New York State Court of Claims

New York State Court of Claims

MANNING v. THE STATE OF NEW YORK, #2005-029-547, Claim No. 102353


Synopsis


partial appropriation; claimants awarded $60,250.

Case Information

UID:
2005-029-547
Claimant(s):
PATRICK B. MANNING and DORIS J. MANNING
Claimant short name:
MANNING
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
102353
Motion number(s):

Cross-motion number(s):

Judge:
STEPHEN J. MIGNANO
Claimant's attorney:
Corbally, Gartland and Rappleyea, LLPBy: Jon Holden Adams, Esq.
Defendant's attorney:
Hon. Eliot Spitzer
Attorney General of the State of New YorkBy: J. Gardner Ryan, Assistant Attorney General
Third-party defendant's attorney:

Signature date:
December 20, 2005
City:
White Plains
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision
This is a timely filed and unassigned claim for the appropriation of a portion of claimants' real property pursuant to the Eminent Domain Procedure Law and Section 30 of the Highway Law. The appropriation map, with description, was filed in the Office of the Dutchess County Clerk on September 1, 1998[1]
. This project is known as PIN 8126.76.201, Taconic State Parkway from Putnam-Dutchess County Line to Dutchess-Columbia County Line, S.H. 9482, Map No. 1013, Parcel 1021 (see Claim, Paragraph 5).
The claim was served upon the Attorney General and filed with the Clerk of the Court on April 24, 2000. The appropriation map and descriptions set forth therein are adopted by the Court and incorporated herein by reference.

The subject property is an irregularly shaped parcel consisting of 32.549± acres of vacant woodland in the Town of East Fishkill, Dutchess County acquired by claimants in March 1987 (see Exhibit 1). The only improvement on the property is a derelict barn from a prior farm which is accessed by a direct pathway. The parcel abuts the right-of-way of the Taconic State Parkway (hereinafter TSP) which traverses the easterly side of a steep walled mountain valley as it descends from the Putnam highlands to the Fishkill plain. The claimants' land is situated below the grade of the TSP, between the TSP and the valley bottom. The topography is steeply sloped with an approximate 200-foot change in elevation which varies with moderating cross-slopes and small plateaus. The property has frontage on Hortontown Road which runs along the valley bottom. The grade of the property as it ascends from Hortontown Road to the TSP is approximately 30%. The parcel also has approximately 66 feet of frontage on Miller Hill Road.

As part of a reconstruction of the TSP to replace the Miller Hill Road grade level crossing with a bilevel interchange, the State acquired .772 acres of claimants' land through the filing of an appropriation map on September 1, 1998. The acquired land was roughly quadrilateral in shape with perimeter dimensions of 430' x 130' x 293' x 60'. The shortest dimension was the property's frontage on Miller Hill Road. The taking contained the dirt path leading from Miller Hill Road to the abandoned barn. The acquisition was made "without access" and eliminated any legal right-of-access for the remaining property to or from Miller Hill Road.

The property is located in an R-2 residential zone of the Town of East Fishkill. Such zoning permits, "of right"[2]
, the residential development of lots with a minimum area of two acres and minimum road frontage of 50 feet. The neighborhood surrounding claimants' parcel is developed with some single family, private homes of varying age, style and value on lots two acres and greater. The area also has a few working farms. There is no commercial use, planned residential subdivision or multi-family development in the area. Electric and telephone service are available, but not town water or sewer. Individual homes have their own wells and septic systems.
It was the opinion of claimants' appraiser, Barbara Peck, that the highest and best use of the subject property prior to the taking was its present use, that is, vacant land available for lawful development consistent with zoning.

The State's appraiser, Kenneth L. Golub, testified that the highest and best use of the subject property prior to the taking was to subdivide the parcel into three large homesites.

