Montano v City of Watervliet

[*1] Montano v City of Watervliet 2006 NY Slip Op 52669(U) [21 Misc 3d 1138(A)] Decided on October 13, 2006 Supreme Court, Albany County McCarthy, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 13, 2006
Supreme Court, Albany County

Charles Montano, Plaintiff,

against

City of Watervliet, MARK R. GILCHRIST, individ- ually and as Zoning Officer of the CITY OF WATERVLIET, the CITY OF WATERVLIET BOARD OF APPEALS, STARFIRE SYSTEMS, INC., WALTER SHERWOOD, individually and as President of, defendant Starfire Systems, Inc., BRUNSWICK RE- SEARCH, INC., WILLIAM BRADLEY, individually and as President of Brunswick Research, Inc., Defendants.



5529-03



APPEARANCES:POKLEMBA & HOBBS, LLC

Attorneys for Plaintiff

(Gary C. Hobbs, Esq. & Laura M. Hoffman, Esq., of counsel)

358 Broadway, Suite 307

Saratoga Springs, NY 12866

BURKE, SCOLAMIERO, MORTATI & HURD, LLPAttorneys for Defendants City of Watervliet, Mark

Gilchrist and City of Watervliet Board of Appeals

(Terese Burke Wolff, Esq., of counsel)

302 Washington Avenue Extension

P.O. Box 15085

Albany, NY 12212-15085

WHITEMAN, OSTERMAN & HANNA, LLP

Attorneys for Defendants Starfire Systems, Inc. and

Walter Sherwood

(Philip H. Dixon, Esq. of counsel)

One Commerce Plaza

Albany, NY 12260

William Bradley

Defendant pro se

William E. McCarthy, J.

This is a motion for summary judgment brought by defendants City of Watervliet, City of Watervliet Board of Appeals and Mark Gilchrist ("the municipal defendants"). For the reasons stated below, the motion is granted in all respects

BACKGROUND

In February of 2000 plaintiff contracted to purchase a parcel of land with a commercial building located on it at 1801 Avenue B in the City of Watervliet. While the contract was originally contingent on the receipt of all governmental approvals needed for the industrial use of the property, plaintiff ultimately let these contingencies expire and became obligated to purchase the parcel. He is now the owner of the premises.

Plaintiff and defendant Starfire Systems, Inc. (Starfire) entered into negotiations for a lease of the premises. Since the property was located within 200 feet of a residential area, the Zoning Code of the City of Watervliet required a variance before the property could be used for commercial purposes [FN1]. Plaintiff and Starfire (through defendant Sherwood, its president) filed an application for such a variance. The application indicated that Starfire intended to use the premises to manufacture ceramic polymers, a process that required the use of certain complex and potentially dangerous chemical compounds. On July 12, 2000 the Zoning Board conducted a hearing on the matter and

ultimately approved the application. The Board issued the requested variance, subject to compliance with all applicable codes.

Plaintiff invested several hundred thousand dollars in improvements to the premises, including a new roof and fencing. Plaintiff and Starfire executed a lease agreement. Under the agreement, plaintiff and Starfire obligations were to have commenced on September 1, 2000; they later agreed that the lease term would begin on January 1, 2001. The terms of this lease included contingencies for necessary governmental permits.

Starfire paid plaintiff a security deposit and began making rental payments in early 2001, though it never occupied the premises. In fact, the record suggests that defendants Sherwood and Bradley, Starfire's project manager, had decided by the spring of 2001 to seek out a different location for their manufacturing operation and as a result wanted to find a way to avoid Starfire's contractual obligations to plaintiff.

Defendant Bradley arranged a meeting in the latter part of April, 2001 with a number of officials of the City of Watervliet. Present at this meeting with Bradley were the mayor, the general manager of the city, the fire chief and the building inspector (defendant Gilchrist). Bradley also invited a member of the Emergency Response Team of General Electric Corporation and a representative of Spectra Engineering Company. The ostensible purpose of the meeting was to [*2]discuss Starfire's plans with the municipal officers whose cooperation would be needed to provide the necessary permits. What actually took place was a presentation before the city officials of a series of "worst case scenarios" in which the chemicals to be stored in the building caught alight and caused uncontrollable conflagrations, and in which chemical spills filled the nearby residential neighborhood with gases that melted contact lenses in their wearers' eyes.

