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Judge denies motion to dismiss FOIL lawsuit against village

A state judge has rejected the village of Saranac Lake’s attempt to dismiss a Freedom of Information Act lawsuit that involves a confidential memo containing legal advice about the Lake Flower hotel project.

In a decision filed Feb. 10, acting state Supreme Court Justice Glen Bruening found Malone Real Estate LLC “has alleged sufficient facts” to move forward with its case against the village.

Malone Real Estate is a company created by New Hampshire-based Roedel Companies, the owners of the Hotel Saranac. It owns 203 River St., a parcel that was included in a special zoning district the village board created for the Lake Flower resort as a potential location for off-site parking but was left out of the district when the Planning Board approved the project last summer. Malone Real Estate has filed a separate lawsuit against the Planning Board over that decision.

Malone Real Estate filed an Article 78 petition in October after the village denied its FOIL request for a copy of a memo submitted to the Planning Board by Miller, Mannix, Schachner and Hafner, a Glens Falls-based law firm the village hired to review planning and zoning matters.

The law firm’s memo advised the village that if 203 River St. is removed as a parking area for the Lake Flower hotel project, the developers should ask the village for a variance or an amendment to the Lake Flower Planned Unit Development District. Otherwise, the law firm advised, any subsequent approvals could result in a challenge that would have “a fairly strong legal position” since the village board had specifically included 203 River St. in the PUDD for off-site parking.

The special counsel’s memo was stamped “confidential” but was left in the project’s public file, apparently by mistake, for an unknown period of time. The village later removed the memo from the file, but a person who read it before then, and who wished to remain anonymous, described it to the Enterprise. Village Community Development Director Jeremy Evans later confirmed the substance of the memo to the newspaper but declined to provide a copy of it, citing attorney-client privilege.

Attorney Michael Crowe of Glens Falls, representing Malone Real Estate, filed a FOIL request for the memo, but village Clerk Kareen Tyler denied it. Crowe appealed, and the village board then voted to reject the appeal, saying it doesn’t have to provide the memo because it’s “privileged and confidential.”

Crowe argued that the FOIL exemptions the village is claiming have been waived because the memo was made available for public view and because Evans confirmed the substance of the memo to the media. Evans has argued, in court papers, that his statements were taken out of context and “did not accurately reflect the advice received by the Planning Board.” The village filed a motion to dismiss the Article 78 petition for failure to state a cause of action.

In his decision, Bruening notes that the burden is on the village to show that attorney-client privilege was not waived and that the memo remained exempt from disclosure.

“In assessing whether the attorney-client privilege is waived, the court must take into consideration whether (the village) intended to retain the confidentiality of (the) memo and whether (the village) took reasonable steps to prevent its disclosure,” the judge wrote.

“Here, there is no evidence regarding who placed the memo, the contents of which are unknown to this court, in the publicly accessible file, and why. In liberally construing the petition, the court finds that (Malone Real Estate) has alleged sufficient facts to maintain a challenge to the denial of its FOIL request.”

The judge denied the village’s dismissal motion. He also gave the village 30 days to file an answer to Malone Real Estate’s petition.

Malone Real Estate’s lawsuit against the village Planning Board, which is being handled by the same judge, is still pending. The village and the owners of the resort have filed a motion to dismiss it.

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