Opinion
No. 118580.
01-04-2013
RONMAR REALTY, INC., Claimant, v. STATE of New York, Defendant.
Flower, Medalie & Markowitz by Edward Flower, Esq., for Claimant. Hon. Eric T. Schneiderman, Attorney General of the State of New York by James Burke Assistant Attorney General, for Defendant.
Flower, Medalie & Markowitz by Edward Flower, Esq., for Claimant.
Hon. Eric T. Schneiderman, Attorney General of the State of New York by James Burke Assistant Attorney General, for Defendant.
JAMES H. FERREIRA, J.
This is a timely filed claim for the temporary taking of property and improvements owned by claimant Ronmar Realty, Inc., pursuant to Section 30 of the Highway Law and the Eminent Domain Procedure Law (hereinafter “EDPL”) in a proceeding entitled SH 912 Port Jefferson–Coram, Map No. 484 TE Parcel No. 495, Town of Brookhaven, County of Suffolk, State of New York. Vesting by defendant State of New York occurred on March 7, 2008. The claim was filed on June 25, 2010. The appropriation map and description contained therein is adopted by the Court and incorporated by reference.
The issue before the Court is the appropriate measure of damages arising from the taking of a temporary easement, which allegedly encumbers the highway frontage and the use of claimant's parcel. The Court's jurisdiction is limited to adjudicating the claim based upon the evidence presented, and the Court's responsibility is to put the claimant in the same position it would have been, absent the condemnation. The date of valuation used by the Court is the vesting date. The vesting date is the date the State of New York filed the taking map in the county clerk's office. This date is used, frozen in time, without regard to any change in the economy in the months and years from vesting to trial.
Although the claim states that it is for a permanent and temporary taking of property, it is undisputed that defendant appropriated only a temporary easement on claimant's property.
A trial on this appropriation claim was held on August 14, 2012. Claimant called two witnesses, Ronald Diamond, the President of Ronmar Realty, and Elinor Brunswick, a real estate appraiser, to testify on its behalf. Claimant also offered documents, including photos, a survey map, an acquisition map and an appraisal report, which were received into evidence without objection. Defendant's witnesses included Joseph Ludwig, a civil engineer with the New York State Department of Transportation (hereinafter “DOT”) and Patrick Given, a real estate appraiser. Additionally, defendant offered an appraisal report and a document reflecting the termination of the temporary easement.
After the trial and with the consent of claimant's counsel, defendant's counsel submitted for inclusion in the record a copy of the Certification of Termination of Temporary Easement along with the Notice of Acknowledgment of the filing of same with the County Clerk of the County of Suffolk. The Court will receive the five-page document (cover letter dated August 28, 2012, included) into evidence as defendant's exhibit B.
The Court has made the required viewing of the property which is the subject of this claim. To the Court's knowledge, this claim has not been assigned or submitted to any other court or tribunal for audit or determination. The appraisers of both parties do not dispute that claimant is the owner of the property (see claimant's exhibit 5 at 4, 5; defendant's exhibit A at 3; see also claimant's exhibit 1). Thus, the Court finds that claimant has established title to the subject property.
FACTS
The parties stipulated to several underlying facts (see claimant's exhibit 3). Defendant vested title to a temporary easement in the subject property on March 7, 2008. The temporary easement terminated on October 6, 2011 (see defendant's exhibit B). The parties stipulated that the market value of the subject property absent the temporary easement both before and after the appropriation of said easement was $775,000.00; that the land value of the subject property both before and after the taking was $21.00 per square foot; and that no permanent fee taking was involved in this matter (see claimant's exhibit 3). Both claimant and defendant agree that the size of the temporary easement is 939 square feet and that a rate of return at 12% (the annual rate of return a reasonable investor could expect to receive on an asset of this value) is appropriate (see Tr. 49; claimant's exhibit 5 at 4, 77; defendant's exhibit A at 3, 87).
References to the trial transcript are delineated herein as (Tr. –––).
