New York State Court of Claims

New York State Court of Claims

HERNIGLE v. STATE OF NEW YORK, #2005-018-496, Claim No. 105457


Defendant is found 100% liable for the water damage to Claimant's property and Claimant is awarded the sum of $85,400.00 in damages.

Case Information

EUGENE HERNIGLE and GENE'S WELDING SHOP, INC. Because Claimant, Eugene Hernigle, is the owner/operator of Gene's Welding Shop, Inc., all references to Claimant will be singular in nature.
Claimant short name:
Footnote (claimant name) :
Because Claimant, Eugene Hernigle, is the owner/operator of Gene's Welding Shop, Inc., all references to Claimant will be singular in nature.
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:
Attorney General of the State of New York
By: G. LAWRENCE DILLON, ESQUIREAssistant Attorney General
Third-party defendant's attorney:

Signature date:
December 20, 2005

Official citation:

Appellate results:

See also (multicaptioned case)

Claimant seeks recovery from the State for property damage allegedly caused by the State's negligence in its contracting and oversight of a total reconstruction project of New York State Routes 30A and 5S through the Village of Fultonville in Montgomery County.

The area which is the subject of this litigation involves Route 30A, also known as Main Street, which runs through the Village of Fultonville in a generally north-south direction. Route 5S also runs through the Village in an east-west direction. As one travels south on Route 30A, the following run perpendicular to Route 30A, generally in an east-west direction: First, the Mohawk River, then the New York State Thruway, then Erie Street, then old railroad tracks, which were converted into a bike path as part of this reconstruction project, and finally Route 5S, also known as Church Street. Beyond Erie Street, Route 30A runs uphill to Route 5S. Flora Cerreto[1]
owned a house on Route 30A, known as 35 Main Street. The Cerreto property is the lowest-lying property in the Village. The backyard of the Cerreto property abuts the side of one parcel of Claimant's property, 17 Erie Street. The back of Claimant's property at 17 Erie Street and the back of the Cerreto property are level. From the back of Claimant's yard, the land topography rises to Route 5S.
Claimant described his property. It includes four parcels on the south side of Erie Street, known by the numbers 11, 13, 15, and 17. His business, Gene's Welding Shop, is located at 17 Erie Street, which is the property closest to Route 30A. He purchased this property on January 17, 1976; it consisted of a 2,376 square foot building on .32 acres. The building at this location has electrical service, air conditioning, and two heating sources - an old furnace and a wood stove. Next to it, traveling east, away from Route 30A, is 15 Erie Street, which Claimant uses for storage.[2]
There are two metal trailers on this property in which he stores welding material. The next property is 13 Erie Street, which has a storage building[3] known as the Old Freight House. Claimant stores material on this property as well, but not in the building. Farther east is 11 Erie Street on which is an old blend plant that Claimant uses for storing material and items he builds.[4] The square footage of this building is 6,596, and the lot is .3 acres. This building has electrical service, plumbing, air conditioning in a portion of it, and a heating source. Claimant testified that before this reconstruction project began he never had a flooding problem on his property.
There is virtually no disagreement about the series of events giving rise to this claim. Paul Daley, the Street and Water Commissioner for the Village of Fultonville; the Claimant; Robert Mosconi, the State's Engineer-in-charge of the reconstruction project; Dennis Brooker, a superintendent for Rifenburg Construction, Inc. (hereinafter Rifenburg), the main contractor for the reconstruction project; and Flora Cerreto[5]
all testified to some or all of the following facts:
New York State entered into a contract[6]
with Rifenburg to reconstruct and resurface Routes 30A and 5S in the Village of Fultonville and Town of Glen. Rifenburg's time-line[7] indicated the work would start in February 1999 and would be completed in July 2000. Some of the work would be suspended from December 1999 through April 2000. Included in the contract was the construction of a new storm drainage system and the conversion of an old railroad track line into a bicycle path. This path runs parallel between Route 5S and Erie Street, behind and uphill from Claimant's properties and perpendicular to Route 30A.
About a year or two before this project began, Mr. Daley, the Village Street and Water Commissioner, repeatedly repaired a recurrent sinkhole at the intersection of Routes 30A and 5S. When the State DOT came to repair the recurrent hole, Mr. Daley saw the uncovered area and noted there appeared to be an old, working drainage system which ran diagonally across Route 30A for approximately 30 feet, heading from the southwest to the northeast toward the Cerreto property. This was referred to as a French drain by many witnesses. Mr. Daley said the map of this existing sewer drainage system was provided to the DOT's engineer-in-charge, Mr. Mosconi, before the reconstruction project began, and he discussed the sinkhole with Mr. Mosconi on numerous occasions.

