New York State Court of Claims

New York State Court of Claims

V. THE STATE OF NEW YORK, #2006-019-003, Claim No. 100685


Synopsis



Case Information

UID:
2006-019-003
Claimant(s):
LIBERTY DINER & RESTAURANT CORP.
Claimant short name:

Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
100685
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: Geoffrey B. Rossi, Assistant Attorney General, of counsel
Third-party defendant's attorney:

Signature date:
February 15, 2006
City:
Binghamton
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision
This is a timely filed claim for damages caused by the partial appropriation pursuant to the Eminent Domain Procedure Law and Highway Law § 30 of property owned by claimant Liberty Diner & Restaurant Corp. in a proceeding entitled "Liberty-Woodbourne, Part 1, S.H. 1691, Sullivan County, Town of Liberty," as reflected on Map No. 69, Parcel No. 93. The parties stipulate that vesting occurred on December 11, 1997. This claim was filed on July 9, 1999. The appropriation maps and descriptions contained therein are adopted by the court and incorporated by reference. The court has made the required viewing of the property which is the subject of this claim. This claim has not been assigned or submitted to any other court or tribunal for audit or determination.


Claimant acquired title to the property by deed recorded in the Sullivan County Clerk's Office on July 24, 1991 in Liber 1534 of Deeds, page 109. There was no dispute as to the ownership of the property.


The subject property is improved with a full service restaurant operated by the claimant herein and known as the Liberty Diner. The restaurant is situated on an irregular shaped parcel containing .753 acres (32,801 square feet)[1]
with 141 feet of frontage located on the westerly side of Sullivan Avenue and a depth of approximately 185 feet. The subject property is adjacent to and immediately north of the westbound off ramp of Exit 100 on Route 17. The subject property is located in a commercial zoning district. The topography is generally level to mildly sloping and is at road grade.

The restaurant is located in a single story masonry building constructed in 1990 containing 6,090 square feet. The restaurant has a maximum seating capacity of 159 people with a lobby, two dining rooms, restrooms, and a full service commercial kitchen. The restaurant is located close to the southerly and easterly side of the subject property.


The subject property also contained site improvements including a large asphalt parking area spanning almost 22,500 square feet around the restaurant, lawn/landscaping, a flagpole, concrete walk, as well as two driveways. The asphalt parking area surrounds the restaurant, but the parking spaces are situated around three sides of the restaurant, since the southerly side contains only a driveway which will be addressed below.


Prior to the taking, the subject property contained 2 driveways for access to and from the property which also contributed to on-site traffic flow and maneuverability which was the subject of much of the testimony and proof at trial. Both driveways accessed Sullivan Avenue. The first driveway, the so-called northerly driveway, is located at the northeastern corner of the subject property and allowed vehicles to both enter and exit the subject property. In fact, the northerly driveway was the only entrance for all vehicles. The second driveway, the so-called southerly driveway, was located on the southern edge of the property between the restaurant and the property line. By all accounts, this southerly driveway allowed for traffic, particularly larger vehicles such as buses and delivery trucks, to exit the parking lot without having to turn around inside the parking lot. In other words, the southerly driveway was used primarily for larger vehicles to exit the premises. (Cl's Ex 8).


With respect to parking itself, the parties disagree on the number of available parking spaces prior to the taking with claimant counting 58 spaces and the State calculating 55 spaces. At the time of the taking the parking spaces surrounded the building in an irregular fashion. According to claimant's numbers, the parking spaces were distributed as 19 located on what the court will describe as the inner loop immediately adjacent to the building with 9 at the front (easterly side) of the restaurant, 7 on the northerly side of the building, and 3 along the back of the restaurant (westerly side). The remaining 39 spaces, according to claimant, were located on what the court will describe as the outer loop, with 2 in the front of the restaurant (easterly side), 16 along the northerly side and 21 spaces in the back of the restaurant (westerly side). (Cl's Ex 8).


