Opinion
# 2011-038-534 Claim No. 117953 Motion No. M-78853 Cross-Motion No. CM-78958
06-30-2011
ISLAND PARK, LLC v. STATE OF NEW YORK
Synopsis
On motion and cross motion for summary judgment, a claim alleging a de facto taking of a property interest in a private railroad crossing is dismissed. The Department of Transportation's closure of a railroad crossing pursuant to Railroad Law § 97 is an exercise of the sovereign's police power, which, as distinguished from an appropriation in an exercise of the power of eminent domain, is not a compensable taking of property. Case information
UID: 2011-038-534 Claimant(s): ISLAND PARK, LLC Claimant short name: ISLAND PARK Footnote (claimant name) : Defendant(s): STATE OF NEW YORK Footnote (defendant name) : Third-party claimant(s): Third-party defendant(s): Claim number(s): 117953 Motion number(s): M-78853 Cross-motion number(s): CM-78958 Judge: W. BROOKS DeBOW YOUNG, SOMMER, WARD, RITZENBERG, BAKER & MOORE, LLC Claimant's attorney: By: J. Michael Naughton, Esq. ERIC T. SCHNEIDERMAN, ATTORNEY GENERAL OF THE STATE Defendant's attorney: OF NEW YORK By: Michael A. Sims, Assistant Attorney General Third-party defendant's attorney: Signature date: June 30, 2011 City: Albany Comments: Official citation: Appellate results: See also (multicaptioned case) Decision
This claim seeks compensation for damages flowing from an alleged de facto taking of claimant's property interest in a railroad crossing known as Abele's Crossing, which was closed pursuant to an administrative order of the New York State Department of Transportation (NYSDOT). The claim asserts two causes of action, the first seeks compensation for the State's alleged de facto acquisition of claimant's interest in Abele's Crossing, and the second is for diminishment of value of claimant's property and other consequential damages from the alleged de facto taking. Claimant moves for partial summary judgment on the issue of liability. Defendant opposes claimant's motion and cross-moves for summary judgment dismissing the claim on various grounds.
The parties agree that there are no disputed issues of material facts (see Naughton Affidavit, ¶ 38; Sims Affirmation, ¶ 41), and the undisputed facts are as follows. Claimant owns nearly 400 acres of farmland in Rensselaer County, New York, upon which it cultivates trees, shrubs and sod for nurseries and landscaping. Railroad tracks that are owned by non-party CSX Transportation, Inc. (CSX) bisect claimant's property such that approximately 300 acres lie to the east of the tracks and 70 acres lie to the west. Access between the cultivated fields on the east and west sides of the tracks was provided by Abele's Crossing, an at-grade crossing that was accessible from a private, unpaved road on claimant's property, and which was used by claimant and its predecessors for many years to move farm equipment and supplies back and forth between the parcels that are separated by the tracks. In February 2006, following an administrative hearing and related proceedings, NYSDOT issued an administrative order directing that Abele's Crossing be closed, and that such closure be implemented by CSX. Following extensive federal and state litigation as discussed in greater detail below, Abele's Crossing was closed on November 25, 2009, when CSX installed concrete barricades and posted signs.
This claim for money damages is at least the fourth judicial action by claimant and its predecessors in interest involving access to Abele's Crossing. Following conduct by Conrail (CSX's predecessor) that effectively eliminated the crossing, an action in Supreme Court, Rensselaer County concluded in 1989 with a judgment enforcing a stipulation between the parties that, inter alia, required Conrail and its successors to maintain Abele's Crossing for the plaintiffs and their successors in perpetuity.
After NYSDOT's issuance in 2006 of its order directing CSX to close Abele's Crossing, claimant commenced an action in federal district court seeking to permanently enjoin the closure of Abele's Crossing (see Island Park, LLC v CSX Transp., Inc., 2007 WL 1851784 [NDNY 2007]). The District Court held in claimant's favor on the ground that Railroad Law § 97 - pursuant to which NYSDOT acted - was preempted by federal law (see id. at *14), and permanently enjoined NYSDOT from employing Railroad Law § 97 to order the closure of Abele's Crossing (id. at *15). The District Court's order was reversed on defendants' appeal to the Second Circuit (see Island Park, LLC v CSX Transp., 559 F3d 96 [2d Cir 2009]) in part on the ground that NYSDOT's order was not preempted by federal law (id. at 108). After remand, the District Court reviewed the issues that remained unaddressed, and dismissed the complaint see Island Park, LLC v CSX Transp., 2010 WL 346828 [NDNY 2010]).
