Opinion
3002197.
Decided March 25, 2005.
Facts and Procedural Background
The City acquired title to the subject property, located at North Henry Street in Brooklyn (the "property"), from claimant Mobil Oil Company (Mobil) on September 19, 1997 for use as part of the Newtown Creek Water Pollution Control Plant. In its appraisal report dated February 18, 2000, Mobil valued the property at $10,330,000, assuming that the highest and best use of the property was for "big-box retail;" this conclusion valued the property at $11,098,544 and subtracted $765,000 as the cost of demolition. In its report dated December 24, 1999, the City valued the property at $1,000; after subtracting demolition costs of $2,848,615 from a value of $2,600,000, the City concluded that the property had only a nominal valuation. The City's appraiser was of the opinion that the property was in a poor location for a retail establishment.
By decision dated October 8, 2002, this court granted Mobil's motion for an order excluding evidence at the trial of this action of any diminution in value of the property by reason of claimed remediation costs of a petroleum spill and granted the City's cross motion for an order directing Mobil to produce information relating to Home Depot's offer to purchase the above referenced property. The Appellate Division, Second Department, agreed that evidence of the cost of environmental remediation should be excluded from the trial, but directed that the condemnation award should be held in escrow pending the outcome of the companion action in which the City is seeking to recover costs and damages for the remediation ( 12 AD3d 77).
On November 2, 2002, Mobil served the documents demanded by the City in its cross motion. On March 10, 2005, the City served the instant motion. The trial is currently scheduled to begin on June 20, 2005.
Although the affidavit of service indicates that service was made on March 10, 2000, it appears that date was set forth in error inasmuch as the notice of motion and the supporting affirmation are dated March 10, 2005.
The Parties' Contentions
In support of its motion, the City argues that in reaching its valuation, Mobil's appraisal report stated that absent a zoning variance, the property could only be used for a "Home Depot or Staples type use." Its appraisal relied upon six comparable sales; in four, Home Depot was the grantee. The City further notes that in its rebuttal appraisal report, Mobil made reference to Home Depot's "interest in purchasing from Mobil `a 13.41 acre (584,326 square foot) parcel of land located at Kingsland Avenue and Calyer Street.'" Documents annexed to that report indicated that Home Depot first expressed an interest in the Kingsland-Calyer property as early as May 2000, but they did not indicate if a sale was consummated or, if not, why.
The City further alleges that after it learned of Home Depot's interest in the property, by letter dated March 22, 2001, it requested additional information from Mobil. Contending that Mobil did not respond to its demand, the City served the above discussed cross motion on May 1, 2002. The City now seeks an order permitting it to engage in further discovery concerning Home Depot's reasons for declining to further pursue its interest in the property. More particularly, the City indicates that it wishes to depose the Home Depot employees who were engaged in the negotiations and it refers to the reports prepared by Mobil's consultants in relation thereto.
Although not relevant to the issues now before the court, Mobil argues that it had, in fact, complied with the City's discovery demand when the cross motion was made.
In opposition, Mobil argues that title to the subject property vested in the City more than seven years ago. Further, appraisal reports were exchanged on May 10, 2000 and rebuttals were exchanged on June 19, 2001. The case was ready for trial on June 19, 2001, when a note of issue should have been filed, and a trial had been scheduled for July 1, 2002 by the Honorable Leonard Scholnick. Hence, the City has known of Home Depot's interest in the property since it received Mobil's rebuttal appraisal on June 19, 2001. Nonetheless, the City waited approximately one year to make its first motion seeking discovery with regard to Home Depot and waited over two more years, until the eve of trial, after a third attorney was assigned to the case, to request additional discovery. Mobil accordingly concludes that the City's application should be denied as untimely and on the grounds of laches.
Mobil also argues that the City has failed to establish that the reasons behind Home Depot's decision to abandon further action to purchase the near-by property are material and necessary to the issues to be determined herein. In addition, the City has made no showing that the persons involved in the decisions are still affiliated with Home Depot and if so, if the City will be able to acquire jurisdiction over them, so that it will be able to obtain the information that it seeks.
Discussion
As a threshold issue, the court recognizes that "pretrial disclosure may be allowed in a condemnation proceeding when warranted by the circumstances of the case and in the interest of justice" (White Plains Urban Renewal Agency v. 56 Grand St. Assocs., 47 AD2d 536, 536-537, citing Matter of Huie (Friedman's Lake View Hotel), 208 Misc 82; 3A Weinstein-Korn-Miller, NY Civ Prac, pars. 3101.21, 3140.01; see also CMRC v. State, 270 AD2d 27, 30 [the rules governing discovery are to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity]). Nonetheless, under the circumstances of this case, the City's motion must be denied.
