Opinion
# 2017-045-519 Claim No. 124906
11-21-2017
STORY BOOK HOMES, INC. v. THE STATE OF NEW YORK
Flower, Medalie & Markowitz By: Edward Flower, Esq. Hon. Eric T. Schneiderman, Attorney General By: Charles E. Gary, Assistant Attorney General
Synopsis
Appropriation trial decision of property along Route 347.
Case information
| UID: | 2017-045-519 |
| Claimant(s): | STORY BOOK HOMES, INC. |
| Claimant short name: | STORY BOOK |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 124906 |
| Motion number(s): | |
| Cross-motion number(s): | |
| Judge: | Gina M. Lopez-Summa |
| Claimant's attorney: | Flower, Medalie & Markowitz By: Edward Flower, Esq. |
| Defendant's attorney: | Hon. Eric T. Schneiderman, Attorney General By: Charles E. Gary, Assistant Attorney General |
| Third-party defendant's attorney: | |
| Signature date: | November 21, 2017 |
| City: | Hauppauge |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
This is a timely filed claim for a permanent and temporary appropriation (taking) of property, as well as a temporary easement on the property, owned by claimant, Story Book Homes, Inc., brought against defendant, the State of New York, pursuant to the Eminent Domain Procedure Law and § 30 of the Highway Law.
The subject property is a rectangular shaped parcel of land located at 682 Nesconset Highway in the Town of Smithtown, County of Suffolk, with all of its frontage on Nesconset Highway. Nesconset Highway is alternatively referred to as Smithtown Bypass as well as Route 347. The parcel is located on the northwesterly side of Nesconset Highway and is improved with a one story ranch style house. It has a certificate of occupancy for a one family dwelling, however the Town of Smithtown Assessor's Office has classified the subject property as a three family residence since 1999.
During the trial of this matter the parties agreed that the title vesting date was May 16, 2014. Title to the subject property on the vesting date was in the name of claimant.
The Claim in this matter was filed with the Court on August 28, 2014. The appropriation maps and descriptions contained therein are adopted by the Court and incorporated herein by reference. The aforesaid maps and descriptions were filed in the Office of the County Clerk of Suffolk County. Pursuant to the requirements of Court of Claims Act § 12 (4) and EDPL § 510 (A), the Court has made the required viewing of the property which is the subject of this claim. The claim has not been assigned or submitted to any other Court or tribunal for audit or determination.
The subject property is identified on the 2003 Suffolk County Tax Map as District 800, Section 134, Block 1, Lot 28. Claimant found that the subject property measured 13,613 square feet while defendant determined the property to be 13,556 square feet. The property is improved with a one story ranch house. The subject property has 126 feet of frontage on Nesconset Highway and a depth of 115 feet. The land is generally level but begins pitching downward 52 feet from the eastern property line to the northwest portion of the site before leveling off. The subject property was originally accessible by a 65 foot driveway located on Nesconset Highway with on-site parking for 6 vehicles.
Defendant exercised a temporary easement, 3,605 square feet in area, across the entire frontage of the subject property. The temporary easement was associated with a construction project to expand New York State Route 347 and its stated purpose was for a work area that would terminate upon the approval of the completed work. The temporary easement reserved to the owner the "right of access and the right of using said property and such use shall not be further limited or restricted under this easement beyond that which is necessary to effectuate its purposes for the construction or reconstruction of the herein identified project." As part of the construction project, defendant installed 16 to 18 foot sound barrier walls along Nesconset Highway.
The construction work along Route 347 necessitated a raise in grade on Route 347 along the subject property's frontage. The change in grade required defendant to change the grade of the subject property's driveway access, parking area and portions of the front yard. It also resulted in a decreased width of the subject property's driveway entrance.
Pursuant to CPLR 3025 (c), the Court deems that the pleadings are conformed to the proof presented at trial.