The taking consisted of a rectangular strip across the front of the property along Sullivan Avenue ranging in depth from 14 feet to 15 feet for a total of .047 acres or 2,034 square feet. The taking reduced the setback from the highway right-of-way by approximately 15 feet. Thus, after the taking, the subject property contained 30,767 square feet (32,801 - 2,034).


The court believes a preliminary statement regarding the parties respective positions will be beneficial in placing the rest of the discussion into context. Claimant's position is that the taking resulted in the following: (1) a loss of 13 parking spaces; (2) total elimination of the southerly driveway due to a grade differential; and (3) attendant loss of on-site maneuverability and access thereby reducing business income.


The State's position is that the subject property only had 55 spaces, not 58, prior to the taking and that the taking resulted in a loss of only 1 parking space. Further, the State argues that claimant's prior use of the southerly driveway was based upon claimant's use of land that was actually owned by the State which claimant had no right to use in the first instance.

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 the 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
The parties' appraisers both found the highest and best use of the subject property, in both the before and after situations, was for its continued use as a full service restaurant. That having been said, however, claimant's appraiser also opined that the restaurant is an over improvement for the property due to the reduced setback and parking. The court accepts both parties position that the highest and best use of the subject property in the before situation was as a full service restaurant. The court further finds that the highest and best use of the subject property in the after situation is still as a full service restaurant despite claimant's assertion that the restaurant is an over improvement for the property.
  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 concluded the subject property had a $800,000 value in the before situation. Claimant's appraiser found a value of $800,000 using the sales comparison approach; a value of $864,000 using the cost approach; and a value of $778,000 using the income approach. Claimant's appraiser relied most heavily on the sales comparison analysis in reaching his before value of $800,000. (Cl's Ex 5, p 36).


The State's appraiser concluded the subject property had a $1,175,000 value in the before situation. The State's appraiser found a value of $1,175,000 using the sales comparison approach (St's Ex A, p 59); a value of $1,133,000 using the cost approach (St's Ex A, p 52); and a value of $1,115,000 using the income approach (St's Ex A, p 72). The State's appraiser relied most heavily on the sales comparison analysis in reaching his before value of $1,175,000. (St's Ex A, p 73). Thus, the difference between claimant's before value of $800,000 and the State's before value of $1,175,000 is $375,000.


The court notes that both appraisers used a $10.50 per square foot cost in analyzing the before value of the land in the sales comparison approach. (Cl's Ex 5, p 20; St's Ex A, p 48). That having been said, however, the court previously noted that the State used an incorrect acreage in the before situation of 46,609 square foot. The court will adjust the before situation square footage to 32,801 as reflected in the deed and accept both parties appraiser's before value of $10.50 per square foot for a total before value of land of $344,411 (32,801 square feet x $10.50). The court accepts the State's remaining before values of the improvements of $24,000 representing $15,000 for the asphalt area, $3,000 for the landscaping and planters, $5,000 for the commercial sign, $750 for the flag pole, and $150 for the concrete pad. (St's Ex A, p 48). Additionally, the court accepts the State's before value of the building as $661,000 without adjustments. (St's Ex A, p 73). Thus, the court finds the total before value of the subject property to have a land value of $344,411, improvements of $24,000, and building of $661,000 for a total before value of $1,029,411.

  1. After value
Claimant reaches a $580,000 value of the subject property in the after situation. (Cl's Ex 5, p 56). Claimant found an after value of $580,000 using the sales comparison approach (Cl's Ex 5, p 50); a value of $653,000 using the cost approach (Cl's Ex 5, p 46); and a value of $533,000 using the income approach. (Cl's Ex 5, pp 51-55). The sales comparison value of $580,000 is based upon a land value of $323,000 and building and site improvements of $257,000. (Cl's Ex 5, p 50).