Shortly after commencement of the federal action, claimant also sought judicial review of NYSDOT's determination to close Abele's Crossing in State court pursuant to Article 78 of the CPLR (see Matter of Island Park, LLC v New York State Dept. of Transp., 61 AD3d 1023 [3d Dept 2009]). Finding that NYSDOT's order was guided by an objective standard and was supported by substantial evidence, the Appellate Division confirmed NYSDOT's determination to close Abele's Crossing. In sum, although claimant is the beneficiary of a judgment essentially requiring CSX to maintain Abele's Crossing for claimant's benefit, litigation by claimant to prevent the closure of Abele's Crossing has been unsuccessful.
In support of its motion for summary judgment on this claim for money damages, claimant argues that it is entitled to judgment as a matter of law because its cognizable property interest in Abele's Crossing was established in the Article 78 proceeding, and that the Appellate Division's finding in that regard must be given res judicata or collateral estoppel effect. Defendant offers no argument in opposition to this point. Claimant further argues that the closure of Abele's Crossing has effected a de facto taking of claimant's cognizable property interest in Abele's Crossing, and that there are no issues of fact to be tried on the question of liability. In support of its cross motion, defendant asserts numerous arguments, among them that NYSDOT's issuance of the order closing Abele's Crossing was not an exercise of the State's power to appropriate property, but was an exercise of the sovereign's police power that is not compensable. Defendant also contends, inter alia, that this claim is untimely. Having thoroughly considered the parties' submissions and all of the arguments made by both sides, the Court turns first to defendant's cross motion.
To the extent that claimant opposes defendant's cross motion on the ground that judicial estoppel should apply to preclude defendant from taking any position in this claim that is inconsistent with positions asserted by defendant in the prior related litigation, such an argument is unavailing. Defendant's contention in earlier litigation that a remedy in the nature of damages must be sought in the Court of Claims is not necessarily inconsistent with defendant's assertion of substantive arguments addressed to the merits of the claim that is subsequently brought. Further, inasmuch as the Court will hold that the claim was timely commenced (see infra), the Court need not address judicial estoppel with respect to defendant's statements in prior litigation that the controversy at hand was then unripe.
As defendant asserts, Court of Claims Act § 10(1) provides in relevant part that "[a] claim for the appropriation by the state of lands, or any right, title or interest in or to lands shall be filed within three years after the accrual of such claim. . ." Whether this claim for damages was timely commenced turns upon whether it accrued when claimant received NYSDOT's determination to close Abele's Crossing or when the crossing was actually closed. Defendant contends that the claim, which was filed on January 27, 2010, is untimely because it accrued on March 7, 2006 when claimant received a copy of the administrative order of NYSDOT directing closure of Abele's Crossing. Claimant argues that NYSDOT's order was effectively stayed by injunctive relief that was issued by the federal district court, and thus, the claim accrued no earlier than August 10, 2009, when the injunctive relief terminated. Claimant further argues, however, that the claim did not, in fact, accrue until November 25, 2009, the date on which Abele's Crossing was barricaded.
The event which defendant argues is the accrual date of this claim - claimant's receipt of NYSDOT's administrative order - is the event that would trigger the period within which an aggrieved party may commence a proceeding pursuant to Article 78 of the CPLR to review an administrative determination (see Matter of Biondo v New York State Bd. of Parole, 60 NY2d 832, 834 [1983]; see also Matter of Village of Westbury v Department of Transp. of State of N.Y., 75 NY2d 62, 72 [1989]). This action, however, is not a proceeding seeking review of NYSDOT's determination to close Abele's Crossing, but is a claim sounding in the "de facto taking of Island Park's interest in the Crossing" (Claim No. 117953, ¶7). In other words, this claim does not seek review of the process and/or substance of NYSDOT's administrative determination (as compared to the Article 78 proceeding), but now seeks compensation for the consequences of that determination, i.e., the interference with claimant's alleged property interest in, and use of, Abele's Crossing. A cause of action sounding in de facto taking of real property accrues when an entity with condemnation powers interferes with the plaintiff/claimant's "physical use, possession, and enjoyment of the property" (Sarnelli v City of New York, 256 AD2d 399, 400-401 [2d Dept 1998], lv denied 93 NY2d 804 [1999]; see Carr v Town of Fleming, 122 AD2d 540, 541 [4th Dept 1986]). Thus, because this de facto taking claim was filed on January 27, 2010, within three years of November 25, 2009 - the date on which Abele's Crossing was permanently barricaded - it was timely commenced.
