New York State Court of Claims

New York State Court of Claims
GROSSMAN v. THE STATE OF NEW YORK, # 2009-044-004, Claim No. 111139


Court determined damages for partial appropriation of, and temporary easement over, real property.

Case information

UID: 2009-044-004
Claimant short name: GROSSMAN
Footnote (claimant name) :
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 111139
Motion number(s):
Cross-motion number(s):
Claimant's attorney: JOSHUA J. EFFRON, ESQ.
BY: Joseph F. Romani, Assistant Attorney General
Third-party defendant's attorney:
Signature date: March 27, 2009
City: Binghamton
Official citation:
Appellate results:
See also (multicaptioned case)


This is a timely served and filed claim for damages resulting from the partial appropriation of, as well as a temporary easement(1) over, certain real property (the Property) owned by claimant(2) and located in the Village of Liberty, Sullivan County. The premises were appropriated in proceedings entitled Liberty Village, S.H. No. 5296, Sullivan County, Map No. 77, Parcel No. 101, and Map No. 78, Parcel No. 102, pursuant to the pertinent provisions of the Highway Law and the Eminent Domain Procedure Law. The parties stipulated that the date of the taking was October 3, 2003, and that the temporary easement was terminated on March 31, 2008. The claim was filed on July 15, 2005 and duly served.

The Court has viewed the property, as required by Court of Claims Act 12 (4). This claim has not been assigned or submitted to any other court or tribunal for audit or determination. Trial of the matter was held in the Binghamton District on July 22, 2008. The parties submitted post-trial memorandums of law.

At the time of the taking, the Property was an irregular-shaped parcel of approximately 0.406 acres, or 17,685 square feet, with improvements consisting of a 1,148-square-foot building containing a 2-bay auto sales and service facility. Most of the Property was paved, with a generally level topography, but sloping sharply up to the rear.(3) The Property is located at the intersection of State Route 55 (Neversink Road), Oberferst Street, and State Route 52, and was zoned C-Commercial by the Village of Liberty. The Property is approximately one-quarter mile away from both Exit 100 and Exit 100-A of the Route 17 Quickway. The land area left after the taking was 11,627 square feet, with its value severely impaired by the taking, according to both claimant's and defendant's appraisers. Claimant sold this remainder to the owner of an adjoining parcel for $5,000 on June 11, 2004.(4) The Court adopts the appropriation maps and the descriptions contained therein, and incorporates them by reference.

Claimant is entitled to fair compensation for property appropriated through the process of eminent domain (Matter of Town of Islip [Mascioli], 49 NY2d 354, 360 [1980]). In a partial taking, the measure of damages 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, 388 [1970]). Fair market value is the price for which the property would sell if there was both a willing buyer and a willing seller, with neither under any compulsion to buy or sell (Matter of Allied Corp. v Town of Camillus, 80 NY2d 351 [1992]; Gold-Mark 35 Assoc. v State of New York, 210 AD2d 377 [1994]).

In such partial takings, claimants are entitled not only to direct damages for the value of the land actually taken, but additionally to any indirect damages resulting from impairment to the remaining property as a result of the appropriation. There also can be severance damages that arise because the taking caused a diminution in value to a claimant's remaining property (see Coldiron Fuel Ctr., Ltd. v State of New York, 8 AD3d 779, 780 [2004]; Williams v State of New York, 90 AD2d 882, 883 [1982]). Any award made should indicate the value of damages attributable to the direct appropriation and those resulting from indirect damage to the remainder, as well as the basis for such award (Howard v State of New York, 35 AD2d 1032 [1970]; Wineburgh v State of New York, 20 AD2d 961, 962 [1964]).

Larry Grossman, claimant's husband, testified at trial that claimant purchased the Property from him in 1992. He in turn had purchased the Property from a closely-held family corporation, R.E.L.L. Corporation (the Corporation), at some point prior to that, when that entity was dissolved for estate planning purposes. He said that the Corporation purchased the Property in May 1986, and made approximately $58,000 in improvements to the premises, including new windows, doors, siding and roof, electrical work and new heating system, removal of four fuel tanks, and some paving.(5) He said that this work was done between 1986 and 2002.(6)

Grossman said that he originally purchased the Property (via the Corporation) because, in his opinion, it had a "strategic location."(7) He stated that just prior to the taking, there was "lots of commercial growth" in the area. He said that, at the time of the taking, the Property was being held for investment purposes, and he had received "very many inquiries" from people interested in purchasing it. The Property had been occupied by tenants almost the entire time since 1986. Grossman said that any time a tenant vacated the Property, a new tenant was available within 24 hours. At the time of the taking, the Property was being leased on a month-to-month basis for $1,000 per month, although Grossman stated he had received much higher rents previously.(8) He testified that he was only willing to rent the Property on a month-to-month basis at that time, because he was "getting ready to sell the Property."

