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002 , " GERALD A. VERGILIS. KENNETH M. STENGER ALBERT P. ROBERTS LOUIS J. VIGLOITl JOAN F. GARRETT.. THOMAS R. DAVIS EMANUEL F. SARIS VERGILIS, STENGER, ROBERTS, PERGAMENT & VIGLOOTI, LLP ATTORNEYS AND COUNSELORS AT LAW 1136 ROUTE 9 WAPPINGERS FALLS, NEW YORK 12590 (845) 298-2000 FAX (845) 298-2842 OF COUNSEL: IRA A. PERGAMENT LEGAL ASSISTANT: AMY E. DECARLO e-mail: VSRP@BestWeb.net POUGHKEEPSIE OFFICE 276 MAIN MALL POUGHKEEPSIE, NY 12601 (845) 452-1046 KAREN P. MACNlSH KEVIN T. McDERMOTT STEVEN K. PATTERSON JAY B. RENFRO .ADMITTED TO PRACTICE IN NY & FLA. .. ADMITTED TO PRACTICE IN NY & CONN. PINE PLAINS OFFICE 2990 CHURCH ST. P.O. BOX 21 PINE PLAINS. NY 12567 (518) 398-9857 ADDRESS REPLY TO: ( ) POUGHKEEPSIE ( ) WAPPINGBRS ( ) PINE PLAINS September 30, 2004 Sedore & Company, CPA's, P.C. P.O. Box 918 62 East Main Street Wappingers Falls, New York 12590 Attention: James L. Sedore, Jr., CPA RECEIVED OCT 0 f 2004 TOWN CLERK Re: Town of Wappinger Pending or Threatened Litigation File No. 12951.0060 Dear Mr. Sedore: Pursuant to the letter request dated June 29, 2004, from Joseph Ruggiero, Supervisor of the Town of Wappinger, the following is the status of material Pending or Threatened Litigation, Claims and Assessments against the Town of Wappinger, as known to the best of my knowledge through September 15, 2004. Please be advised that the undersigned was originally appointed attorney to the Town of Wappinger, effective January 1, 1990, and has been subsequently reappointed yearly thereafter until present. PENDING OR THREATENED LITIGATION (Excluding Unasserted Claims and Assessments): I hereby report that as of the date of this letter, there are some material Pending or Threatened Litigation matters in which the Town of Wappinger was named or is expected to be named as a party. With respect to Tort and Tax Certiorari actions, please know that there are claims pending against the Town which are being defended by the Town's 1 \\ V srp03\Common\ W appinger\ Town Board\PendingLitigation( .0060 )\092304-sedore.doc insurance carriers. I am unaware of the exact number, nature, status or probability of success with respect to any of these actions. Emanuel F. Saris, Esq., now of this firm, has been retained by the Town to defend Tax Certiorari actions and he will submit a separate opinion regarding same. Various actions are being handled by attorneys assigned by the Town's insurance carners. Alpine Improvements, LLC v. Town of Wappinger (Challenging Benefit Assessment): In May 2002, the Town was sued by Alpine Improvements, LLC, challenging the Benefit Assessment Formula for the Tri-Municipal Sewer Transmission! Treatment Improvement Area Phase 3A Improvements. In my last opinion letter dated July 18, 2003, I provided a detailed analysis of the lawsuit. However, since that time, the Petitioner's attorney has not actively pursued the prosecution of this case and the matter has remained dormant for at least 18 months. Joseph Boyce v. Town ofWaopinger (Notice of Claim): In my opinion letter of July 18, 2003, I also reported a Notice of Claim filed by Joseph Boyce against the Town. Since the filing of the Notice of Claim, Mr. Boyce has commenced an action which is being handled through the Town's insurance carrier. I am advised that a proposed settlement has been offered by the presiding Justice and the parties are to return to Court October 8th for a further settlement conference. In addition, Mr. Boyce has filed a second Notice of Claim dated July 22,2004, alleging various acts of orchestrated harassment by employees of the Town, malicious and unwarranted prosecution of him and depriving him of income from rental property, loss of value to the property, emotional and physical damages, etc. The underlying facts are that Mr. Boyce purchased the property as a commercial site, he began making renovations to existing buildings and leasing portions of the renovated buildings to various tenants. He has not complied with the Town's Zoning Code, has not applied for a Site Plan Approval and has not applied for a Building Permit for the renovations. The Town has prosecuted him for failure to obtain Site Plan Approval and failure to obtain Building Permits. Inexplicably, a prior enforcement trial held before a jury in the Town of Wappinger Justice Court resulted in a verdict of not guilty. Mr. Boyce continues to flaunt the Zoning Code and new enforcement proceedings have been commenced. It is hoped that the settlement conference scheduled for October 8th will resolve both the pending case and the new Notice of Claim. Based upon my understanding of the facts, it is unlikely that this action will have an unfavorable outcome 2 \\ V srp03\Common \ Wappinger\ T own Board\PendingLi tigation( .0060)\092304-sedore.doc against the Town. However, if the Boyce claim is successful, it is covered by the Town's msurance. Clayton Industries. Inc. In my letter of July 18, 2003, I also reported on the Notice of Claim filed by Clayton Industries, Inc. The claims stems from the Town's Declaration of a Default on Contract No.6 of the Wappinger Water Improvement Area 1999-2(R). The Claim also names the undersigned and Town Engineer, as agents of the Town, in perpetrating these acts. The matter has been forwarded to the Town's insurance carrier. From the undersigned's personal knowledge of this matter, the claims are absolutely baseless. No formal action has been commenced since the Notice of Claim has been filed. In the Matter of Certain Disciplinary Charges Preferred by Joseph Ruggiero. Supervisor v. Linda A.Tasadfoy Disciplinary proceedings were brought against the Town's appointed Assessor, Linda A. Tasadfoy. The