SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
859
CA 12-02307
PRESENT: SCUDDER, P.J., PERADOTTO, CARNI, VALENTINO, AND WHALEN, JJ.
IN THE MATTER OF ECOGEN WIND LLC AND ECOGEN
TRANSMISSION CORP.,
PETITIONERS-APPELLANTS-RESPONDENTS,
V MEMORANDUM AND ORDER
TOWN OF PRATTSBURGH TOWN BOARD,
RESPONDENT-RESPONDENT-APPELLANT,
ET AL., RESPONDENTS.
----------------------------------------------
TOWN OF PRATTSBURGH,
PLAINTIFF-RESPONDENT-APPELLANT,
V
ECOGEN WIND LLC AND ECOGEN TRANSMISSION CORP.,
DEFENDANTS-APPELLANTS-RESPONDENTS.
NIXON PEABODY LLP, BUFFALO (LAURIE STYKA BLOOM OF COUNSEL), FOR
PETITIONERS-APPELLANTS-RESPONDENTS AND DEFENDANTS-APPELLANTS-
RESPONDENTS.
BOND, SCHOENECK & KING, PLLC, ROCHESTER (JOSEPH S. NACCA OF COUNSEL),
FOR RESPONDENT-RESPONDENT-APPELLANT AND PLAINTIFF-RESPONDENT-
APPELLANT.
Appeal and cross appeal from a judgment (denominated order) of
the Supreme Court, Monroe County (John J. Ark, J.), entered February
24, 2012 in a proceeding pursuant to CPLR article 78. The judgment,
among other things, granted in part the motion of petitioners-
defendants, Ecogen Wind LLC and Ecogen Transmission Corp., to enforce
a settlement agreement and denied the motion of petitioners-defendants
to dismiss the declaratory judgment action.
It is hereby ORDERED that the judgment so appealed from is
unanimously modified on the law by granting the motions of
petitioners-defendants to enforce the settlement agreement in its
entirety and to dismiss the declaratory judgment action and as
modified the judgment is affirmed without costs.
Memorandum: Petitioners-defendants, Ecogen Wind LLC and Ecogen
Transmission Corp. (petitioners), appeal and respondents, including
the Town of Prattsburgh Town Board (Town Board) and respondent-
plaintiff, the Town of Prattsburgh (Town), cross-appeal from a
-2- 859
CA 12-02307
judgment that, inter alia, granted in part petitioners’ motion to
enforce a settlement agreement and denied petitioners’ motion to
dismiss the Town’s declaratory judgment action.
Petitioners are engaged in the business of constructing and
operating wind turbine energy facilities. This litigation involves
petitioners’ attempt to construct such a facility in the Town. In
March 2009, petitioners were advised in writing by the Town Code
Enforcement Officer that “no building permit [could] be required by
the Town for [petitioners’ proposed wind energy project]” as “[t]here
are no Town laws or ordinances which prevent [petitioners] from
proceeding with construction.” On July 20, 2009, petitioners received
the permits required by the New York State Department of Environmental
Conservation to construct a wind energy facility in the Town. It is
undisputed that, at all times prior to the commencement of this
litigation, the Town had no local law, zoning law or building code
provision that required any permit or variance for the construction of
wind turbines in the Town.
Nonetheless, in an attempt to accommodate the concerns of the
Town Board with respect to the proposed project, petitioners undertook
a process to gain respondents’ approval for the project. Petitioners
were unable to reach an agreement with respondents with respect to the
project, and in particular with respect to the use of Town roads to
access and ship materials to the site, and on November 16, 2009 they
commenced this CPLR article 78 proceeding. Thereafter, on December
18, 2009, the parties executed a written settlement agreement
providing, inter alia, that “no approvals, permits or other
authorizations from the Town are required in order for [petitioners]
to develop, construct and operate the Project,” and the Town passed a
resolution approving the settlement. However, on January 7, 2010 the
newly elected Town Board passed a resolution concluding that the
settlement agreement was “invalid, illegal, void, and of no force [or]
effect” and voted to rescind the prior resolution of December 18, 2009
that had approved the settlement. On March 9, 2010, the Town Board
enacted a moratorium on wind turbine development in the Town.
By notice of motion dated February 17, 2010, petitioners moved
within the existing CPLR article 78 proceeding to enforce the
stipulation of settlement pursuant to CPLR 2104. The Town cross-moved
to vacate the settlement on the grounds that, inter alia, it is
illegal and constituted “a gratuitous and invalid act to grant
[petitioners] ‘vested rights’ where the [Town] Board ha[d] no
authority to do so.” Subsequently, the Town commenced a plenary
proceeding seeking a declaration that the settlement is, inter alia,
invalid and/or void. Petitioners moved to dismiss the Town’s
declaratory judgment action pursuant to, inter alia, CPLR 3211 (a)
(4), as seeking relief already sought in the pending CPLR article 78
proceeding.
Supreme Court granted in part petitioners’ motion to enforce the
settlement agreement but concluded that petitioners had not obtained
vested rights in a traditional sense because no substantial changes or
improvements had been made to the real property. The court also
-3- 859
CA 12-02307
concluded that petitioners were prevented for 168 days from making
such improvements because the Town Board could have approved and
reached a Road Agreement with petitioners within that time and before
the moratorium was enacted. Thus, the court gave petitioners 168 days
in which to make such improvements and obtain vested rights. The
court also denied the Town’s cross motion to vacate the settlement
agreement and denied petitioners’ motion to dismiss the declaratory
judgment action.
We conclude that the court should have granted in its entirety
petitioners’ motion to enforce the settlement agreement, and we
therefore modify the judgment accordingly. “Stipulations of
settlement are favored by the courts and not lightly cast aside”
(Hallock v State of New York, 64 NY2d 224, 230; see Matter of Galasso,
35 NY2d 319, 321). “It is well settled that a stipulation of
settlement is an independent contract subject to the principles of
contract interpretation” (Corrigan v Breen, 241 AD2d 861, 863; see
H.K.S. Hunt Club v Town of Claverack, 222 AD2d 769, 769, lv denied 89
NY2d 804), and a party will be relieved from the consequences of a
stipulation made during litigation only where there is cause
sufficient to invalidate a contract, such as fraud, collusion, mistake
or accident (see Hallock, 64 NY2d at 230; Matter of Frutiger, 29 NY2d
143, 149-150). Municipalities are treated no differently from private
parties with respect to contractual obligations (see People ex rel.
Graves v Sohmer, 207 NY 450, 457-458, rearg denied 208 NY 581).
Here, although the court properly determined that the Town did
not meet its burden of demonstrating that the settlement agreement was
the product of fraud, collusion, mistake or accident, the court erred
in further determining the merits of the issue whether petitioners had
acquired traditional “vested rights” in the project. That issue was a
predominate focus of the litigation, and it was fully and finally
resolved by the settlement agreement. Thus, the parties were bound by
the terms of the settlement agreement, and the court was bound to
enforce it (see Matter of New York, Lackawanna & W. R.R. Co., 98 NY
447, 452-453).
In light of our determination with respect to the validity of the
settlement agreement, we further modify the judgment by granting
petitioners’ motion to dismiss the Town’s declaratory judgment action.
We have considered the contentions raised by respondents on their
cross appeal and conclude that they are without merit.
Entered: December 27, 2013 Frances E. Cafarell
Clerk of the Court