Appeal of ROBERT A. FORREST from action of the Board of Education of the East Ramapo Central School District, Congregation Bais Malka, and the Hebrew Academy for Special Children, Inc., regarding a settlement agreement.

Decision No. 16,842

(November 2, 2015)

Bingham McCutchen LLP and Minerva & D’Agostino, P.C., attorneys for respondent Board of Education of the East Ramapo Central School District, David J. Butler and Albert D’Agostino, Esqs., of counsel

Savad|Churgin Law Firm, attorneys for respondents Congregation Bais Malka and Hebrew Academy for Special Children, Inc., Paul Savad, Esq., of counsel

ELIA, Commissioner.--Petitioner challenges a decision of the Board of Education (“board”) of the East Ramapo Central School District (“district”) to enter into a stipulation of settlement relating to the sale of the Colton Elementary School (“Colton”) to Congregation Bais Malka (“Bais Malka”) and the Hebrew Academy for Special Children, Inc. (“HASC”).  The appeal must be dismissed.

This appeal is yet another legal proceeding challenging board actions relating to the closure, lease and sale of Colton.  As background, the board voted to close Colton in April 2009, and thereafter leased the site to Bais Malka and HASC.[1]  The lease gave Bais Malka the “right of first refusal” to purchase Colton in an amount identical to “any arm’s length offer to purchase [Colton] by a third party” if the board decided to sell it.

In May 2011, the board voted to sell Colton to Bais Malka and HASC (collectively, “purchasers”) for $6.6 million.  The contract of sale was conditioned upon the board receiving no higher bids for Colton following the issuance of a Request for Proposals (“RFP”) or, if higher bids were received, the purchasers reserved the right to match any higher bid pursuant to Bais Malka’s “right of first refusal.”  Of note, a second rider to the contract (“rent credit provision”) also provided the purchasers with certain credits against the purchase price, including an unspecified amount for any rent paid after the contract became “unconditional”.^[2]  No bids were received when the RFP period ended on July 27, 2011. 

Two years later, however, the closing had not yet occurred. Consequently, in August 2013, the purchasers commenced an action against the district in Supreme Court, Rockland County, seeking specific performance of the contract.  The purchasers argued, inter alia, that the district breached the contract of sale by failing to diligently pursue subdivision approval.  The purchasers also claimed that they were entitled to a credit for amounts paid in rent from July 27, 2011 to the date of closing pursuant to the rent credit provision.

The district asserted several counterclaims and affirmative defenses to the action, claiming that the purchasers breached the underlying lease by failing to make certain rent payments, and requested a money judgment for the amount allegedly owed.  The district further argued that the purchasers breached the contract by failing to obtain a special use permit for the Colton site.  The district denied that the purchasers were entitled to a rent credit.

Insofar as relevant, the purchasers moved for partial summary judgment on their causes of action for specific performance and the rent credit, and sought dismissal of the district’s counterclaims and affirmative defenses.  The district opposed the motion contending, inter alia, that the rent credit provision was inapplicable because the purchasers did not exercise their right of first refusal.

By a Decision and Order dated February 28, 2014, Supreme Court partially granted the purchasers’ motion and dismissed several of the district’s affirmative defenses.  Nevertheless, Supreme Court agreed with the district that the purchasers had misinterpreted the rent credit provision and dismissed that cause of action.  In doing so, however, Supreme Court noted that a rent credit might exist under a different part of the contract. The purchasers and the district each subsequently filed a Notice of Appeal with the Appellate Division, Second Department, challenging the Decision and Order.

The district and the purchasers thereafter engaged in settlement negotiations and ultimately agreed to proceed with the closing of title and reached a compromise regarding the amount of rent owed to the district and the amount of the rent credit provided to the purchasers.  On April 1, 2014, the board voted to accept the terms of the settlement.  The parties’ detailed agreement was memorialized in a 51-page Stipulation of Settlement that was “So Ordered” by Supreme Court on April 8, 2014 (the “So Ordered Stipulation”).  The So Ordered Stipulation was then filed and entered with the Rockland County Clerk on April 14, 2014. 

