STATE OF NEW YORK

SUPREME COURT: COUNTY OF ERIE

_____________________________________

AFFINITY ELMWOOD GATEWAY AFFIRMATION IN SUPPORT OF

PROPERTIES LLC, CROSS-MOTION REQUESTING

Plaintiff DISQUALIFICATION OF JUDGE

vs.

Index No. I 2011-3883

AJC PROPERTIES LLC, et al., Assigned to: Hon. John A. Michalek

Defendants.

____________________________________

ARTHUR J. GIACALONE, being an attorney duly admitted to practice in the

State of New York, subscribes and affirms the following to be true under the penalty of

perjury:

1. I am attorney for defendants Evelyn Bencinich, Susan M. Davis, Steven

Gathers, Angeline C. Genovese, Sandra Girage and Lorenz M. Wustner (hereinafter,

referred to collectively as the “answering defendants”). I am fully familiar with the facts

and circumstances of this matter, and, unless otherwise noted, I have personal knowledge

of the facts asserted in this affirmation.

2. This affirmation is provided in support of the answering defendants’ cross-

motion which asks the Hon. John A. Michalek, Justice of the Supreme Court, to enter an

order disqualifying himself in this proceeding in accordance with 22 NYCRR

100.3(E)(1). An affirmation in opposition to plaintiff’s pending default judgment motion

will be filed separately. Attached hereto for the convenience of the Court as the

“Appendix” are copies of the following documents: the Court’s January 8, 2013

Memorandum Decision (hereinafter, “Memorandum Decision”); plaintiff’s Order To

Show Cause With A Temporary Restraining Order granted November 20, 2012

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(hereinafter, “OSC/TRO”); the November 20, 2012 Affirmation submitted by Kevin J.

Cross, Esq., without the accompanying exhibits (hereinafter, “Cross Affirmation”);

Defendants’ Notice of Cross-Motion For Costs and Sanctions Under 22 NYCRR Part 130

with Affirmation, dated November 27, 2012; the November 27, 2012 Affirmation

Opposing Affinity Motion and Supporting Cross-Motion for Costs and Sanctions

submitted by Arthur J. Giacalone, Esq., without the accompanying exhibits (hereinafter,

“Giacalone Affirmation”); the November 29, 2012 Reply Affirmation submitted by

Kevin J. Cross, Esq. (hereinafter, “Cross Reply Affirmation”); the answering defendants’

Order To Show Cause with Supporting Affirmation for Relief Pursuant to CPLR 6314,

granted December 6, 2012; the December 5, 2012 Supporting Affirmation of Karen S.

Smith, Esq., without the accompanying exhibits (hereinafter, “Smith Affirmation); the

December 11, 2012 Affirmation submitted by Dennis C. Vacco, Esq., with exhibit

(hereinafter, “Vacco Affirmation”); and, the December 12, 2012 Reply Affirmation of

Karen S. Smith (hereinafter, “Smith Reply Affirmation”).

OVERVIEW OF THE FACTS

3. As the Court is well aware, plaintiff Affinity Elmwood Gateway Properties

LLC (“Affinity”) purchased eleven properties approximately four years ago that are

situated at the southeast corner of the intersection of Elmwood and Forest avenues in the

City of Buffalo (referred to hereinafter as the “Affinity properties”). The Affinity

properties are developed with two-and-a-half story structures built as residences a century

ago. Restrictive covenants created in 1892 prohibit, among other things, the construction

of any building on the Affinity properties for use as “any business establishment

whatsoever.” Plaintiff has expressed a desire to demolish the existing structures and

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construct a six-story, 200,000-square-foot “mixed-use” development consisting of a

hotel, retail space and residential condominiums.

4. Plaintiff, a limited liability company formed in 2008 for the specific purpose of

acquiring the Affinity properties, is one of a number of business entities known

informally as the “Chason Affinity companies.” Upon information and belief, the two

primary principals of the Chason Affinity companies are Mark Chason and P. Jeffrey

(“Jeff”) Birtch.

5. In September 2011, plaintiff commenced an action seeking to extinguish the

restrictive covenants burdening the Affinity properties. Affinity’s attorneys-of-record in

this action, the law firm of Lippes Mathias Wexler Friedman LLP (hereinafter, “the

Lippes firm”) also represented plaintiff when it purchased the Affinity properties. My

clients, the answering defendants, are owners of five residences on Granger Place and

Forest Avenue located immediately adjacent to the Affinity properties. The answering

defendants oppose the extinguishing of the restrictive covenants, and have asked the

Court to enforce the deed restrictions.

6. As is set forth in detail at paragraph 11(a)-(n) of the Giacalone Affirmation, I

took steps on behalf of the answering defendants, commencing in February 2012, urging

the City of Buffalo’s Permits and Inspection Services Bureau (“inspections office”) to

inspect Affinity’s Elmwood Avenue properties “to address chronic code violations and

substantial deterioration adversely impacting the desirable character of the properties and

the adjoining neighborhood.” By letter dated August 2, 2012, I made a request to the

City, pursuant to the State’s Freedom of Information Law (“FOIL”), for copies of all

notices of violation issued in 2012 for the Affinity properties. Five days later I received

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documents from the City which show that on or about July 16, 2012 Affinity was sent

“Notices of Violation” by the inspections office regarding property maintenance code

violations at seven of its Elmwood Avenue properties. Each Notice of Violation

instructed Affinity that “the items noted above must be corrected by 8-16-12.” The code

violations included, for example, deteriorated roofs that Affinity was ordered to replace,

gaping holes in soffits and gutters that Affinity was ordered to repair, peeling houses that

Affinity was ordered to repaint, and “pigeon infestation” that Affinity was ordered to

eliminate. Attached hereto as Exhibit A are photographs that I took from the public

sidewalk on Elmwood Avenue that depict several of the conditions at the Affinity

properties I had complained about. Despite the extent of deterioration, one of plaintiff’s

lawyers, Kevin J. Mr. Cross, Esq., recently characterized the conditions as mere

“technical violations.”

7. In mid-August 2012, Western New York newspapers and media outlets

announced that Kaleida Health (which describes itself as Western New York’s largest

health care provider) had selected the Chason Affinity companies’ proposal for a school

of veterinary medicine as the winner of its competition for a re-use/redevelopment plan

for the former Millard Fillmore Hospital complex at Gates Circle in the City of Buffalo.

