Nrp Holdings Llc et al v. City of Buffalo et al

MOTION for Summary Judgment

W.D.N.Y.October 28, 2016

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK NRP HOLDINGS LLC and NRP PROPERTIES LLC Plaintiffs, v. Civil No.: 11-CV-00472(WMS) CITY OF BUFFALO, BYRON W. BROWN, STEVEN M. CASEY, DEMONE A. SMITH, RICHARD A. STENHOUSE, BUFFALO JEREMIAH PARTNERSHIP FOR COMMUNITY DEVELOPMENT, INC., CITY OF BUFFALO URBAN RENEWAL AGENCY JOHN DOE 1 – 10, and JOHN DOE COMPANIES 1 – 5. Defendants. NOTICE OF MOTION TO DISMISS PURSUANT TO Fed. R. Civ. P. 12(c) MOTION MADE BY: Defendant City of Buffalo Urban Renewal Agency. DATE TIME & PLACE OF HEARING: On a date and time specified by the Court before Hon. William M. Skretny, in the United States District Court for the Western District of New York. SUPPORTING PAPERS: Declaration of Richard T. Sullivan, Esq. dated October 28, 2016 with attached Exhibit A. In addition, Declaration of Michael A. Battle, Esq. (dated October 14, 2016), with attached exhibits; Affidavit of Scott Billman (dated October 12, 2016), with attached exhibits; Affidavit of Mayor Byron W. Brown (dated October 13, 2016); Affidavit of Demone A. Smith (dated October 14, 2016); Memorandum of Law; and Separate Rule 56 Statement of Undisputed Facts, all having been filed with the Motion to Dismiss of the Defendants, City of Buffalo, Byron M. Brown, Steven M. Casey and Demone A. Smith. GROUNDS FOR RELIEF: Fed. R. Civ. P. 12(c) Case 1:11-cv-00472-WMS-LGF Document 165 Filed 10/28/16 Page 1 of 3 2 RELIEF REQUESTED: An Order of this Court dismissing the Second Amended Complaint, in its entirety, as to Defendant City of Buffalo Urban Renewal Agency. REPLY PAPERS: On a date scheduled by the Court. ORAL ARGUMENT: Requested. Dated: October 28, 2016 HARRIS BEACH PLLC By: /s/ Richard T. Sullivan Richard T. Sullivan Attorneys for Defendant, City of Buffalo Urban Renewal Agency 726 Exchange Street, Suite 1000 Buffalo, New York 14210 (716) 200-5050 rsullivan@harrisbeach.com TO: Thomas S. Lane, Esq. Nelson Perel, Esq. WEBSTER SZANYI LLP Attorneys for Plaintiffs 1400 Liberty Building Buffalo, New York 14202 (716) 842-2800 tlane@websterszanyi.com nperel@websterszanyi.com Michael A. Battle BARNES & THORNBURG LLP Attorneys for City of Buffalo, Byron W. Brown and Demone A. Smith 1717 Pennsylvania Ave., Suite 500 Washington, DC 20006 (202) 289-1313 Michael.battle@btlaw.com Michael A. Brady, Esq. Daniel J. Brady, Esq. HAGERTY & BRADY Attorneys for City of Buffalo, Byron W. Brown and Demone A. Smith 69 Delaware Ave., Suite 1010 Buffalo, New York 14202 (716) 856-9443 mbrady@hagerty-brady.com Case 1:11-cv-00472-WMS-LGF Document 165 Filed 10/28/16 Page 2 of 3 3 Rodney O. Personius, Esq. PERSONIUS MELBER LLP Attorneys for Defendant Steven M. Casey 2100 Main Place Tower, 350 Main Street Buffalo, New York 14202 (716) 855-1050 rop@personiusmelber.com Case 1:11-cv-00472-WMS-LGF Document 165 Filed 10/28/16 Page 3 of 3 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK NRP HOLDINGS LLC and NRP PROPERTIES LLC, Plaintiffs, v. Civil No.: 11-CV-00472(WMS) CITY OF BUFFALO, BYRON W. BROWN, STEVEN M. CASEY, DEMONE A. SMITH, RICHARD A STENHOUSE, BUFFALO JEREMIAH PARTNERSHIP FOR COMMUNITY DEVELOPMENT, INC., CITY OF BUFFALO URBAN RENEWAL AGENCY, JOHN DOE 1 – 10, and JOHN DOE COMPANIES 1 – 5, Defendants. DECLARATION IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT Richard T. Sullivan, Esq. affirms the following under penalty of perjury: 1. I am an attorney licensed to practice law in the State of New York and a member of the firm of Harris Beach PLLC, the attorneys for the City of Buffalo Urban Renewal Agency (“BURA”), one of the Defendants named in the Second Amended Complaint in this action. 2. I am admitted to practice before this Court. 3. I make this Declaration in support of a motion by BURA pursuant to Rule 56 of the Federal Rules of Civil Procedure dismissing Count II in the Second Amended Complaint (Docket No. 21) as a matter of law. Count II is referenced as the “promissory estoppel claim” and is the only claim against BURA. 4. I am personally familiar with the facts stated in this Declaration based upon my representation of BURA throughout the course of this action. I have also read the October 14, 2016 Motion for Summary Judgment of the Defendants City of Buffalo, Byron W. Brown and Case 1:11-cv-00472-WMS-LGF Document 165-1 Filed 10/28/16 Page 1 of 5 2 Demone A. Smith (“City Defendants”). BURA joins in that motion as it relates to the promissory estoppel claim. 