Petitioner commenced this appeal on May 14, 2014, challenging the board’s decision to close Colton and sell it to the purchasers. Petitioner’s request for interim relief was denied on June 3, 2014.

Petitioner’s argument distills to a contention that the terms of the settlement constitute a “gift of public funds” because the district settled for amounts less than what petitioner believes should be owed.  In the petition, he requests that the So Ordered Stipulation be “annulled and set aside” by the Commissioner of Education and that the sale be prevented.

The district and the purchasers (collectively, “respondents”) argue that the appeal must be dismissed because the Commissioner of Education does not have the authority to annul a court order.^[3]  In its memorandum of law, the district further notes that the appeal should be dismissed as moot because Colton was sold shortly after this appeal was commenced.

Among the relief sought by petitioner in this matter is an order that the So Ordered Stipulation be set aside. I agree with respondents that the Commissioner of Education does not have the authority to annul the So Ordered Stipulation. 

An appeal to the Commissioner under Education Law §310 is not the appropriate forum for a party seeking to invalidate a court-ordered stipulation because the Commissioner lacks jurisdiction to review a court order (Appeal of a Student Suspected of Having a Disability, 40 Ed Dept Rep 542, Decision No. 14,552; Appeal of a Student With a Disability, 35 id. 285, Decision No. 13,543).

Although not entirely clear, petitioner appears to contend that the So Ordered Stipulation somehow lacks the full force and effect of a judicial order.  However, when “So Ordered” by a court, stipulations are subject to judicial enforcement in the same manner as any other direct order of a court (see e.g., Danker v. Steefel, 41 AD3d 526 [finding of contempt upheld where party disobeyed the provisions of a so-ordered stipulation of settlement]).

With respect to such judicial enforcement, while the district and the purchasers agreed in the So Ordered Stipulation that, at the closing, they would sign and file a stipulation of discontinuance with prejudice with respect to the Supreme Court case, there is no indication in the record before me that they did so.  Accordingly, as respondents note, Supreme Court maintained jurisdiction over the action and is the proper forum in which to enforce the terms of the So Ordered Stipulation (see Teitelbaum Holdings v. Gold, 48 NY2d 51; Aaron v. Aaron, 2 AD3d 942, 944). 

Moreover, even if the action had been discontinued, the proper remedy for a party with standing who seeks to set aside the So Ordered Stipulation would be to commence a plenary action in Supreme Court (see Teitelbaum Holdings v. Gold, 48 NY2d 51; Matter of Niagara Mohawk Power Corp. v. Green Island Power Authority, 260 AD2d 849; Matter of Village of Greenwood Lake v. Mountain Lake Estates, 189 AD2d 987, mot. for lv dismissed 81 NY2d 1006).

Accordingly, as noted previously, I lack jurisdiction to disturb the So Ordered Stipulation (see e.g., Appeal of a Student Suspected of Having a Disability, 40 Ed Dept Rep 542, Decision No. 14,552). 

Even if I had jurisdiction, the appeal would be dismissed as moot.  The Commissioner will only decide matters in actual controversy and will not render a decision on a state of facts which no longer exist or which subsequent events have laid to rest (Appeal of a Student with a Disability, 48 Ed Dept Rep 532, Decision No. 15,940; Appeal of M.M., 48 id. 527, Decision No. 15,937; Appeal of Embro, 48 id. 204, Decision No. 15,836). 

Petitioner commenced this appeal on May 14, 2014, and his request for interim relief was denied on June 3, 2014.  Consequently, the record indicates that the district and the purchasers proceeded to perform their respective obligations under the So Ordered Stipulation.  While they worked on finalizing the sale of Colton, the board and the purchasers each timely served and filed their respective answers in this matter. Thereafter, petitioner requested and received four separate extensions of time to file a reply, the last of which expired on July 1, 2014.  Petitioner, however, failed to file a reply or any further documents in this matter.  Shortly thereafter, title to Colton was legally transferred to the purchasers when the closing occurred on July 24, 2014. Consequently, to the extent petitioner requests that I prevent the sale of Colton, such claim must be dismissed as moot because the sale of Colton has already occurred.

In light of this disposition, I need not consider the parties’ remaining contentions.

THE APPEAL IS DISMISSED.

END OF FILE