8. On August 28, 2012, I wrote a letter-to-the-editor regarding the proposed

Millard Fillmore Hospital reuse/redevelopment project. The letter was written and

disseminated in my personal capacity as a concerned citizen and former resident of the

City of Buffalo, not as a representative of the answering defendants or any other client. I

forwarded the letter to The Buffalo News that date. Because I did not know whether the

newspaper would be publishing my submission, I went to the Kaleida Health web site the

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following day and sent the text of the letter, as a comment at the web site’s “Contact US”

page, to Kaleida Health’s President/CEO, James Kaskie. My message stated:

Dear Mr. Kaskie,

Chason Affinity’s proposal to re-use the Millard Fillmore Gates Circle

Hospital site as a veterinarian teaching hospital may well be “visionary.” But

more than an inspired idea will be needed if Kaleida Health is to reach its

laudable goals for re-use of the prominent landmark.

The expressed purpose of Kaleida’s million-dollar development

competition was to “get the best ideas and the most capable developers to do

something great” with the hospital site – great for the neighborhood, city,

developer and Kaleida. For that goal to be met, Chason Affinity will need to

substantially up its game from its performance the past several years at the

southeast corner of Elmwood and Forest avenues.

In 2007, with vague plans to construct student housing, a Chason Affinity

subsidiary signed a contract to buy several century-old buildings at Elmwood and

Forest. A year-and-a-half later, despite a risky financial market, a group of

unhappy neighbors, and deed restrictions prohibiting “any business

establishment,” Affinity proceeded with the purchase, spending nearly $2 million

for eleven parcels. When the developer subsequently announced its vision for the

“gateway to the Elmwood Village,” it proposed construction of a 6-story, 175,000

square-foot “mixed use” project poorly suited for the neighborhood, rather than

the creative re-use of the quintessential “Elmwood Village” properties.

Unable to convince the adjoining owners to approve its project, Affinity is

now in court seeking to extinguish the restrictive covenants that protect its

neighbors. During the intervening years, the developer’s properties have been

allowed to deteriorate in plain sight of residents, commuters and tourists. Affinity

has been recently cited for code violations at eight of its properties.

Chason Affinity may have won the competition, but the Kaleida may want

to think long and hard before designating it the developer of the Gates Circle site.

On August 30, 2012, Kaleida Health’s Vice-President/Chief Marketing Officer, Michael

Hughes, sent the following reply: “Thank you for your comment & input. MIKE.”

9. Only one sentence in the August 29, 2012 communication to Kaleida Health

referred to Affinity’s lawsuit to extinguish the restrictive covenants: “Unable to convince

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the adjoining owners to approve its project, Affinity is now in court seeking to extinguish

the restrictive covenants that protect its neighbors.”

10. The communication also contained the following comment regarding the

condition of the Affinity properties and property code violations:

… During the intervening years, the developer’s properties have been allowed to

deteriorate in plain sight of residents, commuters and tourists. Affinity has been

recently cited for code violations at eight of its properties.

11. Despite the City’s July 16, 2012 Notices of Violation advising Affinity that

the identified code violations at its Elmwood Avenue properties had to be corrected by

August 16, 2012, the repairs had not taken place by the first week of October 2012. On

October 5, 2012, I emailed to the Director of the City’s inspection office, Patrick Sole,

Jr., a message advising him that the identified code violations had not been corrected, and

forwarding photographs of the existing conditions. I sent a copy of the email to City of

Buffalo Councilmember Michael Locurto. In hopes that Kaleida Health might encourage

the winner of its Millard Fillmore Hospital competition to correct the code violations, I

also sent a copy of my October 5, 2012 email to Kaleida Health’s Michael Hughes. I did

not receive a reply.

12. Six weeks later, on November 15, 2012, I sent an email to Pat Sole advising

him that there was still no sign of “any noticeable repairs” at the Affinity properties,

attaching photographs of the then-current conditions. Once again, I sent a copy of the

email to Councilmember Locurto and Kaleida Health’s Michael Hughes. Mr. Hughes did

not reply.

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13. On November 20, 2012, Brendan H. Little, Esq., of the Lippes firm, appeared

on behalf of plaintiff in Your Honor’s chambers to present an OSC/TRO seeking the

following relief:

(a) A temporary restraining order temporarily restraining me and my agents from

communicating with Kaleida Health, the City of Buffalo, and their respective

agents/employees concerning the subject litigation until further Order of this Court.

(b) An order precluding and/or enjoining me and my agents from engaging in

communication with unrelated third-parties concerning the subject litigation that violates

Rule 4.4(a) of New York’s Rules of Professional Conduct” [“RPC”]. RPC Rule 4.4(a)

provides the following:

Rule 4.4 RESPECT FOR RIGHTS OF THIRD PERSONS:

(a) In representing a client, a lawyer shall not use means

that have no substantial purpose other than to embarrass

or harm a third person or use methods of obtaining

evidence that violate the legal rights of such person.

…

(c) An order precluding and/or enjoining me from engaging in communication

concerning the subject litigation that violates Rule 3.4(e) of the RPC. RPC Rule 3.4(e)

provides the following:

Rule 3.4 FAIRNESS TO OPPOSING PARTY AND COUNSEL:

A lawyer shall not:

…

(e) present, participate in presenting, or threaten to present

criminal charges solely to obtain an advantage in a civil

matter.

(d) An order, pursuant to 22 NYCRR § 130-1.1, imposing financial sanctions

against me in the amount of $10,000, and awarding plaintiff costs and reasonable

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attorneys’ fees, for repeated violations of NY’s RPC and engaging in “frivolous

conduct.” For purposes of 22 NYCRR Part 130, conduct is “frivolous” if:

(1) it is completely without merit in law and cannot be supported by a reasonable

argument for an extension, modification or reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of the litigation,

or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false.

Frivolous conduct shall include the making of a frivolous motion for costs or

sanctions under this section. In determining whether the conduct undertaken was

frivolous, the court shall consider, among other issues the circumstances under

which the conduct took place, including the time available for investigating the

legal or factual basis of the conduct, and whether or not the conduct was

continued when its lack of legal or factual basis was apparent, should have been

apparent, or was brought to the attention of counsel or the party.