From all of the evidence adduced, the Court concludes that the highest and best use of the subject property prior to the taking was residential, single family with potential for subdivision into three smaller lots for homesite development.[3]

There are three generally accepted approaches to determine the value of real estate: the cost approach, the income approach and the sales comparison approach. In determining the value of this property, both appraisers used the sales comparison approach which is the appropriate method for residential raw land.

Claimants are entitled to fair compensation for the property appropriated by condemnation (
Matter of Town of Islip [Mascioli], 49 NY2d 354, 360). Generally, the subject property is valued as it was on the date of the appropriation and the measure of the damages is its fair market value in its highest and best use on that date (Gold-Mark 35 Assocs. v State of New York, 210 AD2d 377). The fair market value is the price for which the property would sell if there was a willing buyer and a willing seller under no compulsion to either buy or sell (Matter of Allied Corp. v Town of Camillus, 80 NY2d 351; Gold-Mark 35 Assocs. v State of New York, 210 AD2d 377, supra). In determining fair market value, the condemnee is entitled to have an appraisal based upon the highest and best available use of the property, irrespective of whether it is being so used (Matter of County of Suffolk (Firester), 37 NY2d 649; Keator v State of New York, 23 NY2d 337).
In
Matter of County of Suffolk (Firester) (37 NY2d 649, supra at 652), the Court of Appeals stated as follows:
"[T]he correct rule to be applied ‘was to treat the premises not as raw acreage nor as part of a completed development but as a potential subdivision site giving the acreage an increment in value because of that potential use' [citations omitted]."

Claimants' appraiser, Ms. Peck, analyzed three sales of vacant property she considered comparable (see Exhibit 2). Ms. Peck's valuation of the property prior to the taking concluded that the property had a fair market value of $8,000 per acre or $260,000 for the entire 32.55 acre parcel.

There are several problematic issues in Ms. Peck's appraisal. First, her valuation of the property prior to the taking was done as of December 1, 1997. The taking actually occurred on September 1, 1998, some nine months later, and
this is the date which is applicable to this case. Notwithstanding this error, the Court would be willing to accept Ms. Peck's pre-taking appraisal since the record fails to demonstrate any dramatic change, positive or negative, in the local real estate values during the nine-month period from December 1, 1997 to September 1, 1998, however, the second issue with the appraisal is much more fundamental and cannot be disregarded so easily. Ms. Peck's testimony was that she valued the subject property as if it were zoned R-1 (1 acre residential). This zoning was used for all of her comparable sales choices and analyses. However, on cross-examination she conceded that the subject property is in fact zoned R-2 (2 acre residential) and was so zoned at the time of the taking. While Ms. Peck's analysis of comparable sales takes into account certain criteria (i.e.: topography and access) appropriate for development potential, it makes no adjustment for zoning differential. Nowhere in the record is there any explanation by Ms. Peck as to how this error may have affected her valuations or may now be effectively adjusted by this Court. As a result, I find that Ms. Peck's appraisal is in error as a matter of law and no weight will be given to this appraisal in regard to the pre-taking valuation of claimants' property. My only non-speculative alternative is to reduce the appraised value by 50% based upon the R-2 zoning. The resultant value would actually be lower than that of the State and I reject this approach as unfair to claimants.
The State's appraiser, Mr. Golub, analyzed six sales of vacant land (see Exhibit A, unnumbered Page 33). In his appraisal, Mr. Golub states that he considered using price per acre for the comparison but that the subject property is divided in two by its terrain and has access on two roads. He stated that a per acre "price could overlook that dual aspect of the property's character, which naturally suggests a three lot subdivision" (Exhibit A, Page 31). Mr. Golub opined the potential in the before situation was for one lot on Miller Hill Road and two lots on Hortontown Road. The witness also stated that lot sizes in the area differ significantly, ranging from 5 to 25 acres.

