City of Yonkers v. Otis Elevator Co., 83 Civ. 5944 (JES).

• Decision Date: 11 December 1986
• Docket Number: No. 83 Civ. 5944 (JES).,83 Civ. 5944 (JES).
• Parties: CITY OF YONKERS and Yonkers Community Development Agency, Plaintiffs, v. OTIS ELEVATOR COMPANY and United Technologies Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

649 F. Supp. 716

CITY OF YONKERS and Yonkers Community Development Agency, Plaintiffs, v. OTIS ELEVATOR COMPANY and United Technologies Corporation, Defendants.

No. 83 Civ. 5944 (JES).

United States District Court, S.D. New York.

December 11, 1986.

COPYRIGHT MATERIAL OMITTED

Vito J. Cassan, New York City, for plaintiffs.

Wachtell, Lipton, Rosen & Katz, New York City, for defendants; Robert B. Mazur, of counsel.

OPINION AND ORDER

SPRIZZO, District Judge.

BACKGROUND

Plaintiff City of Yonkers (the "City" or "Yonkers") is a New York municipal corporation, which is a political subdivision of and located in the State of New York. See Complaint ("Compl.") at ¶ 1. Plaintiff Yonkers Community Development Agency (the "Agency" or "YCDA") is a New York public benefit corporation, organized for the benefit of, and located in the City. See id. For purposes of this action, both plaintiffs stand in essentially the same posture. See Yulish Dep. at 8-9, 18; Martinelli Dep. at 4-5; Del Bello Dep. at 9.¹

Defendant Otis Elevator Company ("Otis") is a New Jersey corporation, with its principal executive offices in Farmington, Connecticut. See Compl. at ¶ 3. Otis is a wholly-owned subsidiary of defendant United Technologies Corporation ("United"), a Delaware corporation with its principal place of business in Connecticut. See id. at ¶¶ 3-4. In 1975, United acquired a majority of the outstanding stock of Otis, which was merged into United in 1976. See id. at ¶ 9.

The facts underlying the instant action are not in substantial dispute. During the 1960's and early 1970's, Otis undertook an evaluation of the efficiency and productivity of its North American plants engaged in the production of high-speed gearless elevators. By 1968 or shortly thereafter, Otis had concluded that its Yonkers plant would not be able to meet future production requirements. See Defendants' Response to Plaintiffs' 3(g) Stmt. ("Def. 3(g) Resp.") at ¶ 1. Among Otis' considered alternatives were: closing the Yonkers plant and relocating the Yonkers operation to Parsippany, New Jersey, or to some alternate site in Westchester County; expanding and increasing the use of Otis' Canadian and United Kingdom plants to replace the Yonkers operation; and expanding and modernizing the Yonkers plant. See Defendants' 3(g) Statement ("Def. 3(g) Stmt.") at ¶ 1; see also Plaintiffs' 3(g) Statement ("Pl. 3(g) Stmt.") at ¶ 6; Plaintiffs' Exhibits "PXs") 1-2, 64-66, 95; Walker Dep. at 33-36, 38-39, 43-52, 56-59, 264-65; Hull Dep. at 4-5, 13-14; Granville Dep. at 10-13, 16-17, 78-79; Sitaras Dep. at 98-100, 153-55, 238-41; Drummond Dep. at 46-47, 49-59, 66, 70-72, 208-10, 226. Yonkers officials were aware of the possibility that Otis might relocate from Yonkers. See Del Bello Aff. at ¶ 8; Scher Aff. at ¶ 2.

In exploring the possibility of Otis' remaining in Yonkers, plaintiffs and Otis engaged in discussions regarding Otis' need for space to accommodate an expansion and modernization effort in Yonkers. New York State Urban Development Corporation ("NYSUDC") officials were part of these discussions. Compare Def. 3(g) Resp. at ¶ 2 with Pl. 3(g) Stmt. at ¶ 2.

In 1969, commissioned by NYSUDC, see Def. 3(g) Resp. at ¶ 3, the Charles T. Main Company prepared a report detailing the possible use of urban renewal as a device to effect Otis' expansion and modernization in Yonkers. See PX 1 ("the Main Proposal"). While the Main Proposal was rejected by Otis, see, e.g., Pl. 3(g) Stmt. at ¶ 4, the concept of utilizing urban renewal continued to be a focus of the parties. See id. at ¶ 5; Def. 3(g) Resp. at ¶ 5.

Otis and Yonkers officials continued to discuss the possibility of Otis' expansion within Yonkers. Meanwhile, Otis continued its search for other sites, and acquired an option to purchase land in Parsippany. See Pl. 3(g) Stmt. at ¶ 6; Def. 3(g) Resp. at ¶ 6. During 1970-1971, George Sitaras, Otis' Manager of Facilities, Production Division, prepared the Modified Urban Renewal Proposal ("MUR"), which recommended the use of an urban renewal program to effectuate an eastward expansion of Otis' existing plant — in contrast to the Main Proposal's recommendation for the construction of a new facility on land to the west of the existing plant. See Pl. 3(g) Stmt. at ¶ 7; Def. 3(g) Resp. at ¶ 7. No such urban renewal plan existed at the time the MUR was written. See Pl. 3(g) Stmt. at ¶ 8. At some time in 1971, Otis told plaintiffs that if an appropriate parcel of land could be made available, Otis would be willing to expand and modernize its Yonkers facilities. See Def. 3(g) Resp. at ¶ 10; Pl. 3(g) Stmt. at ¶ 10.

