In re the Acquisition of Real Property by the State

119 A.D.3d 1033, 990 N.Y.S.2d 105

This text of 119 A.D.3d 1033 (In re the Acquisition of Real Property by the State) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Acquisition of Real Property by the State, 119 A.D.3d 1033, 990 N.Y.S.2d 105 (N.Y. Ct. App. 2014).

Opinion

Stein, J.

Appeal from a judgment and an order of the Court of Claims (Weinstein, J.), entered July 10, 2013 and June 27, 2013, which, among other things, in a proceeding pursuant to EDPL articles 4 and 5, determined the compensation due claimant as a result of petitioner’s acquisition of certain real property.

Claimant, KKS Properties, LLC, was the owner of a 31.77-acre parcel of real property on New Scotland Road in the Town of Bethlehem, Albany County, which it acquired in January 2006. On May 12, 2006, in conjunction with the construction of an extension of State Route 85 — also known as the Slingerlands Bypass (hereinafter the bypass) — petitioner, the State of New York, appropriated a 9.594-acre parcel of claimant’s property, which bifurcated the property from north to south, leaving a 3.736-acre parcel to the east of the bypass and an 18.44-acre parcel to the west. The eastern parcel continued to enjoy access from its frontage on New Scotland Road, while access to the western parcel was reduced to a 43-meter conditional right of access, which was encumbered by wetlands, a fire hydrant and road signage. Claimant and petitioner entered into an agreement for an advance payment to claimant in the amount of $718,500 for the appropriated land. However, believing such [1034]*1034compensation to be insufficient, claimant thereafter commenced this proceeding, asserting that the limited access granted to the western parcel of its land had rendered the northernmost 16.04 acres unsuitable for development to its highest and best use, and sought consequential damages of $1,583,000.

After trial, the Court of Claims concluded that claimant had suffered total damages of $532,000 as a result of the taking and petitioner then moved pursuant to EDPL 304 (H) for an order awarding it judgment against claimant for its overpayment. The court thereafter dismissed the claim and entered judgment in favor of petitioner for $304,679.57, which included petitioner’s overpayment of $186,500, plus statutory interest. Claimant now appeals.

We reverse. When private property is appropriated for public use, just compensation must be paid, which requires that the owner be placed in the financial position that he or she would have occupied had the property not been taken (see United States v Reynolds, 397 US 14, 15-16 [1970]; United States v Miller, 317 US 369, 373 [1943]; Rose Park Place, Inc. v State of New York, 120 AD3d 8, 8-13 [2014]). Upon a partial taking of real property, an owner is not only entitled to the value of the land taken — i.e., direct damages — but also to consequential damages, which consist of the diminution in value of the owner’s remaining land as a result of the taking or the use of the property taken (see La Briola v State of New York, 36 NY2d 328, 332 [1975]; Coldiron Fuel Ctr., Ltd. v State of New York, 8 AD3d 779, 780 [2004]; Matter of Saratoga County Sewer Dist. #1 v Gordon, 101 AD2d 966, 967 [1984]; see generally Chemical Corp. v Town of E. Hampton, 298 AD2d 419, 421 [2002]). Damages must be measured based upon the fair market value of the property as if it were being put to its highest and best use on the date of the appropriation, whether or not the property was being used in such manner at that time (see Matter of City of New York [Rudnick], 25 NY2d 146, 148-150 [1969]; Gyrodyne Co. of Am., Inc. v State of New York, 89 AD3d 988, 989 [2011], lv denied 19 NY3d 804 [2012]; Chester Indus. Park Assoc., LLP v State of New York, 65 AD3d 513, 514-515 [2009]; Chemical Corp. v Town of E. Hampton, 298 AD2d at 420-421).

Here, as part of a comprehensive rezoning of the town in September 2005, the eastern portion of the subject property (as it existed prior to the taking) was rezoned from residential to hamlet while the western portion was rezoned to commercial [1035]*1035hamlet.1 At trial, claimant presented the report and testimony of a professional engineer who opined that petitioner’s appropriation, and the corresponding restrictions to vehicular and utility access that resulted, severely limited claimant’s ability to develop the western portion of its land for its highest and best use. Claimant also presented the appraisal report and testimony of Laurence Farbstein, a licensed real estate appraiser, who opined that the highest and best use of the parcel, both before and after the appropriation, was for commercial development consistent with the zoning requirements. Farbstein valued the land before the taking at $2,360,000 and after the taking at $350,000, thus estimating total direct and consequential damages to be $2,010,000.

