New York State Court of Claims

New York State Court of Claims
TERRY ROAD v. THE STATE OF NEW YORK, # 2020-045-037, Claim No. 124599, Motion Nos. M-94750, M-94777, M-94815

Synopsis

Three motions, claimant's to amend decision, defendant's to amend decision and defendant's to recover paid through advance payment that was in excess of decision.

Case information

UID: 2020-045-037
Claimant(s): 154 TERRY ROAD, LLC
Claimant short name: TERRY ROAD
Footnote (claimant name) :
Defendant(s): THE STATE OF NEW YORK
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 124599
Motion number(s): M-94750, M-94777, M-94815
Cross-motion number(s):
Judge: GINA M. LOPEZ-SUMMA
Claimant's attorney: Flower, Medalie & Markowitz
By: Edward Flower, Esq.
Defendant's attorney: Hon. Letitia James, Attorney General
By: Christopher M. Gatto, Assistant Attorney General
Third-party defendant's attorney:
Signature date: May 22, 2020
City: Hauppauge
Comments:
Official citation:
Appellate results:
See also (multicaptioned case)

Decision

The following papers were read and considered by the Court on motion M-94750: Claimant's Notice of Motion ; Claimant's Affirmation in Support with annexed Exhibit A; Claimant's Affidavit of Support; Defendant's Affirmation in Opposition with annexed Exhibits A-B; Claimant's Further Affirmation, Claimant's Reply Affirmation and Claimant's Post Trial Brief.

The following papers were read and considered by the Court on motion M-94777: Defendant's Notice of Motion with annexed Exhibit A; Claimant's Affirmation in Opposition and Claimant's Post Trial Brief.

The following papers were read and considered by the Court on motion M-94815: Defendant's Notice of Motion; Claimant's Affirmation in Support with annexed Exhibit A-D and Claimants Affirmation in Opposition.

This matter involves a timely filed claim for a permanent appropriation (taking) of property, as well as a temporary easement on the property and consequential damages, owned by claimant, 154 Terry Road LLC, brought against defendant, the State of New York, pursuant to the Eminent Domain Procedure Law and 30 of the Highway Law.

A bench trial was conducted in this matter and a Decision was filed on September 27, 2019 wherein the court awarded claimant $23,898 in direct damages; $18,000 in cost to cure damages for obtaining a variance; $150,000 in severance damages; $2,535 for damages related to rental value of the land encompassed within the temporary easement; and $7,442 for loss of rental income as a consequential/severance damage for a total award of $201,875 with statutory interest from the vesting date of May 7, 2014 to the date of decision and thereafter to date of entry of judgment.

In this trio of motions which are all inter-related and will be considered together by the Court, claimant brought a motion, M-94750, pursuant to CPLR 4404 (b) for reconsideration and modification of this Court's Decision after trial filed September 27, 2019; defendant brought a motion, M-94777, pursuant to CPLR 2201, 4404 (b) and 4406 for leave to stay, vacate and modify the Court's Decision after trial filed September 27, 2019; and defendant brought a motion, M-94815, pursuant to Eminent Domain Procedure Law 304 and Court of Claims Act 12, to recoup the amount in which the sum paid pursuant to the Agreement for Advance Payment exceeds the amount of the Court's award and seeks judgment against claimant in the sum of $59,823.

Claimant's motion, M-94750, sets forth that it is seeking reconsideration to the damage award in the categories of direct and severance damages. Claimant contends that the pre-taking value determined by the Court was a compromise between the two appraiser's values and is contrary to the facts surrounding the acquisition of the property, its improvements and the change in the market. The property was purchased in 2010 for $830,000 and renovated with $208,000 worth of improvements in that same year, four years prior to the taking. Upon purchase, the second floor was vacant and after the improvements were completed, two additional units were created and thereafter rented. At the time of the acquisition, all four units were occupied and rented. Claimant contends that defendant's appraiser's opinion should carry no weight and the Court erred in placing reliance upon it. In support, claimant points out that defendant's own appraiser opined that since 2010, the market was rising at a rate of 2.5% per annum and in fact adjusted one property used in his sales comparison approach by 12.75%. However, defendant's appraiser, testified at trial that when he did his appraisal he was unaware of the condition of the property upon purchase, the amount and substance of the improvements as well as the fact that at time of purchase it was occupied by two tenants but at the time of the taking is was occupied by four tenants. Defendant's appraiser found a before taking value of the subject property of $850,000. Claimant contends that by way of example, solely adjusting the purchase price plus improvements which was $1,038,000, by the amount the appraiser adjusted that one property market increase per annum, results in a value of $1,167,750 which is comparable to claimant's appraiser's value of $1,275,000. Claimant contends that defendant's appraiser's valuation of the property before the taking was based upon incorrect facts about the property and he therefore incorrectly based his valuation only upon the sale price.

