1-4 Notice of Motion, Affirmation by M. Robert Goldstein, Esq., Affidavit of
Arthur H. Bienenstock, Claimant; Affidavit of Elaine Bienenstock, Assignee; and
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
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
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.
, 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."
, 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
, at Page 16]. The Court directed that the trial be "reopened
and continued" and that "supplemental appraisals and /or additional evidence" be
, 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 the...property,...[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 Testimony...in 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
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: