New York State Court of Claims

New York State Court of Claims

CLAIRCUK v. THE STATE OF NEW YORK, #2002-030-526, Claim No. 92044, Motion No. M-65277


Synopsis


Claimant's application for additional allowance pursuant to Eminent Domain Procedure Law §701 granted. As required, the award in underlying appropriation case substantially in excess of Defendant's proof, and the Claimant's expenses necessarily incurred to achieve just and adequate compensation

Case Information

UID:
2002-030-526
Claimant(s):
CLAIRCUK CORP.
Claimant short name:
CLAIRCUK
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
92044
Motion number(s):
M-65277
Cross-motion number(s):

Judge:
THOMAS H. SCUCCIMARRA
Claimant's attorney:
FLOWER, MEDALIE & MARKOWITZBY: ALAN WASSER, ESQ.
Defendant's attorney:
HON. ELIOT SPITZER, NEW YORK STATE ATTORNEY GENERALBY: JOHN J. PICKETT, ASSISTANT ATTORNEY GENERAL
Third-party defendant's attorney:

Signature date:
July 17, 2002
City:
White Plains
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)

.
Decision

Claimant seeks additional allowances for attorneys and appraiser fees pursuant to Eminent Domain Procedure Law (hereinafter "EDPL") § 701. The following papers, numbered 1 to 7, were read and considered by the Court:
Papers Numbered


Notice of Motion, Affidavit of Clarice
Smith, Affidavit of Jeffrey Beal, 1-4

Affirmation of Alan Wasser, Esq. and
Exhibits Annexed


Affirmation In Opposition, by John J. Pickett,
Assistant Attorney General, Affidavit of 5-6
Thomas Miller and Exhibits Annexed

Claimant's Reply Affirmation and 7

Exhibits Annexed
In its motion, claimant seeks an award of an additional allowance in the sum of $17,310.53. The expenses allegedly incurred as a result of the appropriation proceeding are itemized as follows: (1) attorneys' fees of $10,741.00; (2) appraiser fees in the amount of $5,950.00; and (3) attorneys' disbursements of $619.53. Defendant opposes the additional relief sought.

The statutory language of EDPL § 701 gives the Court discretion to award a claimant an additional amount, separately computed and stated, for actual and necessary costs, disbursements and expenses incurred in connection with the appropriation proceedings. EDPL § 701. However, before the Court may grant an additional allowance, under EDPL § 701, two conditions must be satisfied: (1) the award must be substantially in excess of the amount of the defendant's proof, and (2) the claimant's expenses must have been necessarily incurred "to achieve just and adequate compensation." EDPL § 701; see, Hakes v State of New York, 81 NY2d 392, 396 (1993). The appropriate standard to determine whether the award is substantially in excess of the condemnor's proof is the difference between the initial offer and the amount ultimately awarded by the Court. See Id.

Although the statute does not quantify nor define "substantially in excess," more than a modest increase in value is required. Matter of Village of Johnson City, 277 AD2d 773 (3d Dept 2000) citing to Matter of Malin v State of New York, 183 AD2d 899, 900 (2d Dept 1992). By decision, filed January 23, 2002, the Court awarded claimant $20,100.00 in damages, plus statutory interest. Defendant's initial offer to claimant was $1,200.00, or $18,900.00 less than the damages awarded after trial. Because the award exceeds the initial offer by 1675%, the Court finds the appropriation award is substantially in excess of Defendant's proof.[1] Considering that courts have upheld additional allowances in cases where the excess was far less,[2] there is no doubt that the award in the instant case was substantially in excess of the initial offer. As such, the inquiry now turns to whether claimant's expenses were necessarily incurred to achieve just and adequate compensation.

EDPL § 701 gives the Court discretionary power to allow for fees and costs in cases where payment is appropriate to ameliorate a claimant's litigation costs that might otherwise diminish the trial award to something less than just compensation. Hakes v State of New York, supra at 398. Thus, Claimant's request for additional attorneys fees and costs must be evaluated by the factors governing the reasonableness of the award and by the statutory requirement that fees and costs were necessarily incurred. Among the factors the Court may assess to ascertain the reasonableness of attorneys fees are, the nature of services rendered, the amount involved, whether the attorneys' fees were customary, and the result obtained. Matter of New York State Urban Development Corp., 183 Misc 2d 900 (NY Co Sup Ct 2000). Although a court may appropriately consider a fee application based upon a contingency retainer, it is not bound by the terms of such agreement. Id at 904. Instead, the claimant bears the burden of demonstrating the reasonableness of the award. Id.

Although Defendant urges the Court to apply a "comparative reasonableness" test in deciding whether to grant Claimant's request for additional allowances, Defendant also states that by virtue of EDPL § 701, it was the legislature's intent to provide a remedy in a situation where an "unreasonable position by the condemnor causes a reasonable claimant to expend monies to get a fair award." (See Defendant's Affirmation ¶ 6). This does not mean, as Defendant suggests, that Claimant must show the reasonableness of its position at trial as compared to the State's. Therefore, after careful review of all the documents submitted and the applicable case law, the Court finds Claimant met its burden and demonstrated the reasonableness of the request for additional attorneys fees as well as the necessity for incurring those expenses to achieve just compensation.

The Claimant's agreement to pay counsel one-third of all sums recovered, in excess of Defendant's initial offer, including interest, was reasonable, especially considering that a one-third contingency fee is customarily the standard in EDPL § 701 proceedings. See, Meyers v State of New York, 166 Misc 2d 586 (Ct Cl 1995).

In addition, considering the discrepancy between Defendant's initial offer of $1,200.00 and Claimant's claim for damages in the amount of $200,000.00, the Court finds Claimant retained counsel in an attempt to achieve just compensation and thus, attorneys fees were necessarily incurred expenses. Furthermore, a contingency fee arrangement based upon the final amount awarded, including interest, is appropriate as a matter of law. Matter of Hoffman v Town of Malta, 189 AD2d 968 (3d Dept 1993)(the appellate division modified the lower court's order, "on the law," awarding counsel fees plus interest, based on a contingent fee agreement). Although Defendant contends the appropriation proceeding would have taken place even if the State's original offer was in the amount of the Court's award, the Court finds this contention merely speculative and not deserving of further consideration. Rather the result obtained, as compared to Defendant's initial offer, speaks for itself. Therefore, attorneys fees, including interest, are granted in the amount requested ($10,741.00) since the Court finds the fees reasonable and that Claimant has necessarily incurred these expenses in obtaining just and adequate compensation.

With respect to the appraiser's fee, Defendant rightfully argues Claimant is not entitled to be reimbursed for expenses that did not aid the Court in its determination of just compensation. (See Defendant's Affirmation ¶ 11). In fact, under EDPL § 701, the Court may properly evaluate the basis for the trial award and disregard the expenses and services not contributing thereto.[3] Claimant seeks compensation for its appraiser in the amount of $5,950. This amount was itemized as follows: $4,000 for services related to the preparation of the appraisal report and $1,950 for trial preparation and testimony. (See Affidavit of Jeffrey Beal and Ex. D annexed to Claimant's Motion). In determining the final award in this matter, the Court relied more heavily upon its own analysis and Defendant's expert engineer and appraiser, often rejecting testimony offered by Claimant's expert. Given that this aspect of Claimant's proof at trial did little to aid the Court in making its determination on the final award, the Court reduces the appraiser's fee by $2,000. Therefore, the Court concludes that appraiser fees in the amount of $3,950 are appropriate in this matter, to the extent that these expenses were necessarily incurred to achieve just and adequate compensation.

Finally, Claimant seeks to recover disbursements in the amount of $619.53. While the Court agrees with Claimant that the disbursements in the sum of $525.45 are reasonable and justifiably necessary, as part of the customary litigation expenses incurred,[4] the Court finds no explanation for the $94.08 difference between the amount Claimant seeks and the amount of total disbursements. The computer printout entitled "Disbursements Tally" furnished by Claimant's counsel (See Ex. D annexed to Reply Affirmation), shows total disbursements in the amount of $525.45, yet without explanation, Claimant seeks $619.53 in disbursements. Because the Court does not have a basis upon which it can determine whether the $94.08 sum was part of the necessary litigation expenses, it will not include the $94.08 in its calculation of additional allowance.

Based upon the foregoing, Claimant is awarded the total sum of $15,216.45 for actual, reasonable and necessary expenses:
Attorneys' Fees $10,741.00
Appraiser Fees $ 3,950.00
Disbursements $ 525.45

___________

TOTAL: $15,216.45

The Clerk of the Court is directed to enter judgment accordingly.


July 17, 2002
White Plains, New York

HON. THOMAS H. SCUCCIMARRA
Judge of the Court of Claims




[1] With interest, and assuming a July 2002 payment date, the amount of the judgment is $32,224.00, which is 2785% greater than defendant's proof.
[2] It was formerly required that in order for the courts to find substantial excess, the trial award had to be 200% over the initial proof. This, however, has since changed and additional awards are now warranted based on considerably lower percentage and dollar amount differences. See e.g. Matter of Town of Islip v Sikora, 220 AD2d 434, (2d Dept 1995)(award was 37% or $204,207 above the condemnor's proof); Karas v State of New York, 169AD2d 816 (2d Dept 1991)(41.6% or $75,718); see also Matter of New York City Tr. Auth. [Gun Hill Bus Depot], 142 Misc 2d 629 (NY Co Sup Ct 1989) (36% or $656,000).
[3] Courts seem to rationalize that where certain proof offered had no effect on the final award, it is considered as an unnecessary expense, one not incurred to achieve just compensation. See Meyers v State of New York, supra at 589; see also Hakes v State of New York, supra at 395.
[4] Despite Defendant's attempt to urge the Court to disregard the fee for Claimant's expert title report, which Claimant admits was not offered into evidence, the Court is sufficiently satisfied that such expenses were necessarily incurred. As Claimant's counsel explained in its Reply Affirmation at ¶ 7, the purpose of the report was to determine the nature of recorded easement rights with respect to the subject property.