Paul Lieberman also testified on claimant's behalf. He stated that he had investigated purchasing the Property, but had made no formal, binding purchase offer. Lieberman's testimony was given no weight by the Court. Further, defendant's motion to strike the reference in claimant's appraisal (on page 11 thereof) to a verbal offer by Lieberman is granted (see Wechsler v State of New York, Ct Cl, Nov. 29, 2004, Lebous, J., Claim No. 88857 [UID # 2004-019-027]).

Kenneth Gardner II, a certified real estate appraiser, prepared an appraisal(9) and testified on behalf of claimant. He inspected the site on November 21, 2003, shortly after the taking, at which time the Property was in essentially the same condition as at the time of taking.  He said that the large size of the site - 0.406 acres - was relatively unusual for a location in the Village of Liberty. He said it was almost centrally located in the Village, with frontage on two roads and exposure to three roads, two of them State highways. He said that the area surrounding the Property was fully developed with commercial uses, including a variety of small local retail businesses. However, the area also included car dealerships, three motels within walking distance, a convenience store and a small shopping plaza.

Gardner concluded that the highest and best use of the Property would be as a commercial development site, and that there would be demand for such development at that location.(10) Gardner also stated that, in his opinion, any purchaser would be likely to either demolish or substantially enlarge and renovate the building. Based on these conclusions, he testified that the only appropriate standard approach to valuation of the Property would be the sales comparison method.

In his sales comparison analysis, Gardner first focused on sales of four commercial development sites he deemed similar. The first three properties are located in either the Village or the Town of Liberty, and the fourth is a similar sized parcel in the Village of Wurtsboro, a competing market area in Sullivan County. After comparing these properties with the parcel at issue, and making adjustments for market trend,(11) improvements, location and condition, Gardner arrived at a valuation of the subject property of $230,000 as of the date of the taking.

His first comparable sale (Sale #1) was a site located a short distance east of Exit 100 in the Village of Liberty, fronting on State Route 52 at the intersection of Sullivan Avenue. However, the sale of that parcel occurred almost exactly 6 years prior to the taking of the Property (on April 7, 1997). The Court finds this sale too remote in time to be comparable, and accordingly did not consider it in its analysis.

Gardner's second comparable sale (Sale #2) was also located in the Village of Liberty, on Sullivan Avenue at the intersection of the westbound exit ramp of Exit 100 on State Route 17. That parcel was a 15,682-square-foot site with 160 feet of frontage. This sale took place approximately 4 years prior to the taking, and Gardner made the corresponding market trend adjustments for that time period. He also made a 20% downward adjustment because of the superior location of this parcel adjacent to the exit ramp from the highway, resulting in an adjusted value of $11.37 per square foot.

Claimant's third comparable sale (Sale #3) was located in the Town of Liberty. This parcel was a 61,420-square-foot site. Because this parcel was substantially larger than the subject Property, Gardner made a 35% adjustment upward. The net adjustments, including the market trend, resulted in an indicated comparable value for that parcel of nearly 78% higher than the purchase price. As noted in Nichols on Eminent Domain:

The concept of using comparable sales to indicate a value for the subject property presupposes similarities in the characteristics and components of the comparables and the subject. It would appear axiomatic then that the greater the number and percentage of adjustments, the less comparable the property and the more vulnerable the appraisal opinion based thereon. If the net adjustments to the comparable sale equals 30% or more of its unit price to make it equal to the subject property, then it would seem . . . that such comparable sale has been rendered no longer comparable and of no probative value in estimating the market value of the subject (7A Nichols, Eminent Domain G13.04 [3d ed]).

Accordingly, the Court finds that Sale #3 was simply not comparable.

Comparable sale 4 (Sale #4) was a 16,988-square-foot parcel located in the Village of Wurtsboro. Gardner acknowledged at trial that this parcel was located in a smaller village, and was a significant distance from the highway exit. He accordingly made a 25% upward adjustment for location, yielding an adjusted value of $12.63 per square foot.

