Paul Marinaccio, Sr., Respondent,v.Town of Clarence, Defendant, Kieffer Enterprises, Inc., Appellant.BriefN.Y.February 5, 20130 To be Argued by: MICHAEL B. POWERS, ESQ. Estimated Time for Argument: (20 Minutes) STATE OF NEW YORK Court of Appeals PAUL MARINACCIO, SR., Plaintiff-Respondent, vs. TOWN OF CLARENCE, Defendant, and KIEFFER ENTERPRISES, INC., Defendant-Appellant. Appellate Division Docket Number: CA 10-00292. Erie County Index No.: I-2006-006978. BRIEF FOR DEFENDANT-APPELLANT KIEFFER ENTERPRISES, INC. PHILLIPS LYTLE LLP MICHAEL B. POWERS, ESQ., Of Counsel PATRICIA A. MANCABELLI, ESQ., Of Counsel Attorneys for Defendant-Appellant Kieffer Enterprises, Inc. 3400 HSBC Center Buffalo, New York 14203 Telephone: (716) 847-8400 Facsimile: (716) 852-6100 Date of Completion: June 29, 2012. BATAVIA LEGAL PRINTING, INC.— Telephone (866) 768-2100 - i - DISCLOSURE STATEMENT Pursuant to 22 NYCRR 500.1(f), defendant-appellant Kieffer Enterprises, Inc. advises the Court that it has no parents, subsidiaries or affiliates. - ii - TABLE OF CONTENTS Page DISCLOSURE STATEMENT .................................................................................. i TABLE OF AUTHORITIES ..................................................................................... v QUESTIONS PRESENTED ...................................................................................... 1 JURISDICTIONAL STATEMENT .......................................................................... 3 STATEMENT OF FACTS ........................................................................................ 4 Background ...................................................................................................... 4 Kieffer’s Compliance With All Federal, State And Local Regulations .......... 8 The Town’s Easement ................................................................................... 11 Plaintiff Was Aware Of The Easement Since 1995, But Denied Its Existence To The Trial Court ........................................................................ 18 The Trial Court Precluded Proof Of The Easement ...................................... 22 Plaintiff And His Counsel Violated The Trial Court’s Order That All Counsel And All Witnesses Make “No Mention” Of The Easement At Trial ................................................................................................................ 23 The Trial Court Precluded Defendants From Calling Their Expert Damages Witness ........................................................................................... 24 The Trial Court Instructed The Jury That It Could Not Consider Proof That Kieffer Acted Reasonably Based Upon His Engineer’s Advice And Accepted Engineering Practices ............................................................ 26 The Trial Court Instructed The Jury To Disregard Proof That Plaintiff Caused The Subject Flooding By Not Maintaining His Ditch Or His Surrounding Land .......................................................................................... 27 The Verdict And Judgment ............................................................................ 28 The Appellate Division Decision .................................................................. 29 - iii - ARGUMENT ........................................................................................................... 30 POINT I PLAINTIFF OFFERED NO PROOF OF WILLFUL, WANTON OR MALICIOUS CONDUCT BY KIEFFER ...... 30 A. Applicable Legal Standard .............................................................. 30 B. Kieffer’s Compliance With All Federal, State And Local Laws And Regulations Requires Vacatur Of The Punitive Damages Award .............................................................................. 32 POINT II THE TRIAL COURT’S PRECLUSION OF THE EASEMENT AND THE APPELLATE DIVISION’S HOLDING THAT THIS PRECLUSION WAS “IRRELEVANT” CONSTITUTE REVERSIBLE ERROR ..................................................................................... 37 A. Defendants Were Not Required To Plead The Easement’s Existence As An Affirmative Defense Because Plaintiff Was Fully Aware Of It And Not Surprised ............................................. 37 B. Defendants Did Allege In Their Answers That They Had Permission To Drain Water Onto Plaintiff’s Land ......................... 39 C. Plaintiff’s Failure To Disclose The Easement In Response To Defendants’ Discovery Demands Should Have Barred Him From Seeking Preclusion ................................................................. 40 D. The Trial Court Should Have Taken Judicial Notice Of The Easement .......................................................................................... 40 E. The Appellate Division Erred In Holding Preclusion Of The Easement To Be “Irrelevant” .......................................................... 41 POINT III THE TRIAL COURT’S ALLOWANCE OF PLAINTIFF’S UNTRUTHFUL TESTIMONY AND PLAINTIFF’S COUNSEL’S IMPROPER ARGUMENT AFTER ORDERING THAT NO ONE MENTION THE EASEMENT WAS REVERSIBLE ERROR ........................... 45 POINT IV THE TRIAL COURT ERRONEOUSLY PRECLUDED THE DEFENSE EXPERT’S DAMAGES TESTIMONY ....... 47 - iv - A. The Trial Court Erred In Holding Kieffer Was Required To Make Expert Disclosure When None Was Requested .................... 47 B. Plaintiff Admittedly Failed To Comply With 22 NYCRR 202.7 ................................................................................................ 48 C. Plaintiff Offered No Proof Of Intentional Or Willful Failure To Disclose ...................................................................................... 51 D. Defendant’s Expert Testimony On Damages Was Relevant To The Punitive Damage Claim ...................................................... 52 POINT V INSTRUCTING THE JURY TO IGNORE PROOF OF KIEFFER’S RELIANCE UPON HIS ENGINEERS AND SOUND ENGINEERING PRACTICES WAS ERROR ..................................................................................... 54 POINT VI THE TRIAL COURT ERRONEOUSLY DIRECTED THE JURY TO DISREGARD PROOF THAT PLAINTIFF CAUSED HIS OWN FLOODING ..................... 56 A. The Parties Agreed That Justice Makowski’s Rulings Would Be Binding In The Second Trial, Including His Finding That This Proof Was Admissible ............................................................. 56 B. The Jury Should Have Been Allowed To Consider The Overwhelming Proof That Plaintiff Caused His Own Flooding ........................................................................................... 57 CONCLUSION ........................................................................................................ 63 - v - TABLE OF AUTHORITIES Page CASES Amherst Synagogue v. Schuele Paint Co., Inc., 30 A.D.3d 1055 (4th Dep’t 2006) ....................................................................... 49 Baez v. Sugrue, 300 A.D.2d 519 (2d Dep’t 2002) ........................................................................ 50 Bell v. Liberty Drug Co., 16 A.D.2d 809 (2d Dep’t 1962) .............................................................. 31, 52, 54 Bliss v. Consol. Edison Co. of N.Y., Inc., 2010 NY Slip Op 51364(U) (Sup. Ct., N.Y. Cnty., July 1, 2010)...................... 48 Bromberg v. City of N.Y., 25 A.D.2d 885 (2d Dep’t 1966) .......................................................................... 46 Camillo v. Geer, 185 A.D.2d 192 (1st Dep’t 1992) ....................................................................... 31 Carlson v. Porter, 53 A.D.3d 1129 (4th Dep’t 2008) ....................................................................... 51 Clark v. City of Rochester, 25 A.D.2d 713 (4th Dep’t 1966) ......................................................................... 57 Collins v. Greater N.Y. Savs. Bank, 194 A.D.2d 514 (2d Dep’t 1993) ........................................................................ 48 Colombini v. Westchester Cnty. Healthcare Corp., 24 A.D.3d 712 (2d Dep’t 2005) .......................................................................... 32 Fine Ornaments, Inc. v. Esplanade Gardens, Inc., 248 A.D.2d 287 (1st Dep’t 1998) ....................................................................... 48 Finnegan v. Brothman, 270 A.D.2d 808 (4th Dep’t 2000) ....................................................................... 57 Garricks v. City of N.Y., 1 N.Y.3d 22 (2003) ................................................................................. 31, 52, 54 - vi - Gordon v. Hancock, 292 A.D.2d 858 (4th Dep’t 2002) ....................................................................... 50 Green Bus Lines, Inc v. Consol. Mut. Ins. Co., 74 A.D.2d 136 (2d Dep’t 1980) .......................................................................... 39 Harbor Hills Landowners v. Manelski, 65 Misc. 2d 682 (Dist. Ct. Suffolk Cnty 1970) .................................................. 41 In re N.Y. Diet Drug Litig., 47 A.D.3d 586 (1st Dep’t 2008) ......................................................................... 45 Kane v. Shapiro, Rosenbaum, Liebschutz & Nelson, L.L.P., 57 A.D.3d 1513 (4th Dep’t 2008) ....................................................................... 49 Kerhonkson Lodge, Inc. v State, 4 A.D.2d 575 (3d Dep’t 1957) ............................................................................ 54 Kiff v. Youmans, 86 N.Y. 324 (1881) ................................................................................. 57, 58, 62 Laurie Marie M. v. Jeffrey T. M., 159 A.D.2d 52 (2d Dep’t 1990), aff’d, 77 N.Y.2d 981 (1991) .......................... 30 Law v. Moskowitz, 279 A.D.2d 844 (3d Dep’t 2001) ........................................................................ 50 Levine v. Abergel, 127 A.D.2d 822 (2d Dep’t 1987) .................................................................. 57, 62 Longo v. Armor Elevator Co., 307 A.D.2d 848 (1st Dep’t 2003) ................................................................. 32, 33 Marchione v. Greenky, 5 A.D.3d 1044 (4th Dep’t 2004) ......................................................................... 51 McCann v. McCann, 110 A.D.2d. 1069 (4th Dep't 1985) ........................................................ 31, 52, 54 Mirand v. City of N.Y., 84 N.Y.2d 44 (1994) ........................................................................................... 57 - vii - N.Y. Univ. v. Cont’l Ins. Co., 87 N.Y.2d 308 (1995) ............................................................................. 30, 33, 36 Nickerson v. Winkle, 161 A.D.2d 1123 (4th Dep’t 1990) ................................................... 31, 52, 54, 57 Nunn v. GTE Sylvania, Inc., 251 A.D.2d 1089 (4th Dep’t 1998) ..................................................................... 40 Perry v. Town of Geneva, 64 A.D.3d 1225 (4th Dep’t 2009) ....................................................................... 40 Peterson v. Melchiona, 269 A.D.2d 375 (2d Dep’t 2000) ........................................................................ 45 Petracca v. Petracca, 305 A.D.2d 568 (2d Dep’t 2003) ........................................................................ 49 Pizzi v. Anzalone, 261 A.D.2d 374 (2d Dep’t 1999) ........................................................................ 45 Prego v. Gutchess, 61 A.D.3d 1394 (4th Dep’t 2009) ....................................................................... 44 Prozeralik v. Capital Cities Commc’ns. Inc., 82 N.Y.2d 466 (1993) ......................................................................................... 31 Rocanova v. Equitable Life Assurance Soc’y of the United States, 83 N.Y.2d 603 (1994) ......................................................................................... 