6,7 Filed papers: Claim, Answer
This is one of four related claims
the partial taking of properties owned by this claimant on Lake Street in White
Plains, New York, taken by the State in connection with a highway project along
the Cross-Westchester Expressway.
claim, the former fee owner of the subject property alleges that the State
breached its contract to make an agreed settlement payment to it for the partial
taking of property at 80 Lake Street on April 4, 2006, as memorialized in what
appears to be a fully executed “Agreement of Adjustment” forwarded
to claimant’s counsel as “approved” on June 20, 2006 from the
real estate department of the New York State Department of Transportation.
Exhibit 1, Affirmation by J. Gardner Ryan; and Exhibit A, Affidavit
of Herman Press]. Notably, the agreement was forwarded to Claimant’s
attorney with the information that it was being “forwarded to the Office
of the Attorney General for further processing which will permit payment.”
The claim also alleges “[i]n the alternative, if the agreement of
adjustment is vacated or invalid, Claimant will file this claim for the
appropriation of its property.” [Claim Number 112660, ¶18].
In its answer, in addition to general denials, and specific denial of the
allegations contained in ¶¶ 8, 10, 11, 12, 15, 18 and 20, defendant
asserts as a complete defense to the claim that claimant has failed to satisfy a
prerequisite to payment to the effect that it has not delivered to the Attorney
General all papers that in the determination of the Attorney General are needed
for a full release of the State from all claims by reason of the appropriation,
as set forth in the Agreement of Adjustment dated January 27, 2006, and as
requested in writing on April 18, 2006. The January 27, 2006 Agreement of
Adjustment provides in pertinent part that the monies offered as
“compensation” are for “. . . the total value of the property
so appropriated and for all legal damages caused by such appropriation,
including all damages incurred by virtue and during the pendency of said
appropriation proceedings . . . excepting the aggregate value, if any, of claims
hereinafter specifically excluded . . .” [See Affirmation by J.
Gardner Ryan, Assistant Attorney General, Exhibit 1, Agreement of Adjustment,
¶ 1]. No claims are “specifically excluded” thereafter.
Moreover, the claimant was required to “execute and deliver . . . to the
Attorney General . . . all formal papers which the Attorney General deems
necessary to authorize payment, and to secure to the State a full release of all
claims by reason of the aforementioned appropriation . . . ”
[ibid. ¶ 2]. The agreement further provides that it “. .
. is exclusive of the claims, if any, of persons other than owners of the
appropriated property, their tenants, mortgagees and lienors . . . ”
Just as a release of the mortgagor’s interest was to be obtained, a
release of any tenant’s interest in purported trade fixtures would also be
obtained and provided to the State in order to allow release of the monies
without rendering the State open to further liability. [See
ibid.]. It was part of the agreement to settle matters concerning 80
Lake Street, and as a condition precedent it was not met.
Defendant argues that this claim fails to state a cause of action against the
State of New York, and that a defense founded on documentary evidence is fully
made out. Civil Practice Law and Rules §3211(a) (1). The Defendant first
cites to general contract law cases regarding interpretation of a contract
pursuant to the so-called four corners rule, and then later refers to the
specific document at issue as one evidencing the offer of compensation made by
the State of New York in accordance with Eminent Domain Procedure Law §303.
Certainly, the terms of the agreement appear to indicate that since Mazur
Brothers, Inc. is not “other” than a tenant of the property, any
trade fixture claim was encompassed within the agreement. [See
Affirmation by J. Gardner Ryan, Assistant Attorney General, Exhibit 1].
As discussed at length in Cronk v State of New York, 100 Misc 2d 680 (Ct
Cl 1979), agreements for advance payment are not generally construed as legally
binding contracts. This is because it is not a true settlement agreement as
such, but rather “a creature of statute.” Cronk v State of New
York, supra at 684. Such an agreement “. . . arises only
because the parties are unable to reach a settlement . . . [I]t does not possess
the prerequisites of a legally binding contract. Essential to a valid contract
is a meeting of minds with respect to the nature and extent of the obligations
assumed by each party, manifested by an assent to mutually agreeable contract
terms . . . The agreement . . . was not the product of a meeting of the minds,
since it was not reached through free and open bargaining by the parties. The
State . . . was required to offer the claimant a sum equal to 100% of the amount
it determined to be the value of the property . . . ” [Ibid. at
Indeed, part of the confusion engendered by counsels’ interspersing
arguments from one claim to the next has been trying to discern what bearing -
if any - any distinction between an advance payment and an agreement of
adjustment might mean once matters have proceeded to the procedural cross-roads
presented. The Court has concluded that a properly commenced special proceeding
is the appropriate vehicle for determining whether claimant is entitled to all
or some of the monies on deposit whatever the nomenclature.
The documentary records provided show, significantly, that this claimant, as
well as Mazur Brothers, Inc. (the tenant) and The Bank of New York (the
mortgagor) were provided with notice in letters dated May 23, 2006, that the
monies representing the State’s offer ($1,369,500.00) were deposited by
the State Comptroller in its Eminent Domain account, and advised of the
necessity of bringing a distribution proceeding in order that the monies be
distributed and allocated. [See Affirmation by J. Gardner Ryan, Assistant
Attorney General, Exhibit 2]; Eminent Domain Procedure Law §304. Rather
than commence such a special proceeding, claimant filed this breach of contract
action - containing the alternative relief of a cause of action for
appropriation for the State’s partial taking of its property - and has
brought on its own cross-motion in response to the present motion to
The documentary record establishes without contradiction that the State made
the offer of compensation, and the claimant accepted same. Based on the
claimant’s avowed reluctance to furnish the assignment requested - indeed
the correspondence from the claimant’s attorneys transmitting the document
specifically indicates that they were not forwarding the tenant trade fixture
- the State was then
unable to assure the Comptroller of exactly who was entitled to payment under
the agreement. As the statute provides, the Attorney General was unable to
“. . . make certification of the person or persons legally entitled to the
amount payable under an agreement adjusting all legal damages caused by . . .
[the] acquisition . . . ” [Eminent Domain Procedure Law §304(E)(1)].
In accordance with the mandatory language of the statute, to wit; “. . .
the condemnor shall request the comptroller to, and the comptroller shall,
deposit the amount payable under such agreement in a special interest bearing
account . . . to be distributed as ordered by the court of claims on application
of any person claiming an interest in the amount deposited”
]; the Comptroller did as required.
Having been apprised of the Attorney General’s inability to determine to
whom payment is due, since the State’s view was that the settlement figure
encompassed 100% of the value of the property at issue, however said value is
divided as between tenants, mortgagors and fee owners, and absent waivers and
releases from all interested parties, it was incumbent upon claimant to commence
a special proceeding to allow its release. Eminent Domain Procedure Law
§304(E); Court of Claims Act §23; Street of Shoppes, LLC v State of
New York, UID #2003-013-001, Claim No. 106075, Motion No. SP-103 (Patti, J.,
January 17, 2003).
The motion to dismiss the within claim, insofar as it alleges a cause of action
for breach of contract is hereby granted, and that portion of the claim alleging
a cause of action for breach of contract is hereby dismissed. Civil Practice Law
and Rules §3211(a) (1). Claimant’s cross-motion for summary judgment
is in all respects denied, as the documentary proof establishes that no cause of
action for breach of contract is made out, and any judgment based upon the
appropriation cause of action would be premature without appropriate exchange
and evaluation of appraisals.