Preview
JANET D. CALLAHAN
jcallahan@hancocklaw.com
July 4, 2023
VIA ELECTRONIC FILING
Hon. John H. Crandall, J.S.C.
Herkimer County Supreme Court
301 N. Washington Street
Herkimer, New York 13350
Re: Smith v. Smith, Index No. EF2021-108166
Dear Judge Crandall:
As appellate counsel for defendants relative to the second set of appeals in this case, I respond to the letter
efiled by Attorney Pautz yesterday accusing defendants of wrongdoing and asking the Court for a telephone
conference. While we respectfully join in plaintiffs’ request for a phone conference, we strongly object to
their groundless and offensive accusations against defendants.
Respectfully, on Friday June 30, the Fourth Department nullified the preliminary injunction granted by this
Court by order of September 28, 2021. That injunction prohibited defendants from conducting any
“commercial” mining whatsoever on the Property that is the subject of this lawsuit, and also severely
constrained their ability to conduct the tourist side of their business.
In its decision, the Fourth Department characterized the entire preliminary injunction as an abuse of
discretion, holding that it should not have been granted in the first instance and denying plaintiffs’ motion
for an injunction. Its Decision reads, “It is hereby ORDERED that the order so appealed from is unanimously
modified on the law by denying that part of plaintiffs’ motion seeking a preliminary injunction …”
Obviously, the effect of that ruling was to nullify the preliminary injunction ab initio, as if it never existed.
It is important to note that the Fourth Department did not hold that plaintiffs failed to establish one or two
of the necessary elements. Rather, they held that plaintiffs had not met any of the three elements necessary
for a preliminary injunction. First, and foremost, the Fourth Department held that “plaintiffs failed to
establish a likelihood of success on the merits of the action inasmuch as plaintiffs presented no evidence that
partition of the property would result in great prejudice to the owners.” Second, they held that plaintiffs
failed to establish that irreparable harm would result if injunctive relief were not granted because they “put
forward no evidence establishing that the alleged harm caused by continuing the mining operation while the
action was pending . . . could not be ameliorated by monetary damages.” Third, they found that “the balance
of the equities weighs in defendant’s favor.” As to the third factor, the Appellate Division held:
Here, we conclude that the harm defendant will suffer if the preliminary
injunction is in place is more burdensome than the harm to plaintiffs in
the absence of an injunction inasmuch as defendant established that the
{H5179220.1}
temporary restraining order had negatively impacted the business, which
had been operating on the property for decades, and defendant was willing
to increase the payment made to plaintiffs as “rent,” and to memorialize
certain mining restrictions in writing shortly before the proceeding was
commenced. (Emphasis added).
Based on the foregoing, there can be no dispute whatsoever that the preliminary injunction is gone, and the
Fourth Department has held that it never should have been granted in the first place. The Fourth Department
did not vacate the injunction. Rather, it denied plaintiffs’ motion outright, nullifying the injunction as if it
had never existed.
Yet, somewhat incredibly in the face of the plain language of the Decision, plaintiffs seek to convince this
Court that defendants have committed some sort of “egregious” act of “wrongdoing” based on their
erroneous claim that, despite the fact that the original injunction has been completely nullified, the
subsequent May 4, 2023 order modifying it somehow remains in place and continues to bind defendants.
That argument is, frankly, ridiculous. The Appellate Division held on Friday that plaintiffs had never
established a right to injunctive relief in the first instance, and nullified the injunction. There is nothing
confusing or uncertain about the impact of that holding. The May 4, 2023 order of this court did not issue a
new injunction, it simply modified the injunction that the Fourth Department has now found to have been
improperly granted in the first instance. The modification1 of a nullified injunction is similarly nullified and
has no force and effect.
Plaintiffs imply in their letter that defendants are somehow at fault for not seeking to have the Fourth
Department rule on the modification. That was impossible, since the order modifying the injunction was not
signed until May 4, 2023. The appeal from the original injunction was argued in February, months earlier.
Obviously, defendants could not ask the Fourth Department to review the validity of an order that had not
yet been issued. In fact, plaintiffs didn’t even file the motion that led to the modification until March—again
after the appeal was argued.
Plaintiffs appear to change course toward the end of their letter, somewhat reluctantly acknowledging that
the nullification of the injunction also nullified any modification of it, and switching their argument to
contend that defendants are guilty of laying waste to the Property in violation of the terms of their stay under
CPLR 5519 (a)(6). The only evidence they offer to support these accusations, however, is the statement of
their counsel that some unnamed person apparently saw a piece of unspecified “heavy equipment” being
moved to the area of the Property where commercial mining has historically been conducted. Plaintiffs do
not state, however, that this unnamed person observed any actual mining taking place. Simply moving
equipment does not by any stretch of the imagination constitute laying waste. Once again, plaintiffs’
accusations against defendants are not substantiated by evidence.
Further, plaintiffs’ apparent position that any amount of commercial mining, no matter how small, is
forbidden as “waste” is simply wrong. Waste has been defined as “any destruction, misuse, alteration, or
neglect of premises by one lawfully in possession thereof to the prejudice of the interest therein of another.”