In the first instance, the motion is untimely. In this regard, the court notes that the City filed its note of issue on November 7, 2003. Accordingly, it's demand for further discovery must comply with the court rules, 22 NYCRR 202.21, i.e., in order to establish that permission for further discovery should be granted, the City must demonstrate that "unusual or unanticipated circumstances . . . require additional pretrial proceedings to prevent substantial prejudice" ( see e.g. Rodriguez v. Sau Wo Lau, 298 AD2d 376 [since the defendant failed to move to vacate the note of issue within 20 days after its filing, she was required to demonstrate that unusual or unanticipated circumstances developed subsequent to the filing requiring additional pretrial proceedings to prevent substantial prejudice]; Perla v. Wilson, 287 AD2d 606 [since the defendants moved to compel the subject disclosure within 20 days after the note of issue was served, they were merely required to demonstrate why the case was not ready for trial, and were not required to establish that additional discovery was necessary because unusual or unanticipated circumstances had developed]; see generally Audiovox v. Benyamini, 265 AD2d 135).
22 NYCRR 202.21 (d) provides, in relevant part, that: "Where unusual or unanticipated circumstances develop subsequent to the filing of a note of issue and certificate of readiness which require additional pretrial proceedings to prevent substantial prejudice, the court, upon motion supported by affidavit, may grant permission to conduct such necessary proceedings."
Herein, the City cannot make such requisite showing, since the facts upon which its application is based have been known since at least June 2001. Moreover, the City made a previous motion seeking discovery with regard to Home Depot's interest in the near by property approximately three years ago; it offers no explanation as to why it did not seek third-party discovery at that time. Accordingly, having failed to sustain its burden of demonstrating the need for further discovery, its motion must be denied ( see e.g. Francis v. Board of Educ. of the City of Mount Vernon, 278 AD2d 449 [the court providently exercised its discretion in denying that branch of the plaintiffs' motion, made after the plaintiffs filed a note of issue and certificate of readiness, which was to compel the defendant to provide additional disclosure, since plaintiffs failed to offer any evidence of unusual or unanticipated circumstances that developed subsequent to the filing requiring additional pretrial proceedings to prevent substantial prejudice]; cf. Karakostas v. Avis Rent A Car Sys., 306 AD2d 381 [unusual or unanticipated circumstances sufficient to allow respondent to pursue additional discovery were present under circumstances where plaintiff served a supplemental response to discovery indicating for the first time that plaintiff would call an expert to testify about plaintiff's disability and lost future earnings after the filing of the note of issue]; see generally James v. New York City Tr. Auth., 294 AD2d 471 [defendants waived their right to conduct physical examinations of the injured plaintiff by their failure to move to vacate the note of issue within 20 days after service of it and the certificate of readiness]).
More significantly, the City has failed to establish that the information that it seeks is material and relevant to a determination of the value of the property, the issue to be determined herein. In the first instance, it is questionable whether the opinions of the Home Depot representatives or Mobil's consultant will be anything more than speculative in nature or have any probative value whatsoever, since it is unknown whether the individuals involved have any expertise in the field of real estate appraisal. Moreover, pursuant to 22 NYCRR 202.61 (e), "[u]pon trial, all parties shall be limited in their affirmative proof of value to matters set forth in their respective appraisal reports. Any party who fails to file an appraisal report as required by this section shall be precluded from offering any appraisal testimony on value." Accordingly, inasmuch as any opinion with regard to value, as predicated upon statements that may be obtained from further discovery, would not be included or referenced in the report of the City's appraiser, such statements would be inadmissible at trial (see e.g. White Plains Prop. v. Tax Assessor of White Plains, 44 NY2d 971 [the court properly excluded rebuttal testimony by a professional consulting engineer on the ground that it was an attempt to introduce expert testimony as to value which was not included in the report filed and exchanged with petitioners, so that such testimony precluded by the court rule]). Finally, even assuming that Mobil's appraiser made reference to the negotiations with Home Depot in arriving at his valuation, it is well settled that the City "is not entitled to disclosure of the thought processes underlying the appraiser's valuation of any particular parcel" ( Matter of Town of Mamakating v. New York State Bd. of Real Prop. Servs., 246 AD2d 844, 845-846; see generally Consolidated Edison Co. v. State Bd. of Equalization Assessment, 83 AD2d 355, 358, affd 58 NY2d 710 [not only does the rule aid in disclosure, but it allows opposing counsel to adequately prepare for an effective cross-examination of a party's expert witness, thereby abbreviating proceedings which must delve into complex construction, cost and engineering data]).
While the court recognizes that an appraiser's report may be amended at trial upon a showing of "good cause" in accordance with 22 NYCRR 202.61 (a) (3), the City has similarly failed to allege facts sufficient to entitle it to such relief ( see e.g. In re Acquisition of Real Property by City of Albany, 199 AD2d 746, 747-748 [1993] [petitioners failed to establish good cause for attempting to file a late appraisal report premised upon the conclusory assertion that due to a personnel change the appraisal report was "inadvertently lost, misplaced or misfiled"]; Salesian Soc. v. Ellenville, 98 AD2d 927, 928 [1983] [it has been held that inadvertence or oversight; the desire to permit introduction of an additional appraiser's theory; dissatisfaction with an attorney and appraisal report alone, without proof of undue hardship; or a failure by the movant to demonstrate how the alleged new evidence would benefit an appraiser's testimony have been held insufficient to establish good cause to entitle movant to leave to file a supplemental appraisal report]).
Conclusion
For the foregoing reasons, the City's motion is denied.
The foregoing constitutes the decision and order of the court.