30 Ross v. Louise Wise Servs., Inc., 8 N.Y.3d 478 (2007) ........................................................................................... 31 Ruzycki v. Baker, 9 A.D.3d 854 (4th Dep’t 2004) ........................................................................... 51 Sharapata v Town of Islip, 56 N.Y.2d 332 (1982) ......................................................................................... 30 Shouse v. Lyons, 4 A.D.3d 821 (4th Dep’t 2004) ........................................................................... 45 - viii - Siwek v. Mahoney, 39 N.Y.2d 159 (1976) ......................................................................................... 40 St. Hilaire v. White, 305 A.D.2d 209 (1st Dep’t 2003) ....................................................................... 51 Trefoil Capital Corp. v. Creed Taylor, Inc., 121 A.D.2d 874 (1st Dep’t 1986) ....................................................................... 40 Tronolone v. Praxair, Inc., 39 A.D.3d 1146 (4th Dep’t 2007) ....................................................................... 52 Williams v. Way, 289 A.D.2d 483 (2d Dep’t 2001) ........................................................................ 49 Witter v. Taggart, 78 N.Y.2d 234 (1991) ................................................................................... 38, 41 STATUTES CPLR 3018(b) .......................................................................................................... 37 CPLR 3101(d) .............................................................................................. 47, 48, 51 CPLR 3126 ............................................................................................................... 40 CPLR 5601(a) ............................................................................................................ 3 OTHER AUTHORITIES 22 NYCRR 202.7 ..................................................................................... 2, 48, 49, 50 QUESTIONS PRESENTED 1. Did the Appellate Division err in affirming the judgment imposing punitive damages against Kieffer Enterprises Inc. (“Kieffer”) where the undisputed proof at trial was that Kieffer complied with all regulations, requirements, rules, orders and directions imposed by all regulating authorities, including the Army Corps of Engineers (“Army Corps”), the New York State Department of Environmental Conservation (“DEC”), and the Town of Clarence (“Town”)? 2. Did the Appellate Division err in affirming the judgment imposing punitive damages against Kieffer for draining water onto plaintiff’s land where an easement allowed that drainage? 3. Did the Appellate Division err in affirming the trial court’s order precluding evidence of the easement on the basis that it surprised plaintiff when, in fact, plaintiff had both actual and constructive knowledge of it? 4. Did the Appellate Division err in determining that it was irrelevant that the trial court, after ordering the parties and counsel not to mention the easement, permitted plaintiff and his counsel to misinform the jury repeatedly that defendants needed an easement but none existed? 5. Did the Appellate Division err in affirming the trial court’s order precluding Kieffer’s damages expert from testifying on the ground that - 2 - Kieffer failed to provide expert disclosure even though plaintiff had not requested expert disclosure of Kieffer, failed to satisfy 22 NYCRR 202.7 and offered no proof of intentional or willful failure to disclose? 6. Did the Appellate Division err in approving the trial court’s instruction to the jury that plaintiff had no duty to maintain his ditch and surrounding property in a manner that would have avoided the subject flooding? 7. Did the Appellate Division err in approving the trial court’s instruction directing the jury to ignore proof that Kieffer acted reasonably in relying on his engineers and sound engineering practices in developing the drainage plan approved by the Town? - 3 - JURISDICTIONAL STATEMENT This Court has subject matter jurisdiction over this appeal because all requirements of CPLR 5601(a) are satisfied. First, the action originated from the New York Supreme Court, Erie County Index No. 2006-6978. R. 4979. Second, the action was finally determined by the Appellate Division Order because it affirmed a judgment entered following a jury verdict. R. 7-13. Third, two justices of the Appellate Division dissented on a question of law in favor of the Defendant- Appellant Kieffer Enterprises, Inc. (“Kieffer”). R. 10a-12a. Citations to the Record showing preservation of each issue raised in this appeal are set forth in the appropriate arguments and incorporated herein by reference. - 4 - PRELIMINARY STATEMENT This appeal arises from an action by plaintiff for damages caused by water drained into a ditch on plaintiff’s land by defendant Town of Clarence (“Town”) from a subdivision developed by Kieffer. The Town possessed an easement permitting it to do so. Nonetheless, while the full assessed value of plaintiff’s land was $200,000, a jury awarded plaintiff compensatory damages of $1,313,600 against the Town, and $328,400 compensatory and $250,000 punitive damages against Kieffer. After denial of defendants’ post trial motions and entry of judgment, the defendants’ insurance carriers settled all but the punitive damages claim. Kieffer appealed the $250,000 punitive damages award. By decision and order entered December 30, 2011, the Appellate Division affirmed with two dissents, and this appeal followed. STATEMENT OF FACTS Background This matter arose when Kieffer tried to develop lots on a parcel of property in Clarence, New York. R. 78-79. Kieffer was a small residential real estate development company operated by 82 year old Bernard Kieffer. R. 1649. Kieffer was dissolved four to six years prior to trial and has no assets. R. 1883. - 5 - The project, known as Lexington Woods, was built in Phases I, II and III. R. 1650-51. Phase III is directly west of land owned by plaintiff. R. 802, 1512. Plaintiff built a house on the northeast portion of his land, fronting Lapp Road. R. 645-46. Below is a copy of Trial Exhibit GGG, a photograph of plaintiff’s land, with the house on the lower left. R. 4934. To the east of plaintiff’s land is a farm owned by the Kelkenbergs. R. 740. The drainage ditch and easement at issue are located on the west side of plaintiff’s property. R. 4934. (For ease of reference, Kieffer has added blue labeling and blue arrows to Trial Exhibit GGG (R. 4934), including an arrow pointing to the subject ditch and easement.) [The remainder of this page intentionally left blank.] - 6 - To pursue the Lexington Woods project, Kieffer was required to comply with numerous Federal, State, and local regulations. Kieffer did so. Because it was the Town’s responsibility to ensure that all subdivision regulations were followed (R. 337), Kieffer was required to do exactly what the Town required (R. 1651), including complying with all directions from the Town Engineer, - 7 - Joseph Latona. R. 323-24. Kieffer dealt directly with Mr. Latona and the Town Planner, James Callahan, to ensure compliance with all requirements. R. 1653. Kieffer’s design and soil engineering experts worked with the Town and Army Corps to ensure compliance with those requirements. R. 1651. [The remainder of this page intentionally left blank.] - 8 - Kieffer’s Compliance With All Federal, State And Local Regulations Kieffer retained Bissell & Stone, an engineering and surveying firm, to draft concept, design and engineering plans, including all required drainage and storm water designs, plans and calculations. R. 99, 256, 1651, 1654. The drainage calculations were designed to allow storm water to flow out of the Lexington Woods detention ponds at a controlled rate (the ten-year storm rate for the undeveloped parcel) (R. 1543-44) and into a drainage ditch on the western border of plaintiff’s land (R. 115), north to Lapp Road, where water had drained from the surrounding properties for at least 50 years. R. 1419, 1437- 39. The drainage plan ensured that water would not drain into the subject drainage ditch at a greater rate than had occurred during the ten years preceding the development. R. 1543-44. In performing its drainage calculations, Bissell & Stone relied upon the Erie-Niagara County Storm Drain Design Manual (the “Manual”), as the Town required. R. 4460-62. Plaintiff’s construction engineering expert (R. 861-63) agreed that Bissell & Stone’s drainage calculations complied with the Manual. R. 1167-69. Plaintiff’s wetlands expert, Scott Livingstone of Earth Dimensions, agreed that Bissell & Stone’s compliance with the Manual was in accordance with generally accepted engineering practices. R. 1017, 1216. - 9 - These plans were submitted to the Town for review and approval. R. 1371-72, 1654-55, 4403-10. The Town’s approval was necessary before Kieffer could construct the subdivision and implement his drainage plan, which included allowing water to cross plaintiff’s property. R. 285-86, 1389-90. In that regard, the Town agreed that it was its responsibility, not Kieffer’s, to assure that an easement was in place allowing water to drain into plaintiff’s ditch. R. 275-81, 387-88, 396-99, 509, 512-520, 1423. Kieffer relied upon the Town to secure that easement. R. 275, 277-81. To secure the Town’s approval, Kieffer was required to comply with all regulations and directions of the Army Corps. R. 220-21, 465, 1531-33. As part of that process, the Town Board and the Town Planning Board reviewed the wetland and drainage issues with the Army Corps. R. 493-94. The Town also directed Kieffer to address all wetland and drainage impacts identified by the Army Corps. R. 465. Accordingly, Kieffer hired a soil expert, Earth Dimensions (the same entity that employed plaintiff’s wetlands expert), to perform the required wetland delineations and ensure compliance with drainage regulations. R. 995-97. Earth Dimensions worked directly with the Army Corps to ensure that all wetland and drainage issues were properly addressed. R. 221. Earth Dimensions also worked directly with Bissell & Stone, Kieffer’s design engineer, to ensure the - 10 - actual wetland work was done properly (R. 996). Both assisted Kieffer in obtaining all necessary permits from the Army Corps. R. 995. The Town also required Kieffer to comply with all State wetland and drainage regulations. Kieffer secured town maps and instructed his attorney to do independent research to ensure that all wetland and drainage issues were addressed. R. 495, 1651-52. The Town Board and Planning Board reviewed the wetland and drainage issues with the DEC as well. R. 493-94. Kieffer performed the required SEQRA review (R. 494-95) and satisfied all New York State SPDES permits requirements, which are the State’s storm water requirements. R. 997. Kieffer used Mr. Livingston of Earth Dimensions (plaintiff’s wetland expert) to assist with those issues. Id. Mr. Livingston assured Kieffer that the volume required of the detention pond to ensure proper drainage was 45,720 cubic feet and that the pond was built to hold 54,200 cubic feet. R. 1377, 1530-31. The pond, therefore, was sufficient to comply with the engineering analysis. R. 1531. The Town also reviewed Kieffer’s plans and designs to ensure compliance with generally accepted engineering standards. R. 1370-71. As part of that process, the Town required modifications to Phases II and III of the development. R. 391-93, 1389, 1654. Kieffer made those modifications and complied with all related requirements. R. 1654. - 11 - Following completion of the SEQRA review and satisfaction of all SPDES, Army Corps and Town requirements, the Planning Board approved the subdivision design, as did the Town Board. R. 523. The Town