New York State Court of Claims

New York State Court of Claims

VOTSIS v. THE STATE OF NEW YORK, #2008-013-508, Claim No. 105833


Synopsis


Appropriation claim with two remnant parcels of little or no utility, use or value, surviving.

Case Information

UID:
2008-013-508
Claimant(s):
VOTSIS, INC.
Claimant short name:
VOTSIS
Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
105833
Motion number(s):

Cross-motion number(s):

Judge:
PHILIP J. PATTI
Claimant’s attorney:
UNDERBERG & KESSLER, LLP
BY: PAUL F. KENEALLY, ESQ. andCOLIN D. RAMSEY, ESQ.
Defendant’s attorney:
HON. ANDREW M. CUOMO
Attorney General of the State of New York
BY: REYNOLDS E. HAHN, ESQ.Assistant Attorney General
Third-party defendant’s attorney:

Signature date:
June 30, 2008
City:
Rochester
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

The Claimant was the owner of an improved parcel of land containing .856± acres located in the Town of Greece, Monroe County, at 2331 West Ridge Road. The Defendant acquired a portion of the property pursuant to Highway Law §30 and the Eminent Domain Procedure Law of the State of New York. The property was a restaurant facility but, at the time of the taking, was vacant and had been for a period of time previous thereto. The Defendant acquired in fee the portion of the property upon which the restaurant had been constructed and some additional land as set forth on the appropriation map entitled Rochester - West Greece, Map No. 80, Parcel 89. The fee taking left two parcels, each of which abutted adjoining owners, one to the east and the other to the west of the fee taking. Neither remaining parcel was contiguous to the other. The Defendant acquired a temporary easement over the remaining two parcels for the period of construction, as more fully described in Rochester - West Greece, Map No. 234, Parcels 286 and 287 (Exhibit A, Appendix F)

.

The date of taking, as stipulated by the parties, was September 25, 2000, and the claim has not been assigned by Claimant to any other tribunal or Court for audit or determination. The Court accepts as accurate the description of the subject as set forth in the deed from McCurdy & Company, Inc., to Claimant dated May 14, 1998 and recorded in the Monroe County Clerk’s Office on May 15, 1998, in Book 9006, Page 448. The purpose of the taking was to relocate the entrance to the Greece Ridge Mall.

Both appraisers found the highest and best use for the subject prior to the appropriation was as a restaurant, and after the taking that neither of the remaining two parcels could be developed, and thus had value only for sale to adjoining owners.

Claimant purchased the property on May 14, 1998, with the stated intent of operating it as a family restaurant but never did so since, at the time it acquired title, the subject was under lease to T.J.’s Big Boy, a restaurant chain. That company had closed the operation of the restaurant prior to the date of purchase but continued to pay rent to McCurdy & Company, Inc. (Claimant’s grantor) from the date of closing to the date of sale and thereafter until Claimant bought out the lease in May of 2001 after T.J.’s Big Boy (Elias Brothers Restaurants) declared bankruptcy. All of the bankrupt’s rights in and to the subject were then assigned to Claimant (Exhibits 2, 3 and 4).

The property abutting the subject to the south is a large parking area used by the Greece Ridge Mall, an enclosed retail mall containing a large number of retail shops, including a food court. On the north the subject abutted and had access to West Ridge Road through a curb cut, and at one time had been enhanced by a traffic signal allowing traffic to gain ingress and egress to the subject for both eastbound and westbound traffic. Sometime prior to the taking, and presumably after the restaurant had closed, the signal had been removed. According to the record, the subject at the time of the taking did not have direct access to the mall area.