For the first time, in its post-trial memorandum to the Court, defendant argues that the Claim fails to comply with Court of Claims Act § 11 (b) by its failure to state the nature, time of occurrence and items of damage sustained with respect to the alleged de facto appropriation. Court of Claims Act § 11 (b) requires in pertinent part that, "[t]he claim shall state the time when and place where such claim arose, the nature of same, [and] the items of damage or injuries claimed to have been sustained..." Contrary to defendant's argument, the claim provides an accrual date, incorporates the official appropriation maps which further set forth the time when and the place where the claim arose and lastly, the claim asserts the nature of the damages as well as the amount of $250,000. Accordingly, the Court finds that the claim filed in this matter satisfies the requirements of Court of Claims Act § 11 (b). Additionally, the Court is mindful of the paramount Constitutional requirement of just compensation under these circumstances (90 Front St. Assoc., LLC v State of New York, 79 AD3d 708 [2d Dept 2010]).
Christopher Tartaglia, an engineer, submitted an engineering report and testified on behalf of defendant. In his report, Mr. Tartaglia describes the temporary easement as varying from 17 feet in depth to a maximum of 46 feet in depth along the east side of the driveway for a total of 3,605 square feet. He testified that the parking area of the subject property comprises approximately 3,000 to 3,500 square feet and additionally, there is a paved area beyond the limits of the temporary easement, 10 feet deep by 60 feet wide. Beyond that paved area there are trees and vegetation. He explained that the temporary easement would be utilized to facilitate the raise in grade of the Route 347. This will require the grade of the driveway, parking area and portions of the front yard to be raised to match. He further explained that the existing driveway has a center line gradient slope of 1.34%. As a result of the work done on Route 347, the State will be raising the grade of the driveway so that the maximum center line gradient slope will be 5.47%. Mr. Tartaglia set forth that this change is in compliance with the Town of Smithtown Zoning Code which sets forth a maximum center line gradient slope of 8% for driveways. The report continues to set forth that the disturbance caused by the temporary easement and the re-grading of the property will include the placement and compaction of fill materials, re-paving of the asphalt driveway and parking area, installation of concrete curbs bounding the parking area and placement of topsoil and re-seeding of the grass area. The work will be conducted by a State contractor.
Mr. Tartaglia testified that the temporary easement will have no impact to on-site parking. However, his report concludes that the temporary easement and associated work within the right of way will impact the parking area and front yard with respect to the re-grading of these areas to meet the new grade of the right of way.
Mr. Tartaglia opined that the temporary easement will result in the disturbance of sections of existing wood fencing which will need to be replaced at a cost of $5,285 and moving the mailbox at a cost of $241. In addition, the raise in grade will require, at a minimum, the raising of the access cover to the existing water meter/vault. However, if the Suffolk County Water Authority determines that it is not sufficient then the meter/vault itself will have to be raised. This work will also be performed by the State or a State contractor.
Mr. Tartaglia testified that the re-grading of the front yard will create an increased slope of the driveway and parking area which could impact storm water drainage. The increased grade could result in runoff flowing faster toward the rear of the parking area in times of heavy rain which could potentially create a flooding condition. He opined that a new drywell with an inlet grate will need to be installed in the northwest corner of the parking area, sized to accept storm water volume. This requires excavation with subsequent backfill and restoration of pavement at a cost of $25,116. Mr. Tartaglia also added $4,500 in design, engineer and permit costs. He determined that the total cost to cure damages are $35,142.
William Lahti, an engineer, prepared a rebuttal report and testified on behalf of claimant. He opined that the Tartaglia report mischaracterized the effect the temporary easement will have on the property. Specifically, Mr. Lahti set forth that the reduction of the driveway entrance from 65 feet to 28 feet as well as the contours of its corners has permanent effects on the subject property. He opined that the State failed to adhere to its own design criteria when designing the driveway/highway entrance by designing a 5 foot sharp corner rather than a 13 foot radius entrance. He explained that the driveway should have a radius type entrance which would allow entering vehicles to make smoother turning maneuvers into the site at a higher rate of speed as opposed to sharp turning maneuvers that require more work by the driver and a slower speed. He further opined that the decrease in width results in vehicles entering the driveway at 15 mph which increases the risks posed to vehicles entering the site. As a result, the speed differential between highway speed (45mph) and entering speed (15 mph) is now 30 mph rather than zero as it was before the change in the driveway entrance. In support he cited the Center for Transportation Research at Iowa State University's published study which explained that a 20 mph speed differential has a 3 times greater likelihood of accidents whereas a 30 mph speed differential has a 23 times greater likelihood of accidents. Lastly, he sets forth that the site will be unable to use a dumpster for trash collection because the dumpster truck will now be unable to enter the site to pick up the dumpster.
