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applying a statute that provides for an award of attorney fees to any condemnee (citing N.Y. Em. Dom. Proc. § 701 (McKinney 2022) )
Summary of this case from Mulberry Frontage Metro. Dist. v. Sunstate Equip. Co.Opinion
2017–04033 2017–04034 2017–04505 2017–04724 Index No. 1843/06
02-13-2020
In the MATTER OF VILLAGE OF HAVERSTRAW. Ferguson Management Company, LLC, et al., respondents; v. Village of Havestraw, appellant.
Zarin & Steinmetz, White Plains, N.Y. (Michael D. Zarin and Zachary R. Mintz of counsel), for appellant. Goldstein, Rikon, Rikon & Houghton, P.C., New York, N.Y. (Joshua H. Rikon of counsel), for respondents.
Zarin & Steinmetz, White Plains, N.Y. (Michael D. Zarin and Zachary R. Mintz of counsel), for appellant.
Goldstein, Rikon, Rikon & Houghton, P.C., New York, N.Y. (Joshua H. Rikon of counsel), for respondents.
RUTH C. BALKIN, J.P., JEFFREY A. COHEN, ROBERT J. MILLER, COLLEEN D. DUFFY, JJ.
DECISION & ORDER In a condemnation proceeding, the condemnor appeals from (1) an order of the Supreme Court, Rockland County (Bruce E. Tolbert, J.), entered March 2, 2017, (2) an order of the same court also entered March 2, 2017, (3) an order and judgment (one paper) of the same court dated March 30, 2017, and (4) an order and judgment (one paper) of the same court also dated March 30, 2017. The first order granted the motion of the claimant Ferguson Management Company, LLC, for an additional allowance pursuant to EDPL 701 to the extent of awarding it the principal sum of $106,480.73. The second order granted the motion of the claimant Executive Touch Landscaping & Construction, LLC, for an additional allowance pursuant to EDPL 701 to the extent of awarding it the principal sum of $127,064.82. The first order and judgment granted the motion of the claimant Ferguson Management Company, LLC, for an additional allowance pursuant to EDPL 701 to the extent of awarding it the principal sum of $106,480.73, and is in favor of that claimant and against the condemnor in that principal sum, with postjudgment interest at the rate of 9% annually. The second order and judgment granted the motion of the claimant Executive Touch Landscaping & Construction, LLC, for an additional allowance pursuant to EDPL 701 to the extent of awarding it the principal sum of $127,064.82, and is in favor of that claimant and against the condemnor in that principal sum, with postjudgment interest at the rate of 9% annually.
ORDERED that the appeals from the orders entered March 2, 2017, are dismissed, as the orders were superseded by the orders and judgments dated March 30, 2017; and it is further,
ORDERED that the first order and judgment is reversed, on the facts, the motion of the claimant Ferguson Management Company, LLC, for an additional allowance pursuant to EDPL 701 is denied, and the first order is modified accordingly; and it is further,
ORDERED that the second order and judgment is modified, on the law, on the facts, and in the exercise of discretion, (1) by deleting the provision thereof granting the motion of the claimant Executive Touch Landscaping & Construction, LLC, for an additional allowance pursuant to EDPL 701 to the extent of awarding it the principal sum of $127,064.82 and awarding it that principal sum, and substituting therefor a provision granting the motion to the extent of awarding Executive Touch Landscaping & Construction, LLC, the principal sum of $70,831.40 and awarding it that principal sum, and (2) by deleting the provision thereof awarding postjudgment interest at the rate of 9% annually, and substituting therefor a provision awarding postjudgment interest at the rate of 6% annually; as so modified, the second order and judgment is affirmed, and the second order is modified accordingly; and it is further,
ORDERED that one bill of costs is awarded to the condemnor, payable by the claimant Ferguson Management Company, LLC. In 2006, the condemnor, Village of Haverstraw, condemned property owned by the claimant Ferguson Management Company, LLC (hereinafter Ferguson), and leased by the claimant Executive Touch Landscaping & Construction, LLC (hereinafter Executive). The Village made advance payments of $575,000 to Ferguson for the fee and $61,044 to Executive for its fixtures. Both Ferguson and Executive challenged the sufficiency of the compensation paid by the Village.
