Penn Yan Marina, Inc. v. Village of Penn Yan

52 Misc. 2d 740, 276 N.Y.S.2d 690, 1966 N.Y. Misc. LEXIS 1580

• Court: New York County Courts
• Decided: August 22, 1966
• Status: Published

Opinion

Lyman H. Smith, J.

The issues in this action having regularly come on for trial before the County Court of the County of Yates held in and for the County of Yates at the Courthouse in Penn Yan, New York, on the 23d day of June, 1966 and the parties having stipulated trial without jury and the court having heard the allegations and proofs of the parties hereto, and due deliberation having been had thereon,

Now, after hearing Daniel R. Taylor, Esq., attorney for the plaintiff, and William J. McDonald, Esq., attorney for the defendant, I do hereby decide and find the essential facts, which I deem established by the evidence and conclude as a matter of law, as follows:

On and before February 25, 1965 plaintiff corporation was the owner of a certain boathouse and boat slips situate on the southerly edge of Keuka Lake Outlet within the village limits of the Village of Penn Yan, Yates County, New York.

On or about February 25, 1965 the defendant village, acting through its Superintendent of Public Works, entered and demolished the plaintiff’s boathouse and slips by pulling down and burning the «ame.

This is an action in tort and arises from the foregoing undisputed facts. The plaintiff claims damages for the demolition of the boathouse and slips. This court finds as a matter of fact and law the act of demolition on the part of defendant village was negligent.

While the defendant village inferentially raised the defense of title to the underlying fee by alluding to the plaintiff as a ‘ ‘ squatter ’ ’, in an apparent effort to justify its acts, no proof of title was offered in this proceeding. In passing, it should be noted that some years ago an action in ejectment, brought by the defendant village, had been dismissed without prejudice by this court. Further, the defendant village did not dispute plaintiff’s ownership of the structure as personal property. This court, therefore, does not pass on the question of title to the underlying fee, other than to note the proof revealed open and notorious use and possession by the plaintiff and its predecessors for many years which might raise in a proper proceeding the possibility of title through adverse possession.

The prime question in this lawsuit centered upon measuring the damages.

Since the acts of the defendant village amounted to a de facto appropriation, damages should he measured in the same way as any partial appropriation by the sovereign — the accepted rule being (the difference between the before and after values.

While the defendant village offered no proof of the value of the property before and after the demolition of the structure it did, however, narrow the traditional analyses (i.e., cost, income and market data) by limiting the plaintiff’s proof to the ‘1 income approach ”.

Concededly, the highest and best use of the property was for rental boat storage. Therefore, the best support for the expert’s opinion of fair market value of the property was the income approach, although the record reveals plaintiff’s expert gave consideration to the three traditional approaches. In any event, and as pointed out by plaintiff’s expert in his testimony, such evaluation ‘ ‘ in this particular instance could almost be synonymous ” regardless of the approach. This being due, of course, to the 'Specialized use of the property.

It was undisputed that the plaintiff corporation at the time of demolition (taking) and for many years previously had enjoyed from the use of the boathouse and slips a gross annual rental income (or equivalent) of $690. Based upon an economic life of 20 years, (5% per annum) a legal return on invested capital (6% per annum) and after deducting an estimated vacancy and credit loss (10% per annum) together with annual operating expenses of $190 including an allowance for taxes (although the sovereign village had imposed none), and taking into consideration capital requirements of underlying rights and land of $90 per annum, the net income remaining to the .structure was $340 per annnm. This net sum allocated to the structure, capitalized at 11% (6% to capital investment, 5% to recapture of capital on the diminishing structure), is equal to $3,090.

It is clear from the record the plaintiff’s expert took into consideration the value of the whole property (before demolition) at $4,590 “ of which $3,090 is the contributing value of the ‘ improvement ’ ’ ’. Thus, the value after demolition is fixed in the value assigned to the remaining value of land and riparian rights ($1,500).

The property owner is entitled to just compensation. The just compensation in the instant case is the difference in fail-market value before and after the occurrence, to wit, $3,090, which said sum is hereby awarded to the plaintiff corporation,. together with the costs of this action.