Defendant's expert did not address this issue in his written report but he testified that as a result of the decrease in width of the driveway entrance there was no negative impact to the property and the driveway will function adequately.
Mr. Lahti also opined that the re-grading of the existing driveway/parking area created permanent impairments and diminished use of the property. Prior to the temporary easement, the parking area and driveway had a grade of 1.34% and a driveway entrance speed of 15 mph. As a result of the re-grading, the driveway/parking area will be at a grade of 5.34% with a driveway entrance speed of 13 mph. Mr. Lahti opined that the new grade and entrance speed in combination with the deceased width of the driveway will increase the likelihood of accidents and diminish the site functionality for all uses. However, Mr. Lahti conceded that the Town of Smithtown has a maximum allowable driveway slope of 8% on a residential street. Additionally, Mr. Lahti opined that the increased slope proposed by the State will cause stormwater runoff to travel in a north northwest direction across the paved area resulting in water striking the wooden fencing bordering the paved area and pooling in the northwest corner of the subject property. This will result in accelerated deterioration of the wooden fence and a slip hazard in the winter months. Mr. Lahti also testified that the permanent change in grade diminishes the current and future utility of the parking area. He explained that in the future the site will be unable to provide ADA compliant parking because the parking area will be sloped in excess of the maximum slopes permitted for accessible parking.
Mr. Lahti further opined that the cost to cure figures provided by Mr. Tartaglia were insufficient. He set forth that it is necessary to add an additional $16,066 to defendant's estimated cost to cure figures. He explained that an additional $2,085 must be added to compensate for the fact that two storm water drywells will need to be installed rather than one. An additional $1,986 will need to be added for the cast iron manhole and grates or masonry collars for the leaching pools. Mr. Lahti noted that the Tartaglia report excluded excavation or piping costs for the leaching pools and opined that the estimated cost for the work is $5,165. Additional yardage of asphalt will be required as a result of needing two leaching pools thus there is an additional cost of $990 for the materials. The costs for disposing of the pavement demolished for installation of the stormwater leaching pools was not included in the Tartaglia report and is estimated to cost $4,000. With regard to backfilling around the storm water leaching pool, Mr. Lahti added an additional $1,540 to account for the cost of purchasing and delivery of the backfill. Mr. Lahti also pointed out that the costs associated with disposing of the existing fence post and foundation were not included in the Tartaglia cost to cure figures and that the estimated cost for this item is $300.
Mr. Tartaglia conceded that soil boring and ground water levels would need to be known before a drywell could be installed and that it was possible a second drywell would be necessary. Mr. Tartaglia testified that he included the cost of removal of debris in his cost to cure figures. However, the exhibit attached to his expert report states in two separate places that the figures exclude hauling, dumping and disposal fees.
Elinor Brunswick, a real estate appraiser, prepared an appraisal report in this matter and testified on claimant's behalf. In analyzing the land value of the subject property as if vacant, Ms. Brunswick utilized the sales comparison or market data approach which reflects an estimate of value as indicated by the actual sales market. She selected four different sales of vacant residential land within the Town of Smithtown in valuing the subject property. After making certain adjustments to the sales which she determined were appropriate she found a before per square foot value of the subject property of $8.45. She then multiplied $8.45 by 13,613 square feet and found a before land value of $115,000.
Unless otherwise noted all calculations are rounded off.
