In separate decisions, the Supreme Court, Suffolk County has rejected a school district’s attempt to set aside a jury verdict or limit the amount of interest to be paid on the verdict to a construction manager who claimed the district breached a contract, in East Hampton Union Free School District v. Sandpebble Builders, Inc., Index No. 2007/1113.  The jury had rendered a verdict and awarded $755,767.41 in breach of contract damages to the construction manager on May 26, 2016.  The District then filed two motions challenging the verdict.  The first motion sought to set aside the verdict in its entirety, based on an argument that the evidence at trial purportedly demonstrated that the claims were not timely filed.  The court denied this motion because there was “viable, if not conclusive evidence” supporting the jury’s verdict that the claims were timely.  The second motion sought to limit the amount of interest that would be imposed on the verdict from the usual 9% to 4.6% (pre-verdict) and 2.8% (post-verdict).  The court denied this motion after finding that 9% is a “presumptively fair and reasonable” rate by law, and the district had not persuaded the court to depart from that rate.   Based on this decision, the interest awarded to Sandpebble (for a ten-year period) nearly doubled the amount of the jury’s verdict.

The Supreme Court, Suffolk County has upheld a challenge to the East Hampton Village Zoning Board of Appeals’ attempt to impose an unreasonable condition on the granting of an area variance, in Lee Avenue Lot 1 LLC v. ZBA of Village of East Hampton, Index No. 5690/2015.   The case involved the issue of how far can a zoning board go in imposing conditions on variances.  The zoning board had granted a variance but tried to condition the variance on the owner addressing issues over a separate scenic easement area that was not involved in the underlying application.  Although a zoning board  may impose reasonable conditions on variances that “are directly related to and incidental to the proposed use of the property,” the court concluded in this case that the “condition imposed is totally unrelated to the variances granted, and is not aimed at minimizing the adverse impact to an area that might result from the grant of the variances requested by the petitioner.”  The condition was therefore “vacated and annulled.”

The firm is pleased to welcome Amanda Star Frazer to the firm’s civil litigation practice group.  After practicing title litigation, real estate litigation, and commercial litigation in Florida, Amanda has returned to the South Fork to serve her home community.

The Honorable John H. Rouse of the Supreme Court, Suffolk County has dismissed a purchaser’s action to recover a $1,000,000 downpayment in Matrix Investment Group LLC v. Two Trees Farm Development LLC.  The plaintiff had deposited the downpayment toward the purchase of property in Bridgehampton, but in exchange for extensions of the closing date, the plaintiff agreed to release the downpayment from escrow and make it “nonrefundable.”  After the plaintiff’s principal died, it refused to close and sought a refund anyway, arguing that defendant’s retention of the downpayment would constitute “unjust enrichment” and that the death of the plaintiff’s principal rendered the transaction impossible to perform.  Justice Rouse disagreed, explaining that New York law routinely enforces a seller’s retention of a downpayment as liquidated damages and that even if the purchaser’s principal was a “key man” to its operations, the “Plaintiff did not bargain for the Defendant to be the insurer of the risks that might attend his death.”

In an action involving the scope of an easement, and related claims of nuisance and interference with the right-of-way, the Supreme Court, Suffolk County (Hon. Ralph T. Gazzillo) has issued a decision following a non-jury trial in favor of the defendant on all claims.   The action, entitled Martin v. Robins, Suffolk Index No. 22818/2004, centered around the meaning and extent of a written easement dating back to 1969.  The plaintiff claimed to benefit from an expansive interpretation of the easement, while the defendant argued in favor of a limited interpretation based on the extent of the driveway that existed when the easement was created.  The court’s 17-page decision detailed the reasons why the court sided with the defendant and dismissed each and every claim advanced by the plaintiffs.