During the reconstruction project, the French drain was uncovered on the west side of Route 30A near the curb line. Mr. Mosconi testified that part of this drain was removed and one end was sealed off with brick. He said there was some water in the old system when they sealed it off. No investigation was done to determine the source from which the water in this system was draining or where this drainage system went. Mr. Mosconi assumed the designers of the project knew about the old system and took it into account when designing the new storm drainage system. He indicated the new storm drainage system would subsume the old one. At trial, when asked to review the design plans[8]
for this project, Mr. Mosconi could not find any reference to the old system on the plans.
Prior to the reconstruction project, there was a ditch that ran behind Claimant's welding shop at 17 Erie Street. The ditch ran parallel to Erie Street starting at the Cerreto property. The ditch which was approximately 10 feet wide and 2 feet deep, did carry water at times, although, at times it was dry. In 1999, after this construction project began, Claimant spoke with someone from Rifenburg[9]
about the ditch. Claimant was advised by this representative that the new drainage system being installed as part of the project was designed to collect the water that had flowed through the existing ditch. Based on this information, Claimant asked Rifenburg to fill in the ditch because it would now be a wasted area and an eyesore overgrown with brush. When Rifenburg filled in the ditch it was dry.
As a side issue, at this point, Defendant made a motion during the trial to add to its
First Affirmative Defense the culpable conduct of the Claimant as a cause or contributing factor to any damages sustained based upon Claimant's testimony that he requested Rifenburg to fill in the ditch behind his premises. Claimant opposed the motion and the Court reserved decision. Based upon the absence of prejudice and the direction under the CPLR that leave to amend shall be freely given, the Court grants Defendant's motion.
In the early fall of 1999, after part of the road reconstruction project was completed and the ditch behind Claimant's property had been filled in, Ms. Cerreto began having flooding problems in her yard and basement. Mr. Daley, Mr. Mosconi, and others repeatedly tried to help her resolve the situation. The water would enter her basement through the walls and rise so high that the water would shut down her furnace. Her sump pump could not keep up with the amount of water coming in. Mr. Daley recalled standing water on her property as well. At that time, Claimant's property also began to flood a little. Claimant spoke to Mr. Mosconi about the flooding and showed him the problem.
In an effort to alleviate the flooding of Ms. Cerreto's basement, Mr. Mosconi asked Rifenburg to dig a ditch from her backyard to Erie Street, between Claimant's property and the corner property, which helped with the standing water in the yard.[10]
The water was tested for chlorine to determine if it was coming from a municipal water line. It was not. The new ditch helped the flooding problem for a while.
In late November, according to Mr. Mosconi, the new drainage system, which was part of this project, was completed. Uphill, behind the backyard of Claimant's property, the State constructed a bike path which runs east and west, parallel to Erie Street. Beyond the bike path, further uphill, a catch basin or swale was dug adjacent to Route 5S. It was designed to catch water runoff and direct it eastward to a creek. According to Mr. Mosconi, Rifenburg's survey crew had incorrectly drawn out the slope of the swale. As a result, around November 30, Rifenburg had to regrade the slope. The slope was too steep, and if it was not regraded, a guardrail would be necessary on Route 5S. Over the next few days, the area was regraded to a 1 on 4 slope. Also, the swale area had not been sufficiently excavated and the flow of water to the east was blocked. Rifenburg removed excess material from the area which had caused the water to pool. As of December 15, the swale area was still under construction to obtain appropriate drainage.

In January 2000, Claimant's property and buildings were flooded, and Ms. Cerreto's water problems continued. Mr. Mosconi acknowledged that he was aware of the flooding problems at that time. He and others agreed that the water flooding Claimant's property was coming, at least in part, from the swale area near the bicycle path - part of the new drainage system. All of the witnesses who saw the water flowing onto Claimant's property noted that it was slushy, even on the coldest winter days when water would be expected to freeze.

