Town of Putnam Valley v. Kaspar (In re Kaspar)

In re: ALEXANDER BERNARD KASPAR Debtor.

TOWN OF PUTNAM VALLEY, Appellant, v. ALEXANDER BERNARD KASPAR, Appellee.

No. 20-CV-393 (KMK)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

March 31, 2021

OPINION

Appearances:

Lewis D. Wrobel, Esq.

Anthony C. Carlini , Jr., Esq.

Handel & Carlini, LLP

Poughkeepsie, NY

Counsel for Appellant

Matthew M. Cabrera, Esq.

M. Cabrera & Associates, PC

Goshen, NY

Counsel for Appellee

KENNETH M. KARAS, District Judge:

The Town of Putnam Valley ("Appellant" or the "Town") appeals from the December 16, 2019 Order of the Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"), which removed a state court-appointed receiver and reinstated the automatic stay pursuant to 11 U.S.C. § 362(a). (See Am. Not. of Appeal 1 (Dkt. No. 5).) Alexander Bernard Kaspar ("Appellee" or "Kaspar") has moved to dismiss the appeal for lack of jurisdiction and lack of standing. (See generally Appellee's Mot. To Dismiss Appeal ("Appellee's Mot.") (Dkt. No. 12).) For the reasons that follow, Appellee's Motion is denied.

I. Background

A. Factual Background

The following facts are drawn from the Parties' submissions on appeal, including the certified record.

1. The Town's Enforcement Action Against Kaspar

The instant Motion is the latest volley in a bitter, enduring dispute between Kaspar and the Town. The origins of this dispute can be traced to sometime in 2005, when Kaspar and his wife, Grace DeLibero ("DeLibero"), allegedly began to operate an "illegal land fill" on a portion of their property in the Town of Putnam Valley. (See Appellee's Mot. Ex. C (Aff'n of Robert C. Lusardi, Esq., in Supp. of Mot. for Relief from Automatic Stay ("Lusardi Aff'n")) ¶ 3 (Dkt. No. 12-3).) According to the Town, Kaspar conducted a range of illegal activities on his property, including:

logging the property, cutting trees in the wetlands and wetland buffers, using heavy track machinery in the wetlands, conducting a 'dumping operation' on the property, removing stonewalls for sale, processing and disposal of wastes, materials, processing and sales, landfilling, land clearing, site development and excavation and related commercial industrial activities all without permits required by the [Town] Code.

(Reply Aff'n of Robert C. Lusardi, Esq., in Further Supp. of Mot. for Relief from Automatic Stay ("Lusardi Reply Aff'n") ¶ 4 (Bankr. Dkt. No. 45)); see also Lusardi Aff'n ¶ 3 (stating that "[i]tems of household refuse, tree stumps, construction demolition debris, and other substances were brought on to the property by carters, landscaping companies, and others" over a multiyearperiod).)¹ Subsequent inspections by local enforcement officers, state environmental officials, and even two state court judges would confirm the considerable scope of damage to the property. (See Mot. for Relief from Automatic Stay Ex. I ("Grossman Op."), at 4 (Bankr. Dkt. No. 26-10) (noting a Town enforcement officer's 2007 description of a "dumping operation that measured 'almost 300 feet long and 10-15 feet high' and 'included stumps, branches, woody material, construction and demolition debris and household garbage'"); id. at 6 (noting that by 2013, testing performed by the New York State Department of Environmental Conservation (the "NYSDEC") had "revealed the presence of known carcinogens linked to various types of cancer, cardiovascular disease[,] and developmental impacts on one of the [tax] parcels"); Lusardi Reply Aff'n ¶ 18 (noting that after visiting the site himself, State Court Justice Francis A. Nicolai wrote in a February 21, 2012 Decision and Order that "[t]he visible debris included various materials, including plastics, porcelain, and tree stumps and raised issues of waste disposal beyond those related to timber and forestry"); id. ¶ 23 (noting that in a 2011 report, a state court-appointed receiver described "debris [that] was buried 20 feet deep," including "plastic bags, nitrile gloves, steel angle iron, steel pipe, plastic pipe, asphalt, lumber, ash[-]like material, buried [and] unprocessed [construction and debris] fill, concrete[,] and so forth").)²

