Gache v. Hill Realty Assocs., LLC

• Decision Date: 22 September 2014
• Docket Number: No. 13-CV-1650 (CS),13-CV-1650 (CS)
• Parties: PETER D. GACHE, aka PETER DJONALD GACHE, Plaintiff, v. HILL REALTY ASSOCIATES, LLC, WINTERHILL REALTY, LLC, MICHAEL T. TOKARZ, individually, DAVID L. GOLDRICH, individually and as Manager of Hill Realty Associates, LLC, PHILLIP A. MARRACCINI, individually and in his capacity as Supervisor of the Town of Harrison, N.Y., RONALD B. BIANCHI, individually and in his capacity as Supervisor of the Town of Harrison, N.Y., STEPHEN MALFITANO, individually and in his capacity as Supervisor of the Town of Harrison, N.Y., JOHN DOES, I-X and JANE DOES, I-X, Defendants.
• Court: U.S. District Court — Southern District of New York

PETER D. GACHE, aka PETER DJONALD GACHE, Plaintiff, v. HILL REALTY ASSOCIATES, LLC, WINTERHILL REALTY, LLC, MICHAEL T. TOKARZ,individually, DAVID L. GOLDRICH, individually and as Manager of Hill RealtyAssociates, LLC, PHILLIP A. MARRACCINI, individually and in his capacity as Supervisorof the Town of Harrison, N.Y., RONALD B. BIANCHI, individually and in his capacityas Supervisor of the Town of Harrison, N.Y., STEPHEN MALFITANO, individually and in his capacityas Supervisor of the Town of Harrison, N.Y., JOHN DOES, I-X and JANE DOES, I-X, Defendants.

No. 13-CV-1650 (CS)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 22, 2014

OPINION AND ORDER

Appearances:

Peter D. Gache

Beverly Hills, California

Plaintiff Pro Se

Eric Lewis Gordon, Esq.

Keane & Beane, P.C.

White Plains, New York

Counsel for Defendants Hill Realty, Winterhill Realty,

Michael Tokarz and David Goldrich

Steven Jay Harfenist, Esq.

Friedman, Harfenist, Kraut & Perlstein, LLP

Lake Success, New York

Counsel for Defendants Phillip Marraccini,

Ronald Bianchi and Stephen Malfitano

Seibel, J.

Before the Court are Defendants' Motions to Dismiss the Second Amended Complaint, (Docs. 29, 32), and Plaintiff's Motion to Withdraw the Reference to the Bankruptcy Court, (Doc.47). For the reasons set forth below, Defendants' Motions are GRANTED and Plaintiff's Motion is DENIED.

I. BACKGROUND

For purposes of the instant Motions, I accept as true the facts, but not the conclusions, as set forth in the Second Amended Complaint ("SAC"). (Doc. 23.) In addition, because Plaintiff is pro se, I will - despite his lengthy litigation experience and obvious skill at and familiarity with legal matters - "interpret the factual allegations of [his] complaint to raise the strongest arguments that they suggest." Grullon v. City of New Haven, 720 F.3d 133, 139 (2d Cir. 2013) (internal quotation marks omitted).

Plaintiff is a resident of Los Angeles, California. (SAC ¶ 1.) Hill Realty and Winterhill Realty are limited liability corporations organized under New York law. (Id. ¶¶ 2-3.) Michael Tokarz is a principal in the entity that owns Hill Realty and Winterhill Realty, and is a New York resident. (Id. ¶ 4.) David Goldrich is an attorney and the manager of Hill Realty, and is a Georgia resident. (Id. ¶ 5.)¹ All of the other defendants are New York residents and were Supervisors of the Town of Harrison (the "Town") at various points between 1994 and 2008. (Id. ¶¶ 6-8.)²

In August 1985, Plaintiff purchased 104 acres of vacant development land on Barnes Lane in Harrison, New York (the "Barnes Lane Lot"). (Id. ¶¶ 12-13.) After Plaintiff purchased the Barnes Lane Lot, a landfill operated by the Town of Harrison was discovered on a portion of the property. (Id. ¶¶ 16-17.) The presence of the landfill resulted in significant contamination and adversely affected Plaintiff's development plans for the property. (Id. ¶ 17.) In September1990, Plaintiff filed a lawsuit against the Town seeking damages and an order that the Town remove the landfill and remediate the resulting contamination. (Id. ¶ 18.)

In July 1991, Plaintiff filed for Chapter 11 bankruptcy protection. (Id. ¶ 21.) On August 1, 1995, the Bankruptcy Court involuntarily converted the Chapter 11 proceeding to a Chapter 7 proceeding and appointed a Chapter 7 trustee (the "Trustee"). (Id. ¶ 24.)

On September 30, 1996, the Trustee and the Town settled the lawsuit Plaintiff had filed regarding the Town's contamination of the Barnes Lane Lot. (Id. ¶ 25.) Among other things, the settlement required the Town to begin cleaning up the property by May 9, 1997 and to complete the remediation by May 8, 1998. (Id. ¶¶ 26-34.) The settlement also required the Trustee to transfer title to a portion of the property to the Town. (Gordon Decl. Ex. C ¶ 4(b).)³ On November 14, 1996, the Bankruptcy Court approved the settlement, (SAC ¶¶ 25-35), after which Plaintiff moved to have the Bankruptcy Court reject the settlement under Fed. R. Civ. P. 60(b), alleging that he uncovered evidence of fraud, (see Gordon Decl. Ex. D ("4/1/97 Transcript"), at 7-22). On April 1, 1997, the Bankruptcy Court rejected Plaintiff's motion. (Id. at 24.)⁴

Between March 1997 and December 1997, the Bankruptcy Court rejected several attempts to market and sell the property because the proffered sale prices were too low. (See SAC ¶ 36.) The bids rejected by the Bankruptcy Court included a $4.7 million offer by the Town, (see id. ¶ 37), that the Bankruptcy Court later described as "offensive to the court," (Gordon Decl. Ex. K ("6/17/98 Transcript"), at 58). Plaintiff's appraiser, Eugene Albert, submitted multiple affidavits to the Bankruptcy Court asserting that the value of the Barnes LaneLot after the cleanup would be at least $11.5 million. (See id. Ex. E ¶¶ 10, 34; id. Ex. F ¶ 43; id. Ex. G ¶ 12; id. Ex. H ¶ 9.)

