Who’s in Charge Here: The Province of the Trial Court in a Condemnation Case

New York is one of only three states in the nation that does not allow trial by jury in an eminent domain case.  All claims against the State of New York and certain other state authorities have exclusive jurisdiction in the Court of Claims where, regardless of the nature of the claim, there are no jury trials.  Appropriation claims in the Court of Claims are certainly included and are tried by a Court of Claims Judge.  Other condemnation matters must be tried by a Justice of the Supreme Court.[i]  This is an absolute requirement and there may not be a reference to a referee.[ii]

 

A trial court is surely charged with making all the legal determinations in an eminent domain case.  But as the trier of the facts, it also has broad discretion to decide many critical issues which determine the amount of “just compensation.”

 

This article will discuss a few of the areas that are said to be within the sound discretion of the trial court.  Unless it appears that there has been an abuse of this discretion, the exercise of a court’s discretion is generally not reviewable on appeal.

 

Expert Witnesses

Condemnation cases require expert witnesses.  Every case will have a real estate appraiser.  Many cases will require more experts than a real estate appraiser.  A land planner will be required, if there is an issue dealing with a reasonable probability of rezoning.  A civil engineer may be required.  Many cases require a trade fixture appraiser.  Utilizing an expert is the norm in a condemnation case.  Care must be given to comply with New York’s appraisal rule which requires that there be a report filed and exchanged by every expert who is to give opinion evidence.[iii]

 

In New York, condemnation trials are limited by the information set forth in the parties’ appraisals and reports.  After the exchange of appraisals, each side may file a rebuttal report within sixty days after receipt of the document sought to be rebutted.  The appraisal reports are required to contain a statement of the method of appraisal relied on and the conclusions as to value reached by the expert together with the facts, figures and calculations by which the conclusions were reached.  The appraisers are also required to provide specific information regarding their comparable sales, leases and photographs of the property under review.  Upon the trial, expert witnesses are limited in their proof of appraised value to information set forth in their reports.

 

The trial court has the discretion to limit the number of expert witnesses in a trial.[iv]

 

Is the Witness an Expert?

It is the trial court that determines if the witness is qualified as an expert to give opinion evidence.  This determination is within the sound discretion of the trial court and will rarely be disturbed on appeal.

 

In Matter of City of New York (Darlington Avenue),[v] the condemnor objected to claimant’s appraiser on the basis that he was not a licensed real estate appraiser, but a real estate broker.  Justice Abraham Gerges held that for a witness to be qualified as an expert, the witness must possess the requisite skill, training, education, knowledge or experience from which it can be assumed that the opinion rendered is reliable.  The Court held that the witness was properly qualified as an expert to value damages since he has been a real estate broker for 43 years and has been appraising properties for 35 years.  The Court also noted that the expert has previously been qualified as an expert by the Court.

 

The trial court enjoys broad discretion in that it can reject expert testimony and arrive at a determination of value that is either within the range of expert testimony or supported by other evidence and adequately explained by the court.[vi]  Where the trial court’s explanation of its award is supported by the evidence, it is entitled to deference and will not be disturbed on appeal.[vii]

 

Comparable Sales

It is the rare appraisal that does not rely to some extent on comparable sales.  An appraiser is required to adjust comparable sales to the subject property.  An appraiser is also expected to set forth the explanation for the adjustments.

 

It is well settled that the “suitability of comparable sales, absent legal error, is a matter for resolution by the trial court.”[viii]  Further, “[d]ifferences between the subject property and alleged comparables are the proper subject of adjustment by expert witnesses, and the degree of comparability becomes a question of fact.”[ix]  Put another way, the differences between the subject property and alleged comparables are the proper subject of adjustment by expert witnesses, and the degree of comparability becomes a question of fact for the trial court.[x]

 

The court also has discretion to determine whether to consider a sale “beyond the immediate vicinity of the subject property.”  There is a profound reduction in evidentiary value for comparable properties requiring extensive adjustment for geographic remoteness from the subject.[xi]

 

In considering the selection of comparable rentals, it has been held that the degree of comparability of other rentals proposed by appraisers in seeking to assign an income for the income approach to value are within the discretion of the trial court.[xii]

 

Credibility

Although the Appellate Division has the right to make any factual determination that the trial court could make, it will rarely change a trial court’s determination with respect to credibility.[xiii]  This is so because the trial court had the ability to watch the witness, testify and judged the witness’ capacity to tell the truth.  Credibility determinations pertaining to expert opinions offered by the party’s appraiser are committed to the sound discretion of the court.[xiv]

 

Filing a New Appraisal

In general, the trial court will have complete discretion in allowing amendment of an appraisal, or filing an appraisal after a default.  The key is the showing of a “good cause” to excuse the failure.  But the trial court must consider all of the relevant circumstances, not merely the excuse or reason proffered for the delay.[xv]  Certainly, when the trial court itself indicates dissatisfaction that the appraisal reports were inadequate, a trial court’s allowance of amendment will be deemed a proper exercise of discretion.[xvi]

 

Granting an Extension to File Appraisal

A trial court determination to allow a party an extension to file an appraisal report is within the court’s sound discretion.[xvii]

 

Imposition of Sanctions

Another area firmly within the trial court’s discretion is the imposition of sanctions on an expert who destroys prior draft appraisals.

