Court Opinion

ID: 2745032
Source: CourtListenerOpinion
Date Created: 2014-10-23 14:09:47.886755+00
Date Added: 2024-06-11T09:54:03.282157
License: Public Domain

State of New York
                  Supreme Court, Appellate Division
                     Third Judicial Department
Decided and Entered: October 23, 2014                  517299
________________________________

HARRY V. BORST,
                      Plaintiff,
     v

INTERNATIONAL PAPER COMPANY,
                    Defendant.

SANDY KNOLLS, LLC, et al.,
                    Appellants.

(Action No. 1.)
_______________________________

In the Matter of ALBERT L.
   PRICE et al.,
                    Respondents,
      v

TOWN OF ARIETTA et al.,                    MEMORANDUM AND ORDER
                    Appellants.

SANDY KNOLLS, LLC, et al.,
                    Proposed
                    Intervenors-
                    Appellants.

(Proceeding No. 1.)
                                 -2-              517299

________________________________

In the Matter of ALBERT L.
   PRICE et al.,
                    Respondents,
      v

TOWN OF ARIETTA,
                    Appellant.

SANDY KNOLLS, LLC, et al.,
                    Proposed
                    Intervenors-
                    Appellants.

(Proceeding No. 2.)
________________________________

Calendar Date:   September 10, 2014

Before:   Lahtinen, J.P., McCarthy, Rose, Lynch and Devine, JJ.

                            __________

      McPhillips, Fitzgerald & Cullum, LLP, Glens Falls (Dennis
J. Phillips of counsel), for appellants and proposed intervenors-
appellants.

     Robert M. Cohen, Ballston Lake, for respondents.

                            __________

Devine, J.

      Appeals (1) from an order of the Supreme Court (Aulisi,
J.), entered March 22, 2013 in Hamilton County, which, in action
No. 1, denied a motion by Sandy Knolls, LLC to vacate a prior
judgment of the court, (2) from a judgment of said court, entered
March 22, 2013 in Hamilton County, which, among other things,
granted petitioners' application, in combined proceeding No. 1
pursuant to CPLR article 78 and action for declaratory judgment,
for, among other things, a declaration that respondents must
comply with the judgment in action No. 1, (3) from an order of
said court, entered March 22, 2013 in Hamilton County, which, in
                              -3-                517299

combined proceeding No. 1 pursuant to CPLR article 78 and action
for declaratory judgment, among other things, denied motions by
Sandy Knolls, LLC and Piseco Lake Association for leave to
intervene, and (4) from a judgment of said court, entered April
12, 2013 in Hamilton County, which granted petitioners'
application, in proceeding No. 2 pursuant to CPLR article 78, to,
among other things, annul Local Law No. 1 (2011) of the Town of
Arietta.

      Following a bench trial conducted in 1930, Supreme Court
(Crapsor, J.) executed a judgment (hereinafter the Borst
judgment) in action No. 1 which, among other things, perpetually
enjoined defendant, International Paper Company (hereinafter
IPC), and its officers, employees or agents from closing a dam at
the outlet of Piseco Lake that was located on its real property
from June 25 to October 1 each year, as the usage of the dam
caused the water levels of the lake to rise, thereby impairing
the right of plaintiff, Harry V. Borst, to access all parts of
the beach on his property. Nearly 80 years after the Borst
judgment was executed, petitioners commenced a hybrid CPLR
article 78 proceeding and declaratory judgment action (proceeding
no. 1) seeking, among other things, a judicial declaration that
the manner in which respondents regulated the water level of the
lake caused damage to petitioners' properties and was in
violation of the injunctive relief provided in the Borst
judgment.1 Joinder of issue occurred and the parties attempted
to reach a settlement of the matter; such efforts, however, were
abandoned and Supreme Court (Aulisi, J.) granted the petition and
directed petitioners to submit a proposed judgment on notice to
respondents. Before Supreme Court executed the final judgment,
however, respondents moved to reargue their opposition to the
petition and the Piseco Lake Association (hereinafter PLA) and
Sandy Knolls, LLC each moved for leave to intervene in proceeding
No. 1. Supreme Court denied the applications and, subsequently,

