Town of Hempstead v. Lee Associates, Inc.

80 A.D.2d 615, 436 N.Y.S.2d 313, 1981 N.Y. App. Div. LEXIS 10308

This text of 80 A.D.2d 615 (Town of Hempstead v. Lee Associates, Inc.) 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
Town of Hempstead v. Lee Associates, Inc., 80 A.D.2d 615, 436 N.Y.S.2d 313, 1981 N.Y. App. Div. LEXIS 10308 (N.Y. Ct. App. 1981).

Opinion

In a condemnation proceeding, the claimant appeals, as limited by its brief, from so much of a final order of the Supreme Court, Nassau County, entered December 26, 1979, as awarded it only $15,800 for the taking of a certain parcel. Final order modified, on the law and the facts, by increasing the first taking award from $15,800 to $58,361. As so modified, final order affirmed insofar as appealed from, with costs to the appellant. The subject of this condemnation proceeding is a parcel of land located in Woodmere, Long Island, in the Residence B single-family district in which the minimum lot is 6,000 square feet. The parcel is improved with an estate-type house fronting on an 8.36 acre man-made elongated lake known as Lee Lake. The first taking (Jan. 10, 1974) was of the 8.36 acres of [616]*616land under Lee Lake, together with two surface easements. Special Term awarded the owner a total of $15,800, including nominal damages of $8,500 for the lake, $800 for the surface easements, and the remainder ($6,500) for loss of riparian rights and a dock. The award for the second taking (Jan. 20, 19-76) of 1.45 acres of upland (containing nine plots) which remained with the claimant after the first taking was $180,100. Claimant Lee Associates, Inc.’s appeal is limited by its brief to the award granted for the first taking. It asserts that the award was grossly inadequate and that the Town of Hempstead should pay the “$1,060,000” total cost of acquiring the nearly eight and one-half acres at another location and there creating a substitute lake, or that, alternatively, the town should pay “$200,000” damages on the theory that, by filling the seized lake, it could have been economically and profitably developed into residential acreage. The subject property was originally part of a large tract of woodlands, meadowlands, bog and marshlands (in which is now the unincorporated area of Woodmere), acquired more than 75 years ago by Franklin B. Lord, who constructed a country home on these lands. Much of the property was part of the low-lying bog and marsh which was subdivided as the map of Lord Estates at Cedarhurst and filed with Nassau County in 1926. Subsequent to the filing of the map there were sporadic sales of the mapped lots, but neither streets nor utilities were installed, and potential development was halted by the depression. During the life of Franklin B. Lord, the house was well maintained, but after his death it met with fire and vandalization, and fell into general disrepair. After World War II the Lee family acquired the Lord house and much of its surrounding land, and completely restored, renovated and modernized the dwelling, completing the major portion of this work in the early 1950’s. In the period subsequent to 1952 the claimant was engaged in the residential development of other properties in the immediate area. The land now under water on the subject property had served as a convenient source of fill to facilitate the construction of homes on the adjacent lands owned by the claimant. These lands under water (Lee Lake) presently serve as a storm drainage basin for the surrounding residentially developed areas. Throughout the years claimant had granted drainage easements to the town in order to provide adequate drainage for various sections of the unincorporated area of Woodmere, including areas to the east and west of Lee Lake. On March 25, 1969 the parties entered into a written agreement resolving disputes that had arisen with respect to the easements. The agreement made clear that the claimant was then filling parts of the lake, and the town agreed to “install without delay an appropriate underground drainage pipe” (emphasis supplied) in one of the easement areas. An easement designated as “No. 1” in the agreement provided that the town would have the right to maintain open drainage throughout the easement area but the claimant had the right to fill the “ditch” if appropriate drainage pipes were installed. Paragraph 6 of the easement agreement provided that claimant and Sally W. Lee “shall have the unlimited right to use said premises, or any portion thereof, for any purpose whatsoever, including the filling of land and the construction of buildings thereon, provided such use does not interfere with the purpose of said easements and provided that prior to filling any open drainage ditch an underground drainage pipe is installed as hereinbefore required” (emphasis supplied). In 1972 a dispute over Lee Lake arose following complaints that its owner, Dr. William Lee, was dumping construction debris into the water as a prelude to building homes on the site. Lee’s critics protested and the town obtained an injunction to stop the dumping. Town officials then proposed a five-year agreement with Lee un[617]*617der which he would provide a scenic easement for the Lee Lake area and yet retain title, while the town took over the responsibility of costs and maintenance. As a result of ensuing homeowner protests that this agreement was not permanent, the town instituted this condemnation proceeding to acquire the lake for “open space” purposes. At the trial, claimant contended it was entitled to be awarded funds sufficient to enable it to create (at a $210,000 depreciated cost) an equivalent lake on land to be purchased at $100,000 per acre at another location. Thus its expert calculated damages as follows:

“Value Before Taking Value After Taking (1) Total Damages

$2,000,000

786,475

$1,213,515 [sic; should be $1,213,525]

Comprised of:

Direct Damages

8.6938 acres at $100,000 ac. $ 869,300

Landscaping — dock & pilings 22,500

(Marshall Valuation Service)

Lake 210,000

Total Direct Damages $1,101,800

Remainder Non-Direct Damages

to Land and Improvements $ 111,715”.

The legal rationale for this theory is noted in the report of claimant’s appraiser, which quotes from a letter written by claimant’s counsel: “ ‘Together with you, we have concluded that traditional market approaches to valuing such lake would result in manifest injustice to the property owner. This result comes about because of the total lack of a market for private lakes in Nassau County and because utilization of comparable land sales presumes that the lake be filled, thus reversing the creation of the lake. This was the very reason the subject property was acquired by the Town of Hempstead. Valuing the land as filled (the alternative proposal) would result in a double loss to the property owner: the cost of creating the lake and the cost of filling the lake.’ ” We find no basis for an award on this “summation” theory, viz., the $210,000 depreciated reproduction cost of the lake on land to be purchased at $100,000 per acre. Lee Lake was artificially created by claimant by dredging it of fill, which was then used to develop nearby marshland into residential plots. It thus previously extracted value from the lake in the form of the prices obtained on the sale of those residential plots with a lake view. Immediately prior to this condemnation proceeding claimant was reversing the process, i.e., it had begun to fill in the lake land — again to develop and sell residential plots. Under all the circumstances, a “summation” award whether on a specialty theory (see Matter of County of Nassau [Colony Beach Club of Lido], 43 AD2d 45, afid 39 NY2d 958), or some “manifest injustice” concept (see Matter of Port Auth. Trans-Hudson Corp. [Hudson Rapid Tubes Corp], 20 NY2d 457, 469; Matter of City of New York [Fifth Ave. Coach Lines], 18 NY2d 212; City of New York v State of New York,

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In Re the Port Authority Trans-Hudson Corp.
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Bluebook (online)
80 A.D.2d 615, 436 N.Y.S.2d 313, 1981 N.Y. App. Div. LEXIS 10308, Counsel Stack Legal Research, https://law.counselstack.com/opinion/town-of-hempstead-v-lee-associates-inc-nyappdiv-1981.