New York State Court of Claims

New York State Court of Claims

BIENENSTOCK v. THE STATE OF NEW YORK, #2002-030-531, Claim No. 85601, Motion No. M-65355


Claimant's motion for an additional allowance pursuant to EDPL §701 granted in part and denied in part. No affidavits from appraisers to show what portion of their work attributable between two trials.

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:
Defendant's attorney:
Third-party defendant's attorney:

Signature date:
August 21, 2002
White Plains

Official citation:

Appellate results:

See also (multicaptioned case)


By Notice of Motion marked submitted without opposition July 17, 2002, Claimant seeks an Order, pursuant to Eminent Domain Procedure Law § 701, awarding an additional allowance for actual and necessary costs, disbursements and expenses, including reasonable attorney and appraiser fees expended in this appropriation proceeding. The following papers, numbered 1 to 4 were read and considered by the Court:
1-4 Notice of Motion, Affirmation by M. Robert Goldstein, Esq., Affidavit of Arthur H. Bienenstock, Claimant; Affidavit of Elaine Bienenstock, Assignee; and accompanying exhibits.

After careful consideration, the motion is disposed of as follows:

Claimant seeks an additional allowance of Five Hundred Sixty-Four Thousand Four Hundred Thirty Seven and 69/100 Dollars, ($564,437.69) particularized as (1) counsel fees in the amount of $516,226.13; (2) construction cost analysis and court time for John Casson in the amount of $5,500.00; (3) Albert Valuation Group's fee for appraisal and court time in the amount of $41,350.00; and (4) attorneys' reimbursable expenses in the amount of $1,361.56.

Eminent Domain Procedure Law §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 an appropriation proceeding.[1] Before the Court may grant an additional allowance, however, two conditions must be satisfied. First, the award in the underlying appropriation proceeding must be substantially in excess of the amount of the defendant's proof. Second, the expenses claimed must have been necessarily incurred to "achieve just and adequate compensation." Eminent Domain Procedure Law § 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 Defendant's initial offer and the amount ultimately awarded by the Court. Id.

More than a "modest" difference in value is required [See, Matter of Malin v State of New York, 183 AD2d 899, 900 (2d Dept 1992)] to be viewed as an award that is "substantially in excess" of the initial offer. Matter of Town of Islip v Sikora, 220 AD2d 434 (2d Dept 1995); Matter of Village of Johnson City, 277 AD2d 773 (3d Dept 2000).

In this case, the advance payment offer from the Defendant had been in the amount of Four Hundred Fifty-One Thousand Six Hundred Dollars ($451,600.00). [Claimant's Exhibit "B"]. By Decision filed January 28, 2000 this Court (O'Rourke, J.) had granted Claimant an award of Seven Hundred One Thousand Three Dollars ($701,003.00) [Claimant's Exhibit "E"], later modified by Decision and Order of the Appellate Division, Second Department, entered October 22, 2001 [Claimant's Exhibit "J"], to One Million Two Hundred Sixty-Four Thousand One Hundred Twenty-Five and 50/100 Dollars ($1,264,125.50). A Certificate of No Further Appeal was filed March 20, 2002. [Claimant's Exhibit "K"].

This Court's award was thirty-six percent (36%) in excess of the State's initial offer, and fifty-two percent (52%) in excess of the condemnor's proof at trial. Examining the Appellate Division's award increases the percentages. Its award was almost 280% above the initial offer, and almost 376% above the proof. Clearly, the awards assessed by this Court, and the Appellate Division as well, are substantially in excess of both the Defendant's initial advancement and the proof offered at trial. Indeed, Courts have upheld additional allowances in cases where the difference was the same or far less. See, e.g., Matter of Town of Islip v Sikora, supra, (award was 37% or $204,207.00 above the condemnor's proof); Karas v State of New York, 169 AD2d 816 (2d Dept 1995) (award was 41.6% or $75,718 above the condemnor's proof); But c.f., Matter of Village of Johnson City, supra, at 775 (19% of original offer, or $81,700.00). Accordingly, the Court is satisfied that the ultimate award was substantially in excess of both the initial offer and the proof at trial, thus Claimant has satisfied the first requirement for an additional allowance.

