New York State Court of Claims

New York State Court of Claims

HAFNER v. THE STATE OF NEW YORK, #2009-037-505, Claim No. 112741


Case Information

Claimant short name:
Footnote (claimant name) :

Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

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

Cross-motion number(s):

Claimant’s attorney:
Hiscock & Barclay, LLPBy: Mark R. McNamara, 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:
June 22, 2009

Official citation:

Appellate results:

See also (multicaptioned case)


This is a timely filed claim for damages caused by the partial appropriation of Claimant’s property pursuant to Section 30 of the Highway Law and the Eminent Domain Procedure Law of the State of New York in a proceeding entitled “Southwestern Boulevard, Part 4, SH 9269, P.I.N. 5111.82, Erie County, Map No. 282, Parcel No. 314,” filed in the Erie County Clerk’s Office on June 8, 2005, which the Court finds to be the date of taking. Said map and the property description set forth therein are adopted by the Court and incorporated herein by reference. This Claim was filed with the Clerk of the Court on September 12, 2006 and it has not been assigned or submitted to any other court, tribunal or officer for audit or determination. The Court has viewed the property pursuant to Section 12 (4) of the Court of Claims Act and Section 510 of the Eminent Domain Procedure Law.

The subject property is a vacant, unimproved parcel located on the west side of Southwestern Boulevard (US Route 20) in the Town of Hamburg, Erie County, New York, and is more particularly described in a deed from Elmer Olson and Annas Olson to Bradley H. Hafner dated December 1, 1972 and recorded December 1, 1972 in the Erie County Clerk’s Office in Liber 7991 of Deeds at page 337. Ownership was not contested and both appraisers valued the property on the basis of Claimant’s ownership of a fee interest in the subject premises. Thus, the Court concludes that Claimant has established title to and was the owner of the property at the time of the appropriation.

The appraisers differed as to the dimensions of the land area before the appropriation. Claimant’s appraiser, Howard P. Schultz, described the original parcel as comprising approximately 4.09 acres based on a survey of the property dated October 11, 1972. The dimensions set forth in Claimant’s deed comport with those contained in the 1972 survey, including 410.48 feet of frontage on Southwestern Boulevard. By contrast, Defendant’s appraiser, Roger P. Pigeon, reported that the parcel contained 3.99 acres (173,796 square feet) with the same road frontage. The reason for this discrepancy is that Mr. Pigeon took into account a prior appropriation by the State of New York of a strip of land along the road frontage containing 4,131 square feet (0.09 acre) (Exhibit M) which was not reflected in Claimant’s appraisal. As a result, the Court will adopt the land area dimensions relied upon by Defendant’s appraiser.

At the time of the taking the subject property was irregular in shape, primarily wooded and slightly below road grade. The purpose of the appropriation was to construct a retention pond[1] for drainage purposes, for which Defendant took a triangular shaped parcel containing 11,258 square feet (0.26 acre) located in the northeast corner of the original parcel. After the taking, Defendant’s appraiser determined that the land area was 162,538 square feet (3.73 acres) and that the road frontage was reduced from 410.48 feet to 237.48 feet, a reduction of approximately 42%.

Southwestern Boulevard is a main thoroughfare in the central portion of the Town of Hamburg and Claimant’s property is located between Camp Road to the north and Rogers Road to the south. The neighborhood consists of a mix of residential and commercial properties, including single and multifamily dwellings, auto service, mini-storage, offices, restaurant, two golf courses and a large retail development. The property is located in an R-3 Multifamily District under the Town of Hamburg zoning law. Such zoning permits the development of single family, two family and multifamily residential dwellings, together with schools, libraries, hospitals and nursing homes. Commercial development in such a zone would be prohibited absent a change in the zoning classification by the Town of Hamburg. Along the road frontage, utilities such as natural gas, electric, telephone and municipal water are available. There are no public sanitary sewers along this portion of Southwestern Boulevard. Immediately adjacent to the subject property is an apartment complex on the north and a commercial business on the south.

