NIAGARA FALLS WATER BOARD v. CITY OF NIAGARA FALLS ( 2011 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
649
CA 11-00331
PRESENT: SCUDDER, P.J., FAHEY, LINDLEY, GREEN, AND GORSKI, JJ.
NIAGARA FALLS WATER BOARD, PLAINTIFF-RESPONDENT,
V MEMORANDUM AND ORDER
CITY OF NIAGARA FALLS, DEFENDANT-APPELLANT.
JAECKLE FLEISCHMANN & MUGEL, LLP, BUFFALO (HEATH J. SZYMCZAK OF
COUNSEL), FOR DEFENDANT-APPELLANT.
HISCOCK & BARCLAY, LLP, BUFFALO (JAMES P. DOMAGALSKI OF COUNSEL), FOR
PLAINTIFF-RESPONDENT.
Appeal from an order of the Supreme Court, Niagara County
(Richard C. Kloch, Sr., A.J.), entered May 5, 2010. The order, among
other things, granted plaintiff’s motion to compel and denied
defendant’s motion for summary judgment.
It is hereby ORDERED that the order so appealed from is
unanimously reversed on the law without costs, defendant’s motion for
summary judgment dismissing the second amended complaint is granted
and plaintiff’s motion to compel discovery is denied.
Memorandum: Plaintiff commenced this action seeking, inter alia,
to recover funds allegedly owed to it pursuant to the terms of
Resolution No. 2003-90 (Resolution), adopted by defendant’s City
Council, and pursuant to an Acquisition Agreement between the parties.
The Acquisition Agreement provided that, inter alia, plaintiff was to
purchase from defendant certain assets, including “all accounts
receivable of [defendant] . . . in connection with its water,
wastewater and stormwater related accounts.” On a prior appeal and
cross appeal, we modified an order granting in part defendant’s pre-
answer motion to dismiss the complaint and plaintiff’s cross motion
seeking leave to amend the complaint (Niagara Falls Water Bd. v City
of Niagara Falls, 64 AD3d 1142). We concluded that Supreme Court
should have denied the motion and granted the cross motion with
respect to the first cause of action, for breach of contract.
Accepting the facts as alleged in the complaint as true and according
plaintiff the benefit of every possible inference (Daley v County of
Erie, 59 AD3d 1087), we agreed with plaintiff that it had alleged a
cognizable breach of contract cause of action (Niagara Falls Water
Bd., 64 AD3d at 1143). We further concluded, however, that the
remaining causes of action were either properly dismissed or should
have been dismissed (id. at 1143-1144). Plaintiff subsequently filed
and served a second amended complaint asserting a nearly identical
-2- 649
CA 11-00331
breach of contract cause of action.
Defendant appeals from an order that, inter alia, denied its
motion for summary judgment dismissing the second amended complaint.
Inasmuch as we are no longer constrained to accept plaintiff’s
allegations as true (cf. CPLR 3211; Daley, 59 AD3d 1087), we reverse.
The Resolution, adopted prior to the date on which defendant assigned
all accounts receivable to plaintiff, approved a grant to be paid from
defendant’s future revenue in satisfaction of the unpaid water bills
of non-party Niagara Falls Memorial Medical Center (Memorial). Even
assuming, arguendo, that the Resolution does not violate the
constitutional prohibition against gifts to private entities (see NY
Const, art VIII, § 1), we conclude that there is nothing in the
Acquisition Agreement that requires defendant to pay all or part of
Memorial’s unpaid water bills. We reject plaintiff’s contention that
the Resolution created an encumbrance to the transfer of assets and
accounts receivable required by the Acquisition Agreement. Indeed,
there appears to be nothing in either the Acquisition Agreement or the
Resolution that would prohibit plaintiff from seeking payment from
Memorial for any unpaid water bills. Further, plaintiff failed to
establish, beyond mere speculation, that further discovery was
necessary (see generally CPLR 3212 [f]; Heritage Hills Socy., Ltd. v
Heritage Dev. Group, Inc., 56 AD3d 426, 427).
In view of our determination, plaintiff’s motion to compel
defendant to reply to its discovery demands is denied as academic.
Entered: June 17, 2011 Patricia L. Morgan
Clerk of the Court