Opinion
4020/04
6-2-2009
IN THE MATTER OF THE APPLICATION OF THE CITY OF NEW YORK RELATIVE TO ACQUIRING TITLE IN FEE SIMPLE, WHERE NOT HERETOFORE ACQUIRED FOR THE JONES WOODS PARK ADDITION TO THE SKYLINE PLAYGROUND.
Joseph Bavuso, Esq., Corp. Counsel of the City of NY, New York, NY. Richard A Steinberg, Esq., Brandt, Steinberg, & Lewis, New York, NY.
Upon the foregoing papers in this eminent domain proceeding, the City of New York (the City) moves for an order precluding claimant Belair Ridge Development Corp. (Belair) from offering into evidence the "Amended Appraisal" prepared by Brent Lally of Master Associates, Inc., dated January 13, 2009, on the ground that claimant has not obtained leave of court to file it and because it cannot show good cause for amending the original appraisal report dated August 31, 2007.
Facts and Procedural Background
This is the second motion to come before this court with regard to the appraisal reports filed in the instant proceeding. By way of background, and as is relevant herein, the City acquired title to the subject property (Block 89, Lot 1 and Block 96, Lot 1), vacant land with an area of approximately 9.53 acres, on June 14, 2005. The property has a hilly and steeply sloped terrain and is located in the Special Hillsides Preservation District of Staten Island.
On October 15, 2007, the parties exchanged appraisal reports.The report submitted by claimant found a unit value of $99 and valued the property at $19,200,000 (the Lally Report). The City valued the property at $105 per buildable foot, for a total value of $10,500,000, in a report prepared by Sterling Appraisals, Inc. (the Sterling Report). Both the Lally Report and the Sterling Report found that the highest and best use of the property was for the construction of multiple housing units. The widely disparate findings resulted from Lally's reliance upon the opinion rendered by Rampulla Associates Architects (the Rampulla Firm), who concluded that the property could be developed in a four-stage plan consisting of 163 units of approximately 1,190 square feet each, for a total buildable area of 193,970 square feet (163 units x 1,190 square feet). In contrast, Sterling relied upon a plan proposed by Henningston, Durham and Richardson Architecture and Engineering, P.C. (HDR), in which the firm concluded that the property could be developed with only 74 units of 1,356 square feet each, for a total buildable area of 100,344 square feet (74 units x 1,356).
Previously, the City moved for an order precluding claimant from offering the Lally Report into evidence, arguing that Lally's underlying assumption that claimant had a vested right to develop the subject property pursuant to plans approved by the New York City Department of Planning in 1990 was erroneous as a matter of law. Claimant cross moved for an order precluding the City from introducing the Sterling Report into evidence on the ground that the Report expressly states that consideration of discretionary approvals to vary the building requirements of the Special Hillsides Preservation District were not considered by HDR. By decision dated September 15, 2008, this court denied both the City's motion and claimant's cross motion seeking to preclude introduction of the appraisal reports.
In its cross motion, claimant also sought an order directing the deposition of Robert E. Englert, an architect employed by claimant to develop the property who is currently employed by the City; that branch of the cross motion was granted. Although both the City and claimant address the issue of whether Englert can still be deposed, inasmuch as neither party requests any relief with regard to the deposition, the issue will not be addressed in this decision.
At a status conference held on October 3, 2008, the court adjourned the proceeding pending the exchange of rebuttal appraisal reports. On February 5, 2009, the City exchanged a rebuttal report prepared by HDR Engineering, Inc., which rebuts claimant's contention that the property could be developed in accordance with the plans originally approved in 1990. Claimant exchanged the Amended Appraisal, which contains two additional sales, different adjustments and a greater development potential that resulted in an increased valuation of $25,386,000, or an increase of $6,186,000.
At a status conference held on February 6, 2009, the City objected to the Amended Appraisal. In accordance with the court's directive, the instant motion was filed.
The Parties' Contentions
The City
In support of its motion, the City argues that the Amended Appraisal no longer relies upon claimant's contention that it had a vested right to develop the property in accordance with plans approved in 1990 or that, even without the vested rights, the property could be developed as proposed in a site plan prepared by Englert in 1997. Instead, the Amended Appraisal contains a letter and site plan prepared by Calvanico, Inc. (Calvanico), in which it is concluded that the property contained 251,345 square feet of developable floor area, instead of the 193,970 that claimant alleged could be developed in the Lally Report.
The City argues that an appraisal report may be amended only upon good cause shown. Accordingly, the Amended Appraisal should be precluded, since claimant did not seek leave to file it as required by statute. Moreover, even if claimant were to make such a motion, it cannot show good cause. More specifically, the City argues that claimant cannot increase its estimate of the value by more than $6,000,000 because it is now dissatisfied with its original valuation. Nor should claimant now be permitted to discard the Lally Report and its theory of valuation because it now found a new planner who concluded that the property has far more development potential than the Rampulla Firm believed was possible. The City further points out that in response to their earlier motion to preclude introduction of the Lally Report, claimant did not cross move for leave to amend its report, but instead defended the valuation set forth in the Lally Report.
Claimant
In opposition to the motion, claimant argues that the Amended Appraisal directly rebuts the City's as of right development plan by offering a more intensive and valuable use that is equally without need for speculation as to its probable realization. In addressing the assertion that the Amended Appraisal relies upon two additional sales, claimant asserts that the City fails to appraise the court that these sales were first submitted in the Sterling Report. The City also fails to note that in analyzing these sales, Lally arrived at unit values below those offered in the Sterling Report. More significantly, claimant argues that the City fails to acknowledge that the new plan formulated by Calvanico is an as of right development plan and as such, it directly responds to and rebuts Sterling's conclusion that the highest and best use of the property was that produced by the plan offered by the City. In this regard, claimant contends that the Calvanico plan establishes a use for the property that can be relied upon as producing a highest and best use which is both reasonable and probable at the time of taking.
