| Treeline 1 OCR, LLC v Nassau County Indus. Dev. Agency |
| 2011 NY Slip Op 01647 [82 AD3d 748] |
| March 1, 2011 |
| Appellate Division, Second Department |
| Treeline 1 OCR, LLC, Appellant, v Nassau CountyIndustrial Development Agency, Respondents, et al., Defendants. |
—[*1] Harter Secrest & Emery, LLP, Rochester, N.Y. (Paul D. Sylvestri and Julia Green Sewruk ofcounsel), for respondents NL Ventures IV Voice, L.P. and NL Ventures Voice Management,LLC. Cullen and Dykman LLP, Garden City, N.Y. (Douglas J. Bohn and Peter J. Mastaglio ofcounsel), for respondent Manley Holdings, Inc. Drinker Biddle & Reath LLP, New York, N.Y. (Michael O. Adelman of counsel), forrespondent CAWSL Enterprises, Inc.
In an action, inter alia, to recover damages for injury to real property, the plaintiff appeals(1), as limited by its notice of appeal and brief, from so much of an order of the Supreme Court,Nassau County (Warshawsky, J.), entered September 28, 2009, as granted those branches of themotion of the defendants NL Ventures IV Voice, L.P., and NL Ventures Voice Management,LLC, which were pursuant to CPLR 3211 (a) (1) to dismiss the complaint insofar as assertedagainst them and granted those branches of the separate motion of the defendant ManleyHoldings, Inc., joined by the defendant Nassau County Industrial Development Agency, whichwere pursuant to CPLR 3211 (a) (1) and (7) to dismiss the first, second, third, fourth, and fifthcauses of action insofar as asserted against those defendants, and (2), as limited by its brief, fromso much of an order of the same court entered March 22, 2010, as granted those branches of themotion of the defendant CAWSL Enterprises, Inc., which were pursuant to CPLR 3211 (a) (1)and (7) to dismiss the first, second, third, fourth, and fifth causes of action insofar as assertedagainst that defendant.
Ordered that the order entered September 28, 2009, is modified, on the law, by deleting theprovision thereof granting that branch of the motion of the defendants NL Ventures IV Voice,L.P., and NL Ventures Voice Management, LLC, which was pursuant to CPLR 3211 (a) (1) todismiss the complaint insofar as asserted against the defendant NL Ventures Voice Management,LLC, and substituting therefor a provision denying that branch of the motion; as so modified, theorder entered September 28, 2009, is affirmed insofar as appealed from, and it is further,[*2]
Ordered that the order entered March 22, 2010, isreversed insofar as appealed from, on the law, and those branches of the motion of the defendantCAWSL Enterprises, Inc., which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the first,second, third, fourth, and fifth causes of action insofar as asserted against it are denied; and it isfurther,
Ordered that one bill of costs is awarded to the plaintiff, payable by the defendants CAWSLEnterprises, Inc., and the defendants NL Ventures IV Voice, L.P., and NL Ventures VoiceManagement, LLC, appearing separately and filing separate briefs, and one bill of costs isawarded to the defendant Manley Holdings, Inc., payable by the plaintiff.
The plaintiff is the former owner of commercial real property located at One Old CountryRoad in Carle Place (hereinafter the property). It alleges that, as a result of metal manufacturingoperations on a neighboring parcel of real property located at 40 Voice Road, pollutants migratedonto the property. In July 2004 certain defendants, including CAWSL Enterprises, Inc.(hereinafter CAWSL), entered into a voluntary cleanup agreement with the New York StateDepartment of Environmental Conservation and the New York State Department of Health. InJuly 2007 the plaintiff entered into a contract to sell the property for the sum of $71.25 million.However, when environmental testing conducted on July 24, 2007, and August 4, 2007, revealedpollutants on the property above a certain threshold established by the contract of sale, theprospective buyer, on September 4, 2007, canceled the contract, and the plaintiff refunded the $3million deposit to the prospective buyer. In December 2007 the plaintiff sold the property for thesum of $65 million, or $6.25 million less than the sales price agreed to by the initial buyer. Theplaintiff commenced this action, inter alia, to recover damages for the diminution in market valueof the property resulting from the alleged contamination, the failure to remediate the property,and the negligence of the alleged former owners of 40 Voice Road, and made the sameallegations against the current owner of 40 Voice Road, the Nassau County IndustrialDevelopment Agency (hereinafter NCIDA).
