Appeals Court Tosses $10 Million Defamation Lawsuit Filed by New Rochelle Corporation Counsel against Iona College

NEW YORK, NY — Defamation claims filed by New Rochelle Corporation Counsel Kathleen Gill against Iona College, her former employer, and their lawyers, have been tossed out by a State Appeals Court in New York City.

The New York Supreme Court Appellate Division Second Department in Brooklyn dismissed the case Wednesday after a four-judge panel reversed a previous ruling by Westchester County Supreme Court Justice Gerald Loehr.

The judges ruled that the alleged defamatory statements were made as part of a civil lawsuit filed by Iona College and so are excluded from defamation claims.

Kathleen Gill claimed Iona College made defamatory statements against her in a civil case in February 2017 regarding a dispute over aggregating tax lots and as a result filed a personal $10 million lawsuit in New York State Supreme Court.

Gill’s complaint said Iona’s lawsuit, press releases and letters to city official “were damaging to her reputation, character and professional future and can readily be interpreted to mean that Gill is dishonest and unfit for her position”.

Gill had left her position as New Rochelle Corporation Counsel in 2013 for Iona College where she was appointed General Counsel. Gill then left Iona College in 2015 to take up her former position as New Rochelle Corporation Counsel.

Iona College filed the 2017 lawsuit after the New Rochelle City Council amended a local ordinance to require private schools to obtain a Special Permit to merge tax lots on Beechmont Drive and Montgomery Place. The permit would likely put certain conditions on what the college could do with the merged property.

The Iona College lawsuit included allegations that Gill used her insider knowledge of the school’s development plans to interfere with them.

Ordinance 91, approved by the New Rochelle City Council in 2001, was amended in November 2016. Iona complained that Gill had a Conflict of Interest. She said she recused herself from the matter when it was considered by the New Rochelle zoning board.

Under the previous version of the law, a permit was required on “property that had not been previously used for any purposes related to the university, college or private school.”

In Early November 2016, Iona College announced plans to expand what was then known as Hagan Hall, home of its Business School, by merging tax lots in the area along Beechmont Drive.

The City Council moved quickly to unanimously approved a change to the language a week later to read “expansion shall include the merger of lots adjacent to the existing campus.” Iona College believed the amendment targeted them and was instigated peremptorily by Gill who had obtained knowledge of Iona College’s plans to merge tax lots through her position as Iona College General College, according to sources familiar with the school’s thinking at the time.

Westchester County Judge Susan Cacace dismissed the lawsuit brought by Iona College against the City of New Rochelle in July 2017. In addition to rejecting the College’s property claims, Cacase curtly dismissed allegations of ethical violations by Gill.

Gill filed her lawsuit on December 19, 2017. The complaint named Iona General Counsel Kathleen McElroy and attorney Anthony D. Dougherty along with his firm, Tarter Krinsky & Drogin of Manhattan. The complaint claimed Dougherty made threatening statements to her and city officials.

As her lawsuit made its way through the courts, the City and College came to terms in April 2018 under which Iona College dropped its legal fight and the City allowed Iona College to move forward with the planned expansion of its business school.

In a joint press release on April 21, the two parties said the agreement allowed for “the inward expansion of two campus buildings while addressing neighborhood concerns regarding the campus perimeter.”

Under the agreement, any future parcel agreements would require a special permit. The City also promised an expedited environmental review process for the expansion to Hagan Hall, as well as an additional expansion to Spellman Hall.

Iona also agreed to create a “Town-Gown” committee with City and College officials to discuss “shared interests for the community, the college and the city.”