At trial Defendant moved to strike Claimant’s appraisal pursuant to 22 NYCRR 206.21 (Uniform Rules for the Court of Claims). It appeared that the Claimant filed an original and two copies of its appraisal with the Clerk of the Court in accord with the provisions of the above section. One copy of the filed appraisals apparently did not contain a grid showing the adjustments made by the Claimant’s expert to the properties he utilized to determine the value of Claimant’s property. When the Clerk of the Court exchanged appraisals (NYCRR 206.21[d]), the copy of the appraisal lacking the grid was the one that was supplied to the Defendant. At a conference prior to trial, counsel for the Defendant made known to Claimant that the document which had been sent to him by the Clerk did not contain the grid and that he would be objecting to the introduction of the appraisal and its use. Claimant’s counsel, apparently unaware of the alleged deficiency, thereafter provided to the Defendant the missing grid several days prior to the trial. I note that the appraisal received by the Court and the one marked as Exhibit 5 contained the grid, as well as some other missing pages (all of which were provided in a timely fashion to Defendant), and it is only the one sent to the Defendant that was incomplete. Defendant’s motion is denied since I believe and find that it did not prevent or prejudice counsel from conducting a thorough and probative cross-examination of the Claimant’s expert. Claimant’s appraisal, Exhibit 5, is therefore admitted into evidence.

At the commencement of the trial both parties stipulated that the income approach would not be applicable in this case. Consequently Claimant’s appraiser, Alan P. Kozlowski, would rely on the market data and cost less depreciation approaches in arriving at his opinion of the subject’s value. I have not relied on or accepted his explanation as it pertains to the use or applicability of the cost approach to value the subject, since it has long been accepted that such approach is primarily utilized to value special use properties, and clearly the subject never was such a property. Under cross-examination he had difficulty in defining what a special use property was, i.e., when first asked the question he indicated that he was not familiar with that term (Transcript, Vol. I, pgs. 148-149). Moreover, there was little probative support for his opinion regarding the values he established for the improvements and fixtures, or the rate of depreciation he utilized, and I find it to be speculative at best.

Mr. Kozlowski, a licensed real estate appraiser, was retained by Claimant approximately five years after the taking of the subject by the Defendant. Consequently, he did not have the opportunity to view the subject prior to its demolition, contrary to his certification in his appraisal that he had inspected the property inside and out (see Exhibit 5, Paragraph 3 on the third from last page). While he did inspect the properties relied upon in reaching an opinion pursuant to the market data approach to land value, I find his answers to questions by Defendant’s counsel pertaining to the sale located at 2561 West Ridge Road to be evasive and unacceptable. Attached to his data regarding this sale is the deed he relied upon, and it clearly indicates that the conveyance was of two separate parcels, each having its own tax ID number. Equally clear is that one of the parcels was vacant commercial and the other was improved. The total consideration for the two parcels was $660,000.00, yet Mr. Kozlowski reports it as being $650,000.00 (see Exhibit 5, p. 10, albeit contrasted with the grid immediately preceding the Cash Flow Data sheet); however, this discrepancy is the least of my concerns regarding his use of this sale. He also presents this comparable as a sale of vacant land only, which it clearly was not, since the very documentation he included in his appraisal disclosed that at least one of the two lots had an improvement on it (Exhibit K). While he proffered an explanation of his thought processes in representing it as vacant, I find it to be devoid of probative reasoning and evasive in spite of the obvious information set forth on the documents he appended to his appraisal. In light of his unconvincing testimony relating to this sale, I decline to consider it in reaching a determination of the subject’s land value.

In addition, Claimant’s expert suggests a range of value for the land alone at $325,000.00 to $650,000.00, relying on the above (Sale No. 4) and one other, Sale No. 5. In light of my finding regarding Sale No. 4, Claimant is left with just one sale of vacant land, identified as Sale No. 5 on its grid.

The Defendant’s appraiser, Richard J. Stropp, III, on the other hand, offered five vacant land sales, with adjusted values resulting in a range from $244,344.00 to $592, 547.00. I note that Sale Nos. 1 and 2 occurred within a few months prior to the date of vesting, and Sale No. 4 occurred in 1997. Sale Nos. 3 and 5 occurred after the taking date. Consequently, I find that an adjustment for time is required to Sale No. 4 to reflect the appreciation of values for the subject property on West Ridge Road.

