Opinion
# 2015-049-027 Claim No. 118580 Motion No. M-85970
04-30-2015
RONMAR REALTY, INC. v. THE STATE OF NEW YORK
Flower, Medalie & Markowitz By: Edward Flower, Esq Eric T. Schneiderman, New York State Attorney General By: James M. Burke, Assistant Attorney General
Synopsis
Application pursuant to EDPL § 701 to recover additional allowances for fees and expenses incurred in the prosecution and trial of an appropriation action, granted in part.
Case information
| UID: | 2015-049-027 |
| Claimant(s): | RONMAR REALTY, INC. |
| Claimant short name: | RONMAR |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 118580 |
| Motion number(s): | M-85970 |
| Cross-motion number(s): | |
| Judge: | DAVID A. WEINSTEIN |
| Claimant's attorney: | Flower, Medalie & Markowitz By: Edward Flower, Esq |
| Defendant's attorney: | Eric T. Schneiderman, New York State Attorney General By: James M. Burke, Assistant Attorney General |
| Third-party defendant's attorney: | |
| Signature date: | April 30, 2015 |
| City: | Albany |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
This case is before me on a motion by claimant Ronmar Realty, Inc. ("Ronmar"), pursuant to Eminent Domain Procedure Law ("EDPL") § 701, to recover attorney and expert fees and disbursements expended in the prosecution and trial of this appropriation action in the total sum of $16,827.89. The motion is supported by the affidavits of Ronmar President Ronald Diamond, appraisal expert witness Elinor Brunswick, and claimant's counsel Edward Flower. Defendant State of New York has filed opposition papers, consisting of the affirmation of Assistant Attorney General James Burke and the affidavit of New York Department of Transportation ("DOT") acquisition supervisor Diane Kinneary. Flower has submitted an affirmation in reply.
The facts underlying this action, as relevant here, are as follows: Claimant owns a 12,441 square-foot parcel located in the Town of Brookhaven in Suffolk County. In March 2008, the State acquired title, via its eminent domain power, over a 939-square-foot easement on the property that spanned its entire 77 feet of highway frontage (Diamond Aff. ¶ 2).
At the time of the appropriation, the State offered $11,200 as compensation for the taking (Diamond Aff. ¶ 4). Claimant accepted that offer as an advance payment only (see EDPL § 304[A][3]), and filed a claim in this Court on June 25, 2010 seeking damages of $300,000.
At trial, claimant argued that the State's temporary easement had a significant negative effect on the property as a whole, and it therefore sought consequential damages for the rental value of the entire parcel during the full time the State held its easement. Specifically, Brunswick testified that while the direct damage from the easement itself was only $9,424, Ronmar also suffered $167,291 in consequential or "severance" damages owing to the impact of the taking on the use of the remainder of the parcel, and $15,179.19 for the "cost to cure" physical damage caused to the property by the State's work there, including repairs on an electrical switch, parking lot and sidewalk (see Ronmar Realty, Inc. v State of New York, UID No. 2013-039-353 [Ct Cl, Ferreira, J., Jan. 4, 2013]). Defendant's expert, in contrast, testified that there were no severance damages, because the only impact of the appropriation was on the area directly encumbered by the easement. There is no indication in the trial court opinion that defendant made any showing in opposition to claimant's allegations regarding its repair costs.
The Court made various credibility findings that supported the testimony of defendant's fact witnesses, and on that basis agreed with defendant's conclusion that Ronmar suffered no consequential damages from the appropriation of the property, except as to the costs, as noted, of various repairs. The Court found the direct damage from the taking to equal $8,485.65, and accepted claimant's argument that the tab for the repairs came to $15,179.19, for a total of $23,664.84.
In its current filing, the State characterizes the damages as consisting of the advance payment of $11,200 and $12,464.84 for the cost of repairs (Burke Aff. ¶ 7). This is true in the sense that, because the estimated direct damages found by the Court were below that of the advanced payment, all the added payments directed by the Court's opinion arose out of the claimant's repair needs. It is perhaps more accurate to say, though, that the Court found the damages to consist of a lower amount than the advance payment for the value of the easement itself, plus the entire $15,179.19 cost of repairs sought by Ronmar.
On April 22, 2013, the Clerk of the Court entered judgment in the amount of $23,664.84, with interest of $10,276.46 from the date of the appropriation (March 7, 2008) through the date of decision (January 4, 2013), and interest of $916.42 from the date of decision to the date of entry of judgment, for a total of $34,857.72. The Appellate Division affirmed the judgment (121 AD3d 1085 [2d Dept 2014]).