"A motion pursuant to CPLR 3211 (a) (1) to dismiss the complaint on the ground that theaction is barred by documentary evidence may be granted only where the documentary evidenceutterly refutes the plaintiff's factual allegations, thereby conclusively establishing a defense as amatter of law" (Mendelovitz vCohen, 37 AD3d 670, 670 [2007]; see Goshen v Mutual Life Ins. Co. of N.Y.,98 NY2d 314, 326 [2002]; Fontanetta vJohn Doe 1, 73 AD3d 78, 83 [2010]). "On a motion to dismiss the complaint pursuant toCPLR 3211 (a) (7) for failure to state a cause of action, the court must afford the pleading aliberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff thebenefit of every possible inference, and determine only whether the facts as alleged fit within anycognizable legal theory" (Breytman vOlinville Realty, LLC, 54 AD3d 703, 703-704 [2008]; see Leon v Martinez, 84NY2d 83, 87 [1994]).
The Supreme Court properly granted those branches of the motion of the defendant ManleyHoldings, Inc. (hereinafter Manley), which were to dismiss the first, second, third, fourth, andfifth causes of action insofar as asserted against it for failure to state a cause of action and basedon the documentary evidence. The damages for diminution in market value, resulting fromalleged contamination, the failure to remediate, and negligence, which form the basis of thecomplaint, occurred and were discovered prior to August 8, 2007, the date when Manleyacquired 40 Voice Road. Consequently, Manley could not have caused or contributed to thedamages for which the plaintiff seeks to recover in the complaint (see Goshen v Mutual LifeIns. Co. of N.Y., 98 NY2d at 326; Leon v Martinez, 84 NY2d at 87; see also Cotton v Beames, 74 AD3d1620, 1622 [2010]). NCIDA, which joined in Manley's motion, acquired 40 Voice Roadfrom Manley on August 10, 2007, and, thus, is entitled to the dismissal of the first, second, third,fourth, and fifth causes of action insofar as asserted against it for the same reason (see Rodriguez v County of Rockland,43 AD3d 1026, 1027-1028 [2007]). Accordingly, the first, second, third, fourth, and fifthcauses of action insofar as asserted against Manley and NCIDA were properly dismissed.
In connection with those branches of the motion of the defendants NL Ventures IV Voice,L.P. (hereinafter Ventures LP), and NL Ventures Voice Management, LLC (hereinafter VenturesLLC), which were to dismiss the complaint insofar as asserted against them based on thedocumentary evidence, those defendants established that they were both formed in Texas,pursuant to Texas law. Ventures LP and Ventures LLC also established that they were bothformed on April 6, 2004, and dissolved on October 24, 2007. They thus argued that, underapplicable Texas statutes, they were no longer subject [*3]to suit.