Ms. Brunswick set forth that the temporary easement covered 3,605 square feet and actually constituted a defacto permanent easement because it created permanent damages to the subject property. She adopted Mr. Lahti's findings in his rebuttal report with regard to the impact of the temporary easement on the subject property. She opined that the permanent change in grade to the driveway and parking area as well as the reduced driveway entrance had negative impacts to the property with regard to safety, topography/grade, flooding and utility. In addition, she opined that the sound barrier wall construction will increase the flooding impact to the property. As a result, she determined that there was a reduction in the utility of the site due to uncertainties of the drainage problems and potential unknown costs which she reflected in the safety and topography/grade categories in her adjustment grid. She also found that the construction of 16 to 18 foot sound barrier walls located on the southwest corner of the parcel replaced dense foliage and created "visual pollution" for the subject property. She concluded that as a result of the easement and the installation of the sound barrier walls, the subject property's view and aesthetics have been permanently altered as well as the property's marketability thus, downward adjustments were applied in her adjustment grid. On cross-examination she conceded that the sound walls and the lost foliage were located on the State's right of way and not on claimant's property.
Ms. Brunswick set forth in her report that the potential rental stream of the subject property is no longer viable due to the reconstruction of the driveway as well as the fact that almost the entire parking lot area will be within the temporary easement area. The easement extends the entire width of the driveway to a depth of 49 feet which covers the entire roadway access to the property and the parking lot area. She opined that the loss of utilization of these areas will prevent parking on the site as well as loss of entry to the dwelling. Once construction began, two of the three tenants vacated the subject property.
Ms. Brunswick used the same sales in analyzing the land value of the subject property after the effects of the easement were taken into consideration. After applying certain adjustments to the properties for location, topography/grade and aesthetics/view; she found an after land value of $6.61 per square foot for the subject property. She then multiplied $6.61 by 13,613 square feet and found an estimated land value of $90,000.
Ms. Brunswick then used the sales comparison approach to determine the market value of the property as improved before the easement. She selected 4 comparable sales within close proximity to the subject property. After making certain adjustments to the sales which she determined were appropriate she found the adjusted sales price range from $313,000 to $336,000. She then accepted the median of the sales to reach the market value of the property before the temporary easement of $320,000.
Ms. Brunswick performed the same analysis using the sales comparison approach to value the property as improved after the easement. She used the same sales in her after analysis of the subject property. She however determined that additional adjustments were necessary for grading; safety of access; aesthetics/view; and marketability. After applying all of these adjustments to the properties, she found the adjusted price range from $156,000 to $173,000. She then adopted the median of the sales to reach the market value of the property after the temporary easement of $160,000.
Ms. Brunswick found severance damages as a result of the temporary easement in the amount of $160,000. She attributed $25,000 to the land and $135,000 to the improvements.
Ms. Brunwick's report set forth that the subject property was leased prior to the easement in the amount of $2,850 per month. She also looked at comparable leases and determined that the market leases supported the leases at the subject property. Once construction began, on or about June of 2015, two of the three tenants vacated the premises causing a rental loss of $1,975 per month. Ms. Brunswick opined that as the temporary easement covers the entire entry and most of the parking area and the grading work had not yet begun, the loss of rent ($2,850) for the entire property is warranted as there will be no ability to park at the subject property. She multiplied 3,605 square feet by $6.61 per square foot and reached $23,829. She determined that 12% was the appropriate rate of return for the subject property and multiplied 12% by $23,829 for $2,859 per year or $238 per month. She subtracted $238 per month from the total damages of $2850 per month. She concluded that the temporary easement damages were $2,612 per month.
Andrew Albro, a real estate appraiser, prepared defendant's appraisal in this matter and testified on its behalf at trial. In analyzing the land value of the subject property as if vacant, Mr. Albro utilized the sales comparison or market data approach which reflects an estimate of value as indicated by the actual sales market. He selected four different sales of vacant residential land within the Town of Smithtown in valuing the subject property. After making certain adjustments to the sales which he determined were appropriate he found a before taking per square foot value of the subject property of $11. He then multiplied $11 by 13,556 square feet of the entire property and found a before land value of $150,000.
Mr. Albro used the same sales in analyzing the land value of the subject property after the effects of the easement were taken into consideration. He assumed a fee taking in order to establish the extent of damages upon which a rental figure could be determined to represent the temporary easement damages. He determined that although the subject site was reduced in size to 9,951 square feet, no adjustments were necessary and found an after taking land value of $11 per square foot for the subject property. He then multiplied $11 by 9,951 square feet and arrived at a land value of the property after the temporary easement of $110,000.