Claimant identifies inadequacies in the sales comparison approach in the defendant's appraisal with respect to the sales relied upon by the Court. In Sale 2 relied upon by the Court, defendant's appraiser made adjustments against the property unaware that the subject had a basement and that the subject property had been improved. In Sale 3, defendant's appraiser made adjustments against the property for location without an explanation or description of the difference as well as an adjustment for condition where the appraiser was unaware that the subject had been improved. Claimant argues that even with the understanding that adjustments are subjective, these adjustments, based upon an incomplete knowledge of the property operated to incorrectly decrease the value of the subject property.

Claimant also contends that the Court should not have relied upon or adopted defendant's income capitalization approach. Claimant sets forth that defendant's appraiser listed 10 rentals and provided no explanation or description of the properties, their leases, availability of parking or type of lease. Without an explanation, claimant argues that the appraisal was deficient and deprived claimant the ability to fully cross-examine the appraiser and also deprived the Court of pertinent comparable information. Claimant contends that this information should have been stricken from the record when requested at trial. Claimant also points out that defendant's vacancy rate was based on Co-star without explanation. Therefore, claimant urges the Court to find that defendant's appraisal is invalid and should either be stricken from the record or given little weight.

Additionally, claimant contends that the damages awarded for the loss of parking were insufficient. In support, claimant sets forth that because defendant's appraiser made no adjustment for loss of parking, there is only claimant's expert proof before the Court with regard to the loss of parking and the zoning non-conformities. Thus, claimant's appraiser's negative 20% adjustment should prevail absent an explanation for a different sum.

Next, claimant contends that there was insufficient evidence to support the Court's award with respect to the set back zoning non-conformity and the number of parking spaces zoning non-conformity created by the taking. Claimant sets forth that although the Court held that the evidence did not establish that a parking variance would be granted for the loss of parking, it appears that the Court did not award damages for this non-conformity. In addition, claimant contends the Court erred in awarding cost to cure damages for the minor set back non-conformity. Claimant argues that there was insufficient evidence to support the Court's conclusions in either circumstance and the uncertainty of procuring a variance should be considered as a discount factor in fixing compensation.

Claimant further contends that the Court failed to allow damages for a reduction in aesthetics and that such damages are compensable because the retaining wall and metal railing were built on property appropriated from claimant by defendant. Claimant argues that damages are warranted for the use to which the property is to be put.

Claimant contends that their appraiser's after value of $675,000 takes into account all of the allowable elements of damages.

Claimant provided an affidavit from Frank Marotta, the property manager. Mr. Marotta wanted to bring to the Court's attention that defendant, using a qualified appraiser, represented that its offer of $237,000 was its "highest approved appraisal." He contends that the list of damages in the offer did not include the loss of 10 parking spaces or zoning non-conformities. He sets forth he was "shocked" that the appraisal exchanged for trial only included $57,600 in damages, which was only 25% of the highest approved appraisal. Mr. Marotta stated that through his counsel he was made aware that an offer of settlement cannot be brought to the attention of the Court. However, he believed the trial appraisal to be "pure and simple" fraud intended to punish claimant for going to trial and to deceive the Court. Counsel for claimant, cognizant of the fact that the advance payment offer is not admissible in Court set forth that in sixty years of practice he has never encountered a trial appraisal so markedly different and that such an appraisal certainly brings into question defendant's good faith in this matter.

Defendant in its opposition argues that the Court's judgment should not be disturbed unless it is obvious that the court's conclusions cannot be supported by a fair interpretation of the evidence. Defendant correctly contends that the appraisal used by the State for making an EDPL 303 advance payment offer to a condemnee is not binding on the State for trial purposes (Johnson v State of New York, 72 AD2d 487 [3d Dept 1980]; Oriskany Dev. Corp. v State of New York, 63 AD2d 1082 [3d Dept 1978]; Murphy v State, 29 AD2d 81 [3d Dept 1967]). As such, the Court will not take into consideration the amount of the advance payment except where necessary in connection with defendant's motion to recover overpayment pursuant to EDPL 304 (H).

Defendant contends that the before value found by the Court was within the range of expert testimony and claimant failed to establish any basis to disturb that conclusion. Defendant further contends that there is no merit to claimant's contention that it should have adopted claimant's appraiser's adjustment of negative 20% for the loss of parking. In support, defendant refers to the explanation in the Court's Decision that the credible evidence established that the zoning non-conformity created by the loss of parking was adequately addressed by Ms. Brunswick as a parking adjustment only.

