Opinion
INDEX NO. 161071/2019
03-16-2020
THE CITY CLUB OF NEW YORK, Petitioner, v. NEW YORK CITY BOARD OF STANDARDS AND APPEALS, NEW YORK CITY DEPARTMENT OF BUILDINGS, EXTELL DEVELOPMENT COMPANY, WEST 66TH SPONSOR LLC, Respondents.
NYSCEF DOC. NO. 89 PRESENT: HON. ARTHUR F. ENGORON Justice MOTION DATE 3/2/2020 MOTION SEQ. NO. 002 DECISION + ORDER ON MOTION The following e-filed documents, listed by NYSCEF document number (Motion 002) 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88 were read on this motion to DISMISS. Upon the foregoing documents, it is hereby ordered that the motion to dismiss is denied. E-Filed Document # 87 (which only came to this Court's attention when it read E-Filed Document # 88, [which, unlike # 87 the clerk's office incorrectly did not consider as a paper relevant to this motion], as, contrary to what most practicing attorneys seem to think, E-filing does not alert judges of that fact itself) seeks, in part, to have the Court recuse itself. Speaking generally, the Court feels completely capable of presiding over this matter impartially. Speaking specifically, yes, the Court lived on the Upper West Side, some 20 blocks from the site in question, for almost 30 years, but moved to Nassau County years ago. Yes, as I disclosed immediately in open court, I know some of the attorneys and principals on petitioner's side, but in no way would that compromise my impartiality. Finally, respondents suggest that petitioners may have changed their settlement posture when they found out that the case was assigned to this Court. Based on all I know, including the intense history of this case; I do not believe that this happened; I see no reason why this would have happened; and, anyone familiar with this Court's record, will, I hope, conclude that it is neither reflexively anti-development (reference the Court's allowing the Broadway Triangle-Pfizer Project in Brooklyn to proceed) nor reflexively pro-development (reference the Court's recent decisions temporarily halting the Lower East Side's "Two Bridges" Project). Thus, the request for the Court to recuse itself is, respectfully, denied. (Incidentally, this Court sees nothing nefarious, much less improper, unethical or illegal, in the fact and manner of Mr. Low-Beer's obtaining an Order to Show Cause from this Court last February.) Respondents Extell Development Company and West 66th Sponsor LLC ("The Developers") want to build a 41-story, 775-foot residential tower containing 127 condominium units, with a 30,000-square-foot synagogue at its base, at 36-44 West Sixty-Sixth Street, running from West 66th Street to West 65th Street on the block between Central Park West and Columbus Avenue, in Manhattan ("The Proposed Project"). In April of 2019 the New York City Department of Buildings ("DOB") issued a New Building Permit for The Proposed Project. A few weeks later Petitioner, The City Club of New York and others (collectively "The Opponents") commenced a lawsuit ("The Lawsuit") in this Court asking the judge (1) to declare that The Proposed Project violated zoning regulations; and (2) thus, to prevent The Developers from constructing it. In early May 2019, The Opponents appealed the DOB ruling ("The Administrative Appeal") to Respondent New York City Board of Standards and Appeals ("BSA") asserting, essentially, the same objections to The Proposed Project that DOB had rejected. For a while The Lawsuit and The Administrative Appeal proceeded in parallel. In June 2019, Justice Barbara Jaffe dismissed The Lawsuit on the ground, inter alia, that The Opponents had failed to exhaust their administrative remedies. Petitioner appealed that Decision. On October 15 the BSA unanimously denied and dismissed The Administrative Appeal, finding all of The Opponents arguments to be "unpersuasive." Pursuant to N.Y.C. Admin. Code § 25-207(a), The Opponents had 30 days within which to commence a CPLR Article 78 Special Proceeding seeking to overturn the BSA ruling. On or about October 19 David Karnovsky, The Developers' land use attorney, proposed, to John Low-Beer, one of petitioner's attorneys, discussing a settlement that would have, essentially, obviated the need for the instant CPLR Article 78 Special Proceeding challenging the BSA ruling. For several weeks the parties negotiated a possible settlement. However, the attorneys tabled the talks because they could not agree on whether Petitioner would have to withdraw its appeal to the Appellate Division. In early November 2019 the Appellate Division dismissed the appeal as moot because of the BSA's October 15 Ruling. At that point petitioner's only recourse was this proceeding. The following table summarizes, in chronological order, all material settlement communications that the parties have brought to the Court's attention: (Please note that text in quotes usually is not verbatim; "T-C" indicates "telephone call"; E-M indicates email [or snail mail]; Jason "Cyrulnik" is respondents' litigation counsel.)