approved the development plan on July 26, 2000. R. 520. As part of that approval, the Town gave Kieffer permission to drain water into the ditch on plaintiff’s land. R. 285-86, 1389-90. Thereafter, the Town took ownership of the roads and drains in Lexington Woods. R. 354-57. The flooding alleged by plaintiff occurred after the Town took ownership, in November 2000, of those roads and drains alleged to have caused the flooding. R. 4439, 4465, 4963, 5933-37. Even plaintiff claimed that it was “the Town’s actions” that caused water to collect and flood his land. R. 658. Phase III was completed in 2006. R. 120-21. The Town’s Easement As part of its role in this project, the Town agreed to secure a drainage easement across plaintiff’s property. R. 275-81, 387-88, 396-99, 509, 512-20, 1423. The Town acknowledged that it was not Kieffer’s obligation to secure the easement. Id. The Town believed, albeit mistakenly, that it failed to secure that easement. R. 1388-89. In truth, the Town had been granted an easement – recorded in 1966 – to drain water onto plaintiff’s land exactly where the subject drainage occurred. R. 4392-94, 4946-48, 4952, 6034-45; see also Trial Exhibit GGG, infra at 6. The - 12 - recorded easement was granted for the express purpose of allowing water to drain into that ditch from “adjoining premises.” R. 4946-48, 4952. That easement and the map cover clearly describe and depict the location of the drainage easement from its starting point on sublot 6 in the Woodside Subdivision, north through what is now Lexington Woods Phase II, continuing north along Lexington Woods Phase III on the western boundary of plaintiff’s land, and running further north on the western portion of plaintiff’s land to Lapp Road. The easement states quite clearly: WITNESSETH: That the First Parties in consideration of the sum of One ($1.00) dollar and no more, lawful money of the United States of America, paid to them by the Second Party, the receipt whereof is hereby acknowledged, do hereby grant and convey to the Second Party, its transferees and assigns, a right of way and easement for drainage purposes in, over and upon, certain premises in the Town of Clarence, Erie County, New York as follows: ALL THAT TRACT OR PARCEL OF LAND situate in the Town of Clarence, County of Erie and State of New York, being part of Lot 4, Section 12, Township 12, Range 6 of the Holland Land Company’s survey, more particularly bounded and described as follows: being an easement for drainage purposes, twelve feet in width, and extending northerly from a northeast corner of sublot six (6) and the most northerly corner subdivision Map entitled Woodside Subdivision, Part 1, filed in Erie County Clerk’s office on the 2nd day of April 1966, - 13 - under cover of Map[s] No. 2225, north to Lapp Road. The First Parties hereby covenant that the Second Party, its transferees and assigns, shall have the right at all times to enter in and upon the above described premises and to do all things necessary, reasonable and proper thereon in order to establish, maintain or, from time to time, repair, replace or remove a drainage ditch for the disposal and dispersal of surface waters from the adjoining premises. The First Parties, for themselves, their heirs, executors, transferees and assigns, covenant that they will do nothing to interfere with the rights and privileges hereinabove granted to Second Party. TO HAVE AND TO HOLD the said right of way and easement for drainage purposes to the Second Party, its transferees and assigns, for its use forever. IN WITNESS WHEREOF, we have hereunto set our hands and seals, on the day and date first above written. R. 4946-47 (emphasis added). Map cover 2225 provides a visual explanation of the easement’s terms. R. 4952 (Court Exhibit 6). Per the recorded easement, the 12-foot drainage easement starts at the northeast corner of Woodside Subdivision sublot 6 and proceeds north to Lapp Road. R. 4946-48. Map cover 2225 records the easement’s starting point – the northeast corner of sublot 6 – and shows the easement proceeding north from that point, referring to it as both a “12’ DRAINAGE EASEMENT, NATURAL DRAINAGE TO LAPP ROAD” and an “EXIST. DITCH.” R. 4952 (Court Exhibit 6). - 14 - Map cover 2225 also contains a “LOCATION PLAN + DRAINAGE EASEMENT MAP” that identifies, with an arrow, the location of the easement in proximity to plaintiff’s land and Lapp Road. Id. Referring to it as an “EXISTING FARM DITCH,” the arrow points directly to the ditch that runs along the western boundary of plaintiff’s land, continuing north through the western portion of plaintiff’s land to Lapp Road. Id. (emphasis added). One of plaintiff’s own documents, Trial Exhibit A-1 (“A-1”), depicts the location of the drainage ditch and easement clearly. R. 4878. A-1 is the concept plan, prepared by plaintiff’s engineer, that plaintiff submitted to the Town in January 2006 with his application for development of a 13-lot subdivision on his land. R. 659-60. Referenced in the Record at 4878, A-1 is an oversized map that will be handed up to the Court with the Record. Per the Legend on A-1, the “DIRECTION OF SURFACE RUNOFF FLOW” is depicted by black arrows. R. 4878. A line of black arrows shows the path of the drainage ditch and easement at issue, starting on the south end of the map, running north along Lexington Woods Phase III on the western boundary of plaintiff’s land, and running farther north through the western portion of plaintiff’s land to Lapp Road. Id. While the letters are small, the word “DITCH” appears five times along this path of black arrows as it proceeds north on plaintiff’s land to Lapp Road. Id. Per plaintiff’s testimony, - 15 - A-1 also shows the location of his house on the southeast portion of his land. Id.; R. 660. Excerpts of map cover 2225 (R. 4952 [Court Exhibit 6]) and A-1 (R. 4878) are reproduced below. (For ease of reference, on both exhibits, Kieffer has (1) circled and highlighted the North Arrow [engineer’s symbol that indicates north on the map], relevant text and the black arrows [on A-1 only] depicting the easement’s path north to Lapp Road, and (2) added red arrows and text boxes to point out (a) plaintiff’s eastern boundary, (b) plaintiff’s house and (c) the drainage ditch and the easement on the western boundary of plaintiff’s land, continuing north to Lapp Road.) [The remainder of this page intentionally left blank.] - 16 - - 17 - - 18 - Plaintiff Was Aware Of The Easement Since 1995, But Denied Its Existence To The Trial Court During discovery, the Town demanded production of “all boundary surveys of the property . . . .” R. 7412-14. Those boundary surveys would have disclosed the easement and its parameters. Plaintiff, however, never produced those surveys (or any other evidence of the easement). R. 7414-19. The day before trial, when searching his home for unrelated documents, Mr. Kieffer located a letter revealing that a prior owner of plaintiff’s land had, in 1966, formally granted the Town a permanent easement to drain water onto plaintiff’s property into the very drainage ditch at issue. R. 130-31, 4946-48, 4951-52. Kieffer’s trial counsel immediately brought the information to the trial court’s attention. Id. The trial court sent the jury home and ordered counsel to investigate and report back the next morning. R. 130-31. The following morning, plaintiff’s trial counsel admitted that Steven Baum, plaintiff’s real estate attorney at the time plaintiff purchased the subject property in 1995 (R. 809), had identified the easement in plaintiff’s title search. R. 136, 153. Plaintiff’s counsel also admitted that he possessed correspondence from Mr. Baum identifying an easement on plaintiff’s property. R. 136. Plaintiff’s counsel, however, misinformed the trial court that while there may be an easement on the east side of plaintiff’s land, there was “certainly not an easement on the west - 19 - side.” R. 137. As discussed below, both the easement and subject drainage ditch were indeed located on the west side of plaintiff’s land. Kieffer’s trial counsel then demanded to know if the easement was reflected in plaintiff’s title search (R. 150) and argued the severe prejudice it would suffer if plaintiff had not disclosed the easement. R. 150, 152. Plaintiff’s counsel responded that he had never been asked to produce a search or survey. R. 153. This was not true. As the record clearly shows, the Town served a Demand for Production of Documents on April 18, 2008 requesting production of plaintiff’s land surveys. R. 7412-13. Plaintiff responded on September 3, 2008 but failed to produce the surveys. R. 7414-19. When pressed, plaintiff’s counsel then claimed that plaintiff could not find his title search (R. 153) – even though this land was searched and surveyed when plaintiff acquired it in 1995 and again in 2002 when his wife conveyed full title to him in their divorce. R. 4562-64, 4946-48, 4952, 5179-90. When pressed further, plaintiff’s counsel claimed he had not spoken to Mr. Baum. R. 153. This was not true either. Upon review of plaintiff’s counsel’s time records in this matter, defendants discovered that he had consulted with Mr. Baum at least as early as February 1, 2007. R. 5949. The information submitted to the trial court, therefore, revealed beyond question that the Town possessed an easement that allowed it to drain - 20 - water from the Lexington Woods subdivision into the ditch on the western edge of plaintiff’s land, north to Lapp Road. The same information revealed that the easement running along the west side of plaintiff’s land is recorded in plaintiff’s chain of title and that plaintiff has had actual and constructive notice of it since 1995. The Appellate Division, however, committed a critical error, as a matter of law, in stating that a land survey showed the easement was located on the east side of plaintiff’s land. R. 9a-10a. It compounded the error by then holding that the following were “irrelevant to this case:” (a) the easement itself; (b) the trial court’s erroneous preclusion of proof of the easement; (c) Kieffer’s arguments concerning plaintiff’s and plaintiff’s counsel’s false statements to the jury that no easement existed; and (d) plaintiff’s and his counsel’s violation of the trial court’s gag order. R. 9a. In truth, there is no such survey and no reference to any such survey in any recorded title document. R. 4946-47, 5179-90. Nor is there proof in the Record where this purported survey (which plaintiff’s counsel produced for the first time in August 2009) came from, who created it or when. There is also no proof that plaintiff ever saw this document or relied on it. Remarkably, despite the irrefutable evidence of the easement’s true location, plaintiff’s counsel told the trial court that the easement on the west side - 21 - “does not affect the property.” R. 137. This was not true. As the recorded documents in plaintiff’s chain of title demonstrate, the easement in question runs along the west side of plaintiff’s land encompassing the subject drainage ditch, continuing north to Lapp Road (R. 4946-48, 4952, 5179-90) and, therefore, obviously affects the property. When defendants provided the trial court with these recorded documents, plaintiff’s counsel responded with two letters and the mysterious unidentified “survey.” R. 136. The letters, dated March 2, 1995 and April 25, 1995, were exchanged between Attorney Antonio Cardarelli, who is not identified, nor is his client, and former Clarence Town Attorney William Casilio, regarding an easement. R. 4949-50a. The “survey” purporting to show an easement on the east side of plaintiff’s land is unidentified, unverified, unauthenticated and unrecorded. It was produced by plaintiff for the first time on the eve of trial, and