Orange Lake Associates, Inc. v. Kirkpatrick

• Citation: 21 F.3d 1214
• Decision Date: 14 April 1994
• Docket Number: 1140,Nos. 1084,D,s. 1084
• Parties: ORANGE LAKE ASSOCIATES, INC., Plaintiff-Appellant-Cross-Appellee, v. Robert J. KIRKPATRICK, Robert A. Kunkel, Richard P. Herbert, Salvatore De Crosta, Charles P. Walczak, and Thomas Fogarty, Defendants-Appellees-Cross-Appellants. ockets 93-7743, 93-7807.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 1214

21 F.3d 1214

ORANGE LAKE ASSOCIATES, INC., Plaintiff-Appellant-Cross-Appellee, v. Robert J. KIRKPATRICK, Robert A. Kunkel, Richard P. Herbert Salvatore De Crosta, Charles P. Walczak, and Thomas Fogarty Defendants-Appellees-Cross-Appellants.

Nos. 1084, 1140, Dockets 93-7743, 93-7807.

United States Court of Appeals, Second Circuit.

Argued Feb. 1, 1994.

Decided April 14, 1994.

Thomas F. Cunningham, LaGrangeville, NY, for plaintiff-appellant-cross-appellee.

Moacyr R. Calhelha, Newburgh, NY (Rider, Weiner, Frankel & Calhelha, P.C., of Before: FEINBERG, OAKES and KEARSE, Circuit Judges.

counsel), for defendants-appellees-cross-appellants.

OAKES, Senior Circuit Judge:

Orange Lake Associates, Inc. ("OLA"), a putative real estate developer, appeals from the grant of summary judgment to the defendants Robert J. Kirkpatrick, Robert A. Kunkel, Richard P. Herbert, Salvatore De Crosta, Charles P. Walczak and Thomas Fogarty ("the defendants"), by the United States District Court for the Southern District of New York, Gerard L. Goettel, Judge. The defendants cross-appeal the denial of their motion for an award of attorneys' fees. We affirm both on the appeal and the cross-appeal.

I. STANDARD OF REVIEW

This case comes before us on OLA's appeal from the district court's grant of summary judgment to the defendants. We review the grant of summary judgment de novo, accepting as true the factual allegations of OLA's complaint, see, e.g., Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409, 411, 106 S.Ct. 1922, 1923-24, 90 L.Ed.2d 413 (1986), and drawing inferences based upon these allegations in the light most favorable to OLA. Scheuer v. Rhodes, 416 U.S. 232, 235, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1052 (2d Cir.1993). We will affirm an award of summary judgment if the moving party can demonstrate that "there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Thus, summary judgment is warranted where the non-moving party has no evidentiary support for an essential element on which it bears the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986).

II. BACKGROUND

A. Events Leading to the Dispute Between OLA and the Town Board

OLA, a New York corporation formed in May 1990, acquired the right to develop several parcels of property (totaling some 150 acres), located within the Town of Newburgh. The property is adjacent to Orange Lake, a lake sometimes used for recreational purposes. OLA's attorney, Thomas F. Cunningham, is or was the sole shareholder of OLA. He is now in bankruptcy and asserts that the shares are held by a trust. Downpayments totaling some $232,500 were made in connection with the acquisition of these development rights, but title was never closed on the contracts and OLA has forfeited all rights to develop any of the properties for failing to make payments under the respective contracts. We note that OLA also secured a right-of-way on another parcel permitting access to Route 52, a state road intersecting its property.

At the time the contracts for acquisition were first signed, the land involved was zoned "R-3" which permits twelve residential units per acre. In December 1991, after the Town Board adopted a new Master Plan in March of 1991, the Town Board re-zoned the land to "R-2" which permits two residential units per acre.

The Town of Newburgh is located in the northeastern section of Orange County, New York. During the period between 1980 and 1992, the Town grew about 10 percent from 22,747 to approximately 25,000 residents. During this time, the Town's budget grew by a greater rate, from $6,620,006 to $16,037,045. The Town Board, established pursuant to N.Y. Town Law Sec. 60 (McKinney 1987), and having also the powers granted by the New York Constitution and statutes pertaining to N.Y.Mun.Home Rule Law (McKinney 1969 & Supp.1994), governs the Town of Newburgh.

The defendants, who were members of the Town Board of the Town of Newburgh, New York, between 1987 and 1991, have been sued only in their individual capacities.

From 1987 through 1990 they, as members of the Town Board, considered several proposals to handle the town's rapid population growth, including expansion of municipal water and sewer services, adoption of a Master Plan, and amendments to the town's zoning ordinances.