…

14. During the brief conference in chambers on November 20th, Mr. Little told

the Court that his firm had received a phone call from an angry client on Friday,

November 16, 2012, in response to my November 15, 2012 email to the City of Buffalo

and Kaleida Health. Mr. Little did not identify the angry caller or the person at his firm

who received the call. Mr. Little also failed to explain why the client was angry, or state

whether the client was angry at the Lippes law firm, the City of Buffalo, Kaleida Health,

and/or me.

15. The OSC/TRO was supported by an affirmation submitted by the Lippes

firm’s Kevin J. Cross, Esq. The Cross Affirmation makes two primary accusations

against me, parroting the language in the RPC provisions I allegedly violated:

(a) In support of plaintiff’s claim that I had violated RPC Rule 4.4(a), Mr. Cross

alleges that I had communicated with Kaleida Health with “no substantial purpose other

than to embarrass or harm the Plaintiff, Mr. Chason, Mr. Birtch or the Chason Affinity

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companies,” in order to destroy their business relationship with Kaleida Health and

prevent the Chason Affinity companies from re-developing the Gates Circle site.

Plaintiff’s purported “proof” that the purpose of my communications with Kaleida Health

was to destroy Chason Affinity’s business relationship with the health provider is the last

sentence in my August 29, 2012 email to Kaleida:

Chason Affinity may have won the competition, but the Kaleida may want

to think long and hard before designating it the developer of the Gates Circle site.

(b) In support of plaintiff’s claim that I had violated RPC Rule 3.4(e), Mr. Cross

alleges that I had communicated with the City of Buffalo regarding property code

violations at the Affinity properties for the sole purpose of “gain[ing] an advantage in the

subject litigation.” At no time does Mr. Cross describe what possible “advantage”

defendants might hope to gain in this lawsuit by bringing property code violations to the

attention of the City inspectors.

16. Neither the motion papers submitted to the Court on November 20, 2012 in

support of plaintiff’s application for the above-requested relief, nor the papers

subsequently filed with Court by the Lippes law firm on behalf of Affinity, include an

affidavit or any other admissible evidence from Mark Chason, Jeff Birtch, or any other

person affiliated with the Chason Affinity companies describing: (a) what, if any,

communications were exchanged between Kaleida Health and Chason Affinity as a result

of my three communications with Kaleida Health; or, (b) in what way, if any, their

relationship with Kaleida Health had been harmed, or might be harmed if I were allowed

to continue my communication with the owner of the vacant Millard Fillmore Hospital

site. At no time did Your Honor ask plaintiff’s counsel to explain this omission, and at

no time did plaintiff’s counsel offer an explanation for the absence of a client affidavit.

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17. Your Honor granted the TRO restraining my communications with Kaleida

Health on November 20, 2012, making the show cause order returnable on November 30,

2012. I filed a cross-motion on behalf of the answering defendants on November 27,

2012, requesting the imposition of sanctions against plaintiff and/or its counsel for

engaging in frivolous conduct, that is, plaintiff’s frivolous motion against me for costs

and sanctions under 22 NYCRR Subpart 130-1. The answering defendants’ affirmation

in support of their cross-motion and opposition to plaintiff’s application (the “Giacalone

Affirmation”) addressed a number of issues, including, without limitation, the following:

- Plaintiff’s subversion of the purpose of the Rules of Professional Conduct

(“RPC”) and the integrity of the judicial process.

- The total absence of evidentiary proof to support plaintiff’s request for

preliminary relief.

- Affinity’s failure to distinguish between the subject of this lawsuit (whether or

not the deed restrictions burdening the Affinity properties should be extinguished) and

the answering defendants’ desire to have property maintenance violations at plaintiff’s

Elmwood Avenue properties corrected.

- Opposing counsel’s animus towards me and malicious effort to prejudice the

Court against me and my clients.

- The meritless nature of Affinity’s accusations that I had violated RPC Rule

3.4(e) and Rule 4.4(a).

- The meritless nature of Affinity’s accusations that I had engaged in “frivolous

conduct” as defined at 22 NYCRR Subpart 130-1.

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18. The TRO against me was subsequently extended on November 30, 2012, and

again on December 14, 2012. I advised the Court at the November 30, 2012 proceeding

that my strategy of notifying Kaleida Health of the uncorrected code violations in hopes

that they would give Affinity “a nudge” to do the repairs was apparently working. I also

provided photographs to the Court showing that Affinity had begun repairs at its

Elmwood Avenue properties within several days of my 11/15/12 email. In response,

Your Honor stated that the Court’s concerns regarding my intent were “not vitiated by the

pictures or even the fact that those problems exist.” [See 11/30/12 Transcript, page 19,

lines 13-20, attached hereto as part of Exhibit C.] At no time prior to granting the TRO

on November 20, 2012, or extending the restraining order on November 30, 2012 and

December 14, 2012, did Your Honor ask me whether I intended to continue my

communications with Kaleida Health, or whether I would voluntarily refrain from such

contact while plaintiff’s application was under consideration.

19. With one exception, at no time in chambers on November 20, 2012, or at the

November 30, 2012 court proceeding, did it appear to me that Your Honor had any

interest in hearing and considering my defense against the accusations raised against me

in plaintiff’s application, any appreciation for the drastic nature of a TRO, or any respect

for me as an attorney or human being. [The one exception was the Court’s recognition

that opposing counsel’s request that I be enjoined from communicating with the City

inspections office was unsupportable.] The Court seemed unfazed by the absence of

proof that the failure to issue the TRO would result in immediate and irreparable harm to

plaintiff or the Chason Affinity companies. When I expressed my concern that Your

Honor was signing the OSC/TRO before I had an opportunity to address the merits of

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plaintiff’s legal claims, Your Honor sharply stated, “I will not debate this.” At the end of

oral argument on November 30, 2012, Your Honor noted that the TRO would be

continued, and then, treating me as if I had a history of violating court orders, or did not

grasp the seriousness of a TRO, raised your voice and warned me: “Do not play games

with the Supreme Court Judge on a TRO.” [See 11/30/12 Transcript, page 19, lines 24-

25, attached hereto as part of Exhibit C.]