no proof was offered to show who prepared it, when, why or under what circumstances. Nor was any explanation offered as to why it or its contents contradicted the documents plaintiff’s own counsel recorded when plaintiff purchased this land in 1995, which clearly show the easement on plaintiff’s western boundary. This “survey” is troublesome to say the least. It was not produced in response to the Town’s discovery request of April 18, 2008. R. 7412-13. Moreover, plaintiff has offered no explanation for this. It is obviously an altered - 22 - copy of an original document as it has “Paul Marinaccio” handwritten on the top right. R. 4950a. Moreover, it contains a line drawn on the east side of plaintiff’s land which plaintiff claims depicts an easement. This obviously was not on the original because the original survey is dated September 16, 1989 with a “re- surveyed” date of April 17, 1994 (R. 4950a) and Mr. Caldarelli’s letter to the Town Attorney requesting a survey with the easement plotted is dated March 2, 1995, almost one year later. R. 4949. Obviously, therefore, the original 1989/1994 survey did not contain that line or any easement on the east side, at least as of March 2, 1995, the date of Mr. Caldarelli’s request. Id. Someone apparently added that line afterwards and there is no proof in the Record who, how, when or why – only plaintiff’s counsel’s unsupported arguments. Regardless, and it bears repeating, that all authenticated proof, including plaintiff’s own recorded documents, show the easement on the west side of plaintiff’s land. The Trial Court Precluded Proof Of The Easement Plaintiff moved to preclude defendants from offering proof of the easement, claiming incorrectly that he was surprised by the easement’s existence because defendants had not pled it as an affirmative defense. Defendants vigorously opposed plaintiff’s motion (R. 146-60) and moved for a mistrial to allow the parties an opportunity to conduct discovery concerning the easement that plaintiff had failed to disclose. R. 160-61. The trial - 23 - court, however, granted plaintiff’s motion, erroneously holding that plaintiff was surprised because defendants failed to allege in their answers that they were permitted to drain water onto plaintiff’s land. R. 163. In fact, defendants had alleged permission in their answers, plaintiff always had actual and constructive knowledge of the easement, and it was plaintiff who was asked to produce his land surveys and failed to do so. Plaintiff And His Counsel Violated The Trial Court’s Order That All Counsel And All Witnesses Make “No Mention” Of The Easement At Trial As part of its preclusion order, the trial court directed all witnesses and “all counsel” that there should be “no mention” made of the easement or its existence: THE COURT: I’m going to instruct all counsel -- I don’t know who is going to blurt out what here -- and I think everybody understands that preclusion means that there should be no mention made of the easement, the existence of the easement or anything like that. Please instruct any witness before they come up, if you’re going to call them, that they should not make mention of that easement. R. 169 (emphasis added). The trial court warned of “dire consequences” should anyone mention the easement. R. 170 (emphasis added). Plaintiff, however, in violation of that Order, testified untruthfully, and his counsel improperly argued to the jury, that no easement existed. R. 612- 13, 722-23. In fact, plaintiff’s counsel told the jury in his closing that the “most striking” thing about the case was that defendants did not have an easement. - 24 - R. 1740 (emphasis added). He then misinformed the jury that this was based on “undisputed evidence.” Id. (emphasis added). Plaintiff’s counsel then audaciously stated, still fully aware of the trial court’s gag order, that defendants had failed to address “the simple fact” that no easement existed: So there’s a requirement in the Town of Clarence that easements had to be obtained, and the simple fact is they weren’t. You haven’t heard them address that point once. R. 1741 (emphasis added). Of course, defendants could not offer proof of the easement or otherwise address the issue because they had been ordered not to and, unlike plaintiff and his counsel, they obeyed that order. R. 169-70. As a result, Kieffer and its counsel were forced to sit mute, under threat of “dire consequences,” to await the jury’s verdict and the opportunity to challenge the trial court’s preclusion order on appeal. The Trial Court Precluded Defendants From Calling Their Expert Damages Witness Further compromising Kieffer’s ability to defend itself was the trial court’s refusal to allow defendants to call an expert, Gregory Klauk, to testify concerning damages on the ground that Kieffer’s expert disclosure was untimely and inadequate. R. 7711-12. Without discussion, the Appellate Division held the argument to be without merit and irrelevant. R. 10a. This was a clear error of law as Kieffer had no obligation to make any expert disclosure because plaintiff never requested any. Also, prior to bringing the - 25 - motion, plaintiff raised no objection to the Town’s expert disclosure of Mr. Klauk as its witness and made no attempt to meet and confer to resolve any purported dispute. R. 6612. In fact, plaintiff waited two weeks before bringing his motion (R. 6485-86, 6612) and offered no proof, or even an allegation, that defendants had acted willfully or intentionally, as the law requires. R. 7497-99. Finally, the Town’s disclosure was not untimely — it was indisputably made more than a month before trial, precisely as the trial court had ordered. R. 4999, 6611-12. Mr. Klauk would have testified that plaintiff’s land was not permanently damaged and, therefore, was never taken. R. 6609-10. He also would have testified that the land was worth, at most, $15,000 per acre during the five years preceding the complaint. R. 6610. This was generous given the Town’s full assessed value of $5,000 per acre. R. 4549-57. Nonetheless, while precluding Mr. Klauk’s testimony, the trial court allowed plaintiff’s expert to testify to an inflated property value of $50,000 per acre based upon speculative assumptions that plaintiff could and would subdivide his vacant land some day and sell expensive developed lots at a randomly selected price. R. 1285-94. The Appellate Division affirmed the trial court’s preclusion of defendants’ expert without discussion. R. 7a-10a. - 26 - The Trial Court Instructed The Jury That It Could Not Consider Proof That Kieffer Acted Reasonably Based Upon His Engineer’s Advice And Accepted Engineering Practices Prior to the trial at issue, the parties agreed that Justice Makowski’s evidentiary rulings during the first trial would be binding in a second trial. R. 6541, 6558. In the first trial, Justice Makowski denied plaintiff’s in limine motion to preclude evidence that Kieffer relied on qualified engineers and sound engineering practices; Justice Makowski likened that evidence to a “state of the art” defense (R. 3828) and ruled the evidence to be relevant as to lack of intent on the issue of punitive damages. R. 4124-27. Accordingly, proof was offered by defendants and admitted at the second trial demonstrating that Kieffer reasonably relied on his engineers to create appropriate drainage plans and designs based on sound engineering practices. R. 99, 232, 256, 1169, 1216, 1651. This was important evidence for Kieffer to defend against the punitive damages claim as it showed Kieffer’s good faith and reasonable efforts to lawfully drain water from the subdivision. The trial court, however, after allowing this testimony into evidence, erroneously instructed the jury to disregard it, and further instructed that Kieffer’s reasonable reliance on his engineers and their sound engineering practices was not relevant. R. 1773-74. The Appellate Division erroneously held that Kieffer’s challenge on this issue was not - 27 - preserved. R. 10a. It was preserved by Kieffer’s opposition to plaintiff’s motion in limine on this issue, as referenced by Justice Makowski. R. 4125-26. The Trial Court Instructed The Jury To Disregard Proof That Plaintiff Caused The Subject Flooding By Not Maintaining His Ditch Or His Surrounding Land The trial court, over defendants’ objections (R. 1750-51), removed causation from the jury’s consideration by erroneously instructing the jury that plaintiff had no duty to maintain his property. R. 1782. This essentially required the jury to find that plaintiff could not have caused or even contributed to the alleged flooding, leaving the jury no choice but to decide that defendants were solely responsible for the damages alleged. Specifically, plaintiff admitted that cleaning the ditch was necessary to allow the water to move through it to prevent flooding of his land. R. 721-22. Plaintiff also admitted that the Town offered to clean the ditch for him. R. 652. However, when the Town arrived to clean the ditch, plaintiff would not allow its workers to enter his property. R. 652, 721. In fact, plaintiff became enraged and ordered the Highway Superintendent, Mr. Witnauer, off his property. R. 616. Thereafter the Town Engineer, Joseph Latona, met with plaintiff to discuss the Town’s assistance with other remedial efforts. R. 618-19. Plaintiff again became enraged and threatened Mr. Latona and his family, stating he “hated him” (R. 619, 727) and was going to “get him.” R. 619. Plaintiff admitted he is - 28 - still trying to get Mr. Latona fired from his job. R. 619, 727. Plaintiff apparently harbored a grudge against Mr. Latona as a result of the Town previously tabling plaintiff’s request for concept plan review of the proposed subdivision on his land. R. 460. The Town made no further efforts to clean the ditch, taking plaintiff’s threats seriously, as he had already been convicted of illegal weapons possession. R. 727. After allowing all of this testimony into evidence, the trial court instructed the jury to disregard it. R. 1780-82. The Appellate Division found Kieffer’s challenge to this ruling to be without merit and irrelevant to the punitive damages award. R. 10a. The Verdict And Judgment The jury awarded plaintiff compensatory damages of $1,313,600 against the Town on plaintiff’s de facto taking and intentional private nuisance claims and $328,400 against Kieffer on the intentional private nuisance and intentional trespass claims. R. 4973-74. Kieffer was also ordered to pay $250,000 in punitive damages. R. 4976. The verdict was based upon the alleged flooding of 40 acres of vacant land with a full assessed value of $200,000. R. 4549-57. The trial court denied defendants’ post-trial motions. R. 6830-39. Thereafter, the compensatory damages portions of the judgment were settled by the parties’ insurance carriers (R. 6955-58) without requiring plaintiff to forego - 29 - collection of the punitive damages award. (If requested by this Court, Kieffer would welcome the opportunity to provide details of the settlement and the circumstances that allowed the punitive damages award to survive). Plaintiff retains ownership of the purportedly “taken” property. Kieffer appealed the $250,000 punitive damages award. R. 4-5. Plaintiff continues to pursue collection of the punitive damages award and has commenced a new action against Mr. Kieffer personally. The Appellate Division Decision The Appellate Division affirmed, with two dissents, the judgment awarding plaintiff punitive damages of $250,000 against Kieffer. R. 7a-13a. This appeal followed. R. 4a-13a. [The remainder of this page intentionally left blank.] - 30 - ARGUMENT POINT I PLAINTIFF OFFERED NO PROOF OF WILLFUL, WANTON OR MALICIOUS CONDUCT BY KIEFFER A. Applicable Legal Standard This Court