    1
        Respondent Town of Arietta Lake Level Regulating
Committee is comprised of the Town Supervisor, Town Zoning
Officer, President of the Piseco Fish & Game Club and two year-
round residents and one seasonal resident of respondent Town of
Arietta.
                              -4-                517299

issued judgment granting the petition. Around the time that the
court was considering the motions submitted in proceeding No. 1,
Sandy Knolls moved, by order to show cause in action No. 1, to
vacate the Borst judgment, asserting, among other things, that
material factual changes that occurred in the decades since its
entry had rendered the permanent injunction afforded in the Borst
judgment inequitable. Supreme Court ultimately denied the
motion. Thereafter, petitioners commenced a second combined CPLR
article 78 proceeding and declaratory judgment action (proceeding
no. 2) seeking to annul Local Law No. 1 (2011) of the Town of
Arietta (hereinafter Local Law No. 1). Supreme Court granted the
petition, by annulling Local Law No. 1 insofar as it was
determined to contravene the injunctive dictates set forth in the
Borst judgment. These appeals ensued.2

      We first address Supreme Court's denial of the respective
intervenor motions of the PLA and Sandy Knolls, who now argue
that Supreme Court's denial of said motions constituted an abuse
of the court's discretion and, further, that the court erred in
failing to join them as necessary parties to both proceedings.3
"Pursuant to CPLR 7802 (d), a court may allow other interested
persons to intervene" in proceedings brought against public
agencies (Matter of Greater N.Y. Health Care Facilities Assn. v
DeBuono, 91 NY2d 716, 720 [1998] [internal quotation marks
omitted]). Further, intervention is to be granted as of right in
any action or proceeding where a nonparty demonstrates that its

    2
        To the extent that respondents' notice of appeal
indicates that they seek to appeal Supreme Court's order denying
their motion to reargue, no appeal lies from the denial of
reargument (see Mongardi v BJ's Wholesale Club, Inc., 45 AD3d
1149, 1151 [2007]). In any event, as the issue was not discussed
in their brief, it is deemed abandoned (see Kittner v Eastern
Mut. Ins. Co., 80 AD3d 843, 845 n 2 [2011], lvs dismissed 16 NY3d
890 [2011], 18 NY3d 911 [2012]).
    3
        The PLA and Sandy Knolls made respective motions to
intervene in proceeding No. 1. It appears that, thereafter,
proceeding No. 1 and proceeding No. 2 were joined by stipulation
of the parties.
                              -5-                517299

interest in the matter is not being duly represented and the
nonparty may be "bound by the judgment" (CPLR 1012 [a] [2]) or,
alternatively, may be permitted by the court "when the person's
claim or defense and the main action [or proceeding] have a
common question of law or fact" (CPLR 1013; see US Bank N.A. v
Gestetner, 74 AD3d 1538, 1541 [2010]).

      After learning that petitioners sought to prevent
respondents from utilizing the dam to regulate lake water levels,
several lakeshore property owners and individuals who regularly
used the lake notified the Town Board of respondent Town of
Arietta that they opposed the petition in proceeding No. 1. It
was only after Supreme Court granted the petition in proceeding
No. 1 that the PLA formally organized to represent the concerns
of hundreds of lake residents in the matter and advocate for
respondents' continued regulation of the lake. The PLA members
explained in their application that their rights and interests as
landowners would be harmed by the discontinued use of the dam and
that respondents' role in maintaining water levels was vital for
"navigational, recreational and construction purposes."
Likewise, David Henle, a member of Sandy Knolls, as successor in
title to the Borst lakefront property, insisted that Sandy
Knolls' intervention was warranted because, among other things,
an affirmance of the injunctive relief set forth in the Borst
judgment would jeopardize the condition of his lakefront
property, explaining that, in the absence of water level
regulatory action, "gross fluctuations that occurred . . . when
the lake went unregulated . . . caused flooding during the wet
season and/or the appearance of navigable hazards . . . during
drought conditions."

      Although requests for leave to intervene invoke a court's
discretionary authority (see Matter of Pace-O-Matic, Inc. v New
York State Liq. Auth., 72 AD3d 1144, 1145 [2010]; Matter of
Tennessee Gas Pipeline Co. v Town of Chatham Bd. of Assessors,
239 AD2d 831, 832 [1997]), the thorough and well-reasoned
submissions of the PLA and Sandy Knolls have shown that they have
a "'direct and substantial interest' in the outcome of this
litigation" and, therefore, Supreme Court erred in denying their
motions to intervene (Matter of Rent Stabilization Assn. of N.Y.
City v New York State Div. of Hous. & Community Renewal, 252 AD2d
                              -6-                517299