Mr. Albro then used the sales comparison approach to determine the market value of the property as improved before the easement. He selected 4 comparable sales which were residences that at some point were converted or maintained with additional living units within close proximity to the subject property. After making certain adjustments to the sales which he determined were appropriate he found the adjusted sales price range from $134.30 per square foot to $144.70 per square foot. He then accepted the mean of the sales to reach the market value of the property before the temporary easement of $140 per square foot. He multiplied $140 by 2,880, the gross building area, and reached a value of $400,000.
Mr. Albro performed the same analysis using the sales comparison approach to value the property as improved after the easement. He used the same sales in his after taking analysis of the subject property. He determined that a marketability/appeal adjustment was necessary to account for the effect the work easement will have on the property as the easement will encumber most of the front yard and will eliminate landscaping and fencing. He also noted that the loss of the front yard area will impact the subject's occupancy and rental income due to the potential inconvenience during the easement period. After applying a 25% downward adjustment to all the comparable sales, which he determined was appropriate he found the adjusted sales price range from $83 per square foot to $105 per square foot. He then accepted the median of the sales to reach the market value of the property after the temporary easement of $95 per square foot. He multiplied $95 by 2,880, the gross building area, and reached a value of $275,000.
Mr. Albro also utilized the income analysis approach to value the subject property prior to the temporary easement. He set forth this approach assumes an investor purchase on the assumption of continuation of the existing use as a three family house. He compared 4 rentals and after making certain adjustments to the rentals, which he determined were appropriate, he found a rental rate of $1,200 for the one bedroom unit and $1,400 per month for each of two, two bedroom apartments. He then determined a net operating income of $22,100 and a capitalization rate of 6%. He concluded that under the income capitalization approach the before value of the subject property was $370,000.
Mr. Albro then performed the same analysis using the income capitalization approach to value the property after the taking. As he did in the sales comparison approach, he applied a 10% adjustment for marketability/appeal due to the impact of the work easement. He estimated $1,000 per month for the one bedroom and $1,150 per month rent for each of the two bedrooms. He also increased the vacancy and collection loss from 4% to 6%. He then found a net operating income of $11,800. The capitalization rate did not change. He concluded that under the income capitalization approach the after value of the subject property was $195,000.
Mr. Albro opined that in the before scenario, the sales comparison approach was the most reflective of damages and received full weight in his reaching a value of $400,000. However he explained that in the after scenario, the property is viewed more critically as an investor property, as opposed to a property marketable for partial owner occupancy. As such the market value as indicated by the income capitalization approach was factored into his calculations. He then found an estimated market value after the temporary easement of $250,000.
Mr. Albro found total damages of $150,000 by subtracting the reconciled $250,000 after value from the $400,000 reconciled before value. He allocated $75,000 in direct damages with $40,000 for the land and $35,000 for the improvements and determined there was $75,000 of indirect damages to the improvements. He assumed a fee taking for the purposes of finding damages and found $75,000 in severance damages. In order to determine the temporary damages, he added the $75,000 in assumed severance damages to the $40,000 in damages to the land for a total of $115,000. He also found that a 12% rate of return was applicable and multiplied $115,000 by 12% for a total of $13,800 per year or $1,150 per month.
Ms. Brunswick submitted a rebuttal report in response to Mr. Albro's appraisal. She set forth that the method used by defendant's appraiser in calculating the rental value of the temporary easement was inappropriate as it was unrelated to the practical loss of rental to a tenanted building. She explained that the defendant's appraisal was based upon an abstract valuation of something that never occurred, a fee taking, and that his conclusion of $13,800 per annum is inconsistent with his own discussion of the impacts the temporary easement would have on the remainder of the property.
