Opinion
35057/04.
Decided January 7, 2008.
Upon the foregoing papers in this eminent domain proceeding, claimant Belair Ridge Development Corp. moves, pursuant to Eminent Domain Proceeding Law (EDPL) § 304(A)(1), for an award of additional interest in the amount of $385,574.79 on the advance payment made to it by the condemnor, the City of New York (the City).
Facts and Procedural Background
The City acquired title to the subject property on June 16, 2005. On September 13, 2005, the Office of the Comptroller mailed a Notice of Condemnation Advance Payment or Award (the Notice) to claimant, addressed to 2071 Forest Avenue, Staten Island, New York. The Notice advised claimant of the availability of $9,420,000 in principal and $268,471.23 in interest, which represented interest for 95 days, and instructed claimant to contact the New York City Law Department to clear title objections. The Notice was returned to the Office of the Comptroller on or about September 18, 2005, bearing the notation "RETURN TO SENDER. NO SUCH NUMBER. UNABLE TO FORWARD."
Subsequently, a second copy of the Notice was mailed to claimant at P.O. Box 120138, S.I., NY 10312; the mailing was postmarked January 5, 2006. Along with the Notice, claimant received a note stating that "Joe Bavusa of the Law Department told me to Xerox the envelope used to send the enclosed notice of award. As you can see it was returned due to invalid address. I'm sending this to the Post Office box listed in the proceeding at Joe Bavusa' request."
In response to the court's request during oral argument on July 27, 2007, the City submitted a printout from its Fairtax system, which listed claimant's address for billing for tax purposes as Boys Bill, PO Box 120138, Staten Island, NY 10312-0138.
The Parties' Contentions
In support of its motion, claimant argues that it is entitled to receive interest on the advance payment from the date of the taking through August 25, 2006, the date that the payment was received, and not through December 16, 2005, as calculated by City in the Notice, because the delay in receiving payment was caused by the City. More particularly, claimant did not receive the September 13, 2005 Notice until January 6, 2006. Thereafter, claimant was advised to contact Janet Miller, who was allegedly no longer with the Law Department. When several attempts to contact Miller failed, claimant was advised to contact Assistant Corporation Counsel Michael J. Wasser, Esq.; several messages were left with him over a period of one month, without any success in reaching him. After being retained on March 22, 2006, claimant's current counsel, Richard A. Steinberg, Esq., telephoned Wasser, who referred him to Assistant Corporation Counsel Joseph Bavuso, Esq. Steinberg telephoned Bavuso on April 25, 2006 and left a message; the phone call was not returned until May 8, 2000.
On May 17, 2006, Steinberg received an email from Wasser setting forth the title objections and forwarding the City's form of proof of title. On June 22, 2006, Steinberg transmitted the affidavit of title and other documents to Wasser for his review. On July 5, 2006, claimant sent further documents to Wasser and inquired if he had reviewed the first submission, since no response had been received. On July 18, 2006, additional documents were delivered. Having received no response, Steinberg again transmitted original documents to Wasser on August 1, 2006, by hand delivery; on August 2, 2006, an email was sent following up on the delivery. Copies of the later two transmittal letters are annexed to claimant's moving papers.
On August 17, 2006, Wasser notified claimant that checks for the advance payment had been issued and instructed claimant to contact the Comptroller's Office to arrange delivery. On August 22, 2006, however, claimant's counsel was advised that the checks were not ready and there was an issue as to the availability of the funds. Payment was not received until August 25, 2006.
In opposition, the City argues that the funds for the advance payment were made available on September 9, 2005. The City further avers that the September 13, 2005 Notice was mailed to claimant at the address that the notice of petition listed for it, i.e., the address on the deed for the property. The City also alleges that Phillip Sanchez, Esq., contacted Bavusa sometime in December 2005 to inquire about the status of the advance payment. When Sanchez advised him that claimant had not received the Notice, Bavusa directed the Comptroller's Office to send another copy.
Thereafter, sometime in May 2006, Steinberg contacted Wasser, requesting assistance in clearing objections to title on behalf of claimant. On May 17, 2006, Wasser emailed Steinberg a copy of the Certification of Advance Payment on Award of Damages and the required affidavit of title. The objections to title included an $800,000 purchase money mortgage; possible unpaid real estate taxes, water and sewer charges; several Environmental Control Board judgments totalling over $10,000; and proof of both City and State corporation taxes. By letter dated August 1, 2006, claimant's counsel sent the City a package containing documentation intended to induce the City to omit most of the objections. The package also contained a request and supporting documentation authorizing the City to cancel the original checks and reissue a portion of the funds to the successor in interest to the mortgagee and to pay the remaining funds to claimant's 1031 Exchange Trustee.