20. In light of the Court’s apparent hostile attitude towards me, I gladly accepted

the offer of the Hon. Karen S. Smith, retired Acting Justice of the State Supreme Court

(New York County), to provide assistance to me, a total stranger, to address the TRO and

the meritless nature of plaintiff’s application. As Your Honor knows, a motion was

submitted to the Court on my behalf on December 6, 2012 to vacate the TRO pursuant to

CPLR 6314. Our Order to Show Cause was made returnable at 9:30 A.M. on December

14, 2012, at the same time the Court intended to announce its decision on plaintiff’s

application and the answering defendants’ cross-motion. The Court was gracious to

Judge Smith on the 14th. However, during oral argument, plaintiff’s counsel, Dennis C.

Vacco, Esq., made the unsupported and unsupportable claim that my communication with

Kaleida Health was “scurrilous” and “untrue,” allegations that had not been made in

plaintiff’s three written affirmations. Following oral argument, Your Honor “reserved

decision” and continued the TRO.

21. On January 8, 2013, the Court issued its Memorandum Decision determining

plaintiff’s application and the answering defendants’ cross-motion. The oft-extended

TRO was replaced with a “protective order,” issued pursuant to CPLR Article 31

(Disclosure), rather than Article 63 (Injunction), “barring both parties’ counsel and their

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agents and employees from communicating directly or indirectly with Kaleida Health or

any officer, agent or affiliate of Kaleida Health concerning the subject matter of the

litigation, absent further order of this court.” The decision also denied all requests for

sanctions.

22. As of the date of this application, counsel are not in agreement on a proposed

Order.

COMMUNICATIONS BETWEEN CHASON AFFINITY and KALEIDA

23. Despite several opportunities to do so, plaintiff’s counsel never provided the

Court with affidavits from their clients, including the principals of the Chason Affinity

companies, Mark Chason and Jeff Birtch, addressing the communications, if any, that had

occurred between them and Kaleida Health in response to my August 29th, October 5th

and November 15th emails. As counsel for the answering defendants, I found plaintiff’s

silence deafening, given the requirement for evidentiary proof of immediate and

irreparable injury or harm when preliminary relief is sought by a party. I also found the

absence of an affidavit from Mr. Chason or Mr. Birtch suspicious, given the half-page

gap at the top of the forwarded August 29, 2012 email message attached as an exhibit to

Mr. Vacco’s December 11, 2012 affirmation. [The Vacco affirmation and exhibit are

included in the accompanying Appendix.] The Vacco exhibit starts mid-page, and

provides the text of my comment to James Kaskie, Kaleida Health’s President/CEO.

Upon information and belief, omitted from the top of the first page of the two-page

exhibit is the message from the person who had sent the “Forwarded Message,” most

likely a Kaleida Health official.

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24. On December 31, 2012, while awaiting Your Honor’s written decision, I

began my review of more than 2,700 pages of documents contained on a USB flash drive

that I had received from plaintiff’s counsel on December 6, 2012, the day my motion to

vacate the Court’s TRO was filed and served (hereinafter, referred to as the “Chason

documents”). I discovered within that mountain of pdf files an explanation for plaintiff’s

failure to submit any proof that my communications with Kaleida Health were

purportedly jeopardizing the business relationship between Chason Affinity and Kalieda:

My emails to Kaleida were not causing harm. In fact, my communications appear

to have provided Mark Chason an opportunity to exchange pleasantries with the

folks at Kaleida and express his displeasure with me.

25. The Chason documents include email messages that were exchanged in

response to my August 29th, October 5th, and November 15th communications with

Kaleida Health. (Copies of the Kaleida Health - Chason Affinity emails are attached

hereto as Exhibit B.) None of the emails reflects or implies potential harm or injury to

the Chason Affinity/Kaleida Health business relationship due to my communications:

(a) August 30, 2012. On August 30, 2012, Michael Hughes, Kaleida’s Vice

President & Chief Marketing Officer, forwarded the August 29, 2012 “comment” that I

had addressed to Mr. Kaskie to James Kaskie, Kaleida’s President & CEO, and to

Edward F. (“Ted”) Walsh. Upon information and belief, Mr. Walsh is a former Chair

of the Kaleida Health Board of Directors (a position also held in the past by Gerald S.

Lippes, Esq., the Lippes firm’s founder and senior partner), and chair of Kaleida’s

advisory committee established to find a developer for the Millard Fillmore Gates Circle

Hospital. Other correspondence included in the Chason documents reveal that Ted

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Walsh, in his capacity as President & Chief Operating Officer of the “Walsh Insurance

Group,” provides insurance-related services to the Chason Affinity companies. Michael

Hughes’ 8/30/12 email to Mr. Kaskie and Mr. Walsh states the following:

FYI .. Email from the attorney who led the fight to block Bass Pro as well the

move of Children’s. He is also leading the fight against Chason at their

Elmwood & Forest development. [Emphasis added.]

Note: While it is true that I brought litigation on behalf of a group of Buffalo residents

challenging the financial assistance offered to Bass Pro, I never opposed or had any

involvement in the question of whether Children’s Hospital should move from its

Elmwood Village location. I did, however, successfully challenge the City of Buffalo’s

2003 environmental review for the Children’s Hospital helipad. [See, Price v. Common

Council of City of Buffalo, 773 NYS2d 224 (Sup. Ct., Erie Co.) (Hon. John P. Lane).]

(b) August 31, 2012. On August 31, 2012, Mr. Walsh sent the following email to

Mark Chason:

Mark,

Just a heads up that Arthur Giacalone is stirring the pot. [Emphasis added.]

Ted

(c) September 10, 2012. On September 10, 2012, Mark Chason forwarded the

Walsh email to Jeff Birtch without a message.

(d) October 5, 2012. At 5:18 PM on October 5, 2012, Kaleida’s Michael Hughes

forwarded my October 5, 2012 email regarding property code violations to Mark Chason

and Jeff Birtch (with copies to Mr. Kaskie and Mr. Walsh), and added the following

message:

Mark/Jeff – We are getting copied on complaints re: your Elmwood project. I

am sure you are aware of Mr. Giacalone, but if not, FYI … [Emphasis added.]

Hope all is well.

MIKE

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(e) October 5, 2012. At 5:47 PM on October 5, 2012, Mark Chason sent the

following email message to Kaleida’s Michael Hughes and Affinity’s Jeff Birtch (with

copies to Mr. Kaskie and Mr. Walsh):

Mike,

Thanks for sending this over. We are discussing Mr. Giacalone’s actions with

our council [sic], who believe he is way over the line and will take steps to

hopefully curtail this type of nonsense. Of course, if it wasn’t for him there

would be a beautiful development on Elmwood. Sorry for this … Have a great

weekend! [Emphasis added.]