has consistently held that the standard to be met for the imposition of punitive damages is “a strict one.” Rocanova v. Equitable Life Assurance Soc’y of the United States, 83 N.Y.2d 603, 613 (1994). Punitive damages are “reserved for rare cases” involving the most oppressive and malicious conduct. Laurie Marie M. v. Jeffrey T. M., 159 A.D.2d 52, 58 (2d Dep’t 1990), aff’d, 77 N.Y.2d 981 (1991). Punitive damages can be awarded only in exceptional cases where plaintiff proves that the wrongdoer has acted maliciously, wantonly, or with a recklessness that betokens an improper motive or vindictiveness . . . or has engaged in outrageous or oppressive intentional misconduct or with reckless or wanton disregard of safety or rights. Sharapata v Town of Islip, 56 N.Y.2d 332, 335 (1982) (internal quotations omitted). Punitive damages should be awarded only in those limited circumstances where it is necessary to deter persons “from engaging in conduct that may be characterized as ‘gross’ and ‘morally reprehensible,’ and of ‘such wanton dishonesty as to imply a criminal indifference to civil obligations.’” N.Y. Univ. v. Cont’l Ins. Co., 87 N.Y.2d 308, 315-16 (1995). The recklessness required to - 31 - support a punitive damages award must be “close to criminality.” See also Camillo v. Geer, 185 A.D.2d 192, 194 (1st Dep’t 1992); Prozeralik v. Capital Cities Commc’ns. Inc., 82 N.Y.2d 466, 479 (1993); Ross v. Louise Wise Servs., Inc., 8 N.Y.3d 478, 489 (2007) (“Punitive damages are permitted [only] when the defendant[s’] wrongdoing is not simply intentional but evince[s] a high degree of moral turpitude and demonstrate[s] such wanton dishonesty as to imply a criminal indifference to civil obligations . . . [P]unitive damages may be sought when the wrongdoing was deliberate and has the character of outrage frequently associated with crime.”) (internal quotations omitted). “When a plaintiff seeks punitive damages, “all circumstances surrounding the transaction . . . are admissible to rebut plaintiff’s contention that defendant acted with evil or wrongful motives.” Nickerson v. Winkle, 161 A.D.2d 1123, 1123-24 (4th Dep’t 1990). Where excluded evidence “could have affected the outcome of the trial,” its improper exclusion is not harmless error. Garricks v. City of N.Y., 1 N.Y.3d 22, 27 (2003); McCann v. McCann, 110 A.D.2d. 1069, 1070 (4th Dep't 1985) (reversing grant of divorce because erroneous exclusion of evidence tending to show ownership of marital home was not harmless). This is especially true where the proffered evidence would have “raised a crucial fact issue for the jury.” Bell v. Liberty Drug Co., 16 A.D.2d 809, 810 (2d Dep’t 1962) - 32 - (granting new trial based on improper exclusion of evidence which tended to show that plaintiff assumed the risk of injury for which jury awarded damages). B. Kieffer’s Compliance With All Federal, State And Local Laws And Regulations Requires Vacatur Of The Punitive Damages Award A defendant that proves “compliance with all applicable industry and regulatory standards” is entitled to dismissal of a punitive damages claim as a matter of law. Colombini v. Westchester Cnty. Healthcare Corp., 24 A.D.3d 712, 715 (2d Dep’t 2005). See also Longo v. Armor Elevator Co., 307 A.D.2d 848, 849-50 (1st Dep’t 2003) (trial court should have dismissed punitive damages claim where building owner had, among other conduct, hired consultants to evaluate performance of elevator that was later involved in accident). In Colombini, a 6 year old patient was killed when he was struck by an oxygen tank that had been drawn into the magnet of an MRI unit while he was undergoing a scan. Id. at 714. The manufacturer of the MRI unit submitted evidence showing it had complied with all industry and regulatory standards by supplying an instruction manual that warned against this risk, and by suggesting the use of warning signs near the unit. Id. at 715-16. The trial court dismissed the punitive damage claim against the MRI manufacturer and that dismissal was affirmed on appeal. Id. - 33 - In Longo, the Appellate Division held that the trial court should have dismissed the punitive damages claim where plaintiff’s alleged injuries resulted from defective elevator cables. 307 A.D.2d at 849. Even though the defendant building owner had notice of a dangerous condition, punitive damages were not allowed because the defendant had retained a safety consultant, made improvements to the elevator and contracted for, but had not yet implemented, modernization of the elevator. Id. at 849-50. The same principles apply here. Kieffer complied with all applicable laws and regulations, obtained all required municipal and regulatory approvals and permits, retained highly-qualified expert consultants to ensure its compliance and acted in conformity with generally accepted engineering practices. Having done so, Kieffer cannot, as a matter of law, be found to have “engage[ed] in conduct that may be characterized as ‘gross’ and ‘morally reprehensible,’ and of ‘such wanton dishonesty as to imply a criminal indifference to civil obligations.’” See N.Y. Univ. v. Cont’l Ins. Co., 87 N.Y.2d 308, 315-16 (1995). Specifically, Kieffer was required to – and did – comply with the Army Corps’ regulations and directions. R. 220-21, 465, 1531-33. After the Town Board and the Town Planning Board reviewed wetland and drainage issues with the Army Corps (R. 493-94), they directed that Kieffer address those issues with the Army Corps and Kieffer did so. R. 465. He hired Earth Dimensions to - 34 - perform the required wetland delineations, ensure compliance with drainage regulations and work directly with the Army Corps to address all wetland and drainage issues. R. 221, 995-97. Earth Dimensions also assisted Kieffer in obtaining all necessary permits from the Army Corps and worked directly with Kieffer’s design engineers, Bissell & Stone, to ensure the wetland work on Lexington Woods was properly completed. R. 995-96. Bissell & Stone prepared all drainage calculations, a drainage plan and designs in compliance with all federal, state and local drainage regulations. R. 99, 256, 1651. Kieffer personally obtained Town maps and engaged his attorney to research wetland and drainage requirements. R. 1651-52. He took all necessary measures to ensure that all wetland and drainage issues were addressed. Assisted by Earth Dimensions, Kieffer satisfied all State requirements, including SEQRA review and New York’s SPDES permitting process. R. 494-95, 997, 1530-32. The Town’s approval was also necessary before Kieffer could build Lexington Woods and implement his drainage plan. Because it was the Town’s responsibility to ensure that all subdivision regulations were followed (R. 337) and that Kieffer did exactly what the Town required (R. 1651), the Town reviewed Kieffer’s plans and designs to ensure compliance with all applicable regulations and generally accepted engineering standards. R. 1370-71. Kieffer worked - 35 - directly with Town Engineer Latona (R. 323-24) and Town Planner Callahan to ensure its compliance. R. 1653. During this process, the Town required modifications for Phases II and III of the development. R. 391-93, 1389, 1654. Kieffer made those modifications. R. 1654. Following compliance with all such requirements, the Planning Board approved the subdivision design, as did the Town Board. R. 523. On July 26, 2000, the Town approved the development, including Kieffer’s drainage plan (R. 520), and gave Kieffer approval to drain water into the ditch on the western side of plaintiff’s land. R. 285-86, 1389-90. Apparently acknowledging Kieffer’s compliance with all of the Town’s (and Federal and State) requirements, plaintiff claimed that it was “the Town’s actions” (not Kieffer’s) that caused water to collect and flood his land. R. 658. There being no credible dispute that Kieffer secured all required permits and approvals, complied with all governmental regulations and requirements and that it hired highly qualified experts to assist in these regards, Kieffer cannot be said to have acted maliciously or with criminal indifference to its civil obligations. In addition, a defendant cannot be held liable for punitive damages for doing that which he believed in good faith he had the legal right to do. Rather, - 36 - there must be proof of malice or a criminal indifference to civil obligations. See N.Y. Univ., 87 N.Y.2d at 315-16. Here, Kieffer justifiably believed that he had the right to drain water into plaintiff’s ditch. Specifically, as part of its role in this project, the Town agreed to secure a drainage easement across plaintiff’s property. R. 275-81, 387- 88, 396-99, 509, 512-20, 1423. The Town acknowledged that it was its obligation (not Kieffer’s) to do so (id.), but mistakenly believed that it failed to secure that easement. R. 1389. In truth, the Town had been granted a perpetual easement in 1966 to drain water onto plaintiff’s land exactly where the subject drainage occurred. R. 4392-94, 4946-48, 4952, 5179-90. The Town and Kieffer were unaware of the easement, however, until Mr. Kieffer was searching for documents the day before trial and discovered a letter referencing an easement granted to the Town in 1966, allowing it to drain water onto plaintiff’s property exactly where the subject drainage occurred. R. 130-31, 142-43, 146, 151, 4951. Kieffer had not searched for any easement previously because the Town had agreed that it was its obligation to ensure that one was in place. R. 275-81, 387-88, 396-99, 509, 512-20, 1423. The record is, therefore, undisputed that the subject drainage onto plaintiff’s land was, in fact, lawful and that Kieffer always believed in good faith - 37 - that he had the right to drain water into plaintiff’s ditch. The punitive damages award against Kieffer should, therefore, be vacated and that claim dismissed. POINT II THE TRIAL COURT’S PRECLUSION OF THE EASEMENT AND THE APPELLATE DIVISION’S HOLDING THAT THIS PRECLUSION WAS “IRRELEVANT” CONSTITUTE REVERSIBLE ERROR Plaintiff moved to preclude defendants from offering proof of the easement on the ground that Kieffer’s disclosure of it was “a complete surprise and shock.” R. 139. The trial court granted the motion, erroneously holding that “the failure of the Town or Kieffer to plead that affirmative defense constitutes waiver of the affirmative defense.” R. 162-63. This was reversible error for at least four reasons. A. Defendants Were Not Required To Plead The Easement’s Existence As An Affirmative Defense Because Plaintiff Was Fully Aware Of It And Not Surprised CPLR 3018(b) lists defenses that must be affirmatively pled, and the existence of an easement is not one of them. Moreover, although CPLR 3018(b) requires defendants to plead defenses that would cause surprise, plaintiff could not have been surprised by the easement because he had both actual and constructive knowledge of it. Plaintiff’s counsel also knew of the easement long before trial. When the easement was discovered, it was immediately brought to the trial court’s attention. R. 130-31, 4946-48, 4951-52. The trial court ordered - 38 - counsel to investigate the issue and report back the following morning. R. 130-31. The next morning, within only a few hours, plaintiff’s counsel admitted Mr. Baum had “identified in his title search an easement in favor of the Town of Clarence while he was doing his title search.” R. 136. Again, at no time during discovery or any pretrial proceedings had plaintiff disclosed the easement despite the Town’s demand for that information. R. 7412-13. In addition, plaintiff’s counsel’s time records in this matter prove that he had consulted with Mr. Baum about this case at least as early as February 1, 2007. R. 5949. Further, all purchasers of land are charged “with