Opinion
October 27, 1967
Appeal by the State from a judgment entered upon a decision of the Court of Claims after a new trial ordered by this court, awarding damages of $60,000 for the appropriation of improved lands in the City of Binghamton. A prior judgment in the same amount was reversed because neither party produced evidence of market value and, although the property was neither unique nor a specialty, the State relied solely on proof of land value plus reproduction cost of the improvements and claimants produced evidence on the same basis and, additionally, employed a method which their expert termed a "capitalization approach of gross annual earnings". ( 24 A.D.2d 915.) On the retrial, the prior record was stipulated and additional expert evidence was offered. The court found a before value of $73,500, an after value of $13,500 and resulting damage of $60,000, all being direct damage. Claimants did not appeal the denial of the relatively minor consequential damage to which their expert alone testified. The State's expert's findings of before and after values of $55,000 and $12,000, respectively, resulting in damage of $43,000, were properly substantiated. The claimant's expert attempted to support his before value of $79,761 by seven supposedly comparable sales, the first four being employed only to support a land valuation of 70 cents per square foot, an amount which is not in great dispute. The three remaining sales relied upon appear comparable. They were for $27,000, $46,500 and $36,500. Taking the first sale, claimants' expert "adjusted this property for time, location, utility of land and parking, building size, the facilities, the condition and age, and found an indicated adjusted value of the subject property of $89,910." No values were assigned to the various factors mentioned, nor was the adjustment from $27,000 to $89,910 otherwise explained. Similarly, claimants' expert "adjusted" the $46,500 and the $36,500 sales to indicate market values of claimants' property in amounts of $81,375 and $78,475, respectively, again with no demonstrable basis for the so-called "adjustments". In Fredenburgh v. State of New York ( 26 A.D.2d 966) none of the "adjustments" were explained and the mere "conclusory ultimate valuation" that remained presented nothing to review. Similarly, the unexplained and massive, if not extraordinary "adjustments" which this record presents are insufficient to support an award. Additionally, claimants' capitalization of gross income approach to an evaluation, with no evidence or estimate of operating expenses or fixed charges was meaningless and without probative force. (See McMichael's Appraising Manual [4th ed.], p. 36.) In arriving at proper evaluations we are, therefore, obliged to rely principally on the evidence adduced from the State's expert, giving effect, however, to the 70 cents per square foot land valuation which claimants' expert supported by comparable sales; and we find the before value to be $57,000, the after value to be $12,000 and the resulting damage $45,000, all of which is direct damage. Judgment modified, on the law and the facts, so as to reduce the award to $45,000 and appropriate interest and, as so modified, affirmed, without costs. Gibson, P.J., Herlihy, Reynolds, Aulisi and Staley, Jr., JJ., concur in memorandum Per Curiam.