The State reaches a $1,125,000 value of the subject property in the after situation. (St's Ex A, p 95). The State found an after value of $1,125,000 using the sales comparison approach (St's Ex A, p 90); a value of $1,073,000 using the cost approach (St's Ex A, p 87); and a value of $1,075,000 using the income approach (St's Ex A, p 94). The sales comparison value of $1,125,000 is comprised of a building value of $635,800, a land value of $468,500 and site improvements of $20,700. The site improvements value of $20,700 is based upon $13,500 for asphalt area (20,500 square feet); $2,000 for landscaping and planters; $5,000 for commercial sign; and $150 for a concrete pad.

The State's appraiser relied most heavily on the sales comparison approach in reaching an after value of $1,125,000. (St's Ex A, p 95).

The parties agree that direct damages for the land taken, as well as the paved parking area taken, are proper. Claimant's appraiser calculates direct damages as $21,357 (2,034 square feet x $10.50 per square foot), plus $2,000 for the paved parking area for total direct damages of $23,000. The State's appraiser calculates direct damages as $21,500 [rounded] (2,034 square feet x $10.50 per square foot), plus $3,300 for site improvements for total direct damages of $24,800. The State's appraiser's calculations for $3,300 for site improvements is based on $1,500 (for 2,000 square feet of asphalt x .75¢); $1,000 for landscaping and planter; and $750 for the flagpole. (St's Ex A, p 97). In other words, the parties calculations of direct damages are nearly identical. The court accepts the State's calculation of total direct damages of $24,800 without adjustments.


Next, the court must determine whether and to what degree claimant is entitled to consequential or indirect damages as a result of the partial taking. This was the issue on which much of the trial testimony and evidence focused. Claimant argued that the loss of the southerly driveway, loss of maneuverability, and loss of 13 parking spaces has significantly reduced the operation of the restaurant. The State concedes that claimant is entitled to nominal consequential damages for the loss of one parking space, but argues that there is no entitlement to consequential damages flowing from the loss of the southerly driveway.


The court will initially address the loss of the southerly driveway as it relates to the loss of access, change of on site traffic flow, and diminished maneuverability. It is undisputed that prior to the taking the subject property contained two driveways, namely the northerly driveway for ingress and egress and the southerly driveway for egress of larger vehicles. It is undisputed that the northerly driveway was not impacted by the taking and remains as a means of ingress and egress for all vehicles using the subject property. It is well-settled that "[m]ere circuity of access does not constitute a basis for an award of consequential damages [citations omitted]." (
Priestly v State of New York, 23 NY2d 152, 155 [1968]). Thus, there is a crucial distinction between the concepts of mere circuity or inconvenience of access versus access which is unsuitable. (Id.). Moreover, "[t]he final question as to whether or not suitable access has been provided, remains a question of fact to be decided by the court, related to the highest and best use of the affected property [citation omitted]." (Laken Realty Corp. v State of New York, 29 AD2d 1027, 1028 [1968]). The court finds the facts in this case similar to those of Penningroth v State of New York, 35 AD2d 1024 [1970], lv denied 28 NY2d 484 [1971]. In Penningroth, the property owner lost one of two driveways as part of the State's taking which, as here, forced tractor-trailers entering the property "[t]o engage in substantial maneuvering to turn around and exit. This increased activity would also interfere with other customers who will have to compete with the large vehicles." (Penningroth, 35 AD2d at 1024). The Third Department determined that the property owner was not entitled to consequential damages because a reasonable alternate means of access was left remaining.

Additionally, the court finds that claimant has failed to demonstrate that the remaining access of the northerly driveway is no longer suited to the highest and best use of this property or that diminished access caused serious permanent damage to his business. (
Penningroth, 35 AD2d at 1025). Although claimant attempted to demonstrate a loss of business income due to the loss of the southerly driveway and parking spaces, the court finds that claimant's financial proof was inadequate. As noted by the State, claimant submitted financial information for 1997 through 1999 which mirrors the years of the State's construction related to the taking. Claimant did not submit any proof regarding business income prior to 1997. In other words, a drop in income during the years of construction is reasonable and expected and cannot form the basis for a conclusion that the taking resulted in a loss of business income for claimant.