Lawrence Levine, a professional engineer, testified on behalf of Claimant. It was his opinion that the State improperly sealed off the old storm drainage system and that was one source of the flood waters. Mr. Levine opined that the flowing water contained road salt or a similar additive which is why it did not freeze. Mr. Levine also attributed some of the water, coming from the south, to the swale near the newly created bicycle path. The berm, which was constructed to contain the water, had washed out. Claimant videotaped[11]
the flooding in and around his property over the course of approximately one month. Despite Claimant's complaints made to Mr. Mosconi, nothing was done about the water until late February 2000, when Rifenburg redug the previously existing ditch which they had filled in behind Claimant's property. Even with the efforts to redirect the water, there is still, to date, an ongoing problem of excess water in and around Claimant's property. In an effort to find the source of the water, the State dug a test hole near the Cerreto property but could not locate the water source.
Based on Mr. Mosconi's diary entry of January 24, 2000,[12]
in which he noted that an insurance investigator was looking at the Cerreto flooding problem, Mr. Levine stated that Mr. Mosconi knew of the problem but failed to take action to correct it until February 26, 2000. He opined that this was negligent and was contrary to New York State policy. In his opinion, a water problem needs to be dealt with immediately because water can cause damage quickly and, in this instance, there was a lot of water. Mr. Levine said that the State has equipment to handle all types of drainage issues, and that the State could call Rifenburg back into work or utilize experts in the Albany office who could assist. By his failure to use these resources, Mr. Mosconi did not follow standard procedure. Not only should Mr. Mosconi have continued to investigate the problem, he should have investigated it until the source of the water was found; he had, according to Mr. Levine, an obligation to perform such an investigation.
Mr. Levine testified that when Mr. Mosconi learned of the old drainage system, which was not shown on the State's project drawings, he should have consulted with his supervisors or the design engineers to make sure the new drainage system would handle water from the old "French" drainage system before the old system was blocked off. The failure to investigate whether this old drain system was considered, and blocking off the old system without first finding its water source was, according to Mr. Levine, a deviation from engineering standards. The absence of the old drainage system on the project plans suggests the old system was unknown to the project designers. It was Mr. Levine's opinion that Mr. Mosconi had a duty to public safety which was breached by the flooding of Claimant's and Ms. Cerreto's property.

According to Mr. Levine, by walling off the old system, the water from the hill would go around the blocked end and would find a new path. The water could follow the old and new drainage systems. In his opinion, because there was bedrock under the roadway and in this area, the water that flooded the Cerreto property came flowing downhill from Route 30A following the new and old piping systems and the new gravel. The water had nowhere else to go.

Mr. Levine also felt that the recurrent sinkhole, about which Mr. Daley told Mr. Mosconi, was significant because it was a water-related problem, and it indicated a significant volume of water was flowing under Route 30A and 5S. He said the State, by its construction work, basically moved the sinkhole problem from Route 30A to the Cerreto and Hernigle properties.

Mr. Levine visited Claimant's property and took photographs. He found that the trench behind Claimant's property was redug, but not deep enough, and in February 2002 was overflowing.[13]
The water had ponded. Also, the swale above Claimant's property was not properly constructed or maintained because it lacked a self-cleaning velocity of water. At the time of Mr. Levine's visit, the swale was partly filled in with construction debris, soil, etc.[14] Mr. Levine indicated the swale should not have filled in so quickly. He revisited the properties again in January 2004, and there was still water flowing on Claimant's property. He could hear the water moving below Claimant's building, and the water was still not freezing.
Dennis Brooker, a superintendent for Rifenburg, testified on behalf of the State. He oversaw the project at issue. He described it as a total reconstruction of Main Street, the realignment of the intersection of Main Street and Route 5S, and drainage system construction. He identified numerous photographs[15]
which showed a ditch running from the Cerreto property behind the Claimant's property from different viewpoints. That ditch had been filled in at the request of Claimant in the fall of 1999, outside the contract specifications. It was then re-excavated in February 2000 at the request of Mr. Mosconi. Mr. Brooker agreed with Claimant that the ditch behind Claimant's property had to be redug because of ongoing flooding.
The State called Peter Obernesser who was the DOT Regional Construction Engineer at the time of the project. He was unfamiliar with this particular project but testified that, as a general policy, when DOT uncovers an old drainage system they hook up the old system into the new one. This occurs provided the water is not gray or black when an old system is carrying water downstream from a new drainage system upstream. If the old drainage carries gray or black water, it gets hooked up to the sanitary sewer system. If the old system drains away from the new one, it is blocked off.