Notwithstanding its advance payment to Ferguson of $575,000, at the trial on valuation, the Village offered an appraisal of the fee valuing it at $316,500, whereas Ferguson's appraiser valued it at $800,000. The Supreme Court concluded that, "[o]n the whole, [Ferguson] ha[d] provided more competent evidence to support [its] calculations than [the Village]," and that the fair market value of the property on the title vesting date was $721,671. With respect to Executive's trade fixture claim, the court deemed the Village's appraisal "irrelevant" to the issue before it and, thus, precluded the Village from proffering testimony regarding the value of the trade fixtures. The court found that Executive was not entitled to compensation for 142 of the fixtures for which it sought compensation, and that it was entitled to installation costs for only eight additional items. The court concluded that Executive was entitled to compensation for 58 fixtures and awarded it only $159,596 of the $973,000 it sought.
Both Ferguson and Executive moved for additional allowances pursuant to EDPL 701, contending that their respective awards substantially exceeded the Village's proof, and that additional allowances were necessary to achieve just and adequate compensation. The Supreme Court granted the claimants' motions to the extent of awarding an additional allowance of $106,480.73 to Ferguson and an additional allowance of $127,064.82 to Executive, with postjudgment interest at the rate of 9% annually. The Village appeals.
Pursuant to EDPL 701, where a court's award to a claimant in a condemnation proceeding is "substantially in excess of the amount of the condemnor's proof" and where the court deems it necessary to "achieve just and adequate compensation," the court may award the claimant an additional sum for costs including attorneys' and other fees. The goal of this statute is to " ‘assure[ ] that 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’ " ( Matter of Village of Spring Val., N.Y., 171 A.D.3d 934, 935, 98 N.Y.S.3d 210, quoting Hakes v. State of New York, 81 N.Y.2d 392, 397, 599 N.Y.S.2d 498, 615 N.E.2d 982 ; see Matter of Village of Haverstraw [AAA Electricians, Inc.], 165 A.D.3d 955, 956, 86 N.Y.S.3d 604 ; Matter of City of Long Beach v. Sun NLF L.P., 146 A.D.3d 775, 776, 45 N.Y.S.3d 494 ). "The statute requires two determinations: first, whether the award is ‘substantially in excess of the amount of the condemnor's proof’ and second, whether the court deems the award necessary ‘for the condemnee to achieve just and adequate compensation’ " ( Hakes v. State of New York, 81 N.Y.2d at 397, 599 N.Y.S.2d 498, 615 N.E.2d 982, quoting EDPL 701 ; see Matter of Village of Spring Val., N.Y., 171 A.D.3d at 935, 98 N.Y.S.3d 210 ; Matter of Village of Haverstraw [AAA Electricians, Inc.], 165 A.D.3d at 956, 86 N.Y.S.3d 604 ; Matter of City of Long Beach v. Sun NLF L.P., 146 A.D.3d at 776, 45 N.Y.S.3d 494 ). " ‘Where both tests are satisfied, the court may award reasonable fees’ " ( Matter of Village of Spring Val., N.Y., 171 A.D.3d at 935, 98 N.Y.S.3d 210, quoting Hakes v. State of New York, 81 N.Y.2d at 397, 599 N.Y.S.2d 498, 615 N.E.2d 982 ; see Matter of Village of Haverstraw [AAA Electricians, Inc.], 165 A.D.3d at 956, 86 N.Y.S.3d 604 ; Matter of City of Long Beach v. Sun NLF L.P., 146 A.D.3d at 777, 45 N.Y.S.3d 494 ).
