WHEN A JUDGE GETS IT ABSOLUTELY RIGHT: Matter of Village of Haverstraw (AAA Electricians, Inc.)

Like many condemnation proceedings by small towns and villages, the Village of Haverstraw taking of some 19 acres owned by our client AAA Electricians, Inc. represented a severe example of eminent domain abuse.

The vacant land was taken for the construction of luxury condominiums on the Hudson River.  By Decision and Order dated August 5, 2016, the Honorable Bruce E. Tolbert awarded the claimant $1,190,582 as an additional allowance pursuant to Section 701 of New York’s Eminent Domain Procedure Law.

The case was litigated over a thirteen year period of time.  The Village made a pre-vesting offer of $3,480,000, but then paid an advance payment of $2,596,150 claiming a miscalculation.  It then filed an appraisal for the trial of just $1,000,000.  The Village delayed the trial of the claim for years.

The non-jury trial took seven days.  By Decision/Judgment dated December 9, 2011, the Hon. John R. LaCava awarded claimant $6,500,000 plus interest.  33 Misc3d 1232 (A).  In his decision, the trial court sanctioned the condemnor’s appraiser and made an adverse inference with regard to the destruction of prior draft appraisals by the Village’s appraiser.

The case was appealed to the Appellate Division which affirmed.  114 AD3d 955 (2d Dept 2014).  But that wasn’t the end of the matter, the condemnor moved for permission to appeal to the Court of Appeals, filing 16 separate amicus briefs alleging a violation of the Project Influence Rule, U.S. v Miller, 317 US 369 (1943).   The alleged violation was the mention that there was a ferry from Haverstraw to Ossining, New York in claimant’s appraiser’s general description of the area.  The appraiser valued the property on comparable sales, none of which had ferry service.  Nor did the Court rely on the one sentence in his decision.  The motion for permission was denied.  But still more litigation was required to obtain just compensation which was finally paid on December 24, 2014.

EDPL § 701 provides as follows:

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, upon application, notice and opportunity for hearing, 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 application shall include affidavits of the condemnee and all parties that have incurred expenses on the condemnee’s behalf, set forth inter alia the amount of the expenses incurred.

The statute has been held to be remedial in nature.  Matter of City of New York (Douglaston Littleneck Branch Library), 160 AD2d 696 (2d Dept 1990).

The Court of Appeals explained the reason for EDPL § 701,

In fairness to a private property owner forced to litigate the value of its property when the State comes forward with an unreasonably low offer in effecting a taking of that property, the Legislature enacted Section 701 of the Eminent Domain Procedure Law.  This section allows the owner to apply for allowance – litigation costs expended to ensure just compensation.

General Crushed Stone Co. v State of New York, 93 NY2d 23, 25 (1999).

EDPL § 701 requires two determinations: first, whether the court’s award is substantially in excess of the amount of the condemnor’s proof and second, whether the court deems the award to be necessary for the condemnee to achieve just and adequate compensation.  When both tests are satisfied, the court may award reasonable fees.  Hakes v State of New York, 81 NY2d 392, 397 (1993).

Justice Tolbert noted the length of time that the litigation took.  He stated, “[n]ot only was this litigation protracted but in this Court’s opinion upon review, protracted by virtue of the condemnor’s actions.”

The Village (developer) has taken an appeal from this discretionary award as well.  Incredibly, the developer sued its trial counsel for malpractice alleging, among other things, that trial counsel should have known that its appraiser had destroyed all appraisal drafts.  Remarkably, the developer alleged in its complaint that despite the fact that three appraisers for the Village found an average $3.4 million value, its trial attorney “argued” at trial that the property was worth only $1.0 million.  We do not know the present status of this case.

Posted in Additional Allowances, Eminent Domain
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