The subject property is an irregular shaped parcel of 12,441 square feet located at 1651 Route 112, within the hamlet of Port Jefferson Station in the Town of Brookhaven, County of Suffolk, and runs along the east side of Route 112. The parcel has an approximate rear width of 72.5 feet and highway frontage of 77.34 feet, with a northern boundary of 184.89 feet in width and a southern boundary of 158.13 feet in width (see claimant's exhibit 6). The parcel is located in a J Business 2 zoning district in accordance with the Town of Brookhaven Land Use Code. The subject property is used for commercial retail purposes, specifically a costume and magic shop, which is housed in a one story 2,987 square foot building with a full basement and two front entrances. The building is set back approximately 79 feet from the front property line (claimant's exhibit 6). The parking lot has 14 parking spaces (Tr. 110).
The size and location of the temporary easement is depicted as the area in red hash marks on claimant's exhibit 6. The DOT Acquisition Map describes the temporary easement as follows:
TEMPORARY EASEMENT FOR WORK AREA
A temporary easement to be exercised in, on and over the property delineated above for the purpose of a work area in connection with the construction or reconstruction of the highway and appurtenances for use and exercisable during the construction or reconstruction of the highway and terminating upon the approval of the completed work, unless sooner terminated if deemed no longer necessary for highway purposes and released by the Commissioner of Transportation or other authorized representative acting for the People of the State of New York, or its assigns. Such easement shall be exercised in and to all that piece or parcel of property designated as Parcel No. 495, as shown on the accompanying map.
RESERVING, however, to the owner of any right, title or interest in and to the property above delineated and such owner's successors or assigns, the right of access and the right of using said property and such use shall not be further limited or restricted under this easement beyond that which is necessary to effectuate its purposes for the construction or reconstruction of the herein identified project.
(claimant's exhibit 1, sheet 2).
Testimony
Ronald Diamond, the President of Ronmar Realty, Inc., testified that the retail building on the subject property is approximately 3,000 square feet and houses Ronjo's Magic and Costumes, a retail business (Tr. 19). A parking lot is situated between the building and the area comprising the temporary easement (Tr. 19; claimant's exhibits 1, 4 and 6). Diamond took 71 photographs of the subject property between October 12, 2009 and May 6, 2010, which were compiled in a red photo album and received into evidence as claimant's exhibit 2 (Tr. 22–23). Diamond stated that from October 2009, on “numerous occasions” he would go to work unsure as to whether he would be able to access the parking lot (Tr. 26, 41). He testified that construction workers used the parking spaces to park their vehicles and trucks (Tr. 27) and to work on a sump (Tr. 30). The use of the parking lot in this manner “varied from week-to-week” (Tr. 27–28). On some days the parking lot was full with State vehicles and on other days the lot was partially full with such vehicles (Tr. 27–29). Diamond stated that, as a result of the taking, drainage patterns changed and he had to repair stress cracks to the parking lot caused by the “heavy duty equipment” used for the project and make emergency electrical repairs (Tr. 31–33).
During cross-examination, Diamond acknowledged that Joe Ludwig, his main contact at DOT regarding the easement, was generally responsive to his questions or concerns about the impacts of the easement (Tr. 36). Diamond described a couple of instances where customers could not leave the parking lot because their vehicles “were blocked” by State vehicles, but did not answer for how long a period of time such persons were inconvenienced (Tr. 36–38, 40).
The photograph depicted in claimant's exhibit 4 shows the subject property before the taking. Photographs taken by Diamond between October 2009 and October 2010 show the subject property during and after the construction work on the subject property. The first photo was taken on October 12, 2009 (see claimant's exhibit 2, No.1). Sequentially, the next photographs taken in Diamond's photo binder are two pictures taken on March 11, 2010 (see id. # 55 and # 56). Over 60 photos were taken between April 14, 2010 and May 11, 2010, and show various stages of work being done in the area in front of the parking lot of the subject property. Construction vehicles, orange barrels and construction equipment, as well as DOT workers and their vehicles are visible in many of these photos. In one photo taken on April 28, 2010, Diamond portrays a “disarray” of orange construction barrels that do not identify how to enter or exit the parking lot, and in another photo taken on May 11, 2010, he describes a “monster crane” that blocks people from entering and leaving his property (Tr. 42; claimant's exhibit 2, photos 7 and 14). The next photographs were taken on October 11, 2010 and show the work in front of Diamond's property completed but also depict three trucks parked in the center of Route 112 (see id. photos 66–70).
