MATTER OF KAREDES v. COLELLA

Mugglin, J.

The sole issue remaining for resolution after our previous decision (292 A.D.2d 138 [2002]) and reversal and remittal by the Court of Appeals (100 N.Y.2d 45 [2003]) is respondents' argument that Supreme Court improperly treated its CPLR 3211 motion to dismiss as one for summary judgment without giving them the notice required by CPLR 3211 (c), thus depriving them of their right to answer petitioner's pleadings. Petitioner argues, and Supreme Court stated in its opinion, that the parties "each (in one way or another) ha[d] asked for a determination as to the legality and enforceability of the contract." The record does not support this conclusion. Respondents' arguments to Supreme Court were that the statute of limitations barred petitioner's claims and that the contract was void because of the term limit rule. Both of these issues are now resolved against respondents. Respondents, on appeal to this Court, further asserted, however, that had they been given an opportunity to answer, other defenses involving allegations of "wrongdoing and financial improprieties" by petitioner, as well as "favoritism, favors and gifts," which induced the Village Board of Trustees to approve the contract, would be pleaded and could conceivably compel the Court to declare the contract void.

We have previously held that "`leave to serve an answer should be refused only if it clearly appear[s] that no issue exist[s] which might be raised by answer concerning the merits of the petitioner's application'" (Matter of DeVito v Nyquist, 56 A.D.2d 159, 161 [1977], affd 43 N.Y.2d 681 [1977], quoting Matter of Kane v New York State Dept. of Correction, 21 A.D.2d 919, 920 [1964], appeal dismissed 15 N.Y.2d 551 [1964]). A motion to dismiss for failure to state a cause of action may be considered as one for summary judgment only if prior notice has been afforded to the parties of the court's intention to so treat it (see Matter of Phillips v Town of Clifton Park Water Auth., 215 A.D.2d 924 [1995]). Likewise, in CPLR article 78 proceedings, CPLR 7804 (f) requires that when an objection in point of law is raised and denied, "the court shall permit the respondent to answer" (see id. at 926).

Since respondents raise factual issues, Supreme Court should not have decided in petitioner's favor without allowing respondents the opportunity to submit an answer (see Matter of Nassau BOCES Cent. Council of Teachers v Board of Coop. Educ. Servs. of Nassau County, 63 N.Y.2d 100, 103 [1984]; Matter of Phillips v Town of Clifton Park Water Auth., supra at 926; Matter of 230 Tenants Corp. v Board of Stds. & Appeals of City of N.Y., 101 A.D.2d 53 [1984]).

Ordered that the judgment is reversed, on the law, without costs, and matter remitted to the Supreme Court for further proceedings not inconsistent with this Court's decision. [See 187 Misc.2d 656.]