As to whether the claimant's litigation costs were necessarily incurred, courts examine whether such expenditures were incurred with the aim of achieving a just result and without advancing far-fetched or "unrealistic" legal theories with no foundation in fact. Hakes v State of New York, supra, at 396.[2] What is interesting here is that essentially two trials were had. At the conclusion of the first trial, Claimant had successfully advanced the theory that there was a reasonable probability that the property would have been rezoned from an industrial, to a zone including retail uses - and indeed the area was rezoned to that effect some five (5) months after the taking - and that a buyer would have paid a premium for Claimant's property given the high probability of advantageous rezoning. [See, Exhibit "D", Interim Decision and Order, Claim No. 85601, filed August 20, 1998, O'Rourke, J.] The Court found, however, that insufficient proof had been presented at trial to enable it to ascertain what the market value was due to the probability of rezoning, given that Defendant's appraiser did not consider rezoning at all, and the Claimant's proof was also "fatally flawed." [Id, at Page 10]. Indeed, the Court stated that the Claimant's "...appraisal as a whole is so unreliable as to be of no assistance to the Court." [Id, at Page 16]. The Court directed that the trial be "reopened and continued" and that "supplemental appraisals and /or additional evidence" be submitted. [Id, at Page 17].

In the final Decision of the Court filed January 28, 2000, after the "second " trial, the Court indicated that it had accorded the most weight to the Defendant's appraisal as providing the Court "...with the simplest and most reasonable assessment of claimant's damages...." [See, Exhibit "E", Decision, Claim No. 85601, filed January 28, 2000, O'Rourke, J. Page 8]; yet also noted agreement with other portions of Claimant's appraisal concluding that the property suffered consequential damages as a result of the loss of parking. [See, Id, at Pages 11-12].

The Appellate Division, however, noted that the Court of Claims should not have relied on the Defendant's appraisal since the property was valued there in accordance with a zoning use not in effect until two years after the valuation date. [See, Exhibit ""J"; See also, Bienenstock v State of New York, 287 AD2d 587,588 (2d Dept 2001)]; and erred in the way it diminished the before value of the property based upon the cost of demolishing one of the structures on the theory that it would have been demolished regardless of the taking. Instead, the Appellate Division said, the Court of Claims should have found that the structure "...could have remained as part of a new retail operation..." but for the taking, and modified the Court of Claims judgment by increasing the amount awarded as noted above. [Id]. The appellate court noted that "...the Court of Claims was [not] required to accept the valuation of the claimant's appraiser without question. Yet, the claimant's appraiser sets the outer limit of the award to the claimant unless there is a sufficient basis for a different conclusion...." [Id].

Accordingly, in this Court's view, to some degree the Claimant's appraisal was relied upon for the ultimate determination of just compensation, and the attorney's fees were incurred of necessity as well. The issue remains, however, one of apportionment, since it would appear that at the first trial the claimant's appraisal was a nullity, while at the second the appellate court has determined it should have been given more weight.

In counsel's affirmation in support of the present motion, M. Robert Goldstein, Esq. affirms the essential procedural history of the claim, and the expenditures associated with its prosecution. He indicates that the initial retainer agreement is dated June 29, 1992, and provides that counsel is to receive "twenty-five (25%) percent of the award and interest as is in excess of the State's offer of $451,600.00, but not less than 5% percent nor more than 15% of the total award and interest, in addition to experts' fees and disbursements." [Claimant's Exhibit "O"]. With respect to the cross appeal by Claimant, an additional retainer agreement provided for a fee of one-third of any increase in the award by reason of the cross appeal plus disbursements. [Claimant's Exhibit "P"]. The total fee to counsel under this arrangement amounts to that asserted: $516, 226.13 plus reimbursable expenses in the amount of $1,361.56. [Exhibit "L"].