Claimant called Elinor Brunswick, a real estate appraiser, to testify as to the damages caused from the imposition of a temporary easement on the subject property. She described the easement as a work easement running 77 feet along the front of the property and comprising 939 square feet in total (Tr. 49). She appraised total damages from the temporary easement based on the premise that the entire subject property was impacted by the temporary easement. She estimated the annual rental value for the subject property to be $96,000, a monthly rental of $8,000 and the daily rental value to be $270 (Tr. 51–52; claimant's exhibit 5 at 77). She then decreased that $270 by 50% for a figure of $135 to reflect the rental loss per day during the period of the temporary easement (Tr. 52). Her total temporary easement damages calculation was $176,715 ($135 x 1,309 [total number of days from March 7, 2008 thru October 6, 2011] ) (see claimant's exhibit 5 at 77). This figure included $167,291.00 in severance damages and $9,424 in direct damages. She also included $15,179.19 as the cost to cure physical damage to the property, including repairs to an electrical switch, parking lot and sidewalk (see id. at 78; Tr. 53). Thus, she assessed total damages of $192,000 ($176,715 + $15,179 = $191,894) (see id. at 78).
These numbers are based on her estimate of a market value of the subject property of $800,000; the parties later stipulated to a market value of $775,000.
Invoices for the electrical repairs ($2,679.19) and asphalt parking lot repairs ($11,000.00) are included in claimant's appraisal report (see claimant's exhibit 5, Addenda at iii and iv). Additionally, Brunswick includes a $1,500.00 figure for “Sidewalk” with estimates derived from the Marshall Valuation Cost Manual (id. at 78).
During cross-examination, Brunswick stated that her damages calculation was from March 7, 2008 thru October 6, 2011, the entire length of the temporary easement (Tr. 56). She opined that although no work began until October 2009, it was appropriate to calculate damages from March 2008 because “you have the threat that was imposed on this property from the very date that it was encumbered with the temporary easement ... at any given time the State had the right to come in to the property and do whatever was necessary in order to fulfill their objective with regard to the road widening” (Tr. 56–57). Brunswick added further that she apportioned the rental value of the property at 50% for the duration of the temporary easement because “the property was completely and beyond the sixteen feet in depth occupied [and][s]econdly, it had an indefinite time period of which they could enter and be working at any given time” (Tr. 59). She stated that she did not personally observe that the subject property was occupied beyond the temporary easement (Tr. 59). Claimant rested following Brunswick's testimony.
Defendant called Joseph Ludwig, a licensed professional engineer and civil engineer with DOT, to testify. Ludwig was the engineer in charge of the road widening and reconstruction project along a three mile stretch of Route 112, which included the work done on the subject property (Tr. 63, 87). His field office was a half mile north of the subject property (Tr. 64). The project work included removing existing asphalt pavement and replacing it, installing a new drainage system, new sidewalks and driveways, and landscaping (Tr. 63–64). Between August 24, 2009 and December 4, 2009, a temporary roadway was constructed on the opposite side of the road from the subject property and “no work [was] performed at the subject site during this phase” (Tr. 67). On December 4, 2009, the traffic pattern on Route 112 was changed, which created a work zone in front of the Ronmar Realty site (Tr. 68). On December 7, 2009, defendant excavated the existing asphalt roadway on the portion of Route 112 in front of the subject property. Ludwig stated this work was completed in one day and that “we kept the access open by leaving the portion, enough of the roadway in place in front of, to create a driveway that would connect the existing parking lot to the work zone” (Tr. 68–69). On January 18 and 19, 2010, as part of the building of a new drainage system, DOT installed a drainage pipe from a new recharge basin constructed on an adjacent parcel to the Ronmar Realty site “up until a point where we would not disturb access to his driveway. We stopped the operation to mitigate any disruption to access to his driveway” (Tr. 69–70). Efforts were made to avoid blocking the driveway and working at times when his business was not open (Tr. 71). Thereafter, work continued intermittently in front of the subject property: March 5 and 9 excavating existing concrete roadway; March 25 earthwork and grading; April 2 placing sub-base material in the roadway; April 21 and 23 installing a concrete driveway apron while keeping access open on half the driveway on both days; and April 28, 29, May 5, May 10 and May 11 laying asphalt and installing the concrete curbs and aprons (Tr. 71–73). On May 17, 2010, the traffic pattern was changed and the same road work began on the opposite side of Route 112 (Tr. 75). He acknowledged that, although on these dates there were some “five to twenty minute disruptions” of access to the subject property (Tr. 74), temporary ramps or roadways were constructed in order to maintain site access (Tr. 85–86).
