Champlain Gas & Oil, LLC v. People

• Decision Date: 09 July 2020
• Docket Number: 529569
• Parties: CHAMPLAIN GAS & OIL, LLC, et al., Appellants, v. The PEOPLE of the State of New York, Acting by and Through the Commissioner of Environmental Conservation, Defendant, and Lyme Adirondack Timberlands I, LLC, Respondent.
• Court: New York Supreme Court — Appellate Division

185 A.D.3d 1192

128 N.Y.S.3d 69

CHAMPLAIN GAS & OIL, LLC, et al., Appellants,

v.The PEOPLE of the State of New York, Acting by and Through the Commissioner of Environmental Conservation, Defendant,andLyme Adirondack Timberlands I, LLC, Respondent.

529569

Supreme Court, Appellate Division, Third Department, New York.

Decided and Entered: July 9, 2020

Calendar Date: June 11, 2020

Girvin & Ferlazzo, PC, Albany (Bonnie R. Watson of counsel), for appellants.

DLA Piper LLP (US), Albany (Jeffrey D. Kuhn of counsel), for Lyme Adirondack Timberlands I, LLC, respondent.

Before: Egan Jr., J.P., Lynch, Devine, Pritzker and Reynolds Fitzgerald, JJ.

MEMORANDUM AND ORDER

Devine, J. Appeal from an order of the Supreme Court (Ellis, J.), entered March 11, 2019 in Clinton County, which, among other things, granted a motion by defendant Lyme Adirondack Timberlands I, LLC to preclude certain evidence.

As set forth in our prior decision ( 148 A.D.3d 1260, 49 N.Y.S.3d 563 [2017] ), plaintiffs commenced this action to adjudicate the claim that they hold mineral estates on lands of defendant Lyme Adirondack Timberlands I, LLC (hereinafter Lyme) that are superior to a conservation easement, burdening a portion of the lands, held by defendant People of the State of New York, acting by and through the Commissioner of Environmental Conservation. Plaintiffs moved for summary judgment in 2014 and, while that motion was pending, withdrew their request for a determination as to the parties' "respective rights [over property owned by Lyme in] [g]reat [l]ots 13, 30, 31, 40, 55, 56, [and] 58" and asked Supreme Court to strike the portions of the complaint relating to those lots. Supreme Court thereafter issued an order in June 2015 which it, among other things, struck portions of the complaint as requested, denied the related portions of plaintiffs' motion for summary judgment and granted the remainder. Lyme's appeal resulted in this Court agreeing with Supreme Court that plaintiffs possessed mineral rights, but that summary judgment was inappropriate given plaintiffs' failure to specify the "location and boundaries" of those rights ( id. at 1263, 49 N.Y.S.3d 563 ).

Upon remittal, further discovery was conducted on the location of the mineral rights, with plaintiffs submitting modified survey maps and testimony from a surveyor. Lyme moved to preclude that evidence and, arguing that plaintiffs would be unable to establish the extent of their mineral rights without it, for summary judgment dismissing the complaint. Plaintiffs withdrew their contentions with regard to mineral rights in great lots 22, 23, 32, 47, 57 and 65 and otherwise opposed Lyme's motion. Supreme Court granted preclusion – rejecting, in the process, plaintiffs' contention that an "omnibus clause" in a 1933 deed conveyed mineral rights to their predecessor-in-title that went beyond those specifically described – but not summary judgment. The court further discontinued plaintiffs' claims in certain great lots as requested, but did so with prejudice. It then added that the claims stricken in the June 2015 order were discontinued with prejudice and that any inconsistent provisions in the 2015 order were vacated. Plaintiffs appeal.

Plaintiffs first argue that Supreme Court erred in dismissing the mineral rights claims they had sought to withdraw with prejudice, and we agree. With regard to the mineral rights claims that were dismissed in the June 2015 order, their discontinuance was without prejudice due to the silence of that order as to whether plaintiffs could revisit them in another action (see CPLR 3217[c] ). Supreme Court accordingly modified the terms of the 2015 order when it held that those claims were discontinued with prejudice but, where "no motion was made and none of the circumstances set forth in CPLR 5015(a) or 5019(a) were applicable," it should not have done so ( Armstrong Trading, Ltd. v. MBM Enters., 29 A.D.3d 835, 836, 815 N.Y.S.2d 689 [2006] ; see Wells Fargo Bank, N.A. v. Pabon, 138 A.D.3d 1217, 1218–1219, 31 N.Y.S.3d 221 [2016] ). Moreover, although CPLR 5019(a) permits a court to correct "any mistake, defect or irregularity in the papers or procedures in [an] action not affecting a substantial right of a party," Supreme Court exceeded its power in substantively altering the 2015 order to strike plaintiffs' claims with prejudice (see B & H Fla. Notes LLC v. Ashkenazi, 182 A.D.3d 525, 526, 120 N.Y.S.3d 778 [2020] ; Sokoloff v. Schor, 176 A.D.3d 120, 130, 109 N.Y.S.3d 58 [2019] ). Supreme Court therefore erred in altering and vacating portions of the June 2015 order.

