negligence standard would address a hypothetical issue that may not exist in the real world, while also enhancing the ability of an applicant, which does not claim to have a vested right or a legitimate expectation that the zoning designation of its property would remain in place, to impede implementation of a zone change intended to implement the comprehensive plan for an entire municipality. The prerequisites to the application of the special facts exception should remain as they have for decades: in this writers opinion they are good law and good policy.

 

Maureen T. Liccione is partner of Jaspan Schlesinger LLP, practicing in the Municipal and Litigation Practice Groups. Prior to joining Jaspan Schlesinger LLP, Ms. Liccione served as an Assistant Corporation Counsel for the City of New York and as an attorney at a major Long Island firm. She is a member of the Advisory Board of Touro Law Center's Land Use & Sustainable Development Law Institute. Ms. Liccione represented the Town of Brookhaven as appellant in the Second Department and as respondent in the Court of Appeals in the Rocky Point litigation.



[i] 21 N.Y.3d 729, 736, 977 N.Y.S.2d 719, 722 (2013); see also Alscot Investing Corp. v. Inc. Vill. of Rockville Centre, 64 N.Y.2d 921, 488 N.Y.S.2d 629 (1985), aff'g, 99 A.D.2d 754, 471 N.Y.S.2d 669 (2d Dep’t 1984); Mascony Transp. & Ferry Serv. Inc., v. Richmond, 49 N.Y.2d 969, 428 N.Y.S.2d 948 (1980), aff'g, 71 A.D.2d 826, 419 N.Y.S.2d 381 (2d Dep’t 1979); Pokoik v. Silsdorf, 40 N.Y.2d 769, 390 N.Y.S.2d 49 (1976); Demisay, Inc. v. Petito, 31 N.Y.2d 896, 340 N.Y.S.2d 406 (1972).

[ii] Town of Orangetown v. Magee, 88 N.Y.2d 41, 643 N.Y.S.2d 21 (1996); Ellington Constr. Corp. v. Zoning Bd. of Appeals, 77 N.Y.2d 114, 564 N.Y.S.2d 1001 (1990); Faymour Dev. Co., Inc. v. Bd. of Standards & Appeals of N.Y.C., 45 N.Y.2d 560, 410 N.Y.S.2d 798 (1978).

[iii] Alscot Investing Corp., 64 N.Y.2d 921, 488 N.Y.S.2d 629; Pokoik, 40 N.Y.2d 769, 390 N.Y.S.2d 49.

[iv] Alscot Investing Corp. v. Inc. Vill.age of Rockville Centre, supra, 64 N.Y.2d 921, 488 N.Y.S.2d 629; Pokoik v. Silsdorf, supra, 40 N.Y.2d 769, 390 N.Y.S.2d 49.

[v] See, e.g., Jamaica Recycling Corp. v. City of N.Y., 38 A.D.3d 398, 832 N.Y.S.2d 40 (1st Dep’t 2007), app. dend, 9 N.Y.3d 801, 840 N.Y.S.2d 566 (2007); Hamptons LLC v. Rickenbach, 98 A.D.3d 736, 950 N.Y.S.2d 182 (2d Dep’t 2012); Alfano v. ZBA of Vill. of Farmingdale, 74 A.D.3d 961, 902 N.Y.S.2d 662 (2d Dep’t 2010); Ronsville v. Totman, 303 A.D.2d 897, 757 N.Y.S.2d 134 (3d Dep’t 2003); Preble Aggregate v. Town of Preble, 263 A.D.2d 849, 694 N.Y.S.2d 788 (3d Dep’t 1999); Cleary v. Bibbo, 241 A.D.2d 887, 660 N.Y.S.2d 230 (3d Dep’t 1997); Meteor Enter., LLC v. Bylewski, 38 A.D.3d 1356, 831 N.Y.S.2d 787 (4th Dep’t 2007); Envirotech of America, Inc. v. Dadey, 234 A.D.2d 968, 651 N.Y.S.2d 778 (4th Dep’t 1997).

[vi] Rocky Point Drive-In, L.P. v. Town of Brookhaven, 37 A.D.3d 805, 806, 831 N.Y.S.2d 456, 457-58 (2d Dep’t 2007).

[vii] A floating zoning district is created by an amendment to a town code, but is placed on a town’s zoning map only through subsequent town board legislative acts placing the zoning on individual parcel(s), in accordance with a comprehensive plan. Rodgers v. Vill. of Tarrytown, 302 N.Y. 115, 96 N.E.2d 731 (1951); Patricia Salkin, 1 N.Y. Zoning Law & Prac. § 4:18. A floating zone does not have set boundaries but is applied on individual bases at varied times. Applying a floating zone to a particular parcel or "landing” it on a designated lot amends the zoning map. Such a designation is not spot zoning. Patricia Salkin, 1 N.Y. Zoning Law & Prac. § 4:18.

