S&R Dev. Estates, LLC v. Town of Greenburgh

336 F. Supp. 3d 300
CourtDistrict Court, S.D. Illinois
DecidedAugust 29, 2018
DocketNo. 16-CV-8043 (CS)
StatusPublished
Cited by10 cases

This text of 336 F. Supp. 3d 300 (S&R Dev. Estates, LLC v. Town of Greenburgh) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
S&R Dev. Estates, LLC v. Town of Greenburgh, 336 F. Supp. 3d 300 (S.D. Ill. 2018).

Opinion

Seibel, District Judge

Before the Court is the motion of Plaintiff S & R Development Estates, LLC ("S & R") to dismiss the counterclaim of Defendant Sisters of the Blessed Sacrament, Inc. (the "Sisters"). (Doc. 140.) For the following reasons, the motion is GRANTED.

I. BACKGROUND

For purposes of this motion, I accept as true the facts, but not the conclusions, set *306forth in the Sisters' Amended Counterclaim. (Doc. 139 at 47-84 ("ACC").)1

A. Facts

Defendant and Counterclaim Plaintiff Sisters is a religious not-for-profit corporation that owns and operates a convent located at 86 Dromore Road in the Town of Greenburgh, New York. (Id. ¶ 19.) Plaintiff and Counterclaim Defendant S & R is a New York limited-liability company managed by brothers Stephen and Richard Troy. (Id. ) In approximately 2006, S & R purchased, and since then has attempted to develop, a parcel of land directly adjacent to the Sisters' convent. (Id. ¶¶ 65, 95.)

The Sisters purchased the 6.7-acre lot which is used for their convent in 1996. (Id. ¶¶ 2, 26.) They use their land to "conduct daily prayer and meditation" and "spiritual reading and study." (Id. ¶ 25.) The Sisters allege that the parcel's relative distance from developed land is vital to their "need for quiet and privacy" and their religious practice. (Id. ¶ 29.)

The Sisters allege that certain restrictive covenants on the use of adjacent land were also important to their decision to purchase their land.2 (Id. ¶ 43) The Sisters' land and all of the adjacent parcels are part of a ten-lot subdivision that was created by a March 1912 deed. (Id. ¶¶ 5, 37.) The deed included restrictive covenants that banned, among other things, the building of "tenements and flat houses so-called." (Id. ¶¶ 26, 37.) The Sisters argue that this ban continues in force and restricts the building of any modern apartment building. (Id. ¶ 110.)

Following its acquisition of the neighboring property, S & R received a permit to demolish the then-existing home and swimming pool, and submitted plans to build thirty-seven "market rate" apartments. (Id. ¶ 67.) On August 17, 2009, S & R publicly announced a new plan to build forty-one "affordable housing" units instead. (Id. ¶ 95.)

S & R and the Town were involved in multiple lawsuits as early as 2008 regarding whether the zoning of its land allowed for the development of a housing project. (Id. ¶ 94.) In March 2008, the Sisters notified the Town that they opposed any zoning change to S & R's property that would interfere with the zoning classification that guaranteed their peaceful setting. (Id. ¶¶ 92-93.) During a Town Planning Board hearing held in February 2013 regarding S & R's request for a zoning variance, the Edgemont Community Council, a local civic group, raised the issue of the restrictive covenant, which brought it to the attention of the Sisters' counsel, who was at the meeting. (Id. ¶¶ 102, 103.)

On March 2, 2013, the Sisters sent a letter to S & R reserving its rights under the restrictive covenant. (Id. ¶ 106.) Following receipt of this letter, S & R commenced a suit against the Sisters in Westchester County Supreme Court seeking to extinguish the enforcement of the covenant. (Id. ¶ 107.) After this suit was dismissed on procedural grounds, a second *307suit was filed on March 4, 2016, and is currently pending. (Id. ¶¶ 107-108.)

B. Procedural History

On October 14, 2016, S & R commenced this action claiming, among other things, that the Sisters selectively enforced the covenant against it in violation of the Fair Housing Act of 1968 ("FHA"), 42 U.S.C. §§ 3601 et seq. (See Doc. 1.) On February 17, 2017, S & R filed an Amended Complaint including the same claim against the Sisters. (Doc. 78.) The Sisters moved to dismiss, (Doc. 103), and in an oral ruling on September 20, 2017, the Court denied the motion, (Minute Entry dated Sept. 20, 2017).

On October 20, 2017, the Sisters filed an Answer to the Amended Complaint and Counterclaim. (Doc. 129.) On October 31, 2017, S & R filed a letter seeking a pre-motion conference to discuss its anticipated motion to dismiss the counterclaim. (Doc. 133.) The Sisters responded on November 8, 2017, (Doc. 136), and at a pre-motion conference on November 15, 2017, the Sisters were granted leave to amend their counterclaim. (Minute Entry dated Nov. 15, 2017.) On December 7, 2017, the Sisters filed an Amended Answer and Counterclaim. (Doc. 139.) On December 22, 2017, S & R filed the instant motion to dismiss the counterclaim. (Doc. 140.)

In their counterclaim, the Sisters allege that in the event that S & R's FHA claims succeed, they should be entitled to compensation for any damages suffered as a result of the "extinguishment" of their restrictive covenant. (ACC ¶¶ 122, 125.) The Sisters' position is that New York Real Property Actions and Proceedings Law ("RPAPL") § 1951(2) allows for recovery of the monetary value of a covenant that has been deemed unenforceable, regardless of the reason. See New York Real Prop. Acts. Law § 1951(2) (McKinney 2018); ACC ¶ 122.3

S & R responds that any state law claim for damages plainly conflicts with Congress's intent in passing the FHA and is therefore preempted. (Doc. 141 ("P's Mem.") at 4) ("It would be perverse to allow a state-law claim to require the victims of housing discrimination to compensate the perpetrators for the privilege of being their neighbors."). S & R also argues that the Sisters fail to state a claim under RPAPL § 1951(2). (Id. at 6 n.1.)

The Sisters respond that allowing the FHA to preempt § 1951(2) claims would amount to a "taking" without just compensation in violation of the Fifth Amendment. (Doc. 143 ("D's Opp.") at 13.) They allege further that in areas where state police powers have traditionally governed, there is a strong presumption against federal preemption and that the standard for showing preemption is rigorous.

II. LEGAL STANDARD

"A motion to dismiss a counterclaim is evaluated under the same standard as a motion to dismiss a complaint." Holborn Corp. v. Sawgrass Mut. Ins. Co. , 304 F.Supp.3d 392, 397 (S.D.N.Y. 2018)

*308(internal quotation marks omitted). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal ,

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Bluebook (online)
336 F. Supp. 3d 300, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sr-dev-estates-llc-v-town-of-greenburgh-ilsd-2018.