notice of matters . . . in the record of the purchased land’s chain of title back to the original grantor.” Witter v. Taggart, 78 N.Y.2d 234, 238 (1991). Here, the easement is recorded in plaintiff’s chain of title. R. 4946-48, 4952, 5179-90. Plaintiff’s own title search and the documents in his chain of title are recorded in the Erie County Clerk’s Office and clearly show the easement running along the ditch on the western boundary of plaintiff’s property, north to Lapp Road, and that it was granted for the express purpose of allowing water to drain into that ditch from “adjoining premises.” Id. Plaintiff, therefore, has had both actual and constructive notice of the easement since 1995, and, therefore, could not have been surprised when confronted with it upon Mr. Kieffer’s discovery. - 39 - Given the absence of any surprise to plaintiff, the existence of the easement was not required to be pled as an affirmative defense and its preclusion constitutes reversible error. B. Defendants Did Allege In Their Answers That They Had Permission To Drain Water Onto Plaintiff’s Land Under New York law, if a plaintiff introduces a matter in his complaint that would ordinarily be an affirmative defense, the defendant is not obligated to plead it as an affirmative defense. Green Bus Lines, Inc v. Consol. Mut. Ins. Co., 74 A.D.2d 136, 142-43 (2d Dep’t 1980). Here, each of plaintiff’s five complaints (original and four amended) alleged that defendants lacked permission to allow collected storm water to be deposited onto plaintiff’s property or an easement to do so. R. 5002-03, 6213-14, 6222-23, 6447. Kieffer (and the Town) denied these allegations in each of their answers. R. 4982-83, 4988-89, 6432-33, 6439-40, 6454-55, 6462-63, 6471-72. Accordingly, plaintiff was clearly on notice that Kieffer was contending that defendants had permission to drain water onto plaintiff’s land and that they had an easement permitting them to do so. In addition, Kieffer (and the Town) alleged agreement or assent as an affirmative defense in each of their answers. R. 4984, 4991, 6435, 6441, 6456, 6465, 6474. Plaintiff, therefore, always knew that defendants were contending that they had permission to drain water onto his property. Plaintiff’s claim of surprise, - 40 - therefore, was not only unsupported by any proof in the record, it was flatly contradicted by that proof. C. Plaintiff’s Failure To Disclose The Easement In Response To Defendants’ Discovery Demands Should Have Barred Him From Seeking Preclusion A party that willfully fails to disclose information may be penalized under CPLR 3126. Appropriate penalties include resolving key facts against the non-disclosing party, Nunn v. GTE Sylvania, Inc., 251 A.D.2d 1089, 1091 (4th Dep’t 1998), and prohibiting the non-disclosing party from offering evidence on issues relating to the undisclosed information. Perry v. Town of Geneva, 64 A.D.3d 1225, 1226 (4th Dep’t 2009). Here, the Town demanded production of “all boundary surveys of the property” (R. 7412), but plaintiff never produced them, or any other evidence of the easement. R. 7414-19. Plaintiff, therefore, should not have been heard to complain that Kieffer failed to plead the easement’s existence. D. The Trial Court Should Have Taken Judicial Notice Of The Easement Because the easement was a matter of public record, it was a proper subject for judicial notice by the trial court. “Data culled from public records is, of course, a proper subject of judicial notice.” Siwek v. Mahoney, 39 N.Y.2d 159, 163 n.2 (1976). New York courts take judicial notice of deeds in a party’s chain of title. Trefoil Capital Corp. v. Creed Taylor, Inc., 121 A.D.2d 874 (1st Dep’t 1986); - 41 - Harbor Hills Landowners v. Manelski, 65 Misc. 2d 682, 683 (Dist. Ct. Suffolk Cnty 1970) (“Since the said deeds . . . are public records, the court takes judicial notice of the contents of each.”). All purchasers of real property are charged “with notice of matters . . . in the record of the purchased land’s chain of title back to the original grantor.” Witter v. Taggart, 78 N.Y.2d 234, 238 (1991). Here, the trial court had before it all of the information confirming the existence of the easement and its purpose “for disposal and dispersal of surface waters from the adjoining premises” onto plaintiff’s land. R. 4946-48, 4951-52. The trial court knew (as did plaintiff and his counsel) that the easement encompassed the subject drainage ditch on the west side of plaintiff’s property, continuing north to Lapp Road. Id. Given this, and plaintiff’s failure to disclose the easement during discovery, the trial court should have taken judicial notice of the easement at trial. Instead, plaintiff not only escaped punishment for his non- disclosure, he was rewarded for it by the trial court’s preclusion order. The trial court’s failure to take judicial notice of the easement (and its preclusion of it) constitute reversible error. E. The Appellate Division Erred In Holding Preclusion Of The Easement To Be “Irrelevant” The Appellate Division erroneously held that: based on a land survey prepared by the Town in 1994 upon which plaintiff relied in purchasing his property in 1995, the easement was shown to be on the east side of - 42 - plaintiff's property, i.e., the opposite side of the property where KEI drained water onto that land; and thus the easement is irrelevant to this case. R. 9a. The Appellate Division apparently accepted plaintiff’s erroneous argument in this regard (R. 136-37) without even a shred of proof to support its conclusion. Moreover, all of the authenticated proof, including plaintiff’s own title search, which his attorney obtained on two separate occasions, and all recorded documents in plaintiff’s chain of title, show the easement and drainage ditch on the west side of plaintiff’s land. R. 4946-47, 4948, 4952, 5179-90. Plaintiff argued below that, although the easement is located on the west side of plaintiff’s land, plaintiff purchased the property in reliance on a 1994 survey allegedly prepared by the Town and allegedly showing the easement on the east side of plaintiff’s property. R. 137, 147. The record contains no proof to support this argument or the Appellate Division’s conclusion. In truth, there was no “land survey” prepared by the Town in 1994. Nor does any original survey record either an easement or drainage ditch on the east side of plaintiff’s land. Plaintiff refers to two letters exchanged between Mr. Casilio, the former Town Attorney, and Antonio Cardarelli, Esq. (R. 136-37, 4949-50) and an altered copy of a September 16, 1989 survey bearing a re-survey date of April 12, 1994 (R. 4950a), but they prove nothing. - 43 - First, the purported “survey” is unidentified, unverified, unauthenticated and unrecorded. The Record is devoid of any proof as to who created it, when or why. It, therefore, has no probative value for those reasons alone. Second, neither plaintiff nor his former attorney, Mr. Baum, are identified as recipients of those letters or that “survey,” and there is no evidence or even an allegation that either saw or relied on them. Third, the letter from Attorney Cardarelli to Town Attorney Casilio, dated March 2, 1995, purports to enclose an easement and a survey but, curiously, neither document was disclosed before trial and it submitted only Mr. Cardarelli’s letter to the trial court, not the purportedly enclosed easement or survey. R. 142, 4949. Indeed, neither of those purported documents is in the Record. Fourth, plaintiff offered no testimony, affidavit or other proof of the authenticity of the “survey” purportedly enclosed in Mr. Casilio’s letter or when or why it was created and by whom. Fifth, neither letter even identifies Attorney Cardarelli, his client or his role, if any, in this matter. R. 4949-50. Sixth, the March 2, 1995 letter requesting that the Town either “release its interest in the right of way and easement on the land plaintiff intended to purchase or plot the same on the survey” (R. 4949) proves only Mr. Cardarelli’s knowledge of an easement. Moreover, that letter confirms that the original September 16, 1989 survey/April 12, 1994 re-survey, did not record an easement on the east side of plaintiff’s land, or Mr. Cardarelli would not have - 44 - asked in 1995 for a survey that plotted the easement. It also demonstrates that the “survey” plaintiff’s counsel provided to the trial court was not an original but rather an altered copy of an earlier survey. Regardless, it remains undisputed that plaintiff’s own title search and all recorded documents, of which plaintiff and his attorney were aware at both real estate closings in 1995 and 2002, show the easement on the west side of plaintiff’s land exactly where the water was drained. R. 4946-47, 4948, 4952, 5179-90. Finally, when arguing that the easement on the west side of plaintiff’s land has no effect on plaintiff’s property, plaintiff cited Prego v. Gutchess, 61 A.D.3d 1394 (4th Dep’t 2009), for the proposition that “basically if you take without notice of an easement, and if the easement is not filed, and/or you take without actual or constructive notice of it, it does not affect the property.” R. 137. The problem with that argument is that (1) plaintiff had been notified of the easement by Mr. Baum (R. 136, 153), (2) the easement was recorded (R. 4946-47) and (3) the easement and map cover clearly show the easement to be on the west side of plaintiff’s land, continuing north to Lapp Road. R. 4946-47, 4952. Plaintiff, therefore, took the property with actual and constructive notice of the easement on the west side of his land and should not have been heard to cry surprise. Accordingly, the Appellate Division’s characterization of the easement as “irrelevant” was error as a matter of law. - 45 - At a minimum, the jury should have been allowed to determine whether the easement existed on the west or east side of plaintiff’s land, and whether Kieffer acted in a morally reprehensible manner with a criminal indifference to civil obligations when he drained water from the subdivision in a manner he believed was lawful after satisfying all governmental regulations and requirements and securing all necessary permits and approvals. The Appellate Division decision that this issue is “irrelevant” (R. 9a) constitutes reversible error. POINT III THE TRIAL COURT’S ALLOWANCE OF PLAINTIFF’S UNTRUTHFUL TESTIMONY AND PLAINTIFF’S COUNSEL’S IMPROPER ARGUMENT AFTER ORDERING THAT NO ONE MENTION THE EASEMENT WAS REVERSIBLE ERROR Where a party has committed fraud during the course of a legal proceeding, the proper remedy is to seek relief from the judgment entered. In re N.Y. Diet Drug Litig., 47 A.D.3d 586 (1st Dep’t 2008). A trial court should grant relief from a judgment where it was procured by fraud. See Shouse v. Lyons, 4 A.D.3d 821 (4th Dep’t 2004) (trial court should have vacated default judgment where plaintiff’s sworn statements constituted fraud and misrepresentation); Pizzi v. Anzalone, 261 A.D.2d 374 (2d Dep’t 1999) (setting aside verdict based upon the defendant’s untruthful testimony on factual matters material to the verdict). See also Peterson v. Melchiona, 269 A.D.2d 375 (2d Dep’t 2000) (defendant’s false statements warranted vacatur of summary judgment order). Counsel is not - 46 - permitted to argue to the jury based on perjured testimony. See Bromberg v. City of N.Y., 25 A.D.2d 885, 885 (2d Dep’t 1966) (counsel may not make himself an unsworn witness and may not “indulge in argument founded on no proof”). When the trial court issued its order of preclusion, it ordered “all counsel” and all witnesses to make “no mention” of the easement under threat of “dire consequences.” R. 170 (emphasis added). The trial court’s gag order could not have been