Matter of Malone Real Estate LLC v Village of Saranac Lake Bd. of Trustees

[*1] Matter of Malone Real Estate LLC v Village of Saranac Lake Bd. of Trustees 2017 NY Slip Op 50334(U) Decided on February 10, 2017 Supreme Court, Essex County Bruening, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 February 10, 2017
Supreme Court, Essex County

In the Matter of the Application of Malone Real Estate, LLC, Petitioner,

against

Village of Saranac Lake Board Of Trustees, Respondent.



CV16-0476



APPEARANCES:

FITZGERALD MORRIS BAKER FIRTH, P.C.

Attorneys for Petitioner

(Thomas A. Ulasewicz, Esq.)

16 Pearl Street, PO Box 2017

Glens Falls, New York 12801

MILLER, MANNIX, SCHACHNER & HAFNER, LLC

(Attorneys for Respondent)

Leah Everhart, Esq.

15 West Notre Dame Street

Glens Falls, New York 12801
Glen T. Bruening, J.

Petitioner commenced this CPLR Article 78 proceeding to challenge Respondent's denial of its Freedom of Information Law (FOIL) request. Respondent moves to dismiss the Petition for failure to state a cause of action.

As background, in 2014, Lake Flower Lodging, LLC submitted an application to Respondent seeking the approval of a planned unit development comprised of certain parcels of property located within the Village for the purposes of constructing a resort hotel and conference center. Also in 2014, Respondent adopted and filed with the Department of State Local Law 17- 2014 which, among other things, established the Village of Saranac Lake Planned Unit Development District Law, which set forth criteria for review and approval of any Planned Unit Development District (PUDD). Pursuant to Local Law 17-2014, a minimum of three contiguous acres was required for a proposed PUDD site within the Village. Thereafter, in 2015, Respondent adopted and filed with the Department of State Local Law 01-2015 establishing the Lake Flower Planned Unit Development District (Lake Flower PUDD) for the purposes of [*2]constructing and operating a resort hotel and conference center on Lake Flower. As is relevant to this action, a parcel of real property, known as 203 River Street, was retained as part of the Lake Flower PUDD. According to the Local Law 01-2015, the Lake Flower PUDD must include a minimum of three acres of land. The Lake Flower PUDD comprised 3.184 acres of land.[FN1]

Petitioner alleges that, in June of 2016, the Adirondack Daily Enterprise newspaper published the substance of a December 2015 Memorandum (Memo), purportedly drafted by Respondent's counsel to the Planning Board, in which counsel is purported to advise the Village's Planning Board that the removal of the 203 River Street lot from the Lake Flower PUDD would bring the project below the acreage requirement, thus requiring applicant to obtain a variance or requiring Respondent to amend the Lake Flower PUDD. The Memo was purportedly marked "Confidential," but placed in a publically viewable file, reviewed by a member of the public, who then discussed its contents with the Adirondack Daily Enterprise. The newspaper then, in a 2016 article, reported that "Village Community Development Director Jeremy Evans confirmed the substance of the memo but declined to let the Enterprise see it, citing attorney-client privilege."

In July 2016, Petitioner submitted a FOIL request to the Village seeking to inspect and copy records prepared by Respondent's counsel in December 2015, the substance of which was published in the Adirondack Daily Enterprise on June 23, 2016. The Village Clerk denied Petitioner's request, citing the attorney-client privilege. Following its unsuccessful administrative appeal to Respondent, Petitioner commenced this CPLR article 78 proceeding, contending that Respondent's determination to deny the FOIL request was rendered in error as the Memo is not exempt from disclosure because any privilege asserted has been waived through the public disclosure of the Memo and its substance. Respondent now makes this pre-answer motion to dismiss the Petition for failure to state a cause of action. Petitioner opposes the motion.

FOIL requires that state and municipal agencies "make available for public inspection and copying all records," subject to certain exemptions (Public Officers Law § 87 [2]). Agencies claiming an exemption from disclosure bear the burden of showing that the requested material "falls squarely within the ambit of one of the statutory exemptions" (Matter of Verizon NY, Inc. v Bradbury, 40 AD3d 1113, 1114 [2d Dept 2007]). In this regard, Public Officers Law § 87(2) (a) exempts from disclosure information specifically exempted by state (or federal) statute, for example, attorney-client information pursuant to CPLR 4503 (Matter of Morgan v New York State Dept. of Envtl. Conservation, 9 AD3d 586, 587 [3d Dept 2004]).

