Glenville Police Benevolent Assn. v Mosher

[*1] Glenville Police Benevolent Assn. v Mosher 2005 NY Slip Op 52350(U) [18 Misc 3d 1143(A)] Decided on October 18, 2005 Supreme Court, Schenectady County Giardino, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 18, 2005
Supreme Court, Schenectady County

Glenville Police Benevolent Association and Gregory Restina, President of the Glenville Police Benevolent Association;, Plaintiffs;

against

Clarence Mosher, as Town Supervisor for the Town of Glenville, New York; Robert E. Bailey, as Councilman of The Town of Glenville, New York; Mark A. Quinn, as Councilman of the Town of Glenville, New York; James W. Denney, as Councilman of the Town of Glenville, New York; Peter V. Russo, as Councilman of the Town of Glenville, New York; and Town of Glenville, New York, Defendants.



2004-1012



Appearances:

For Plaintiffs:

Thomas J. Jordan, Esq.

Attorney at Law

Albany, New York

For Defendants:

Brian S. Kremer, Esq.

Goldberger and Kremer

Albany, New York

Richard C. Giardino, J.

This matter comes before the Court on the motion of Defendants seeking summary judgment dismissing the Complaint herein and the cross-motion of Plaintiffs seeking summary judgment awarding specific performance of a settlement agreement or damages based upon unjust enrichment, all as sought in the Complaint.

The facts can be summarized briefly. Plaintiffs filed two Improper Practice Charges against Defendants with the New York State Public Employment Relations Board. On January 15, 2004, one of these charges was scheduled for hearing before an administrative law judge. Just prior to that hearing, the Town Attorney, Mr. Moore (now retired), asked counsel for Plaintiffs if they could discuss settlement. The two sides did so and arrived at mutually agreeable terms. Defendants would make a change to the health insurance coverage provided to police officers upon their retirement and Plaintiffs would withdraw the pending Improper Practice Charges. Counsel for Plaintiffs then withdrew the charge set for hearing that day, and approximately one month later, he withdrew the other charge.

The next regular meeting of the Glenville Town Board was held on February 18, 2004. During that meeting, the Board went into executive session to discuss pending PERB matters, but did not vote on the settlement agreement. The matter was again discussed at the Town Board meeting on May 19, 2004, at which time the agreement was rejected by board vote. At several points during this period, meetings took place between Plaintiffs and the Town Attorney attempting to resolve issues raised by certain Town Board members. Those discussions were not fruitful, however, and this action ensued.

The core argument advanced by Defendants is that no settlement agreement exists between Plaintiffs and Defendants because the Town Board did not approve one. Specifically, Defendants argue that Town Law §64(6) requires that a formal resolution be passed by the Town Board and executed by the Town Supervisor in the name of the Town before the Town can be bound by any contract (See, e.g., Verifacts Group, Inc. v. Town of Babylon, 267 AD2d 379). The rule that municipal contracts must comply with specific statutory requirements has been uniformly applied by the Court of Appeals (See, e.g., Parsa v. State, 64 NY2d 143) and all four appellate departments (See, e.g., Walentas v. New York City Dept. of Ports, 167 AD2d 211 (First Department); Infrastructure Management Systems, L.L.C. v. Count of Nassau, 2 AD3d 784 (Second Department); Town of Oneonta v. City of Oneonta, 191 AD2d 891 (Third Department); H & R Project Associates, Inc. v. City of Syracuse, 289 AD2d 967 (Fourth Department)).

This "statutory compliance" rule has been applied specifically to preclude enforcement of settlement stipulations reached in open court (Par Builders, Inc. v. Assessor of the Town of Orangetown, 234 AD2d 374). In fact, it has been expressly held to supersede the public policy favoring stipulations of settlement (Walentas v. New York City Dept. of Ports, supra). It has also been held to preclude enforcement implied contracts founded upon notions of unjust enrichment (Hamlin Beach Camping, Catering & Concessions Corp. v. State, 303 AD2d 849), "rough justice" (Parsa v. State, supra) and, in all but the rarest of situations, estoppel (Hamlin Beach Camping, Catering & Concessions Corp. v. State, supra; Rosefsky by Koffman v. State, 205 AD2d 120; Town of Oneonta v. City of Oneonta, supra).

Plaintiffs raise a number of arguments in response. First, Plaintiffs' argue that the Town Attorney had apparent authority to bind the Town. This argument is defeated by a corollary to the statutory compliance rule; namely, a party contracting with a municipal entity is chargeable with knowledge of the statutes applicable to that municipality and their limitation on the authority of [*2]municipal personnel (Parsa v. State, supra; Town of Oneonta v. City of Oneonta, supra). Plaintiffs' argument that Defendants waived the statutory compliance defense is negated by the Third Affirmative Defense found in Defendants' Answer to the Amended Complaint. That defense alleges that neither the Town Attorney nor the Assistant Town Attorney was authorized to enter into the settlement agreement, which was, therefore, not binding on the Town. Giving Defendants the benefit of "every reasonable intendment of the pleading" (Brodeur v. Hayes, 305 AD2d 754, 755, quoting Warwick v. Cruz, 270 AD2d 255, 255) these allegations were sufficient to give notice of the "material elements of the defense" (Sinacore v. State, 176 Misc 2d 1, 4), especially in light of Plaintiffs' status as representatives of municipal employees. Plaintiffs' arguments asserting the public policy in favor of settlement stipulations and the availability of the remedies of specific performance and damages for unjust enrichment are negated by the authority discussed above in conjunction with the statutory compliance rule.

