As we explained in our case summary, the question in this case was whether a municipality may recover damages directly from a property owner for unpaid water rents when the municipality has not contracted to provide water to the property owner. The Court (mem.) unanimously held that the village was authorized only to obtain a lien on the subject property, and could not seek a judgment holding the owner personally liable.
The facts were straightforward: the Herkimer County Industrial Development Agency (IDA) owned property that it leased to a tenant. The tenant went bankrupt without paying two years’ worth of water bills due to the Village of Herkimer. The Village sought to hold the IDA responsible for the tenant’s nonpayment. After a meandering procedural history, the Fourth Department held that the Village could obtain a judgment holding the IDA personally liable.
As this case came to the Court of Appeals, it primarily raised a broad question about the nature of an industrial development agency’s “ownership” of property. That ownership, the IDA contended, was fundamentally different from the ownership of a traditional property owner. The IDA argued that an industrial development agency should therefore be specially immune from the liabilities of its tenants.
The Court did not reach that broad argument, however, and instead decided the case narrowly on statutory grounds. The Village’s remedies for nonpayment of water charges were established in statute, the Court observed, and the only statutory remedy provided was a lien on the subject property. There being no statutory authorization for a judgment imposing personal liability on the IDA, the Court reversed the Fourth Department’s decision and dismissed the Village’s claim against the IDA.