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THREE-YEAR TIME LIMIT FOR STARTING EMINENT DOMAIN PROCEEDINGS AFTER A COURT CHALLENGE STARTS TO RUN WHEN THE COURT OF APPEALS DISMISSES THE APPEAL FROM THE APPELLATE DIVISION DECISION.

The First Department, in a full-fledged opinion by Justice Manzanet-Daniels, determined the three-year time limit within which a municipality must commence eminent domain proceedings begins to run when the Court of Appeals dismisses the appeal:

EDPL 401, entitled “Time for acquisition,” prescribes the time during which a condemnor may commence proceedings “to acquire the property necessary for the proposed public project” (EDPL 401[A]). Specifically, section 401(A) provides that the condemnor may commence such proceedings “up to three years” after the latest of “(1) publication of its determination and findings pursuant to [EDPL 204], or (2) the date of the order or completion of [an exemption procedure under EDPL 206], or (3) entry of the final order or judgment on judicial review pursuant to [EDPL 207]” (EDPL 401[A][1]-[3]). Section 401(B) provides that if the condemnor does not commence EDPL article 4 proceedings within the specified time, “the project shall be deemed abandoned, and thereafter, before commencing [EDPL article 4 proceedings,] the condemnor must again comply with the provisions of article two” (EDPL 401[B]).

The plain and common-sense interpretation of the statute is that “the final order or judgment on judicial review” is the final order or judgment disposing of any EDPL 207 challenge and terminating judicial review. Our October 12, 2010 decision did not finally terminate judicial review, as the challengers filed a notice of appeal which entailed further review by the Court of Appeals. The decision of the Court of Appeals could not be known until such time as it issued its order dismissing the appeal. Matter of City of New York v 2305-07 Third Ave., LLC, 2016 NY Slip Op 05352, 1st Dept 7-5-16

 

EMINENT DOMAIN (THREE-YEAR TIME LIMIT FOR STARTING EMINENT DOMAIN PROCEEDINGS AFTER A COURT CHALLENGE STARTS TO RUN WHEN THE COURT OF APPEALS DISMISSES THE APPEAL FROM THE APPELLATE DIVISION DECISION)/MUNICIPAL LAW (EMINENT DOMAIN, THREE-YEAR TIME LIMIT FOR STARTING EMINENT DOMAIN PROCEEDINGS AFTER A COURT CHALLENGE STARTS TO RUN WHEN THE COURT OF APPEALS DISMISSES THE APPEAL FROM THE APPELLATE DIVISION DECISION)

CLAIMANTS DID NOT DEMONSTRATE THE FEASIBILITY OF USE OF THE CONDEMNED LAND FOR HIGH-RISE RESIDENTIAL AS THE HIGHEST AND BEST USE.

The Second Department determined claimants did not demonstrate it was feasible the highest and best use of condemned waterfront property would be high-rise residential. The court explained the law:

The bedrock of eminent domain law is the principle that, when private property is taken for public use, the condemning authority must “compensate the owner so that he may be put in the same relative position, insofar as this is possible, as if the taking had not occurred” … . “The measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time” … . Moreover, “[i]t is necessary to show that there is a reasonable possibility that the property's highest and best asserted use could or would have been made within the reasonably near future, and a use which is no more than a speculative or hypothetical arrangement may not be accepted as the basis for an award”… .

” [A] condemnee may not receive an enhanced value for its property where the enhancement is due to the property's inclusion within a redevelopment plan'” … . Thus, for example, property zoned for industrial use ” should be valued in accordance with the industrial zoning designation which would apply if the redevelopment plan did not exist,' for [a] condemnee is only entitled to compensation for what it has lost, not for what the condemnor has gained'” … . Matter of Queens W. Dev. Corp. v Nixbot Realty Assoc., 2016 NY Slip Op 03746, 2nd Dept 5-11-16

EMINENT DOMAIN (CLAIMANTS DID NOT DEMONSTRATE THE FEASIBILITY OF USE OF THE CONDEMNED LAND FOR HIGH-RISE RESIDENTIAL AS THE HIGHEST AND BEST USE)/HIGHEST AND BEST USE (EMINENT DOMAIN, CLAIMANTS DID NOT DEMONSTRATE THE FEASIBILITY OF USE OF THE CONDEMNED LAND FOR HIGH-RISE RESIDENTIAL AS THE HIGHEST AND BEST USE)

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EXTENSION OF TIME TO FILE NOTICE OF APPEARANCE RE: A CLAIM FOR DAMAGES FOR THE ACQUISITION OF REAL PROPERTY BY THE VILLAGE PROPERLY GRANTED, CRITERIA EXPLAINED.