| Date | From | To | Content | Format | Source |
|---|---|---|---|---|---|
| 10/16/20 | Karnovsky | Low-Beer | $275K settlementproposal | T-C | Low-Beer Aff¶ 10 |
| 10/19 | Low-Beer | Karnovsky | $37K counter-proposal | E-M | Low Beer Aff inOpp ¶ 10 |
| 10/20 | Karnovsky | Low-Beer | $300K + strictconfidentiality - bindingupon parties signing | E-M | Low-Beer Aff inOpp ¶ 12 |
| 10/22 | Low-Beer | Karnovsky | Various obstacles;settlement may beimpossible | E-M | Low-Beer Aff inOpp ¶ 13 |
| 11/4 | Low-Beer | Karnovsky | Numerous concerns,including confidentialityproposal | E-M | Low-Beer Aff inOpp ¶ 14 |
| 11/8 | Low-Beer | Karnovsky | Revised proposal with"numerous changes"; noconfidentiality provision | E-M | Low-Beer Aff inOpp ¶ 17 |
| 11/8 | Karnovsky | Low-Beer | "not acceptable"; $100Koffer | E-M | Low-Beer Aff inOpp ¶ 19 |
| 11/8 | Low-Beer | Karnovsky | "client won't settle onthose terms" | E-M | Low-Beer Aff inOpp ¶ 19 |
| 11/9 | Low-Beer | Karnovsky | Draft SettlementAgreement | E-M | KarnovskyMoving Aff ¶ 9 |
| 11/9 | Karnovsky | Low-Beer | $300K "Final offer" | E-M | Low-Beer Aff inOpp ¶ 10 |
| 11/9 | Karnovsky | Low-Beer | Rejection with comments | E-M | KarnovskyMoving Aff ¶ 9 |
|---|---|---|---|---|---|
| 11/9 | Low-Beer | Karnovsky | New Proposal, contingenton no other CPLR Article78 proceedings | E-M | KarnovskyMoving Aff ¶11 |
| 11/11 | Karnovsky | Low-Beer | Counter-proposal: "OK inconcept"; $100K offer | E-M | KarnovskyMoving Aff ¶13 |
| 11/11 | Low-Beer | Karnovsky | Counter-Proposal: $300K | E-M | KarnovskyMoving Aff ¶14 |
| 11/12 | Karnovsky | Low-Beer | "Preparing agreement"including $300K amount;no mention ofconfidentiality terms | E-M | KarnovskyMoving Aff ¶15 |
| 11/12 | Low-Beer | Karnovsky | "OK" "Filing Art 78tomorrow" | E-M | KarnovskyMoving Aff ¶16 |
| 11/12 | Karnovsky | Low-Beer | "Let's talk tomorrow" | E-M | KarnovskyMoving Aff ¶17 |
| 11/12(?) | Low-Beer | Karnovsky | "OK, I would like to avoidcourt filing" | E-M | KarnovskyMoving Aff ¶17 |
| 11/13 | Low-Beer | Karnovsky | "$300K OK" | T-C | KarnovskyMoving Aff ¶18 |
| 11/13 | Low-Beer | Cyrulnik | "What are we discussing"?"You never responded tomy redline" | E-M | Low-Beer Aff inOpp¶ 28 |
| 11/13 | Low-Beer | Cyrulnik | "may never be asettlement | T-C | Low-Beer Aff inOpp ¶ 29 |
| 11/13 | Low-Beer | Cyrulnik | "inability to agreepresumably unlikely | E-M | Low-Beer Aff inOpp ¶ 32 |
| 11/13 | Low-Beer | Cyrulnik | "Should be able to settlebut not 100% certain" | E-M | Low-Beer AffIn Opp. ¶ 33 |
| 11/13 | Weinstock(or Low-Beer) | Cyrulnik | "Let's hope case will bemoot soon." | E-M | CyrulnikMoving Aff ¶18 |
| 11/13 | Low-Beer | Cyrulnik | "Other objectors need notsign" | E-M | Low-Beer Aff InOpp ¶ 36 |
| 11/13 | Cyrulnik | Low-Beer | "Other objectors need tosign. Have your clientsready to sign." | E-M | Low-Beer Aff inOpp ¶ 37 |
| 11/14 | Low-Beer | Cyrulnik | "Proposed release is toobroad" | E-M | Low-Beer Aff inOpp ¶ 39 |
| 11/14 | Cyrulnik | Low-Beer | Proposed SettlementAgreement; "Confirm thatthis is a final draft";contains confidentialityclause | E-M | KarnovskyMoving Aff ¶22; Low-Beer¶¶ 41-44 |
| 11/14 | Low-Beer | Cyrulnik | Confidentialityunacceptable + otherissues | T-C | Low-Beer Aff inOpp ¶ 45-46 |
