Opinion
# 2017-015-220 Claim No. 123499 Motion No. M-89665
03-22-2017
A-1 AUTO PARTS, INC. v. THE STATE OF NEW YORK
Biersdorf & Associates, P.A. By: Dan Biersdorf, Esquire Honorable Eric T. Schneiderman, Attorney General By: Audrey Alexander, Esquire Assistant Attorney General
Synopsis
Claimant's motion for an additional allowance pursuant to EDPL § 701 was granted on a contingency fee basis plus costs and disbursements.
Case information
| UID: | 2017-015-220 |
| Claimant(s): | A-1 AUTO PARTS, INC. |
| Claimant short name: | A-1 AUTO |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 123499 |
| Motion number(s): | M-89665 |
| Cross-motion number(s): | |
| Judge: | FRANCIS T. COLLINS |
| Claimant's attorney: | Biersdorf & Associates, P.A. By: Dan Biersdorf, Esquire |
| Defendant's attorney: | Honorable Eric T. Schneiderman, Attorney General By: Audrey Alexander, Esquire Assistant Attorney General |
| Third-party defendant's attorney: | |
| Signature date: | March 22, 2017 |
| City: | Saratoga Springs |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
Claimant seeks leave to renew and reargue claimant's prior application for an additional allowance pursuant to EDPL § 701 for costs, disbursements and expenses incurred in litigating the instant appropriation claim.
Claimant was awarded damages in the amount of $357,479 for the appropriation of the right of access to its property, an automotive salvage yard consisting of 13.14 plus or minus acres in the Town of Marcy, New York. Claimant's first EDPL 701 application was denied, with leave to renew, upon the ground that claimant failed to submit an affidavit of the condemnee and all parties that incurred expenses as required by the statute, nor were invoices submitted reflecting the amount of the expenses incurred. In addition, although claimant's counsel stated that his firm billed claimant on an hourly basis in amounts that varied depending upon whether the legal work was performed by its principal, an associate or paralegal, a copy of the retainer agreement was not provided. The attorney's fee sought in the initial application was $67,797.50 exclusive of costs and disbursements. This amount included 76.6 hours of legal work and three trial days at a rate of $4,000.00 per day.
Claimant now submits a copy of its retainer agreement, an affidavit of Salvatore Viti, and certain invoices in support of its motion to renew. Mr. Viti is the President and sole shareholder of claimant, A-1 Auto Parts, Inc., and avers, in relevant part, that "[a]ll of the attorney fees and costs submitted by Biersdorf firm and its employees were incurred on my behalf in the pursuit of this matter"(Viti affidavit, ¶ 3). Mr. Viti also indicates that a true and accurate copy of the retainer agreement is submitted as claimant's Exhibit 3.
The retainer agreement submitted in support of claimant's renewal motion provides for a contingency fee "equal to one-third of the Recovery, unless a fee order is issued by the court or presumed issued as provided in Paragraph 5. In that event the Law Firm's fee will be the amount established under Paragraph 6 herein" (claimant's Exhibit 3, ¶ 2). Paragraph 6 of the retainer agreement provides, in relevant part, the following:
"Recovery" is defined by the agreement to include "all monetary award for the property taken or damaged, interest on any amount in excess of funds already paid to Client by the Government . . . attorney's fees, and any other thing of value received by Client" (id. at ¶ 3).
"Where a Fees Order is issued or presumed issued, the Law Firm's fee to Client will be the greater of one third of the Recovery or the accumulated fee based upon the Law Firm's normal non-contingent billing rates. Those normal non-contingent billing rates are $400 per hour for non-trial work and $4000 per day or partial day for any appearance for a trial or evidentiary hearing" (id. at ¶ 6).