On the other hand, petitioner offered the appraisal report and testimony of Jacqueline Conti, a certified general real estate appraiser. Conti’s appraisal report misidentified the zoning of claimant’s property at the time of the appropriation as residential. Concomitantly, she opined that the highest and best use of the property, both before and after the sale, was for residential development and valued the direct damages for the taking of claimant’s property at $211,000. Conti further opined that the value of the entire property before the appropriation was $773,000 and that the value after the appropriation was $574,000; as the differential was less than the direct damages assessed, she concluded that claimant did not suffer any consequential damages.

The Court of Claims declined to consider Farbstein’s opinion on valuation, finding that it was unable to engage in meaningful review of his appraisal. The court further found that claimant’s property would not have been rezoned absent the bypass extension and concluded that, inasmuch as it was not permitted to take into account any enhancement in value attributable to the reason for the appropriation itself, the highest and best use of the land — both before and after the taking — was for residential development. Relying primarily on Conti’s residential comparable sales as a baseline, with some of its own adjustments, and finding that claimant had sustained some consequential damages to the western parcel of its property due to limited access, the court determined that claimant suffered total damages of $532,000 as a result of the taking.

Initially, the Court of Claims properly rejected Farbstein’s [1036]*1036valuation opinion based upon his failure to use his experience to factor in dollar or percentage adjustments to the comparables he used and explain his calculations (see Latham Holding Co. v State of New York, 16 NY2d 41, 45-46 [1965]; Chester Indus. Park Assoc., L.P. v State of New York, 103 AD3d 827, 828 [2013], lv denied 21 NY3d 856 [2013]; Matter of County of Dutchess [285 Mill St.], 186 AD2d 891, 891-892 [1992]).2 Nevertheless, we are of the view that the Court of Claims erred in valuing claimant’s property based upon residential development as its highest and best use. While it is indeed well settled that a condemnee may not receive an enhanced value for its property when the enhancement can be exclusively attributed to the reason for the taking itself, we find that petitioner failed to demonstrate that “but for” the bypass extension, claimant’s property would not have been rezoned (Matter of City of New York v Zahav LLC, 106 AD3d 418, 418-419 [2013]; see Latham Holding Co. v State of New York, 16 NY2d at 47; Matter of Queens W. Dev. Corp., 289 AD2d 335, 336 [2001]).

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Related

United States v. Miller
317 U.S. 369 (Supreme Court, 1943)
United States v. Reynolds
397 U.S. 14 (Supreme Court, 1970)
La Briola v. State of NY
328 N.E.2d 781 (New York Court of Appeals, 1975)
Latham Holding Co. v. State of NY
209 N.E.2d 542 (New York Court of Appeals, 1965)
In re the City of New York
250 N.E.2d 333 (New York Court of Appeals, 1969)
Coldiron Fuel Center, Ltd. v. State
8 A.D.3d 779 (Appellate Division of the Supreme Court of New York, 2004)
Chester Industrial Park Associates, LLP v. State
65 A.D.3d 513 (Appellate Division of the Supreme Court of New York, 2009)
Gyrodyne Co. of America, Inc. v. State
89 A.D.3d 988 (Appellate Division of the Supreme Court of New York, 2011)
Saratoga County Sewer District 1 v. Gordon
101 A.D.2d 966 (Appellate Division of the Supreme Court of New York, 1984)
Lerner Pavlick Realty v. State
98 A.D.3d 567 (Appellate Division of the Supreme Court of New York, 2012)
City of New York v. Zahav LLC
106 A.D.3d 418 (Appellate Division of the Supreme Court of New York, 2013)
In re the Acquisition of Real Property by the County of Dutchess
186 A.D.2d 891 (Appellate Division of the Supreme Court of New York, 1992)
Yaphank Development Co. v. County of Suffolk
203 A.D.2d 280 (Appellate Division of the Supreme Court of New York, 1994)
In re the Acquisition of Real Property by Iroquois Gas Transmission System
226 A.D.2d 808 (Appellate Division of the Supreme Court of New York, 1996)
Rose Park Place, Inc. v. State
120 A.D.3d 8 (Appellate Division of the Supreme Court of New York, 2014)
Bell v. Village of Poland
281 A.D.2d 878 (Appellate Division of the Supreme Court of New York, 2001)
Nastasuk v. Board of Trustees
289 A.D.2d 335 (Appellate Division of the Supreme Court of New York, 2001)
Chemical Corp. v. Town of East Hampton
298 A.D.2d 419 (Appellate Division of the Supreme Court of New York, 2002)

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Bluebook (online)
119 A.D.3d 1033, 990 N.Y.S.2d 105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-acquisition-of-real-property-by-the-state-nyappdiv-2014.