No Treble Damages for Municipalities: The Court of Appeals Cuts RPAPL §861 Down to Size

For claimants and their legal counsel, money no longer grows on trees in claims asserted against municipalities under New York’s Real Property Actions and Proceedings Law (RPAPL) §861.  In March of this year, the New York Court of Appeals addressed the question of whether a municipality could be held liable for treble damages under the statute.  In Rosbaugh v. Town of Lodi, the Court held that even though the statute provided for an award of treble damages, a court could not assess those damages against a municipality. 

The Town of Lodi had determined that certain trees posed a hazard to drivers traveling on a town highway adjacent to the Rosbaugh’s property and, believing incorrectly that the trees were within the highway right of way, they hired a tree service to remove or trim 55 of them.  The Rosbaugh’s sued the Town for damages under RPAPL §861 which provides for treble damages for anyone who “cuts, removes, injurers or destroys” trees without the consent and permission of their owner.  Following arbitration, an arbitrator awarded the Rosbaugh’s damages, including treble the “stumpage value” of the trees based upon the treble damages provision in the statute.  The town appealed the arbitrator’s award to Supreme Court challenging the treble damages.  The Supreme Court affirmed the award, holding that the treble damages were not punitive damages because RPAPL §861 did not require a finding of “actual malice or a wanton, willful or reckless disregard for plaintiffs’ right” to support the award.  A split Appellate Division then affirmed the Supreme Court’s decision. 

When the Court of Appeals considered the case, they focused on the legislative history behind RPAPL §861, particularly materials submitted to the Legislature by the New York State Department of Environmental Conservation which advocated for passage of the statute and its treble damages provisions to deter the illegal taking of timber by illegitimate timber harvesters.  The Court relied upon this legislative history to hold that the treble damages contemplated by the statute were punitive damages.  They reversed the lower courts and held that treble damages under RPAPL §861 could not be awarded against the Town of Lodi based upon a long line of well-established Court of Appeals precedent holding that the neither the State of New York nor any of its political subdivisions is subject to punitive damages. 

The practical take away for adjusters handling claims against New York municipalities is this: municipalities are not subject to punitive damages and when presented with claims seeking enhanced damages, such as the treble damages provided for in RPAPL §861, adjusters should consider whether the intent of the statute providing for those damages is to punish or deter conduct and, if so, argue that such damages are punitive in nature and that recovery of them is therefore barred.