clearer. Incredibly, however, plaintiff not only mentioned the easement, he testified falsely that no easement existed and that no one had permission to allow water to drain onto his land. R. 612-13, 722-23. Plaintiff’s counsel made the same improper arguments to the jury at least five times. R. 49- 50, 52, 57, 62-63, 67. Plaintiff’s counsel went so far as to misinform the jury in his closing that the “most striking” thing about the case was that defendants had no easement. R. 1740 (emphasis added). He then made the wholly improper and false comment to the jury that no easement existed and that this was “undisputed.” Id. (emphasis added). Perhaps worse, plaintiff’s counsel told the jury, while fully aware of the trial court’s gag order, that Kieffer and the Town had not even addressed that issue – “you haven’t heard them address that point once.” R. 1742. (emphasis added). Of course, defendants did not address the easement issue with the jury because they had been ordered not to and, unlike plaintiff and his counsel, they obeyed that order. - 47 - This conduct was inexcusable and severely prejudicial. The trial court had issued a very clear order that no witness or attorney was to mention the easement. Yet plaintiff and his counsel brazenly violated the order not just by mentioning the easement but by testifying and arguing to the jury untruthfully that no easement existed, while Kieffer and the Town by obeying the trial court’s order, were forced to sit mute and await the jury’s verdict and an opportunity to seek justice on appeal. Under these egregious circumstances, the punitive damage award against Kieffer should be vacated and the claim dismissed. POINT IV THE TRIAL COURT ERRONEOUSLY PRECLUDED THE DEFENSE EXPERT’S DAMAGES TESTIMONY A. The Trial Court Erred In Holding Kieffer Was Required To Make Expert Disclosure When None Was Requested CPLR 3101(d)(1)(i) provides: Upon request, each party shall identify each person whom the party expects to call as an expert witness at trial and shall disclose in reasonable detail the subject matter on which each expert is expected to testify, the substance of the facts and opinions on which each expert is expected to testify, the qualifications of each expert witness and a summary of the grounds for each expert's opinion. (McKinney 2005 & Supp. 2012) (emphasis added). - 48 - By the statute’s own terms, information about a party’s expert must be supplied only “upon request.” Id. Where a plaintiff fails to make a CPLR 3101(d)(1)(i) request, the defendant has no duty to provide expert disclosure. See Collins v. Greater N.Y. Savs. Bank, 194 A.D.2d 514 (2d Dep’t 1993). See also Fine Ornaments, Inc. v. Esplanade Gardens, Inc., 248 A.D.2d 287 (1st Dep’t 1998) (error to exclude expert testimony absent disclosure request); Bliss v. Consol. Edison Co. of N.Y., Inc., 2010 NY Slip Op 51364(U) (Sup. Ct., N.Y. Cnty., July 1, 2010). The Appellate Division, however, erroneously held that the trial court properly precluded the expert defense testimony of Mr. Gregory Klauk on the basis that Kieffer did not disclose Mr. Klauk as his expert witness in response to plaintiff’s expert discovery demands. R. 10a. This, however, was error as a matter of law because plaintiff never served an expert discovery request on Kieffer. As such, Kieffer had no obligation to make any expert disclosure. See CPLR 3101 (d)(1)(i). For this reason alone, the Appellate Division committed reversible error. B. Plaintiff Admittedly Failed To Comply With 22 NYCRR 202.7 Uniform Rule 202.7(a) provides that “no motion shall be filed with the court unless there have been served and filed with the motion papers . . . an affirmation that counsel has conferred with counsel for the opposing party in a good faith effort to resolve the issues raised by the motion.” The affirmation must - 49 - state the time, place and nature of the consultation, the issues discussed and any resolutions, or shall show good cause why no such conferral with counsel for opposing parties was held. See 22 NYCRR 202.7(c). Failure to include the required affirmation requires denial of a motion to preclude or compel. In Williams v. Way, 289 A.D.2d 483, 485 (2d Dep’t 2001), the court held: The defendants also challenge the adequacy of the plaintiff’s expert witness disclosure. However, since the defendants failed to comply with the good faith requirements of 22 NYCRR 202.7, they cannot obtain preclusion on this ground. Similarly, in Amherst Synagogue v. Schuele Paint Co., Inc., 30 A.D.3d 1055 (4th Dep’t 2006), the court reversed the trial court’s order compelling discovery where there had been inadequate compliance with Rule 202.7. See also Kane v. Shapiro, Rosenbaum, Liebschutz & Nelson, L.L.P., 57 A.D.3d 1513, 1513-14 (4th Dep’t 2008) (denying motion because affidavit submitted by plaintiffs’ attorney in support of motion failed to demonstrate “‘that counsel has conferred with counsel for [defendant] in a good faith effort to resolve the issues raised by the motion’”); Petracca v. Petracca, 305 A.D.2d 568, 568-69 (2d Dep’t 2003) (finding that trial court properly denied motion to preclude expert testimony at trial where moving attorney failed to submit an affidavit of good faith required - 50 - by 22 NYCRR 202.7). As the Court held in Baez v. Sugrue, 300 A.D.2d 519, 521 (2d Dep’t 2002): The Supreme Court properly denied that branch of the defendants’ motion which was to preclude the plaintiffs’ expert witnesses from testifying at trial, because they failed to demonstrate that they made a diligent effort to resolve this discovery dispute and that the plaintiffs’ failure to disclose was willful. See also Law v. Moskowitz, 279 A.D.2d 844, 846 (3d Dep’t 2001) (trial court abused its discretion in granting motion to preclude expert testimony, a “drastic measure,” where although plaintiff’s expert disclosure was insufficient, defense counsel failed to seek clarification or specification from plaintiff’s counsel upon its receipt); Gordon v. Hancock, 292 A.D.2d 858, 858 (4th Dep’t 2002) (requiring denial of a motion to preclude absent compliance with 22 NYCRR 202.7(a)). Here, contrary to plaintiff’s arguments below, the trial court found that defendants had timely served their damages expert disclosure. R. 6553-65. This disclosure was made more than a month prior to commencement of trial, just as the trial court had ordered. R. 4999, 6611-12. Plaintiff accepted the Town’s disclosure (R. 4999, 7486-88), and raised no objection before springing his motion to preclude two weeks before trial. R. 6611-12, 6623-24. Plaintiff failed to attempt to resolve this issue before bringing his motion (R. 6612) and, therefore, violated Rule 202.7(a). The trial court, however, precluded defendants’ damages expert, and did so even after the Town, while - 51 - maintaining the adequacy of its disclosure, offered to supplement. R. 6564-65. The Appellate Division’s affirmance of this erroneous preclusion should, therefore, be reversed. C. Plaintiff Offered No Proof Of Intentional Or Willful Failure To Disclose Courts have consistently held that an untimely or inadequate expert disclosure should not result in preclusion absent a showing of intentional or willful failure and prejudice to the opposing party. As the court held in Marchione v. Greenky, 5 A.D.3d 1044, 1045 (4th Dep’t 2004): Preclusion for failure to comply with CPLR 3101(d) is improper unless there is evidence of intentional or willful failure to disclose and a showing of prejudice by the opposing party. See Ruzycki v. Baker, 9 A.D.3d 854, 855 (4th Dep’t 2004) (allowing expert to testify where expert disclosure was served during trial and ruling that “[p]reclusion for failure to comply with CPLR 3101(d) is improper where there is no evidence of intentional or willful failure to disclose and no prejudice to the party seeking disclosure”); St. Hilaire v. White, 305 A.D.2d 209, 210 (1st Dep’t 2003) (preclusion order should not be granted based on inadequate expert disclosure where the inadequacy was unintentional and opposing party failed to show prejudice). See also Carlson v. Porter, 53 A.D.3d 1129, 1132 (4th Dep’t 2008) (allowing expert to testify where expert disclosure was served on the eve of trial); - 52 - Tronolone v. Praxair, Inc., 39 A.D.3d 1146, 1147 (4th Dep’t 2007) (allowing expert to testify where no expert disclosure was made prior to trial). Here, plaintiff offered no evidence that defendants willfully or intentionally provided insufficient expert disclosure. R. 7497-99. The order of the Appellate Division affirming the preclusion of defendants’ damages expert (R. 10a) should, therefore, be reversed. D. Defendant’s Expert Testimony On Damages Was Relevant To The Punitive Damage Claim To the extent the Appellate Division believed that expert testimony on damages was irrelevant to the punitive damages issue, it erred in that regard as well. When a plaintiff seeks punitive damages, “all circumstances surrounding the transaction . . . are admissible to rebut plaintiff’s contention that defendant acted with evil or wrongful motives.” Nickerson, 161 A.D.2d at 1124. Where excluded evidence “could have affected the outcome of the trial,” its improper exclusion is not harmless error. Garricks v. City of N.Y., 1 N.Y.3d 22, 27 (2003); McCann v. McCann, 110 A.D.2d 1069, 1070 (4th Dep’t 1985) (reversing grant of divorce because erroneous exclusion of evidence tending to show ownership of marital home was not harmless). This is especially true where the proffered evidence would have “raised a crucial fact issue for the jury.” Bell v. Liberty Drug Co., 16 A.D.2d 809, 810 (2d Dep’t 1962) (granting new trial based on improper exclusion - 53 - of evidence which tended to show that plaintiff assumed the risk of injury for which jury awarded damages). If allowed to testify, Mr. Klauk would have provided the jury with an accurate appraisal of the highest price per acre for plaintiff’s land – $15,000 – generous given the full assessed value of $5,000 per acre (R. 4549-57). The ruling, therefore, emasculated Kieffer’s ability to rebut plaintiff’s excessive and speculative $50,000 per acre damages figure, about which plaintiff’s expert was allowed to testify. R. 1271-72, 6609-10. This made an excessive award of punitive damages more likely because even as the trial court charged the jury, with no objection or exception by plaintiff, punitive damages must be “proportionate to the actual and potential harm suffered by Mr. Marinaccio and to the compensatory damages you awarded Mr. Marinaccio.” R. 1885. (emphasis added). As such, preclusion of Mr. Klauk’s testimony that the compensatory damages allegedly suffered by plaintiff were much lower than claimed eliminated all defense proof as to the quantum of compensatory damages, as well as proof relevant to the proportionality of those damages to the punitive damages awarded. The Appellate Division’s affirmance of this determination (R. 10a) was, therefore, reversible error. - 54 - POINT V INSTRUCTING THE JURY TO IGNORE PROOF OF KIEFFER’S RELIANCE UPON HIS ENGINEERS AND SOUND ENGINEERING PRACTICES WAS ERROR “When a plaintiff seeks punitive damages, all circumstances surrounding the transaction . . . are admissible to rebut plaintiff’s contention that defendant acted with evil or wrongful motives.” Nickerson v. Winkle, 161 A.D.2d 1123, 1123-24 (4th Dep’t 1990). A punitive damages verdict based on trespass cannot stand where the trial court improperly excluded evidence of the circumstances surrounding the trespass. Id. at 1124. Where excluded evidence “could have affected the outcome of the trial,” its improper exclusion is not harmless error, Garricks, 1 N.Y.3d at 27; McCann, 110 A.D.2d at 1070, especially where the proffered evidence would have “raised a crucial fact issue for the