New York State Court of Claims

New York State Court of Claims

LEENY'S v. THE STATE OF NEW YORK, #2006-019-001, Claim No. 100514


Synopsis


After trial, court awarded claimant total damages of $110,560. for partial appropriation including direct damages of $22,400, indirect damages of $62,600, as well as $25,560 for costs to cure; court adopted State's proof of highest and best use and valuation in the after situation.

Case Information

UID:
2006-019-001
Claimant(s):
LEENY'S AUTO WASH, INC.
Claimant short name:
LEENY'S
Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
100514
Motion number(s):

Cross-motion number(s):

Judge:
FERRIS D. LEBOUS
Claimant's attorney:
JOSHUA J. EFFRON, ESQ.
Defendant's attorney:
HON. ELIOT SPITZER, ATTORNEY GENERALBY: Joseph F. Romani, Assistant Attorney General, of counsel
Third-party defendant's attorney:

Signature date:
February 10, 2006
City:
Binghamton
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision
This is a timely filed claim for the permanent appropriation of property owned by claimant Leeny's Auto Wash, Inc. pursuant to the Eminent Domain Procedure Law and Highway Law § 30 in a proceeding entitled "Liberty-Woodbourne, Part 1, State Highway No. 1691, Sullivan County, Town of Liberty, Map No. 65, Parcel No. 88." A trial in this matter was held on November 30, 2004 and December 1, 2004 in the Binghamton District. Thereafter, the parties requested and were granted additional time to submit post-trial memorandums. The court has made the required viewing of the subject property which is the subject of this claim. (CCA § 12 [4]).


Appropriation Map No. 65, describing the appropriated Parcel No. 88, was filed in the Sullivan County Clerk's Office on February 13, 1998 which the court finds was the date of the taking. The appropriation maps and descriptions contained therein are adopted by the court and incorporated by reference. This claim has not been assigned or submitted to any other court or tribunal for audit or determination.


Claimant took title to the subject property by deed dated July 24, 1997 which was filed in the Sullivan County Clerk's Office in Liber 1958 at page 516. The appraisers of both parties conclude that claimant was the owner in fee of the subject property. This claim was filed on June 9, 1999.


The subject property is located on the westerly side of Sullivan Avenue (known as Old Route 17) in the Village and Town of Liberty, Sullivan County, New York.


Prior to the taking, the subject property was rectangular in shape and consisted of

approximately 0.37 level acres (or 16,117 square feet), with 100 feet of frontage on Sullivan Avenue and an average depth of 163 feet. The subject is located within a commercial zoning district allowing for a wide variety of commercial uses. The site was improved in 1970 by a one story masonry building used as a four bay car wash (one automatic car wash bay and three self-service bays). Additionally, there were four vacuum units located in the front of the building along Sullivan Avenue. The building was setback approximately 52 feet from the highway right-of-way and almost the entire area around the building was asphalt.

The taking consisted of a rectangular strip across the front of the property along Sullivan Avenue ranging in depth from 18 feet to 20 feet for a total of .042 acres or 1,830 square feet. The appropriated portion was paved asphalt on which four vacuum stations and two pole-mounted lighting fixtures were located. The taking reduced the setback on the front of the subject property along Sullivan Avenue.


The court believes a preliminary statement regarding the parties respective positions will be beneficial in placing the rest of the discussion into context. Prior to the taking, customers would enter the subject property and proceed to the rear to enter the car wash bays and then exit towards the front of the car wash building, enabling the customers if they so desired to pull into one of the vacuum units. Claimant's position is that the reduced setback along the front of the subject property on Sullivan Avenue caused it to move the vacuum stations to the rear of the parcel and reverse the traffic flow by directing customers to enter the car wash bays from the east side (or front) of the building which was consistent with the State's proposed cost to cure. According to claimant, there is now an inadequate area between the car wash bays and Sullivan Avenue thereby reducing in half the number of vehicles that can be on-site either actively using or waiting to use the car wash bays. Additionally, claimant alleges that the State's taking created drainage problems in front of the building due to a change in grade resulting in customers having to drive through standing water along the front of the subject property.


For its part, the State contends that the highest and best use of the property is still as a car wash. The State argues that claimant's damages are due in large part to increased competition from a modern, state-of-the-art car wash facility in the area and not solely due to the State's appropriation. The State also asserts that the drainage problem alleged to have been caused by the raise in grade of Sullivan Avenue actually existed prior to the appropriation as demonstrated by photographs showing ponding in front of the building before the taking.