Gilman v. Abagnale, 235 A.D.2d 989, 653 N.Y.S.2d 176 (3d Dep't 1997). To put defendants’ historic
“commercial mining” in perspective, even assuming they have a present intent to resume it, defendants have
established that they have historically removed a small amount of quartz crystal from approximately 2,000
1
There can be no dispute that this Court’s order of May 4, 2023 merely modified the existing injunction and did not
issue a new one, the validity of which must be tested on a new appeal as urged by plaintiffs. The order stated, “Plaintiffs'
motion to renew is GRANTED in part by revising the Court's prior Order to further define the Court's prohibition on
mining operations on the Property as follows:…” (Dkt. # 198) (Emphasis added).
{H5179220.1}
square feet of rock each year, to sell at a rock and mineral show in Arizona and in the Ace of Diamonds gift
shop. (NYSCEF #12). 2,000 square feet is 0.045, or 4.5/100ths, of an acre. Considering that the Property
comprises 52 acres, the amount of quartz crystal extracted from commercial mining in the past is
undisputedly de minimus and cannot be characterized as laying waste to the Property. (NYSCEF #25, p.3).
It is also respectfully submitted that defendants should be entitled to a return of the $6,000 sanction they
were ordered to pay pursuant to this Court’s finding in its order of May 4, 2023 that they were in contempt
of the preliminary injunction. Since that injunction has been nullified and the Fourth Department has held
that it was improperly granted in the first instance, any punishment imposed for violating it cannot stand.
The United States Court of Appeals for the Federal Circuit was presented with the question of whether civil
contempt sanctions imposed by a court for violating an injunction could stand when the injunction was
invalidated, and held that “[c]ivil contempt sanctions must be set aside when the resolution of the case
requires overturning the injunction on which those sanctions are based.” ePlus, Inc. v. Lawson Software,
Inc., 789 F.3d 1349 (Fed. Cir. 2015). The same holding should be made here. The sanction against defendants
must be set aside because the injunction on which it was based has been invalidated.
Finally, as we represented we would do when we moved this Court to set an undertaking in order to obtain
a stay pursuant to CPLR 5519 (a)(6), we perfected our current consolidated appeals on June 26, 2023. The
Fourth Department has issued a scheduling order calling for plaintiffs to file their responding brief by July
28, 2023 in order to allow the appeals to be heard during the Fourth Department’s November term. We hope
plaintiffs adhere to that schedule and do not seek an extension of the deadline, so that this case can move
forward toward a resolution.
Very respectfully yours,
HANCOCK ESTABROOK, LLP
Janet D. Callahan, Esq.
cc: Daniel J. Pautz, Esq. via ECF
{H5179220.1}
Preview
JANET D. CALLAHAN jcallahan@hancocklaw.com July 4, 2023 VIA ELECTRONIC FILING Hon. John H. Crandall, J.S.C. Herkimer County Supreme Court 301 N. Washington Street Herkimer, New York 13350 Re: Smith v. Smith, Index No. EF2021-108166 Dear Judge Crandall: As appellate counsel for defendants relative to the second set of appeals in this case, I respond to the letter efiled by Attorney Pautz yesterday accusing defendants of wrongdoing and asking the Court for a telephone conference. While we respectfully join in plaintiffs’ request for a phone conference, we strongly object to their groundless and offensive accusations against defendants. Respectfully, on Friday June 30, the Fourth Department nullified the preliminary injunction granted by this Court by order of September 28, 2021. That injunction prohibited defendants from conducting any “commercial” mining whatsoever on the Property that is the subject of this lawsuit, and also severely constrained their ability to conduct the tourist side of their business. In its decision, the Fourth Department characterized the entire preliminary injunction as an abuse of discretion, holding that it should not have been granted in the first instance and denying plaintiffs’ motion for an injunction. Its Decision reads, “It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying that part of plaintiffs’ motion seeking a preliminary injunction …” Obviously, the effect of that ruling was to nullify the preliminary injunction ab initio, as if it never existed. It is important to note that the Fourth Department did not hold that plaintiffs failed to establish one or two of the necessary elements. Rather, they held that plaintiffs had not met any of the three elements necessary for a preliminary injunction. First, and foremost, the Fourth Department held that “plaintiffs failed to establish a likelihood of success on the merits of the action inasmuch as plaintiffs presented no evidence that partition of the property would result in great prejudice to the owners.” Second, they held that plaintiffs failed to establish that irreparable harm would result if injunctive relief were not granted because they “put forward no evidence establishing that the alleged harm caused by continuing the mining operation while the action was pending . . . could not be ameliorated by monetary damages.” Third, they found that “the balance of the equities weighs in defendant’s favor.” As to the third factor, the Appellate Division held: Here, we conclude that the harm defendant will suffer if the preliminary injunction is in place is more burdensome than the harm to plaintiffs in the absence of an injunction inasmuch as defendant established that the {H5179220.1} temporary restraining order had negatively impacted the business, which had been operating on the property for decades, and defendant was willing to increase the payment made to plaintiffs as “rent,” and to memorialize certain mining restrictions in writing shortly before the proceeding was commenced. (Emphasis added). Based on the foregoing, there can