Claimant is entitled to “just compensation” when the State exercises its power of eminent domain and the amount is generally determined by reference to the fair market value of the property according to its highest and best use (Matter of Town of Islip [Mascioli], 49 NY2d 354 [1980]). In determining fair market value, “the condemnee is entitled to have the appraisal based on the highest and best available use of the property irrespective of whether he is so using it” (Keator v State of New York, 23 NY2d 337, 339 [1968]). Where the State takes part of a condemnee’s property and leaves a remainder, just compensation includes not only direct damages for the portion taken, but also any indirect damages resulting from impairment to the remaining property as a result of the appropriation. Such indirect impairment can be in the form of consequential damages (damage resulting from the use to which the appropriated portion is put; see e.g. Matter of City of New York [Metro Inv. & Credit Corp.], 288 NY 75 [1942]; Dennison v State of New York, 48 Misc 2d 778 [1965], affd 28 AD2d 28 [1967], affd 22 NY2d 409 [1968]) or severance damages (damage resulting from the effects of the loss of the taken portion; see e.g. Coldiron Fuel Ctr., Ltd. v State of New York, 8 AD3d 779 [2004]). The measure of indirect damages in the case of a partial taking is the difference between the fair market value of the property before the appropriation and its fair market value after the taking (McDonald v State of New York, 42 NY2d 900 [1977]; Acme Theatres v State of New York, 26 NY2d 385 [1970]; Diocese of Buffalo v State of New York, 24 NY2d 320 [1969]).

In addition to widely divergent views of the value of the property both before and after the taking and whether the property sustained consequential or severance damage as a result of the taking, the parties’ primary dispute was whether the highest and best use of the property for just compensation purposes was for residential or commercial development. As a result of this dispute, the expert testimony presented was based upon these conflicting viewpoints, with Claimant’s witnesses opining that the highest and best use was for commercial development and Defendant’s witnesses opining that the highest and best use was for residential development. Both appraisers utilized only the sales comparison approach to arrive at an indicated value for the subject property at the time of the taking since vacant land was at issue.

It is well settled that a party asserting a different highest and best use from the one existing at the time of the condemnation has the burden of proving a reasonable probability that the highest and best use it asserts would or could have been made of the subject property in the near future (Thompson v Erie County Indus. Dev. Agency, 251 AD2d 1026 [1998]; Matter of Rochester Urban Renewal Agency v Lee, 83 AD2d 770 [1981]; see Matter of City of New York [Broadway Cary Corp.], 34 NY2d 535 [1974], rearg denied, 34 NY2d 916 [1974]), including rezoning (cf. Masten v State of New York, 11 AD2d 370 [1960], affd 9 NY2d 796 [1961]; Matter of Town of Islip [Mascioli], supra; Harwood v State of New York, 112 AD2d 741 [1985]; Dittmer v State of New York, 187 AD2d 693 [1992]). A use which is no more than a speculative or hypothetical arrangement in the mind of the Claimant may not be accepted as the basis for an award (Matter of City of New York [Rudnick], 25 NY2d 146 [1969]; Triple Cities Shopping Ctr. v State of New York, 26 AD2d 744 [1966], affd 22 NY2d 683 [1968]). While the owner is not required to demonstrate that there was a plan for the projected use prior to the taking, it must be shown that such use is economically as well as physically feasible (Matter of City of New York [Broadway Cary Corp.], supra). Claimant’s appraiser testified that the pattern of zoning changes from residential to commercial, coupled with the proposed large-scale commercial redevelopment ongoing in the area, created a reasonable probability that the property would be rezoned and that Claimant should be awarded an increment above the residential value. It is significant that Andrew C. Reilly, a licensed professional engineer and certified professional planner who provides services to the Town of Hamburg Planning and Environmental Department, testifying for Defendant, did not rule out the possibility that the subject property would be rezoned upon proper application. Based upon the foregoing, the Court concludes that the reasonable probability of rezoning is a relevant factor in determining the market value of Claimant’s property.

Although both appraisers used the market data approach in valuing the property, they arrived at markedly different results. Claimant’s appraiser found a before value of $1,200 per front foot and an after value of $900 per front foot, i.e. the remainder sustained $300 per front foot in consequential/severance damages. Total damages, according to this analysis, amounted to $210,000 (R) in direct damages (173 front feet taken x $1,200), plus $75,000 (R) in indirect damages (237.48 front feet remaining x $300) for a total of $285,000 (R).

