Calverton Hills Homeowners Ass'n, Inc. v. Nugent Bldg. Corp.

CALVERTON HILLS HOMEOWNERS ASSOCIATION, INC.,and NEUER INC. Plaintiffs, v. NUGENT BUILDING CORP., COUNTYOF SUFFOLK, SUFFOLK COUNTY DEPARTMENTOF HEALTH SERVICES, SUFFOLK COUNTY SEWER AGENCY,SUFFOLK COUNTY DEPARTMENT OF PUBLIC WORKS, DIVISIONOF ENVIORNMENTAL QUALITY OFFICE OF WASTE WATER MANAGEMENT,and SEWER DEPARTMENT OF ENVIORNMENTAL CONTROL, Defendants.

2:17-cv-03916 (ADS)(GRB)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

December 26, 2017

MEMORANDUM OF DECISION & ORDER

APPEARANCES:

Scheyer & Jellenik

Co-Counsel for the Plaintiffs

110 Lake Avenue So., Suite 46

Nesconset, NY 11767

By: Richard I. Scheyer, Esq., Of Counsel

Fredrick P. Stern P.C.

Co-Counsel for the Plaintiffs

110 Lake Avenue So., Suite 46

Nesconset, NY 11767

By: Fredrick P. Stern, Esq., Of Counsel

Suffolk County Department of Law

Counsel for the Defendants

100 Veterans Memorial Highway

Hauppauge, NY 11788

By: Leonard G. Kapsalis, Esq., Of Counsel

SPATT, District Judge:

Currently before the Court is a decades-old dispute between the Plaintiffs, Calverton Hills Homeowners Association, Inc. (the "Association") and Neuer Inc. ("Neuer") (together, the "Plaintiffs") and the Defendants, Nugent Building Corp. ("Nugent"), the County of Suffolk (the "County"), the Suffolk County Department of Health Services ("DHS"), and other associated government agencies (together, the "Defendants") over the ownership and maintenance of the sewage treatment plant which services the Calverton Hills residential development in Calverton, New York.

On June 30, 2016, the Plaintiffs commenced this action by filing a complaint that alleges eight causes of actions against the Defendants, namely, violations of 42 U.S.C. § 1983 for deprivation of rights under the Fourth, Fifth, and Fourteenth Amendments of the United States Constitution as well as pendent state law claims. The Plaintiffs are seeking monetary damages as well as equitable relief in the form of a preliminary and permanent injunction declaring the County as owner of the sewage treatment plant, and requiring the County to operate, maintain or replace the above-mentioned plant.

On October 6, 2017, the Defendants filed a motion to dismiss the complaint, pursuant to Federal Rule of Civil Procedure ("FED. R. CIV. P." or "Rule") 12(b)(1), and Rule 12(b)(6). The following day, the Plaintiffs filed a motion for a preliminary injunction seeking to declare the County as owner of the plant and to require the County to operate, maintain or replace the plant. The Court ordered and received additional briefings on both motions. Both motions were fully briefed on December 6, 2017.

On December 8, 2017, the Court heard oral argument on both motions.

For the reasons set forth below, the Court denies the Plaintiffs' motion for a preliminary injunction and grants the Defendants' motion to dismiss, pursuant to Rule 12(b)(1) and 12(b)(6). Further, the Court declines to exercise supplemental jurisdiction over the Plaintiffs' state law claims.

I. BACKGROUND

In 1973, Nugent proposed to develop a parcel of property it owned located in Calverton, Town of Brookhaven, County of Suffolk, State of New York. The proposal called for the construction of approximately 236 individually owned townhouses and a common area of approximately 34 acres. Complaint ¶ 12.

In order to facilitate the construction of the townhouses, the Town of Brookhaven (the "Town") approved a change of the zoning on the property to MF-1. Id. ¶ 13. This approval was contingent on the construction of a sewage treatment plant on the property. Id. ¶ 14.

On April 12, 1973, the County, the Town, DHS and Nugent entered into an agreement (the "1973 Agreement"). It was recorded in the Suffolk County Clerk's Office on September 7, 1973 in the books of Deeds and Conveyances at Liber 7483, page 312. Id. ¶ 15.

In part, the document reads:

1. Where the term "OWNER" is used herein, it shall be deemed to mean the owner of all or part of a particular section of the plot, whether it be the CORPORATION or another ...

9. The responsibility for maintenance and operation of all on-site plumbing lines and sewer laterals be the obligation of the Owner until the same are turned over to the Association and shall thereafter be the responsibility of the Association.