Where, as here, the client elects to have the law firm pay the costs of the litigation, the retainer contains yet another fee arrangement: "In consideration for assuming this additional risk, the fee under the Agreement (contingent or hourly as provided in the Agreement) will be increased by an additional fee equal to seven percent (7%) of the Recovery" (claimant's Exhibit 3, last par.). Claimant's counsel, Dan Biersdorf, Esq., initially calculated the hourly fee at $67,797.50 and the contingent fee as $66,647.69 (Biersdorf affidavit, ¶¶ 4, 5). Since the contingent fee arrangement was less than the hourly charges, the hourly charges controlled, according to Mr. Biersdorf. However, Mr. Biersdorf now asserts that he had forgotten that the client had elected that the firm advance all costs, and the contingency fee percentage was therefore 401/3 % (not 331/3 %) for a correct contingent fee of $81,451.52, plus interest that has continued to accrue since the date of the last application. Inasmuch as this most-recently advanced 401/3 % contingency fee arrangement exceeds the hourly billing arrangement, Mr. Biersdorf requests a total of $99,783.01, inclusive of costs and disbursements (Biersdorf affidavit, ¶ 19).
It is unclear how claimant calculated this amount.
Defendant contends in opposition to the motion that a one-third contingency fee is the customary fee arrangement and more proportionate to the result obtained in this case. In addition, defendant contends that certain costs for which claimant seeks payment should be disallowed because they were either unnecessary or brought about by the claimant's conduct. Defendant contends that claimant's motion to extend the time for filing claimant's appraisal was the result of claimant's attorney's failure to meet the filing deadline; that the basis for claimant's motion to strike the State's opposition to this motion as untimely was erroneous and, in any event, resolved by a so ordered stipulation; that claimant's motion in limine to preclude the State's appraisal was based upon matters that were related to the weight to be given the appraisal, not its admissibility and, lastly, that the claimant's appraiser's rebuttal report and the entire last day of trial were unnecessary. Accordingly, defendant requests that the costs associated with this work be disallowed.
In opposition to the instant motion, defendant also objected to the Court's consideration of the affidavit of Salvatore Viti because it was unsigned and to the Court's consideration of the retainer agreement because it indicated the client only as Salvatore Viti and did not include a description of the property for which additional compensation was sought. However, the claimant has now submitted a signed version of Mr. Viti's affidavit which identified the retainer agreement submitted as claimant's Exhibit 3 as a true and accurate copy of the agreement with his attorneys.
EDPL § 701 provides for the discretionary awarding of costs, disbursements and expenses to a condemnee whose property was substantially undervalued. Pursuant to the statute:
"In instances where the order or award is substantially in excess of the amount of the condemnor's proof and where deemed necessary by the court for the condemnee to achieve just and adequate compensation, the court . . . may in its discretion, award to the condemnee an additional amount, separately computed and stated, for actual and necessary costs, disbursements and expenses, including reasonable attorney, appraiser and engineer fees actually incurred by such condemnee."
The purpose of the statute "is to permit an additional, discretionary allowance to ameliorate expenses which might otherwise diminish an appropriation award to something less than just compensation" (Meyers v State of New York, 166 Misc 2d 586, 590 [Ct Cl 1995]; see also Matter of County of Tompkins, 298 AD2d 825, 826 [3d Dept 2002], lv denied 100 NY2d 501 [2003]). In this way, " 'a condemnee receives a fair recovery by providing an opportunity for condemnees whose property has been substantially undervalued to recover the costs of litigation establishing the inadequacy of the condemnor's offer' "(General Crushed Stone Co. v State of New York, 93 NY2d 23, 26-27 [1999], quoting Hakes v State of New York, 81 NY2d 392, 397 [1993]; see also Matter of Village of Port Chester (Bologna), 137 AD3d 802 [2d Dept 2016]). To succeed on an application for an additional allowance two criteria must be met: first, the award must be substantially in excess of the condemnor's proof, and, second, the expenses incurred must have been necessary to achieve just and adequate compensation (Hakes, 81 NY2d at 397; Matter of Village of Johnson City [Waldo's Inc.], 277 AD2d 773 [3d Dept 2000]).
Here, the advance payment made by the condemnor was $249,000 and the amount awarded was $357,479, which represents nearly a 30% increase over the advance payment. Inasmuch as defendant does not dispute that the award is substantially in excess of the advance payment, the first requirement is met.