Under New York law, the laws of the jurisdiction under which a foreign limited partnershipand foreign limited liability company are organized govern, respectively, the liability of limitedpartners in a limited partnership, and the members and managers of a limited liability company(see Limited Liability Company Law § 801; Partnership Law § 121-901).Thus, Texas law applies to the causes of action asserted against Ventures LP and Ventures LLC(see Mizrahi v Chanel, Inc., 193 Misc 2d 1, 4 [2001]). The plaintiff notes that, under theTexas Business Organizations Code, "an existing claim . . . against a terminatedfiling entity," which includes a limited liability company and limited partnership, "isextinguished unless an action . . . is brought on the claim not later than the thirdanniversary of the date of termination of the entity" (Tex Bus Orgs Code Ann § 11.359 [a];see Tex Bus Orgs Code Ann § 1.002 [21]). Accordingly, the plaintiff contends thatVentures LP and Ventures LLC are amenable to suit, since this action was commenced less thanthree years after those entities were dissolved or terminated. However, as Ventures LP andVentures LLC correctly contend, the Texas Business Organizations Code does not apply to them,as that statute only became effective on January 1, 2006, they were formed prior to January 1,2006, and none of the exceptions articulated in the statute are applicable to them (see TexBus Orgs Code Ann § 402.001 [a] [1]; §§ 402.003, 402.005; AndersonPetro-Equip., Inc. v State, 317 SW3d 812, 815 n 2 [Tex 2010]).
Nevertheless, a predecessor to the Texas Business Organizations Code—the formerTexas Limited Liability Company Act, which was in effect at the time this action wascommenced—applies to Ventures LLC. The former Texas Limited Liability Company Actprovided that causes of action against a Texas limited liability company accruing prior to thedissolution of that limited liability company survive for three years after the dissolution of thatthe limited liability company (see former Texas Limited Liability Company Act [Tex RevCiv Stat Ann art 1528n] art 8.12; former Texas Business Corporation Act [Tex Bus Corp ActAnn] art 7.12). With respect to Ventures LP, however, the former Texas Revised LimitedPartnership Act, the predecessor statute under which it was organized, does not contain aprovision applicable to Texas limited partnerships that corresponds to the provision in the formerTexas Limited Liability Company Act relating to the survival of an existing claim against adissolved Texas limited liability company. Moreover, the Texas Business Organizations Code,adopted in 2003, and effective January 1, 2006, expressly applies the general three-year survivalprovision contained therein to limited partnerships formed after January 1, 2006 (see TexBus Orgs Code §§ 11.356, 11.359; Bill Analysis, HB 1156, 2003 Leg, 78th Sess[Tex 2003]), but is silent as to Texas limited partnerships formed prior to that date. Thus, there isno three-year survival period applicable to claims asserted against Ventures LP. Accordingly, theSupreme Court properly granted that branch of the motion of Ventures LP and Ventures LLCwhich was to dismiss the complaint insofar as asserted against Ventures LP, but should havedenied that branch of the motion which was to dismiss the complaint insofar as asserted againstVentures LLC.
In connection with those branches of CAWSL's motion which were to dismiss the complaintinsofar as asserted against it, based on both documentary evidence and failure to state a cause ofaction, CAWSL submitted, inter alia, an affidavit denying the allegation that it owned 40 VoiceRoad, and asserting that it merely owned stock in Johnson & Hoffman Manufacturing Corp., thecorporation which actually owned 40 Voice Road. This affidavit, however, was insufficient toqualify as documentary evidence under CPLR 3211 (a) (1) (see Fontanetta v John Doe 1,73 AD3d at 84-87). In order to be documentary, the evidence must be unambiguous, authentic,and undeniable; thus, affidavits are not considered documentary evidence (see Granada Condominium III Assn. vPalomino, 78 AD3d 996 [2010]; Fontanetta v John Doe 1, 73 AD3d at 85). Inaddition, the voluntary cleanup agreement submitted by CAWSL failed to conclusively establisha defense as a matter of law, as it merely states that the agreement would not constitute anadmission that CAWSL was an operator of 40 Voice Road, or had engaged in any wrongdoing.Contrary to the Supreme Court's conclusion, viable causes of action are stated against CAWSL(see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d at 326; Rovello v OrofinoRealty Co., 40 NY2d 633, 635-636 [1976]). Accordingly, the Supreme Court should nothave dismissed the complaint insofar as asserted against CAWSL.
The parties' remaining contentions either are without merit or have been rendered academic[*4]in light of our determination. Dillon, J.P., Balkin, Leventhaland Chambers, JJ., concur. [Prior Case History: 2009 NY Slip Op 32295(U).]