Cnty. of Suffolk v. Long Island Power Auth.

• Decision Date: 28 November 2012
• Citation: 2012 N.Y. Slip Op. 08087,954 N.Y.S.2d 619,100 A.D.3d 944
• Parties: COUNTY OF SUFFOLK, etc., appellant, v. LONG ISLAND POWER AUTHORITY, et al., respondents.
• Court: New York Supreme Court — Appellate Division

100 A.D.3d 944

954 N.Y.S.2d 619

2012 N.Y. Slip Op. 08087

COUNTY OF SUFFOLK, etc., appellant,

v.LONG ISLAND POWER AUTHORITY, et al., respondents.

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

Nov. 28, 2012.

Leon Friedman, New York, N.Y., and Reilly Like & Tenety, Babylon, N.Y. (Irving Like of counsel), for appellant (one brief filed).

Rivkin Radler, LLP, Uniondale, N.Y. (Evan H. Krinick, Michael P. Versichelli, and Harris J. Zakarin of counsel), for respondents.

RANDALL T. ENG, P.J., ANITA R. FLORIO, SANDRA L. SGROI, and ROBERT J. MILLER, JJ.

In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals (1), as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Emerson, J.), dated June 3, 2010, as, in effect, granted that branch of the defendants' motion which was for a protective order quashing its subpoenas seeking discovery related to certain unpleaded causes of action, and (2) from an order of the same court dated December 22, 2010, which denied its motion for leave to reargue its opposition to that branch of the defendants' motion which was for a protective order and, in effect, for resettlement of the decretal provisions of the order dated June 3, 2010.

ORDERED that the appeal from the order dated December 22, 2010, is dismissed, as no appeal lies from an order denying resettlement of the substantive or decretal provisions of a prior order or judgment, or from an order denying reargument ( see Braun v. Edwards Trucking & Warehousing, Inc., 68 A.D.3d 699, 700, 889 N.Y.S.2d 676;Matter of Kosowski v. Kosowski, 61 A.D.3d 689, 875 N.Y.S.2d 914); and it is further,

ORDERED that the order dated June 3, 2010, is affirmed insofar as appealed from; and it is further,

ORDERED that one bill of costs is awarded to the defendants.

An agreement was executed on January 11, 2000, by the Long Island Power Authority (hereinafter LIPA), Suffolk County, Nassau County, the Town of Brookhaven, the Shoreham—the Wading River Central School District, the Wading River Fire District, and the North Shore Library District (hereinafter the Shoreham Agreement). Pursuant to the Shoreham Agreement, LIPA waived certain claims it had against several Suffolk County taxing jurisdictions for refunds of certain payments made in lieu of taxes. Additionally, LIPA aggregated the remaining obligation owed by these same jurisdictions pursuant to a judgment held by LIPA relating to property tax over-assessments. After the waiver and aggregation, the taxing jurisdictions owed LIPA a refund of approximately $620 million.

To assist the taxing jurisdictions in funding payment of their settlement obligations, LIPA issued bonds (hereinafter the Tax Settlement Bonds). A surcharge imposed on Suffolk County ratepayers in accordance with the Shoreham Agreement was to be used to pay the debt service, related charges, and obligations incurred in connection with the Tax Settlement Bonds. The amounts received by LIPA pursuant to the Shoreham Agreement were to be used to provide rebates and credits to ratepayers in Suffolk County, Nassau County, and the Rockaways. In addition, LIPA agreed to provide additional credits to ratepayers from its own funds.

To ensure Nassau County's acquiescence with the Shoreham Agreement, LIPA entered into a separate agreement with Nassau County on January 13, 2000 (hereinafter the Nassau Agreement). Pursuant to the Nassau Agreement, LIPA agreed to give ratepayers in Nassau County and the Rockaways additional rebates totaling $25 million and to provide Nassau County with a grant of approximately $20 million from LIPA's clean energy fund. Suffolk County was not a party to the Nassau Agreement.

The instant appeals arise from litigation commenced in 2002 by the plaintiff, County of Suffolk, individually and on behalf of the rate payers of the County of Suffolk, following the issuance of the Tax Settlement Bonds pursuant to the Shoreham Agreement. After issuing Tax Settlement Bonds totaling approximately$325 million to assist the taxing jurisdictions with repaying some of their obligations under the settlement, LIPA used a portion of the bond money to pay the various rebates and credits provided for in the Shoreham Agreement. The remaining bond proceeds, totaling $220 million, were invested through a repurchase agreement and earned interest money. That interest money was used by LIPA to pay a significant portion of the additional $25 million in rebates owed to the Nassau County and Rockaways ratepayers under the Nassau Agreement.