On cross-examination, Mr. Obernesser said if there was water flowing in the old system, it would be improper to cap it off without finding the water source, and if Mr. Mosconi did so, it was a deviation from the standard DOT practices. At the end of the job, the old system should be incorporated into the new one.
Claimant contends that the State caused his property to flood by sealing off the old storm drainage system, referred to at trial as the French drain, without finding the source of the water in that old system and investigating whether that drainage was incorporated into the new drainage system. The water displaced from the French drain, and according to Claimant's position, contributed to the flooding on his property. The overflow from the new catch basin or swale above his property also caused the backup of water onto his property and into his buildings. Claimant argues that once the State undertook the construction of a new drainage system, it had the duty to act with reasonable care so as not to injure adjoining property owners. Claimant asserts that the invasion of his property by this excess water, as a result of the State's actions, also was a trespass and a nuisance.

Defendant, in opposition, argues that no duty was owed to Claimant by the State and that the State's actions were not the proximate cause of Claimant's injury. Defendant relies upon
Friedland v State of New York (35 AD2d 755) in support of its position and for the proposition that water moving from State-owned property to an adjoining property is not, in and of itself, actionable. In Friedland, the Third Department said "[r]iparian owners above or below have equal rights to improve their properties, come what may to the surface waters, so long as the improvements are made in good faith to fit a rational use for which it is adopted and provided the water is not cast by means of drains or ditches upon adjoining premises" (Friedland 35 AD2d at 756). The State, in Friedland, built a highway about one mile from Claimant's property and redirected an existing stream which Claimants alleged caused damage to a pond on their property. However, the stream followed its original streambed to Claimant's property. The Court found that there was no unreasonable interference by the State with the drainage of water or the natural watercourse which resulted in any damage to Claimant's pond.
Here, the State undertook the construction of a new drainage system. Mr. Mosconi testified that the old drainage system located by the church, referred to as the French drain, had some water running through it when it was capped off and sealed. Mr. Mosconi presumed that this old drainage system was subsumed within the new system, but he did not investigate the accuracy of his presumption, and the plans for the new system[16]
did not make any reference to this old system. Mr. Obernesser testified that the failure to find the water source and ensure the incorporation of the French drain into the new system was a deviation from standard DOT practices and, according to Mr. Levine, a deviation from good and accepted engineering practices. Mr. Levine testified that the water that flowed through the French drain, once the drain was sealed off, would follow outside of the piping and channel through the new gravel, particularly since the base at this location was bedrock, leaving the water no place else to go.
According to both Mr. Daley and Mr. Mosconi, the piping from the old French drain proceeded from Route 30A, in front of the church on the west side, across the street in the direction of the Cerreto property. Since the backyard of Claimant's property, at 17 Erie Street, and the property of Ms. Cerreto were level and the lowest-lying location in the vicinity, it requires no speculation to find that the water, which could no longer travel the old drainage system, would flow with the natural downhill course to the property of Claimant and Ms. Cerreto.