In contrast, Defendant contends that the property should be compared to other vacant parcels consistent with the zoning in effect at the time of taking and the loss valued on a square foot basis with no allowance for consequential/severance damages. Accordingly, Defendant’s appraiser found a before value of $0.75 per square foot and, based on his conclusion that there were no damages to the remainder, utilized the same figure for his after valuation, assessing direct damages of $8,500 (R) (11,258 square feet taken x $0.75).

During the trial, counsel for the parties challenged the validity of the filed appraisal reports and these issues were briefed by each in post trial memoranda of law which were reviewed by the Court. Claimant’s counsel argues that Defendant’s appraisal (Exhibit A) should be stricken because an earlier appraisal report prepared by the same firm for advanced payment and settlement purposes contained a higher damage figure. The earlier appraisal was admitted into evidence (Exhibit 12) and was utilized by Claimant as an admission against interest relative to the before and after market values and the damage figures (see Sullivan v State of New York, 57 Misc 2d 308 [1968]). However, in this Court’s view, the existence of the earlier appraisal does not preclude Defendant from filing an appraisal containing different values pursuant to 22 NYCRR § 206.21. Therefore, Claimant’s motion to strike Defendant’s filed appraisal, reserved on at the time of trial, is denied.

Counsel for Defendant contends that Claimant’s appraisal report is defective for a variety of reasons and should be stricken. Although inadequate in some respects, the appraisal, taken as a whole, substantially satisfies the requirements of 22 NYCRR § 206.21 (b) (see Welch Foods v Town of Westfield, 222 AD2d 1053 [1995]; Matter of Broadway-Saranac Lake Corp. v Board of Assessors of Saranac Lake 43 AD2d 649 [1973]). Whatever insufficiencies there may be in Claimant’s appraisal does not hamper the Court’s ability to determine value. Therefore, Defendant’s motion to strike Claimant’s appraisal, upon which decision was reserved at trial, is denied.
To avoid confusion in examining the valuations of each appraiser, the Court will convert Claimant’s front footage appraisal format to the square footage basis employed by Defendant. Claimant’s appraiser utilized six comparable sales in the before valuation and the adjusted land sales indicated a range of $781.00 per front foot to $2,155.00 per front foot with a mean value of $1,353.00. Although he relied upon all listed sales, primary weight was given to Sale No. 1 and Sale No. 3, which were considered similar to the subject indicating a front footage adjusted value in the before situation of $1,200.00 per foot for 410.48 feet of frontage on Southwestern Boulevard, finding a rounded before value of $500,000.00 for the entire parcel. The appraiser notes that the indicated land value calculated on a per acre basis is supported by Sale No. 5, which is located just south of the subject property. Utilizing the area of the subject as 173,796 square feet, this valuation equates to $2.88 per square foot.

Defendant’s appraiser never considered the front footage valuation methodology proffered by Claimant, but compared three sales of vacant land and found square foot valuations, after adjustments, ranging from $0.60 to $0.81 per square foot and rendered an opinion of $0.75 per square foot resulting in a rounded before land value of $130,400.00 (173,796 square feet x $0.75). It is significant to note that the earlier appraisal prepared by Mr. Pigeon’s firm utilized the same three comparable sales to find square foot valuations, after adjustments, ranging from $0.66 to $0.89 per square foot and rendering an opinion of $0.85 per square foot resulting in a before land value, as rounded, of $147,800.00.

Given the relatively minor difference between the square foot valuations based upon the valuations arrived at by the two appraisers, the Court finds it unnecessary to engage in an exhaustive discussion of the comparable sales offered by the appraisers. Overall, based upon a preponderance of the evidence and the Court’s consideration of the comparable sales submitted by each party, the Court elects to adopt a mean value of $ 1.85 per square foot for the vacant land value before the taking resulting in a total before value of $321,500.00 (R) for 173,796 square feet of land area. Therefore, with respect to direct damages, the taking contained 11,258 square feet of land area and the Court has assigned a value of $1.85 per square foot to the land resulting in direct damage of $20,830.00 (R).

