New York State Court of Claims

New York State Court of Claims

NORTHVILLE v. THE STATE OF NEW YORK, #2002-028-052, Claim No. 97489, Motion No. M-64964


SUMMARY: The Court denied Claimant's EDPL 701 application as the award was not substantially in excess of the initial offer.

Case Information

Claimant short name:
Footnote (claimant name) :

Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
Motion number(s):
Cross-motion number(s):

Claimant's attorney:
SIEGEL FENCHEL & PEDDY, P.C.BY: Saul R. Fenchel, Esq.
Defendant's attorney:
BY: Rose Farrell Lowe, Esq. Assistant Attorney General
Third-party defendant's attorney:

Signature date:
September 17, 2002

Official citation:

Appellate results:

See also (multicaptioned case)


The following papers were read on Claimants' motion for an additional allowance pursuant to EDPL §701:

1) Notice of Motion filed March 29, 2002 with Supporting Affirmation of Saul R. Fenchel (Fenchel Affirmation) and annexed Exhibits A-D.

2) Affirmation in Opposition of Assistant Attorney General Rose Farrell Lowe, (Lowe Affirmation), filed April 29, 2002, with annexed Exhibits A-C.

3) Reply Affirmation of Saul R. Fenchel (Fenchel Reply) filed May 14, 2002.

4) "Sur Reply Affirmation" in Opposition of Assistant Attorney General Rose Farrell Lowe, (Lowe Reply), filed June 4, 2002 .

Filed Papers: Decision of Sise, J., filed February 28, 2002; Judgment, entered

April 19, 2002.

Claimant seeks an additional allowance for actual and necessary costs, disbursements and expenses pursuant to EDPL § 701. The Defendant has opposed the application, asserting that the trial award does not entitle Claimant to a " 701 award" (Lowe Affirmation, ¶ 5). As there is no automatic right to recover the additional costs in defending the value of a landowner's property, the Court reviews the application (General Crushed Stone Co. v State of New York , 93 NY2d 23, 28).

Following trial, a decision, filed February 28, 2002 awarded Claimant $547,083.00 with statutory interest thereon from the vesting date of November 21, 1994 to the date of decision herein and thereafter to the date of entry of judgment[1] for the permanent appropriation.

At the time of the taking, the State offered $458,000.00 as payment for the taking (Fenchel Affirmation, ¶ 10; Lowe Affirmation, ¶ 4), but then held back $115,392.00 for alleged remediation costs associated with the clean-up of the subject parcel, a former gasoline service station (Id.). Claimant accepted the State's initial offer as an advance payment only, receiving $342,600.00 (Fenchel Affirmation, ¶ 10) plus interest of $16,701.75 (Lowe Affirmation, ¶ 4 and see Exhibit C) and commenced this action. To obtain a fair and just valuation of its property, Claimant hired an appraiser whose fees were $4,750.00 for the report and $1,250.00 for court appearances. The total due the appraiser was $6,000.00. Claimant's attorney seeks $85,627.00 in attorneys fees based upon a twenty-five percent contingent fee agreement with the Claimant (Fenchel Affirmation, ¶¶ 2, 32 and, see Exhibit C). Claimant thus seeks an additional allowance of $91,627.00 plus interest thereon.

An award of an additional allowance is in order where the award is substantially in excess of the condemnor's initial offer (First Bank & Trust Co. of Corning v State of New York, 184 AD2d 1034, affd 81 NY2d 392; Matter of New York City Transit Authority, [Superior Reed & Rattan Furniture Co., Inc.] 160 AD2d 705, 709-710; Karas v State of New York, 169 AD2d 816; Done Holding Co. v State of New York, 169 AD2d 809. [EDPL § 701 defines the condition as in excess of the "condemnor's proof" which phrase has been interpreted by these cases to mean "condemnor's initial offer") and when deemed necessary by the Court to achieve just and adequate compensation (Hakes v State of New York, 81 NY2d 392, 397). The additional allowance is not mandatory and the determinations are left to the Court's discretion. The application for an additional allowance "shall include affidavits of the condemnee and all parties that have incurred expenses on the condemnee's behalf" (EDPL § 701).