jury.” Bell, 16 A.D.2d at 810. While reliance on good engineering practices may not be an absolute defense to claims for compensatory damages, see Kerhonkson Lodge, Inc. v State, 4 A.D.2d 575, 578 (3d Dep’t 1957), the reasonableness of Kieffer’s conduct in relying on qualified engineers and other experts was a critical issue for the jury to consider when deciding the punitive damages claim. - 55 - The trial court, however, erroneously instructed the jury to ignore proof that Kieffer acted reasonably in reliance on his engineers and their sound engineering practices: If you find that defendants are liable for unlawful diversion of surface water onto plaintiffs property, then defendants cannot escape liability on the theory that their actions were in conformance with good engineering practices. Thus, the fact that the subdivision’s design was allegedly in accordance with good engineering practices is not sufficient to remove liability of the defendants if you find that their acts were in violation of plaintiff’s right as a property owner. R. 1773-74. The proof was uncontroverted that Kieffer retained qualified engineers, scientists and wetland experts to develop its subdivision and drainage plans and that those experts did so based upon good engineering practices. R. 256, 1169, 1216, 1374. It is also undisputed that Kieffer relied on their expertise (R. 256, 1651-54), satisfied all federal, state and local regulations and requirements and secured all necessary permits and approvals. One must ask therefore, how Kieffer could have acted more reasonably. This largely undisputed proof, if it had not been negated by the trial court’s instruction that the jury disregard it would have refuted the claim that Kieffer acted maliciously and with near criminal intent. By its erroneous instruction, the trial court eliminated one of Kieffer’s principle - 56 - defenses to the punitive damage claim. The Appellate Division affirmance of that erroneous instruction, therefore, constituted reversible error. POINT VI THE TRIAL COURT ERRONEOUSLY DIRECTED THE JURY TO DISREGARD PROOF THAT PLAINTIFF CAUSED HIS OWN FLOODING A. The Parties Agreed That Justice Makowski’s Rulings Would Be Binding In The Second Trial, Including His Finding That This Proof Was Admissible As discussed above, the parties agreed in open court, as confirmed by letter, that Justice Makowski’s evidentiary rulings in the first trial would be binding on all parties in the second trial. R. 6541, 6558. During the first trial, plaintiff moved in limine to preclude defendants from offering evidence to show that plaintiff had a duty to prevent the flooding. R. 7005-09. Justice Makowski denied plaintiff’s motion, holding such proof relevant and admissible: You know the argument may be he made a bad situation worse from a damage point of view, if not a liability point of view. R. 4126. Because the parties stipulated to be bound by Justice Makowski’s in limine rulings (R. 6541, 6558), the trial court committed reversible error by instructing the jury to disregard proof that plaintiff failed to maintain his property to prevent flooding. - 57 - B. The Jury Should Have Been Allowed To Consider The Overwhelming Proof That Plaintiff Caused His Own Flooding “Proximate cause is a question of fact for the jury where varying inferences are possible.” Mirand v. City of N.Y., 84 N.Y.2d 44, 51 (1994). If varying inferences are possible as to whether a given defendant’s actions were “a substantial factor in bringing about” a plaintiff’s injury (PJI 2:70), the issue of proximate cause is a question for the jury. See Finnegan v. Brothman, 270 A.D.2d 808 (4th Dep’t 2000); Clark v. City of Rochester, 25 A.D.2d 713, 713-14 (4th Dep’t 1966) (proof presented factual question for jury regarding whether the plaintiff’s damages were proximately caused by defendant and without negligence on the part of plaintiffs). “When a plaintiff seeks punitive damages, all circumstances surrounding the transaction . . . are admissible to rebut plaintiff’s contention that defendant acted with evil or wrongful motives.” Nickerson v. Winkle, 161 A.D.2d 1123, 1123-24 (4th Dep’t 1990). Those circumstances include plaintiff’s contribution to the harm and any reasonable excuse for defendant’s conduct. See Levine v. Abergel, 127 A.D.2d 822 (2d Dep’t 1987) (citing Kiff v. Youmans, 86 N.Y. 324 (1881)). Even if plaintiff’s contribution to his own injuries did not impact his right to compensatory damages, it can negate his claim for punitive damages: - 58 - If the injury of which [the plaintiff] complains came in part from his own act . . . the law seeks to do justice between the parties, and will not require one to atone for the other’s error. Kiff, 86 N.Y. at 331. Here, the trial court instructed the jury that: The plaintiff in this case had no duty to the defendants to keep any watercourse, ditch, or furrow on his property free and clear from any debris which may have accumulated there in order to assist the flow of water across his property. Moreover, plaintiff did not owe a duty to the defendants to alter his property in any way which may have assisted the flow of water across his property. R. 1782 (emphasis added). That instruction violated the principles set forth in Nickerson, Levine and Kiff. It also contradicted the express language of the easement: The First Parties for themselves, their heirs, executors, transferees [plaintiff], and assigns, covenant that they will do nothing to interfere with the rights and privileges hereinabove granted to Second Party. R. 4947 (emphasis added). Plaintiff has argued that the trial court correctly charged the jury that he had no duty to maintain his land so the flow of water across it would not be impeded. He also argued that the jury determined that plaintiff was negligent, but that his negligence did not cause any damages. Plaintiff is wrong on the first argument and the second one misses the point. - 59 - The jury was not allowed to consider whether plaintiff caused or contributed to the flooding because the trial court improperly “directed” them to disregard plaintiff’s duty to maintain the ditch. R. 1782. In doing so, the trial court also improperly precluded the jury from considering proof that plaintiff was obligated by law (and the easement) to maintain his land so as not to cause or exacerbate any flooding and to allow defendants to maintain the ditch as well. The evidence that plaintiff was primarily responsible for damage to his property was overwhelming and the jury should have been allowed to consider it. For example, plaintiff’s wetlands expert, Scott Livingstone – the same Scott Livingstone who consulted for Kieffer on wetland issues in Lexington Woods – testified that the farmers’ furrows on plaintiff’s land run south to north with the general slope of the land. R. 1064. He testified that the rows help water move across the land from south to north and that when the land was actively farmed and maintained, there were no wetlands. R. 1065-66. Once the land was no longer farmed in the 1970s, wetlands began to appear. R. 1063, 1067. When plaintiff’s land became overgrown with vegetation, the vegetation impeded the flow of water. R. 1070. Mr. Livingstone testified that when he walked the land in 2001, it had been brush hogged by a “lawn mower on steroids” and the cut vegetation was just lying on the ground. R. 1074-75. He testified that the cut - 60 - vegetation, which had not been “raked up or piled or anything,” impeded the flow of water on plaintiff’s land. R. 1075. Mr. Livingstone also testified that a wetland can be created when a ditch is not maintained. R. 1073-74. Conversely, when impediments are removed from a ditch, the land is allowed to dry out. R. 1087. He testified that is why highway departments maintain ditches. Id. Mr. Livingstone further testified that plaintiff’s land dried out in an area where the ditch had been maintained. R. 1024. Even plaintiff was forced to admit that clearing the ditch would have allowed the water to drain more quickly. R. 722-23. Plaintiff also admitted that he brought in approximately 300 truck loads of fill when he built his house, raising its elevation to thirty inches above the center of Lapp Road. R. 798, 825. Plaintiff’s alteration of his land in this regard also interrupted the flow of water across that land. R. 1135. Plaintiff’s engineering expert, Anthony Milone, testified that vegetation growing in a ditch impedes water flow and reduces the capacity of the ditch to carry water. R. 1178-79. Town Engineer Joseph Latona testified that where plaintiff’s land is located, the Town offers to maintain ditches to avoid the accumulation of water. R. 1399. Plaintiff admits, however, that he refused to allow the Town to clean his ditch. R. 652-53. - 61 - Kieffer’s engineering expert, Mark Visscher, testified that it was critical to maintain the ditch on plaintiff’s land as it neared Lapp Road because the slope of the land there is almost flat. R. 1621-24. If plaintiff had properly maintained the ditch or allowed the Town to do so, it would have allowed the water to move off plaintiff’s land to the north. R. 1399-1400. Gregory Giblin, the Town’s Deputy Highway Superintendent, testified that the Town cleans ditches to remove sediment, weeds, grass and brush to avoid flooding and that when a ditch is properly maintained, it dries out the land. R. 1443-44, 1449-50. He also testified that the drainage ditch on plaintiff’s property was “very poorly maintained,” filled with silt and “[a] significant amount of vegetation,” and “severely plugged” by a “tree shrub structure” as it neared Lapp Road. R. 1468-69, 1621-23. The Town wanted to clean the drainage ditch, but plaintiff refused to allow it. R. 652-53, 1445. In fact, when the Town’s Highway Superintendent came to clean the ditch, plaintiff ordered him not to come on his land. R. 616. When the Town Engineer tried to reason with plaintiff, plaintiff threatened him and his family. R. 618-19, 726-27. Plaintiff’s employees purportedly made some effort to clean out the ditch, but the ditch was not even a foot deep when they finished. R. 912, 915-16. The one-foot depth was not sufficient to drain water. R. 1487-88. If plaintiff had - 62 - permitted the Town to maintain the ditch, it would have dug it to its original depth of 2½ feet, and the land would have dried out. R. 1488-89. Despite this overwhelming proof that plaintiff caused some or all of his damages, and despite Justice Makowski’s ruling that this evidence was relevant to the intent necessary for a punitive damage award (R. 4124-27), the trial court, after admitting this proof into evidence, erroneously instructed the jury to disregard it and further instructed that plaintiff had no duty to maintain his property. R. 1782. In doing so, the trial court essentially instructed the jury that plaintiff could not have caused or even contributed to the alleged flooding (when there was overwhelming proof to the contrary), making a finding of causation solely against the defendants inevitable. The Appellate Division’s determination that Kieffer’s challenge on this issue was without merit or irrelevant to the punitive damages award was also error as New York law provides that a plaintiff’s contribution to his own harm may negate an award of punitive damages. Levine supra; Kiff supra. - 63 - CONCLUSION For the foregoing reasons, Kieffer respectfully requests that the Court modify the order of the Appellate Division by dismissing the punitive damage award with prejudice. Dated: Buffalo, New York June __, 2012 PHILLIPS LYTLE LLP By Michael B. Powers Patricia A. Mancabelli Attorneys for Defendant-Appellant Kieffer Enterprises, Inc. 3400 HSBC Center Buffalo, New York 14203-2887 Telephone No.: (716) 847-8400 Doc # 01-2568828.16