Ludwig stated that the Route 112 project staging area-where materials were stored, deliveries made and contractors met—was located a half-mile north of the subject property (Tr. 76). Property adjacent to the subject property was used “at times” to store materials (id. ). He spoke with Diamond several times during the course of the work and recalled two complaints regarding site access and another regarding vehicles parked in his lot (Tr. 78). The issue of vehicles in Diamond's lot occurred from “time-to-time” and Ludwig directed the contractor two to four times to not have cars parked there (Tr. 78–79, 80, 100).
During cross-examination, Ludwig stated that he directed the contractors to let Diamond know when access would be impacted and that the contractors reported to him that they had done so (Tr. 96, 100). He did not, however, have any records to reflect that such warnings were given (Tr. 97). Access in some instances was provided by laying down boards for the public to traverse over (Tr. 98–99). Ludwig acknowledged three instances where the State placed equipment in claimant's parking lot (Tr. 106).
Patrick Given, a licensed real estate broker and licensed real estate appraiser, testified on behalf of defendant. He estimated that he has prepared over 1,000 appraisals of properties within the Town of Brookhaven (Tr. 115). Given concluded “that the land was the only portion of the property that was affected ... that was directly encumbered” (Tr. 111). In his appraisal report, he determined that after the temporary easement terminated, “[t]he subject [property]'s size, shape, parking and access will be the same as existed in the before situation ... we conclude that only the area directly encumbered by the temporary easement is affected and there are no severance damages” (defendant's exhibit A at 86; Tr. 113).During cross-examination, he stated that:
“from time-to-time there would be some interruption of access [at the subject property] but the goal of the State and its contractors is to maintain access and that I think ... an occasional disruption of access is just part of the deal of getting a better road out in front. So I felt that the building was not affected to this, to the point that it would have a lower value during that time period [the duration of the temporary easement]”
(Tr. 119–120).
LAW
Generally, “the damage accruing from a temporary easement is measured by the rental value of property for the period effective” (Pomeroy v. State of New York, 18 Misc.2d 377, 379 Ct Cl [1959 ]; see Mead v. State of New York, 24 A.D.2d 1043, 1043 [1965] [a “taking of a temporary easement entitles the landowner to recover the loss in rental value during the term of such appropriation plus further damage, if any, caused to the fee”] ). Thus, a claimant may recover “further loss, if any, resulting from damages to the fee arising from the use of the easement” (Kauffman v. State of New York, 43 A.D.2d 1004, 1004 [1974], affd 36 N.Y.2d 745 [1975] [emphasis in original] ), including consequential damages (Matter of Kadlec v. State of New York, 264 A.D.2d 420, 420 [1999] ). However, “[d]amage is based on loss and it is claimant['s] obligation to show such loss” (Pomeroy v. State of New York, 18 Misc.2d at 380 ). “There should be no recovery where there is no loss” (Matter of Kadlec v. State of New York, 264 A.D.2d at 420 ), or where the proof of damages is “highly speculative and hypothetical” (Graham v. State of New York, 51 N.Y.S.2d 437, 439 [1944] ). Stated differently, “compensation need not be paid for the State's taking of a temporary easement when there is no actual interference with the property owner's use of his property” (Village of Highland Falls v. State of New York, 44 N.Y.2d 505, 507 [1978] ).
