Rose Park Place, Inc. v. State

120 A.D.3d 8, 985 N.Y.S.2d 350
Appellate Division of the Supreme Court of the State of New York·Decided May 2, 2014·No. Appeal No. 1·Published·Cited by 10 cases

Opinion

OPINION OF THE COURT

Fahey, J.

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.

I

Our analysis begins “with the proposition that [i]t is constitutionally mandated that the sovereign will pay just compensation for property it takes by its powers of eminent domain. Just compensation is properly measured by determining what the owner has lost” (Matter of USA Niagara Dev. Corp. [Settco, LLC], 51 AD3d 377, 379 [2008], lv denied 11 NY3d 704 [2008] [internal quotation marks omitted]). Put differently, “[w]hen [defendant] takes property by eminent domain, the Constitution requires that it 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’ ” (Matter of City of New [10] York [Kaiser Woodcraft Corp.], 11 NY3d 353, 359 [2008], rearg denied 11 NY3d 903 [2009], quoting City of Buffalo v Clement Co., 28 NY2d 241, 258 [1971], rearg denied 29 NY2d 640 [1971] [hereafter Clement]).

“When there is a partial taking of land, damages are measured ‘by finding the difference between the fair market value of the whole before the taking and the fair market value of the remainder after the taking’ ” (Erie County Indus. Dev. Agency v Fry, 254 AD2d 721, 721-722 [1998], quoting Acme Theatres v State of New York, 26 NY2d 385, 388 [1970]; see McDonald v State of New York, 42 NY2d 900, 900 [1977]; National Fuel Gas Supply Corp. v Goodremote, 13 AD3d 1134, 1135 [2004]). Therefore,

“when [defendant] takes part of a condemnee’s property and leaves a remainder, just compensation includes not only the direct damages for the portion that was taken, but also any consequential or indirect damages caused by the taking that impaired the remaining portion of the property . . . Consequential damages are measured by the difference between the before and after values, less the value of the land and improvements appropriated . . . The burden of proof is on the claimant to establish indirect damages and to furnish a basis upon which a reasonable estimate of those damages can be made” (Lerner Pavlick Realty v State of New York, 98 AD3d 567, 568 [2012]).

II

Before us here is not an issue concerning the amount of consequential damages with respect to the Progressive Parcel, but the issue whether any such damages should have been awarded relative to that parcel. Viewed as a whole, the Court of Appeals’ decision in Wilmot v State of New York (32 NY2d 164, 167-168 [1973], rearg denied 33 NY2d 657 [1973]) stands for the proposition that the condemnee is allowed to multiply the higher per-acre value of the original parcel by the number of acres under his or her ownership at the time of the taking, not by the acreage he or she once owned and had previously sold (see also 90 Front St. Assoc., LLC v State of New York, 79 AD3d 708, 710 [2010]). In view of that proposition of law, here the court properly excluded the sale of the Progressive Parcel in calculating the pre-taking, per-acre value of claimants’ parcel. [11] The court, however, erred in including the Progressive Parcel in the acreage for which it awarded consequential damages.

Claimants attempt to evade Wilmot by contending that the part of that case providing that consequential damages are unavailable relative to property that is sold prior to a planned taking and from which no land is ultimately appropriated is dicta. We reject that contention.

“ ‘To identify dictum, it is useful to turn the questioned proposition around to assert its opposite, or to assert whatever alternative proposition the court rejected in its favor. If the insertion of the rejected proposition into the court’s reasoning, in place of the one adopted, would not require a change in either the court’s judgment or the reasoning that supports it, then the proposition is dictum. It is superfluous. It had no functional role in compelling the judgment’ ” (People v Taylor, 9 NY3d 129, 164 [2007, Read, J., dissenting], quoting Leval, Madison Lecture, Judging Under the Constitution: Dicta about Dicta, 81 NYU L Rev 1249, 1257 [2006]).

Applying that test here, we conclude that the part of Wilmot at issue is a secondary holding, i.e., that such determination was necessary to Wilmot’s primary holding with respect to the unsold land and is therefore law (see Pollicino v Roemer & Featherstonhaugh, 277 AD2d 666, 667-668 [2000]; see also Matter of Hellner v Board of Educ. of Wilson Cent. School Dist., 78 AD3d 1649, 1650-1651 [2010]; cf. United States v Henderson, 961 F2d 880, 882 [1992]).

Claimants further attempt to avoid the holding of Wilmot through reference to the “condemnation blight” doctrine, but that attempt likewise fails. Clement teaches that a de facto taking

“requires a physical entry by the condemnor, a physical ouster of the owner, a legal interference with the physical use, possession or enjoyment of the property or a legal interference with the owner’s power of disposition of the property. On the other hand, ‘condemnation blight’ relates to the impact of certain [value-depressing] acts [on the part of the condemning authority] upon the value of the subject property. It in no way imports a taking in the constitutional sense, but merely permits of a more realistic valuation of the condemned property in the [12] subsequent de jure proceeding. In such a case, compensation shall be based on the value of the property at the time of the taking, as if it had not been subjected to the debilitating effect of a threatened condemnation” (28 NY2d at 255; see id. at 254).

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Rose Park Place, Inc. v. State, 120 A.D.3d 8, 985 N.Y.S.2d 350 (N.Y. Ct. App. 2014).

120 A.D.3d 8 (Rose Park Place, Inc. v. State) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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