5. I incorporate by reference herein the Statement of Undisputed Facts in Support of Motion for Summary Judgment as well as the October 12, 2016 Affidavit of Scott Billman, Esq., BURA’s General counsel (“Billman Affidavit”, Document 152-3, Exhibit “A” hereto). 6. This motion is based upon the determination of this Court in its December 17, 2016 Decision and Order (Document 132) that BURA did not make a clear and unambiguous promise to the Plaintiffs. As a result the promissory estoppel claim against it must be dismissed as a matter of law. PROCEDURAL HISTORY 7. BURA was added as a Defendant in this action upon cross-motion of the Plaintiffs (“NRP”) in reply to a Rule 12(b)(6) motion by the City Defendants to dismiss the First Amended Complaint. 8. In a July, 2012 Decision and Order (Docket No. 43) this Court granted the City Defendants’ motion to dismiss Counts I, III, and V of the Amended Complaint. Among other things, the Court determined that a February 25, 2008 letter from Timothy Wanamaker, the former Executive Director of the City of Buffalo’s Office of Strategic Planning, to Belmont Shelter Corporation (“Wanamaker Letter”) did not create a contract between the City and NRP. 9. The Court found that the Wanamaker Letter, “leaves certain terms open, and is contingent on other events (Document No. 43, p. 11), that the “City harbored no intent to be bound” (Document No. 43, p. 12), and that the “letter was sent to NPR to support its application Case 1:11-cv-00472-WMS-LGF Document 165-1 Filed 10/28/16 Page 2 of 5 3 to the N.Y.S. State Division of Housing and Community Renewal for low income housing credits.”1 10. There are only two references to BURA in the Wanamaker Letter. The first refers to BURA having “earmarked $1,600,000 of the City’s HOME funds for the above referenced project … ”. The second references the fact that “BURA is required to meet all applicable Federal, State and local rules and regulations before issuance of HOME funds to eligible recipients”. 11. Before answering the Second Amended Complaint, BURA made a Rule 12(b)(6) motion to dismiss the claims alleged against it, including the promissory estoppel claim in Count II (Document No. 58). 12. In a September 13, 2013 Decision and Order (Docket No. 68), this Court granted BURA’s motion to dismiss Counts I, III and V in the Second Amended Complaint, but denied the motion to dismiss Count II, the promissory estoppel claim. 13. BURA thereafter answered the Second Amended Complaint (Document No. 73). Among other things, it asserted an Affirmative Defense that the Wanamaker Letter does not create a contractual relationship, by estoppel or otherwise, between the Plaintiffs and BURA. THE DECEMBER 17, 2015 DECISION AND ORDER 14. On August 13, 2015 BURA moved to dismiss the promissory estoppel claim pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, a motion addressed to the allegations in the Second Amended Complaint. 1 The Wanamaker Letter was not written to NRP. It was written to Belmont Shelter Corporation. Case 1:11-cv-00472-WMS-LGF Document 165-1 Filed 10/28/16 Page 3 of 5 4 15. The Court addressed the promissory estoppel claim in a December 17, 2016 Decision and Order addressing the Rule 12(c) motion. It noted that the “specific promises” in the Wanamaker letter alleged in the Second Amended Complaint are that the Defendants would: A. Extend the project its usual Low Income PILOT agreement; B. Provide $1,600,000 of its HOME funds to assist in the construction; and C. Provide fifty-one (51) buildable lots at a price no greater than $2,000 per buildable lot, and not to exceed a total price of $100,000. 16. The Court noted that the Wanamaker letter contained two “contingencies”. The contingency that related to BURA was that it is, “[R]equired to meet all applicable Federal, State and local rules and regulations before issuance of HOME funds to eligible recipients.” The Court concluded that, “[E]ven considered solely within the four corners of the letter, the release of HOME funds is not only contingent, but the terms of that contingency are ambiguous”, i.e., the promise. 