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EQUUS ASSOCIATES, LTD v. TOWN OF SOUTHAMPTON

February 27, 1999

EQUUS ASSOCIATES LTD., PLAINTIFF,
v.
THE TOWN OF SOUTHAMPTON, THE TOWN BOARD OF THE TOWN OF SOUTHAMPTON, FRED THIELE, MARTHA ROGERS, DOUGLAS PENNY, PATRICK HEANEY, JR., MICHAEL WALSH, GEORGE STAVROPOULOS, MARIETTA SEAMAN, JAMES NEEDHAM AND PATRICIA NEUMANN, DEFENDANTS.



The opinion of the court was delivered by: Spatt, District Judge.

MEMORANDUM DECISION AND ORDER

In this Section 1983 action, the plaintiff Equus Associates Ltd. ("Equus" or the "plaintiff") alleges that the defendants, the Town of Southampton (the "Town"), its Town Board, the current Town Board members, the past Town Board members who sat on the Board during the relevant time period, and the former Town Attorney, Michael Walsh (collectively the "defendants"), engaged in an unbridled abuse of power when they unlawfully saddled its application for a building permit to erect six barns on its property for the purpose of breeding, raising and selling polo ponies. The plaintiff's mane complaint is that the defendants trampled on its civil rights in failing to issue the building permit.

Following motions for summary judgment by both sides, the Court rendered a decision on August 27, 1997, which, among other things, dismissed the plaintiff's substantive due process Section 1983 cause of action. See Equus Associates Ltd. v. The Town of Southampton, 975 F. Supp. 454 (E.D.N.Y. 1997). At issue in this non-jury trial is the plaintiff's Section 1983 cause of action based on equal protection of the laws. At the risk of beating a dead horse, the plaintiff's moves to amend the complaint to "resurrect" its Section 1983 substantive due process claim together with other causes of action.

I. BACKGROUND

This opinion and order includes the Court's findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a) and 65(d). See Rosen v. Siegel, 106 F.3d 28, 32 (2d Cir. 1997); Colonial Exchange L.P. v. Continental Cas. Co., 923 F.2d 257 (2d Cir. 1991).

The plaintiff, Equus Associates Ltd., is a New York corporation in the business of breeding, raising, training, stabling and selling horses for recreational riding and for playing polo. Anthony E. Tiska, Jr., now deceased, and Gail O. Tiska ("the Tiskas") were the owners of a 65 acre parcel of farmland located in Bridgehampton in the Town of Southampton. The Tiskas were participants in the Farmland Preservation Program ("Farmland Program" or "Program") (Town Code of the Town of Southampton § 330.50) which was designed to preserve agricultural open lands within the Town. In 1982, acting under the terms of the Farmland Program, by way of an Indenture, the Tiskas sold their "development rights" to the Town for the sum of $637,000, retaining only the right to use the property for "agricultural production" as that term is defined in the New York State Agricultural and Markets Law. See N.Y. Agric. & Mkt's L. § 301.

When the indenture was executed, New York Agricultural and Markets Law § 301 read, in pertinent part: "Agricultural production is defined as the production for commercial purposes of all crops, livestock and livestock products, including, but not limited to . . . horses."

The Southampton Hunt & Polo Club ("the Polo Club") is a private membership club organized to promote and provide facilities for polo matches. On March 12, 1990, the Polo Club leased the 65 acre parcel of land from the Tiskas, for the purpose, among other things, of training and stabling polo ponies. On April 30, 1990, the Polo Club assigned the lease to the plaintiff corporation. Members of the Polo Club had organized Equus to operate an equestrian facility on the 65 acre parcel, which operation would include the stabling and training of polo ponies.

According to the plaintiff, the Tiskas became participants in the Farmland Program in reliance upon an amendment to the Town Code of the Town of Southampton ("Town Code"), enacted on May 26, 1981 pursuant to which the Town Board added "Horse Back Riding Academy and Horse Stabling Facilities" to the list of permissible uses for land governed by the Program (the "1981 amendment"). Equus alleges that as result of the 1981 amendment, the number of participants in the Farmland Program increased from one to fifteen.