Gardner then considered two sales of improved property (Sales #7 and #8), both in the Village of Liberty, "[a]s a test to determine the highest and best use of the subject property . . . [and to serve] as an alternate sales comparison analysis bolstering support for the market value of the subject property."(12) Defendant's counsel objected to the use of Sale #7 on the ground that it took place nearly three years after the appropriation, and was thus too removed in time to appropriately be considered as a comparable sale. Without addressing defendant's objection, the Court finds that Gardner's adjustments for location, site and other variables, which totaled 87 % of the purchase price, render the sale simply not comparable. Likewise, the 40 % adjustment necessary to render Sale # 8 comparable with the condition of the subject Property, particularly when combined with the fact that Sale # 8 took place 8 years prior to the taking of the Property, also renders that sale not comparable.

Defendant's certified appraiser, Robert Congdon, Jr., MAI, RM, prepared an appraisal and testified on defendant's behalf. He arrived at a valuation of the Property at the date of the taking of $57,000.(13) He based this figure on the direct sales comparison approach, finding that neither the cost approach nor the income approach were appropriate in this instance. He apportioned his valuation in the following manner, using three sales:

Land $ 33,000

Land Improvements $ 6,300

Building $ 17,700.

In Congdon's appraisal, he stated that the highest and best use for the Property as if vacant would be "smaller commercial developments such as auto repair, auto sales, laundromat, personal service use, eating or drinking establishment, bank, small retail or commercial

office . . ."(14) Congdon's first comparable sale (Sale #1) was a relatively similar sized parcel in the Town of Liberty, sold a little less than two years prior to the taking at issue in this case. After making an adjustment for the demolition of the building on that site, Congdon arrived at a site value of $2.84 per square foot, with no further adjustments necessary.(15) Defendant's comparable Sales #2 and #3 were in Monticello and Bloomingburgh, respectively. Due to location and other issues, Congdon found it necessary to apply a 40% adjustment downward on Sale #2, and a 90% adjustment downward on Sale #3. The Court accordingly finds that neither Sale #2 nor Sale #3 qualify as comparable sales (see p 7, supra).

Using Sales #1, #2 and #3, and weighing Sale #1 most heavily, due to its similar location, Congdon arrived at a square-foot land value of $2.80 (as previously noted in this Decision, the square-foot-land-value for Sale #1, after adjustment for the demolition, was $2.84). Congdon multiplied that number by 11,745(16) to arrive at the land value of $33,000.

In the second portion of his analysis, Congdon concluded that the highest and best use for the Property as improved was in the capacity of its previous use as auto sales/service. However, the Court found this analysis to be seriously flawed. Both the appraisal and his testimony at trial made it clear that he did not consider in any way the necessary factor of the maximally productive use of the site when he conducted his analysis. Instead he made only a conclusory statement in his appraisal:

[a]s of 10/03/03, the improved portion of the subject property was used as an Auto Sales/Service. This use agrees with the concept set forth in the previous highest and best use analysis "as if vacant". When this situation occurs, there is no need to reiterate the foregoing analysis. Therefore, based on the configuration of the improvements, and the information contained herein, the highest and best use of the subject "as improved" is estimated to be for its previous use as an Auto Sales/Service.(17)

The Court accordingly declines to consider his comparable sales comparison to improved properties.

Finally, the Court also gave no credence to Congdon's "Income Approach Exercise." He stated at trial that he had initially rejected the income approach as being inappropriate in this instance, "because these [types of] properties are typically not purchased for the production of rental income." He did eventually perform the analysis after being requested to do so by DOT. It was clear from his testimony that he did not find this analysis to be relevant, and the Court has accordingly not considered it.

After discarding the non-comparable sales, the Court was left with three comparisons: Sales # 2 and #4 submitted in claimant's appraisal, and Sale #1 submitted in defendant's appraisal. After having carefully reviewed the exhibits, including the appraisals, and listening to the witnesses testify and observing their demeanor as they did so, the Court found the following adjustments appropriate.

With regard to claimant's Sale #2, the Court found that Gardner's location adjustment of 20% was simply not adequate to reflect the inherently superior location of Sale #2 over that of the Property, as Sale #2 was immediately adjacent to the highway exit, as opposed to the Property's distance of about a quarter of a mile from the highway exit. The Court accordingly modifies that adjustment to 30%, which yields an adjusted value per square foot of $9.95.