Turning to defendant's argument that damages are not recoverable because the State was exercising its police powers, the parties do not dispute that in closing Abele's Crossing, NYSDOT was acting pursuant to the authority of Railroad Law § 97 (see Claim No. 117953, Exhibit E, at p 11; see generally Matter of Island Park, LLC v New York State Dept. of Transp., supra; see also Island Park, LLC v CSX Transp., 559 F3d at 99). Railroad Law § 97(3) provides, in relevant part, as follows:
In order to insure public safety, the commissioner may, if he or she determines it appropriate, require alterations in an existing private rail crossing, including a farm crossing, which is located in an intercity rail passenger service corridor [emphasis added].
Defendant asserts that its closure of Abele's Crossing was an exercise of the sovereign's police power, and not its power of eminent domain, and that injuries sustained as a result of an exercise of police power are not compensable. Focusing not upon the nature of defendant's authority, but upon the result of defendant's determination, claimant argues that its property interest in Abele's Crossing was subjected to a de facto taking for which it must be compensated.However, the compensability of an alleged taking of property is adjudicated not upon the fact that there has been a loss of a property right, but upon the nature of the State's action (see e.g. Lutheran Church In Am. v City of New York, 35 NY2d 121, 128-129 [1974] ["Where government acts in its enterprise capacity, as where it takes land to widen a road, there is a compensable taking. Where government acts in its arbitral capacity, as where it legislates zoning or provides the machinery to enjoin noxious use, there is simply noncompensable regulation"]). Thus, determination of the parties' motions requires analysis of the nature of defendant's action in determining to close Abele's Crossing.
Claimant expressly contends: "The State's motive for closing the crossing is not relevant to the question presented in this case. The issue is whether the State's order to close the crossing resulted in a de facto taking of Island Park's 'cognizable property interest' " (Naughton Reply Affidavit, ¶ 13).
"Eminent domain is the power vested in the state as sovereign to take private property for public use without the consent of the owner whenever necessity demands, upon making just compensation" (51 NY Jur 2d, Eminent Domain § 1). In other words, property that is owned by an individual member of the community is "appropriated" for a public use for the benefit of the whole community (see id.), such as construction of public highways, creation of public parks, or other such usage. The State constitution commands that "[p]rivate property shall not be taken for public use without just compensation" (NY Const, art 1, § 7[a]), and thus, "[t]he taking of property under the power of eminent domain operates as a sale or purchase thereof" (51 NY Jur 2d, Eminent Domain § 2). An example of an exercise of the power of eminent domain is provided by claimant itself, insofar as NYSDOT is appropriating a portion of claimant's property separate and apart from Abele's Crossing for the purpose of constructing a public road/bridge (see Buono Affidavit, ¶ 29, and Exhibit B).
An exercise of the police power is not a taking of private property for public use, but is in the nature of governmental regulation of the private use of property to protect public safety or the general welfare. There is a "sharp distinction between the powers of eminent domain and of regulation under the police power . . . in that in its exercise police power is exerted to regulate the use and enjoyment of property by the owner or to take away or destroy property to promote the general welfare or to conserve the safety, health or morals of the public" (Matter of Bronx Chamber, Inc. of Commerce v Fullen, 174 Misc 524, 530 [Sup Ct NY County 1940]). Generally, "any loss arising upon the exercise of the police power is noncompensable" (51 NY Jur 2d Eminent Domain § 3; see Matter of Bronx Chamber of Commerce, Inc. v Fullen, at 530), including the loss of an interest in real property (see Terrace Hotel Co. v State of New York, 19 NY2d 526, 528 [if the Legislature had chosen to exercise police power to acquire negative easements to restrict property owners' use of property, it could have done so "without paying anything" for the easements]; Matter of Jordan v Smith, 137 Misc 341, 345 [SCt NY County 1930], affd 254 NY 585 [1930] ["[a]n act in the interest of the public health or welfare may occasion incidental injury and disadvantage to property, which must be borne without compensation"]). A "taking under police power is under the maxim 'sic utere tuo ut alienum non laedas' " (Matter of Bronx Chamber of Commerce, Inc. v Fullen, supra, at 530), that is, "one should use his own property in such a manner as not injure that of another" (Black's Law Dictionary 1380 [6th ed]). When the State's exercise of the police power occasions a loss, "the loss is damnum absque injuria" (Matter of Bronx Chamber of Commerce, Inc. v Fullen, supra, at 535), or "injury for which the law furnishes no redress" (79 NY Jur 2d Negligence § 3; see also Tenement House Dept. of City of N.Y. v Moeschen, 179 NY 325, 330 [1904], affd 203 US 583 [1906] [exercise of the police power causing expense or loss of property is noncompensable]). An exercise of the police power may, however, constitute a compensable taking where it "impose[s] so onerous a burden on the property regulated that it has, in effect, deprived the owner of the reasonable income productive or other private use of his property and has destroyed its economic value. In all but exceptional cases, nevertheless, such a regulation does not constitute a 'taking,' and is therefore not compensable" (Fred F. French Inv. Co. v City of New York, 39 NY2d 587, 593 [1976]).