Defendant Bradley was apparently satisfied with the results he had achieved in the meeting. He sent an email to defendant Sherwood in which he noted that "the meeting was productive in the fact that everyone in the end agreed this was not the right place for the proposed expansion." Starfire immediately ceased paying rent to plaintiff and shortly afterwards leased a building for its manufacturing operation in the Town of Malta in Saratoga County.

Meanwhile, defendant Gilchrist spoke with the city manager and the city attorney. Gilchrist then wrote a letter to Starfire on May 10, 2001 stating, "Due to health, safety and welfare issues for the residents living in the area around 1801 Avenue B, the Building Department will not issue a permit for renovations." Neither plaintiff nor Starfire ever applied for any such permit, nor did either of them take an administrative appeal of defendant Gilchrist's determination. Plaintiff also never sought relief from the municipal defendants under CPLR Article 78.

After two unsuccessful subsequent applications for variances to allow other businesses to occupy the premises, defendant Board of Appeals ultimately granted a variance to plaintiff on February 13, 2003 which allowed him to lease the building to Comfortex, Inc., its present tenant. In January of 2002, plaintiff commenced the present lawsuit. Extensive discovery having taken place, the matter is scheduled for trial beginning October 23, 2006.

ANALYSIS

Initially, this Court must address the contention raised by plaintiff and reiterated throughout his papers that the April, 2001 meeting held at the request of defendant Bradley was a violation of Public Officers Law §103 (the "Open Meetings Law"). That statute provides that "[e]very meeting of a public body shall be open to the genera! public" (Public Officers Law § 103[a]). The term "meeting;" however, is defined as "the official convening of a public body for the purpose of conducting public business" (Public Officers Law § 102[1]). This provision has been construed as requiring the presence of a quorum of the body in question (Matter of Trivillage Publishers, Inc. v St. Johnsville Board of Education, 110 AD2d 932 [3d Dept 1985], citing Britt v County of Niagara, 82 AD2d 65, 68-69). In the instant case, the April, 2001 meeting was not attended by a quorum of any public body; in fact, the record shows that no member of defendant Board of Appeals was even present. Those in attendance were, in the main, the heads of various executive departments and each had duties and responsibilities independent of those of the others. Thus, no view of the evidence supports the contention that this was a "meeting" as that term is defined in the Open Meetings Law.

The first cause of action in plaintiff's amended verified complaint alleges tortious interference with contract on the part of defendant City of Watervliet and defendant Gilchrist. As a threshold matter, this Court finds that plaintiff's failure to have filed a Notice of Claim against the City under General Municipal Law § 50-e mandates dismissal of this cause of action against the City General Municipal Law § 50-i(l) provides, in pertinent part, "No action ... shall be prosecuted or maintained against a city . . . by reason of the negligence or wrongful act of such city . . . unless (a) a notice of claim shall have been made and served upon the city . . . in compliance with section fifty-e of this chapter." No notice of claim having ever been filed by plaintiff, this cause of action [*3]cannot proceed.

Plaintiff contends that his failure to comply with § 50-e may be overlooked since the City had "actual notice" of the subject matter of the claim. In support of this proposition, plaintiff cites Diallo v City of New York, (224 AD2d 339 [1st Dept 1996]). In Diallo, the plaintiff had filed a timely notice of claim alleging personal injury suffered at the hands of the police. After charges that had been filed against him had been dismissed, the plaintiff then sought permission to file a late notice of claim alleging malicious prosecution. In reversing the Order of Supreme Court which had denied that application, the Appellate Division held that the actual notice of the incident on the part of the New York City Police Department was a factor to consider when weighing an application to file a late notice of claim. Here, however, plaintiff has not only never filed a notice of claim, he has never requested permission to file a late notice. He is therefore precluded from recovery against the City on this cause of action by operation of § 50-i(1), as the timely filing of a notice of claim is a condition precedent to maintaining a suit against the City (see Scantlebury v New York City Health and Hospitals Corporation, 4 NY3d 606 [2005]; Maxwell v City of New York, 29 AD3d 540 [2d Dept 2006]).

