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Fourth Department — Tax Liens — Bankruptcy: County of Chautauqua v. Elderkin

Appellate Division, Fourth Department

Tax Liens — Bankruptcy

Referee’s Report — Calculation of Liability

County of Chautauqua v. Elderkin
CA 13-00473
Appealed from Chatauqua County Court

Background: The petitioner commenced an in rem proceeding to foreclose tax liens against 23 parcels owned by the respondent. The parcels were severed due to deficiencies in the foreclosure proceeding and the petitioner moved for summary judgment in the severed proceeding. Before the motion could be heard, the respondent filed for bankruptcy. The bankruptcy court granted the petitioner’s motion to lift the automatic stay and ordered the foreclosure proceeding to continue. After the petitioner withdrew its motion for summary judgment, the case was then transferred to a referee. The respondent appeals from an order confirming the referee’s report.

Ruling: The Appellate Division affirmed. The automatic stay was modified to permit the petitioner to assert summary judgment on title to the respondent’s parcels. Therefore, the court had properly ordered a hearing on the issue. The court held that as the petitioner may be obligated to accept partial payments of taxes for properties affected by the bankruptcy proceeding, or may be required to cancel tax liens, the referee properly considered the total amount of the respondent’s tax liability, and not only that portion that had accrued prior to the commencement of the in rem proceeding.

James E. Westman of the Westman Law Firm for the respondent-appellant; Kurt D. Gustafson, county attorney, for the petitioner-respondent

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