The Second Department affirmed Supreme Court’s grant of an extension of time to file a notice of appearance pursuant to Eminent Domain Procedure Law (EDPL) 503 (B). The village’s petition for condemnation had been granted and the EDPL requires a landowner to file a notice of appearance for any claim of damages arise from the acquisition of real property. The landowners’ attorney failed to timely file the notice of appearance with the clerk of the court, but the village had been served with it. The Second Department explained the relevant law:

 

The time within which to file a written claim or notice of appearance pursuant to EDPL 503 is “merely a procedural direction to be issued by the court in the exercise of its broad discretion to administer the litigation in an orderly and expeditious manner” … . It is neither a statute of limitations nor a condition precedent to compensation and may be extended by the Supreme Court ” upon such terms as may be just and upon good cause shown'” … . In considering a motion for such an extension of time, “[a] court may properly consider factors such as the length of the delay, whether the opposing party has been prejudiced by the delay, the reason given for the delay, whether the moving party was in default before seeking the extension, and, if so, the presence or absence of an affidavit of merit” … .

Here, the landowners established ” good cause'” for an extension of time to file a notice of appearance … . Although the landowners’ attorney failed to properly file a notice of appearance with the clerk of the court within the timeframe set forth by the Supreme Court, the Village was nevertheless served with a notice of appearance that alerted it to the landowners’ claims. Moreover, the landowners repeatedly demanded an “advance payment” for the taking (EDPL 304), repeatedly requested that their expert appraisers be given access to the subject property in order to assess its value, and sought to exchange “written appraisal reports” (EDPL 508). In addition, after the Village had acquired the subject property, a judicial viewing of the property took place (see EDPL 510). Furthermore, the landowners demonstrated that their claim was potentially meritorious through the submission of expert evidence demonstrating that the property was worth significantly more than the amount tendered by the Village as an advance payment. Matter of Village of Haverstraw v Ray Riv. Co., Inc., 2016 NY Slip Op 01500, 2nd Dept 3-2-16

 

EMINENT DOMAIN (EXTENSION OF TIME TO FILE NOTICE OF APPEARANCE RE: DAMAGES FOR ACQUISITION OF REAL PROPERTY PROPERLY GRANTED)/NOTICE OF APPEARANCE (EMINENT DOMAIN, EXTENSION OF TIME TO FILE NOTICE OF APPEARANCE RE: DAMAGES FOR ACQUISITION OF REAL PROPERTY PROPERLY GRANTED)/MUNICIPAL LAW (EMINENT DOMAIN, EXTENSION OF TIME TO FILE NOTICE OF APPEARANCE RE: DAMAGES FOR ACQUISITION OF REAL PROPERTY PROPERLY GRANTED)

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QUESTION OF FACT WHETHER TENANT ENTITLED TO COMPENSATION FOR TRADE FIXTURES ON PROPERTY TO WHICH VILLAGE ACQUIRED TITLE BY EMINENT DOMAIN.

The Second Department, reversing Supreme Court, determined there was a question of fact whether tenant was entitled to compensation for trade fixtures in property to which the village acquired title by eminent domain.  The court explained the relevant law:

 

Providing compensation to a trade fixture owner is in derogation of the common-law rule that government taking of real property encompasses the land and everything annexed thereto, including trade fixtures … . Under the trade fixture rule, a tenant who owns the trade fixture, but not the property to which the fixture is annexed, may seek compensation for trade fixtures it had a right to remove, but elected not to remove, and thus remained annexed to the property at the time of the taking … . A tenant’s right to compensation for fixtures installed on the leasehold exists despite provisions in the lease which terminate the lease in the event of a condemnation. Such provisions have been interpreted as ” an agreement between landlord and tenant that the tenant shall receive out of the award no compensation for his leasehold interest. Even so, the tenant retains the right to compensation for his interest in any annexation to the real property which but for the fact that the real property has been taken, he would have had the right to remove at the end of his lease'” … . Matter of Village of Spring Val., N.Y.. (Sport Club Intl., Inc.), 2016 NY Slip Op 00985, 2nd Dept 2-10-16

 

NEGLIGENCE (QUESTION OF FACT WHETHER EMPLOYEE WAS ACTING WITHIN THE SCOPE OF EMPLOYMENT AT THE TIME OF THE CAR ACCIDENT)/EMPLOYMENT LAW (QUESTION OF FACT WHETHER EMPLOYEE WAS ACTING WITHIN THE SCOPE OF EMPLOYMENT AT THE TIME OF THE CAR ACCIDENT)/RESPONDEAT SUPERIOR  (QUESTION OF FACT WHETHER EMPLOYEE WAS ACTING WITHIN THE SCOPE OF EMPLOYMENT AT THE TIME OF THE CAR ACCIDENT)

