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
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
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
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
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.
, 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."
, 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, 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
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