Mark

(f) October 5, 2012. At 5:48 PM on October 5, 2012, Kaleida’s Michael Hughes

immediately emailed the following reply to Mark Chason and Jeff Birtch (with copies to

Mr. Kaskie and Mr. Walsh):

No need to apologize. We are aware of who he is. [Emphasis added.]

(g) October 5, 2012. At 5:56 PM on October 5, 2012, Mark Chason sent the

following email message to Kaleida’s Michael Hughes:

Thanks!

26. These communications between the various Kaleida officials and Chason

Affinity reflect a camaraderie that, if anything, appears to be strengthened, not

threatened, in response to my emails. It appears that I provided Chason Affinity, the

developer, and Kaleida Health, the owner of the Gates Circle facilities, an opportunity to

identify a common foe or irritant.

27. It is no wonder that plaintiff and its legal counsel, the Lippes firm, made the

strategic decision not to provide the Court with either the emails exchanged between

Kaleida Health and the Chason Affinity companies, or an affidavit from Mark Chason.

Mr. Chason’s claim, that “if it wasn’t for [Giacalone]” Affinity’s mixed-use project at

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Elmwood & Forest would be built, confirms my contention that the efforts by the Lippes

firm to enjoin my speech and sanction me reflect plaintiff’s desire, fueled by animosity,

to harass and intimidate me, and reduce my ability to effectively represent my clients.

The Memorandum Decision disregards this claim.

I. REQUEST FOR DISQUALIFICATION

28. It is with great sadness and reluctance that I file this application requesting

Your Honor to disqualify yourself in this proceeding. During the decades that I have

appeared in your courtroom, I never have had reason in the past to question the Court’s

impartiality or diligence. I am fully aware of the serious nature of this motion. However,

as attorney of record for the six answering defendants, it is my obligation to protect their

interests in this action. Following consultation with my counsel, I have reached the

conclusion that reasons exist for reasonably questioning Your Honor’s impartiality in this

proceeding.

29. As the Court knows, a judge is required by Section 100.3(E)(1) of the Rules

of the Chief Administrator to “disqualify himself or herself in a proceeding in which the

judge's impartiality might reasonably be questioned.” [22 NYCRR 1003(E)(1)] Included

among the non-exclusive list of instances where a judge’s impartiality might reasonably

be questioned is where “the judge has a personal bias or prejudice concerning a party.”

30. From the facts as I know them, no basis exists for mandatory disqualification

pursuant to Section 14 of the State’s Judiciary Law (disqualification of judge by reason of

interest or consanguinity).

31. Defendants and I understand that generally a judge is “the sole arbiter of

recusal,” that recusal is “a matter of personal conscience,” and that, ultimately, the

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disqualification decision is Your Honor’s alone. See, In the Matter of Richard W.

Murphy, 82 NY2d 491, 495 (1993); People v. Smith, 63 NY2d 41, 68 (1984) (noting that

recusal is generally "a matter of personal conscience"). With that being said, it is my

expectation that Your Honor fully concurs with the sentiment of our State’s highest court

that, “Judges should strive to avoid even the appearance of partiality,” and that “the

‘better practice’ would be to err on the side of recusal in close cases.” Murphy, supra, 82

NY2d at 495.

32. The answering defendants and I ask Your Honor to consider, with an open

mind, whether the circumstances described below could lead the answering defendants in

particular, or the public generally, to reasonably question the Court’s impartiality.

A. The January 8, 2013 Decision and Related Proceedings

(i) A judge shall be faithful to the law

[22 NYCRR 100.3(B)(1)]

33. New York’s appellate courts have consistently characterized preliminary

relief as a “drastic remedy” that is not routinely granted. The moving party has the

burden of demonstrating, “by clear and convincing evidence,” a likelihood of success on

the merits, irreparable injury in the absence of injunctive relief, and a balance of equities

in its favor. See, e.g., Eastman Kodak Co. v. Carmosino, 77 AD3d 1434 (4th Dept. 2010).

CPLR Section 6301 expressly provides that a TRO may not be granted unless “it appears

that immediate and irreparable injury, loss or damage will result” if the preliminary relief

is not granted. CPLR 6301. Furthermore, the Fourth Department has repeatedly held

that conclusory allegations alone are inadequate to support a party’s claim that it will

suffer irreparable harm if preliminary relief is not granted. See, e.g., Glazer v. Brown, 55

AD3d 1385 (4th Dept. 2008); Genesis II Hair Replacement Studio v. Vallar, 251 AD2d

19

1082 (4th Dept. 1998); Sutton, DeLeeuw, Clark & Darcy v. Beck, 155 AD2d 962 (4th

Dept. 1989).

34. In the brief period that I was allowed to speak in chambers on November 20,

2012, I advised the Court that plaintiff’s motion papers failed to allege, much less provide

evidentiary proof, that plaintiff would suffer “immediate and irreparable injury, loss or

damage” unless I was restrained from communicating with Kaleida Health before the

November 30, 2012 return date. As noted above, Mark Chason and Jeff Birtch, the

purported “victim” of my communications with Kaleida Health, did not provide an

affidavit in support of plaintiff’s application. Nonetheless, a TRO restraining my

communications with Kaleida Health was granted by the Court.

35. My November 27, 2012 affirmation again informed the Court of the absence

of evidentiary proof (or even a conclusory allegation) of irreparable harm or injury if

preliminary relief was not granted. It also provided the Court with appellate case law

holding that the movant for preliminary relief must provide evidentiary proof, not merely

conclusory allegations, in support of its application. [Giacalone Affirmation, paragraph

6(A)] Although plaintiff’s reply papers again failed to provide evidence demonstrating

the likelihood of irreparable harm in the absence of a TRO, on November 30, 2012, the

TRO was extended an additional two weeks, that is, to December 14, 2012, at which time

the Court expected to read its decision from the bench.