I note that the subject’s size was .856± acres, while each of these sales ranged in size from 1.127± acres to 7.21± acres. I find that Sale Nos. 1, 3 and 4 should be further adjusted upward to more realistically reflect the size differential between them and the subject, especially when the areas of these sales are at least twice the size of the subject. Further, I find the subject’s location on West Ridge Road was superior to Sale Nos. 1, 2, 3 and 4 and merits a more positive adjustment to demonstrate comparability. With regard to Sale No. 5, the negative adjustment made by Defendant’s expert under the rubric of “location” is too severe given his explanation and justification for the -30%. While it is true this sale had frontage on West Ridge Road, it lacked direct access to it, unlike the subject. Instead, access to this sale was gained by turning off West Ridge Road at a signalized intersection and traveling a short distance of Bowman Drive; turning left off Bowman Drive to Center Place Drive, from which you would then turn left to gain access. In addition, this location is east of Route 390 and not in proximity to any enclosed mall such as the one the subject abutted.

Based on the foregoing, I find the subject’s land value to be $441,500.00, prior to the appropriation, or $11.85/sq ft (R) ($516,000.00 (R)/acre).

I adopt as accurate the Defendant’s values for the fixtures and equipment contained in the subject prior to and after the appropriation, since I find Mr. Kozlowski’s testimony regarding these items to be unpersuasive and lacking in foundation. Of course it must be remembered that Claimant’s appraiser was not retained until 2005, and by that time the subject had been razed and he was compelled, by his own admission, to try to reconstruct what was actually on the premises. While I appreciate the circumstances he had to deal with, I cannot accept his opinion, which I believe was by necessity speculative. Defendant’s expert, it will be recalled, had the opportunity to inspect the premises in his preparation of the project appraisal and thus was able to testify persuasively regarding these items in greater detail.

I find the fair and reasonable value of these items to be $25,000.00 and the total value for land and site improvements is $466,500.00 (R).

Claimant’s expert’s testimony regarding the sales he used in his whole-to-whole market data approach was, in my opinion, vague and somewhat unclear as it related to the adjustment required to be made to establish comparability between them and the subject. Nonetheless, I find that his testimony as a whole regarding these sales make them relevant and I have considered them, along with the Defendant’s, in order to establish the subject’s value.

The sales relied upon by Claimant’s expert are set forth in Exhibit 5, pages 9-11, and the adjustments he made to each are found on an unnumbered page which I determined to be the 54th page of that document, excluding the letter from Mr. Kozlowski to Claimant.

Regarding Sale No. 1, located at 3590 West Ridge Road, I find that there should be an adjustment for time to reflect the period between the date of sale for this property and the date of the appropriation. I base this on both experts’ acknowledgment that the West Ridge Road area generally was experiencing growth prior to the appropriation. Consequently, I have used a 4% rate of appreciation for this factor for this sale which occurred on June 9, 1997. In addition, I find that its location on West Ridge Road is less favorable than the subject’s but not to the extent found by Claimant. While access to Sale No. 1 is not as direct as it was to the subject, nonetheless that factor does not merit the significant positive adjustment as found by Mr. Kozlowski, and I have reduced that to more adequately reflect the difference.

His Sale No. 2, located at 2890 West Ridge Road, should be adjusted positively for location. Because of its proximity to the subject and its comparable access, based on the record before me I have reduced Claimant’s expert’s adjustment for access by half.

Claimant’s Sale No. 3 at 2960 West Ridge Road is one that was also utilized by the Defendant’s expert. Accordingly, I have given this sale, and one other to be discussed later, greater probative weight than the others. While this appears as Sale No. 3 on Claimant’s grid, the Defendant indicates that within the body of the report at pages 9-10, it is in fact Sale No. 2.[1] Again, a time adjustment was required, and I have reduced Mr. Kozlowski’s adjustments for location and access to reflect the impact of each based on the testimony of each appraiser.