17. The Court ended the Decision and Order by dismissing the promissory estoppel claim, “to the extent it is based on the alleged promise to provide $1,600,000 of its HOME funds toward the Project.” That is the only “promise” that the Court found to be made by BURA. 18. In his Affidavit, Mr. Billman reviewed BURA’s role in the general planning and administration of urban renewal projects in the City of Buffalo. BURA is a “separate entity” and “not a part” of the City of Buffalo. Mr. Billman states unequivocally that, “BURA would not have been a party to either the City-to-Developer real property transfer or to the proposed PILOT Agreement”. The PILOT Agreement is between be between the City of Buffalo, Erie County and NRP. The real property transfers, i.e., the fifty-one (51) buildable lots are made by the City. They involve City-owned properties. Case 1:11-cv-00472-WMS-LGF Document 165-1 Filed 10/28/16 Page 4 of 5 5 19. The only “promise” involving BURA in the Wanamaker letter, i.e., the promise to “provide 1,600,000 of its HOME funds to the Project”, has been determined by the Court to be ambiguous and unenforceable. Thus, the promissory estoppel claim against BURA should be dismissed as a matter of law. DATED: October 28, 2016 /s/ Richard T. Sullivan Richard T. Sullivan 263409 2946402v1 Case 1:11-cv-00472-WMS-LGF Document 165-1 Filed 10/28/16 Page 5 of 5 EXHIBIT “A” Case 1:11-cv-00472-WMS-LGF Document 165-2 Filed 10/28/16 Page 1 of 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 1 of 7965 2 28 2 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 2 of 7965 2 28 3 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 3 of 7965 2 28 4 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 4 of 7965 2 28 5 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 5 of 7965 2 28 6 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 6 of 7965 2 28 7 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 7 of 7965 2 28 8 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 8 of 7965 2 28 9 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 9 of 79Case 1:11-cv-00472- MS-LGF Document 165-2 Filed 10/28/16 Page 10 of 80 Case 1:11-cv-00472-WMS-LGF 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Document 152-3 Filed 10/14/16 Page 70 of 7965 2 28 1 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 71 of 7965 2 28 2 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 72 of 7965 2 28 3 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 73 of 7965 2 28 4 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 74 of 7965 2 28 5 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 75 of 7965 2 28 6 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 76 of 7965 2 28 7 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 77 of 7965 2 28 8 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 78 of 7965 2 28 9 80 Case 1:11-cv-00472-WMS-LGF Document 152-3 Filed 10/14/16 Page 79 of 7965 2 28 80 80 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK NRP HOLDINGS LLC and NRP PROPERTIES LLC, Plaintiffs, v. Civil No.: 11-CV-00472(WMS) CITY OF BUFFALO, BYRON W. BROWN, STEVEN M. CASEY, DEMONE A. SMITH, RICHARD A. STENHOUSE, BUFFALO JEREMIAH PARTNERSHIP FOR COMMUNITY DEVELOPMENT, INC., CITY OF BUFFALO URBAN RENEWAL AGENCY, JOHN DOE 1 – 10, and JOHN DOE COMPANIES 1 – 5, Defendants. MEMORANDUM OF LAW Harris Beach PLLC Attorneys for Defendant City of Buffalo Urban Renewal Agency 726 Exchange Street, Suite 1000 Buffalo, New York 14210 (716) 200-5050 Case 1:11-cv-00472-WMS-LGF Document 165-3 Filed 10/28/16 Page 1 of 5 -1- I. INTRODUCTION This Memorandum is submitted on behalf of the City of Buffalo Urban Renewal Agency (“BURA”) in support of its motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. The motion addresses Count II in the Second Amended Complaint, the promissory estoppel claim. It is based upon the determination of this Court in a December 17, 2015 Decision and Order (Docket No. 132) that the only “promise” allegedly made by BURA was ambiguous and unenforceable. BURA also joins in the October 14, 2016 motion for summary judgment by the City of Buffalo, Byron W. Brown and Demone Smith (“City Defendants”) and incorporates by reference herein their legal arguments relating to the promissory estoppel claim. II. PROCEDURAL HISTORY This action was commenced in June 2011. BURA was added as a Defendant upon the Plaintiffs’ (“NRP”) cross-motion in reply to a motion by the City Defendants to dismiss the Amended Complaint. In a July 2012 Decision and Order (Docket No. 43), the Court granted the City Defendants’ motion to dismiss Counts I, III, and V of the Amended Complaint. However, the Court did not dismiss the promissory estoppel claim in Count II. Before answering the Second Amended Complaint, BURA moved to dismiss the claims alleged against it, including the claim for promissory estoppel (Docket No. 58). In a September 13, 2013 Decision and Order (Docket No. 68) the Court granted BURA’s motion to dismiss Counts I, III and V, but denied the motion to dismiss Count II, of the Second Amended Complaint. Case 1:11-cv-00472-WMS-LGF Document 165-3 Filed 10/28/16 Page 2 of 5 -2- BURA then answered the Second Amended Complaint (Docket No. 73). Among other things, it asserted an