The Lily Dale Assembly is trying again to put an end to a bed and breakfast whose owners have refused to pay business taxes the spiritualist assembly says it is owed.

While the assembly will get a hearing in state Supreme Court in July, the assembly will not be able to keep the business from opening until a decision is made by state Supreme Court Justice Grace Hanlon.

The assembly filed documents recently in state Supreme Court asking Hanlon for a hearing that could lead to the Owl’s Nest Guest House inside Lily Dale to operate this summer, require the business to pay the annual business license fee, including unpaid fees for prior years in escrow while the lawsuit between the business’ owners, Robert and Danielle Ruether, plays out, and prevents the Reuthers from taking any action that harms the assembly. Until that hearing is held, Lily Dale officials want the business closed down and past and present business fees to be paid.

Hanlon had set a series of deadlines in the case that would have taken it through September, but there will now be a hearing on the newest order to show cause filed by the Lily Dale Assembly on July 15. Hanlon did not grant any injunction that prevents the Reuthers from operating their bed and breakfast or require the business to pay a current or past business license fee.

“Plaintiff Lily Dale Assembly seeks immediate relief from the defendants’ continued operation and advertisement of their guest house on Lily Dale grounds – the Owl’s Nest Guest House. The issue came to light during the Labor Day weekend when the defendants affixed a large sign on the property, which is on Lily Dale land within the Lily Dale community, promoting the guest house,” a memorandum by Lily Dale attorneys Michael Ferdman and Nichole Mastrocinque of Barclay Damon LLP in Buffalo states. “The defendants currently operate and blatantly advertise their guest house in direct violation of Lily Dale bylaws and rules and regulations. Other individuals now refuse to operate their guest houses in compliance with Lily Dale’s bylaws and rules and regulations. Lily Dale can no longer wait given the immediate and irreparable harm to its reputation and relationship with members of Lily Dale.”

Hanlon has declined in the past to grant Lily Dale a preliminary injunction, a decision Lily Dale has appealed to the Fourth Department Appellate Division in Rochester.

Lily Dale filed a lawsuit in state Supreme Court in 2022 seeking to have the Reuthers removed from the spiritualist community over a dispute over annual business and licensing fees related to a guest house the Reuthers operated on their Fourth Street, Lily Dale, address. The Reuthers stopped paying the $1,000 fee in 2019, prompting the assembly to claim the contract had been breached and giving reason to have the Reuthers removed from the assembly.

In an answer submitted to the state Supreme Court in September 2022, the Reuthers said the claims in Lily Dale’s complaint aren’t authorized under state law, the state constitution, the Lily Dale Assembly bylaws, rules or regulations and, further, that the actions taken by Lily Dale constitute harassment, discrimination and abuse of process against the Reuthers. The Reuthers also say they did not enter into agreements on the terms Lily Dale alleges and can’t prove the Reuthers violated the material terms of any binding or valid contract.

Lily Dale officials renewed their efforts to have the Reuthers removed in 2023 after the case sat dormant for about a year. In October, Hanlon denied Lily Dale’s claim for summary judgment against the Reuthers, denying the claim and disagreeing with Lily Dale that there was clear language showing the Reuthers agreed to follow the community’s bylaws, rules and regulations in exchange for living on the Lily Dale Grounds.Ambiguity within the documents the Reuthers received, Hanlon wrote, courts have held courts should not grant requests for summary judgment.

“The court disagrees and it is unclear when and if the Reuthers received a copy of the by-laws and rules,” Hanlon wrote in her 2023 decision before continuing, “This case involves the interpretation of contractual language within three separate documents, and viewing the language within all the documents is reasonably susceptible to more than one interpretation.”