matter was tried before a Hearing Officer and the Hearing Officer decided in favor ofthe Town and directed her removal as Assessor. Ms. Tasadfoy has commenced an action in Federal District Court, in essence, charging unlawful removal. The matter is being handled through the Town's insurance carrier. It is my understanding that a Motion to Dismiss the action is presently pending. Based upon my understanding of the facts, it is not anticipated that the case will result in an unfavorable outcome against the Town. However, if the case is decided against the Town, the damages should be covered by the Town's insurance policy subject to the deductible. Absolute Property Management. Inc. v. Town of Wappinger This is an action commenced in the United States District Court for the Southern District against the Town seeking damages for loss ofa use of house, developing land as well as punitive damages in the amount of $3,000,000. Plaintiff purchased the property from Dutchess County at tax sale. Plaintiff then applied to Town of Wappinger for a Building Permit for a single family residence which was constructed. After the residence was constructed but prior to the issuance of a Certificate of Occupancy, it was discovered that this property had been designated "open space" on a subdivision map filed in 1963. The "open space" designation was unknown to the Building Department when the Building Permit was issued. Extensive EBTs have been conducted and there is presently pending a Motion for Summary Judgment. The general rule is that a municipality cannot be bound by mistakes of its administrative officials in the enforcement of the Town's Codes, rules and regulations, etc. The Building Permit was obviously issued in error and despite negotiations for a resolution, Plaintiff chose to litigate. Based on the facts and law as known to me as of the date of writing this letter, I do not expect an unfavorable outcome and even if the Town loses the litigation, punitive damages are not recoverable against a municipality. 3 \\ V srp03\Common\ Wappinger\ Town Board\PendingLitigation( .OO60)\092304-sedore.doc Giggles World Corp. v. Town of Wappinger Plaintiff seeks to establish an adult use business in an existing business along Route 9 in the Town. The Town's Zoning Administrator has ruled that the use is not permitted on the parcel selected by Plaintiff. Plaintiff has commenced an action against the Town in the United States District Court Southern District of New York seeking, among other things, to have the Town's Zoning Code determined unconstitutional, ordering a preliminary injunction against the enforcement of the challenged aspects of the Zoning Code as well as awarding attorney's fees and costs to Plaintiff. This matter is presently being handled by the firm of Boeggeman, George, Hodges & Corde, P.C., attorneys appointed by the Town's insurance carrier. I cannot pass judgment on the merits of the case but the issues presented appear to be covered by the Town's insurance policy. A unfavorable verdict, if any, should be paid by the insurance carrier, subject to the Town's deductible. Board of Managers of the Pavilion Condominium v. the Town of Wappinger A Notice of Claim dated September 22, 2003 was served on the Town in the total sum of $190,815.40. The claim stems from purported misinformation given to the Claimant by the Town's prior Building Inspector in connection with fire damage to a building at the Pavilion Condominium. No action has been commenced since the Notice of Claim has been filed. It is unknown whether an action will be commenced. However, if an action is commenced, it will be vigorously opposed and I do not anticipate an unfavorable outcome in the event that an action is so commenced. UNASSERTED CLAIMS AND ASSESSMENTS: The undersigned knows of no other unasserted claims or assessments considered to be probable of assertion and/ or if asserted, would have a possibility of an unfavorable material outcome. However, in the course of performing legal duties for the Town of Wappinger with respect to a matter recognized to involve an unasserted possible claim or assessment that may call for financial statement disclosure, and I have formed a professional conclusion that the Town should disclose or consider disclosure concerning such possible claim or assessment, as a matter of professional responsibility to the Town of Wappinger, I will so advise the Town and will consult with the Town concerning the question of such disclosure and the applicable requirements of Statement of Financial Accounting Standards No.5. There are no other potential liabilities or loss contingencies that are required to be disclosed or accrued in the financial statements, other than the abovementioned matters. There are no other potential liabilities or loss contingencies that are required to be disclosed or accrued in the financial statements. All contingent liabilities set forth above are as of the date of this correspondence. The scope of this letter includes litigation commenced against the Town to present, except as noted above. 4 \ \V srp03\Common \ Wappinger\ Town Board\PendingLi tigation( .0060)\092304-sedore.doc . To the best of the knowledge ofthe undersigned, there are no actions that have been commenced against the Town, or threatened to be commenced the Town, nor are there any actions pending which would subject the Town to any monetary payment or financial loss. Very truly yours, VERGILIS, STENGER, ROBERTS, PERGAMENT & VIGLOTTI, LLP .:;7,1 //~-~ J.. ./..fiW~~~ ALBERT P. ROBERTS APR/bg cc: Hon. Joseph Ruggiero, Supervisor Hon. Gloria Morse, Town Clerk 5 \IV srp03 ICommonl Wappingerl Town BoardlPendingLitigation( .0060)I092304-sedore.doc