The State, as part of the new drainage system, also collected the surface water from Route 5S and redirected this water into a newly constructed catch basin or swale which drained into a small creek ultimately flowing to the Mohawk River. However, the swale was not properly excavated and the drainage was blocked which caused a backup of water that flowed over the banks of the berm and down the hill to Claimant's property. According to Mr. Levine, as late as 2002, two years after the construction undertaken by the State, the swale had a buildup of debris causing it to overflow onto Claimant's property. Mr. Mosconi also testified that he saw water flowing over the berm, downhill, to Claimant's property. Under these circumstances, the facts stand apart from the rights of landowners to do as they will to the surface waters, as set forth in the
Friedland case, relied upon by Defendant.
Here, the State collected and diverted the surface waters effectively casting these waters, upon Claimant's property, conduct proscribed by established precedent and forming the basis for the State's liability. In
Musumeci v State of New York, 43 AD2d 288, the State was constructing and relocating a State highway. In conjunction with this work, drainage ditches were built to collect the surface waters which were then fed into a nearby creek. The creek was taxed beyond its capacity and, as a result, flooded Claimants' property. The Court said "[l]iability attaches to the State, here, however, on this record which plainly demonstrates that the State did employ artificial means to channel the diffused surface waters in excess of the natural capacity of Waterhouse Creek despite well-settled law proscribing such conduct" (Musumeci, 43 AD2d at 292; [citations omitted]; see also Long v Sage Estates Homeowners Assn. 16 AD3d 963, where plaintiff's parcel of land was downhill from an undeveloped lot. Defendant bought the lot, built a house and a berm. After a storm, the berm washed out, flooding plaintiff's property. The Court found the berm to be an artificial diversion and collection of water, supporting sufficient actionable conduct to defeat summary judgment).
Claimant also asserts Defendant's conduct was a trespass and private nuisance. An action for trespass requires a showing of intentional or reckless entering upon another's land by a person, thing, or substance resulting in actual or constructive possession (
Brown v Arcady Realty Corp. 1 AD3d 753; Farrell v Stram 228 AD2d 880). The resulting damage need not be intended; however, the invasion or intrusion must be intentional or an immediate and inevitable consequence of Defendant's conduct which is wilful or so negligent as to be the equivalent of wilful (Phillips v Sun Oil Co., 307 NY 328, 331). Here, although the State's conduct resulted in the invasion upon Claimant's property of significant water, there is no indication that the State either intended, or wilfully constructed the drainage system so as to make the invasion of Claimant's property an immediate or inevitable consequence. Although negligent, the State's conduct did not rise to the level of wilful or intentional, and therefore, no cause of action for trespass has been established.
The basis for a nuisance action is interference with the use and enjoyment of land (
Copart Inds. v Consolidated Edison Co. of N.Y., 41 NY2d 564). The interference can be either intentional and unreasonable or negligent and reckless, but it must be a substantial interference (Christenson v Gutman, 249 AD2d 805, 807; Copart Inds. 41 NY2d at 569). Defendant's interference is intentional when Defendant acts for the purpose of causing it, knows that it is resulting, or is substantially certain to result from its conduct (Copart Inds. 41 NY2d at 571;
2 NY PJI2d 126 [2005]). The Court does not find that the State intentionally caused the interference with Claimant's use and enjoyment of his land. The Court does find, however, that the State's negligence in this regard has been adequately established and the State is 100% liable for Claimant's property damage caused by the water flowing onto his property. The Court does not find that Claimant's direction to Rifenburg to fill in the ditch behind his property was a proximate cause of his damages, since after this ditch was re-excavated, Claimant continued to incur significant flooding and damage. The Court also does not find Rifenburg's actions independently culpable from the State's, as Mr. Mosconi directed and oversaw the work being performed, and it was not established that Rifenburg's action in constructing and excavating the swale and sealing off the French drain were done in contravention to the State's design plans.
Claimant testified as to the extent of the damage to his property as a result of the flooding. His main business location at 17 Erie Street suffered the most extensive damage. Water flowed under the concrete floor of the building and came up through cracks in the floor to a level of approximately two inches. The flow of water excavated a path through the dirt underneath the concrete, leaving the concrete flooring with no base support at various locations. As a result, the concrete settled and cracked causing the main support beams to split and the roof to sag and leak. In mid-March of 2000, Claimant was working on a 10-wheel dump truck which was parked in one bay on the concrete flooring, when the concrete cracked and dropped from the weight. As a result, there are areas of Claimant's shop, including his hoist which is secured to the concrete, which he can no longer use due to the risk of further concrete failure and injury to himself or other workers.
At the old blend plant, 11 Erie Street, approximately a half inch of water flowed through the building, also causing damage to the concrete flooring. The old freight house at 13 Erie Street had no water inside the building although water flowed underneath the structure.

The structural condition of the buildings was described by Claimant's expert, Mr. Levine, who opined that the buildings at 17 and 11 Erie Street were not economically repairable due to the extent of the water damage. He described the magnitude of the cracking. At the old blend plant, 11 Erie Street, there was horizontal cracking which evidenced foundation failure, although this building was still usable according to Mr. Levine. In Gene's Welding Shop, 17 Erie Street, the flowing water could be heard, as well as seen, under the concrete. There are actual openings in the welding shop's concrete flooring through which Mr. Levine shined a light and inserted a measuring tape showing the void and the absence of supportive ground. This building also has horizontal cracking caused by the water undermining the concrete, resulting in the walls "kicking out." Mr. Levine told Claimant not to use the hoist and at least one of the shop bays due to the extent of the undermining of the concrete. Since Mr. Levine opined that the buildings were not salvageable, he estimated the total cost to replace the welding shop, the adjoining shed, and this portion of the blend plant was $391,776.[17]
No evidence was submitted as to the cost of damage to the blend plant, separately, or the freight building at 13 Erie Street.
According to Mr. Levine, before rebuilding 17 Erie Street, in order to be sure the new building will be stable, the water source must be found and diverted. The building at 17 Erie Street must be demolished, all the heavy equipment must be moved, and the business either closed or relocated temporarily. The building must be taken down, all debris removed, the ground stabilized with new gravel fill, and a new metal building installed.

