Town & Country Adult Living, Inc. v. Village/Town of Mount Kisco

• Decision Date: 26 March 2019
• Docket Number: 17-CV-8586 (CS)
• Parties: TOWN AND COUNTRY ADULT LIVING, INC., THE WESTCHESTER RESIDENCE AND CLUB, LLC, ROBERT MISHKIN, and JOHN DOES NO. 1 THROUGH 129, Plaintiffs, v. VILLAGE/TOWN OF MOUNT KISCO, VILLAGE/TOWN OF MOUNT KISCO BOARD OF TRUSTEES, J. MICHAEL CINDRICH, ANTHONY MARKUS, JEAN FARBER, PETER GRUNTHAL, KAREN B. SCHLEIMER, VILLAGE/TOWN OF MOUNT KISCO PLANNING BOARD, DOUGLAS HERTZ, RALPH VIGLIOTTI, ENRICO MARESCHI, JOHN BAINLARDI, MICHAEL BONFORTE, WILLIAM POLESE, FRANK VITERITTI, JOHN HOCHSTEIN, JOSEPH COSENTINO, and WHITNEY SINGLETON, Defendants.
• Court: U.S. District Court — Southern District of New York

TOWN AND COUNTRY ADULT LIVING, INC., THE WESTCHESTER RESIDENCEAND CLUB, LLC, ROBERT MISHKIN,and JOHN DOES NO. 1 THROUGH 129, Plaintiffs, v. VILLAGE/TOWN OF MOUNT KISCO, VILLAGE/TOWN

OF MOUNT KISCO BOARD OF TRUSTEES, J. MICHAEL CINDRICH,

ANTHONY MARKUS, JEAN FARBER, PETER GRUNTHAL,

KAREN B. SCHLEIMER, VILLAGE/TOWN OF MOUNT KISCO PLANNING BOARD,

DOUGLAS HERTZ, RALPH VIGLIOTTI, ENRICO MARESCHI,

JOHN BAINLARDI, MICHAEL BONFORTE, WILLIAM POLESE, FRANK VITERITTI,

JOHN HOCHSTEIN, JOSEPH COSENTINO,

and WHITNEY SINGLETON, Defendants.

17-CV-8586 (CS)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

March 26, 2019

OPINION & ORDER

Appearances:

Brian H. Brick

Brick Law PLLC

White Plains, New York

Counsel for Plaintiffs

Terry Rice

Suffern, New York

Counsel for Defendants

Seibel, J.

Before the Court is Defendants' motion to dismiss Plaintiffs' Amended Complaint. (Doc. 83.)

I. BACKGROUND

A. Facts

The Court accepts as true the facts, but not the conclusions, set forth in Plaintiffs' Amended Complaint. (Doc. 60 ("AC").)

1. The Parties

Plaintiffs include the following entities and individuals:

• Town and Country Adult Living, Inc. ("Town and Country"), a corporation that operated an assisted living residence for senior citizens with disabilities at 53 Mountain Avenue in Mount Kisco, New York, (id. ¶¶ 43, 95);

• The Westchester Residence and Club, LLC ("WR&C"), a limited liability company that was formed to develop and operate - along with Town and Country - the 129-unit residence for senior citizens with disabilities that Plaintiffs have been trying to build at 270 Kisco Avenue in Mount Kisco, (id. ¶¶ 44, 97);

• Robert Mishkin, a citizen of New York who formed Town and Country and WR&C, (id. ¶¶ 45, 94, 97); and

• John Does No. 1 through 129, who are individuals whose identities are currently unknown but who were either the residents of the now-demolished senior assisted living residence previously located at 53 Mountain Avenue or the future residents of the senior assisted living residence that is the development project at issue in this action, (id. ¶ 46).