The Law
In addressing the issues raised herein, the court first recognizes that court rules control the exchange and content of appraisal reports submitted in tax assessment and condemnation proceedings. The rules provide that appraisal reports "must contain a statement of the method of appraisal relied on and the appraiser's conclusions as to the property's value, along with facts, figures and calculations by which the conclusion was reached" (Bialystock & Bloom v Gleason, 290 AD2d 607 [2002], citing 22 NYCRR 202.59[g][2]).
22 NYCRR 202.59(g)(2), which pertains to appraisal reports in tax assessment review proceedings in counties outside the City of New York, provides that:
"The appraisal reports shall 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. If sales, leases or other transactions involving comparable properties are to be relied on, they shall be set forth with sufficient particularity as to permit the transaction to be readily identified, and the report shall contain a clear and concise statement of every fact that a party will seek to prove in relation to those comparable properties. The appraisal reports also may contain photographs of the property under review and of any comparable property that specifically is relied upon by the appraiser, unless the court otherwise directs."
The language of 22 NYCRR 202.60 (g) (3), which pertains to tax assessments review proceedings in the counties within the City of New York, is identical, except that the final sentence provides that "[t]he appraisal reports also shall contain photographs of the property under review and of any comparable property that specifically is relied upon by the appraiser, unless the court otherwise directs."
As is also relevant here, CPLR 3140 provides, in pertinent part, that "the chief administrator of the courts shall adopt rules governing the exchange of appraisal reports intended for use at the trial in proceedings for condemnation." 22 NYCRR 202.61(a)(1) provides that appraisal reports "shall be filed no later than nine months after service of the claim, demand or notice of appearance required by section 503 of the Eminent Domain Procedure Law unless otherwise extended by the court." 22 NYCRR 202.61(a)(2) provides that "[i]f a party intends to offer at trial expert evidence in rebuttal to any report, an expert's report shall be filed within 60 days after receipt of the document sought to be rebutted." Also relevant herein is 22 NYCRR 202.61(a)(3) provides that:
"(3) Upon application of any party upon such notice as the court in which the proceeding is pending shall direct, the court may, upon good cause shown, relieve a party of a default in filing a report, extend the time for filing reports, or allow an amended or supplemental report to be filed upon such conditions as the court may direct."
22 NYCRR 202.61(c) states that "[t]he contents and form of each appraisal report including any rebuttal, amended or supplementary report, shall conform to the requirements of sections 202.59(g) and 202.60(g) of this Part."
In addressing the issue of what constitutes good cause to file an amended or supplemental appraisal report:
"It has been held that inadvertence or oversight is not good cause (Matter of Consolidated Edison Co. v State Bd. of Equalization & Assessment, 83 AD2d 355, affd 58 NY2d 710), nor is the mere desire to introduce a new theory or new evidence (see Matter of City of Troy v Board of Assessors, 53 AD2d 794; Home Gas Co. v Miles, 40 AD2d 896). Finally, dissatisfaction with an attorney and the appraisal report, without proof of undue hardship, does not constitute good cause (Laken Realty Corp. v State of New York, 37 AD2d 885)."
(Niagara Mohawk Power v Peryea, 102 AD2d 986, 986 [1987]; accord Salesian Soc. v Village of Ellenville, 98 AD2d 927 [1983], citing Matter of Consolidated Edison Co., 83 AD2d 355 [1981], affd 58 NY2d 710 [1982]; Binghamton Urban Renewal Agency v Levene, 34 AD2d 241 [1970]). Similarly, leave to file a supplemental appraisal report has been denied under circumstances where "no convincing reason is given why the appraisal could not also have included therein whatever additional factual support' or greater detail' she now seeks to proffer by way of a supplemental appraisal" (Matter of Acquisition of Country Knolls Water Works, 229 AD2d 859, 860 [1996]; cf. In re Town of Guilderland, 267 AD2d 837, 838 [1999] [the court did not err in permitting petitioner to file a supplemental appraisal incorporating claimants' sale of a portion of the land which had not been acquired given that since this ostensibly arm's length transaction occurred after petitioner's appraisal was filed, it cannot be said that the failure to include it was due to inadvertence or oversight]).
Discussion
Herein, a review of the Amended Appraisal supports the City's contention that it is not a rebuttal report, but is instead a report setting forth a new valuation of the property based upon the claim that it has greater development potential than was first set forth in the Lally Report. Hence, the Amended Appraisal is based upon facts that were known to claimant at the time that the Lally Report was prepared and does nothing more than offer a new theory upon which to value the property. Claimant also fails to establish that it will suffer from any hardship if it is precluded from relying upon the Amended Appraisal at trial. Accordingly, having already exchanged the Lally Report, the above quoted court rules do not permit claimant to now file a second, substantially different appraisal report (see generally 22 NYCRR 202.61).
Even if the court were to construe claimant's opposition to the City's motion as a request to exchange an amended appraisal report, the request would also be denied, since the above discussed case law clearly establishes that the mere desire to introduce a new theory or new evidence does not constitute good cause to permit a party to amend an appraisal report (see Niagara Mohawk Power, 102 AD2d 986; Salesian Soc., 98 AD2d 927; Matter of Consolidated Edison Co., 83 AD2d 355; Matter of City of Troy v Board of Assessors, 53 AD2d 794; Home Gas Co. v Miles, 40 AD2d 896; Binghamton Urban Renewal Agency v Levene, 34 AD2d 241 [1970]).
Conclusion
Accordingly, the City's motion seeking an order precluding claimant from offering the Amended Appraisal, dated January 13, 2009, into evidence at trial is granted.
The foregoing constitutes the order and decision of this court.