be no dispute whatsoever that the preliminary injunction is gone, and the Fourth Department has held that it never should have been granted in the first place. The Fourth Department did not vacate the injunction. Rather, it denied plaintiffs’ motion outright, nullifying the injunction as if it had never existed. Yet, somewhat incredibly in the face of the plain language of the Decision, plaintiffs seek to convince this Court that defendants have committed some sort of “egregious” act of “wrongdoing” based on their erroneous claim that, despite the fact that the original injunction has been completely nullified, the subsequent May 4, 2023 order modifying it somehow remains in place and continues to bind defendants. That argument is, frankly, ridiculous. The Appellate Division held on Friday that plaintiffs had never established a right to injunctive relief in the first instance, and nullified the injunction. There is nothing confusing or uncertain about the impact of that holding. The May 4, 2023 order of this court did not issue a new injunction, it simply modified the injunction that the Fourth Department has now found to have been improperly granted in the first instance. The modification1 of a nullified injunction is similarly nullified and has no force and effect. Plaintiffs imply in their letter that defendants are somehow at fault for not seeking to have the Fourth Department rule on the modification. That was impossible, since the order modifying the injunction was not signed until May 4, 2023. The appeal from the original injunction was argued in February, months earlier. Obviously, defendants could not ask the Fourth Department to review the validity of an order that had not yet been issued. In fact, plaintiffs didn’t even file the motion that led to the modification until March—again after the appeal was argued. Plaintiffs appear to change course toward the end of their letter, somewhat reluctantly acknowledging that the nullification of the injunction also nullified any modification of it, and switching their argument to contend that defendants are guilty of laying waste to the Property in violation of the terms of their stay under CPLR 5519 (a)(6). The only evidence they offer to support these accusations, however, is the statement of their counsel that some unnamed person apparently saw a piece of unspecified “heavy equipment” being moved to the area of the Property where commercial mining has historically been conducted. Plaintiffs do not state, however, that this unnamed person observed any actual mining taking place. Simply moving equipment does not by any stretch of the imagination constitute laying waste. Once again, plaintiffs’ accusations against defendants are not substantiated by evidence. Further, plaintiffs’ apparent position that any amount of commercial mining, no matter how small, is forbidden as “waste” is simply wrong. Waste has been defined as “any destruction, misuse, alteration, or neglect of premises by one lawfully in possession thereof to the prejudice of the interest therein of another.” Gilman v. Abagnale, 235 A.D.2d 989, 653 N.Y.S.2d 176 (3d Dep't 1997). To put defendants’ historic “commercial mining” in perspective, even assuming they have a present intent to resume it, defendants have established that they have historically removed a small amount of quartz crystal from approximately 2,000 1 There can be no dispute that this Court’s order of May 4, 2023 merely modified the existing injunction and did not issue a new one, the validity of which must be tested on a new appeal as urged by plaintiffs. The order stated, “Plaintiffs' motion to renew is GRANTED in part by revising the Court's prior Order to further define the Court's prohibition on mining operations on the Property as follows:…” (Dkt. # 198) (Emphasis added). {H5179220.1} square feet of rock each year, to sell at a rock and mineral show in Arizona and in the Ace of Diamonds gift shop. (NYSCEF #12). 2,000 square feet is 0.045, or 4.5/100ths, of an acre. Considering that the Property comprises 52 acres, the amount of quartz crystal extracted from commercial mining in the past is undisputedly de minimus and cannot be characterized as laying waste to the Property. (NYSCEF #25, p.3). It is also respectfully submitted that defendants should be entitled to a return of the $6,000 sanction they were ordered to pay pursuant to this Court’s finding in its order of May 4, 2023 that they were in contempt of the preliminary injunction. Since that injunction has been nullified and the Fourth Department has held that it was improperly granted in the first instance, any punishment imposed for violating it cannot stand. The United States Court of Appeals for the Federal Circuit was presented with the question of whether civil contempt sanctions imposed by a court for violating an injunction could stand when the injunction was invalidated, and held that “[c]ivil contempt sanctions must be set aside when the resolution of the case requires overturning the injunction on which those sanctions are based.” ePlus, Inc. v. Lawson Software, Inc., 789 F.3d 1349 (Fed. Cir. 2015). The same holding should be made here. The sanction against defendants must be set aside because the injunction on which it was based has been invalidated. Finally, as we represented we would do when we moved this Court to set an undertaking in order to obtain a stay pursuant to CPLR 5519 (a)(6), we perfected our current consolidated appeals on June 26, 2023. The Fourth Department has issued a scheduling order calling for plaintiffs to file their responding brief by July 28, 2023 in order to allow the appeals to be heard during the Fourth Department’s November term. We hope plaintiffs adhere to that schedule and do not seek an extension of the deadline, so that this case can move forward toward a resolution. Very respectfully yours, HANCOCK ESTABROOK, LLP Janet D. Callahan, Esq. cc: Daniel J. Pautz, Esq. via ECF {H5179220.1}