However, one of Plaintiffs' arguments is not addressed directly by the statutory compliance rule. Plaintiffs argue that Defendants ratified the settlement agreement through their conduct. The Third Department has held that a municipality can ratify a contract even if the contract was initially invalid (Della Rocco v. City of Schenectady, 278 AD2d 628). Plaintiffs argue that Town officials retained the benefits of the contract the withdrawal of the Improper Practice Charges and continued to meet with Plaintiffs to seek additional changes to the settlement agreement. Defendants respond by arguing that ratification requires affirmative conduct, which is not present here.

In the Della Rocco case, the Third Department noted that the municipality had for twenty years made supplemental payments to the plaintiff according to the terms of the settlement agreement being asserted. The court also noted the affidavits of several municipal officials to the effect that they were well aware of the agreement and purposefully acquiesced to its terms. In the case relied upon in the Della Rocco decision, Imburgia v. City of New Rochelle (223 AD2d 44), the municipality had passed legislation with the specific intent of ratifying a prior agreement.

In this case, only Plaintiffs took affirmative action by withdrawing the Improper Practice Charges, while Defendants did nothing to advance the alleged agreement. The alleged acceptance of contract benefits by Defendants appears, on this record, to have amounted to inaction by the Town Board rather than affirmative action consistent with the terms of the asserted agreement. Indeed, Defendants argue persuasively that the continued meetings between the parties to discuss the settlement agreement is evidence that the Town Board had not accepted its terms. Moreover, holding that Defendants' passive acceptance of the benefits of the agreement constitutes ratification of that agreement would contradict the rule found in cases such as Parsa v. State (supra) and Rosefsky by Koffman v. State (supra) that a municipality's acceptance of contract benefits does not raise an estoppel preventing the municipality from challenging the validity of that contract. Plaintiffs' ratification argument must therefore fail.

Courts have commented that the statutory compliance rule sometimes yields harsh results (See, e.g., Hamlin Beach Camping, Catering & Concessions Corp. v. State, supra, at 853). In the Hamlin Beach case, the plaintiff fulfilled all of its obligations under the agreement at issue, including "extensive and renovations," only to lose the benefit of those expenditures because the contract had not been properly approved. In H & R Projects Associates (supra), the plaintiff, in reliance upon representations made by municipal officials, purchased and renovated two buildings. The plaintiff brought claims based on contract, quantum meruit and estoppel, but was denied relief on all three theories due to the statutory compliance rule. [*3]

In this case, the actions (and the inaction) of Defendants would appear to support at least some of Plaintiffs' arguments, were it not for application of the statutory compliance rule. Plaintiffs acted to their detriment in reliance on the settlement agreement they thought they had negotiated with Defendants. Nonetheless, Town Law §64, like the other statutes dealing with municipal contracts, was formulated by the Legislature and must be enforced by this Court. As noted both by the Court of Appeals and by the Third Department, courts whose decisions are binding upon this Court, to do otherwise would be to frustrate the legislative purpose of protecting the public from "governmental misconduct or improvidence" (Parsa v. State, supra, at 147; Hamlin Beach Camping, Catering & Concessions Corp. v. State, supra, at 853).

On the record presented here, the rule that strict compliance with Town Law §64 was necessary in order for a valid agreement to exist between Plaintiffs and Defendants effectively precludes the existence of either an express contract or an implied contract based upon the conversations between Plaintiffs and the Town Attorney aimed at settling the Improper Practice Charges brought by Plaintiffs. Plaintiffs' arguments to the contrary are not sufficient to overcome that rule.

Fore the foregoing reasons, it is hereby

ORDERED, that Defendant's motion for summary judgment dismissing Plaintiff's Complaint herein is GRANTED, and it is further

ORDERED, that Plaintiffs' motion seeking summary judgment granting relief requested in the Complaint is DENIED.

THIS DECISION SHALL CONSTITUTE THE ORDER OF THE COURT.

THE ATTORNEY FOR THE DEFENDANTS SHALL ENTER THIS ORIGINAL DECISION/ORDER AND PROVIDE A COPY WITH PROOF OF ITS ENTRY ON THE OPPOSING ATTORNEY(S) OR THE PRO SE LITIGANT(S), AS THE CASE MAY BE.

Dated: October 18, 2005

ENTER.

___________________________________

Richard C. Giardino

Acting Supreme Court Justice