New York State Court of Claims

New York State Court of Claims

LAKE GEORGE v. THE STATE OF NEW YORK, #2007-015-217, Claim No. 104481, Motion No. M-73186


Synopsis


Application for attorney fees and costs pursuant to EDPL § 701 was granted, albeit for less than that which was requested by counsel for the claimant.

Case Information

UID:
2007-015-217
Claimant(s):
LAKE GEORGE ASSOCIATES
Claimant short name:
LAKE GEORGE
Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
104481
Motion number(s):
M-73186
Cross-motion number(s):

Judge:
FRANCIS T. COLLINS
Claimant’s attorney:
Bond, Schoeneck & King, PLLCBy: Stuart F. Klein, Esquire
Defendant’s attorney:
Honorable Andrew M. Cuomo, Attorney General
By: Michael A. Sims, EsquireAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
September 20, 2007
City:
Saratoga Springs
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Claimant owned a 1.82-acre shopping plaza parcel located at the southeast corner of Route 9 and Route 149 in Queensbury, New York. In July of 1998 the defendant appropriated 6,081 square feet of property for the purpose of installing turn lanes on the abutting highways, new sidewalks and a utility strip. Following trial the claimant was awarded $98,786.63 for direct damages but did not prevail on its claim for consequential damages in the amount of $389,000.00. The claimant appealed the judgment of the Court of Claims, which was affirmed by both the Appellate Division and the Court of Appeals (Lake George Assoc. v State of New York, 23 AD3d 737 [2005], affd 7 NY3d 475 [2006]). Claimant now moves for an additional allowance pursuant to EDPL § 701 for costs, disbursements and expenses, including attorney fees, in the total amount of $36, 915.19. The costs, disbursements and expenses sought are as follows: attorney fees in the amount of 33% of the difference between the Court's award, with accrued interest, and the advance payment, totaling $22,317.59; appraisal fees paid to Kenneth Gardner in the amount of $13, 280.00; and disbursements in the amount of $1,317.60[1]. EDPL § 701 provides for the discretionary awarding of costs, disbursements and expenses to a condemnee whose property was substantially undervalued. Pursuant to the statute:
In instances where the order or award is substantially in excess of the amount of the condemnor's proof and where deemed necessary by the court for the condemnee to achieve just and adequate compensation, the court . . . may in its discretion, award to the condemnee an additional amount, separately computed and stated, for actual and necessary costs, disbursements and expenses, including reasonable attorney, appraiser and engineer fees actually incurred by such condemnee.

The purpose of the statute "is to permit an additional, discretionary allowance to ameliorate expenses which might otherwise diminish an appropriation award to something less than just compensation" (Meyers v State of New York, 166 Misc 2d 586, 590 [Ct Cl 1995]; see also Matter of County of Tompkins, 298 AD2d 825, 826 [2002], lv denied 100 NY2d 501 [2003]). The trial court is vested with discretion "in order to limit both the incentive for frivolous litigation and the cost of acquiring land through eminent domain" (Hakes v State of New York, 81 NY2d 392, 397 [1993]). To succeed on an application for an additional allowance two criteria must be met: 1) the award must be substantially in excess of the condemnor's proof, and 2) the award must be necessary to achieve just and adequate compensation (Hakes v State of New York, 81 NY2d at 397).

Here, the first requirement is met. The advance payment was $63,000 and the award following trial on the claim for direct damages was $98,786.63. Thus, the sum awarded was 57% more than the advance payment and was therefore sufficiently substantial to satisfy the first requirement set forth above[2] (see Matter of Village of Johnson City [Waldo's, Inc.], 277 AD2d 773 [2000]).

The second requirement is more problematic. The claim for consequential damages was clearly the focal point of the claimant's proof at trial and was rejected not only by the trial court but by the Appellate Division and the Court of Appeals. Thus, it must be determined whether the claimant's counsel fees, appraisal fees and expenses were necessary to achieve just and adequate compensation or were expended in an effort to prove a meritless claim (see EDPL § 701; First Bank & Trust Co. of Corning v State of New York, 184 AD2d 1034 [1992], affd 81 NY2d 392 [1993]; Matter of Village of Johnson City [Waldo's, Inc.], supra; Matter of Estate of Haynes v County of Monroe, 278 AD2d 823 [2000], lv denied 96 NY2d 712 [2001]; Carbone v State of New York, 13 Misc 3d 1246[A], 2006 NY Slip Op 52364[U][2006]). "Where the proof offered has had no effect on the final award, then it cannot be found to be necessary to achieve just and adequate compensation . . . " (Carbone v State of New York, supra).