[viii] Town of Brookhaven Final Comprehensive Land Use Plan, adopted May, 1996.

[ix] The trial court incorrectly held that the zoning amendment was commenced after the Appellant’s predecessor had filed its site plan application.

[x] Brookhaven Town Code § 85-1.

[xi] Brookhaven Town Code § 85-45H, formerly § 85-45 G.

[xii] 6 NYCRR § 617.6(b)(3).

[xiii] Sans Agent Inc. v. Town of Brookhaven, Short Form Order, Suffolk County Supreme Court, October 4, 2001, Index No. 01-14952 (Whelan, J.).

[xiv] Rocky Point, 37 A.D.3d at 806, 831 N.Y.S.2d at 457-58.

[xv] Id.

[xvi] Id.

[xvii] Rocky Point, 93 A.D.3d at 654, 939 N.Y.S.2d at 865-66.

[xviii] Rocky Point, 21 N.Y.3d at 734, 977 N.Y.S.2d at 720.

[xix] Id. at 737, 977 N.Y.S.2d at 722.

[xx] Id.

[xxi] Id. at 738, 977 N.Y.S.2d at 723.

[xxii] Id. at 736, 997 M/U/S/2d at 722.

[xxiii] Rocky Point, Decision After Trial, June 5, 2009, Suffolk County Supreme Court, Index No. 02-30047 (Sweeney, J.).

[xxiv] 303 West 42nd Street Corp. v. Klein, 46 N.Y.2d 686, 693, 416 N.Y.S.2d 219, 223 (1979) (citing Yick Wo v. Hopkins, 118 U.S. 356, 373-74 (1986)).

[xxv] Id. at 693, 416 N.Y.S.2d at 223.

[xxvi] 2 N.Y.3d 617, 631, 781 N.Y.S.2d 240, 248 (2004).

[xxvii] 56 A.D.2d 150, 152, 391 N.Y.S.2d 750, 753 (3d Dep’t 1977) (citation omitted), affd, 43 N.Y.2d 662, 400 N.Y.S.2d 816 (1977).

[xxviii] Rocky Point, 21 N.Y.3d at 738, 977 N.Y.S.2d at 723 (citing 45 N.Y.2d 560, 566, 410 N.Y.S.2d 798, 803 (1978)).

[xxix] Id. (citation omitted).

[xxx] See, e.g., Our Lady of Good Counsel v. Ball, 45 A.D.2d 66, 68, 356 N.Y.S.2d 641, 643 (2d Dep't 1974), where the New York City Department of Consumer Affairs failed to move along an application for a bingo license despite "persistent and continuous” inquiries by the applicant.

[xxxi] Tilles Investment Co. v. Town of Huntington, 74 N.Y.2d 885, 888, 547 N.Y.S.2d 835, 836 (1989) (citation omitted); Town of Islip v. Caviglia, 73 N.Y.2d 544, 542 N.Y.S.2d 139 (1989); Kurzius v. Inc. Village of Upper Brookville, 51 N.Y.2d 338, 434 N.Y.S.2d 180 (1980).

[xxxii] Sag Harbor Port Assocs. v. Village of Sag Harbor, 21 F. Supp. 2d 179 (E.D.N.Y. 1998) (quoting Elias v. Town of Brookhaven, 783 F. Supp. 758, 761 (E.D.N.Y. 1992)).

[xxxiii] Patricia Salkin, 1 N.Y. Zoning Law & Prac. § 1:12 (10th ed.).

[xxxiv] See, e.g., Sunrise Check Cashing and Payroll Serv., Inc. v. Town of Hempstead, 20 N.Y.3d 481, 964 N.Y.S.2d 64 (2013), reargument denied, 21 N.Y.3d 978 (2013).

[xxxv] E.F.S. Ventures Corp. v. Foster, 71 N.Y.2d 359, 369-70, 526 N.Y.S.2d 56, 61 (1988); Parkview Assocs. v. City of New York, 71 N.Y.2d 274, 282, 525 N.Y.S.2d 176, 178-79 (1988), reargument denied, 71 N.Y.2d 995 (1988), cert. denied, 488 U.S. 801 (1988); Rudolf Steiner Fellowship Found. v. De Luccia, 90 N.Y.2d 453, 460, 662 N.Y.S.2d 411, 414 (1997).

Reprinted with permission from:  Municipal Lawyer, Summer 2014, Vol. 28, No. 2, published by the New York State Bar Association, One Elk Street, Albany, NY 12207.
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