On February 28, 1991, Equus applied to the Town Board for a permit to erect six prefabricated dirt floor barns which could be removed without difficulty by subsequent owners. The barns would occupy only one-third of one acre on the 65 acre plot. The permit states that: "The subject premises is a parcel of 65 acres which is the central most portion of a parcel of 89 acres owned by the Tiskas. As can be seen from the enclosed Sketch Plan, the applicant proposes to construct six (6) barns (each with a total of 21 stalls), seven (7) paddocks, fencing for the entire 65 acres area as well as parking for 62 cars."

The projected use in the permit was "stabling and training for polo ponies." The description of the project was as follows: "Applicant is tenant of owners and seeks to maintain stabling and training facility for polo ponies on the subject premises for development rights of which were sold to the Town of Southampton."

The Equus Special Exception Petition dated October 1, 1990, in pertinent part, states as follows:

  1. Applicant seeks a special exception for a horse
  farm, horse stabling facility, and horseback riding
  academy pursuant to Section 69 — 24NN, Zoning
  Ordinance.
  10. The premises shall be used for a horse farm and
  horse stabling facility for the enjoyment of the
  members and guests of the Southampton Polo Club. . .
  . Petitioner shall from time to

  time and consistent with the uses allowed under
  Section 69-24NN(10), Zoning Ordinance, engage in the
  playing of polo matches at the subject premises.

The plaintiff alleges that at the time of the application, two other Farm Program participants, David Birdsall and Seong Jik Moon, used their properties for horse riding and horse stabling.

Construction of the barns at issue is governed by the Southampton Town Code § 330-50D(2), which states:

  Construction permit. The Town Board shall be
  empowered to authorize construction by the issuance,
  after a public hearing, of a permit, as follows:
  (a) For the construction of buildings and other
    structures customarily accessory and incidental to
    agricultural production as same is presently
    defined by § 301 of the New York State Agriculture
    and Markets Law; provided, however, that no such
    permit shall be issued for the erection or
    maintenance of any building or other structures
    intended for human habitation.
  (b) All construction permit applications shall be
    referred by the Town Board to the Farmland
    Committee which shall investigate the application
    and report its recommendations to the Town Board.
  (c) Any construction permit issued pursuant to this
    section shall be subject to such conditions and
    limitations as the Town Board shall see fit, in the
    reasonable exercise of its discretion, to impose.

Prior to the filing of the application for the construction permit, Equus brought onto the leased site approximately 60 polo ponies. Also, polo matches among members were held several times a week, allegedly for the purpose of training the polo ponies. In addition, prior to the filing, Equus erected fencing, graded and seeded certain areas, installed water lines and equipment and hired a professional polo player from Argentina named Tolo Ocampo to teach polo playing to the Polo Club members on the leased property. Equus alleges that it expended in excess of $300,000 in obtaining, improving and maintaining the property.

The plaintiff's permit application was referred to the Town's Farmland Committee to investigate and report its recommendation to the Town Board. On April 16, 1991, the Committee issued its report stating that "the use as proposed by Equus was a use which would fall within the spirit and language of the Town's Farmland Preservation Program." The Farmland Committee report stated that Section 301 of the Agricultural and Markets law defined agricultural production as "[t]he production for commercial purposes of all crops, livestock and livestock products, including but not limited to horses." The Committee concluded that:

  the inclusion of horse farms, horse stabling
  facilities, and horse back riding academies was
  something that was within the general contemplation
  of the Town at the time of the passage of the
  Development Rights Program and immediately
  thereafter, as witnessed by the 1981
  amendments/clarification of the Town Code expressly
  to include horseback riding academies and horse
  stabling facilities to permitted agricultural uses as
  defined by Section 301 of the Agriculture and Markets
  Law.
  Based upon all of the foregoing, it is the conclusion
  of the Southampton Town Farmland Committee that the
  application of Equus Associates Ltd. pursuant to
  Section 330-50D(2) of the Town Code for the
  construction of buildings and other structures
  customarily accessory and incidental to agricultural
  production as proposed by the applicant and as
  indicated in the documents and submissions referred
  to above, is proper and appropriate under the
  Southampton Town Farmland Program.