Undoubtedly the services of an appraiser were necessary to achieve just and adequate compensation. The appraiser's services here, however, were geared largely to support an award for consequential damages which ultimately proved unsuccessful and it is impossible to discern which services contributed to the award for direct damages and which services were attributable to the unsuccessful claim for consequential damages. Inasmuch as the award of $98,786.63 for direct damages represents only 20% of the total damages sought to be proved at trial in the amount of $488,000.00, the Court finds 20% of the amount sought for the services of the appraiser ($2,656.00) to be a reasonable allowance.

The agreement for legal services provided for attorney's fees in the amount of 33% of the difference between the State's advance payment and the total amount of the Court of Claims' award, plus interest (claimant's exhibit "A"). Computing the attorney's fee on a contingent fee basis the fee is $15,535.39. This amount is computed by determining 33% of the difference between the amount of the award ($98,786.63) and the amount of the advance payment ($63,000.00), plus interest ($11,290.31)[3]. Defendant's contrary argument notwithstanding, interest is properly included in computing the fee (see Matter of Hoffman v Town of Malta,189 AD2d 968; Carbone v State of New York, supra; Braunstein v State of New York, 11 Misc 3d 1066[A], 2005 NY Slip Op 52286[U] [2005]). Contingent fee arrangements in cases such as this have been noted "an acceptable factor to be considered by the courts in determining reasonable counsel fees" (Matter of Hoffman v Town of Malta, 189 AD2d at 969; see also 627 Smith St. Corp. v Bureau of Waste Disposal of the Dept. of Sanitation of the City of N.Y., 289 AD2d 472 [2001], appeal dismissed 98 NY2d 646 [2002], lv denied 98 NY2d 611 [2002]; Carbone v State of New York, supra). The contingent fee requested by claimant is based on the amount of the actual recovery for direct damages and is not reflective of the time spent on prosecuting the unsuccessful claim for consequential damages. Notably, claimant's counsel's billing records (Exhibit "B" of Reply) indicate that 283 hours were expended by counsel in the prosecution of this case, exclusive of work performed on the appeals. Had the fee agreement been based on an hourly rate, the attorney fees for the services rendered would have totaled $81,972.50[4]. The Court finds the contingent fee in the amount of $15,535.39 reasonably related to the amount of the actual recovery for which attorney's services were utilized. Upon consideration of the difficulty of the issues presented, the level of skill required and the benefit to the claimant resulting from the attorney's skill and results obtained, the Court finds this fee to be reasonable compensation for the work performed (see Carbone v State of New York, supra).

Lastly, the disbursements in the amount of $1,317.60 appear reasonable and permissible as an additional allowance.

Therefore, claimant is entitled to an additional allowance as follows:



September 20, 2007
Saratoga Springs, New York

HON. FRANCIS T. COLLINS
Judge of the Court of Claims


The Court considered the following papers:
  1. Notice of motion dated April 9, 2007;
  2. Affidavit of Stuart F. Klein sworn to April 9, 2007 with exhibits;
  3. Affidavit of Michael Gordon sworn to March 13, 2007;
  4. Affirmation of Michael A. Sims dated April 25, 2007 with exhibit;
  5. Reply affidavit of Stuart F. Klein sworn to May 1, 2007 with exhibits;
  6. Affirmation of Michael A. Sims dated May 3, 3007 with exhibits.

[1]. In his reply affidavit, claimant's counsel waived the request for an additional allowance for the fees of Thomas Andress, an engineer, in the amount of $2,565.00 and corrected the amount of disbursements sought to reflect the correct amount of $1,317.60.
[2]. Notwithstanding the statutory requirement that the award be "substantially in excess of the amount of the condemnor's proof", it has been held that the appropriate measure is the difference between the initial offer and the amount of the award Matter of Village of Johnson City [Waldo's, Inc.], 277 AD2d 773 [2000].
[3]. Although claimant proposed to compute the contingency fee based upon 33% of the difference between the amount of the judgment ($129, 952.78) and the amount of the advance payment ($63,000.00), this would result in an attorney's fee which is improperly based, in part, on the accrual of interest on the amount of the advance payment (see Court of Claims Act § 20 [9]).
[4]. These records do not reflect the time spent on the claim for direct damages as distinct from the claim for consequential damages.