New York State Court of Claims

New York State Court of Claims

MILLIGAN v. NEW YORK STATE


DEPARTMENT OF TRANSPORTATION



MERCY HOSPITAL OF BUFFALO



GREG SABUDA d/b/a MILLIGAN’S PUB and SABUDA CORP.



NEW YORK STATE ELECTRIC & GAS CORPORATION



ADELPHIA COMMUNICATIONS


CORPORATION PLANNING & DESIGN



VERIZON NEW YORK INC.



NATIONAL FUEL GAS DISTRIBUTION CORPORATION



TOWN OF ORCHARD PARK


, #2009-037-011, Claim No. NONE, Motion No. SP-126


Synopsis



Case Information

UID:
2009-037-011
Claimant(s):
JAY MILLIGAN
Claimant short name:
MILLIGAN
Footnote (claimant name) :

Defendant(s):
NEW YORK STATE
DEPARTMENT OF TRANSPORTATION

MERCY HOSPITAL OF BUFFALO

GREG SABUDA d/b/a MILLIGAN’S PUB and SABUDA CORP.

NEW YORK STATE ELECTRIC & GAS CORPORATION

ADELPHIA COMMUNICATIONS
CORPORATION PLANNING & DESIGN

VERIZON NEW YORK INC.

NATIONAL FUEL GAS DISTRIBUTION CORPORATION

TOWN OF ORCHARD PARK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
NONE
Motion number(s):
SP-126
Cross-motion number(s):

Judge:
JEREMIAH J. MORIARTY III
Claimant’s attorney:
Paul William Beltz, P.C.By: Kevin J. Sullivan, Esq.
Defendant’s attorney:
Hon. Andrew M. Cuomo
New York State Attorney General
By: William D. LonerganAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
May 6, 2009
City:
Buffalo
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Petitioner[1] commenced this proceeding by order to show cause pursuant to Eminent Domain Procedure Law (EDPL) § 304 (E) and Court of Claims Act § 23 for an order of distribution of an advance payment (the fund) deposited by the State Comptroller pursuant to EDPL § 304 (E) (1).[2]

The following papers were read and considered by the Court in connection with this proceeding:
  1. Order to Show Cause dated January 21, 2009 and Verified Petition dated January 9,
2009 and verified January 15, 2009, with annexed exhibits A-L, filed January 30, 2009;

  1. Affidavits of Service of the Order to Show Cause, personally and by certified mail,
return receipt requested, by Christopher Bukowski on The Office of the Attorney General sworn to February 11, 2009 and filed February 23, 2009;

  1. Affidavit of Service of the Order to Show Cause, personally, by Christopher
Bukowski on the Department of Transportation-Buffalo sworn to February 11, 2009 and filed February 23, 2009;

  1. Affidavit of Service through the Secretary of State of the Order to Show Cause by
Jeffrey Teitel on Mercy Hospital of Buffalo sworn to February 3, 2009 and filed February 23, 2009;

  1. Affidavit of Service of the Order to Show Cause, personally, by Christopher
Bukowski on Mercy Hospital of Buffalo sworn to February 11, 2009 and filed February 23, 2009;

  1. Affidavit of Service of the Order to Show Cause through substituted service by
Christopher Bukowski on Greg Sabuda d/b/a Milligan’s Pub and Sabuda Corp. sworn to February

11, 2009 and filed February 23, 2009;

  1. Affidavit of Service of the Order to Show Cause, personally, by John Madan on New
York State Electric & Gas Corporation sworn to February 12, 2009 and filed February 23, 2009;

  1. Affidavit of Service through the Secretary of State of the Order to Show Cause by
Christopher Bukowski on New York State Electric & Gas Corporation sworn to February 11, 2009 and filed February 23, 2009;

  1. Affidavit of Service through the Secretary of State of the Order to Show Cause by
Jeffrey Teitel on Adelphia Communications Corporation sworn to February 3, 2009 and filed February 23, 2009;

  1. Affidavit of Service of the Order to Show Cause, personally, by Christopher
Bukowski on Adelphia Communications Corporation Planning & Design sworn to February 11, 2009 and filed February 23, 2009;

  1. Affidavit of Service through the Secretary of State of the Order to Show Cause by
Jeffrey Teitel on Verizon New York Inc. sworn to February 3, 2009 and filed February 23, 2009;