Defendant also contends that the Court properly found that the retaining wall did not decrease the value of the property and claimant has failed to set forth why the Court should disturb its decision. Defendant sets forth that the testimony and evidence presented at trial demonstrated that claimant's aesthetic adjustment of over $100,000 for the installation of a retaining wail and metal tube railing lacked a credible foundation.

CPLR 4404 (b) provides that after a trial not triable of right by a jury, upon the motion of any party or on its own initiative, the court may set aside its decision or any judgment entered thereon. It may make new findings of fact or conclusions of law, with or without taking additional testimony, render a new decision and direct entry of judgment, or it may order a new trial of a cause of action or separable issue.

The Court finds that claimant has failed to establish that the Court should make new findings of fact and order additional damages concerning the loss of parking, the need for a variance and the retaining wall. Those issues were properly considered and appropriately addressed by the Court in its Decision after trial filed September 27, 2019. Accordingly, that portion of the Decision should not be disturbed.

However, the Court finds that claimant has established that the Court should reconsider it findings with respect to the value of the subject property prior to the taking. The Court now finds that the before taking value of $1,000,000 determined by the Court in its Decision after trial filed September 27, 2019 does not accurately reflect the value of the subject property considering the history of the property, the use of the property and the action of the marketplace at that time. The Court now finds that claimant's appraiser credibly and appropriately considered those factors in arriving at his $1,275,000 before taking value of the subject property. Additionally, the Court now finds that defendant's appraiser did not credibly and appropriately consider those factors in arriving at his before taking value of the subject property. Thus, the Court finds that the appropriate measure of the value of the subject property prior to the taking, to be that as opined by claimant's appraiser, $1,275,000.

Based upon the foregoing, claimant's motion, M-94750, for reconsideration and modification of the Court's Decision after trial filed September 27, 2019 is granted only to extent that the Court finds the value of the subject property prior to the taking to be $1,275,000.

The Court will next address defendant's motion, M-94777, for a correction in the calculation of damages and a new direction as to the entry of judgment. Defendant contends that there is a mathematical error in the Court's award of damages in that the Court should have deducted the amount of the award for direct damages from the amount of the award for severance damages. Claimant contends that it is generally correct that in a partial taking, the difference between the before taking value and the after taking value is usually intended to reflect both direct and severance damages.

The Court agrees with defendant in that it should have deducted the direct damages award from the severance damages award (Chester Indus. Park Assoc., L.P. v State of New York, 103 AD3d 827 [2d Dept 2013]). Thus, defendant's motion is granted to the extent that the direct damages of $23,898 should be subtracted from the amount awarded for severance damages.

Based upon the foregoing, the Court makes a new finding that the value of the subject property before the taking is $1,275,000. The Court also finds that it correctly determined that the value of the subject property after the taking was $850,000. The difference in the value of the subject property after the taking is $425,000. The Court reached this number by subtracting the after value of $850,000 from the new before value of $1,275,000.

New Award

Accordingly, claimant is entitled to $23,898 in direct damages; $18,000 in cost to cure damages for obtaining a variance(1) ; $401,102 in severance damages(2) ; $2,535 for damages related to rental value of the land encompassed within the temporary easement; and $7,442 for loss of rental income as a consequential/severance damage for a total award of $452,977 with statutory interest from the vesting date of May 7, 2014 to the date of decision and thereafter to date of entry of judgment (see CPLR 5001 and 5002). Suspension of interest is not warranted since the notice of acquisition was served by certified mail, return receipt requested and not by personal service (Sokol v State of New York, 272 AD2d 604 [2d Dept 2000]; see also EDPL 514 [B]).

The award to claimant herein is exclusive of the claims, if any, of persons other than the owners of the appropriated property, their tenants, mortgagees or lienors having any right or interest in any stream, lake, drainage, irrigation ditch or channel, street, road, highway or public or private right-of-way or the bed thereof within the limits of the appropriated property or contiguous thereto; and is exclusive also of claims, if any, for the value of or damage to easements or appurtenant facilities for the construction, operation or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer or railroad lines. To the extent the claimant has paid a filing fee, it may be recovered pursuant to Court of Claims Act section 11-a (2).

Finally, in light of the Court's aforementioned decision and new award in the above referenced motions, defendant's motion M-94815 in which defendant seeks to recover the amount in which the sum paid pursuant to the Agreement for Advance Payment exceeds the amount of the Court's award is denied as moot.

The Chief Clerk of the Court is hereby directed to enter said Judgment accordingly.

May 22, 2020

Hauppauge, New York

GINA M. LOPEZ-SUMMA

Judge of the Court of Claims


1. The Court adopted Mr. Tartaglia's cost for obtaining a variance for the setback non-conformity.

2. The Court deducted the amount of the award for direct damages from the amount of the award for severance damages.