111, 116 [1998], quoting Matter of Pier v Board of Assessment
Review of Town of Niskayuna, 209 AD2d 788, 789 [1994]). Further,
inasmuch as the motions to intervene were filed in the months
after Supreme Court issued its order in proceeding No. 1, but
before the final judgment was rendered in that proceeding more
than a year and one half later, and approximately two years
before judgment was entered in proceeding No. 2, we do not agree
that denial of the motions on untimeliness grounds was
necessitated (see Bond v Giebel, 101 AD3d 1340, 1344 [2012], lv
dismissed 21 NY3d 884 [2013]; compare Carnrike v Youngs, 70 AD3d
1146, 1147 [2010]). Nor are there any indicia of undue prejudice
to petitioners that would warrant the exclusion of the proposed
intervenors from the matters (see Town of N. Elba v Grimditch, 96
AD3d 1305, 1306-1307 [2012]; see also Matter of White v
Incorporated Vil. of Plandome Manor, 190 AD2d 854, 855 [1993], lv
denied 83 NY2d 752 [1994]). In light of this determination, the
argument that the PLA and Sandy Knolls should have been joined as
necessary parties has become academic.

      Next, we consider Supreme Court's finding, in its judgment
granting the petition in proceeding No. 1, that collateral
estoppel principles precluded respondents from challenging the
Borst judgment. As a "narrower species of res judicata," the
equitable doctrine of collateral estoppel precludes a party from
retrying "an issue clearly raised in a prior action or proceeding
and decided against that party or those in privity" (Ryan v New
York Tel. Co., 62 NY2d 494, 500 [1984]; see Walter v White-Bonn,
Inc., 8 AD3d 715, 716 [2004]; Matter of Hickey v Sinnott, 277
AD2d 572, 573 [2000]). In this regard, privity is an amorphous
term not "susceptible to ease of application" (Buechel v Bain,
275 AD2d 65, 73 [2000], affd 97 NY2d 295 [2001], cert denied 535
U.S. 1096 [2002]), and a court's finding that differing parties are
in privity requires consideration of "the character, right and
extent of a party's role in one proceeding as it bears on the
intervention of the collateral estoppel doctrine in another"
(David v Biondo, 92 NY2d 318, 324 [1998]). Although petitioners
have made a minimal showing that there was an identity of issues
considered in the Borst action and in proceeding no. 1 – namely
that the maintenance and usage of a dam to control water levels
by IPC and respondents affected petitioners' rights to use and
enjoy their lakefront properties – respondents were never given
                              -7-                517299

"a full and fair opportunity to contest the decision now said to
be controlling" in action No. 1 (Buechel v Bain, 97 NY2d 295, 304
[2001], cert denied 535 U.S. 1096 [2002]), nor were their interests
properly represented by IPC, as defendant in the Borst action, so
as to warrant the application of collateral estoppel (see Green v
Santa Fe Indus., 70 NY2d 244, 253-254 [1987]; State of New York v
Zurich Amer. Ins. Co., 106 AD3d 1222, 1223-1224 [2013]; compare
Matter of Corporate Woods 11, LP v Board of Assessment Review of
the Town of Colonie, 83 AD3d 1250, 1252-1253 [2011], lv denied 17
NY3d 707 [2011]).

      Within the context of the Borst litigation, IPC asserted,
as an affirmative defense, that its construction and use of the
dam, which was done ostensibly for corporate purposes, was
sustainable under adverse possession principles. Such position,
however, is completely at odds with that of respondents, which
were granted an express easement from IPC's successors in
interest to operate the dam and regulated the water levels of the
lake in the name of environmental preservation and to benefit the
majority of local property owners and members of the general
public. Based upon the vastly conflicting positions taken by
respondents and IPC in these respective matters, we find that
Supreme Court erred in granting the petition in proceeding No. 1
on collateral estoppel grounds (see Matter of Juan C. v Cortines,
89 NY2d 659, 667-669 [1997]; State of New York v Zurich Am. Ins.
Co., 106 AD3d at 1223-1224). Furthermore, although the court
found that, because the Borst judgment has long been in
existence, Sandy Knolls was precluded from challenging it under
the doctrine of laches, we find the opposite to be true. As an
equitable defense, the doctrine – "based on a lengthy neglect or
omission to assert a right and the resulting prejudice to an
adverse party" – bars petitioners from seeking to enforce the
Borst judgment after such a significant delay and the resulting
prejudice to respondents (Saratoga County Chamber of Commerce v
Pataki, 100 NY2d 801, 816 [2003], cert denied 540 U.S. 1017 [2003];
see Matter of Boland v Town of Northampton, 25 AD3d 848, 848-849
[2006]).