| 11/14 | Low-Beer | Cyrulnik | Confidentialityunacceptable + otherminor issues | E-M | Low-Beer Aff inOpp 48 |
| 11/12-20 | Low-Beer | Karnovsky(?) | Agree to $300K | Misc. | KarnovskyMoving Aff ¶24 |
| 11/18 | Low-Beer | Cyrulnik | "Will send clients'signature pages" | T-C | CyrulnikMoving Aff ¶20 |
| 11/18 | Weinstock | City | "Negotiations continuing" | E-M | Low-Beer Aff inOpp ¶ 52 |
| 11/20 | Cyrulnik | Low-Beer | "Following up on wheresignatures stand." | E-M | Low-Beer Aff inOpp ¶ 56 |
| 11/20 | Low-Beer | Cyrulnik | Petitioner unsure aboutsettling; new proposal,with confidentialitystricken, "in event thedecision is to settle," | T-C | CyrulnikMoving Aff ¶¶23-24; Low-Beer Aff in Opp¶ 57 |
| 11/20 | Low-Beer | Cyrulnik | New proposal "in casePetitioner is willing tosettle" | E-M | CyrulnikMoving Aff ¶¶25 |
| 11/20 | Cyrulnik | Low-Beer | "But we already settled" | E-M | |
| 11/20 | Low-Beer | Cyrulnik | "We did not agree; partiesdisputing terms." | E-M | CyrulnikMoving Aff ¶27: Low-BeerAff in Opp ¶ 59 |
| 11/20 | Low-Beer | Cyrulnik | "No binding agreement | E-M | CyrulnikMoving Aff ¶28 |
| 11/21 | Cyrulnik | Low-Beer | Petitioners' memberssignatures merelyministerial | E-M | CyrulnikMoving Aff ¶29 |
| 11/21 | Low-Beer | Cyrulnik | Signatures not the onlyremaining issue; newredline copy sent | E-M | CyrulnikMoving Aff ¶30 |
| 11/22 | Low-Beer | Cyrulnik | Petitioner meeting todiscuss possiblesettlement | E-M | CyrulnikMoving Aff ¶32 |
| 11/22 | Low-Beer | Cyrulnik | "Prior to petitioner'smeeting, inform mewhether redline copy isacceptable" | E-M | CyrulnikMoving Aff ¶33; Low-BeerAff in Opp ¶ 60 |
| 11/24 | Cyrulnik | Low-Beer | We already agreed; andanyway, we acceptredline/proposal | E-M | CyrulnikMoving Aff ¶34 |
| 11/25 | Karnovsky | Low-Beer | "We settled earlier" | E-M | KarnovskyMoving Aff ¶25 |
| 12/2 | Cyrulnik | Low-Beer | Inform by 12/3 whethersending signature pagesand dismissing Art. 78 | E-M | CyrulnikMoving Aff ¶37 |
| 12/24 | Low-Beer | Karnovsky | "We are not settling" | T-C | KarnovskyMoving Aff ¶26 |
Discussion
Hornbook law provides that the burden of proof lies with a party relying on a release. Khalid v. Scagnelli, 290 AD2d 352, 354 (1st Dept 2002). The Developers urge this Court (Moving Memorandum at 15-16) to adopt what might be termed a "holistic" view of settlement negotiations: considering the totality of the circumstances, did the parties intend to bind themselves? The Developers also point out, correctly (ibid.), that documents and negotiations that contemplate signatures can still demonstrate a settlement even if final signatures are not (to use a somewhat archaic phrase) "inked." The Developers are also correct (i.d. at 16-18) that they and petitioners agreed to the basic framework of an agreement: the settlement amount (to wit, $300,000.00) and a discontinuance and release. Petitioner relies on the hornbook law that settlements and other contracts require a clear agreement on all material terms. "To form a binding contract there must be a 'meeting of the minds,' such that there is 'a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms.'" Stonehill Capital