Hence, the City contends that it was not until August 2006 that claimant provided the papers necessary to clear the title objections and to have the advance payment distributed as requested, and that the payment was distributed approximately two weeks after claimant cleared the objections. The City therefore concludes that since the delay in obtaining payment is solely due to claimant's failure to clear the objections to title, and was not delayed through any fault of the City, claimant should not be entitled to invade the City's fisc by obtaining additional interest.
The Law
As this court has recently held:
"In discussing the award of interest, it has been held that [i]t is well established that in condemnation proceedings the constitutional requirement of just compensation necessarily includes a sum in addition to the bare value of the property to account for the delay between the taking and the ultimate payment to the property owner' ( Matter of City of New York [Brookfield Refrig. Corp. Zoloto], 58 NY2d 532, 536-537, citing Jacobs v United States, 290 US 13, 54 S Ct 26, 78 L Ed 142; City of Buffalo v Clement Co., 28 NY2d 241, 265-266, rearg denied 29 NY2d 640; Matter of City of New York, 284 NY 48, 54-55, affd sub nom. A. F. G. Realty v City of New York, 313 US 540; see US Const 5th Amend; NY Const, art I, § 7).
"In accordance with this rationale, Eminent Domain Procedure Law § 514(A) provides in pertinent part that [s]ubject to the provisions of this chapter, a condemnee shall be entitled to lawful interest from the date of acquisition to the date of payment.' This provision is consistent with Administrative Code of the City of New York § 5-327(a), which provides, in relevant part, that:
"all damages awarded by the court, with interest thereon from the date title to the real property acquired shall have vested in the city and all costs, charges and expenses which may have been taxed shall be paid by the city to the respective owners mentioned or referred to in the final decree or to the persons in whose favor such costs, charges and expenses were taxed.'" ( Matter of City of New York, 12 Misc 3d 1171A, 4 [2006], quoting Matter of City of New York , 10 Misc 3d 749 , 753 [2005]).
As is also relevant herein, Section 382 of the New York City Charter, notice to owners of proceeding to acquire property, provides in pertinent part that:
"In addition to all other requirements of law, written notice of the application to have compensation for real property ascertained in any proceeding brought by the city to acquire title to real property shall be given by the corporation counsel to the owners of all property affected by the proceeding at least ten days prior to such application, by mailing the same to such owners at the address registered or filed with the commissioner of finance for the purpose of forwarding to them bills for taxes, assessments and frontage water rates."
With regard to advance payments, New York City Administrative Code § 5-328 provides that:
"The mayor may authorize the comptroller to pay to the person entitled to an award for real property acquired in a proceeding, in advance of the final determination of such person's damages pursuant to the requirements of article three of the eminent domain procedure law, a sum to be determined by the corporation counsel, after an appraisal of the damages sustained by such person by the expert or experts employed by the corporation counsel less any liens or encumbrances of record upon such property, which amount shall be certified to the comptroller by the corporation counsel. The mayor shall authorize the comptroller to cause to be published in the City Record for ten consecutive days a notice stating that the comptroller is ready to pay such persons entitled to awards for real property acquired in such proceeding, in advance of the final determination of their damage."
In applying this provision, it has been held that a notice of advance payment of award that was mailed to a claimant at a wrong address and was never received did not prevent the notice from being effective, since the mailing of notice was surplusage, as the Comptroller had also given notice by publication ( In re City of New York (Carver Houses), 114 NYS2d 760 [1952], affd 281 AppDiv 970).