Notwithstanding the statutory requirement that the award be "substantially in excess of the amount of the condemnor's proof", it has been held that the appropriate measure is the difference between the initial offer and the amount of the award (Matter of Village of Johnson City [Waldo's, Inc.], 277 AD2d 773 [2d Dept 2000]. --------
The Court also finds that the appraisal fees, including those incurred for the rebuttal report, were necessary to achieve just and adequate compensation (see EDPL § 701; First Bank & Trust Co. of Corning v State of New York, 184 AD2d 1034 [4th Dept 1992], affd 81 NY2d 392 [1992]; Matter of Estate of Haynes v County of Monroe, 278 AD2d 823 [4th Dept 2000], lv denied 96 NY2d 712 [2001]; Carbone v State of New York, 13 Misc 3d 1246 [A], 2006 NY Slip Op 52364 [U] [Ct Cl 2006]). While defendant contends that the rebuttal was unnecessary because the Court did not credit claimant's contention that all of the property was used in the operation of its salvage business, the Court did, in large measure, credit claimant's appraisal report over that of the defendant's. This is not a situation where a portion of claimant's counsel's efforts and costs were expended to develop and present completely unsuccessful valuation theories (see Matter of City of Long Beach v Sun NLF L.P., 146 AD3d 775, 777 [2d Dept 2017]; cf. Matter of Village of Port Chester (Bologna), 137 AD3d 802 [2d Dept 2016]; Matter of Village of Johnson City (Waldo's, Inc.), 277 AD2d 773 [3d Dept 2000]). Indeed, the claim was limited to consequential damages for which the award was substantially in excess of the advance payment. Thus, the Court finds claimant's expenditures for appraisal fees, the rebuttal report included, were reasonable and necessary to achieve just compensation.
Turning to claimant's request for legal fees, contingency fee arrangements in cases such as this have been found to be "an acceptable factor to be considered by the courts in determining reasonable counsel fees" (Matter of Hoffman v Town of Malta, 189 AD2d 968, 969 [3d Dept 1993]; see also 627 Smith St. Corp. v Bureau of Waste Disposal of the Dept. of Sanitation of City of N.Y., 289 AD2d 472 [2d Dept 2001], lv dismissed 98 NY2d 646 [2002]). However, the Court finds that while a contingency fee arrangement is customary (see Matter of City of Long Beach, 146 AD3d at 777; 627 Smith St. Corp. v Bureau of Waste Disposal of the Dept. of Sanitation of the City of N.Y., 289 AD2d 472 [2d Dept 2001], appeal dismissed 98 NY2d 646 [2002], lv denied 98 NY2d 611 [2002] Carbone v State of New York, 13 Misc 3d 1246 [A] [Ct Claims, 2006]), claimant's request for a contingency fee of 401/3 % is not. Rather, the Court finds that a contingency fee of 331/3 % of the difference between the amount of the award ($357,479) and the amount of the advance payment ($249,000), plus interest ($30,682.36), a total of $46,387.12, is more proportionate to the overall recovery in this case and the effort necessarily expended to establish the value of the property. Inasmuch as the attorneys' fee is being calculated on a contingency fee basis, no reduction for legal work which defendant contends was unnecessary is appropriate.
Lastly, the Court finds costs and disbursements in the amount of $15,613.39 as set forth in claimant's Exhibit 2 of its prior motion to be reasonable and necessarily incurred to achieve just compensation. However, claimant's request for costs such as photocopying, fax, westlaw, phone, postage, and color copies are considered a part of law office overhead and not recoverable (see Matter of Ellman, 7 AD3d 423, 424 [1st Dept 2004]; Meyers v State of New York, 166 Misc 2d 586 [Ct Cl, 1995]). Accordingly, claimant is entitled to an additional allowance in the amount of $46,387.12 (attorneys' fee) plus $15,613.39 (allowable costs and disbursements).
Based on the foregoing, claimant is awarded the sum of $62,000.51.
Let judgment be entered accordingly.
March 22, 2017
Saratoga Springs, New York
FRANCIS T. COLLINS
Judge of the Court of Claims The Court considered the following papers:
1. Notice of motion dated November 30, 2016;
2. Affidavit of Dan Biersdorf sworn to November 30, 2016 with exhibits;
3. Affidavit of Salvatore Viti sworn to January 10, 2017;
4. Affirmation of Audrey V. Alexander dated January 11, 2017 with exhibits;
5. Affirmation of Dan Biersdorf dated January 17, 2017.