In April 1998, the Trustee noticed a sale hearing for the property. (SAC ¶ 44.) On May 22, 1998, the Bankruptcy Court held the Town in contempt for failing to complete the cleanup. (Id. ¶ 47.) Also on May 22, 1998, the Bankruptcy Court denied Plaintiff's motion to compel enforcement of the settlement and to stay the Barnes Lane Lot auction until the Town completed the cleanup. (See id. ¶¶ 47-48.)

On May 27, 1998, an auction sale for the property took place before the Bankruptcy Court. (Id. ¶ 48.) Although the SAC states that "Hill Realty [was] the only bidder to show up," (id.), the Bankruptcy Court transcript reveals that other potential bidders attended and at least one other bidder actively bid on the Barnes Lane Lot, (see Gordon Decl. Ex. J ("5/27/98 Transcript"), at 11-19). Hill Realty offered the winning bid of $8.95 million. (Id. at 19-23; SAC ¶ 48.)

On June 17, 1998, the Bankruptcy Court held a hearing at which it confirmed Hill Realty's bid. (SAC ¶ 50.) At the June 17, 1998 hearing, the Bankruptcy Court wanted to be sure "that there [was] no agreement between [the Hill Defendants] and the town of Harrison," (6/17/98 Transcript 7), and Hill Realty's attorney, David Goldrich (who is a Defendant in this action), averred that there were no dealings between Hill Realty and the Town prior to Hill Realty's offer, (id. at 7-8; SAC ¶ 59). The Bankruptcy Court then stated its reasons for confirming the sale. (See 6/17/98 Transcript 59-66, 77-89.) In response to Plaintiff's argument that the sale price was depressed because the land was still contaminated and the buyer might have to sue the Town to get it cleaned up, the Bankruptcy Court noted that "it will retain jurisdiction to enforce its orders," including its order that the Town "clean up the property." (Id.at 59.) Because the land came with a court-enforceable guarantee that the Town would remediate it, the Bankruptcy Court found Plaintiff's argument that the sale price was depressed to be "spurious, salacious, [and] bogus." (Id.) The Bankruptcy Court found that $8.95 million was sufficient value for the property, because that price was 81% of Plaintiff's expert's valuation of the Barnes Lane Lot once remediated, and other courts had held 75% of a property's appraised value to be a sufficient bankruptcy auction price. (See id. at 84-87.) Finally, the Bankruptcy Court denied Plaintiff's motion to stay the sale of the property pending appeal, reasoning that "Mr. Gache's argument that the purchase price was not adequate because the property was not cleaned up before it was sold shows no likely success on the merits." (Id. at 84; see id. at 66, 67, 77-89.) The Bankruptcy Court, however, stated it would not sign the order confirming the sale until the next day, so that Plaintiff could petition the District Court for a stay. (See id. at 91-92.) The Bankruptcy Court also rejected Plaintiff's argument that the Court should have investigated the auction process due to Plaintiff's suspicion of bid-rigging, stating, "There is no suggestion before this court that there was collusion between the bidders in the auction process." (Id. at 78.) On June 18, 1998, the Bankruptcy Court entered an order confirming the sale to Hill Realty. (Gordon Decl. Ex. L.)

Following the Bankruptcy Court's approval of the sale, the Town began the cleanup process. (SAC ¶ 62.) On March 30, 1999, the Bankruptcy Court held a hearing at which Plaintiff sought another contempt order and damages against the Town based on his belief that the Town intentionally delayed its cleanup and failed to obey the Bankruptcy Court's May 22, 1998 contempt order. (Id. ¶¶ 64-65.) In connection with the March 30, 1999 hearing, Jonathan Kraut, the Town's attorney, affirmed that the "clean up of the Property is substantially complete," and that "the removal of all debris . . . was 99% complete," (Gordon Decl. Ex. M¶ 64; see SAC ¶ 68), and Mr. Goldrich affirmed that Hill Realty had been informed that the cleanup was "largely completed," (see Gordon Decl. Ex. N ¶ 5; id. Ex. O ¶ 7; SAC ¶ 67). At the hearing, the Bankruptcy Court denied Plaintiff's contempt motion and vacated the May 22, 1998 contempt order, because it found that the cleanup was "substantially completed," and the Town had failed to abide only by the "purely ministerial aspects of the settlement." (Gordon Decl. Ex. P ("3/30/99 Transcript"), at 28-29, 31.) Also at this hearing, the Bankruptcy Court observed that "[t]he record is further fraught with Mr. Gache's bold-face [sic] assertions that the town acted in 'bad faith,'" (id. at 29), and that through his contempt motion, Mr. Gache was, after exhausting all of his appeals, "trying to relitigate the sale of the property," (id. at 33).

On May 21, 1999, Plaintiff settled his bankruptcy case with the Trustee. (SAC ¶ 72.) The settlement provided for the validity of all court orders and judgments, including the 1996 settlement and the 1998 sale of the property to Hill Realty. (Id.) By the end of June 1999, all of Plaintiff's creditors were paid ("some by settlements negotiated with the Trustee for a partial disallowance of their claims"); Plaintiff received the...