Here, Petitioner does not argue that the Memo was not privileged when it was prepared. Rather, Petitioner contends that the attorney-client privilege was waived when the Memo was 1) made available for public view and, 2) based on Jeremy Evans' confirmation of the substance of that Memo to the media.[FN2] Accordingly, it is Respondent's burden to demonstrate that the [*3]privilege was not waived and that the Memo remained exempt from disclosure (see Matter of Loudon House LLC v. Town of Colonie, 123 AD3d 1409, 1411 [3d Dept 2014). Along these lines, a "client who voluntarily testifies to a privileged matter, who publicly discloses such matter or who permits his or her attorney to testify regarding the matter is deemed to have impliedly waived the attorney-client privilege" (id. [internal quotation marks and citations omitted]).[FN3]

In determining Respondent's motion, "the sole criterion is whether the petition sets forth allegations sufficient to make out a claim that the determination sought to be reviewed was 'made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion'" (Matter of Kunik v New York City Dept. of Educ., 142 AD3d 616, 617 [2d Dept 2016] [quoting CPLR 7803 [3]). In assessing whether the attorney-client privilege is waived, the Court must take into consideration whether Respondent intended to retain the confidentiality of Memo and whether Respondent took reasonable steps to prevent its disclosure (see Kraus v Brandstetter, 185 AD2d 300, 301 [2d Dept 1992]). "The burden is on the proponent of the privilege to prove that the privilege was not waived" (New York Times Newspaper Div. of NY Times Co. v Lehrer McGovern Bovis, 300 AD2d 169, 172 [2d Dept 2002]). Here, there is no evidence regarding who placed the Memo, the contents of which are unknown to this Court, in the publically-accessible file, and why. In liberally construing the Petition, the Court finds that Petitioner has alleged sufficient facts to maintain a challenge to the denial of its FOIL request.

Accordingly, it is hereby

ORDERED that Respondent's motion to dismiss the Petition is denied; and it is further

ORDERED that Respondent shall file and serve its answer to the Petition within 30 days after service of this Decision and Order with notice of entry (see CPLR 3211 [f]; 7804 [f]), and Petitioners shall file and serve any reply within 20 days after service of the answer (see CPLR 7804 [d] and [f]).

This constitutes the Decision and Order of the Court. The original Decision and Order is being returned to counsel for Petitioner. A copy of the Decision and Order/Judgment has been delivered to the County Clerk for placement in the file. The signing of this Decision and Order and delivery of a copy of this Decision and Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of that rule respecting filing, entry and notice of entry.

IT IS SO ORDERED.

ENTER.

__________________________________

Dated: February 10, 2017

Glen T. Bruening

Saratoga Springs, New York

Acting Supreme Court Justice

The Court considered the following papers:

By Petitioner:

Affirmation of Thomas A. Ulasewicz, dated November 22, 2016, with Exhibit A.

By Respondent:

Notice of Motion, filed November 10, 2016;

Affidavit of Leah Everhart, Esq., sworn to on November 7, 2016;

Affidavit of Jeremy Evans, sworn to on November 7, 2016;

Memorandum of Law, dated November 7, 2016;

Correspondence dated November 29, 2016. Footnotes

Footnote 1:Petitioner has commenced a related CPLR article 78 proceeding in Essex County Supreme Court, bearing Index Number CV16-0389, challenging site plan approval of the project.

Footnote 2:In support of its motion, Respondent submits the affidavit of Jeremy Evans, who attests that the Memo was inadvertently placed in a publically-accessible file. However, it is unclear from Respondent's submission that Mr. Evans has personal knowledge regarding when and how that Memo came to be placed there. Mr. Evans also attests that his statements made to the media — confirming the substance of the memo and classifying the information contained therein as a recommendation to protect the Village from lawsuits — were taken out of context.

Footnote 3:Whether and how much the Memo and Mr. Evans' statements to the media overlap are unknown at this stage of the proceedings.