The suitability of comparable sales is a matter resting in the sound discretion of the trial court (
Levin v State of New York, 13 NY2d 87; Houle v State of New York, 73 AD2d 794). Mr. Golub opined that prior to the taking, the subject property could have been divided into three lots of 10 to 11 acres each.
Mr. Golub's comparable Sale 1 (labeled Sale 4924) involved a parcel of 22.15 acres. He made a total net adjustment of -30% and he indicated to the Court that the parcel is not truly comparable to the subject property. The Court agrees and this sale is disregarded.

Sale 2 (labeled Sale 4926) involved the sale of a parcel of 50.14 acres. This parcel was properly valued as raw land, however, no consideration was given to development potential. Further, the appraisal "double dips" by adjusting for both lot size and quantity, which are effectively the same thing. While the Court takes note of the $42,750 valuation in this sale, it is in no way dispositive.

Sale 3 (labeled Sale 4944) was a parcel of 6.32 acres located in Stormville, New York which sold for $50,000 in March 1997. Mr. Golub considered eight categories of potential difference between the parcels and made adjustments in three. He made a -10% adjustment for access and a -5% adjustment for quantity. He also made a +5% adjustment for lot size. This resulted in a net adjustment of -10% with an adjusted sale price of $45,000 for a single building lot.

Sale 4 (labeled Sale 4945) was a parcel of 6.37 acres, also located in Stormville, New York, which sold for $50,000 in July 1997. Mr. Golub again made adjustments in three of the eight categories of potential differences. He made a -10% adjustment for access, a -5% adjustment for quantity and a +5% adjustment for lot size. This resulted in a net adjustment of

-10% with an adjusted sale price of $45,000 for a single building lot.
Sale 5 (labeled Sale 4942) was a parcel of 5.94 acres, located in Stormville, which sold for $56,500 in March 1997. Mr. Golub made a -10% adjustment for access, a -5% adjustment for topography and a -5% adjustment for quantity. He also made a +5% adjust for lot size. This resulted in a net adjustment of -15% and an adjusted sale price of $48,000.

Sale 6 (labeled Sale 4948) was a parcel of 6.53 acres, located in Stormville, which sold in August 1997 for $45,000. Mr. Golub made a -10% adjustment for topography and a -5% adjustment for quantity, a +10% adjustment for location and a +5% adjustment for lot size. The adjustments negated each other which resulted in no adjustment to the sale price.

Based upon Mr. Golub's analysis of the sales, it was his opinion that the value of claimants' property prior to the taking was $135,000 (Exhibit A, Page 32) which indicates a development potential of three lots at $45,000 per lot.

Given the Court's required disregard of claimants' pre-taking appraisal, the Court must rely upon the State's appraisal
. However, the Court is not constrained to merely rubber stamp Mr. Golub's appraisal (see Matter of City of New York [A. & W. Realty Corp.], 1 NY2d 428; Foothills Corp. v State of New York, 50 AD2d 986).
In reviewing the potential development analysis, which the Court finds most persuasive, I note that each of the building lots identified by Mr. Golub (Comparable Sales 3-6) contained 6± acres. Mr. Golub's own testimony indicates that each of the three theoretical lots available to claimants would have been in the 10 to 11 acre size. The Court is mindful of the fact that land values do not increase in a linear fashion based solely upon total acreage. However, the Court is also aware that an 11-acre homesite will be worth incrementally more than a 6-acre homesite. As a result, the Court accepts Mr. Golub's pre-taking lot value of $45,000 and,
sua sponte, adjusts that lot price by 15% which the Court finds reasonable to allow for almost 100% variation in acreage for each of the building lots. Thus, the Court finds that the pre-taking value of the property to be $155,250 ($4,770 per acre), which includes potential development of three lots at $51,750.
Claimants' appraiser determined that following the appropriation, the subject property is without access, "has no potential for future development and has minimal value" (Exhibit 3, Addendum Page 3). At trial, Ms. Peck stated that it is her belief that the subject property has a highest and best use after the taking limited to excess land with no development potential.