Viewing the determination to close Abele's Crossing by looking at the nature of the State's action rather than the effect of its action, it is manifest that NYSDOT's determination to close the crossing was an exercise of the police power. In general, the State's control over railroad crossings and its determinations regarding alterations to railroad crossings have historically been defined as an exercise of the police power (see Miller v State of New York, 277 AD2d 770 [3d Dept 2000]; Matter of East Seneca St. Grade Crossing in City of Oswego, 244 App Div 664, 667 [4th Dept 1935], affd 271 NY 567 [1936]; Matter of Highway-Railroad Crossings at Grade Operated by N.Y. Cent. R.R. Co., 251 App Div 72, 77 [4th Dept 1937]), and in the prior federal litigation over the closure of Abele's Crossing, the District Court and the Second Circuit both perceived NYSDOT's determination as an exercise of the police power (see Island Park, LLC v CSX Transp., Inc., 2007 WL 1851784, at *14; 559 F3d 96, 102; 2010 WL 346828, at *3). As specifically pertinent to this claim, Railroad Law § 97(3) expressly states that the commissioner may make alterations to a farm crossing such as Abele's Crossing "[i]n order to insure public safety." Thus, as a matter of law, NYSDOT's closure of Abele's Crossing was an exercise of the police power, and accordingly, any damages allegedly suffered by claimant are not compensable.Moreover, although claimant demonstrates that the closure of Abele's Crossing requires claimant to transport its farm equipment 4.7 miles over public roads to access the fields that are bisected by the CSX tracks, and claimant asserts that doing so has had a "substantial negative impact" on claimant's farm operations (see Buono Affidavit, ¶¶ 21-25), these averments of injury do not raise an issue of fact with regard to whether the economic value of claimant's property has been destroyed such that the closure would constitute a taking entitling claimant to compensation, and defendant's right to summary judgment is not defeated.
Despite its assertion that the State's motive in closing Abele's Crossing is irrelevant (see Naughton Reply Affidavit, ¶ 13, supra), claimant contends that its interest in Abele's Crossing was subjected to a taking because the determination to close the crossing was part and parcel of a plan by NYSDOT to construct a bridge over the CSX tracks at a nearby location, in furtherance of a plan to implement a high-speed rail project (see Naughton Reply Affidavit, ¶¶ 14-16, and exhibits thereto). The fact that NYSDOT considered whether access over the tracks might be provided by a nearby bridge in conjunction with its determination to close Abele's Crossing does not, in the view of the Court, raise an issue of fact with respect to whether Abele's Crossing was closed for reasons of safety.
Claimant's reliance upon Walsh v State of New York (UID # 2008-028-001, Claim No. 104981, Sise, P.J. [Jan. 17, 2008]) for the proposition that the State may be liable for a de facto taking pursuant to Railroad Law § 97 is unavailing. In Walsh, as in this case, NYSDOT directed the closure pursuant to Railroad Law § 97 of a railroad crossing over tracks that bisected claimants' property. However, the issue in Walsh was not whether there had been a compensable de facto taking, but whether NYSDOT had acted lawfully when it closed the crossing without notice to the Walshes as required by Railroad Law § 97 and its implementing regulations. The State was found liable because it failed to notify the claimants that the crossing would be closed, but the issues relating to damages remain to be tried. The Court's decision involves the due process provisions of Railroad Law § 97, and does not address whether the closing of Walsh's Crossing was an exercise of the police power or a compensable taking, and thus, it does not support claimant's contention that the State must be held liable for a de facto taking of Abele's Crossing.
Claimant's reliance on Railroad Law § 97(5) is similarly misplaced. That subsection provides that:
The commissioner shall have the power to acquire any real property, easements, rights of way or similar rights necessary for the purposes of this article in the same manner as property is acquired for state highway purposes pursuant to the provisions of section thirty of the highway law.
