RB Hempstead LLC v Incorporated Vil. of Hempstead

[*1] RB Hempstead LLC v Incorporated Vil. of Hempstead 2005 NY Slip Op 50027(U) Decided on January 13, 2005 Supreme Court, Nassau County Austin, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 13, 2005
Supreme Court, Nassau County

RB HEMPSTEAD LLC, Plaintiff,

against

THE INCORPORATED VILLAGE OF HEMPSTEAD and THE INCORPORATED VILLAGE OF HEMPSTEAD COMMUNITY DEVELOPMENT AGENCY, Defendants.



9256-04



COUNSEL FOR PLAINTIFF

Jaspan, Schlesinger & Hoffman, LLP

300 Garden City Plaza

Garden City, New York 11530

COUNSEL FOR DEFENDANT

C. Robinson Thompson & Associates, LLP

Diplomat Centre

820 Second Avenue - Suite 7B

New York, New York 10017

Leonard B. Austin, J.

Plaintiff moves for preliminary injunctive relief enjoining Defendants, their employees, agents and representatives from accepting or opening any bids or proposals for the sale and development of Parking Field 10 in the Incorporated Village of Hempstead, as identified in the complaint, and further requiring Defendants to withdraw the Request for Proposal dated June 16, 2004.

BACKGROUND

Plaintiff is a developer. Defendant, Incorporated Village of Hempstead ("Village"), sought development of a retail project on a 15-acre site in the Village ("the Development Area"). Defendant, Incorporated Village of Hempstead Community Development Agency ("CDA") is a public benefit corporation charged with fulfilling the goals of community development and urban renewal.

Pursuant to a resolution dated June 25, 2002, the CDA accepted the proposal of Plaintiff for the commercial and retail development of the Development Area. Although this June 2002 resolution purported to authorize the CDA " to enter into any agreement or contract in furtherance of the commercial and residential redevelopment of the North Main Street area" by Plaintiff, Defendants allege, without refutation, that the resolution was executed only by the members of CDA; not by the Trustees of the Village.

Subsequent resolutions passed by the Village on August 6, 2002, and September 7, 2002, expressly authorized CDA to "prepare and process an urban renewal plan," while these resolutions expressly reserved to the Village the authority "to execute any documents, agreements or contracts in furtherance of said urban renewal area." By resolution dated February 25, 2003, the Trustees of the Village authorized the Mayor to convey Village property "to the CDA to be utilized in furtherance of the Urban Renewal Plan upon its enactment."

Plaintiff entered into a Condemnation Agreement dated May 16, 2003, with the CDA. This Condemnation Agreement defines the Development Area as "the area in the Incorporated Village of Hempstead bound by the following roads: Union Place on the North; Franklin Avenue on the West, W. Columbia Street on the South; Main Street on the East; and the properties included therein." The Condemnation Agreement provided, with regard to the roads and parking lots which are the property of the Village located within the Development Area, that CDA would sell or arrange for the sale by the Village to the Plaintiff of such property for the sum of $75,000.00 per acre. Parking Field 10 lies within the Development Area.

By letter dated May 25, 2004, Plaintiff was advised that the Village decided to delete Parking Field 10 from the Development Area and sell it to another interested party. Despite Plaintiff's objections, CDA issued a Request for Proposal for the proposed sale of Parking Field 10.

Plaintiff filed its complaint for specific performance and served the instant [*2]application for preliminary injunctive relief by order to show cause. Plaintiff alleges that it has spent more than $600,000.00 in order to fulfill its obligations under the Condemnation Agreement, and that the loss of Parking Lot 10 may discourage a large

potential retailer from investing in the site. This Court granted a temporary restraining order pending the determination of this motion.

DISCUSSION

The decision to grant a preliminary injunction is a matter committed to the sound discretion of the trial court. Doe v. Axelrod, 73 NY2d 748, 758 (1988); and Mosseri v. Fried, 289 AD2d 545 (2nd Dept. 2001). To prevail on a motion for a preliminary injunction, the movant must show (1) a probability of success on the merits; (2) danger of irreparable injury in the absence of injunctive relief; and (3) a balancing of the equities in the movant's favor. Aetna Ins. Co. v. Capasso, 75 NY2d 860 (1990); Doe v. Axelrod, supra; W.T. Grant Co. v. Srogi, 52 NY2d 496 (1980); Olabi v. Mayfield, 8 AD3d 459 (2nd Dept. 2004); and Mosseri v. Fried, supra. Preliminary injunctive relief is a drastic remedy which will not be granted unless the moving party demonstrates a clear right to relief under the law and the undisputed facts. Hoeffner v. John F. Frank Inc., 302 AD2d 428, 429 (2nd Dept. 2003).