Insofar as the principle governing the valuation of a temporary easement, the Court of Appeals has stated:
When a temporary easement, contemplating only incidental and contingent use, is appropriated, rather than a permanent interest, however, it may be somewhat more acceptable to permit the use of hindsight in valuing the interest taken. If the condemnation award is made after the easement has expired, it makes practical sense to compute the property owner's actual damages rather than indulging in speculation on the measure of damages claimant could have contemplated at the time of taking
(id. at 508 [emphasis added] ). The Court continued, noting that “retrospective valuation of a temporary easement, looking only to actual entry on the property and interruption of the activity of the property owner, has been sanctioned by this court” (id. at 509). The rule set forth in Village of Highland Falls v. State of New York, supra has been followed more recently in McCurdy v. State of New York, (10 NY3d 234, 235 [2008] ):
This appeal calls upon us to decide the proper measure of damages when a condemnor takes a temporary easement that encumbers a vacant parcel's entire highway frontage. We hold that damages in this case should be awarded in line with the formula set out in Village of Highland Falls v. State of New York ...—i.e., the rental value of the land encompassed within the temporary easement for so long as the easement is in effect plus, as consequential damages, the rental value of the parcel's unencumbered interior acreage for any period of time when highway access was not possible by virtue of the easement's use.
Claimant argues that the caveat noted by the Court in Village of Highland Falls, set forth below, controls the facts at issue here:
. Not to be ignored, however, although not always measurable, is the damage to a property owner caused by uncertainty regarding the condemnor's intentions. A temporary easement that leaves the property owner under constant threat that his use of the property may be curtailed or stopped is likely to affect business or other financial decisions even if use is never interrupted in fact. The threat imposed by the condemnor's legal right to occupy may be almost as damaging as the actual occupation of the property. Damages caused by such uncertainty, difficult as they may be to measure, should generally be compensable.
Village of Highland Falls v. State of New York, 44 N.Y.2d at 509. The Court finds the argument unpersuasive under these circumstances. At the outset, the Court in McCurdy v. State of New York considered the caveat to be “dictum” (10 NY3d at 241 ). In any event, this Court found Ludwig's testimony credible regarding his frequent communications with both Diamond and the State's contractors as to when work would be performed on or near the subject property, his directions to contractors to avoid blocking access to and parking in Diamond's lot, and his efforts to minimize disruptions to Diamond's business.
(id. at 235 ).
Upon applying these principles to the facts herein, the Court finds that claimant failed to meet his burden of proving consequential damages and that the award of damages is limited to the rental value of the temporary easement acreage (939 square feet or .22 acres) for the duration of the easement, plus the actual damages to the subject property during the period of the temporary easement.
The record indicates that the subject property was taken pursuant to a “Temporary Easement for Work Area” and that the easement contemplated the incidental and contingent use necessary to widen Route 112 (see claimant's exhibit 1, sheet 2). Ludwig, who the Court found particularly credible, maintained detailed records as to when work was done on the subject property. Based on his notes, he recounted that work was done on the subject property on 14 days during the duration of the approximately 43–month easement (Tr. 68–75). Ludwig stated that while work on the days he referenced lasted several hours, access to the site was maintained but for “momentary disruptions” of access, which only lasted “between five to twenty minutes” each (Tr. 73, 74). Moreover, even during those brief disruptions, Ludwig stated that temporary ramps or roadways were created in order to maintain access to the site (Tr. 85–86, 98–99). Thus, the disruption and interference with the subject property was limited, sporadic and of a very brief duration, and more pointedly, access to the subject property was never, in fact, completely blocked, even on days when disruption occurred (see McCurdy v. State of New York, 10 NY3d at 240–241 [condemnee not entitled to consequential damages caused by State's temporary easement encumbering a vacant parcel's highway frontage where, inter alia, “highway access to claimant's parcel was obstructed for only 7 to 10 days ... during the 666 days the easement was in effect”]; compare Matter of Kadlec v. State of New York, 264 A.D.2d at 421 [consequential damages for a temporary easement upheld where easement spanned the entire property frontage and rendered claimant's remaining property inaccessible] ).
Similarly, Diamond's photo log suggests that most work activity occurred over 16 days between April and May 2010 (see claimant's exhibit 2).
In addition, the Court has reviewed claimant's photo log and finds that not only do the dates reflecting when Diamond took the photographs match, or approximate, the dates Ludwig reports work being performed on the subject property, the photos support the finding that there were relatively few disruptions of access over the duration of the easement and that access was never completely blocked, or at most, such disruptions were fleeting and often occurred when the business was not open (see e.g. claimant's exhibit 2, photos 41–48, 8:09 a.m.–10:58 a.m., April 16, 2010 [before business opened]; photos 39–40, 7:35 a.m.–7:36 a.m., April 17, 2010; photos 17–21, 1:53 p.m.–1:57 p.m., April 27, 2010). Diamond's testimony as to the lot being sixty percent filled or completely filled with construction workers' vehicles through July 2012 (even though the easement terminated October 6, 2011) is neither credible nor consistent with the record (Tr. 28).