36. On December 6, 2012, my counsel filed a motion pursuant to an Order to

Show Cause asking Your Honor to vacate the TRO prior to the December 14, 2012 court

proceeding. The Court was again reminded of the Fourth Department precedent holding

that conclusory allegations alone are inadequate to support a party’s claim that it will

20

suffer irreparable harm. My counsel’s supporting affirmation also addressed plaintiff’s

failure to establish the “likelihood of success” on its application, and the Court’s lack of

authority to grant a permanent injunction restraining my speech pursuant to RPC Rules

4.4(a) and 3.4(e). Nonetheless, following oral argument on December 14, 2012, the

Court “reserved decision” and, once again, continued the TRO. [Attached hereto as

Exhibit C is a copy of the transcript of the November 30, 2012 oral argument by

plaintiff’s counsel, Brendan H. Little, Esq., and your deponent, and the December 14,

2012 oral argument by my counsel, Hon. Karen S. Smith, and plaintiff’s counsel, Dennis

C. Vacco, Esq., former NYS Attorney General.]

37. Given the Court’s disregard, on three occasions, of the substantial burden a

movant is required to meet when requesting a TRO, a reasonable basis exists for

questioning whether Your Honor acted impartially and faithfully applied the law when

restraining my communication with Kaleida Health. [22 NYCRR 100.3(E)(1)]

A. The January 8, 2013 Decision and Related Proceedings

(ii) A judge shall accord every person who has a legal interest in a proceeding,

or that person’s lawyer, the right to be heard according to law

[22 NYCRR 100.3(B)(6)]

38. The January 8, 2013 Memorandum Decision concurs with the arguments

asserted by my counsel that the Court lacks the authority under the Rules of Professional

Conduct (more precisely, Rule 3.4(e) regarding “fairness to opposing party and counsel,”

and Rule 4.4(a) regarding “respect for rights of third persons”), as well as under Section

130-1.1 of the Rules of the Chief Administrator (“awards of costs and sanctions for

frivolous conduct in civil litigation”), to grant the relief demanded by plaintiff’s counsel:

“The court does not disagree…”

21

[Memorandum Decision, pages 8-9 of 20]

39. Nonetheless, rather than denying plaintiff’s application for an injunction that

would bar me from communicating with Kaleida Health, the Memorandum Decision

searches for other possible ways to restrain my speech and identifies a purported source

of authority for barring my communications that had not previously been asserted by

plaintiff, discussed by the parties, or raised by the Court:

…

… The court does not disagree, but shall grant a protective order against certain

conduct nonetheless, within its wide discretion to regulate discovery and the

course of the proceedings before it. The order will issue under CPLR 3103, not

under article 63 on injunctions, and therefore the burdens of proof and the

bases for decision are very different.

…

[Memorandum Decision, page 9 of 20]

40. Your Honor is quite accurate in describing the bases for the Court’s ruling as

“very different” from the issues addressed by the parties at the November 20th, November

30th and December 14th proceedings before the Court. As noted in the Memorandum

Decision, “[v]irtually none of the law relied on in the court’s decision came from the

parties.” [Memorandum Decision, page 17 of 20] Nonetheless, no steps were taken to

afford plaintiff and defendants’ counsel an opportunity “to be heard” on the new legal

theories advanced by the Court prior to entry of the January 8, 2013 ruling.

41. The approach taken by the Court appears to violate a judge’s obligation to

“accord to every person who has a legal interest in a proceeding, or that person's lawyer,

the right to be heard according to law” [22 NYCRR 100.3(B)(6)], as well as the due

process clause of the U.S. Constitution. Under such circumstances, Your Honor’s

impartiality might reasonably be questioned. [22 NYCRR 100.3(E)(1)]

22

42. Had my counsel or I been offered an opportunity to be heard on the new legal

theories raised by the Court on its own initiative, strong arguments could have been

raised against issuance of a protective order pursuant to a CPLR provision intended to

prevent abuse of the discovery process, including, without limitation, the following:

(a) The Memorandum Decision is entirely wrong when it identifies the purported

factual underpinning for issuing a protective order pursuant to CPLR 3103:

… The information at issue in the present matter [as in Seattle Times v.

Rhinehart] stems from pretrial discovery, i. e. the presence of alleged code

violations at improvements located on plaintiff’s property on Elmwood Avenue,

and the state of the improvements in general.

[Memorandum Decision, page 15 of 20] It is undisputed that I obtained copies of the

City’s July 16, 2012 notices of violation, not through the pretrial discovery process, but

from the City of Buffalo inspection bureau. As is set forth in detail at paragraph 11(a)-

(n) of the Giacalone Affirmation (included in the Appendix), I am the person who

requested inspection of the Affinity properties, commencing the process in February

2012; by letter dated August 2, 2012, I made a request to the City, pursuant to the State’s

Freedom of Information Law (“FOIL”), for copies of the notices of violation issued for

the Affinity properties; because the City’s notices of violation are public documents, the

City promptly honored my FOIL request; and, on August 7, 2012, I received the

requested documents from the City. A copy of my February 6, 2012 letter initially

requesting inspection of the Affinity properties, and my August 2, 2012 FOIL request to

the City, were included as part of Exhibit B attached to my November 27, 2012

affirmation. Furthermore, the “alleged code violations” and “the state of the

improvements generally” at the Affinity properties are clearly visible to anyone walking

or driving down Elmwood Avenue.

23

(b) Although a trial court is vested with broad discretion in supervising disclosure,

that discretion is not unlimited. Button v. Guererri, 298 AD2d 947 (AD4 2002). Plaintiff

has never claimed that I abused the disclosure process when I communicated with

Kaleida Health and/or the City of Buffalo. Furthermore, in stark contrast to the cases

cited in the Memorandum Decision, “the information at issue in the present matter” was

not obtained through the discovery process, and does not in any way implicate the

privacy interests of the litigants or third parties. Given the facts in the instant proceeding,

issuance of a protective order pursuant to CPLR 3103 appears to be an abuse of

discretion.

(c) Although the Memorandum Decision claims that the protective order is

“exceptionally narrowly tailored,” it is, in fact, broad and vague. For example:

(i) It goes far beyond barring me from dissemination of information

obtained in discovery, and prohibits me from all communication with Kaleida

Health “concerning the subject matter of this litigation.”

(ii) It treats information regarding property code violations at the Affinity

properties as communications “concerning the subject matter of this litigation”

(Memorandum Decision, page 5 of 20), despite the fact that the issue for the

Court and/or fact finder to determine in this action is whether or not the restrictive

covenants should be extinguished.

(iii) It bars me from communicating “directly or indirectly” with Kaleida

Health, without providing any guidance as to what the Court considers an

“indirect” communication.