Management LLC v Bank of the West, 28 NY3d 439, 448 (2016). In this Court's considered view, at least three reasons significantly militate in favor of finding that the parties never settled. First, the parties never agreed upon the existence or substance of a confidentiality clause. Respondents have cited to cases where confidentiality was deemed immaterial. That does not seem to be the case here. Each side had its own significant reason(s) to want or not want such a clause. The potential construction of the tallest building on the Upper West Side of Manhattan, challenged by a state legislator, a neighboring building, vociferous community activists, and a century-old self-proclaimed "good government" group, is not your everyday, garden variety dispute. The First Department guides us that one strong indicia of materiality is that a party has indicated that it must be resolved. Silber v. New York Life Ins. Co., 92 AD3d 436, 439 (1st Dep't 2012) ("Plaintiff's claim that there would be no point in 'moving forward' without resolving one of these terms indicates that it is a material term."). Here, opposing versions of confidentiality, or lack thereof, appear to have been batted back and forth without a final resolution. Second, although a closer call than the first ratio decidendi, both the specific wording of the subject emails, and what one would expect in a situation like the instant one, indicate that an agreement would have required a signature(s) by petitioner's governing body. Both sides of the negotiations seemed to contemplate this. Finally, settlement was clearly "in the air" here, the parties had agreed on the basic terms, but that is not enough. Settlements are binary; they exist or they do not. And there must be a specific action or inaction, at a specific time to create them. Several times in November (The Developers rely on 11/12), the parties came very close to settling. But a close reading of the emails does not reveal a final agreement, a "meeting of the minds." "Proof of negligence in the air, so to speak, will not do." Palsgraf v Long Island R. Co., 248 NY 339, 341 (1928), quoting Pollock, Torts [11th ed.] at 455. This Court certainly agrees with the Developers that, for a variety of excellent reasons, courts should honor and enforce contracts in general and settlements and releases in particular. However, the Court does not believe that The Developers have satisfied their burden of demonstrating that the parties reached an agreement to settle this case.
The Obvious Irony
This Court notes in passing (i.e., dicta) the obvious irony that when this Court reaches the merits of the instant proceeding, which it has studiously avoided up until now, but which it hopes, circumstances permitting, to do on an expedited basis when the case is fully submitted, petitioner will have an uphill, albeit not insurmountable, battle convincing this (or any) Court to overturn a BSA decision. If it cannot do that, it will have passed up a $300,000 windfall. However, petitioner has its reasons, and whether they are good, bad, or indifferent is not for this Court to say.
Conclusion
Motion to dismiss denied. 3/16/2020
DATE
/s/ _________
ARTHUR F. ENGORON, J.S.C.