After receipt of the Farmland Committee report, the Town Board asked the Town Attorney for an opinion as to the plaintiff's proposed use of the land. The Town Attorney, Michael Walsh, submitted an initial opinion memorandum to the Town Board dated April 23, 1991 (Pl.Ex. 3). In this letter, Walsh stated that the New York State Constitution and the General Municipal Law prohibited the plaintiff's proposed use of the land, and that equestrian uses of the property would be contrary to the intent of the Farmland Program.

Nevertheless, Walsh proposed an amendment to the Farmland Program to "prohibit horse stabling facilities and/or horseback riding academies," which would apparently have the effect of repealing the 1981 amendment relied upon by the Tiskas. The Town Board then requested an "advisory opinion" from the Town Planning Board regarding the plaintiff's permit application. On June 20, 1991, the Town Planning Board issued an opinion asserting that the 1981 amendment was "legally defective" (Pl.Ex. 4). However, the Town Planning Board conceded that:

  1) The horse farm aspect of this application if fully
  complying with New York Agriculture and Markets Law
  Section 301 is approvable under said statute and the
  stabling of horses for said purpose as accessory to
  this use is also approvable . . .
  2) The training of such horses for sale as polo
  ponies should not extend to the point where polo
  matches or similar sport activities would be carried
  on said lands where the Town has purchased these
  development rights. . . .
  3) Despite the Town Code amendment of May 26, 1981,
  which appears to be legally defective and which is
  also contrary to the original intent of the basis and
  language upon which the public acted in referendum
  vote of November 4, 1980, a horse stabling facility
  for lease, rent or hire of riding horses, and a
  horseback riding academy with all that it implies are
  recreational purposes that this Board advises against
  approving.

The Town Planning Board also concluded that:

  Given that some farmers may have signed agreements
  with the Town which relied on the Code Amendment of
  May 26, 1981, the Town Board should examine the
  procedures for allowing such farmers to purchase back
  from the Town their development rights.

On August 7, 1991, the Town Attorney issued a second opinion memorandum (Pl. Ex. 5), which discussed the 1981 amendment and the language in the Indenture. The second opinion memorandum concluded that:

  [T]he present Board would have a good chance of
  prevailing in the event it wishes to rely on the
  terms of the deed and deny the use proposed by the
  applicant. Alternatively, if the Board finds that the
  circumstances surrounding the transaction warrant a
  re-interpretation of the provisions of the deed, the
  Board does have the legal authority to permit, the
  proposed use since the major legal barrier, that is,
  the 1980 referendum, is not binding due to the
  aforesaid technical defects.

On September 10, 1991, the Town Board rejected the plaintiff's permit application by a three to one vote. Defendants Stavropoulos, Needham and Seaman voted to deny the permit. Defendant Neumann voted to grant the application.