Turning to the cause of action alleging tortious interference on the part of defendant Gilchrist, this Court is mindful of the legal standard applicable upon a motion for summary judgment. The record and papers filed are to be viewed in a light most favorable to the non-moving party, and all reasonable inferences supporting the denial of summary judgment are to be drawn (see e.g. Tilson v Russo, 30 AD3d 856, 856, n 1 [3d Dept 2006], citing Boston v Dunham, 274 AD2d 708 [3d Dept 2000]). Even under this standard, however, a search of the record reveals no triable issue of fact on this claim.

Plaintiff contends that defendant Gilchrist's actions - specifically referring to the May 10, 2001 letter - were intended to cause a breach of the contractual relationship between plaintiff and Starfire. Nothing in the voluminous discovery generated in this litigation suggests such an intent on the part of Gilchrist. Indeed, Starfire's last rent check was sent to plaintiff on March 20, 2001, well before either the May 10 letter or even the April meeting set up by Bradley. Thus, the uncontroverted facts suggest that defendants Bradley and Sherwood had come to the decision that Starfire was not relocating its manufacturing operation to plaintiff's building long before Gilchrist had any involvement with the situation.

Moreover, when viewed in a light most favorable to plaintiff, the record suggests that, at best, Gilchrist unwittingly was fooled by Starfire's principals, who had decided that the lease with plaintiff was no longer in their best interest. Following this line of reasoning, Bradley and Sherwood might well have decided to manipulate the circumstances in such a way as to render it impossible for the City to grant any permits to allow their use of the premises. This, in turn, would have triggered the contingencies of the lease and absolved Starfire of any remaining obligations to plaintiff. This still does not suggest, much less prove, however, that Gilchrist acted with wrongful intent. As a matter of law, therefore, plaintiff cannot prevail on a theory of tortious interference with contract.

"The elements of tortious interference with contract are, inter alia, the existence of a valid contract between [plaintiff] and a third party, [defendant's] intentional and unjustified procurement of the third party's breach of the contract, and the actual breach of the contract" (Lawley Service, Inc. v Progressive Weatherproofing, Inc., 30 AD3d 977, 978-979 [4th Dept 2006][Pigott, J. dissenting]. citing Jim Ball Chrysler LLC v Marong Chrysler-Plymouth, Inc., 19 AD3d 1094 [4th Dept 2005], [*4]lv denied 5 NY3d 709 [2005]). The element lacking from the instant case is any indication that Gilchrist intentionally and unjustifiedly procured a breach of the lease between plaintiff and Starfire. Thus, summary judgment in favor of defendant Gilchrist is appropriate.

Plaintiff also alleges (in his sixth cause of action) that the City and Gilchrist caused a diminution in value of plaintiff's property as a result of a "breach of duty of care" on the part of these defendants. Under the analysis of plaintiff's first cause of action, supra, summary judgment must be granted to the City for plaintiff's failure to have filed a notice of claim. This cause of action clearly sounds in tort, as it alleges a breach of a duty of care. It thus falls squarely within the ambit of General Municipal Law § 50-i. The lack of a notice of claim is therefore fatal to plaintiff's case.

Plaintiff's claim against defendant Gilchrist also fails as a matter of law. "The decision whether to issue a permit is a discretionary determination and the actions of the government in such instances are immune from lawsuits based on such decisions" (City of New York v 17 Vista Associates, 84 NY2d 299, 307 [1994]). Here, plaintiff contends that defendant Gilchrist, in improperly refusing to issue permits in his capacity as building inspector for the City of Watervliet, breached a duty of care. Under the doctrine of qualified immunity restated in 17 Vista Associates, supra, Gilchrist may not be held liable for any alleged negligence in the performance of his discretionary duties as building inspector. Defendant is therefore entitled to summary judgment.