As part of Mr. Levine's estimate,[18]
he included a 20% increase over the total project cost for site cleanup because of concern that the water or surrounding site could be contaminated. There was no proof of contamination to support this estimation. The breakdown of Mr. Levine's assessment of the cost to restore the property to its pre-damage condition from his testimony is:
• ab Engineering and architectural costs,

environmental testing and impact
statements $ 45,000.00

• ab Clear site, remove equipment, tear

down structure, remove debris, take

away old gravel fill and bring in new

gravel fill, stabilize ground foundation

and relocate underground water flows
(To take approximately two months) $ 80,000.00

• ab Pre-designed building to include size
to include out buildings $161,000.00

• ab Sign and foundation $ 5,000.00

• ab Telephone, cable, electrical $ 5,800.00

• ab Equipment/construction costs $ 16,600.00

• ab Soft costs, DEC, town, legal fees,
insurance, miscellaneous consulting fees
(Estimate approximately 3 months) $ 18,000.00

• ab Site cleanup - 20% of total cost $


• ab Total time business closed - 7 months

On cross-examination, Mr. Levine indicated the pre-designed building was a 60' X 60' or a 3,600 square foot structure, almost 1,300 square feet larger than the existing building at 17 Erie Street, which the Town of Glen assessor, Ms. Stella Gittle, testified was 2,376 square foot. Mr. Levine indicated he used the cost for the larger building to accommodate the space lost from the blend plant and to meet the required building codes. Mr. Levine did not specify what portion of the 3,600 square foot new building was attributable to the blend plant and the building code requirements. The $161,000 cost for this new building was based on a $35 per square foot cost incurred for the recent construction of a similar building in the Albany area. Mr. Levine did not describe the specifics relied upon in reaching that square foot cost. In reviewing the calculations, the Court notes that $35 per square foot for a 3,600 square foot building actually is $126,000 not $161,000.

Also, on cross-examination, Mr. Levine indicated that the $16,600 cost attributable to equipment/construction cost contingencies, was based upon 10% of the total building construction costs as a monetary buffer for unanticipated expenses. The Court finds such a contingency speculative. Mr. Levine also testified that the 7-month closure for the business was an estimate. He did indicate that Claimant could perform at least some work from another site, although finding a feasible location would be challenging given the type of business and extensive equipment needs. No other evidence was presented regarding feasibility or costs of rent and operating at a temporary location.

Mr. Levine did not estimate any separate costs for the cost to repair or replace the blend plant at 11 Erie Street.

After considering the evidence, the Court finds that the building at 17 Erie Street has sustained total damage as a result of the water on Claimant's property - in effect a destruction. Although Claimant is still using the building, it is no longer structurally sound for Claimant's business activities. The concrete flooring and ground support have been undermined causing the supportive framework for the building to be compromised. The real property continues to have ongoing flooding and draining problems which must be corrected. The building at 11 Erie Street, the old blend plant, also has been totally undermined due to the water damage. The fact that the property is still usable, in its damaged condition, does not negate the full extent of the damage (
compare Prashant Enters. v State of New York, 228 AD2d 144, 148). There was also some damage to the old freight house; however, Claimant doesn't use this building and no evidence of any measure of damages was submitted, thus no damages will be awarded for 13 Erie Street.
It is well-established that the measure of damages to property with a market value where the property is not totally destroyed, is either the difference between the market value immediately before and immediately after the damage, often referred to as the diminution-in-value rule, or the reasonable cost of repairs necessary to restore the property to its former condition, whichever is less (
see Jenkins v Etlinger, 55 NY2d 35, 39; PJI 2:311 [citation to charge]). It is the lesser amount to which Claimant is entitled and which ensures that no more than is necessary to remedy the injury is received (Fisher v Qualico Contr. Corp., 98 NY2d 534, 539; Jenkins, 55 NY2d at 39). Where as here, the property has been effectively totally destroyed, the market value prior to the damage is the proper measure of damages (Gass v Agate Ice Cream Inc., 264 NY 141; Sandoro Harlem-Genesee Market & Nursery, Inc., 105 AD2d 1103, 1104). Claimant needs to prove only one measure of damages, which will be used if no evidence of another measure is provided (Jenkins, 55 NY2d at 39; Prashant Enters., 228 AD2d at 148). Once Claimant has established one measure of compensation, the burden then shifts to Defendant, as an issue of mitigation, to prove that a lesser amount will adequately compensate the Claimant (Fisher, 98 NY2d at 539; Jenkins, 55 NY2d at 39).
Claimant has presented proof of the cost to repair the property by correcting the water problem and constructing a new building at 17 Erie Street for Claimant's business. Based upon Mr. Levine's testimony, a new, larger building would be the most economical and efficient means to repair the structural damage to 17 Erie Street and incorporate the necessary space from 11 Erie Street.