Defendants include the following entities and individuals:

• Village/Town of Mount Kisco ("Village" or "Mount Kisco"), (id. ¶ 47);

• Mount Kisco's Board of Trustees, (id. ¶ 48), and several individual members of the Board of Trustees, (id. ¶¶ 49-53);

• J. Michael Cindrich, former mayor of the Village and a trustee on the Board of Trustees, (id. ¶ 49);

• Anthony Markus, former deputy mayor of the Village and a trustee on the Board of Trustees, (id. ¶ 50);

• Jean Farber, deputy mayor of the Village and a trustee on the Board of Trustees; (id. ¶ 51);• Mount Kisco's Planning Board (the "Planning Board"), which was responsible for the review and approval of all applications concerning site plans, subdivisions, change of use, and special permits, (id. ¶ 54);

• Douglas Hertz, the chairman of the Planning Board, (id. ¶ 55), and other individual members of the Planning Board, (id. ¶¶ 56-63); and

• Whitney Singleton, legal counsel to the Village with the title of "Village Attorney," (id. ¶ 64).

2. 2006 Settlement

Sometime before 2006, Mount Kisco faced an increased need for residential housing for senior citizens with disabilities. (See id. ¶ 98.) To meet this need, Plaintiffs applied to the Village for a variance to expand on a prior non-conforming use to add the capacity to house an additional forty-six senior citizens at 53 Mountain Avenue. (Id.) Plaintiffs claim that the Village denied Plaintiffs' application for a variance because wealthy and politically connected residents whose properties neighbored 53 Mountain Avenue did not want additional senior citizens with disabilities living in their neighborhood. (Id. ¶ 99.)

Following the Village's denial of the variance, Plaintiffs filed an action in the Southern District of New York captioned Town & Country Adult Living, Inc. v. The Village/Town of Mount Kisco, 02-CV-444 (S.D.N.Y. 2002). (Id. ¶ 100.) The 2002 action alleged violations of the Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601, et seq., and the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12131, et seq. ("ADA"). (Id. ¶ 101.)

On December 19, 2005, the Village's Board of Trustees held a meeting to approve a property exchange that would settle the lawsuit. (Id. ¶¶ 103-104.) The exchange called for Plaintiffs to demolish their existing and operating senior adult assisted living facility at 53 Mountain Avenue and to deed 53 Mountain Avenue to the Village. (Id. ¶¶ 3, 111.) In return, the Village was obligated to sell 270 Kisco Avenue (which the Village owned) to Plaintiffs for$3,500,000, once the Village provided Plaintiffs with site plan approval for a larger facility that Plaintiffs would build on the property. (Id. ¶¶ 3-4, 112-113.) Defendants estimated and represented to the court that site plan approval would take twelve months to complete. (Id. ¶ 4.) At the December 19 meeting, Singleton told the Trustees that the proposal to sell 270 Kisco Avenue to Plaintiffs would be "very beneficial" to the Village, noting that the Village would be getting rid of a non-conforming use and would receive double the value of what the Village was previously receiving under an old contract to sell 270 Kisco Avenue. (Id. ¶¶ 10, 106.)

On January 17, 2006, Plaintiffs and Defendants the Village, the Planning Board, and Singleton settled the lawsuit by agreeing to the property exchange. (Id. ¶¶ 2, 99; see Doc. 86 ("Rice Decl.") Ex. B ("Stipulation of Settlement").) The Stipulation of Settlement was signed by Singleton, Joseph Cosentino (as then-Chairman of the Planning Board), and Cindrich (as then-Village mayor). (AC ¶ 109.)

The Stipulation of Settlement contained the following terms, among others:

• The Village was required to close the sale of 270 Kisco Avenue within forty-five days after Planning Board approval of the site plan, (Stipulation of Settlement ¶ 2(d));

• Town and Country was to apply to the Village Board of Trustees for a zoning amendment to allow the project, (id. ¶ 4);

• "[T]he parties do hereby understand and agree that the Board of Trustees and the Planning Board are required to exercise independent judgment and discretion in reviewing the aforesaid applications," (id.);

• "Each party to this Stipulation shall exercise good faith and due diligence," (id. ¶ 11);

• Plaintiffs agreed to sign a release of the claims against the Village, which was to be held in escrow until the Planning Board granted site plan approval. (Id. ¶ 12.) In addition, Plaintiffs were required to obtain certain third-party approvals, including from the New York City Department of Environmental Protection, ("NYCDEP"), and Plaintiffs' failure to close based on the lack of third-partyapprovals would not affect the Stipulation of Settlement or the releases issued to the Village. (Id.)

