## Facts

- A Brooklyn warehouse property in an M2-1 zoning district permitted manufacturing, commercial, and retail uses but prohibited residential use.
- The owner, 160 Imlay Street Real Estate LLC (Imlay), sought a zoning variance to convert the building to residential use, asserting it could not obtain enough commercial tenants.
- The Red Hook/Gowanus Chamber of Commerce opposed the variance during multiple administrative hearings.
- The New York City Board of Standards and Appeals (BSA) granted Imlay a hardship variance on December 24, 2003.
- The Chamber commenced a CPLR article 78 proceeding on January 23, 2004 (the last day of the 30-day limitations period), naming only the BSA and the City of New York, and omitting Imlay.
- Four days later, the Chamber delivered a courtesy copy of the petition papers to Imlay’s counsel.
- The City moved to dismiss for failure to timely join a necessary party; the Chamber cross-moved to amend to add Imlay.

## Issues

1. Whether the landowner who received the variance (Imlay) was a necessary party to an Article 78 challenge to the BSA’s variance determination under CPLR 1001(a).
2. If Imlay was a necessary party, whether the proceeding had to be dismissed for nonjoinder within the limitations period, or whether the court could permit amendment/continuation under CPLR 1001(b).

## Decision

- The Court of Appeals held that Imlay, as the beneficiary of the variance, was a necessary party because its rights would be directly affected by a judgment annulling the variance.
- The Court reversed the Appellate Division’s dismissal and reinstated Supreme Court’s order denying dismissal and permitting amendment to add Imlay.
- The Court ruled that dismissal was not required because CPLR 1001(b) demands a discretionary balancing of statutory factors, which the Appellate Division did not properly perform.

## Legal Principles

- In an Article 78 proceeding challenging a zoning variance, the property owner who obtained the variance is generally a necessary party under CPLR 1001(a) because the owner’s legally protectable interests may be inequitably affected.
- When a necessary party was not timely joined and joinder is impeded by the statute of limitations, CPLR 1001(b) requires a multi-factor analysis before dismissal, including:
  - whether the petitioner has another effective remedy if dismissed;
  - the prejudice to the absent party and existing parties if the case proceeds or is dismissed;
  - whether prejudice can be reduced by protective measures; and
  - whether an effective judgment can be rendered in the party’s absence.
- A court errs by treating the petitioner’s inadequate explanation for nonjoinder as dispositive without applying CPLR 1001(b)’s statutory balancing.
- Prompt notice to the omitted necessary party and the ability to join with limited or remediable prejudice support allowing amendment rather than dismissal.

## Conclusion

The Court of Appeals held that the variance beneficiary was a necessary party to the Article 78 challenge, but the proceeding should not be dismissed solely for late joinder; courts must apply CPLR 1001(b)’s equitable factors and may permit amendment to add the omitted party where fairness and lack of substantial prejudice support that result.


Matter of Red Hook/Gowanus Chamber of Com. v. N.Y.C. Bd. of Stds. & Appeals, 5 N.Y.3d 452 (N.Y. 2005)