As for plaintiffs' mineral rights claims that were first dismissed in the appealed-from order, "whether an application to discontinue [claims] pursuant to CPLR 3217(b) should be granted lies within the sound exercise of the court's discretion, and such should be entered ‘upon terms and conditions, as the court deems proper’ " ( Matter of Fiacco v. Engler, 79 A.D.3d 1206, 1207, 911 N.Y.S.2d 701 [2010], quoting CPLR 3217[b] ; see Tucker v. Tucker, 55 N.Y.2d 378, 383, 449 N.Y.S.2d 683, 434 N.E.2d 1050 [1982] ; Hurrell–Harring v. State of New York, 112 A.D.3d 1213, 1214–1215, 977 N.Y.S.2d 464 [2013] ). Nevertheless, an application to discontinue should ordinarily be granted, and granted without prejudice, unless discontinuance will itself prejudice the opposing party (see Tucker v. Tucker, 55 N.Y.2d at 383–384, 449 N.Y.S.2d 683, 434 N.E.2d 1050 ; Wells Fargo Bank, N.A. v. Fisch, 103 A.D.3d 622, 622, 959 N.Y.S.2d 260 [2013] ; Matter of Fiacco v. Engler, 79 A.D.3d at 1207, 911 N.Y.S.2d 701 ; Christenson v. Gutman, 249 A.D.2d 805, 806, 671 N.Y.S.2d 835 [1998] ). The record does not bear out Lyme's contention that the withdrawal of claims to mineral rights in additional great lots prejudiced it by allowing plaintiffs to escape an adverse ruling on the merits that, to date, does not exist. It instead appears that plaintiffs wanted to withdraw the claims because they either involved land owned by nonparties or would complicate trial by involving areas beyond those that Supreme Court, in its 2015 order, had determined were subject to plaintiffs' mineral rights estate. Lyme did not explain how it could be prejudiced by future disputes over property that it does not own and, as for its lands, it "will have the same rights as were available" here should plaintiffs commence a future action involving them ( Onewest Bank, FSB v. Slowek, 115 A.D.3d 1083, 1084, 982 N.Y.S.2d 193 [2014] ; see Christenson v. Gutman, 249 A.D.2d at 806, 671 N.Y.S.2d 835 ). Lyme therefore failed to demonstrate prejudice arising from the withdrawal of claims by plaintiffs, and they should have been discontinued without prejudice (see Onewest Bank, FSB v. Jach, 180 A.D.3d 1061, 1062, 120 N.Y.S.3d 379 [2020] ).

Next, plaintiffs argue that Supreme Court erred in determining that the omnibus clause of the 1933 deed was void for indefiniteness.¹ The 1933 deed was issued in the context of a mortgage foreclosure action, where a referee's deed "conveys only the interests of the foreclosure parties" ( Jorgensen v. Endicott Trust Co., 100 A.D.2d 647, 648, 473 N.Y.S.2d 275 [1984] ; see RPAPL 1353[3] ). It is accordingly essential that a referee's deed describe the mortgaged property interests and, as Supreme Court observed, one that describes the conveyance as "all the land of a debtor in a certain place is void for indefiniteness and uncertainty" (4 Warren's Weed New York Real Property § 38.17 [2019]; see Jackson v. Delancey, 13 Johns. 537, 551–552 [1816] ; Jackson v. Rosevelt, 13 Johns. 97, 102–103 [1816] ; 1 Rasch & Dolan, N.Y. Law & Prac. of Real Property § 24:43 [2020] ). The 1933 deed, however, was not just a referee's deed. The debtor in the foreclosure action "join[ed] with the [r]eferee in the execution" of that deed and, having received separate consideration from the purchaser,...