24

(iv) It inexplicably bars “both parties’ counsel” from communicating with

Kaleida Health concerning the subject matter of the litigation. [Memorandum

Decision, page 19 of 20] I can think of no reason why Plaintiff’s counsel should

be barred from answering Mike Hughes’ question: “How’s that restrictive

covenant lawsuit going?”

A. The January 8, 2013 Decision and Related Proceedings

(iii) A judge shall dispose of all judicial matters fairly

[22 NYCRR 100.3(B)(7)]

43. As described above at paragraphs 38 through 41, rather than deny plaintiff’s

application following His Honor’s conclusion that the Court lacked the authority to grant

the requested relief pursuant to RPC Rules 4.4(a) and 3.4(e) and 22 NYCRR Subpart

130-1, the Court issued a “protective order” pursuant to authority and legal principles not

previously addressed or briefed by the parties WITHOUT providing me or my counsel

and opportunity to be heard. In light of the substantial arguments, factual and legal, set

forth at paragraph 42 above that could have been raised in opposition to issuance of a

protective order pursuant to CPLR 3103, reasonable grounds exist to question whether

plaintiff’s application was disposed of fairly, and whether Your Honor acted impartiality

in this proceeding. [22 NYCRR 100.3(B)(7)]

44. There are many other aspects of the Court’s 20-page Memorandum Decision

that a reasonable person might conclude reflect a less-than-fair disposition of the

plaintiff’s application. One notable example can be found in the conclusory paragraph

that is utilized in the Court’s decision in an attempt to characterize my communications

with Kaleida Health as improper and contrary to RPC Rule 3.6 (Trial Publicity):

25

…

The court determines that Mr. Giacalone’s emails to Kaleida are

“extrajudicial statement[s]” that he knew or reasonably should have known

would be disseminated by means of public communication (by email) and “will

have a substantial likelihood of materially prejudicing an adjudicative proceeding

in the matter” at issue.

[Memorandum Decision, pages 14-15 of 20] This determination is palpably unfair to me

in a variety of ways:

(a) I replied to Mr. Cross’ contention in his October 11, 2012 cease-and-desist

letter that my August 29, 2012 and October 5, 2012 communications with Kaleida Health

violated the requirements of Rule 3.6, explaining why I believed that that rule was not

applicable, and forwarded a copy of my written reply to Your Honor. Plaintiff’s counsel

elected to abandon that argument when bringing the November 20, 2012 OSC/TRO. It is

unfair for the Court to rely upon that provision without allowing me or my counsel to be

heard on that issue.

(b) Characterization of my emails to Kaleida Health as “extrajudicial statements”

pertaining to plaintiff’s action to extinguish the restrictive covenants is an enormous and

unseemly stretch. My October 5, 2012 and November 15, 2012 emails do not refer in

any fashion to the pending litigation. And the only reference to this lawsuit in my August

29, 2012 email to Kaleida’s President/CEO was the following neutral statement:

“Unable to convince the adjoining owners to approve its project, Affinity is now in court

seeking to extinguish the restrictive covenants that protect its neighbors.”

(c) The Memorandum Decision fails to explain its parenthetical observation that

emails directed to Kaleida Health constitute “dissemination by means of public

communication.”

26

(d) The most unfair aspect of Your Honor’s determination that I violated RPC

Rule 3.6 by communicating with Kaleida Health is the assertion that I knew or should

have known that the communication “will have a substantial likelihood of materially

prejudicing an adjudicative proceeding” in this matter. I know of no logical connection

between the content of my emails and an “adjudicative proceeding in this matter.”

Moreover, plaintiff’s motion papers do not allege that there is a substantial likelihood that

Affinity will be prejudiced in this proceeding due to my emails, and provide no

evidentiary proof that Affinity has been prejudiced, or is likely to be prejudiced, in this

lawsuit as a result of my emails to Kaleida Health. As the emails attached hereto as

Exhibit B reflect, my communications have not adversely impacted plaintiff.

45. In light of the above, reasonable grounds exist to question whether plaintiff’s

application was disposed of fairly, [22 NYCRR 100.3(B)(7)] and whether the Court acted

impartially in this proceeding. [22 NYCRR 100.3(E)(1)]

A. The January 8, 2013 Decision and Related Proceedings

(iv) A judge shall perform judicial duties without bias

or prejudice against or in favor of any person

[22 NYCRR 100.3(B)(4)]

46. The stark contrast between the Court’s treatment of a reckless comment made

by Dennis C. Vacco, Esq., during oral argument on December 14, 2012, and the

treatment of my sworn statements in the Giacalone Affirmation expressing the purpose of

my communications with Kaleida Health, provides a reasonable basis to question whether

the Court performed its judicial duties in this proceeding with either a bias in favor of Mr.

Vacco, his law firm and/or his clients, and/or a bias or prejudice against me and/or the

answering defendants.

27

47. On December 14, 2012, following my counsel’s oral argument in support of

my motion to vacate the TRO, Mr. Vacco accused me of having written “scurrilous,

untrue, no factual-based things” about his clients. [See 12/14/12 Transcript, page 16,

lines 14-23, attached hereto as part of Exhibit C.] To characterize the text of my August

29, 2012 email to Kaleida Health (printed at paragraph 8 above) as “scurrilous” is

unbridled hyperbole, at best. More importantly, to assert that my words were untrue and

lacking factual bases is simply false. Had any of my statements been deemed “untrue” by

plaintiff, Mr. Vacco’s colleague, Mr. Cross, certainly would have included such

allegations in his affirmations. As the Court acknowledges in its Memorandum Decision

(directly under the heading “Restraint of Libel”), no such accusations were made:

Restraint of Libel

Although plaintiff’s counsel at oral argument suggested that Mr.

Giacalone’s email contained falsehoods about plaintiff’s affiliates, there i[s]

nothing in plaintiff’s papers pointing specifically to any false statements.

[Memorandum Decision, page 9 of 20]

48. Rather than simply ignoring the former State Attorney General’s unsupported

accusation, or, perhaps, chastising plaintiff’s counsel for making an assertion at court that

lacks any factual bases, Your Honor uses Mr. Vacco’s reckless assertion as a springboard

to discuss New York case law “concerning when injunctions may issue to restrain libel.”

