New York State Court of Claims

New York State Court of Claims

BIENENSTOCK v. THE STATE OF NEW YORK , #2003-030-522, Claim No. 85601, Motion No. M-65971


Motion for additional allowance for expert appraiser's fees pursuant to Eminent Domain Procedure Law § 701 granted. Court not bound by Claimant's actual payments to experts, but may assess the reasonable value of the services necessarily rendered toward achieving a just result

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:
March 20, 2003
White Plains

Official citation:

Appellate results:

See also (multicaptioned case)


The following papers, numbered 1 to 8 were read and considered on Claimant's motion for an Order, pursuant to Eminent Domain Procedure Law § 701, awarding an additional allowance for actual and necessary costs, disbursements and expenses, including reasonable expert appraiser's fees expended in this appropriation proceeding.:
1-6 Notice of Motion, Affirmation by M. Robert Goldstein, Attorney for Claimant, Affidavit of Arthur H. Bienenstock, Claimant; Affidavit of Elaine Bienenstock, Assignee; Affidavit of Eugene Albert, Claimant's appraiser; Affidavit of John Casson, Claimant's appraiser, and accompanying exhibits

  1. Affirmation of J. Gardner Ryan, Assistant Attorney General
  1. Reply Affirmation of M. Robert Goldstein
After careful consideration, the motion is disposed of as follows:

Claimant seeks an additional allowance of $51,250.00 particularized as (1) construction cost analysis and court time for John Casson in the amount of $5,500.00; and (2) Albert Valuation Group's fee for appraisal and court time in the amount of $45,750.00.

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 condemner's proof is the difference between the Defendant's initial offer and the amount ultimately awarded by the Court. Id.

In this case, the advance payment offer from the Defendant had been in the amount of $451,600.00. [Claimant's Exhibit "B"]. By Decision filed January 28, 2000 this Court (O'Rourke, J.) had granted Claimant an award of $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 $1,264,125.50. A Certificate of No further Appeal was filed March 14, 2002. [Claimant's Exhibit "K"].

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.

In a prior motion addressed to allowing an additional allowance, this Court had granted the application as it pertained to counsel fees and disbursements, and awarded Claimant the sum of $517,587.69 for the actual, reasonable and necessary expense then established. [See, Bienenstock v State of New York, Scuccimarra, J. September 6, 2002, UID No. 2002-030-531

( The motion was denied to the extent that it sought additional allowances for Claimant's experts, since the necessary affidavits from the experts breaking down the efforts expended between the two trials involved in this case had not been included. Part of that determination necessarily involved ruling that the award was substantially in excess of the condemnor's proof, and that the litigation expenses as they related to counsel fees and disbursements were necessarily incurred.

As to whether the balance of the claimant's litigation costs were necessarily incurred - as noted by Defendant in its Affirmation - 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 re-zoned from an industrial, to a zone including retail uses - and indeed the area was re-zoned 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 re-zoning. [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 re-zoning, given that Defendant's appraiser did not consider re-zoning 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, 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. 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 determined Claimant's valuations should have been given some weight.

In the first appraisal submitted by Claimant the subject property was valued at $5,670,000.00. The fee for preparation of the initial appraisal report by Albert Valuation Group was $30,000.00. Eugene Albert, the president of the company, appeared to testify for Claimant on March 18, 1998 and March 19, 1998 in connection with that report. The State argues that the value analyses presented by Mr. Albert "were so egregiously flawed that little, if any weight could be accorded to them." Counsel for Claimant argues that this initial appraisal proposed the theory for what then became the predicate for the Appellate Division decision: that the highest and best use of the subject parcel at the time of the vesting was for retail purposes allowable were there a zone change to a "B-H" zone. Mr. Albert devoted a substantial portion of his analysis to that theory, as well as descriptions of the property. [Reply Affirmation, ¶¶ 4-6]. This analysis, it is argued, accounts for "65% of the report" and was "vital to any determination." [Ibid, ¶9].

As conceded by Claimant's counsel, however, while Mr. Albert's thesis that the current use was not economic was accepted, his approach as to how that might be achieved through demolition of part of the front of one of the buildings to accommodate replacement parking was discarded. The Courts instead thought demolition of all buildings except for buildings K and E would have been necessary. Claimant also concedes that Mr. Albert "went astray in his first report" by not determining a before and after value. [Ibid, ¶16].

Counsel for Claimant states "...the part of the Albert appraisal which was rejected by Judge O'Rourke and the Appellate Division was the methodology of partial demolition and reconstruction of the remaining building, as well as damages for the buildings ultimately required to be demolished. Most of the work done as to that report and the testimony concerning it was actually useful and used in fixing the award." [Ibid, ¶15]. This Court agrees.

A fair reading of the Appellate Division's determination certainly suggests that the most important aspect that required expert analysis, i.e.: the changed zoning considerations, was presented by Mr. Albert. In the second report prepared for the "second" trial, before and after values were presented. Mr. Albert charged $5,000.00 for the report. [Affidavit of Eugene Albert, ¶3]. He also testified on Claimant's behalf on November 12, 1998, January 21, 1999 and April 29, 1999. [Ibid, ¶2]. Information concerning the cost of demolition and reconstruction was incorporated through Mr. John Casson, Claimant's other expert.

In his Affidavit, dated October 16, 2002, John Casson states that he provided "expert analysis" to Claimant, and "prepared a report identifying the construction costs to convert Mr. Bienenstock's property into retail use. My fee for the preparation of said report was $4,750.00. In addition I testified before the court on behalf of Mr. Bienenstock. My fee for same was $750.00."

While it would be overstating it to declare that the information provided by these experts was relied on exclusively by the Courts in determining the ultimate awards, to state that the information was useless is not accurate either. As noted in the Appellate Division decision, no consideration should have been given to Defendant's expert's appraisal, and Claimant's appraisals remained as the theoretical benchmark. The Court is not bound by the Claimant's actual payments to his experts, but rather may assess the reasonable value of the services necessarily rendered toward achieving a just result. Based upon the present application, the reasonable value of the expert services necessarily expended toward achieving a just result for Claimant is $25,875.00.

Accordingly, Claimant's motion is granted to the extent that Claimant is awarded the total sum of $25,875.00, for the actual, reasonable and necessary expenses established herein:
Appraisals by Albert Valuation Group $22,875.00
Construction Cost by John Casson 3,000.00
TOTAL: $25,875.00

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

March 20, 2003
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...."