Mr. Albro also filed a rebuttal to claimant's appraisal and amended appraisal reports. He opined that it was inappropriate for claimant's appraiser to make legal and engineering conclusions without citing that these assumptions were based upon extraordinary assumptions. He also opined that claimant's adjustments for view incorrectly included the view of trees not located on the subject property. He put forth that claimant's adjustments for the grade and utility were speculative and inconsistent. Mr. Albro also contended that claimant's amended appraisal report makes downward adjustments for topography/grade and aesthetics/view however, there were no indications of these qualities in the sale abstracts. They were located in the explanation of adjustments.
Claimant contends that it is entitled to recover $160,000 for damages stemming from the permanent changes brought about by the State's actions, whether as a result of the temporary easement or as a de facto appropriation. Defendant contends that claimant is entitled to recover $35,000 in cost to cure damages stemming from the work done by the State.
The appropriate measure of damages for a partial taking of real property is the difference between the value of the whole property before the taking and the value of the remainder after the taking (Chester Indus. Park Assoc., L.P. v State of New York, 103 AD3d 827 [2d Dept 2013]). The measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking, whether or not the property is being put to such use at that time (Gyrodyne Co. of Am., Inc. v State of New York, 89 AD3d 988 [2d Dept 2011]).
The taking of a temporary easement entitles the landowner to recover the loss in rental value of the land encompassed within the temporary easement during the term of the appropriation plus further damage, if any, caused to the property (Matter of Kadlec v State of New York, 264 AD2d 420 [2d Dept 1999]).
Rental value of the land encompassed within the temporary easement is calculated by multiplying the square footage of the temporary easement area by the square foot value of the land after the appropriation. That figure is then multiplied by an interest rate for an annual rate of return which is then divided by 12 to arrive at a monthly rental.
The appraisers for the respective parties both agreed that the temporary easement measures 3,605 square feet in total, it was still in effect as of the date of the trial and that 12% was the reasonable rate of return. The parties' calculations of the temporary easement damages included rental damages for the use and occupancy of the property and consequential or severance damages due to the temporary easement's impact. The Court finds it prudent to separate the calculations.
With respect to the rental damages for the use and occupancy of the land encompassed within the temporary easement, the court finds that the amount of $11 per square foot as set forth by defendant to be the appropriate value of the land. Accordingly, the Court multiplies 3,605 square feet by $11 and calculates a total value of $40,000. That total is multiplied by 12%, the rate of return, for a value of $4,800 per year or $400 per month. Multiplying $400 by 38 and ½ months, the Court finds and awards $15,400 in damages to date related to rental value of the land encompassed within the temporary easement.
The Court calculated 38 and ½ months from the date of vesting, May 16, 2014 to July 28, 2017, the date the temporary easement was extinguished. At the request of the Court both parties submitted a copy of a letter from the New York State Department of Transportation evincing that the official date of the termination of the temporary easement was July 28, 2017.
Ms. Brunswick set forth that the highest and best use of the property both before and after the temporary easement is with a single family residence. However, she adds that the highest and best use of the subject property, as improved, and utilized to its maximum potential use, is represented by the existing improvements to the subject property.
Mr. Albro set forth that the highest and best use of the property as vacant is for single family development. However, he opined that the highest and best use for the property as improved would be for the continued use as a three family residence if appropriate permits and/or variances could be secured. He concluded that absent such permits and/or variances, the only use would be for conversion back to a single family residence.
Claimant also contends that the damages due to the loss of rental to a tenanted building should be recoverable as severance damages. Both, claimant and defendant recognize that along with rental damages for the use and occupancy of the temporary easement, severance damages due to the temporary easement are also warranted, although defendant uses the term temporary severance damages.
The Court finds that the highest and best use of the property is a single family house. However, given the unique facts and circumstances of this matter and the fact that both parties experts recognized the subject property as a three family residence in their respective appraisal reports, the Court will consider loss of rental damages. Additional support for consideration is that, notwithstanding the subject property's certificate of occupancy, the Town of Smithtown has classified the subject property as a three family residence since 1999 and has assessed taxes accordingly.
The easement area, including the driveway and portions of the front yard, was re-graded. This included placement and compaction of fill material, re-paving the driveway and parking area, installation of concrete curbs and placement of topsoil and re-seeding of the grass area. Claimant contends that no parking was available for any vehicles during the period of the temporary easement whereas defendant contends that parking for six vehicles could be maintained. Defendant's experts conceded that while the property was being re-graded, the associated work would impact the parking area.
