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Loyal Order of Moose v. County of Cortland

Other Lower Courts

September 6, 2007

Local Lodge No.1512, Loyal Order of Moose, Plaintiff,
v.
The County of Cortland, Defendant.

Editorial Note:

This case is not published in a printed volume and its disposition appears in a table in the reporter.

COUNSEL

Russell E. Ruthig, Esq. Attorneys for Plaintiff

Richard C. Van Donsel, Esq. County Attorney

OPINION

Phillip R. Rumsey, J.

Beginning in early 2006, defendant County of Cortland began to explore options for obtaining additional space for county facilities, including a health facility. At some point, the County Administrator obtained the services of a real estate agent, to secure contracts for the purchase of several properties located on South Main Street in the City of Cortland, including three parcels owned by plaintiff (the subject property). The agent tendered a purchase offer for the subject property, set forth in a standard form contract, that was accepted by plaintiff on September 20, 2006. The contract, which did not disclose the identity of the prospective purchaser, [1] was contingent upon the buyer obtaining "any and all governmental approvals and/or permits (if necessary) required to use the premises as commercial use" (Complaint, Exhibit A [sale agreement], "Addenda" F [emphasis in original]). This "government approvals contingency" further provided that it would be "deemed waived" unless the buyer notified the real estate agency in writing, "postmarked no later than December 22, 2006," of its failure (id.).

On December 21, 2006, the County Legislature approved the purchase, authorized its Chairman to execute any documents necessary to consummate the sale, and established a budget for the acquisition of property and construction of a health complex (Complaint, Exhibit B [Resolution 478-06]). On January 2, 2007, the County Attorney wrote to plaintiff's counsel requesting title documents (Abstract of Title, copy of survey, copies of tax bills) and other information necessary to prepare for a closing (Complaint, Exhibit C [Letter of Richard C. Van Donsel, Esq., dated January 2, 2007]).

After the December meeting, some of the Legislators apparently became concerned about the advisability of the project, its cost, and the manner and timeframe in which it had been proposed and approved. Some individuals felt that they, or their fellow Legislators, had been provided with incorrect or inadequate information prior to the vote. As a result, at the next regular meeting of the County Legislature, a motion was made (by one of the Legislators who had voted in favor of the purchase) to "reconsider" the purchase resolution, which passed by a majority vote. After some discussion, the original motion was again brought up for a vote, but it did not garner the two-thirds majority required to authorize a purchase of real property. [2] The County thus deemed the purchase contracts null and void, due to the lack of authorization by its governing body, and refused to proceed with the transactions, prompting this action for specific performance or, alternatively, monetary damages. [3] Issue having been joined, plaintiff moves for summary judgment, and defendant cross-moves for dismissal of the complaint.

The County takes the position that because its duly promulgated "Rules of Order" permit the reconsideration of any action, provided the motion for reconsideration is made by a proper individual at the next regular meeting, an approved contract cannot become binding until the time for such action has passed. Unlike a motion to "rescind," which may be made at any time, unless action has been taken "which cannot be undone" (Answer, Exhibit B [Rules of Order], Article I), the motion to reconsider, though broader in scope (i.e., there is no limitation based on the nature of the action being reconsidered), is limited in time - it must be made at the meeting where an action is taken, or the next regular meeting. This, the County contends, strikes a balance between the need for careful decision-making and the principle of finality. Because the Legislature's rules are matters of public record, the County argues, plaintiff is charged with knowledge of its ability to reconsider, and thus with knowledge that the purchase contract could not be assumed to have been duly "authorized" by the Legislature until after its meeting on January 25, 2007 had passed without a contrary result.

Once a valid contract has been entered into by a municipality, however, it is bound thereby, and cannot "disavow its just commitments or obligations" in a manner that would not be permitted if the contracting party were a natural person (Lowe v City of New York, 240 A.D. 484, 489 [1934]). A municipality, like an individual, cannot escape the obligations of a valid contract by unilateral action. The question then is whether a valid and binding contract came into existence prior to the Legislature's meeting on January 25, 2007. The court finds that it did.

If there has been a valid grant of authority to a municipal representative to enter into a contract, as by vote of the governing body, and the designated individual signs a written contract in that capacity, the municipality's obligations thereunder become "complete" and binding (id.). Likewise, a municipality can become obligated by the vote of its governing body to accept an offer that has been tendered by another party, and a contract will be deemed to exist, even in the absence of any signed, written agreement (see, Vil. of Lake George v Town of Caldwell, 3 A.D.2d 550, 553-554 [1957]; Van Curler Dev. Corp. v City of Schenectady, 59 Misc.2d 621, 623 [1969]). Here, once both steps had been completed - the written contract was signed by an agent purportedly acting on behalf of the County, and that contract was approved by the Legislature, ratifying the agent's authority - a binding contract was formed, that could not be abrogated by a later "change of policy" (id.).

Notably, the contract itself specified that the approval contingency would be "deemed waived" by the purchaser if notice of its failure were not provided to the seller by December 22, 2006. Concededly, this provision could not effectuate a waiver of the statutory requirement that the contract be authorized by a vote of the Legislature (see, e.g., Genesco Entertainment v Koch, 593 F.Supp. 743, 748 [1984]). In the absence of such a vote, the agent would have had no power to create a liability for the County, and the contract would have been a nullity (id.). Once the Legislature voted to approve the purchase, however, that vote constituted an acceptance of the offer as made in the contract, including the provision that further "approvals" (including the right to "reconsider") would be waived, if not exercised before the deadline established in the contingency. While the statutory mandate of legislative approval could not be waived, there is no reason why the Legislature could not waive its internal rules permitting reconsideration, and it did so by approving the purchase. Significantly, it is undisputed that if no further action had been taken by the Legislature after its vote of December 21, 2006, a binding contract would have existed from that date forward, with all of the terms and conditions set forth in the sale agreement. That contract could not have been abrogated by the unilateral action of the County, without plaintiff's consent.

Defendant's suggestion, raised as an affirmative defense, that plaintiff's failure to tender the title documents by December 29, 2006 constituted a breach of the contract, excusing further performance, is unpersuasive, as ...


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