Notwithstanding the Village's trial proof reducing its valuation of the fee property from the sum offered as an advance payment, in applying the test set forth in EDPL 701, we look to the condemnor's initial offer, not its trial proof (see Matter of New York City Tr. Auth. [Superior Reed & Rattan Furniture Co.], 160 A.D.2d 705, 709–710, 553 N.Y.S.2d 785 ; see also General Crushed Stone Co. v State of New York, 93 N.Y.2d 23, 27, 686 N.Y.S.2d 754, 709 N.E.2d 463 ). Here, the Supreme Court's award of $721,671 exceeded the Village's advance payment of $575,000. While the difference is not insignificant, we find that it does not substantially exceed the Village's advance payment within the meaning of EDPL 701 (compare Matter of Metropolitan Transp. Auth., 86 A.D.3d 314, 327, 927 N.Y.S.2d 67, Matter of Gelsomino v. City of New Rochelle, 25 A.D.3d 554, 555, 809 N.Y.S.2d 122, Matter of Metropolitan Transp. Auth. v Ausnit, 306 A.D.2d 190, 763 N.Y.S.2d 549, Matter of Town of Islip v. Sikora, 220 A.D.2d 434, 437, 632 N.Y.S.2d 160, Matter of Town of Riverhead v. Lobozzo, 207 A.D.2d 789, 790, 616 N.Y.S.2d 973, Scuderi v. State of New York, 184 A.D.2d 1073, 585 N.Y.S.2d 271, and Karas v. State of New York, 169 A.D.2d 816, 565 N.Y.S.2d 185, with CMRC, Ltd. v. State of New York, 16 A.D.3d 204, 790 N.Y.S.2d 601, Matter of County of Tompkins, 298 A.D.2d 825, 826–827, 749 N.Y.S.2d 332, and Matter of Village of Johnson City [Waldo's Inc.], 277 A.D.2d 773, 774–775, 715 N.Y.S.2d 775 ). Accordingly, the court improvidently exercised its discretion in awarding an additional allowance to Ferguson.
Although the Village, in effect, concedes that the Supreme Court's award to Executive of $159,596 substantially exceeded its advance payment of $61,044, it correctly points out that Executive was unsuccessful as to the bulk of its claims for compensation and received an award of 16.4% of the $973,000 it sought. Contrary to the Village's assertion, since Executive's attorneys were compensated on a contingent basis, their fees were perforce proportionate to their success. Accordingly, the portion of the additional allowance awarded to Executive representing their fees should not be disturbed (see Matter of City of Long Beach v Sun NLF L.P., 146 A.D.3d at 777, 45 N.Y.S.3d 494 ). Furthermore, under the circumstances, the court providently exercised its discretion in awarding Executive that portion of its attorneys' contingent fee which was based upon the award of prejudgment interest (see Adventurers Whitestone Corp. v City of New York, 65 N.Y.2d 83, 85, 489 N.Y.S.2d 896, 479 N.E.2d 241 ). However, the same does not hold as to the portion of the additional allowance compensating Executive for its appraiser's fees. In permitting a court to award fees and costs in condemnation cases to "ameliorate the condemnee's costs in cases it considers appropriate" ( Hakes v. State of New York, 81 N.Y.2d at 398, 599 N.Y.S.2d 498, 615 N.E.2d 982 ), EDPL 701 "vests the trial court with discretion, in order to limit both the incentive for frivolous litigation and the cost of acquiring land through eminent domain" ( Hakes v. State of New York, 81 N.Y.2d at 397, 599 N.Y.S.2d 498, 615 N.E.2d 982 ; see Matter of Village of Port Chester [Bologna], 137 A.D.3d 802, 803, 25 N.Y.S.3d 666 ; Matter of Town of Islip v. Sikora, 220 A.D.2d at 436, 632 N.Y.S.2d 160 ). Here, the Supreme Court awarded Executive compensation for its fixtures of only $159,596, only 16.4% of the $973,000 it claimed based upon its appraisal. Since Executive's appraiser was not compensated on a contingent basis, the Village is correct that much of his work did not contribute to Executive's recovery. In the exercise of discretion, we therefore reduce the portion of the additional allowance attributable to appraisal fees from $67,265 to $11,031.58 (i.e., 16.4% of the total fee) and modify the order and judgment in favor of Executive accordingly by reducing the principal sum awarded from $127,064.82 to $70,831.40.
General Municipal Law § 3–a(2) provides that the rate of interest on an award or judgment against a municipal corporation in a condemnation proceeding may not exceed 6% annually. Since Executive failed to articulate any basis why "as compared to the prevailing market rate the statutory rate is unreasonable," the Supreme Court should not have awarded postjudgment interest at the rate of 9% annually ( Adventurers Whitestone Corp. v. City of New York, 65 N.Y.2d at 85, 489 N.Y.S.2d 896, 479 N.E.2d 241 ; see Matter of Town of Islip v. Sikora, 220 A.D.2d at 437, 632 N.Y.S.2d 160 ; Matter of Town of Oyster Bay, 174 A.D.2d 676, 677–678, 571 N.Y.S.2d 330 ). We therefore further modify the order and judgment in favor of Executive accordingly.
BALKIN, J.P., COHEN, MILLER and DUFFY, JJ., concur.