Court Opinion

ID: 5488519
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:21:04.35125+00
Date Added: 2024-06-11T08:33:43.343845
License: Public Domain

Pigott, J.
(dissenting). The majority in this case makes two points: (1) that a municipality may withdraw a defense and indemnification of current and former municipal officials for failure to accept a reasonable settlement offer; and (2) that the First Amendment to the United States Constitution does not warrant a different result. While I have no quarrel with either proposition in the appropriate case, this is not such a case and I therefore dissent.
The Incorporated Village of Freeport hired the law firm of Wilson, Elser, Moskowitz, Edelman & Dicker, LLP (Wilson, Elser) to represent it and its elected and appointed officials in two lawsuits (the underlying actions) brought in July 2008. Plaintiff Water Works Realty Corp. and its principal alleged that while they had made a “business decision” not to pay Water Works’ real property taxes, the Village defendants colluded in every fashion possible to deprive plaintiffs of their property through a conspiracy surrounding a tax sale of the Water Works property. The litigation appeared to proceed apace, having initially been brought in state court but removed, on stipulation, to the United States District Court for the Eastern District of New York.
In March 2009, village elections brought a new mayor and two new village trustees. Three of the original board members left office while two, Jorge Martinez1 and William H. White, remained, along with the Village Treasurer, Vilma Lancaster. In July 2009, the new village majority, perceiving a conflict of interest between the “old board” and the new majority, hired separate counsel, Warren and Warren, LLR to represent the Village going forward. Thereafter, the new majority’s attorney negotiated with attorneys for the plaintiffs in the underlying actions and ultimately agreed to a settlement of $3.5 million to be paid by the Village.2
The “stipulation of settlement” appears to have been executed in November 2009 by plaintiffs in the underlying actions, the Village by its new mayor, Andrew Hardwick, and counsel for both the plaintiffs and Warren and Warren, the attorneys hired by the “new Village.”
*42The rub came, and thus this lawsuit, when someone (it is not entirely clear who) sought not a stipulation of settlement—that had already been agreed to in November 2009 and approved by the board by a vote of 3-0 (with Trustees Martinez and White abstaining)—but, rather, a stipulation of discontinuance that was addressed to the defendants represented by Wilson, Elser. The Village was not noted in this stipulation, apparently because the Village, through its new mayor, had executed the previous stipulation of settlement. The stipulation of discontinuance (which is typically signed by the attorneys, not the litigants), sent to the plaintiffs by Village counsel, stated, in addition to the usual boilerplate, as follows:
“Each undersigned Defendant specifically represents and warrants that he/she has read the Village Stipulation [of settlement] and this Stipulation carefully and; that he/she has fully discussed it with his/ her attorneys and that he/she has signed this Stipulation voluntarily and of his/her own free will; and he/she has no objections to the Village Stipulation nor this Stipulation and agrees not to ever interfere, nor challenge or criticize the terms of either Stipulation in any manner.”
Petitioners refused to sign this stipulation, but made it abundantly clear that they are willing to sign a stipulation of discontinuance absent this language.
The majority makes much of the fact that this stipulation of discontinuance requires no money to be paid by the petitioners and therefore, ipso facto, their refusal to sign the stipulation constitutes a failure to cooperate.
However, one has to ask why, if the plaintiffs in the underlying action are receiving no further funds from defendants, who have not even asked them to sign the stipulation of settlement, one would need anything more than a stipulation of discontinuance signed by their attorneys, as is the usual practice. Indeed, a simple motion before the trial court to dismiss the complaint based upon its settlement would suffice.
Obviously, it is important to someone that these litigants be silenced. Two of them, at the time of the settlement, were still on the Village Board. A third, the Village Treasurer, while not a voting member of the Board, remained in office at the time the settlement was reached. Our decision today means that these two elected officials and the Village Treasurer are prohibited *43from speaking against a proposal that they have opposed and must, instead, effectively commit perjury by stating that they have “no objections to the Village Stipulation” even though the public record shows otherwise. The better question here is why a village and its new board would insist on this promise of silence. A settlement of this size should invite vigorous debate, not suppress it.
Judges Graffeo, Read, Smith, Rivera and Abdus-Salaam concur with Chief Judge Lippman; Judge Pigott dissents in an opinion.
Order affirmed, with costs.

. The under lying actions were discontinued against Martinez.

. The majority assumes that the settlement was “reasonable”; however, I find no record support for this claim, as the parties had not engaged in pretrial discovery prior to the settlement.