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Court of Claims Must Determine the Interests of All Parties Named by the Attorney General as Potentially Entitled to Payment for a Taking by the State—Therefore a Claimant Must Join all the Parties Named by the Attorney General

The Second Department explained the procedure under the Eminent Domain Procedure Law (EDPL) for determining how to apportion payment for a taking when there is a dispute about which parties are entitled to payment. Under the EDPL and the Court of Claims Act, the Court of Claims must determine the interests of all parties named by the Attorney General as having a possible claim. Therefore a claimant must join all the named parties in any action seeking payment:

EDPL 304(E)(1) … provides that when the Attorney General determines that there is a conflict with regard to the person or persons legally entitled to receive payment for the value of property acquired by the State through the power of eminent domain, he or she shall request the Comptroller to deposit the funds in an interest-bearing account “to be distributed as ordered by the Court of Claims on application of any person claiming an interest in the amount” (EDPL 304[E][1]). The statute further provides that the procedure to be employed in connection with such an application “shall be the same as provided in [Court of Claims Act § 23],” and that “[n]o judgment of distribution shall be made unless the court shall first obtain personal jurisdiction over all persons certified by the Attorney General as having or claiming to have an interest in the fund” (EDPL 304[E][1]).

The claimant argues, in effect, that Mazur Brothers, Inc. (hereinafter MBI), an entity that the Attorney General has determined has a possible interest in the subject proceeds, does not in fact have any such interest and that, therefore, the claimant was under no obligation to join MBI as a party to this claim. In advancing this argument, however, the claimant essentially asked the Court of Claims to assume the very fact that is the ultimate fact that must be proven, namely, that MBI has no interest in the money deposited by the Comptroller. Without jurisdiction over MBI, it would have been improper for the Court of Claims to grant the relief requested by the claimant in connection with this claim. Indeed, as the claimant appears to have recognized, its remedy, under these circumstances, lies in a special distribution proceeding pursuant to EDPL 304 … . Mazur Bros. Realty, LLC v State of New York, 2015 NY Slip Op 06119, 2nd Dept 7-15-15

 

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Criteria for Valuation of a Partial Taking of Vacant Land Explained

The Second Department determined the valuation of a partial taking of vacant land (the value before minus the value after the taking based on the highest and best use of the land)  was flawed and remitted the matter for a new valuation.  The decision is detailed and fact-specific and therefore is not fully summarized here.  The court explained some of the most significant valuation criteria, noting that any comparable sales considered in the valuation must be similar in character to the subject land (not so here):

When private property is taken for public use, the condemning authority must “compensate the owner so that he may be put in the same relative position, insofar as this is possible, as if the taking had not occurred'” … . Where, as here, there is a partial taking of real property, “the measure of damages is the difference between the value of the whole before the taking and the value of the remainder after the taking” … . “The measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time”… . The determination of highest and best use must be based upon evidence of a use which reasonably could or would be made of the property in the near future … . Matter of County of Orange v Monroe Bakertown Rd. Realty, Inc., 2015 NY Slip Op 06143, 2nd Dept 7-15-15

 

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Service of an Unverified Petition in Violation of the Court of Claims Act Did Not Constitute a Jurisdictional Defect

Reversing the Court of Claims, the Second Department determined that service of a petition which was not verified was not a jurisdictional defect in a proceeding to recover money placed in escrow by the NYS Comptroller pending claims for the state’s appropriation and use of easements.

In accordance with the Eminent Domain Procedure Law, after the Attorney General determined that there was or might be a conflict with regard to the money allegedly owed as a result of the extended use of these temporary easements, the funds were deposited by the New York State Comptroller into a special interest-bearing eminent domain account (see EDPL 304[E][1]). Upon receiving notice of this deposit, the petitioner commenced this special proceeding for the distribution of the money pursuant to EDPL 304(E)(1) and Court of Claims Act § 23. The State promptly rejected the petition, noting that it was served without a proper verification. Within days, the petitioner provided the missing verification. The Court of Claims, however, dismissed the petition, concluding, inter alia, that the failure to comply with the statutory provisions requiring verification constituted a jurisdictional defect that mandated dismissal, without consideration of the merits. The petitioner appeals, and we reverse.