  On appeal, on August 8, 1994, the Appellate Division, Second
Department reversed the trial court's decision, vacated the
injunction, annulled the Town Board's determination denying the
permit application, and granted the plaintiff's Article 78
petition and its request for a construction permit. See Town of
Southampton v. Equus Assocs. Ltd., 201 A.D.2d 210, 615 N.Y.S.2d 714
 (2d Dept. 1994). In reaching its decision, the Appellate
Division framed the issue as "whether [the plaintiff's] proposed
use of its leased property to raise, train and sell polo ponies
constitutes `agricultural production' within the meaning of
Agriculture and Markets Law § 301, and therefore should have been
permitted by the Town of Southampton." Id. at 714. In answering
this question in the affirmative, the court relied on the
language of section 301 and the Third Department's decision in
Kinderhill Farm Breeding Assocs. v. Walker, 54 A.D.2d 811,
388 N.Y.S.2d 43 (3d Dept. 1976), aff'd, 42 N.Y.2d 919, 397 N.Y.S.2d 1006,
366 N.E.2d 1360 (1977). Agriculture and Markets Law § 301
defines "agricultural production" as "[t]he production for
commercial purposes of all crops, livestock and livestock
products, including, but not limited to the following: . . .
horses." Equus, 615 N.Y.S.2d at 715. Consistent with this
definition, in Kinderhill, the Third Department held that the
breeding of thoroughbred race horses constituted agricultural
production as defined in section 301. Id. Further, the Second
Department found that Equus's proposed use of the land was
consistent with the purpose of the Farmland Program, namely:
  [to] provide the open rural use environment so highly
  valued by those persons who support the Town of
  Southampton's recreational and resort economy, as
  well as by year-round residents . . . Therefore, as a
  matter of public policy, the Town of Southampton
  designates those specific land areas as the
  Agricultural Overlay District in order to encourage
  and to make economically feasible the preservation
  of these lands for agricultural purposes.

See id. at 716, quoting Town Code, article X § 330-47[A] (emphasis by the Appellate Division). Finally, the court relied on a letter dated October 11, 1991, submitted by Ned B. Stiles, a board member of the Group for the South Fork, which was an intervenor in the Article 78 proceeding and who opposed the Group's support of the Town's position. The letter stated that the Town Board's decision to deny the permit was political rather than environmental and grounded on a "fundamental error" by the Group. The Court further concluded that local opposition was "largely the result of unwarranted warnings" and an "unfounded" rumor that Equus sought to erect a polo stadium and parking lot. Id. As a result of these factors, the Appellate Division ordered that the Town Board grant Equus's application for the construction permit. The matter was remitted to the Town Board "for the imposition of any appropriate conditions." Id. at 716-717.

In reliance on the Appellate Division decision directing the issuance of a permit, Equus re-entered the property pursuant to a subsequent lease with the new owners, utilizing a smaller portion of the parcel consisting of 44 acres instead of the original 65 acre parcel.

At the time this bench trial concluded on May 20, 1998, notwithstanding the Appellate Division direction, no construction permit had been issued. However, at the closing arguments on January 29, 1999, as stated above, the Court was advised that permits were issued to the plaintiff on June 19, 1998, subject to a number of conditions.

This lawsuit was commenced on September 9, 1994. The plaintiff's First Amended Complaint contained three causes of action based on the defendants' alleged violation of its constitutional rights under (1) the due process clause, (2) the equal protection clause, and (3) the takings clause. Both sides moved for summary judgment. In its decision dated August 27, 1997, reported at 975 F. Supp. 454, the Court granted the defendants' motion to dismiss the substantive due process claim. Thus, the two causes of action that remained were (1) the Section 1983 equal protection claim, and (2) the Section 1983 takings claim. It was noted that, in the plaintiff's post-trial memorandum of law, there was no reference to the takings cause of action. During closing arguments, plaintiff's counsel confirmed that Equus was not pursuing the takings claim.

In addition, the plaintiff moved: (1) pursuant to 28 U.S.C. ยง 1367, to exercise supplemental jurisdiction over the State law issues now being presented; (2) pursuant to Rule 15(a) of the Federal Rules of Civil Procedure ("F.R.C.P."), for an order permitting plaintiff to amend the complaint to include a State law cause of action for a mandatory injunction compelling the issuance of a permit; and (3) pursuant to F.R.C.P. Rule 15(d), for an order permitting the plaintiff to supplement the complaint due to defendants' continued failure to issue a permit. As stated above, the Court at closing arguments was advised that the permits were issued to ...


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