I note that Claimant did not use the sale of the subject from McCurdy & Company, Inc., to Claimant, even though it was within 2½ years of the appropriation and a time adjustment would properly reflect its appreciation in value. The Defendant’s appraiser did include it in his sales analysis as Sale No. P-1, and I have given his treatment of this sale somewhat greater weight.

On the other hand, I find that Mr. Stropp’s Sale No. P-3, which was located a significant distance from the subject, in an adjoining county, had no probative value. It was relatively near, but did not abut, Eastview Mall in Victor, a larger shopping facility than the Greece Ridge Mall on West Ridge Road. As a result, I have accorded it no weight. Furthermore, I gave little weight to his analysis of his proffered Sale No. P-4, located in the Town of Henrietta, and nowhere near a comparable commercial area such as the one abutting the subject. I am not unaware that Sale No. P-4 was across from Monroe Community College and that it fronted on Route 15A, but I am unconvinced that it bears the degree of comparability required to make it probative in determining the subject’s value.

In fact, I believe that Claimant’s sales for the most part had greater comparability by reason of their proximity to the subject. It surprised me, although I suppose it should not have, that Defendant’s expert, who prepared the project appraisal for the West Ridge Road reconstruction, failed to find more comparable properties in the general area of the subject and felt it necessary to include these two sales in his analysis.

Based upon the proof in the record, my viewing of the area where the subject stood (Court of Claims Act §12[4]), the comparable sales I deemed to be relevant to the subject, the testimony of the witnesses and the appraisals submitted, I find the subject’s before value to be $897,500 as follows:

Land - .856± acres @ $516,000.00 (R)/acre,
or $11.85/sq ft (R) $441,500.00 (R)

Site Improvements $ 25,000.00

Building $431,000.00


After the appropriation, the Claimant was left with two non-contiguous parcels: the easterly parcel contained 3,344 sq ft, while the westerly parcel consisted of 12,405 sq ft, according to the map prepared by the Defendant (see Exhibit A, Appendix F). I note that the Defendant’s appraisal is the only one which sets out an after value for the remaining parcels after the temporary easements ended. For reasons that were neither explored nor explained, Claimant’s expert in a perfunctory and undocumented manner merely concludes the after value for the larger parcel at $83,129.00, based on a contested sales price some three years after the taking and, without explanation, set the value of the smaller parcel at $2,000.00. I have chosen to disregard his opinion with respect to both of these parcels.

At trial it was disclosed that Claimant attempted to sell both remaining parcels to the respective adjoining owners. The larger parcel (No. 286, Exhibit A, Appendix F) was sold to the McDonald’s Restaurant located to the west of the subject, apparently for additional parking. Claimant testified that the purchase price received was $83,129.00 (Exhibit 6). However, Defendant’s Exhibit H includes the filed Real Estate Transfer Report RP-5217, signed by an officer of Claimant, which sets forth a full sale price of $110,000.00.[2] The explanation for the discrepancy between these two figures, according to Claimant, was that McDonald’s apparently, as a condition of the sale, deducted the amount of rent Claimant was paid by the Defendant for the temporary easement over this property during the period of construction. Claimant contends that the value of this parcel therefore is the amount actually received, while the Defendant contends its value is the amount set forth on the RP-5217 report. I agree with the Defendant and find that the price of the parcel sold to McDonald’s is $110,000.00.

Only Defendant’s appraiser, Mr. Stropp, went into detail in arriving at the after value of the remaining two parcels, utilizing the same comparable sales he had used to determine the subject’s land value in the before situation. There being no credible proof by Claimant’s appraiser with respect to after values, I accept without modification the after values for the remnant parcels of the Defendant’s appraiser. However, there is no explanation for Mr. Stropp’s calculation based upon areas for these remnants, to wit, Parcel 286 @ 11,689 sq ft (.268± acres) and Parcel 287 @ 4,060 sq ft (.093± acres)[3] that differ from those on Map 234 (Exhibit A, Appendix F). Accordingly, I defer to and utilize the areas as established on said taking map.