While the time limitations and service requirements set forth in Court of Claims Act §§ 10 and 11 have been referred to as “jurisdictional” … , the instant matter concerns a special proceeding pursuant to EDPL 304(E) for the distribution of money that had been deposited (see Court of Claims Act § 9[12]), and service of the petition without a verification did not constitute an incurable “jurisdictional” defect … . In this regard, the petitioner, upon notice from the State, cured the omission within a matter of days (see CPLR 3022, 3025[a]…). Moreover, considering that no substantive right of the State was prejudiced by the missing verification, even if the omitted material had not been supplied, the Court of Claims, under the circumstances presented to it, should have disregarded the technical infirmity pursuant to CPLR 2001 and 3026 … . Matter of Mazur Bros. Realty, LLC v State of New York, 2015 NY Slip Op 06149, 2nd Dept 7-15-15

 

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Town Board Should Not Have Considered the Environmental Impact of Only One Small Part of a Revitalization Project, as Opposed to the Entire Revitalization Project, without Explaining the Reasons for Limiting Its Review In Accordance with the Requirements of the State Environmental Quality Review Act

The Second Department determined the town board did not complete the required review under the State Environmental Quality Review Act (SEQRA) in connection with an Eminent Domain Procedure Law (EDPL) 207 proceeding to condemn certain land for drainage and storm water management improvements (drainage plan).  Even though the drainage plan is part of a much larger revitalization plan, the town board considered only the drainage plan in its SEQRA review, a limited review which can be done only if certain SEQRA requirements are met.  The matter was remitted to the town board for compliance with the relevant provisions of SEQRA:

…[U]nder SEQRA, the Town Board was obligated to consider the environmental concerns raised by the entire project (see 6 NYCRR 617.3[g][1]…). If, at this stage, the larger project is merely speculative or hypothetical, then the Town’s separate consideration of the drainage plan would not constitute impermissible segmentation … . However, the respondents are not claiming that the larger project is speculative or hypothetical. Moreover, to the extent that the Town Board concluded that segmenting the environmental review of the drainage plan from that of the larger revitalization project was warranted under the circumstances presented here, it was required under the SEQRA regulations to “clearly state in its determination of significance . . . the supporting reasons[,]” “demonstrate that such review is clearly no less protective of the environment[,]” and to identify and discuss “[r]elated actions . . . to the fullest extent possible” (6 NYCRR 617.3[g][1]). The Town Board failed to do so. Since the Town Board failed to properly comply with SEQRA, the determination and findings must be rejected, and the matter remitted to the Town Board to undertake an appropriate review … . Matter of J. Owens Bldg. Co., Inc. v Town of Clarkstown, 2015 NY Slip Op 04487, 2nd Dept 5-27-15

 

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Installing, Pursuant to a Resolution, a Temporary Barrier to Address Traffic and Speeding Problems Did Not Violate the “Prior Public Use” Doctrine

The Second Department determined the town’s passing of a resolution installing a temporary barrier on a street to address complaints about traffic and speeding was proper.  Installing the barrier did not violate the “prior public use” doctrine because the barrier did not interfere with a prior public use:

The prior public use doctrine limits “the general grant of the power of eminent domain extended in Town Law § 64(2)” by prohibiting towns from “acquir[ing] rights in property already devoted to another public use where the acquisition will interfere with or destroy the prior public use” … . The subject breakaway barrier that the Town installed on Samuel Road did not interfere with or destroy the prior public use of Samuel Road. Accordingly, the prior public use doctrine is inapplicable, and does not prohibit the Town from installing the barrier … . Matter of County of Rockland v Town of Clarkstown, 2015 NY Slip Op 04314 2nd Dept 5-20-15

 

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Consequential Damages Related to a Parcel of Land Sold Prior to the Taking Should Not Have Been Granted by the Court of Claims

The Fourth Department, in a full-fledged opinion by Justice Fahey, determined the Court of Claims should not have awarded consequential damages for a parcel of land which was sold prior to the taking.  As the court described the issue:

Here we address the issue whether consequential damages may be awarded when the real property in question was sold months before the taking of other real property that affects the land in question. Claimants commenced this proceeding seeking damages for the diminished value of approximately 16 acres of what claimants characterized as “remaining land” following defendant’s taking of approximately 1.22 acres of land from what was claimants’ 17.3-acre parcel. Following a trial, the Court of Claims awarded claimants consequential damages with respect to what the court concluded was 12.835 acres of that parcel. Included in the 12.835 acres of land for which the court awarded consequential damages were 4.63 acres of land sold by claimants to Progressive Casualty Insurance Company (Progressive Parcel) for $1,800,000. That sale occurred in November 2005, i.e., before the taking of the aforementioned 1.22 acres of land in July 2006. Defendant now contends that the award of consequential damages was excessive inasmuch as the court erroneously awarded consequential damages for the Progressive Parcel. We agree. Rose Park Place Inc v State of New York, 2014 NY Slip Op 03070, 4th Dept 5-2-14

 

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