After Kaspar failed to comply with the Town's violation notices, the Town brought suit on May 22, 2006, seeking to enjoin Kaspar from further despoiling the property. (Lusardi Reply Aff'n ¶ 5; Grossman Op. 4.) On March 5, 2007, the late Honorable Andrew P. O'Rourke, then a Supreme Court Justice in Putnam County, granted the Town's preliminary injunction, which was subsequently affirmed by the Appellate Division, Second Department (the "Second Department"), on April 18, 2008. (Lusardi Aff'n ¶ 4; Grossman Op. 5.) While his appeal to the Second Department was pending, however, Kaspar continued operating his private landfill. (Lusardi Aff'n ¶ 5; Lusardi Reply Aff'n ¶ 8; Grossman Op. 5.)³ Indeed, Kaspar apparently carried on, undeterred, even after the Second Department upheld the injunction in April 2008, and after the Town initiated contempt proceedings on May 5, 2008. (Lusardi Aff'n ¶ 6; Lusardi Reply Aff'n ¶¶ 9-10; Grossman Op. 5.) Finally, after a hearing on the Town's application for contempt, Kaspar entered into a settlement agreement that was reduced to an Order and Judgment (the "Consent Order") signed by Justice O'Rourke on March 12, 2009. (Lusardi Aff'n ¶ 6; Lusardi Reply Aff'n ¶ 11; Grossman Op. 5.) Among other provisions, the Consent Order (i) stated that Kaspar's activities violated municipal law, (ii) ordered that various heavy machinery and equipment be removed from the property, (iii) required Kaspar and his wife to submit a restoration plan, and (iv) directed that the property "be restored and remediated in accordance with regulations of the [NYSDEC]." (Grossman Op. 5; see also Lusardi Aff'n ¶ 6 (noting that, pursuant to the terms of the Consent Order, Kaspar "agreed to cleanup [sic] the illegal landfill in accordance with a remediation plan approved by the [c]ourt"); Lusardi Reply Aff'n ¶ 13 (noting that the Consent Order directed Kaspar to "cease and desist all activities on the property").)

But the saga was just beginning. Despite having consented to Justice O'Rourke's Consent Order in March 2009, Kaspar then objected to the court's remediation directive in a letter dated May 19, 2009, arguing that he was in compliance with state environmental regulations after all. (See Lusardi Reply Aff'n ¶ 14; Grossman Op. 5.) Although the NYSDEC had notified Kaspar of "[n]umerous violations" on March 6, 2009—just six days before Justice O'Rourke signed the Consent Order—Kaspar's May 19 letter stated, incredibly, that "[t]he site was regularly monitored by [the NYSDEC] and . . . was [found to be] in compliance with [NYSDEC] regulations." (Lusardi Reply Aff'n ¶¶ 14-15; Grossman Op. 5-6.) There is no evidence, however, that Kaspar took any steps to remediate the property between entry of the Consent Order and his May 19 letter to Justice O'Rourke. (Lusardi Aff'n ¶ 7 (averring that Kaspar had "still refused to [clean up] the property" following the Consent Order); Lusardi Reply Aff'n ¶ 14 (noting that although "no [r]eceiver was in charge of the property" immediately after entry of the Consent Order, and Kaspar was therefore "free to [clean up] the property on his own accord," he "did no such thing"); Grossman Op. 5-6 ("[D]espite the determinations of the Supreme Court, and the Appellate Division, the [NYSDEC], and Town officials, Kaspar not only denied what was found, but [] also failed to remediate the contamination in spite of his consent to do so.").)

In August 2009, after Kaspar had still taken no steps to remediate the property, the Town pursued yet another remedy in state court, moving for the appointment of a post-judgment receiver who could enforce the Consent Order. (Lusardi Reply Aff'n ¶ 16; Grossman Op. 6.) Kaspar sought to vacate the Consent Order by cross-motion. (Lusardi Reply Aff'n ¶ 16; Grossman Op. 6.) On November 12, 2009, after having inspected the property himself, Justice O'Rourke granted the Town's motion to appoint a receiver, denied Kaspar's cross-motion, andfurther directed that the property be remediated in accordance with a restoration plan (the "Donohue Plan") prepared by landscape architect Bruce M. Donohue ("Donohue"). (Lusardi Aff'n ¶ 8; Lusardi Reply Aff'n ¶ 16; Grossman Op. 6.) On March 15, 2011, the Second Department affirmed. (Lusardi Aff'n ¶ 9; Grossman Op. 6 (citing Town of Putnam Valley v. Cabot, 82 A.D.3d 959 (2d Dep't 2011)).)

Still, Kaspar was not ready to throw in the towel. In February 2011, shortly before the Second Department affirmed Justice O'Rourke's November 2009 Decision and Order, he brought an application to discharge the receiver. (Lusardi Reply Aff'n ¶ 17; Grossman Op. 6.) After visiting the site himself, the Honorable Francis A. Nicolai, then Supreme Court Justice for Westchester County, observed that there was still "visible debris" on Kaspar's property, including "plastics, porcelain, and tree stumps," which implicated "issues of waste disposal beyond those related to timber and forestry." (Grossman Op. 6; Lusardi Reply Aff'n ¶ 18.) On February 21, 2012, Justice Nicolai ordered that Donohue serve as the court-appointed receiver (the "Receiver"), "based on his experience with solid waste management and landscape architecture." (Grossman Op. 6.)⁴ Ten months later, on December 21, 2012, Justice Nicolai authorized the Receiver to sell portions of the property in order to generate funds for remediation. (Lusardi Aff'n ¶ 11; Lusardi Reply Aff'n ¶ 21.)

Perhaps unsurprisingly, the Receiver's efforts to sell the property encountered several roadblocks. One challenge stemmed from "environmental constraints" endemic to the property,including "wetlands, steep slopes, and limited access from public roads." (Lusardi Aff'n ¶ 12; see also Lusardi Reply Aff'n ¶ 30 (describing environmental limitations in detail).) Another challenge involved land-use restrictions: with the exception of one tax parcel, the property is located in a...