Cooney Brothers, Inc. v. State, 27 N.Y.2d 381 (1971)
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When a business relocates due to a partial taking of property, the measure of damages for fixtures is the lesser of either the fixture’s value in place (reproduction cost less depreciation less salvage value) or the reasonable cost of removing and reinstalling the fixture at a new location.
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Summary
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Cooney Brothers, a gravel manufacturer, had its leased land partially appropriated by the State for highway construction, rendering the remaining property unusable for its business. Cooney relocated its operations and sought compensation for the value of its fixtures. The Court of Claims awarded damages for the fixtures but disallowed claims for a fixture owned by another corporation (in which Cooney held a majority interest) and for leasehold interests. The Court of Appeals held that Cooney was not entitled to compensation for the fixture owned by the other corporation or for certain leasehold damages. However, the court established that the compensation for the fixtures Cooney did own should be determined by comparing the fixture’s value in place with the reasonable cost of removal and reinstallation, awarding the lesser of the two.
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Facts
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Cooney Brothers leased two adjacent parcels of land and operated a sand and gravel business. The State appropriated a 26-acre strip of land, effectively dividing the property and preventing access between mining and manufacturing areas. As a result, Cooney was forced to relocate its entire operation to a new location three miles away. Cooney sought compensation for the value of fixtures and equipment on the property. One primary crusher was owned by another corporation in which Cooney was the majority shareholder.
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Procedural History
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Cooney filed a claim in the Court of Claims seeking damages for the appropriation. The Court of Claims awarded damages for the value of the fixtures but denied compensation for the fixture owned by the separate corporation and for damages to the leasehold interests. Both the State and Cooney appealed to the Appellate Division, which affirmed the Court of Claims decision. Cooney then appealed to the Court of Appeals.
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Issue(s)
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1. Whether Cooney is entitled to compensation for a fixture (primary crusher) located on the property but owned by a separate corporation in which Cooney holds a majority interest, when the corporation is not a party to the condemnation proceeding.r
2. Whether Cooney is entitled to damages for the loss of its leasehold interests, where the lease contains a provision reserving any condemnation award to the fee owner.r
3. How should the fixtures be valued for compensation purposes, given that Cooney removed them to a new location?
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Holding
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1. No, because an award cannot be made in a condemnation proceeding to a stockholder of a corporation who does not own all the equity and the corporation itself was not a party to the action.r
2. No, because the lease agreement reserved any condemnation award to the landlord and impliedly terminated the lessee’s rights in the event of condemnation.r
3. The fixtures should be valued at the lesser of either the fixture’s value in place (reproduction cost less depreciation less salvage value) or the reasonable cost of disassembling, trucking, and reassembling the item at a new location, because this reflects the actual injury to the claimant without placing them in a better position than before the taking.
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Court’s Reasoning
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The Court of Appeals relied on precedent to deny compensation for the primary crusher owned by a separate corporation, emphasizing that awards in condemnation proceedings should only go to the actual owner of the property. As to the leasehold interests, the court upheld the denial of damages, citing the lease provision that reserved condemnation awards to the fee owner. The Court found that the lease impliedly terminated the lessee’s rights. Regarding the valuation of fixtures, the court referenced its prior decision in Rose v. State, which established the