It was the opinion of the State's appraiser that the remaining land had similar highest and best use as prior to the taking--potential for subdivision development. However, the post-taking potential was for two lots, both accessing Hortontown Road. He also stated that the parcel was no longer two separate sectors due to lack of access from Miller Hill Road.

Claimants introduced into evidence a portion of the Town of East Fishkill Code which was in effect in September 1998. Section A197-76 (B) (4) of the Code provides that "driveway grades shall not exceed a gradient of 4% within 30 feet of the roadway, then 15% overall, then 4% within 30 feet of the dwelling" (Exhibit 18, Page 2). Claimants assert that since the grade of their property on Hortontown Road is 30%, no driveway could be placed there and therefore, there was no development potential. However, no evidence was adduced to establish that construction of driveways meeting the Town Code (as opposed to a Town specification roadway) could not be accomplished, albeit with cut and fill costs which would be substantial.

Based upon the preponderance of the evidence presented, the Court finds that following the partial appropriation by the State, the highest and best use for the subject property remained as a residential (R-2) subdivision with development potential reduced from three lots to two.

The appropriate measure of damages in a partial taking is the fair market value of the whole before the taking, minus the fair market value of the remainder after the taking (
Acme Theatres v State of New York, 26 NY2d 385).
Ms. Peck determined that as the parcel's frontage on Miller Hill Road had been appropriated by the State and the remaining frontage on Hortontown Road is a steep uphill grade equal to or exceeding a 30% slope, which does not meet the requirements of the Town of East Fishkill of a maximum of a 10% grade for access and development, she concluded that the property is, in effect, "without access, the land now has no potential for future development and has minimal value" (Exhibit 3, Addendum Page 3).

Ms. Peck used the sales comparison approach in the after situation. She analyzed three sales, all in the Town of East Fishkill. The first was a 74.10 acre parcel sold June 3, 1999 (nine months after the taking) for $55,000 ($742 per acre). Ms. Peck made a +$25 per acre adjustment for site/view and a -$25 adjustment for accessibility. The adjustments negated each other and the indicated value stayed at $742 per acre.

Sale 2 was a 28.66 acre parcel sold in September 1996 for $25,000 ($872 per acre). Ms. Peck made an adjustment of -$50 per acre for topography resulting in an indicated value of $822 per acre.

Sale 3[4]
was a 50.14 acre parcel sold in July 1997 for $45,000 ($897 per acre). Ms. Peck made an adjustment of -$50 per acre for the inferior accessibility of the subject as compared to Sale 3. This resulted in an indicated value of $847 per acre. Ms. Peck opined that the value of claimants' property after the taking was $800 per acre for a total of $26,000 (rounded).
Mr. Golub used the sales comparison approach. He analyzed six sales (see Exhibit A, unnumbered Page 52). As stated above, the suitability of comparable sales is a matter resting in the sound discretion of the trial court (
Levin v State of New York, 13 NY2d 87, supra; Houle v State of New York, 73 AD2d 794, supra). Mr. Golub's comparable Sale 2 (labeled 4919) involves a parcel of 18.79 acres. He made a total net adjustment of -30% which the Court finds excessive indicating that the parcel is not truly comparable to the subject. The Court will not consider this sale in determining the subject's fair market value. Mr. Golub's Sale 5 (labeled Sale 4923) and Sale 6 (labeled Sale 4946) involved parcels of 87.11 acres and 113.03 acres respectively. Sale 5 is more than 2½ times as large as the subject property and Sale 6 is over 3½ times larger than the subject property. Based upon the size of these two parcels, the Court finds that these sales are not comparable to the subject property and the Court will not consider Sale 5 and 6 in determining the subject property's fair market value.
Sale 1 (labeled Sale 4918) was a 25.20 acre parcel sold in July 1997 for $150,000 ($5,952 per acre). Mr. Golub made one adjustment, -20% for topography, resulting in an adjusted sale price of $4,762 per acre.