The record also indicates that defendant attempted to address complaints from Diamond, and Diamond acknowledged as much in his testimony. Ludwig recalled one complaint about site access and another about work vehicles parked on the subject property lot, which he communicated to the contractor (Tr. 78–79). Diamond recalled only two instances where his electrician and a customer could not leave the lot and could not estimate how long their access was blocked (Tr. 26, 36–40).In light of the evidence showing that the subject property was not substantially impacted and that access was not significantly disrupted by the temporary easement, the Court finds claimant's appraiser's calculations of severance damages of $167,291 to be flawed and unsupported. There was no evidence proffered to establish that the entire subject property was impacted, or that the business operation decreased or was “significantly disrupted” as a result of the temporary easement and the Route 112 widening project (Village of Highland Falls v. State of New York, 44 N.Y.2d at 508 ). The Court can discern no rational basis for the appraiser's finding that the entire property suffered a 50% loss in rental value during the course of the easement (Tr. 52, 58–59). Under the circumstances herein, damages are limited to the rental value of the land encompassed within the temporary easement for the length of time the easement was in effect, together with any actual damages.
Finally, it bears mention that the easement here expressly reserves to the property owner “the right of access and the right of using said property and such use shall not be further limited or restricted under this easement beyond that which is necessary to effectuate its purposes” (claimant's exhibit 1, sheet 2). Identical language was in the temporary easement at issue in Village of Highland Falls v. State of New York, supra, where the Court stated that “[s]uch language indicates, to some extent, an intention to permit substantially continued use by the property owner” (44 N.Y.2d at 509 ). This Court finds no persuasive evidence that claimant's “continued use” was precluded by this highway project, or that it was “prevented entirely from operating” (id. at 509 –510 ).
Based on the foregoing, the Court finds damages should be calculated as follows: Having accepted the rationale underlying defendant's appraisal expert and using the values as stipulated by the parties, the annual rental of the area encumbered by the temporary easement can be calculated as follows: the value of the land encumbered with the temporary easement is $19,719.00 (939 square feet x $21 per square foot). $19,719.00 x 12% = $2,366.28 per year or $197.19 per month. The temporary easement was taken on March 7, 2008, and terminated on October 6, 2011. There are 42 months from April 2008 through September 2011. 42 months x $197.19 per month = $8,281.98. There are also 31 more days to be factored into the calculation (25 days from March 7, 2008 through March 31, 2008 and 6 days from October 1, 2011 through October 6, 2011). Assuming a daily rental value of $6.57 ($197.19 ÷ 30) and 31 additional days, damages of $203.67 ($6.57 x 31) are also included, for a total of $8,485.65 ($8,281.98 + $203.67). Additionally, the Court awards $15,179.19 for damages to the subject property ($2,679.19 [electrical repairs] + $11,000.00 [asphalt/parking lot repairs] + $1,500.00 [sidewalk repairs] as calculated by claimant's appraiser).
For purposes of this calculation, the Court presumes a month equals 30 days.
The Court finds no evidence that defendant rebutted or disputed these costs.
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Therefore, claimant is awarded a total of $23,664.84 in damages related to the temporary easement. Accordingly, claimant is entitled to an award of $23,664.84 with statutory interest from the vesting date of March 7, 2008 to the date of the decision and thereafter to date of entry of judgment.
The award to claimant herein is exclusive of the claim, if any, of persons other than the owner of the appropriated property, their tenants, mortgages and lienors having any right or interest in any stream, lake, drainage and irrigation ditch or channel, street, road, highway or public or private right-of-way or the bed thereof within the limits of the appropriated property or contiguous thereto; and is exclusive also of claims, if any, for the value of or damage to easements and appurtenant facilities for the construction, operation or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer and railroad lines.
It is further ordered that, to the extent claimant has paid a filing fee, it may be recovered pursuant to Court of Claims Act § 11–a (2).
All other motions on which the Court may have previously reserved or which were not previously determined, are hereby denied.
Let judgment be entered accordingly.