I find that Claimant is entitled to an award of $764,480.00, as follows:

Direct Damages


Land: .494± acres @ $516,000.00(R)/acre
or 21,503± sq ft @ $11.85(R) $254,900.00(R)

Improvements $ 12,500.00

Building $431,000.00


$698,400.00


Indirect Damages


Land:


Parcel 286 - .285± acres @ $148,000.00(R)/acre
or 12,405± sq ft @ $3.40(R) $ 42,180.00(R)


Parcel 287 - .077± acres @ $148,000.00(R)/acre
or 3,344± sq ft @ $3.40(R) $ 11,400.00(R)

Improvements $ 12,500.00


$66,080.00(R)


Therefore, Claimant is awarded $764,480.00 for all damages, with appropriate interest thereon from September 25, 2000, the date of taking, except as suspended below. While the claim alleges service upon Claimant was completed on or about October 2, 2000, the date stipulated was September 25, 2000, but the record is unclear with respect to the manner of service (Transcript, Vol. II, p. 324). EDPL 512(B) provides that prejudgment interest may be suspended unless the condemnee files a claim “within six months after accrual of such claim, or within six months after personal service of the notice of acquisition upon the condemnee, whichever is later.” As in Sokol v State of New York (272 AD2d 604), where nothing in the record established the date of personal service of the notice of acquisition on that claimant, interest on the award should not be suspended pursuant to EDPL 514(B) for any period preceding the filing of the claim.

Interest, however, was suspended by me in a so-ordered stipulation dated August 6, 2004, from the date of filing of the Defendant’s appraisal on January 29, 2004, until the filing of Claimant’s appraisal on March 30, 2005. Accordingly, this award shall be inclusive of interest from the date of accrual, September 25, 2000, until its suspension from January 29, 2004 until March 30, 2005, with interest resuming until the date of this decision, and thereafter to the date of entry of judgment herein, pursuant to CPLR 5001 and CPLR 5002, and subject to Court of Claims Act §19(4).

Claimant’s application in its post-trial memoranda for an additional allowance under EDPL 701 must be rejected at this time; indeed such an award is to be considered on the differential between the advanced payment (of which I have no knowledge) and the Court’s award. Such application would implicate the Defendant’s purported undervaluing of the subject’s value, requiring the Claimant to bring an action, engage an attorney and incur the expenses of a trial appraisal and expert testimony, all to satisfy the constitutional requirement that the condemnor provide just compensation to a condemnee. Thus, in order to make a claimant whole, an action under EDPL 701 is available to reimburse a claimant for the costs of obtaining constitutionally required recompense. Claimant’s argument is misplaced, however, when it contrasts the values set forth in the trial appraisals prior to any award by the Court. Moreover, relief under EDPL 701 was not sought or alleged in the claim, and the statute only applies where “an award is substantially in excess of the amount of the condemnor’s proof” and the Court may make such further award, upon application with notice, an opportunity for a hearing and affidavits of the condemnee setting forth the amount of expenses actually and necessarily incurred. At the least, this application is premature.

The award to Claimant herein is exclusive of the claims, if any, of persons other than the owner of the appropriated property, its tenants, mortgagees or lienors having any right or interest in any stream, lake, drainage, 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 or appurtenant facilities for the construction, operation or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer or railroad lines.

All motions not heretofore ruled upon are now denied. To the extent that Claimant has paid a filing fee, it may be recovered pursuant to Court of Claims Act §11-a(2).

LET JUDGMENT BE ENTERED ACCORDINGLY.

June 30, 2008
Rochester, New York

HON. PHILIP J. PATTI
Judge of the Court of Claims




  1. [1]I found that Claimant’s appraisal was lacking in organization compared to most of the trial appraisals I have seen. Consequently, it became difficult to follow as the testimony evolved, and this is but one example.
  2. [2]Defendant’s attempt to withdraw Exhibit H, proposed in its post-trial memorandum of law, is denied.
  3. [3]See Defendant’s appraisal, Exhibit A, pages 51 and 53 respectively.