Beginning in March 1988, the Town Board undertook a study of a proposal to increase its sewage treatment handling capacity. In August 1988, almost two years before OLA was even formed and about eight months before OLA's predecessor presented an initial application to the Town Planning Board, the Town Board heard a presentation from a planning consultant concerning his review of the existing town zoning law and of proposed revisions in connection with the preparation of a Master Plan for the town. In October 1988, the Town Board retained a planning consultant to prepare a Master Plan for the town. Perhaps OLA's biggest single objection to the defendants' conduct was that the Town Board ultimately adopted the Master Plan--OLA contending that New York law permits only the Town Planning Board to adopt such a plan.

On May 2, 1989, OLA's predecessor, a partnership, presented to the Town Planning Board the initial application for a proposed residential condominium development to be called "The Commons at Orange Lake" (the "Commons"). The proposal involved the construction of approximately 515 townhouse and condominium units on a total of approximately 100 acres.

On May 22, 1989, the members of the Town Board and the Town Planning Board held a joint public meeting. At the meeting, they discussed the Master Plan, and asked the planning consultant, first, to focus on "critical environmental areas," including property in the vicinity of Orange Lake, which included lands proposed for OLA's project. On July 19, 1989, the consultant submitted to the Town Board the first Master Plan report recommending that the town should "restrict sewer extension to control the development of the more fragile, non-sewered areas, particularly near the Chadwick Lake and Orange Lake areas."

At a July 13, 1989, meeting, the OLA predecessor partnership made a presentation of its proposal to the members of the Town Planning Board in connection with its request for "sketch plan review." The Planning Board attorney advised the sponsors that the Town of Newburgh was considering re-zoning which might affect the plans they were proposing to develop so that the developers knew that they were proceeding at a certain risk.

At a September 14, 1989, public meeting of the Town Planning Board, the Planning Board referred OLA's predecessor's application to the consultant for review. On September 18, 1989, the consultant reported that there were a number of deficiencies in OLA's predecessor's submissions made in its application; for instance, liquid effluent would have to be conveyed off-site to facilities that did not exist and the proposal was not consistent with the existing zoning ordinance which required that multiple dwellings be serviced by "town water facilities." It was not until some nine months later--on May 19, 1990--that OLA attempted to respond to these comments.

On October 20, 1989, the Town Board received the consultant's second report recommending, among other things, that the Town Board (1) designate lands bordering Orange Lake as a critical environmental area, (2) eliminate R-3 districts in the Rock Cut Road area, i.e, the area of the Commons and another proposed development, and, at the expense of the developers, (3) expand infrastructure to include the proposed subdivision, the Commons, but only at "R-2" densities (two units per acre). By letter dated June 20, 1990, the Town Board declared its intention to serve as the "lead agency" for the purpose of conducting an environmental review of the proposed Master Plan for the town of Newburgh pursuant to New York's State Environmental Quality Review Act ("SEQRA"). N.Y.Envtl.Conserv.Law Secs. 8-0101, et seq., (McKinney 1984 & Supp.1994). The letter advised interested agencies, including the Town Planning Board and the New York State Department of Environmental Conservation (DEC), to serve notice of any objections to the Town Board's resolution In July 1990, after receiving OLA's comments, the Town Planning Board undertook the required SEQRA review of OLA's proposal. In September 1990, the Town Planning Board held a "scoping session" with OLA to establish the scope of the environmental submissions that would be necessary. On December 3, 1990, the Town Board held a public hearing on the proposed Master Plan. Numerous comments were made including some by OLA's counsel.

declaring itself lead agency. No objections were received from any of the interested agencies.

Meanwhile, on December 28, 1990, the DEC wrote a letter commenting that at least five DEC permits would be required for OLA's Commons project, alerting the sponsors to "our potential concerns regarding the project impacts on fresh water wetlands, surface waters (including Orange Lake), and surrounding properties," and suggesting that a pre-application conference be arranged.

In June 1991, OLA submitted a draft environmental impact statement (EIS) for its Commons project. In August 1991, the Town Planning Board's planning consultant and engineer issued separate reports noting numerous deficiencies in the draft EIS. On August 16, 1991, the Town Planning Board unanimously voted to reject OLA's draft EIS as incomplete. Meanwhile, in March 1991, the Town Board adopted, by unanimous vote, the Master Plan prepared by its consultant. In May 1991, the Town Board began environmental review on proposed zoning law amendments and referred the proposed amendments to the Town Planning Board and the Orange County Planning Department...