      Respondents, Sandy Knolls and the PLA further argue that
Supreme Court abused its discretion in denying Sandy Knolls'
motion, submitted in action No. 1, to vacate the Borst judgment.
                              -8-                517299

We agree. A court may vacate a judgment "upon such terms as may
be just, on motion of any interested person . . . upon the ground
of . . . newly-discovered evidence which . . . could not have
been discovered in time to move for a new trial" (CPLR 5015 [a]
[2]; see Matter of American Comm. for Weizmann Inst. of Science v
Dunn, 10 NY3d 82, 95-96 [2008]; Pritchard v Curtis, 101 AD3d
1502, 1503 [2012]; Maddux v Schur, 53 AD3d 738, 739 [2008]).
Courts are not limited to vacating a judgment pursuant to the
enumerated grounds set forth in CPLR 5015, however, as they
"retain inherent discretionary power to vacate their own
judgments for sufficient reason and in the interests of
substantial justice" (Gurin v Pogge, 112 AD3d 1028, 1030 [2013]
[internal quotation marks and citations omitted]). Shortly after
the Borst judgment was entered, Borst, on more than one occasion,
recognized that, without the use of the dam during the summer
months, the lowered water levels of Piseco Lake harmed other
lakefront property owners and he, therefore, gave permission to
IPC to dam the lake in order to restore the water levels. In
fact, it is undisputed that the dam was operated by respondents
and their predecessors, without any documented complaint, during
the summer months since the 1960s until petitioners, after having
taken issue with respondents' methods of gauging and regulating
water levels, commenced these enforcement proceedings. Despite
the evidence that, in the decades following the execution of the
Borst judgment, Sandy Knolls – as partial successor to the Borst
property – and a majority of lakefront property owners had
expressed a clear interest in the continued operation of the dam
in order to stabilize water levels, Supreme Court found that the
importance of ensuring that the Borst judgment maintained its
"element of finality" was a prevailing concern. We disagree with
the court's reasoning in this regard and, thus, find that vacatur
of the Borst judgment in the interest of justice is warranted
under the facts and circumstances (see Nicholas v Consolidated
Edison Co. of N.Y., 100 AD2d 957, 958 [1984]; Matter of Mento, 33
AD2d 650, 651 [1969]; compare Maddux v Schur, 53 AD3d at 739).

      Finally, we consider Supreme Court's judgment annulling
Local Law No. 1. Finding that petitioners had a vested right in
the injunctive relief that was afforded in the Borst judgment,
the court annulled Local Law No. 1 "to the extent that it fails
to comply with the [Borst] [j]udgment." The provisions of Local
                              -9-                517299

Law No. 1, however, merely created a five-member commission whose
stated purpose was to, among other things, "maintain, restore and
renew the Piseco Outlet Dam and thereby to regulate the water
level of Piseco Lake for all appropriate residential,
conservation, health and recreational purposes." The law, which
had an immediate effective date, further provided that commission
determinations could be appealed to the Town Board. As
petitioners failed to demonstrate how the local legislative
enactment violated any provisions of the now-vacated Borst
judgment, Supreme Court erred in declaring that Local Law No. 1
is invalid. As the court failed to consider petitioners' other
challenges to Local Law No. 1, including that its promulgation
was in violation of lawful procedures and that the Town failed to
satisfy certain requirements of the State Environmental Quality
Review Act (see ECL art 8), we must remit proceeding No. 2 to
Supreme Court for further proceedings related to the petition's
outstanding claims.

      We have considered the balance of the parties' claims and,
to the extent not specifically addressed herein, have found them
to be without merit or otherwise rendered academic.

     Lahtinen, J.P., McCarthy, Rose and Lynch, JJ., concur.

      ORDERED that the order entered March 22, 2013 in action No.
1 is reversed, on the law, without costs, and motion to vacate
granted.

      ORDERED that the order entered March 22, 2013 in proceeding
No. 1 is modified, on the law, without costs, by reversing so
much thereof as denied motions by Sandy Knolls, LLC and Piseco
Lake Association to intervene; motions granted and said entities
are permitted to intervene in the proceedings; and, as so
modified, affirmed.

      ORDERED that the judgment entered March 22, 2013 in
proceeding No. 1 is reversed, on the law, without costs, and
petition dismissed.
                              -10-                 517299

      ORDERED that the judgment entered April 12, 2013 is
reversed, on the law, without costs, and matter remitted to the
Supreme Court for further proceedings not inconsistent with this
Court's decision.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court