Claimant also presented proof of the assessed fair market value of the property at 17 and 11 Erie Street through the testimony of Stella Gittle, Chairperson, since January 2000, of the Board of Assessors for the Town of Glen. Ms. Gittle testified that in 1997, the Town of Glen contracted with Sabre Systems to reassess all of the properties in the town for the 2000 tax roll. As a result of that valuation process, as of 1999, Claimant's property at 17 Erie Street, which included a 2,376 square foot structure built in 1950 on .32 acres was valued at $41,456 for the building. This was later adjusted in 1999, Ms. Gittle believed after a grievance was filed, to $21,000 for the building and $7,800 for the land.[20]
Ms. Gittle had no knowledge of the reason for the reduction or the basis for the new or prior value. According to Ms. Gittle, the property at 11 Erie Street, the blend plant, included a 6,596 square foot building built in 1950 on .3 acres valued at $7,600 for land and $51,800 for the building. Ms. Gittle also had no knowledge of the factors considered in reaching this valuation.
Defendant presented evidence of the fair market value of 17 Erie Street before the damage, using two separate appraisal approaches. Defendant provided the testimony and appraisal report[21]
of Richard J. Stropp, III, of Pomeroy Appraisal Associates, Inc. Mr. Stropp assessed the market value of 17 Erie Street to be $26,000 using both the Sales Comparison and Direct Income Capitalization Approaches. Although the date of valuation reflected in the appraisal report is November 1, 2000, at trial Mr. Stropp testified that this was in error and the valuation date was actually November 1, 1999. Defendant did not provide any evidence of the value of the property after the water damage; no reduction in value was offered, nor did Mr. Stropp indicate any conclusion that his appraisal reflects a determination that the flooding did not diminish the value of the property. Such a determination, the Court would, in any event, find incredible given the extent of the water damage found by the Court. No evidence was provided as to the fair market value or diminution in value of Claimant's other damaged properties, specifically 11 Erie Street.
Restrained by the proof and bound by the law, the Court must assess damages. As a result of the complete damage to Claimant's properties, he is entitled to the full pre-damage fair market value of the properties.

For the property at 17 Erie Street, the Court has two sources of fair market value, Defendant's appraisal and the 1999 Town of Glen assessment. The Court finds both valuations problematic.

In reviewing Defendant's appraisal of 17 Erie Street, Mr. Stropp, using the Sales Comparison Approach, the approach with which he credited the most weight, valued the land, improvements, and the building. To value the land alone, Mr. Stropp utilized four comparables. All the properties utilized for comparison were significantly larger than Claimant's property and three out of the four, also representing the lowest price per acre, were outside of Fultonville in the City of Johnstown in another county. Mr. Stropp gave these properties equal weight in assessing the land value at 17 Erie Street and only made one adjustment for land size (-10%) on a lot that was almost 14 times larger than Claimant's. A review of the photographs of each property led this Court to the conclusion that most weight should have been placed on the Fultonville property as it is larger but closer in size and location to Claimant's property. The sale of this property, however, was after the valuation date (the other sales were all well before the valuation date).

The improved property comparisons the Court finds similarly skewed. Mr. Stropp considered five properties, three in Johnstown and two in Fultonville. Only one property, P-4, was sold at the time of the valuation date but in a different city. P-2, a Fultonville property, was sold in January 1999 for $16.18 per square foot. However, this building was significantly larger than Claimant's. Mr. Stropp also notes that he made a $4.50 adjustment to each comparable for heating and plumbing. Yet, Claimant's property actually has two heat sources so it is unclear why he made this adjustment or what portion of the $4.50 per square foot reduction was attributable to heat. A -20% adjustment was made for the condition of the properties identified as P-2 and P-5, and an unspecified personal property adjustment was made to P-4. As far as the personal property adjustment, presumably although not identified, Mr. Stropp was adjusting for the three lifts located on this property; yet pre-damage, Claimant's property also had an inground anchored hoist or lift which was operable.