The evidence established that the only non-impacted portion of the parking area during the period of the temporary easement was the 10 x 60 horizontal strip of land located behind the easement area. Clearly, such minimal space was insufficient to provide parking for 6 vehicles. Defendant's expert also made a downward adjustment of the value of the property to take into consideration the temporary easement's impact on occupancy and loss of rental income during the duration of the temporary easement. Moreover, defendant did not establish that the disruption and interference with the property was limited, sporadic, of a brief duration or that access was available on certain days of the disruption. Defendant relied solely on the existence of a right of access contained within the language of the temporary easement. Defendant did not present any fact witnesses with first hand knowledge as to the extent of the interval of actual obstruction to the property.
Generally, a claimant is entitled to compensation for any loss suffered as a result of the taking of a temporary easement (Ronmar Realty, Inc. v State of New York, 121 AD3d 1085 [2d Dept 2014]). A temporary easement that leaves the property owner under constant threat that his use of the property may be curtailed or stopped is likely to affect business or other financial decisions even if use is never interrupted in fact (McCurdy v State of New York, 10 NY3d 234 [2008] quoting Village of Highland Falls v State of New York, 44 NY2d 505 [1978]). Here, as opposed to Ronmar, claimant established that the State's taking of a temporary easement actually interfered with claimant's highest and best use of its property. Claimant's evidence established that the temporary easement negatively affected its rental stream and parking commencing in June 2015, causing an actual rental loss of $1,975 per month.
Thus, the Court finds that claimant is entitled to the actual loss of rent from June 28, 2015 to the date the trial concluded. Multiplying $1,975 by 20 months, the Court finds and awards $39,500 in damages to date for the loss of rental income as consequential/severance damages.
The Court calculated 20 months from the date the tenancies were vacated to the date the trial concluded, June 28, 2015 to February 28, 2017.
Claimant contends that due to the removal of foliage and installation of the sound wall along Route 347, the subject property has an inferior view and as such, damages ensue. However, the sound walls and the lost foliage were located on the State's right of way and not on claimant's property.
In support of its argument, claimant cites Dennison v State of New York, 22 NY2d 409 (1968), where the Court of Appeals recognized that when the State appropriated a portion of claimant's property and constructed a highway thereupon, claimant was entitled to consequential damages taking into consideration the loss of privacy and seclusion, the loss of view and the increased traffic noise, lights and odors as factors. However, the holding in Dennison has rarely been extended beyond the unique facts of that case (City of Yonkers v State of New York, 40 NY2d 408 [1976]; DuBois v State of New York, 54 AD2d 782 [3d Dept 1976]; Sperry v State of New York, 50 AD2d 618 [3d Dept 1975]).
The general rule is clear that condemnees are not entitled to consequential damages for the taking of a neighbor's land unless a property interest exists in the appropriated parcel (DuBois v State of New York, 54 AD2d 782 [3d Dept 1976]; Rochester Refrig. Corp. v State of New York, 25 AD2d 943 [4d Dept 1966]). Consequential damages are typically limited to damages resulting from the use of the condemned portion of the property only; damages resulting from the taking of neighbor's lands are not compensable (Lucas v State of New York, 44 AD2d 633 [3d Dept 1974]). Based upon the foregoing and with consideration of the particular facts and circumstances inherent in this case, claimant has failed to establish by a preponderance of the credible evidence that they are entitled to damages based upon removal of foliage and installation of the sound walls adjacent to their property. As a result, there is no basis for claimant's adjustments in the aesthetics/view category.