Plaintiff alleges (in his seventh cause of action) that the actions of the municipal defendants amount to an unconstitutional taking without just compensation. As noted above, plaintiff filed no notice of claim against the City or the defendant Board of Appeals. This failure mandates the dismissal of this cause of action against the City and the Board.

A claim for money damages predicated upon the allegation that a municipality has taken private property for a public use without just compensation has been held to require a notice of claim (Phelps Steel, Inc. v City o Glens Falls, 89 AD2d 652 [3d Dept 1982]). Plaintiff filed no such notice, and the time within which to have filed the notice has long since expired. Summary judgment to defendants City of Watervliet and Board of Appeals is therefore granted.

As to the claim against defendant Gilchrist, even when viewed in a light most favorable to plaintiff, there is no evidence of a "taking" of plaintiff's property that would entitle plaintiff to relief. In order to succeed on this claim, there would need to be a question of fact as to whether the denial of permits rendered plaintiff's expenditures in reliance on the variance without value (see Town of Orangetown v Magee, 88 NY2d 41, 48 [1996]). While plaintiff did invest significant money in the premises, those expenditures were on generic improvements to a factory building or warehouse (e.g., roofing and fencing). There is no evidence in the record to suggest that plaintiff had expended funds to modify or equip the building in such a way that it could only have been occupied by a factory that used the same types of caustic, toxic, flammable and otherwise dangerous chemicals as would have been employed by Starfire. Thus, in the absence of a triable issue of fact, summary judgment is granted to defendants on this cause of action.

Moreover, plaintiff's failure to have sought CPLR Article 78 relief also mandates dismissal of this cause of action. Allegations of unconstitutional takings without just compensation cannot be advanced in a plenary action absent the exhaustion of administrative remedies (Peck Slip Associates LLC v City Council of the City of New York, 26 AD3d 209,211 [1st Dept 2006]). On this additional ground, summary judgment is granted to defendants.

In plaintiff's second and fifth causes of action he advances allegations of a number of [*5]constitutional violations ranging from denials of equal protection to denials of due process. Plaintiff also alleges a violation of Federal law under 42 USC § 1983. Defendants are entitled to judgment on all of these claims due to plaintiff's failure to have exhausted state administrative remedies that were available to him via CPLR Article 78.

A cause of action alleging violations of federal Constitutional or statutory law on the part of a state administrative body or officer cannot proceed when the plaintiff had adequate state remedies available but chose not to pursue them (Alfaro Motors, Inc. v Ward, 814 F2d 833 [2d Cir 1987]). In the present case, plaintiff could have sought review of defendant Gilchrist's actions (as well as of any actions on the part of the defendant Board or City) through an Article 78 proceeding. His failure to have done so is fatal to his claims in the instant litigation (see id. at 888 [abandonment of New York CPLR Article 78 proceeding fatal to federal claims regarding property interests]).

Accordingly, it is

ORDERED that the motion by defendants City of Watervliet, Mark R. Gilchrist and the City of Watervliet Board of Appeals for summary judgment is granted in all respects; and it is further

ORDERED the complaint is dismissed as to defendants City of Watervliet, Mark R. Gilchrist and the City of Watervliet Board of Appeals.

This shall constitute both the decision and order of the Court. All papers, including this decision and order, are being returned to counsel for the moving defendants. The signing of this decision and order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of that section relating to filing, entry and notice of entry.

SO ORDERED!

ENTER.

Dated: October 13, 2006

Albany, New York

William E. McCarthy, J.S.C. Footnotes

Footnote 1:Since the property head been vacant for more than six months, the Zoning Code required a variance despite the property's prior commercial and manufacturing use.