Mr. Stropp also valued the property by the income capitalization approach. This approach values the property by capitalizing the income potential of the building. The net rental income of the property is estimated after deducting certain estimated expenses and then applying a capitalization rate. Here, the property is owner-occupied. Mr. Stropp used four rentals as comparables. No comparable rental leases were used from Fultonville, except one. This building was almost six times larger than Claimant's structure with a newly added addition in 1995. This property was actually purchased by the renter a year before the valuation date, during the pendency of the lease. The remaining rental values used comparables in Amsterdam and Little Falls, many miles from Claimant's property, for warehouse and manufacturing businesses. Two of these leases were long-term, 10 to 25 years, and were entered into in 1992, seven years before the valuation date. The rents of both of these comparables were approximately $.50 per square foot lower than the Fultonville leased property.

What was referred to as the fair market assessed value of the property was also troublesome. The assessed value of the premises, provided by Ms. Gittle, was presented without any basis for how the value was reached or what factors were considered. The original assessment for the building at 17 Erie Street was $41,456, later reduced, presumably after the valuation was grieved to $21,000 for the building, and $7,800 for the land. Whether the land value was also reduced was not presented. Without any basis or reasoning for the reduction in the record, the Court finds Defendant's calculation of the fair market value of the premises as the most reliable evidence of the pre-damage value of this property.

The only value for the property at 11 Erie Street was the evidence of the 1999 tax assessment. Since this building was also completely undermined and structurally compromised, according to Mr. Levine, and the land subject to ongoing flooding, the Court awards the full value of this property in damages as well.

Claimant is thus awarded $59,400 for the 11 Erie Street property and $26,000 for the 17 Erie Street property for a total of $85,400.

Even if these properties are not considered destroyed but merely damaged, the proper measure of damages would be the cost to repair the property to its pre-damage condition or the diminution in value, whichever is less (
Jenkins, 55 NY3d at 39).
Where no evidence of the diminution in value is provided, Claimant's estimate of the cost to repair would be used, limited only by the fair market value of the pre-damage property (
Id.; Gass, 264 NY at 143; 1B NY PJI3d 1935 [2005] [citation to comment]). Since Claimant's estimate of the cost to repair is several times greater than the pre-damage fair market value of the property at 17 Erie Street by either Defendant or the town assessment, the Claimant would still be limited to the fair market value (see Gass, 264 NY at 143; McDermott v City of Albany, 309 AD2d 1004, 1006; Byrdcliffe Music v Craig 143 AD2d 869, 870; 1B NY PJI3d 1935 [2005] [citation to comment]). No evidence other than the town assessment was offered for 13 Erie Street. Since the building at this location, due to the water, is also structurally unsound, using Mr. Levine's uncontradicted estimate for the cost of a replacement building at $35 per square foot, the cost for just a new structure the size of the blend plant, $230,860 (6,596 sq. ft. X $35/ft.), would be far in excess of the pre-damage fair market value based upon the town's assessment. Claimant can receive no more than the full pre-damage value of the property.
The Court does not find sufficient proof in the record to award any damages for loss of income that may be incurred for the time the business may be closed or restricted for necessary work on the property.

Accordingly, based upon the foregoing, Defendant is found 100% liable for the water damage to Claimant's property and Claimant is awarded the sum of $85,400.00 in damages.

All motions heretofore not ruled upon are denied. To the extent Claimant has paid a filing fee, it shall be reimbursed pursuant to Court of Claims Act § 11-a(2).

December 20, 2005
Syracuse, New York

Judge of the Court of Claims

[1]Ms. Cerreto's testimony was received in deposition form as she was deceased by the time of trial. Her claim against the State (Claim No. 105456) was settled and discontinued.
[2]Exhibit 65.
[3]Exhibit 64.
[4]See n. 2.
[5] See n. 1.
[6]Exhibit 1.
[7]Exhibit 3.

[8]Exhibits 51 - 56.

[9]Exhibits 51 - 56.

[10]Claimant marked this trench on Exhibit 81.
[11]Exhibit 67.
[12]Exhibit 46.
[13]Exhibit 95.
[14]Exhibit 94.
[15]Exhibits 61, 62, I, J, and L.
[16]Exhibits 52 -56.
[17]The cost includes one new building that incorporates the area used in the blend plant for storage.
[18]Mr. Levine's report was never introduced into evidence.
[19]The total is the amount to which Mr. Levine testified, despite the fact when added together the sum of the breakdown is $396,696.
[20]It wasn't clear whether there was any reduction for the value of the land.
[21]Exhibit M.