  1. Affidavit of Service of the Order to Show Cause, personally, by Christopher
Bukowski on Verizon New York Inc. sworn to February 11, 2009 and filed February 23, 2009;

  1. Affidavit of Service through the Secretary of State of the Order to Show Cause by
Jeffrey Teitel on National Fuel Gas Distribution Corporation sworn to February 3, 2009 and filed February 23, 2009;

  1. Affidavit of Service of the Order to Show Cause, personally, by Christopher
Bukowski on National Fuel Gas Distribution Corporation sworn to February 11, 2009 and filed February 23, 2009;

  1. Affidavit of Service of the Order to Show Cause, personally, by Christopher
Bukowski on the Town of Orchard Park sworn to February 11, 2009 and filed February 23, 2009;

  1. Copy of letter from Jeffrey A. Rosenbloom, Senior Attorney for New York State
Electric & Gas dated March 20, 2009 and received March 23, 2009;

  1. Letter from Phillips Lytle LLP, counsel to Verizon New York Inc., dated April 28,
2009 and received April 29, 2009.

On February 8, 2007 the State of New York, acting by and through the New York State Department of Transportation (NYSDOT), appropriated certain real property located at 3864 Abbott Road in the Town of Orchard Park, Erie County, New York, by filing a Notice of Appropriation entitled Map No. 327, Parcel No. 371, Southwestern Boulevard, Part 2, S.H. 9269, with the Erie County Clerk’s Office (Exhibit D).[3] Petitioner was the sole owner of the appropriated parcel at the time of the appropriation and NYSDOT tendered an offer of settlement in the amount of $43,300.00 as just compensation for the taking. Thereafter, the Comptroller of the State of New York (Comptroller) deposited the advance payment with interest ($43,505.68) into an eminent domain account under EDPL § 304 and Petitioner now seeks distribution of the fund pursuant to § 23 of the Court of Claims Act.

On or about January 9, 2008, Petitioner and NYSDOT entered into an Agreement for Advance Payment (Exhibit F) which provides that Petitioner will be paid the amount of the advance payment and interest upon the receipt of all documents required by the Attorney General of the State of New York with respect to other parties having a potential interest in the fund. NYSDOT by letter to Petitioner’s attorneys identified the following parties, in addition to Petitioner, as having a potential interest in the advance payment: Mercy Hospital of Buffalo; Greg Sabuda d/b/a Milligan’s Pub and Sabuda Corp (Sabuda).; New York State Electric & Gas Corporation (NYSEG); Adelphia Communications Corporation Planning & Design (Adelphia); Verizon New York Inc. (Verizon); National Fuel Gas Distribution Corporation (National Fuel Gas); and Town of Orchard Park (Orchard Park). To satisfy the requirements for payment, Petitioner was requested to provide: (1) Voucher in duplicate; (2) Affidavit of Title; (3) Release of Owner; (4) Assignment of Claim and Release executed by Sabuda Corp.; and (5) Assignment of Claim and Release executed by Mercy Hospital of Buffalo.

The Petition explains and the affidavit of title confirms that NYSEG, Adelphia, Verizon, National Fuel Gas and Orchard Park hold easements which may affect the subject premises and they did not submit any papers in opposition to the relief requested. Joanna Dickinson, Esq., of counsel to Phillips Lytle LLP attorneys for Verizon, appeared in Court to advise that Verizon takes no position with respect to this application and wishes to be dismissed from the Petition. The letter from counsel for NYSEG states that the company has no interest in this proceeding.

Annexed to the Petition is a NYSDOT Assignment of Claim and Release form executed by Sabuda which states that the corporation claims no part of the advance payment. The Assignment of Claim and Release form for Mercy Hospital of Buffalo has not been executed and NYSDOT will not authorize distribution of the fund until that outstanding interest has been resolved. Petitioner argues that Mercy Hospital has no interest in the fund because its judgment lien expired on March 13, 2007 and has not been extended pursuant to CPLR §5203 (b).