DISCUSSION
  1. Fair Compensation
Claimant is entitled to fair compensation for property appropriated by condemnation. (
Matter of Town of Islip [Mascioli], 49 NY2d 354, 360 [1980]). To that end the court is required to value the subject property according to its highest and best use as of the date of vesting with the measure of damages being the fair market value in its highest and best use on that date. (Town of Islip [Mascioli], 49 NY2d at 360; Matter of County of Clinton [Gagnon], 204 AD2d 898, 899 [1994]; Gold-Mark 35 Assocs. v State of New York, 210 AD2d 377 [1994]). 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 [1992]; Gold-Mark 35 Assocs., 210 AD2d 377).
  1. Highest and Best Use
It is well-settled that "[i]t must be established as reasonably probable that the asserted highest and best use could or would have been made of the subject property in the near future [citation omitted]. A use which is no more than a speculative or hypothetical arrangement in the mind of the claimant may not be accepted as the basis for an award [citation omitted]." (
Matter of City of New York [Shorefront High School - - Rudnick], 25 NY2d 146, 149 [1969]).

Both appraisers concluded that the highest and best use of the subject property, in the before situation, is its current use as a car wash operation.


The parties' appraisers disagree, however, on the highest and best use of the subject property in the after situation. (Cl's Ex 8, pp 13-14; St's Ex A, pp 43-44). Claimant's appraiser concludes that the highest and best use for the subject property in the after situation is as commercial vacant land. (Cl's Ex 8, pp 38, 42-43). The State's appraiser testified that the highest and best use after the appropriation is the same as in the before situation, namely as commercial development as if vacant and for a car wash as improved. (St's Ex A, p 86). The State contends that its position regarding the highest and best use after the appropriation is supported by the fact that claimant has continued using the subject property as a car wash after the taking.


The court concurs with and adopts the finding of both appraisers in the before situation and the finding of the State's appraiser in the after situation. The court is satisfied that the highest and best use of claimant's property still is as a car wash. Claimant's position that his facility is functionally obsolete after the appropriation is not borne out by the fact that the car wash is still operating. This court finds that claimant's conclusion of a highest and best use of the subject property as vacant commercial land without improvement must be rejected as not supported by the credible evidence. As such, the court rejects the after situation analysis of claimant's appraisal as to both use and valuation. (
Mays, Inc. v State of New York, 300 AD2d 545, 547 [2002], lv denied 99 NY2d 511 [2003]; Split Rock Partnership v State of New York, 275 AD2d 450 [2000], lv denied 95 NY2d 770 [2000]; Broadway v State of New York, Ct Cl, November 6, 2003, Ruderman, J., Claim No. 103220 [UID No. 2003-010-032]).[1] Accordingly, the court finds that the State's after situation analysis of highest and best use is supported by the credible evidence and thus turns to the issue of valuation. (Chemical Corp. v Town of E. Hampton, 298 AD2d 419 [2002]; Vassar College v State of New York, 294 AD2d 427 [2002]).
  1. Valuation
  1. Before Value
There are three generally accepted approaches to determine the value of real estate: (1) the cost approach; (2) the income capitalization approach; and (3) the sales comparison approach.


Claimant's appraiser testified to a $380,000 value of the subject property in the before situation. Claimant found a value of $384,000 using the sales comparison approach; a value of $392,000 using the cost approach; and a value of $376,000 using the income approach. Claimant's $384,000 value using the sales comparison approach represented a land value of $222,000 and $162,000 for building and improvements. Claimant's appraiser indicated that the sales comparison approach provided an excellent indicator of before value. (Cl's Ex 8, p 37).


The State's appraiser testified to a $385,000 value of the subject property in the before situation. The State found a value of $385,000 using the sales comparison approach, a value of $340,000 using the income approach, and a value of $405,000 using the cost approach. The State's appraiser found the $385,000 value using the sales comparison approach represented a land value of $185,000, a building value of $184,000, and improvements of $16,000. The State's appraiser also indicated that the strongest confidence was placed on the sales comparison approach with less emphasis placed on the income approach and the cost approach used merely as a secondary approach. (St's Ex A, pp 46 & 76).


The court agrees that the sales comparison approach is the best indicator of the value and will rely on that approach. The court accepts the State's appraiser's valuation in the before situation of $385,000 without adjustments.

  1. After Value
Having rejected claimant's after situation analysis as to both use and valuation, the court need not review claimant's appraisal as to after value and will turn to the State's appraisal on the issue of valuation in the after situation. (
Split Rock Partnership, 275 AD2d 450). As previously outlined, claimant argues that the loss in business after the taking was the result of the loss of setback and the impact on traffic flow and the reduced ability of the subject property to accommodate vehicles waiting to use the car wash bays. The State asserts that the loss in business after the taking is due in large part to competition from a new state-of-the-art car wash down the street, not the appropriation.

The State reaches a $300,000 value of the subject property in the after situation. The State found an after value of $300,000 using the sales comparison approach; a value of $314,000 using the cost approach; and a value of $307,000 using the income approach. However, the State's appraisal indicates that the sales comparison approach is again considered the most reliable method of the three approaches and, as such, the court will review the State's sales comparison approach only. (St's Ex A, p 103).