 

The Record Keeping Rule of Uniform Standards of Professional Appraisal Practice (USPAP) requires every appraiser to maintain a file for every appraisal assignment.  The appraiser must retain true copies of all written reports for at least five years, or two years after all litigation is completed whichever is later.

 

It is well established law in New York that a prior appraisal prepared by an expert witness testifying at trial may be introduced into evidence to impeach the credibility of that witness’s testimony.[xviii]

 

The only limitation is that the workfile can only be discovered after the appraiser testifies.  Until that time, the file enjoys “conditional immunity from disclosure which is conferred on material prepared for litigation” under CPLR § 3101.[xix]

 

But once the appraiser testifies, the prior reports must be produced.  If the prior appraisals are not part of the workfile, it is appropriate to impose sanctions for the spoilation of evidence to the extent of according an adverse inference with respect to the destruction of the draft reports.[xx]

 

The Appellate Division has also held that a condemnor’s witnesses may be precluded by the trial court when there is a failure to disclose or identify either witness until after the trial had begun and provided no explanation for that failure.  The same court held that the trial court providently exercised its broad discretion in granting an adverse inference against the condemnor with respect to the destruction of draft appraisal reports prepared by its appraiser and draft feasibility studies prepared by its civil engineering firm.[xxi]

 

Additional Allowance

The Eminent Domain Procedure Law provides that the trial court has, in its discretion, the ability to award an additional allowance for actual and necessary costs, disbursements and expenses including reasonable attorneys, appraiser, and engineer fees.[xxii]  The award follows a recovery after trial which is substantially higher than the condemnor’s proof at trial.  The award of fees in a condemnation case is not mandatory but left to the discretion of the trial court.[xxiii]

 

[i] EDPL Sec. 501 B

[ii] Accessocraft Prods. Corp. v City of New Rochelle, 7 AD3d 703 (2d Dept 2004)

[iii] 22 NYCRR Sec. 202.61.  See Miriam Osborn Mem. Home Assoc. v Assessor of City of Rye, 4 Misc3d 1009(A) (Sup. Ct. Westchester Countuy 2004) where Justice Thomas A. Dickerson provides a remarkable history of the appraisal rule in New York

[iv] Sixth A.R. Co. v Metropolitan E.R. Co., 138 NY 548 (1893)

[v] 25 Misc3d 1240(A) (Sup. Ct. Kings County 2009)

[vi] Matter of City of New York (Reiss), 55 NY2d 885 (1982)

[vii] Matter of Rocky Point Realty, LLC v Town of Brookhaven, 126 AD3d 706 (2d Dept 2015)

[viii] Matter of City of New York, 98 AD2d 166, 190-191 (2d Dept 1983) (citations omitted)

[ix] Martin v State of New York, 33 AD2d 599, 600 (3d Dept 1969)

[x] Matter of City of New York (Sanitation Garage), 29Misc3d 1226(A) (Sup. Ct. Kings County 2010)

[xi] Matter of Rockland County Sewer Dist. No. 1 (Split Rock Partnership, 37 Misc3d 1222(A) (Rockland County 2012), afd. 120 AD3d 703 (2d Dept 2014)

[xii] CMRC, Ltd. v State of New York, 2 AD3d 303 (1st Dept 2003)

[xiii] Matter of Mazur Bros. Inc. v State of New York, 97 AD3d 826 (2d Dept 2012)

[xiv] Chemical Corp. v Town of East Hampton, 298 AD2d 419 (2d Dept 2002)

[xv] Matter of Town of Guilderland, 244 AD2d 604 (3d Dept 1997)

[xvi] Matter of City of New York (Bluebelt Phase 2), 108 AD3d 773 (2d Dept 2013)

[xvii] See Matter of City of New York, 18 Misc3d 945 (Sup. Ct. Kings County 2008) where, after a nine year delay, claimant was permitted to file an appraisal.  The court suspended interest for that period of time.

[xviii] Hicksville Properties, Inc. v Bd. of Assessors, 116 AD2d 717, 718 (2d Dept 1986) (“where an unfiled appraisal report was prepared by a party’s trial expert and is consistent with his trial testimony, the unfiled report may be introduced into evidence for impeachment purposes and used to cross-examine the witness”) (citing Swartout v State of New York, 44 AD2d 766 (4th Dept 1974); Matter of City of New York (Brooklyn Bridge Southwest Urban Renewal Project), 50 Misc2d 478 (Sup. Ct. Spec. Term N.Y. County 1966))

[xix] CMRC Corp. v State of New York, 270 AD2d 27 (1st Dept 2000)

[xx] Matter of Vill. of Port Chester (Bologna), 95 AD3d 895 (2d Dept 2012)

[xxi] Matter of Western Ramapo Sewer Extension Project (Split Rock Partnership), 120 AD3d 703 (2d Dept 2014)

[xxii] EDPL Sec. 701

[xxiii] For an excellent discussion on EDPL Sec. 701 see Matter of City of New York (Paolella), 49 Misc3d 1217(A) (Justice Wayne Saitta, Sup. Ct. Richmond County 2015)

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