Opinion
May 31, 1967
Appeal from an order of the Supreme Court, Delaware County, confirming a report of the Commissioners of Appraisal awarding business damage to respondent. The award here involved was made by the commission pursuant to section K41-44.0 (now K51-44.0) of the New York City Administrative Code for alleged business damage caused by the city's construction of the Pepacton Reservoir. Respondent bank, located at Downsville, New York, has been in business since 1905. In October, 1947 the city started acquiring properties in the Downsville area for the Pepacton project. The acquisitions were completed in April, 1954. Respondent urges that the takings caused many of its depositors to move, but the city's proof shows that most of these people departed from the area for reasons other than the takings. The contention strongly urged by respondent on this appeal is that it has lost approximately $300,000 per year in farm loan business because of the acquisition of some 114 farms in the area. This alleged loss is entirely hypothetical. The bank's expert reasoned that had these farms been left intact through the years following World War II there would have been farm indebtedness of more than $900,000 in the area, and that respondent's share of this business should have been roughly $300,000. The commission's award of $45,000 was based on an asserted $6,000 per year income lost on the $300,000 in loans which might have been outstanding had there been no loss of these farms, and also upon the finding that after 1945 respondent changed from a conservative lending institution to an aggressive one. It is obvious that the basis of damages was entirely hypothetical. In fact, the record shows that the respondent's loans in 1945 totaled only $78,000. Its loan business tripled to $213,000 by 1957 and has never suffered any actual decrease. The claim here is for a loss of potential business based on speculation as to the business that might have been done had the farms remained in the area and based on respondent's more aggressive loan policies. While the allowance for decrease in business value where businesses are not actually taken under section K51-44.0 of the Administrative Code of the City of New York is a departure from the usual eminent domain rule, we are not aware that this liberality extends to cases such as this where the decrease is measured by hypothetical future profits. We perceive no reason to depart from the usual rule in this situation (see New York Cent. R.R. Co. v. Maloney, 234 N.Y. 208; Levitin v. State of New York, 12 A.D.2d 6; Matter of Niagara, Lockport Ontario Power Co. v. Horton, 231 App. Div. 402). Section K51-44.0 provides for damages for an established business "directly or indirectly decreased in value". We do not read "indirectly" to mean "potentially". An actual loss of business must be proved (see Matter of Ford [ Siska], 24 A.D.2d 14). There must be proof of an actual decrease in business which can be traced to the takings. In the instant case, however, we find a steady increase in actual business. That these increases might have been greater had it not been for the takings can in no way be proved with the degree of certainty necessary to support an award either under the usual rules of eminent domain, or under section K51-44.0. Order reversed, on the law and the facts, and claim dismissed, without costs. Gibson, P.J., Herlihy, Reynolds, Aulisi and Staley, Jr., JJ., concur in memorandum by Aulisi, J.