The alleged interest of Mercy Hospital of Buffalo arises from a money judgment it recovered in the City Court of Buffalo, N.Y. against Richard Rettig and Linda Rettig in the amount of $13,850.93, which was perfected and docketed in the Erie County Clerk’s Office on March 13, 1997. The records in the Erie County Clerk’s Office indicate that on the date of the entry of judgment, Richard Rettig and Linda Rettig were the owners of the subject premises located at 3864 Abbott Road in the Town of Orchard Park, Erie County, New York, which they subsequently transferred to J. W. Milligan by a deed recorded on August 18, 1998 in Liber 10937 of Deeds at page 4924. Under the provisions of CPLR §5203 (a), the lien created by the entry of the money judgment expired ten years from the date of entry, i.e. on or about March 13, 2007. Thus the judgment lien had not expired when title to the appropriated premises vested in the State of New York on February 8, 2007.

Valid liens against real property which existed at the time of taking and are extinguished by an appropriation are preserved as equitable liens against the condemnation award to the extent of the lien and interest thereon as of the date of vesting (see Matter of County of Nassau [Gelb-Siegel], 24 NY2d 621 [1969]; Copp v Sands Point Mar., 17 NY2d 291 [1966]; Muldoon v Mid-Bronx Holding Corp., 287 NY 227 [1942]; City of Syracuse v State of New York, 121 Misc 2d 8 [1983]). Accordingly, by operation of law, at the time of the appropriation the lien interest of the judgment creditor in the subject property was converted from a lien against the property to a lien against the fund.

EDPL § 304 (E) (1) sets forth the procedure for the payment of advance appropriation funds into an interest bearing account when the Attorney General determines that there is a conflict of title or a conflict otherwise arises so that he is unable to certify the persons legally entitled to the amount payable. The fund may then be distributed “as ordered by the Court of Claims on application of any person claiming an interest in the amount deposited.” After the fund is deposited, the statute requires that the Attorney General “notify all parties claiming an interest in the fund that the amount payable thereunder has been deposited and is subject to an application by an interested person or persons to a distribution proceeding.” The statute incorporates the procedure set forth in § 23 of the Court of Claims Act for the distribution of deposited Court of Claims awards. Section 23 requires a special proceeding on notice to all interested persons to “show cause why a final order of distribution should not be made.” It is by this procedure that this Court, having obtained jurisdiction over all interested parties, will determine and order the distribution of the advance payment (the fund).

The uncontroverted allegations in the Verified Petition sufficiently establish the superior interest of the Petitioner in the fund. The affidavits of service filed herein show that all parties certified by the Attorney General as having a potential interest in the fund have been served with the Order to Show Cause and supporting documentation. In addition, it appears that the Attorney General notified Mercy Hospital of Buffalo by letter dated October 15, 2007 that the fund was deposited in an eminent domain account pursuant to EDPL § 304 (Exhibit G). None of the interested parties submitted an answer to the Petition and the only responses were from the Attorney General, who appeared in person on behalf of NYSDOT; Verizon, which appeared by its counsel to confirm that it has no interest in this proceeding; and NYSEG which communicated by letter from its counsel that it likewise has no interest in this proceeding.

Therefore, the Court, having obtained jurisdiction, hereby grants the Petition and the Comptroller is directed to pay the balance on deposit in the eminent domain account to Petitioner, Jay Milligan. Payment is stayed for thirty (30) days after Petitioner serves copies of this decision and order, with notice of entry, upon all interested parties listed in the Order to Show Cause pursuant to Court of Claims Act § 25. Petitioner shall file the affidavits of service with notice of entry with the Clerk of the Court.



May 6, 2009
Buffalo, New York

HON. JEREMIAH J. MORIARTY III
Judge of the Court of Claims




[1].The Court notes that Petitioner signed the verification on the petition and the Land Claims Payment Voucher “W. Jay Milligan.” The Notice of Appropriation lists the owner of the appropriated parcel as “J. W. Milligan” and the Agreement for Advance Payment was signed “W. J. Milligan.” For purposes of this proceeding the Court will consider that Jay Milligan, W. Jay Milligan, W. J. Milligan, and J. W. Milligan are the same person.
[2].The verified petition indicates that the deposit was made pursuant to EDPL 304 (E) (2) (Paragraph 25). However, the Court notes that this proceeding more properly falls under subdivision (1) of that section.
[3].A Supplemental Notice of Appropriation listing Sabuda Corp. as an interested party was filed with the Erie County Clerk’s Office on September 26, 2007.