Discussion
The court finds the City's assertion that "the timing of the issuance of the advance payment was solely within Claimant's control and was not delayed through any fault of the City" to be lacking in merit. In the first instance, although the City alleges that the funds for payment to claimant became available on September 9, 2005, the record does not support a conclusion that claimant was aware of this internal appropriation of the funds at that time. Further, the first Notice was mailed on September 13, 2005 to 2071 Forest Avenue in Staten Island, the address indicated on the deed transferring the property to it. Mailing the Notice to this address cannot be construed to have given claimant notice of the availability of the advance payment, since the deed is dated August 21, 1995, more than ten years ago, and the City offers no basis for its conclusion that this address was still valid. In addition, although the City avers that 2071 Forest Avenue was the address to which the petition was mailed, the Court's review of the file reveals that P.O. Box 120138 was also listed as an address for claimant for two parcels of property that it owned, thereby establishing that the City was aware of this address. Most significantly, the Notice was returned to the City on September 18, 2005, bearing a notation that it could not be delivered, and the Notice was apparently not mailed again until January 2006, after claimant contacted the City to inquire about the advance payment.
The court also notes that while there does not appear to be any specific provision of the EDPL or the New York City Administrative Code or Charter that provides guidance with regard to where a notice of advance payment should be mailed, § 5-382 of the Charter provides that notice of the condemnation proceeding shall be mailed to claimant "at the address registered or filed with the commissioner of finance for the purpose of forwarding to them bills for taxes." By analogy, the court finds that this provision should also apply to mailing a notice of the availability of an advance payment. In this regard, it is also noted that although § 5-328 of the Code provides that notice of an advance payment may be given by publication in the City Record, the City does not allege that it availed itself of this option.
Accordingly, the court concludes that claimant was not notified that the advance payment was available until January 5, 2006, when a second copy of the Notice was mailed to the address on file with the Department of Finance for tax purposes, so that it is entitled to receive interest through that date. Further, since the City included interest for 95 days in the September 13, 2005, notice, apparently recognizing that some period of time would be needed to clear all title objections, claimant is further entitled to recover interest for an additional period of 95 days from January 5, 2006, or through April 10, 2006.
The court, however, declines to award claimant interest through August 25, 2006. In so holding, it is clear that claimant has the burden of establishing ownership of the property and entitlement to receive the funds being dispersed by the City. After receiving the Notice on or about January 6, 2006, however, claimant made only a few telephone calls to inquire as to what it had to do in order to receive payment until present counsel was retained on March 22, 2005; no details with regard to these alleged communications is offered. Further, claimant admits that Bavusa responded to a telephone message left by claimant's attorney on April 25, 2006 approximately two weeks later, on May 8, 2006, and on May 17, 2006, Wasser emailed claimant regarding the documents necessary to clear title. Neither of these delays on the part of the City will be held to be unreasonable or excessive. Although claimant's counsel alleges that letters forwarding information were sent to the City on June 22, 2006 and July 5, 2006, copies of these letters are not annexed to its papers. Moreover, a review of the letter dated July 18, 2005 reveals that additional documents still had to be provided, which were not delivered until August 1, 2006. The City's conduct is called into question, however, since it makes no mention of any communications from claimant until it received the letter dated August 1, 2006.
The New York City Charter, § 5-310, proof of ownership, provides that:
"The proof of title to the real property to be acquired, where the same is undisputed, together with proof of liens or encumbrances, thereon, shall be submitted by the claimant to the corporation counsel, or to such assistant as the corporation counsel shall designate. The corporation counsel shall serve upon all parties or their attorneys, who have served upon him or her copies of their verified claims, a notice of the time and place at which the corporation counsel will receive such proof of title."
(New York City Charter § 5-310[a]).
While claimant was apparently represented by Phillip Sanchez, Esq. before current counsel was retained, no affidavit from Sanchez was submitted to substantiate these claimed telephone calls.
Hence, while claimant is undeniably obligated to clear title objections, and will not be awarded interest for any delay in obtaining payment as the result of its failure to do so, the court will not permit the City to ignore communications from a claimant, thereby making it impossible for the claimant to obtain payment. Accordingly, on these facts, the court concludes that the delay in clearing title between January 6, 2006 and April 25 2006 will be attributed to claimant's inaction. Similarly, since it appears that claimant continued to supply documentation to the City through August 1, 2006, the City will not be ordered to pay additional interest during this period. Claimant is, however, entitled to interest for the 95 day period following the mailing of the second Notice on January 5, 2006, as discussed above. In view of the City's failure to respond to earlier correspondence, the delay between August 1, 2006, when claimant supplied all of the necessary documents, and August 25, 2006, when claimant received payment, is found to be excessive, so that claimant will be awarded an additional 14 days in interest.
Conclusion
Accordingly, claimant is entitled interest on the advance payment through January 5, 2006, plus interest for an additional period of 109 days (95 + 14).
Settle order on notice.