On June 29, 1971, Dr. Seymour Scher, then Yonkers' City Manager, sent a letter to Otis' president, Ralph Weller. See PX 5. That letter informed Weller that urban renewal funding was available for the purpose of expanding Otis' Yonkers plant, and stated the general terms and conditions that plaintiff expected would apply in their relationship with Otis. It is noteworthy that nowhere in this letter is there any indication that plaintiffs, or HUD, or any other entity would exact in return for urban renewal funding a commitment from Otis to operate its Yonkers plant for any period of time. See id.; see also Scher dep. at 10-13.

On March 7, 1972, Scher wrote a letter to William Granville, Otis' vice-president. See DXs 19-20 (the "Yonkers Proposal Letter"). In that letter, Scher advanced on behalf of plaintiffs certain "preliminary language which together with Otis' concerns would ultimately be contained in a formal Letter of Intent." See id. at 1. It is again noteworthy that the author of that letter stated in his deposition that the letter did not "ask any commitment by Otis to operate its Yonkers plant for any period of time." See Scher Dep. at 20.² Morton Yulish, who was at that time Administrator of Yonkers' Department of Development and Executive Director of the Yonkers Urban Renewal Agency, see Yulish Dep. at 8-9, also stated at his deposition that there was no such commitment sought in the letter. See Yulish Dep. at 21-22.

Upon Otis' receipt of this proposal letter, Otis' representatives, primarily Granville and George J. Sitaras, were in contact with Yonkers officials, primarily Scher and Yulish, concerning the signing of a formal "Letter of Intent." See, e.g., Scher Dep. at 20-21; Yulish Dep. at 24-25, Hull Dep. at 9. On June 6, 1972, Otis and plaintiffs signed a Letter of Intent, dated June 5, 1972. See DX 6.³ This letter clearly states:

The purpose of this letter and of the commitments set forth herein is the realization of the following goals:

(a) the retention by Otis of its existing usable manufacturing facilities in Yonkers;

(b) the improvement and expansion of these facilities with the cooperation and assistance of federal, state and local agencies;

(c) the improvement in the aesthetic appearance of the older section of Yonkers in which these facilities are located; and

(d) the continuation of existing opportunities for employment and training of the unemployed and the underemployed, such as are now provided by Otis.

See DX 6 at 1. (emphasis added).

The "commitments" set forth in the Letter of Intent included various land transactions and site improvement agreements. See id. at ¶¶ 2-9. All of these "commitments" were expressly subject to various conditions, also set forth in the Letter of Intent. See id. at ¶¶ 2-8, 10-11. Again, nowhere in this Letter of Intent does there appear any "commitment" or "agreement" by Otis to "remain" in Yonkers. See id.; Del Bello Dep. at 89; Scher dep. at 23;⁴ see also Def. 3(g) Stmt. at ¶ 10. This Letter of Intent was never approved by the Yonkers City Council. See Ex. N to Mazur Aff. at ¶ 7; Ex. O to Mazur Aff. at 26-27.

At this time, Otis had no intention to leave Yonkers, see Def. 3(g) Stmt. at ¶ 11; see also Weller Dep. at 104-05, 145-48, 161-62, 238, 240-41; Drummond Dep. at 25; Sitaras Dep. at 188; Del Bello Dep. at 93, but there was no binding agreement to stay, and plaintiffs' own employees and officials proceeded as if there were no such agreement. See note 4, supra; see also Mazur Reply Aff. at ¶¶ 2-8.⁵ Indeed, contrary to the impression created by their counsel's arguments on this motion, not even the post-deposition affidavits of various plaintiffs' officials assert that there was ever an objective manifestation of any affirmative agreement by Otis to remain in Yonkers. See Del Bello Aff. at ¶ 10; Dunn Aff. at ¶ 9; Scher Aff. at ¶ 5; Yulish Aff. at ¶ 9.⁶

On June 27, 1972, the Yonkers City Council designated the Warburton-Woodworth Parcel as an urban renewal area. See DX 30; Def. 3(g) Stmt. at ¶ 13. On September 26, 1972, the Yonkers City Council approved an Urban Renewal Plan ("URP" or the "Plan") for NDP area No. 4, see DX 22, which included the Warburton-Woodworth Parcel. This Plan, which was prepared by plaintiffs, see Martinelli Dep. at 72; Del Bello Dep. at 25; Yulish Dep. at 29-32; Yost Dep. at 9-10, sets forth various "development goals," none of which includes requiring Otis to operate its Yonkers plant for any period of time. Compare Def. 3(g) Stmt. at ¶ 14 with Pl. 3(g) Stmt. at ¶ 29. Nowhere in the section entitled "Redevelopers Obligations" or in any other section does the URP purport to require Otis to operate its Yonkers plant for any period of time. Compare Def. 3(g) Stmt. at ¶ 14 with Pl. 3(g) Stmt. at ¶ 29; see also, Yulish Dep. at 33-34; Del Bello Dep. at 32. While the Plan did state that the site would "provide a much needed expansion area for the Otis Elevator Company, a long time industry in the city," see DX 22 at 3, the URP did not state as a goal or condition that Otis be required to operate its Yonkers plant for any period of time. See Del Bello Tr. at 30. HUD also approved the URP. See Yulish Dep. at 55; see also Scher Dep. at 33.

In June of 1973, Otis received from Yulish drafts of a proposed land disposition agreement and deed of conveyance (indenture), which were sent to Mr....