3. 2007 Ground Lease

Eventually it became apparent that the site plan approvals would take longer than the Village originally estimated. (AC ¶ 126.) As a result, on January 22, 2007, the parties entered into a Ground Lease for 270 Kisco Avenue, under which the Village was the Landlord and both Town and Country and WR&C were co-tenants. (Id.; see Rice Decl. Ex. C ("Ground Lease").) The Ground Lease reiterated many of the terms of the Stipulation of Settlement, (AC ¶¶ 131-132), but also contained the following new terms, among others¹:

• The Ground Lease, the Contract of Sale, and the Stipulation of Settlement would automatically terminate if Plaintiffs could not obtain site plan approval within thirty-nine months after entering into the Ground Lease; (id. ¶ 135; see Ground Lease ¶ 34.2);

• The Village had the option at any time six months after the execution of the Ground Lease to transfer title of the leased premises to the tenants, without site plan approval, (AC ¶ 136), and that other agencies may require other approvals would not constitute grounds to delay payment or transfer of title, (id. ¶ 137; see Ground Lease ¶ 34.9); and

• If the Ground Lease were terminated, the exchange of 53 Mountain Avenue for 270 Kisco Avenue would not take place, and all rights in 53 Mountain Avenue would remain with Plaintiffs, (AC ¶ 138; see Ground Lease ¶ 34.11).

Also in January 2007, Plaintiffs paid the Village $1,500,000 as a deposit on the purchase of 270 Kisco Avenue. (Id. ¶ 27.)

4. Amending and Assigning the Ground Lease

In December 2007, the parties entered into the first of ten different amendments to the Ground Lease over a seven-year period. (Id. ¶ 141.) In the Third Amendment, Plaintiffs agreed to contribute $500,000 to the Mount Kisco Open Space Fund or another fund the Village designated. (Id. ¶ 144; see Rice Decl. Ex. F ¶ 3.) As an alternative, Plaintiffs had the option to increase the $3,500,000 purchase price for 270 Mount Kisco by $500,000. (Id.) Plaintiffs allege that this is one of several examples of how the Village extracted - but Plaintiffs agreed to - additional money from Plaintiffs beyond the original $3,500,000 purchase price. (AC ¶ 145.) For example, the Village extracted or accrued payments of $15,000 for a "senior bus replacement" in the Fourth Amendment, (id. ¶ 146; see Rice Decl. Ex. G ¶ 7), $200,000 for the extension granted by the Seventh Amendment, (AC ¶ 146; see Rice Affirm Ex. L ¶ 3), $852,150 for the extension granted by the Ninth Amendment, (AC ¶ 146; see Rice Decl. Ex. N ¶ 4), and $150,000 for three monthly extensions under the Tenth Amendment, (AC ¶ 146; see Rice Decl. Ex. O ¶ 2.) The Fourth Amendment also called for Plaintiffs to demolish the existing residence on 53 Mountain Avenue. (AC ¶ 148; see Rice Decl. Ex. G ¶ 4.)

In 2012, Plaintiffs looked for a partner to assist with completing the approval process and the development of 270 Kisco Avenue. (AC ¶ 150.) Plaintiffs assigned the Ground Lease and deeded the property at 53 Mountain Avenue to the Fortus Group ("Fortus") and Hearth Senior Care (the "Hearth"), Town and Country's new development partners. (AC ¶ 151.) On August 27, 2012, Fortus, the Hearth, Town and Country,...