Manifestly, this provision does not expressly mandate appropriation of, and compensation for, all interests in property that may be affected by a determination under Railroad Law § 97(3). Nor does interpretation or construction of Railroad Law § 97 as a whole (see McKinney's Cons Laws of NY, Book 1, Statutes § 97; Friedman v Connecticut Gen. Life Ins. Co., 9 NY3d 105, 115 [2007]) support claimant's contention that defendant should have compensated claimant for its interest in Abele's Crossing. Railroad Law § 97(3) generally addresses the alteration of railroad crossings, including closures thereof, and it is perfectly reasonable to construe the authority to condemn and compensate as being necessarily exercised only when an alteration of a crossing requires the acquisition of private property for public use.For example, if a determination to alter a crossing involved changing it from an at-grade crossing to a separated (bridged) crossing, the State might need to appropriate property on either side of the tracks upon which the bridge could be constructed and might therefore be required to exercise the authority granted to it by Railroad Law § 97(5). But the closing of an at-grade crossing for the purpose of preventing collisions between passenger trains and farm equipment, as was the case in this instance, is manifestly an exercise of the police power, and does not implicate the acquisition of private property for public use. Thus, an "as a whole" reading of Railroad Law § 97 does not require NYSDOT to exercise its authority under Railroad Law § 97(5) in all cases when it alters a railroad crossing pursuant to Railroad Law § 97(3).
Indeed, in the jargon of condemnation, the phrase "acquire any real property, easements..." does not mean the acquisition of easements held by others, but the acquisition from fee owners of easements in favor of the State that are necessary for the State to effectuate its projects (see e.g. New York Central Lines, LLC v State of New York, UID # 2010-016-055, Claim No. 102648, Marin, J. [Aug. 26, 2010]; Dufel v State of New York and The New York Thruway Auth., UID # 2009-009-203, Claim No. 78568, Midey, Jr., J. [Sept. 9, 2009]).
To the extent that the claim asserts two separate causes of action - one seeking the value of the easement over Abele's Crossing and the other seeking consequential and other damages - such causes of action merely set forth different categories of damages that flowed from NYSDOT's determination to close Abele's Crossing. Inasmuch as that exercise of the police power is non-compensable, both causes of action for damages must be dismissed. All of the cases upon which claimant relies for the proposition that it is entitled to consequential damages involved compensable takings (see Wilmot v State of New York, 32 NY2d 164 [1973]; Priestly v State of New York, 23 NY2d 152 [1968]; Tauzel v State of New York, 82 AD2d 933 [3d Dept 1981]; Hinkley v State of New York, 30 AD2d 584 [3d Dept 1968]; King v State of New York, 29 AD2d 604 [3d Dept 1967]; J.G.C. Hage Realty, Inc. v State of New York, UID # 2009-018-048, Claim No. 105407, Fitzpatrick, J. [Oct. 2, 2009]). In the absence of a compensable taking, a cause of action for consequential damages cannot be stated.
As noted above, the Court has thoroughly considered all of the arguments presented by claimant in support of its motion for summary judgment and by defendant in support of its cross motion for summary judgment. In light of the analysis and conclusions stated above, no discussion of the remaining issues is necessary.
Accordingly, it is
ORDERED, that claimant's Motion No. M-78853 is DENIED, and it is further
ORDERED, that defendant's Cross Motion No. CM-78958 is GRANTED, and Claim No. 117953 is DISMISSED.
June 30, 2011
Albany, New York
W. BROOKS DeBOW
Judge of the Court of Claims
Papers considered:
(1) Claim No. 117953, filed January 27, 2010; (2) Verified Answer, filed March 30, 2010; (3) Notice of Motion, dated September 28, 2010; (4) Affidavit of J. Michael Naughton, Esq., sworn to September 27, 2010, with Exhibits 1-8; (5) Affidavit of Joseph Buono, sworn to September 27, 2010, with Exhibits A-B; (6) Claimant's Memorandum of Law in Support of Motion for Partial Summary Judgment, dated September 28, 2010, with Exhibit A; (7) Cross-Notice of Motion for Summary Judgment Dismissing Claim & Opposing Claimant's Motion for Partial Summary Judgment, dated October 13, 2010; (8) Affirmation Supporting Cross-Motion for Summary Judgment & Opposing Claimant's Motion for Partial Summary Judgment, dated October 13, 2010, with Exhibits A-C, including Affidavit of Edward R. Rosen, sworn to October 13, 2010; (9) Reply Affidavit of J. Michael Naughton, Esq., sworn to October 29, 2010, with Claimant's Appendex of Exhibits, dated October 29, 2010; (10) Claimant's Reply Memorandum of Law in Further Support of Motion for Partial Summary Judgment, dated October 29, 2010; (11) Defendant's Surreply Opposing Claimant's Motion for Partial Summary Judgment, dated November 12, 2010; (12) Letter-Brief of J. Michael Naughton, Esq., dated March 14, 2011; (13) Defendant's Memorandum of Law Concerning Applicability and Effect of Railroad Law § 94(8), dated March 21, 2011.