In its present motion, claimant states that in pursuing this action, it made expenditures of $10,125 for expert fees to Brunswick, $6,419.39 for counsel fees, $233.50 in transcript costs and $50 in filing fees (Diamond Aff. ¶ 12-13). In regard to the attorneys' fees, the amount was calculated based on a contingency fee arrangement, with counsel receiving one third of the total recovery that exceeded the State's advance payment (see id. ¶ 11).
Attached as exhibit C to claimant's filing is a breakdown of expenditures attributed to Brunswick's fees, as follows: $4000 for the appraisal report; $2,625 for preparation of Brunswick's court appearances; and $3,500 for her trial testimony.
In its present filing, defendant argues that prior to trial, claimant never contacted the contractor or the State to obtain reimbursement for the physical damages which serve as the basis for Ronmar's repair costs, and such costs did not arise in any case until after the advance payment had been made (Burke Aff. ¶ 9; Kinneary Aff. ¶¶ 4-6). Claimant points out, however, that these damages were included in the claimant's appraisal report exchanged with the State on January 6, 2012 (Reply Aff. ¶ 6). It also notes that the trial court indicated, in its opinion, that it relied for its award of repair costs on the calculations performed by claimant's appraiser - although it does not appear that defendant made any effort to rebut such calculations (Reply Aff.¶ ¶ 4, 6). Claimant therefore asserts that its damages would have been limited to $11,200 had it not proceeded to trial, and that its expenditures for attorney and appraisal fees therefore were necessary for the additional recovery of $12,464.84, or $19,258.18 with interest (id. ¶ 8).
Discussion
EDPL § 701 provides:
"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 an 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, setting forth inter alia the amount of the expenses incurred."
This statute "assures 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" (Hakes v State of New York, 81 NY2d 392, 397 [1993]; see also General Crushed Stone Co. v State of New York, 93 NY2d 23, 27 [1999] [purpose of section 701 is to "provide a means of mitigating the financial damage wrought by the condemnor's low, original offer"]). As is apparent from the statutory language, an award under section 701 turns on "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, 81 NY2d at 397).
Claimant's prosecution of this case resulted in a pre-interest award of $23,664.84, more than double either the advance payment or the land valuation the State sought to prove at trial. This meets the "substantially in excess" test (id. [no dispute that award of $43,525, when compared with State appraiser's estimate of $17,570, is "substantially in excess of condemnor's proof"]; Matter of Metropolitan Transp. Auth., 86 AD3d 314 [1st Dept 2011] [award 44% higher than offer constituted "substantial" increase for purposes of section 701]; Matter of Gelsomino v City of New Rochelle, 25 AD3d 554 [2d Dept 2006] [plaintiff entitled to recover fees under EDPL § 701 where award was 35.5% higher than condemnor's offer]).
For this reason, I need not decide whether interest must be considered in deciding if an award is "substantially in excess" of the condemnor's proof.
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The second element is a matter for this Court's discretion (see Hakes, 81 NY2d at 397-398). There is "no automatic right to recover additional costs" under section 701 in an eminent domain action (see General Crushed Stone Co., 93 NY2d at 28). Thus claimant must show something more than the fact that it had to secure counsel and an expert to proceed with its action - as that is true in every appropriation case.
As noted, defendant questions whether it was necessary for claimant to pursue the case through trial to secure the only compensation awarded by the court over and above the State's original offer: recompense for the cost to cure the damages caused to claimant's property. Specifically, it argues that the issue could have been resolved prior to trial had the matter been brought to its attention. While claimant does not deny that such costs arose after the initial advance payment was made, it avers, without contradiction, that such sums were noted in its expert appraisal, but did not result in any increase in the State's offer.
I cannot say, on the basis of this record, that it was unnecessary for claimant to proceed to trial to obtain this relief, particularly as there is no proof by the State that it sought to resolve the issue of repair costs at the time it was alerted to it. Indeed, at least one decision of this Court found the award of fees and partial costs under section 701 appropriate even though the damages matched a settlement offer made by the State, because the offer was not advanced until the eve of trial (see Carbone v State of New York, 13 Misc 3d 1246[A] [Ct Cl, 2006]). By this reasoning, claimant is entitled to such relief here, where the State never made such an offer, and simply did not present contrary evidence.
That leaves, though, the question of the scope of the section 701 award to which Ronmar is entitled, in light of the fact that its primary damages claim at trial - that it was entitled to recover consequential damages for loss of the value of the entire property for the duration of the easement - was rejected by the Court.