In sum, this court finds that "[n]o consequential damages may be awarded for interference with access if a suitable means of access is left or provided [citations omitted]." (
Lundquist v State of New York, 33 AD2d 950, 950 [1970]; Red Apple Rest. v State of New York, 27 AD2d 417, 419 [1967] ["where ample access is provided, however, such access cannot be deemed unsuitable merely because it is more difficult or inconvenient to enter or leave the premises."]). Consequently, this court finds that claimant is not entitled to consequential damages for the loss of access of the southerly driveway or diminished maneuverability.[2]

That having been said, however, the court does find that claimant is entitled to consequential damages for the loss of one parking space and reduced setback. With respect to the issue of loss of parking spaces, the court finds that claimant's argument of a loss of 13 spaces is not supported by the evidence. Claimant's expert conceded on cross-examination that his calculation of the number of parking spaces in the before situation included parking spaces that were never marked with painted lines, but rather were based upon his assessment of parking spaces that could have been used given the geographical layout of the subject property. Moreover, the court notes that claimant's calculations of a loss of 13 spaces include a loss of parking spaces that had to be converted into handicap parking due to a change in the law which was not related to the State's appropriation. Nevertheless, the court is satisfied that the taking resulted in the loss of 1 parking space near the planter. With respect to the reduced setback, the court agrees with the State's appraiser that the building's angled orientation on the subject property as compared to a building with a more parallel orientation minimized the impact of the reduced setback. (St's Ex A, p 77). In view of the foregoing, the court accepts the State's calculation of consequential damages of $25,200 without adjustment.


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

  1. Direct Damages: $24,800
!
Land taken of 2,034 square feet at $10.50 square foot, totals $21,500 (rounded)

!
Site improvements taken $3,300

  1. Indirect Damages: $25,200



Total:
Thus, the total damages to be awarded to claimant are direct damages of $24,800 plus indirect damages of $25,200 for total damages of $50,000.


Finally, with respect to the issue of interest, by way of an Decision and Order dated October 6, 2000, the Hon. Jerome F. Hanifin suspended interest from May 31, 2000 to a date by which claimant was to respond to discovery demands but not later than November 10, 2000. (
Liberty v State of New York, Ct Cl, October 6, 2000, Hanifin, J., Claim No. 100685, Motion No. M-61297 [UID No. 2000-004-535]). Claimant ultimately responded on November 8, 2000 which the court finds is the date that interest should resume pursuant to the terms of said Decision and Order. Consequently, claimant is awarded the sum of $50,000 with interest as follows:
(a) interest from December 11, 1997 (the date of filing of the appropriation map in the Sullivan County Clerk's Office) to May 11, 1998 (six months thereafter) pursuant to CCA § 19 (1);


(b) interest is suspended from May 11, 1998 until July 9, 1999 (date claim was filed) pursuant to CCA § 19 (1);


(c) interest resumes from July 10, 1999 until May 31, 2000 pursuant to Judge Hanifin's Decision and Order;


(d) interest is suspended from May 31, 2000 to November 8, 2000 pursuant to Judge Hanifin's Decision and Order;

(e) interest resumes on November 9, 2000 to the date of this Decision and thereafter to the date of entry of judgment herein, pursuant to CPLR § 5001 and CPLR § 5002; EDPL § 514; CCA § 19(1); subject to CCA § 19 (4).


The award herein is exclusive of the claims, if any, of persons other than the owners of the appropriated property, its 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 the 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 15, 2006
Binghamton, New York

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




[1]The court finds that the State's appraisal mistakenly lists the total before situation acreage as 46,609 square feet (St's Ex A, p 3), even though the deed attached to the State's appraisal lists the property as containing .753 acres which equates to 32,801 square feet. (St's Ex A, Appendix H).
[2]Consequently, the court need not address the issue of whether claimant had any legal or ownership rights to the southerly driveway in the first instance.