The Court also finds that claimant has failed to establish by a preponderance of the credible evidence that the decrease in the driveway size and resultant curbing resulted in recoverable damages. "Consequential damages may be recovered where defendant's appropriation has caused access to the remainder of a property to become 'unsuitable,' that is, 'inadequate to the access needs inherent in the highest and best use of the property involved' (Priestly v State of New York, 23 NY2d 152, 155-156 [1968]; see Lake George Assoc. v State of New York, 23 AD3d 737, 738 [2005], affd 7 NY3d 475 [2006]). Access may be rendered unsuitable if the taking of frontage on a property abutting a highway or 'the physical construction of [an] improvement itself, so impairs access to the remaining property that it can no longer sustain its previous highest and best use' (LaBriola v State of New York, 36 NY2d 328, 332 [1975])" (Knickerbocker Dev. Corp. v State of New York, 140 AD3d 1444, 1445 [3d Dept 2016]). Claimant failed to establish that the decrease in the driveway size and resultant curbing so impaired the remaining property that it could no longer sustain its previous highest and best use. As a result, there is no basis for claimant's adjustments in the safety of access category.
Lastly, there is no dispute between the parties that the temporary easement taken by the State created permanent changes to the slope of the subject property. Once the temporary easement is extinguished, the subject property will have an increased driveway/parking area slope. Defendant argues that cost to cure damages are appropriate, however, its cost to cure damages only addressed the costs for curing the drainage, mailbox and fencing problems on the subject property. Defendant found total cost to cure damages of $35,142 which covered primarily a drywell, a mailbox, fence replacement and permits. Claimant determined that cost to cure damages would require an additional $16,066 to cover primarily a second drywell, manhole cover, pipes, additional asphalt as well as additional delivery and disposal costs. Consequently, the total cost to cure damages would be $51,208 which the Court finds to be appropriate in this matter.
However, those cost to cure damages do not take into account the impact of the permanent change of slope to the driveway/parking area itself and the resultant diminishment of the overall value of the property. The cost to cure damages do not completely return the property to the owner in the same or similar state as before the easement. After the easement is extinguished the increased slope remains on the property. The evidence established that although the new slope is within Town guidelines, the experts themselves would not design/build a new property with such a slope. The only evidence before the Court in regard to diminution in property value due to the permanent change in slope is from claimant's appraiser who determined that the after value of the property was $160,000. However, the Court, having disallowed damages for aesthetics/view and for safety of access, must recalculate the market value of the subject property after the taking.
The Court recalculated claimant's after value calculations accordingly. The Court removed the aesthetics/view and safety of access adjustments from claimant's after value calculations. As a result, the only adjustment remaining is that of slope. After removing the aforementioned adjustments from claimant's after value calculations, and using the resulting average property values of the comparable properties, as claimant's expert did, the Court finds that the after value of the subject property is $245,000. Subtracting $245,000 from the before value of $320,000, the Court finds a diminution of value of $75,000.
As such, the Court awards claimant $75,000 in damages as the appropriate amount of the diminution of the value of the overall property arising from the permanent change in slope of the driveway/parking area.
Accordingly, claimant is entitled to $75,000 in damages due to the permanent change in slope of the driveway/parking area; $51,208 in cost to cure damages; $15,400 for damages related to rental value of the land encompassed within the temporary easement; and $39,500 for loss of rental income as a consequential/severance damage for a total award of $181,108 with statutory interest from the vesting date of May 16, 2014 to the date of decision and thereafter to date of entry of judgment (see CPLR §§ 5001 and 5002). Suspension of interest is not warranted since the notice of acquisition was served by certified mail, return receipt requested and not by personal service (Sokol v State of New York, 272 AD2d 604 [2000]; see also EDPL 514 [B]).
The award to claimant herein is exclusive of the claims, if any, of persons other than the owners of the appropriated property, their tenants, mortgagees or lienors having any right or interest in any stream, lake, drainage, irrigation ditch or channel, street, road, highway or public or private right-of-way or the bed thereof within the limits of the appropriated property or contiguous thereto; and is exclusive also of claims, if any, for the value of or damage to easements or appurtenant facilities for the construction, operation or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer or railroad lines. To the extent the claimant has paid a filing fee, it may be recovered pursuant to Court of Claims Act section 11-a (2).
All other motions on which the Court may have previously reserved or which were not previously determined, are hereby denied.
The Chief Clerk of the Court is hereby directed to enter said Judgment accordingly.
November 21, 2017
Hauppauge, New York
Gina M. Lopez-Summa
Judge of the Court of Claims