In regard to attorneys' fees, I find that claimant is entitled to the entire amount it seeks. Those fees were calculated based on a one-third contingency arrangement, and thus are tied directly to the amount recovered. As a result, the fact that the Court only granted a fraction of the compensation sought by claimant is reflected in the attorney fee itself - which is far less than would have been owed if claimant had recovered the full amount sought, or if counsel were paid by the hour. Under these circumstances, there is no need to reduce the award to match the scope of the recovery; such reduction is built into the fee calculation (see Matter of Hoffman v Town of Malta, 189 AD2d 968, 969 [3d Dept 1993] ["contingency fee arrangements are an acceptable factor to be considered by the courts in determining reasonable counsel fees"] [citation omitted]; Lake George Assoc. v State of New York, UID No. 2007-015-217 [Ct Cl, Collins, J., Sept. 20, 2007] [fees calculated on basis of contingency agreement were "reasonably related to amount of actual recovery" in appropriation action which resulted in only partial recovery, and therefore subject to full reimbursement under section 701]).
Moreover, the allocation of the award to attorney's fees (one-third) reflects a standard arrangement, and has been repeatedly been upheld as a basis for recovery under section 701 (see e.g. Carbone, 13 Misc 3d 1246[A], *3 [Ct Cl, 2006] [33% contingency is a "customary fee arrangement . . . reasonable given the amount of time and labor required, the difficulty of the issues presented, the level of skill required of this matter, the benefit resulting to claimant from the attorney's skill and the results obtained"]). Nor do I see anything wrong in the way the arrangement was implemented in this case. In particular, it was proper for claimant to include the pre-judgment interest in the amount that was subject to the one-third calculation (see e.g. Matter of Hoffman, supra [upholding section 701 award for contingency fee calculated based on award plus interest]; Braunstein v State of New York, 11 Misc 3d 1066[A], *2 [Ct Cl, 2005] [same]).
In light of the foregoing, claimant is entitled to $6,419.39 in attorneys' fees. Further, I find that recovery of its modest disbursements of $283.50 is reasonable in light of the recovery achieved.
The same conclusion does not hold, however, in regard to the appraisal costs. Unlike claimant's attorney fees, its payment to Ms. Brunswick was a flat fee. It appears from the record, moreover, that the lion's share of her efforts in this case, including her testimony at trial, concerned the claimant's case for consequential damages that was rejected by the trial court. While the court relied on the appraiser's calculation in determining the "cost to cure" damages, it is not apparent from the trial court opinion (or that of the Appellate Division), that Brunswick gave any testimony on this issue, nor is it clear that an appraisal expert was even necessary for the task of calculating the outlay made for repairs. In any case, what is apparent from the record is that the great majority of the appraiser's work was directed at the different - and ultimately unsuccessful - task of proving that the easement interfered with, and caused damage to, the use and value of the property as a whole.
Under these circumstances, the award of appraisal fees should reflect the very limited degree to which the appraiser's efforts were successful. Put otherwise, the section 701 award should reflect the limited percentage of the expert's time and effort that proved relevant to claimant's recovery (see Matter of City of New York (China Plaza Co.), 254 AD2d 210 [1st Dept 1998] [when "a significant portion of claimant's efforts and costs were expended to develop and present valuation theories to support a claim for compensation substantially in excess of what the court awarded," there is no reason to disturb a section 701 award "substantially less" than what was sought]; see also Matter of Estate of Hayne v County of Monroe, 278 AD2d 823, 825 [4th Dept 2000] [where expenses were largely incurred "to develop and present [claimant's] unsuccessful claim for consequential damages," the application to recover them should be denied]). Here, outside the essentially undisputed value of the easement itself, claimant recovered $15,179 out of a total $191,894 sought overall - or less than 10%. Rounding up to 10%, I find that $1,120 is an appropriate award for the expert appraisal fees.
Therefore, claimant is entitled to an additional allowance as follows:
Attorney's Fees: $ 6,419.39
Expert Appraisal Fees: $ 1,120.00
Disbursements: $ 283.50
TOTAL: $ 7,822.89
LET JUDGMENT BE ENTERED ACCORDINGLY.
April 30, 2015
Albany, New York
DAVID A. WEINSTEIN
Judge of the Court of Claims Papers Considered: 1. Claimant's Notice of Motion, Affidavit and annexed exhibits. 2. Defendant's Affirmation in Opposition, Affidavit of Diane Kinneary, and annexed exhibit. 3. Claimant's Reply Affirmation and annexed exhibit.