Sale 3 (labeled Sale 4921) was a parcel of 33 acres sold in March 1997 for $127,500 ($3,864 per acre). The witness made negative adjustments of -10% for access, -20% for topography, -10% for shape and positive adjustments of 10% for location and 5% for cover, resulting in a net adjustment of -25% and an adjusted sale price of $2,898 per acre.

Sale 4 (labeled Sale 4922) was a parcel of 38.2 acres sold in May 1996 for $160,000 ($4,188 per acre). Mr. Golub made adjustments of -10% for access, -20% for topography, -10% for shape, +10% for location and +5% for cover for a net adjustment of -25% resulting in an adjusted sale price of $3,141 per acre.

Based upon Mr. Golub's analysis of the sales, it was his opinion that the value of claimants' property after the taking was $3,000 per acre (31.777 acres) for a total of $95,000 (rounded).

The Court disagrees with claimants' appraiser (Exhibit 3) in arriving at an after value of claimants' property. The Court does not accept Ms. Peck's opinion that the property has no possible potential access, minimal value and no highest and best use in the after situation.

Based upon the preponderance of the credible evidence, the Court concludes that the post-taking value of claimants' property is $3,000 per acre (31.777 acres) for a total value of $95,000 (rounded). Therefore, the Court finds that claimants were damaged in the amount of $60,250 as follows:
RECAPITULATION OF DAMAGES
Before Taking Market Value $155,250
After Taking Market Value
$ 95,000
$ 60,250

Direct Damages (.772 acres @ $4,770) $ 3,700 (rounded)

Indirect (Consequential Damages)
$ 56,550
$ 60,250


The Court has viewed the subject property and, in accordance with all of the foregoing, finds that claimants are entitled to an award of $60,250 with appropriate interest from September 1, 1998 (the date of the taking) to March 16, 1999 (six months subsequent to the date of service of the Notice of Appropriation upon claimants) and from April 24, 2000 (the date of the filing) to the date of this decision (see Court of Claims Act § 19 [1]) and thereafter to the date of entry of judgment herein (pursuant to CPLR 5001 and 5002). To the extent claimants have paid a filing fee, it may be recovered pursuant to Court of Claims Act § 11-a (2).

The award to claimants herein is exclusive of the claims, if any, of persons other than the owners of the appropriated property, their tenants, mortgagees, and lienors having any right or interest in any stream, lake, drainage and irrigation ditch or channel, street, road, highway, or public or private right-of-way, or the bed thereof, within the limits of the appropriated property, or contiguous thereto and is exclusive also of claims, if any, for the value of or damage to easements and appurtenant facilities for the construction, operation and maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer and railroad lines.

Let judgment be entered accordingly.

December 20, 2005
White Plains, New York

HON. STEPHEN J. MIGNANO
Judge of the Court of Claims



[1] The claim states September 1, 1999 which is apparently a typographical error. All appraisal reports and testimony refer to the year of taking as 1998.
[2] It is important in this analysis to note that in present day land use law the phrase "of right" zoning is more a theoretical concept than a regulatory definition. It represents a hypothetical maximum density on flat land with no water, flora, fauna, history, vistas or neighbors.
[3] There was somewhat vague testimony in the record indicating that a previous application for a 5-lot subdivision had been processed and was about to be denied (see Exhibit B). Claimants sought to minimize this denial by calling it a "sketch plan" but were simply not credible since the matter clearly went to public hearing. Further, Mrs. Manning's testimony that a subdivision could be approved with sole access to Miller Hill Road, despite Town Code restrictions on public roads and cul-de-sac length is, at best, speculative. Thus, claimants' apparent position that the loss of the Miller Hill Road access precluded an otherwise obtainable subdivision with Miller Hill Road as the sole access/egress is simply not credible.
[4] Ms. Peck's Sale 3 after the appropriation is the same parcel as Mr. Golub's Sale 2 (labeled Sale 4926) in the before situation.