While the Court is not bound by the terms of a contingency fee arrangement, the arrangement presented here is commonly used, and reflects the efforts experienced counsel expended to attain a just result for Claimant. More than ten (10) years were spent on this case. The Court finds the fees reasonable and, having found that the judgment was substantially in excess of the condemnor's proof as required, also finds the attorneys' fees were necessarily incurred by claimant and he is entitled to the additional allowance sought in this regard. See, Norboro Realty v State of New York, Claim No. 96631, Motion No. M-61971 (O'Rourke, J., August 27, 2000).

In the attorney's affirmation reference is made to an attached letter - not an affidavit - from John Casson dated September 24, 1998 directed to Claimant's attorneys and indicating, in pertinent part, his "proposal to prepare a construction cost estimate for,...[and his] understanding that the proposal will identify the necessary construction costs to convert the existing structure into ‘Vanilla Box' retail use." [Exhibit "M"]. An additional letter from Mr. Casson to counsel dated January 25th, 1999 indicates that it is an "invoice for providing expert testimony on...Jan. 22nd....for ½ day of Expert the amount of $750.00." [Id].

Reference is also made in the attorney's affirmation to letters from "The Albert & Sterling Appraisal Company, Inc.", memorializing its fee arrangement with Claimant. [Exhibit "N"].

Claimant's own affidavit, sworn to June 12, 2002, also makes reference to the expenses incurred in hiring appraisers, as well as assignment of his interest in any award to Elaine Bienenstock, on May 10, 2001. Her affidavit, sworn to the same day, confirms this assignment and payment to her of the final award by the State in May, 2002.

The portion of the present application seeking an additional allowance for appraiser fees is hereby denied without prejudice. Claimant has not provided the necessary affidavits from the appraisers indicating exactly what they did, and how their efforts were broken down between the two trials. This Court cannot evaluate whether the services were necessarily expended toward achieving a just result for Claimant without submission of the required affidavits from the appraisers. See, §701 Eminent Domain Procedure Law.[3]

Accordingly, Claimant's motion is granted in part and denied in part. Claimant is awarded the total sum of $517,587.69 for the actual, reasonable and necessary expenses established herein:
Attorneys' fees $516,226.13
Disbursements 1,361.56
TOTAL: $517,587.69

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

August 21, 2002
White Plains, New York

Judge of the Court of Claims

[1] The statute provides in pertinent part: "In instances where the order or award is substantially in excess of the amount of the condemnor's proof and where deemed necessary by the court for the condemnee to achieve just and adequate compensation, the court,...may in its discretion, award to the condemnee an additional amount, separately computed and stated for actual and necessary costs, disbursements and expenses, including reasonable attorney, appraiser and engineer fees actually incurred by such condemnee. The application shall include affidavits of the condemnee and all parties that have incurred expenses on the condemnee's behalf, setting forth inter alia the amount of the expenses incurred."
[2] "While noting that none of these fees [for attorneys and appraisals] were unreasonable for the work performed, the court [of claims] exercised its discretion and made no award. The court [of claims] based its denial of reimbursement on its conclusion that claimants' fees were expended primarily in an unrealistic attempt to prove consequential damages to a nonappropriated parcel. Since that theory was rejected and had no bearing on the actual damages awarded, the court explained that it would not reimburse the fees. While noting that a fee award could be warranted for claimants' efforts in disputing the lack of access to Parcel B, the court explained it would not make such award in the absence of evidence of fees and costs expended on that point...."
[3] "....The application shall include affidavits of the condemnee and all parties that have incurred expenses on the condemnee's behalf, setting forth inter alia the amount of the expenses incurred." (Emphasis added) §70l Eminent Domain Procedure Law.