With regard to defendant's Sale #1, Congdon acknowledged during trial that this parcel was not located anywhere near the highway exit. However, he did not make any location adjustment to this sale, which the Court finds to be necessary in light of the superior location and configuration of the subject Property. The Property at issue here was located on two State highways, approximately one-quarter mile from the Route 17 Exits, with combined frontage of approximately 250 feet on State Route 55 and Oberferst Street.(18) In contrast, Sale #1 had 89 feet of frontage on a County Road. The Court finds that a 25% upward adjustment in the square-foot price of Sale #1 is appropriate to render it comparable to the Property. This adjustment yields a value per square foot of $3.55.

Finally, claimant's Sale #4 does not appear to need further adjustment. However, due to its considerably greater distance from a highway exit and its location in a smaller village, the Court has given it less weight than the other sales (20%, as opposed to the 40% accorded each of the other sales).

With these corrections, the Court arrives at a square-foot value of $7.93.(19) Then, $7.93 multiplied by the square footage of 17,685(20) yields a before-taking value of $140,242.(21)

Additionally, claimant is entitled to compensation for the temporary easement. The easement area was 6,147 square feet and lasted 2 years. Both claimant's and defendant's appraisers used an annual rate of return of 10%. Accordingly, the value of the easement is:

6,147 square feet multiplied by $7.93 per square foot = $48,746

$48,746 @ 10% per year = $4,875 per year

$4,875 per year multiplied by 2 years = $9,750.

Although claimant might in certain cases be entitled to consequential damages because the temporary easement encumbered the entire remaining road frontage of the parcel (after the fee taking), thus impeding development or sale of the unencumbered interior portion of the parcel (see McCurdy v State of New York, 10 NY3d 234 [2008]), claimant made no showing in this instance that sale or development of the remainder of the parcel was impeded. Accordingly, the Court has awarded no consequential damages for obstruction of access to or sale of the unencumbered portion of the Property.

To summarize, claimant's damages are allocated as follows:

Direct Damages

Fee Area Appropriated: 6,058 square feet multiplied by $7.93 per square foot = $48,040

Consequential Damages

Remainder of Property after Appropriation - 11,627 square feet multiplied by $7.93 per square foot = $92,202 (the value of the "remainder" prior to the appropriation), less $5,000 (the sale price of the remainder) = $87,202



Total Damages

$48,040 + $87,202 + $9,750 = $144,992, rounded to $145,000.(22)

Accordingly, it is the finding of the Court that claimant is entitled to an award of $145,000, with statutory interest thereon from October 3, 2003, the date of the appropriation, to the date of this Decision,(23) and thereafter to the date of entry of judgment, pursuant to CPLR 5001, 5002; EDPL 514; Court of Claims Act 19 (1); and subject to Court of Claims Act 19 (4).

Any motions not previously determined are hereby denied.

The award to the claimant herein is exclusive of the claims, if any, of any persons other than owners of the appropriated properties, their 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 properties 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. The Chief Clerk is directed to enter judgment in favor of claimant as set forth above and to the extent that claimant paid a filing fee, it may be recovered pursuant to Court of Claims Act 11-a (2).

Let judgment be entered accordingly.

March 27, 2009

Binghamton, New York


Judge of the Court of Claims

1. Although the claim itself states that claimant is seeking compensation for only "the permanent appropriation of interests in real property" (Claim, 2), the maps annexed thereto and explicitly made a part thereof do reference the temporary easement, as well as the fee appropriation. No objection was made by defendant State of New York (defendant) to claimant's request for inclusion of damages for the temporary easement. Accordingly, the Court will award appropriate damages for the temporary easement as well as for the fee appropriation, as discussed infra.

2. There is no dispute regarding claimant's fee ownership of the property.

3. At trial, the engineer in charge of construction projects for Region 9 of the Department of Transportation (DOT), Edward Mall, testified that the retaining wall near the rear of the Property varied in height between 1 to 2 feet, and that the land then sloped up sharply in a rise of approximately 35 to 40 feet to the parcel behind the Property.

4. Both claimant's and defendant's appraisers agree that the post-taking value of the remainder was $5,000, based on this sale.

5. These improvements were obviously made by the fee owner of the Property at the time, whether that was the Corporation, Mr. Grossman, or claimant.

6. Although Mr. Grossman was not the titular owner at the time of the taking, it was readily apparent to the Court - and not contested by defendant - that claimant held the Property in name only, and Mr. Grossman made all the decisions and essentially acted as the fee owner. Accordingly, the Court has treated Mr. Grossman's testimony as that of an agent.