After the defendants joined issue in this action, the parties commenced discovery. In 2008, following disclosure of more than 11,000 documents by the defendants, the plaintiff served an amended complaint based upon audits of the disclosed documents. The defendants served an answer in response to the amended complaint. The plaintiff made requests for additional discovery to support unpleaded claims, issuing subpoenas for depositions from nonparty witnesses. In particular, the plaintiff sought evidence to support its claim that LIPA's use of the interest money earned from the invested Tax Settlement Bonds proceeds to pay a substantial portion of additional rebates owed to Nassau County and Rockaways ratepayers pursuant to the Nassau Agreement constituted a breach of the Shoreham Agreement. The plaintiff further contended, inter alia, that LIPA made misrepresentations with respect to the intended use of the proceeds from the sale of the Tax Settlement Bonds. The defendants moved, inter alia, to quash the subpoenas, solely on the ground that the unpleaded claims were without merit. The Supreme Court, inter alia, in effect, granted that branch of the defendants' motion, and the plaintiff appeals.

CPLR 3101(a) provides that “[t]here shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof.” Nevertheless, unlimited disclosure is not mandated, and the rules provide that the court may issue a protective order “denying, limiting, conditioning or regulating the use of any disclosure device” to “prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts” (CPLR 3103[a]; see Accent Collections, Inc. v. Cappelli Enters., Inc., 84 A.D.3d 1283, 924 N.Y.S.2d 545;Spohn–Konen v. Town of Brookhaven, 74 A.D.3d 1049, 902 N.Y.S.2d 391;Palermo Mason Constr. v. Aark Holding Corp., 300 A.D.2d 460, 461, 751 N.Y.S.2d 599). “Generally, the supervision of disclosure is left to the broad discretion of the trial court, which must balance the parties' competing interests” ( Accent Collections, Inc. v. Cappelli Enters. Inc., 84 A.D.3d at 1283, 924 N.Y.S.2d 545;see Kooper v. Kooper, 74 A.D.3d 6, 17, 901 N.Y.S.2d 312;Palermo Mason Constr. v. Aark Holding Corp., 300 A.D.2d at 461, 751 N.Y.S.2d 599).

Here, the plaintiff sought additional evidence, inter alia, related to an unpleaded breach of contract cause of action. “ ‘The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent’ ” ( Maser Consulting, P.A. v. Viola Park Realty, LLC, 91 A.D.3d 836, 836, 936 N.Y.S.2d 693, quoting Greenfield v. Philles Records, 98 N.Y.2d 562, 569, 750 N.Y.S.2d 565, 780 N.E.2d 166;see Dysal, Inc. v. Hub Props. Trust, 92 A.D.3d 826, 827, 938 N.Y.S.2d 642;Staples the Off. Superstore E., Inc. v. Flushing Town Ctr. III, L.P., 90 A.D.3d 638, 639, 933 N.Y.S.2d 732). The best evidence of the parties' intent is their own writing. “Thus, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” ( Greenfield v. Philles Records, 98 N.Y.2d at 569, 750 N.Y.S.2d 565, 780 N.E.2d 166;see Albert Jacobs, LLP v. Parker, 94 A.D.3d 919, 942 N.Y.S.2d 597;Scotto v. Georgoulis, 89 A.D.3d 717, 718–719, 932 N.Y.S.2d 120;Ross v. Sherman, 57 A.D.3d 758, 870 N.Y.S.2d 383). The threshold question of whether a contract is unambiguous, and the subsequent construction and interpretation of a contract determined to be unambiguous, are issues of law within the province of the court ( see W.W.W. Assocs. v. Giancontieri, 77 N.Y.2d 157, 163, 565 N.Y.S.2d 440, 566 N.E.2d 639;Maser Consulting, P.A. v. Viola Park Realty, LLC, 91 A.D.3d at 837, 936 N.Y.S.2d 693;Franklin Apt. Assoc., Inc. v. Westbrook Tenants Corp., 43 A.D.3d 860, 861, 841 N.Y.S.2d 673). Where the language of the contract “was written so imperfectly that it is susceptible to more than one reasonable interpretation,” it will be considered ambiguous ( Brad H. v. City of New York, 17 N.Y.3d 180, 186, 928 N.Y.S.2d 221, 951 N.E.2d 743). Extrinsic evidence of the parties' intent may not be admitted to create ambiguity in a contract that is unambiguous on its face ( see Brad H. v. City of New York, 17 N.Y.3d at 185–186, 928 N.Y.S.2d 221, 951 N.E.2d 743;W.W.W. Assocs. v. Giancontieri, 77 N.Y.2d at 163, 565 N.Y.S.2d 440, 566 N.E.2d 639;Scotto v. Georgoulis, 89 A.D.3d at 718, 932 N.Y.S.2d 120).

The plaintiff contends that the Nassau Agreement is not extrinsic evidence. Rather, the plaintiff asserts that the Nassau Agreement must be considered when interpreting the Shoreham Agreement because the two contracts are part of the same transaction. “Generally, the rule is that separate contracts relating to the same subject matter and executed simultaneously by the same parties may be construed as one agreement” ( Williams v. Mobil Oil Corp., 83 A.D.2d 434, 439, 445 N.Y.S.2d 172;see Nau v. Vulcan Rail & Constr. Co., 286 N.Y. 188, 197, 36 N.E.2d 106;Davimos v. Halle, 60 A.D.3d 576, 877...