By doing so, the Court implies that a foundation exists for considering my written

communications libelous, despite the fact that the record before the Court makes no such

claim. Following its review of the law, the Court states:

. .. In any event, in the court’s view, Mr. Giacalone shared his opinions about the

lawsuit and about Chason Affinity’s abilities as a developer, clothed in the factual

background of the lawsuit. The parties have not briefed this issue, the court

28

assumes, because opinions generally are not subject to a libel action [cite

omitted]. Thus, the case does not fall directly under such case law…

[Memorandum Decision, page 10 of 20]

49. Contrary to the Court’s view, I did not “share [my] opinions about the

lawsuit.” I merely stated a simple fact: “Unable to convince the adjoining owners to

approve its project, Affinity is now in court seeking to extinguish the restrictive covenants

that protect its neighbors.” Furthermore, the reason the parties did not brief the issue of

libel is because my statements were not false, and plaintiff’s court papers do not accuse

me of libel. Not only does this case not fall “directly” under the cases that allow

injunctive relief to restrain libel, it does not fall “indirectly” under such precedent.

50. While the Court dignifies Mr. Vacco’s baseless accusation at oral argument

by considering whether my speech could be restrained as libel, the Memorandum

Decision refuses to grant my sworn affirmation any credence:

As noted, Mr. Giacalone has attempted to state other reasons for his

communications with Kaleida besides the intent to “materially prejudice” the

outcome of the instant proceeding. … [T]he court is concerned that, despite his

argument otherwise, Mr. Giacalone is seeking to obtain an advantage in the

litigation by emailing the President and CEO of Kaleida. Although Mr.

Giacalone asserts that he is merely interested in ensuring that his clients’

neighbor’s property is up to code (see Giacalone Affirm, paragraph 11), there is

no evidence that, prior to commencement of this hard-fought litigation, Mr.

Giacalone sent any communications to Kaleida concerning his efforts to correct

code violations at the properties at issue… Further, Chason Affinity was

awarded chosen developer status in August 2012 – and it was not until that event,

that Mr. Giacalone emailed Kaleida about the code violations…

[Memorandum Decision, pages 17-18 of 20]

51. Rather than approaching my sworn statements with an open and impartial

mind, the Court assumes the role of an adversary, striving desperately to disparage my

words and question my integrity:

29

(a) Despite the absence of factual support for its assertion, the Court insists that

the purpose of my emails to Kaleida is to materially prejudice the outcome of this

lawsuit. I do not understand what “prejudice” the Court is referring to, and plaintiff’s

motion papers contain no suggestion on how Affinity might be harmed in this proceeding

due to my emails. As noted above, the emails exchanged between Kaleida Health and

Mark Chason (which plaintiff chose not to provide to the Court) do not reflect any

deterioration in their business relationship as a result of my emails. [See paragraph 25

above; the emails attached hereto as Exhibit B.]

(b) The Court does not explain the factual bases for its “concern” that I emailed

Kaleida’s President/CEO to gain an advantage in this litigation. The “concern,” as with

most biases, appears to be founded on something other than fact. According to plaintiff, I

emailed Mr. Kaskie, not to gain an advantage in this lawsuit, but to destroy the business

relationship between Chason Affinity and Kaleida. The two goals are not synonymous.

(c) There are two logical reasons why I did not email Kaleida regarding the

Affinity property code violations prior to commencement of this lawsuit, or prior to the

mid-August 2012 announcement of Chason Affinity’s selection as winner of the Kaleida

competition. First, I was unaware of any relationship between Chason Affinity and

Kaleida until August 2012, and, therefore, I had no reason to think that Kaleida might be

in a position to give Affinity “a nudge” to correct the violations. Second, it was not until

July 16, 2012 that the City issued its Notices of Violation for Affinity’s Elmwood

Avenue properties, and not until post-August 16, 2012 that it became clear to me that it

would take more than a request from the City inspection office to motivate plaintiff to

correct the code violations.

30

52. The Court demonstrates a determination to find a way –any way, apparently-

to enjoin my communications with Kaleida, despite the absence of evidentiary proof to

support such relief, when the Memorandum Decision rejects my stated motivation and

bases its issuance of a “protective order” on what it refers to as “the elephant in the

room”:

... Although Mr. Giacalone argues that he seeks only as a long-time activist to

communicate his opinions on development in a City in which he used to live and

work and in which his clients live, such statements ignore the “elephant in the

room” – That Mr. Giacalone’s intent is to continue to push Kaleida to withdraw

from the Gates Circle deal unless plaintiff settles or resolves the instant

litigation… [Emphasis added.]

[Memorandum Decision, page 18 of 20]

53. For the Court to make the above assertion, when plaintiff’s counsel has not

stooped to utter it, is, to say the least, troubling. For reasons about which I can only

speculate (and, therefore, I will not express), Your Honor attributes malevolent motives

to me that have never crossed my mind. And, if they had crossed my mind, they would

have been instantly rejected as beneath the dignity of an attorney and the judicial system.

54. In light of the above, a reasonable basis exists to question whether the Court

performed its judicial duties in this proceeding free of bias, either in favor of Mr. Vacco,

the Lippes firm, and his clients, or against me and my clients. [22 NYCRR 100.3(B)(4)]

CONCLUSION

55. This Court’s handling of plaintiff’s request for injunctive relief has left the

answering defendants – ordinary citizens who approached the pending lawsuit with hopes

that the Court would objectively and fairly evaluate the law and the facts – with a sense

of disbelief and dread. For all the reasons discussed above, there is no longer an

31

expectation, by me or my clients, that the Court will handle its duties in this proceeding

impartially.

56. With a disclosure deadline fast approaching, discovery matters exist that

require judicial intervention. A host of trial-related issues will need attention as this year

progresses. Given prior events in this lawsuit, there is reason to fear that it will be bias,

rather than fairness and impartiality, that will determine future decisions if Your Honor

does not disqualify himself in this proceeding.

57. The answering defendants and I ask Your Honor to conclude, for the reasons

discussed above, that the Court’s impartiality might reasonably be questioned in this

proceeding, and that disqualification is the proper step to take.

DATED: East Aurora, New York

January 18, 2013

_____________________________

Arthur J. Giacalone

Attorney for Defendants Bencinich, Davis,

Gathers, Genovese, Girage and Wustner,

140 Knox Road

East Aurora, New York 14052

(716) 687-1902