In examining the State's sales comparison approach regarding the land, the State uses the same analysis and price per square foot as in the before situation (St's Ex A, p 48), while adjusting for the acreage appropriated by the State. As such, the State's appraiser determined that at $11.50 per square foot for the 14,287 square feet of remaining land the total remaining land value was $164,000 (rounded). (St's Ex A, p 93). Thus, the difference in value of the land due to the taking is $21,000 which represents a $185,000 value in the before situation less $164,000 in the after situation. (St's Ex A, p 104).


In addition to the land taken, the State also took improvements which were situated within the taking area, namely the asphalt area, four vacuum islands, and two lightpoles. The court accepts the State's after situation valuation of damages for said improvements including $9,600 for the asphalt area; $3,000 for the vacuum islands, and $2,000 for the lightpoles for a total site improvements value of $14,600. (St's Ex A, p 94). Thus, the difference in value of the improvements due to the taking is $1,400 which represents a $16,000 value in the before situation less $14,600 in the after situation. (St's Ex A, p 104).


The court must next determine if there was any consequential damages to the building as a result of the taking. Where the State takes a portion of a claimant's property, that claimant is entitled not only to direct damages for the taking but also consequential or indirect damages for the diminution in the value of the remaining property as a result of the taking. As a general rule, the measure of damages in a partial taking case is the difference between the fair market value of the whole property before the taking and the fair market value of the remainder after the taking. (
Acme Theatres v State of New York, 26 NY2d 385, 388 [1970]).

The court is satisfied that a new state-of-the-art car wash is in operation just a short distance down the street from the subject property and was a major factor in drawing away business. In short, the court does not believe that all of the subject property's shortcomings are attributable to the State's appropriation. As such, the court has considered increased competition and accounted for the same in determining damages. The court finds that the adjustments used by the State in its appraisal and, more particularly, the sales comparison approach, are reasonable and persuasive. Consequently, the court accepts the State's appraiser's calculation of indirect damages to the car wash as $62,600 which represents $184,000 (before value) less $121,400 (after value). (St's Ex A, p 104).


With respect to the cost to cure issue, the State's appraiser determined that although the car wash building remained physically the same after the taking, a cost to cure was appropriate to allow for the reversal of the direction of traffic into the automatic car wash bay and relocation of the vacuum island. Although claimant's cost to cure addresses the drainage problem, the State argued that there was a pre-existing ponding problem as demonstrated by photographs taken before the taking. The court finds that although there may well have been some drainage problems before the taking the raising of the driveway clearly exacerbated the drainage problem as described by claimant. The court finds that claimant's calculation of a cost to cure as set forth in its engineer's report and analysis is supported by the credible evidence. (Cl's Ex 8, Addenda, p 110). Consequently, the court finds that claimant is entitled to an initial cost to cure the drainage problem of $14,310.


Additionally, the court finds that claimant is entitled to an additional cost to cure for the cost of correcting the paving problem created by the State. More specifically, claimant's witness, Stanley Miller, testified that claimant had incurred $11,250 in costs to excavate and repave an area improperly paved by the State. (Cl's Ex 6). The State's appraiser, Donald Fisher, conceded during his direct testimony that he was unaware at the time he prepared the State's appraisal that claimant had incurred this additional cost and agreed that his appraisal should be amended to reflect an additional cost to cure of $11,250. As such, the court finds that claimant is entitled to an additional cost to cure of $11,250.


SUMMARY OF FINDINGS
Recapping, the court finds the following damages:

I.
Direct Damages: $22,400.
!
Land taken, approximately 1,830 square feet square feet at $11.50 per square foot, totals $21,000 (rounded).

!
Site Improvements taken $1,400.

II.
Indirect Damages: $62,600.
III.
Cost to Cure
$25,560. ($14,310 + $11,250)



Total:
Thus, the total damages to be awarded to claimant are direct damages ($22,400), indirect ($62,600), and cost to cure ($25,560), for total damages of $110,560.


Accordingly, it is the finding of the court that claimant is entitled to an award of $110,560 with statutory interest thereon from the vesting date of February 13, 1998 (date of appropriation) to August 13, 1998 (six months thereafter), and from June 9, 1999 (date of filing of claim) to the date of decision herein and thereafter to the date of entry of judgment for the permanent appropriation.


The award to claimant herein is exclusive of the claim, if any, of persons other than the owners of the appropriated property, their tenants, mortgagees or 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 or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer or railroad lines.


Any motions on which the court previously reserved or were previously undecided are hereby denied.


ENTER JUDGMENT ACCORDINGLY.




February 10, 2006
Binghamton, New York

HON. FERRIS D. LEBOUS
Judge of the Court of Claims



[1]Selected unreported decisions from the Court of Claims are available via the Internet at