In addition to direct damages, the Court must determine if there was any consequential or severance damage to the remainder of Claimant’s property as a result of the partial taking and, if so, at what valuation. As noted, there is a difference of opinion between the appraisers in this regard with Claimant asserting indirect damages and Defendant contending that Claimant suffered no indirect damages. The Court rejects Defendant’s arguments finding that the loss of 42% of the road frontage as a result of the taking alone is sufficient to generate a measurable amount of severance damage. Furthermore, Defendant’s earlier appraisal found indirect damage to the remainder of Claimant’s property, stating:
“There is also justification for indirect damage to the subject’s remainder. The subject property currently has 411± feet of frontage. Subsequent to the appropriation, the subject will have 238±’ of frontage. The appropriation will result in a loss of 42±% of the subject’s frontage. As per NYSDOT, the purpose of the appropriation is for a detention pond to handle overflow storm waters. This attractive nuisance, as well as the loss of 42±% of the subject’s frontage will have a negative impact on the subject’s remainder. The appropriation area will affect the subject’s utility and development potential. The utility of the remaining land area after the appropriation will become diminished. Indirect damage to the subject’s remaining land is indicated.” (Exhibit 12, p 27)

The appraisers do not assert a different highest and best use in the after situation from the before as they believe there was no change in use or potential use. The Court finds that the optimal use of the remainder for commercial development asserted by Claimant has not changed as a result of the taking and remains its highest and best use.

In determining the diminution in value of the remaining property resulting from indirect or severance damage, Claimant’s appraiser provided a market data assessment, using the same comparable sales that were used in the before taking analysis with different adjustments reflecting his opinion of the lesser value of the remaining parcel. Without engaging in a detailed discussion of the appraisal, he concludes that the remaining 237.48 front feet should be valued at $900.00 per front foot or $213,732, which he rounds to $215,000.00 for the after land value which, based on the remaining area of 162,538 square feet, equates to $1.32 per square foot. Based upon his conclusion that there was no indirect damage to the land, Defendant’s appraiser used the before taking unit value of $0.75 per square foot in the after situation resulting in an after land value of $121,900.00 (R) (162,538 square feet x $0.75). Given the difference between the square foot valuations arrived at by the two appraisers, the Court again finds it unnecessary to engage in an exhaustive discussion of the comparable sales provided by the appraisers. Thus, based upon a preponderance of the evidence and the Court’s careful consideration of the comparable sales offered by each party, together with the adjustments thereto, the Court will use Claimant’s unit value of $1.32 per square foot in the after situation, resulting in an after land value of $214,550.00.

Accordingly, the Court finds that Claimant sustained damages in the total sum of $106,950.00, allocated as follows: $20,830.00 in direct damages for the loss of the land and $86,120.00 in severance damages. Therefore, Claimant is awarded the sum of $106,950.00, together with statutory interest thereon from the vesting date of June 8, 2005 to March 12, 2007. Pursuant to an order of this Court interest is suspended from March 13, 2007 to December 14, 2007, when Claimant filed his appraisal and interest thereafter resumes to the date of this decision and continues thereafter to the date of the entry of judgment thereon.[2]

The award to Claimant herein is exclusive of the claims, if any, of persons other than the owners of the appropriated property, their 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 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.

To the extent that Claimant has paid a filing fee, it may be recovered pursuant to Court of Claims Act § 11-a (2).

All motions not previously ruled upon or upon which decision was reserved are hereby denied.


June 22, 2009
Buffalo, New York

Judge of the Court of Claims

[1].The record reflects that the retention pond has not been constructed.
[2].Since there is no evidence on the record establishing the date of personal service of the notice of appropriation, prejudgment interest shall not be suspended pursuant to EDPL § 514 (B) (see Sokol v State of New York, 272 AD2d 604 [2000]). Therefore, prejudgment interest will only be suspended during the period set forth in Hafner v State of New York, Ct Cl, Moriarty, J., Claim No. 112741, M-74012, filed October 25, 2007.