19. It is understood and agreed that upon completion of the treatment plant in accordance with the approved plans and specifications therefor, [NUGENT] shall execute and deliver to the AGENCY such deed and other instruments necessary to vest in the AGENCY or its nominee good marketable and insurable title to the treatment plant site together with the treatment plant and appurtenances to be erected thereon, and together with an easement in perpetuity for purposes of ingressand egress to and from the said sewage treatment plant and site, and to operate and maintain the said sewage treatment plant and site ... The AGENCY or its nominee shall accept such deeds and other instruments, and shall thereafter assume responsibility for the ownership, maintenance and operation of the said sewage treatment plant, site and easement, and shall levy or assess charges therefor in accordance with the law ... Until such time as the AGENCY or its nominee shall accept ownership, operation and maintenance of the sewage treatment plant and site, as hereinabove provided, OWNER, shall have the obligation to properly maintain and operate said sewage treatment plant ... The area designated as the plant site shall be marked specifically "area to be dedicated to the Suffolk County Sewer Agency or its municipal nominee..."

Id. ¶ 16. Under the terms of the 1973 Agreement, Nugent was responsible for the construction of the sewage treatment plant. Id.

All 236 townhouses were built and certificates of occupancy were issued by 1980. However, in January of 1980, Nugent was dissolved for failure to pay franchise taxes. In March of 1987, title to the common elements of the property reverted to the County as a result of Nugent's non-payment of real estate taxes. In 1990, the County deeded the common elements to the Association by unrecorded deed. According to the Complaint, title to the sewage treatment plant remains with Nugent to this date. Id. ¶¶ 18-23.

From 1973 to the present, the Association has operated and maintained the sewage treatment plant. Id. ¶ 24. In 2007, DHS alerted the Association that the sewage treatment plant was not being operated in compliance with the discharge monitoring requirements of Article 7, Section 713 of the Suffolk County Sanitary Code. At that time, DHS began enforcement proceedings against the Association stemming from the failure to comply with the above-mentioned provision of the Suffolk County Sanitary Code. Id. ¶ 31.

On March 7, 2008, the Association entered into a Consent Order with DHS (the "2008 Agreement"), which provided, in pertinent part, the following:

2. submit, in approvable form, a report, prepared by an engineer...detailing the requirements necessary to bring Respondent's above referenced sewage treatment facility into compliance with SPDES Permit";

3. submit, in approvable form, plans and specifications prepared by an Engineer...detailing the requirements necessary to bring Respondent 's above referenced sewage treatment plant into compliance with the SPDES Permit" (which the SPDES had consented to increase to permit limits of 45 mg/I BOD and 45 mg/I SS upon signing of the DHS Order);

4. By three (3) months after the approval of the engineering report, [Association] shall complete all required plan modifications that were developed tor item 3 above;

5. By August 1, 2008, [Association] shall submit, in approvable form, prepared by an engineer...detailing the requirements necessary for the construction of a new sewage treatment plant that will meet or exceed the current nitrogen removal limits and the Suffolk County Sanitary Code;

6. By three 3 months after the approval of the engineering report, [Association] shall submit, in approvable form, plans and specifications, prepared by an engineer...for the construction of a new sewage treatment plant;

7. By three (3) months after the approval of the plans and specifications referred to in item 6 above, [Association] shall commence construction in accordance with the approved engineering report, plans and specifications referred to in Terms and Condition 5 and 6 above;

8. By sixteen (16) months after the commencement of construction, [Association] shall complete the construction referred to in Term and Condition 7 above;

9. By 3 months after completion of construction, [Association] shall submit, in approvable form, an Operations and Maintenance (O&M) Manual, prepared by an engineer...for the upgraded facility;

10. By 3 months after the completion of construction,

[Association] shall complete all on line debugging and shall operate the upgraded facility in accordance with [Association's] SPDES permit effluent limitations and approved engineering report, plans and specifications, and operations and maintenance manual;

12. Respondent agrees that in the event that Respondent fails to meet any terms of conditions of this Order on Consent, the Department shall be entitled to payment by [Association] of a stipulated penalty to be calculated in accordance with..." a penalty schedule."

Id. ¶ 35. According to the 2008 Agreement, if the Association fails to comply, it may be subjected to significant fines. Id. ¶ 39. The Association alleges that it was under duress at the time of the 2008 Agreement and was coerced into signing it. Id. ¶ 40. It further asserts that the Suffolk County Legislature never held a public hearing and failed to pass a resolution adopting the 2008 Agreement. Id. ¶¶ 66-67.

On March 7, 2016, the County issued a letter to the Association, stating that the Association was in breach of the agreement by failing to begin construction of a new sewage treatment facility within three months of the approval of the plans and specifications, as specified in the 2008 Agreement. According to the 2008...