Affirmative Defense that the Wanamaker Letter does not create a contractual relationship, by estoppel or otherwise, between the Plaintiffs and BURA. On August 13, 2015, BURA moved to dismiss the promissory estoppel claim pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, a motion addressed to the allegations in the Second Amended Complaint. The Court addressed the promissory estoppel claim in its December 17, 2015 Decision and Order in response to the Rule 12(c) motion (Docket No. 132). It noted that the “specific promises”1 alleged in the Second Amended Complaint are that Defendants would: 1. Extend the project its usual Low Income PILOT agreement; 2. Provide $1,600,000 of its HOME funds to assist in the construction; and 3. Provide fifty-one (51) buildable lots at a price no greater than $2,000 per buildable lot, and not to exceed a total price of $100,000. The Court determined that the Wanamaker Letter contained two “contingencies”. The contingency relating to BURA was that it is “required to meet all applicable Federal, State and local rules and regulations before issuance of HOME funds to eligible recipients”. The Court found that, “[E]ven considered solely within the four corners of the letter, the release of HOME funds is not only contingent, but the terms of that contingency are ambiguous.” The Court also determined that the two remaining “promises” – “to extend a low income PILOT agreement and to sell 51 buildable vacant lots”- are unambiguous. It concluded the Decision and Order by 1 According to the Second Amended Complaint, the promises are contained in the February 25, 2008 letter from Timothy E. Wanamaker, the Executive Director of the City of Buffalo’s Office of Strategic Planning (the “Wannamaker Letter”) Case 1:11-cv-00472-WMS-LGF Document 165-3 Filed 10/28/16 Page 3 of 5 -3- dismissing the promissory estoppel claim “to the extent it is based on the alleged promise to provide $1,600,000 of its HOME funds toward the Project.” An affidavit of Scott Billman, Esq., BURA’s General Counsel, was submitted in support of the City Defendant’s motion for summary judgment (“Billman Affidavit”). Mr. Billman explained the role of BURA in the project development process and stated unequivocally that, “To be clear BURA would not have been a party to either the City-to-Developer real property transfer or to the proposed PILOT Agreement.” In other words, the two promises in the Wanamaker Letter the Court found to be unambiguous do not involve BURA. The only promise that did involve BURA was found to be unenforceable. III. NRP’S PROMISSORY ESTOPPEL CLAIM SHOULD BE DISMISSED AS AGAINST DEFENDANT BURA To state a claim for promissory estoppel, NRP would have to demonstrate “(1) a promise that is sufficiently clear and unambiguous; (2) reasonable reliance on the promise by [NRP]; and (3) injury caused by the reliance.” (Docket No. 132, citing Matlin Patterson ATA Holdings LLC v. Fed. Express Corp., 87 A.D.3d 836, 841-42; Henneberry v. Sumitomo Corp of Am., No. 04 Civ. 2128 (PKL), 2005 WL 991772 at *5-6). NRP cannot proceed with a promissory estoppel claim against BURA as a matter of law. This Court has determined that BURA did not make a “promise that is sufficiently clear and unambiguous.” The December 17, 2015 Decision and Order dismissed the promissory estoppel claim “to the extent it is based on the alleged promise to provide $1,600,000 of its HOME funds toward the Project.” That is the only “promise” made by BURA. BURA had no involvement in the remaining two “promises” – “to extend a low income PILOT agreement and to sell 51 buildable vacant lots.” The PILOT Agreement was to be between the City, the County of Erie and NRP. The real property transfers involved City-owned properties. Case 1:11-cv-00472-WMS-LGF Document 165-3 Filed 10/28/16 Page 4 of 5 -4- There is no “sufficiently clear and unambiguous” promise to sustain a claim for promissory estoppel against BURA as this Court so determined. Count II in the Second Amended Complaint should be dismissed against it as a matter of law. IV. CONCLUSION This Court has found that the only promise allegedly made by BURA that is the foundation of the promissory estoppel claim is unenforceable. Count II in the Second Amended Complaint should be dismissed against BURA as a matter of law Dated: October 28, 2016 Respectfully Submitted, Harris Beach PLLC By: /s/Richard T. Sullivan Richard T. Sullivan Attorneys for Defendant City of Buffalo Urban Renewal Agency 726 Exchange Street, Suite 1000 Buffalo, New York 14210 (716) 200-5050 263409 2946329v2 Case 1:11-cv-00472-WMS-LGF Document 165-3 Filed 10/28/16 Page 5 of 5