Specific performance is not available in the absence of a binding contractual agreement. See, Cipriano v. Glen Cove Lodge No.1458, BPOE, 1 NY3d 53, 61 (2003); and Somma v. Wehrle, 245 AD2d 284 (2nd Dept. 1997). The question presented is whether the Condemnation Agreement is a binding contract for the sale of the entire Development Area to Plaintiff.

Article 15-A of the General Municipal Law governs municipal urban renewal agencies. Section 554(19) of this statute enables the agency to transfer any right, title or interest in or to any real property acquired or held by it in connection with any urban renewal program, "subject to the prior approval of the governing body." Article 15 of the General Municipal Law governs urban renewal. Section 507(2)(c) authorizes a sale of real property to any entity designated by the agency and "approved by the governing body." The "governing body" of a village is defined in the statute as "the board of trustees." General Municipal Law §502 (1)(c).

A municipal contract that does not comply with statutory requirements is invalid and unenforceable. Parsa v. State of New York, 64 NY2d 143, 147 (1984); Granada Bldgs., Inc. v. City of Kingston, 58 NY2d 705, 708 (1982); Infrastructure Mgt. Sys., LLC v. County of Nassau, 2 AD3d 784, 786 (2nd Dept. 2003); Town of Babylon v. N. Racanelli Assocs., 171 AD2d 741 (2nd Dept.), app. den., 78 NY2d 853 (1991); and Gladsky v. City of Glen Cove, 164 AD2d 567 (2nd Dept.), app. den., 78 NY2d 859 (1991). See gen'lly, Goldberg v. Penny, 163 AD2d 352 (2nd Dept. 1990). On this record, it is clear that the Village never approved or authorized the Condemnation Agreement as required by the General Municipal Law, as well as the Village's own resolutions. Plaintiff's argument that the resolution of February, 2003, "effectively conveyed certain Village property to the CDA, including the property at issue here" is legally insufficient to enable this Court to find that there was a valid enforceable [*3]contract.[FN1]

The Court of Appeals, in Parsa v. State of New York, supra at 147, held:

[T]he State's acceptance of benefits furnished under a contract made without authority does not estop it from challenging the validity of the contract or from denying liability pursuant to it (citations omitted). Even though a promise to pay may be spelled out from the parties' conduct, a contract between them may not be implied to provide 'rough justice' and faster liability on the State when applicable statutes expressly prohibit it (citation omitted). The result may seem unjust but any other rule would completely frustrate statutes designed to protect the public from governmental misconduct or improvidence. The contractor's option is to withhold his services unless an agreement is executed and approved as the statutes require.

This principle is applicable to municipal contracts generally. Consequently, the Court is compelled to conclude that the Condemnation Agreement is not a valid and binding contract for the sale of the entire Development Area to Plaintiff.

Based on the foregoing, Plaintiff cannot show a likelihood of success on the merits with regard to its claim for specific performance in the absence of a binding contract for the sale of the Village's property. Therefore, Plaintiff's application for preliminary injunctive relief must be denied. Under these circumstances, there is no need for the Court to address the remaining factors for the test for preliminary injunctive relief, nor is there any need to address the Village's additional defense that the Condemnation Agreement violates the Statute of Frauds.

Accordingly, it is,

ORDERED, that Plaintiff's motion for a preliminary injunction is denied, and it is further,

ORDERED, that the temporary restraining order granted on July 12, 2004, is hereby vacated.

This constitutes the decision and Order of the Court.

Dated: Mineola, NY ______________________________

January 13, 2005 HON. LEONARD B AUSTIN, J.S.C. Footnotes

Footnote 1:Such a finding is not intended to be on the ultimate merits of Plaintiff's claims and competing theories of recovery equitable and legal.