Resolution of the first condition - whether the award is substantially in excess of the initial offer - is sharply disputed as the Claimant asserts the "initial offer" is the "net advance payment" not the "gross advance payment" (Fenchel Affirmation, ¶ 21, et seq.). Using this "net advance payment" as the initial offer, Claimant calculates the award as being nearly sixty percent greater than the initial offer ($547,083.00 ÷ 342,600.00). Claimant acknowledges that using the award and the "gross advance payment" results in an excess of less than twenty percent of the initial offer (Fenchel Reply, ¶ 5); the very position advanced by the State in opposition to the application (Lowe Affirmation, ¶ 4). The State further asserts it is common practice for deductions to be made from advance payment accounts for "known liabilities of the Claimant"

(Lowe Reply ¶ 10).

The Court first notes that the parties affirmatively decided not to litigate issues involving the remediation of Claimant's property in the trial of the claim (see, Decision, footnote 1) and the Court will not, in the context of this EDPL § 701 application, now endeavor to determine "the legality of the State's deduction" (Fenchel Reply ¶ 5). Instead, the Court's inquiry is focused on what constitutes "the condemnor's initial offer."[2] Claimant, who has apparently failed to litigate the propriety of the State's holdback or the amount thereof, points to no legal authority for its contention that the "net advance payment" may constitute the State's initial offer. Nor has the Court found any support for this novel theory. A review of the exhibits submitted by the Defendant in opposition (Lowe Affirmation, Exhibits A & B) clearly indicate the State had valued the appropriation at $ 458,000.00. Claimant has acknowledged that the advance offer was $458,000.00 (Fenchel Affirmation, supra) and that offer, with the holdback, was accepted by Claimant as the basis for advance payment (see, EDPL § 304). In the Court's view, the "condemnor's initial offer" was the $458,000.00 and so finds.

In determining whether the difference between the award and initial offer is substantial, the Court must look to the percentage difference, as well as the dollar amount. In this Claim, the award for the permanent taking was greater than the State's initial offer of $458,000.00 by $89,083.00, or not quite 20%. A review of the reported cases following the amendment of the EDPL and the removal of the 200% requirement reveals no case in which a percentage excess of less than 20% was found to be substantial (see, Matter of Village of Johnson City [Waldo's Inc.], 277 AD2d 773, 775 [19%], collecting cases; Matter of New York State Urban Dev. Corp. [42nd St. Dev. Project], 183 Misc 2d 900, 902 [excess of 19.79% not substantial] ). Here, the Court calculates the excess to be 19.45% ($547,083.00 [award] ÷ 458,000.00 [initial offer] = 19.45%). As such, the Court finds that the award herein is not substantially more than the initial offer. Stated otherwise, the State did not substantially undervalue Claimant's property (Hakes v State of New York, 81 NY2d 392, 397) so as to warrant the Court exercising its discretion pursuant to EDPL § 701. Based upon the foregoing, it is determined that the differences herein are not substantial within the meaning of the statute (Matter of Malin v State of New York, 183 AD2d 899). Accordingly, the Court does not reach the second statutory condition.

Assuming arguendo that Claimant satisfied the first condition, the Court is not convinced that an additional allowance is necessary to achieve just and adequate compensation. First, the Court notes Claimant has only supplied an affirmation of its attorney (see, EDPL § 701), effectively preventing the Court from examining the expenses of the appraiser. Furthermore, as detailed by Claimant's attorney, substantial effort was applied to the issue of the holdback and remediation costs, an issue which ultimately was not presented to the Court and, following an exchange of appraisals the appraisers for the parties "were relatively close" (Fenchel Affirmation, ¶ 14), in fact, the appraisals were $215,000.00 apart. Thus, the Court cannot conclude the services provided, and the fee requested, were reasonable and necessary (see, Matter of Village of Johnson City [Waldo's, Inc.], 277 AD2d 773)[3].

For the foregoing reasons, Claimant's application for an additional allowance is DENIED.

September 17, 2002
Albany, New York

Judge of the Court of Claims

[1] The Clerk calculated judgment interest in the amount of $371,811.97 through April 19, 2002.
[2] Initial, when used as an adjective, is defined as meaning - of, relating to, or occurring at the beginning; first: (The American Heritage Dictionary of the English Language [4th Edition]).
[3] The Court notes that Claimant's counsel was not retained until December, 1997 (see, Fenchel Affirmation, Exhibit C), fully two years after the payment of the advance and there is no affidavit from the condemnee explaining the intervening years leading up to the engagement of counsel.