7. All quotes herein are taken from the Court's recording of the proceedings unless otherwise noted.

8. Grossman did not indicate the amount of these "higher rents."

9. Claimant's Exhibit 8.

10. In support of his conclusion that there would be demand for commercial development at this location, Gardner included in his appraisal a report (the Hudson Report) commissioned by the Liberty Chamber of Commerce, which essentially reached the same conclusion. Defendant's counsel objected to the inclusion of the Hudson Report in claimant's appraisal on the basis that it had been compiled by a third party, rather than by Gardner, essentially constituting impermissible hearsay. The Court reserved decision on the objection. The Court now finds that, although this Report was not the principal basis for Gardner's conclusions, but instead merely formed "a link in the chain" leading him to those conclusions, it must be held to be inadmissible because claimant made no showing that the Hudson Report was reliable as the basis for an expert opinion in the field of appraisals (see People v Wlasiuk, 32 AD3d 674, 680-681 [2006], lv dismissed 7 NY3d 871 [2006]; see also Borden v Brady, 92 AD2d 983, 984 [1983]). Accordingly, the Hudson Report (Claimant's Exhibit 8, pp 46-51) is hereby stricken from claimant's appraisal.

11. Gardner used repeat sales of two properties (Sales 5 and 5A and 6 and 6A) in the Village of Liberty to conduct a "market trend analysis." He found that these two sales supported a trend of +10% per year. However, he used a much more reasonable, although possibly still high, adjustment of +5% per year in his sales comparisons.

12. Claimant's Exhibit 8, p 28.

13. Congdon first viewed the Property on December 29, 2005, over two years after the date of taking. His appraisal was performed subject to "the Extraordinary Assumption that the property as of the inspection date [was] generally representative of the building as of the effective date of th[e] report" (Defendant's Exhibit E, p 8). Claimant's counsel objected to Congdon's testimony regarding anything prior to the date of his initial viewing. However, Congdon testified that he reviewed photographs of the property, provided to him by DOT, as of the date of the taking. Moreover, claimant submitted no proof that the condition of the building had deteriorated between the time of the taking and the date of Congdon's inspection. Claimant's objection is accordingly overruled.

14. Defendant's Exhibit E, p 54.

15. At trial, Congdon testified that in his opinion, the market in that area was "stable," and thus no adjustments for market trend were necessary.

16. Regarding the size of the Property, Congdon's appraisal states: "[b]ased on scaled measurements from the Appropriation Map . . . 5,940 Sq.Ft. is not usable because of topography, thus the useable land area is 11,745 Sq.Ft." (Defendant's Exhibit E, p 39). As discussed infra at n 19, the Court does not agree with Congdon's analysis on this point.

17. Defendant's Exhibit E, p 54.

18. See Claimant's Exhibit 11, a survey of the Property.

19. Claimant's Sale #2: $ 9.95 x 40% = $3.98

Claimant's Sale #4: $12.63 x 20% = $2.53

Defendant's Sale #1: $ 3.55 x 40% = $1.42



20. The Court explicitly rejects defendant's appraiser's assertion that only the 11,745-square-foot "usable" portion of the land should be included in this calculation. While a certain portion of the land may not be buildable - and it must be noted that defendant did not meet its burden of proof regarding the actual size of any non-buildable area - that area is still valuable to provide necessary setbacks and lot size to comply with zoning requirements, which claimant showed were pertinent to many of the commercial uses for which the Property could be developed.

21. The Court is rounding all dollar amounts except total damages (see n 22 infra), to the nearest whole dollar.

22. The Court is rounding the total dollar amount of damages to the nearest thousand. Note that the before-taking valuation of the Property ($140,242) less the sale price of the remainder ($5,000) plus the value of the easement ($9,750) equals $144,992, rounded to $145,000.

23. While Court of Claims Act 19 (1), which governs the matter of suspension of interest on Court of Claims awards generally, provides: "[i]f a claim which bears interest, is not filed until more than six months after the accrual of said claim, no interest shall be allowed between the expiration of six months from the time of such accrual and the time of the filing of such claim," the Court of Claims Act applies only to the extent it is not inconsistent with the Eminent Domain Procedure Law (see EDPL 705; Boyajian v State of New York, 293 AD2d 560 [2002]). EDPL 514 (B) specifically addresses the suspension of pre-judgment interest in appropriation cases in the Court of Claims. Pursuant to that statute, interest will be suspended "unless a condemnee files and serves his claim against the condemnor for damages arising from the acquisition of his property, 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." In this instance, because there is no evidence on the record establishing personal service of the notice of acquisition, prejudgment interest should not be suspended (Sokol v State of New York, 272 AD2d 604 [2000]).