The Supreme Court, Suffolk County has dismissed a $26 million specific performance action in Suites in Boca, LLC v. Sandbar North LLC, Index No. 604212/2016.  The case involved the basic question of whether the signature on a contract, without actual delivery, creates a binding agreement?  The contract at issue had been signed but not delivered to the prospective purchaser before the seller rejected the $26 million offer in favor of another buyer.   The prospective purchaser sued for specific performance anyway, and placed a notice of pendency on the property to stop the sale to the other buyer.  The Honorable Joseph Farneti of the Supreme Court reviewed the terms of the contract itself, which specifically provided that delivery was a pre-condition to the formation of a binding contract, before concluding that “no binding agreement was created between plaintiff and defendants.”  Justice Farneti explained the rule of law succinctly as follows:  “Where the parties have agreed that delivery is essential to the making of a contract, there is no agreement without it.”  He therefore dismissed the action, canceled the notice of pendency, and set the matter down for a hearing on the issue of an award of costs and expenses to the defendant for the “wrongful filing of the notice of pendency….”

The Supreme Court, Suffolk County has dismissed a neighbor’s challenge to the Town of East Hampton’s decision to buy and preserve a waterfront parcel in Levin v. Town Board, Index No. 21518/15.  The case involves the use of the Town’s “Community Preservation Fund,” or “CPF,” which is a dedicated fund used by the five East End towns to preserve open space.  The Levin case was a rare example of a neighbor who, rather than supporting the preservation effort, opposed it and argued that the acquisition of the property would negatively impact the enjoyment of his adjacent parcel.  The Honorable Daniel Martin of the Supreme Court rejected the challenge and found the neighbor’s concerns speculative and in disregard of the “… intent of the [CPF] program which is motivated by the greater good of the entire town and the Peconic Bay region.”  The case appears to be the first of its kind where a neighbor directly challenged a Town’s compliance with the mandates of the CPF program, as set forth in section 64-e of the N.Y. Town Law.  In this case, Justice Martin reviewed those requirements before concluding that the Town followed “all the mandates of 64-e of the Town Law concerning the CPF….”

The Appellate Division, Second Department has upheld a Village of Southampton Zoning Board decision in Wambold v. Village of Southampton ZBA.  The case involved the often misunderstood zoning issue of whether an accessory dwelling is a nonconforming use or a nonconforming structure.   The Village ZBA had concluded that the accessory dwelling was a nonconforming structure, which could be expanded through an area variance, but a neighbor challenged the decision on the ground that it was a nonconforming use, which could only be expanded through a use variance.  After the Supreme Court upheld the ZBA’s decision, the neighbor appealed.  The Appellate Division affirmed and agreed that only an area variance was required, because the owners “were not seeking to change the essential use of the property.”

A Suffolk County jury, after a two-week trial, has issued a verdict and awarded over $750,000 in damages (excluding interest) to a construction manager that was wrongfully terminated by a school district, in East Hampton Union Free School District v. Sandpebble Builders, Inc.   The school district had sued the construction manager first, seeking millions in alleged damages for breach of contract, and the construction manager counterclaimed for wrongful termination.  After more than nine years of pretrial litigation that included multiple appeals, one of which was heard by New York’s highest court,  the case finally reached trial in May of 2016.  The trial was conducted before the Hon. Jerry Garguilo over ten days, before being turned over to the jury.  After only two hours of deliberations, the jury returned a unanimous verdict in favor of the construction manager on all issues, rejecting the district’s claims and statute of limitations defense, finding the district’s actions to be a breach of contract, and it awarding the construction manager damages for the district’s breach.  The final judgment will include nearly ten years of interest added to the jury’s award.

In a case of first impression, the Supreme Court, Suffolk County has concluded that an Industrial Development Agency (IDA) that is in record ownership of a parcel is a necessary party to an ejectment action brought by a plaintiff claiming to be the “beneficial owner” of the property against a defendant who raises adverse claims of title, in JKJ Marine LLC v. 1320 Entertainment Inc., Suffolk Index No. 62514/14.   The defendant argued that the IDA, as record owner, must be joined in the action, but the plaintiff claimed that the IDA was just a nominal owner and was uninterested in the action.   After conducting a hearing to determine the issue, the Court (Hon. Paul J. Baisley, Jr.) concluded that the IDA was a necessary party and ordered that it be joined in the action.