Wilmot v. State of New York, 32 N.Y.2d 164 (1973)
A property owner’s good-faith actions to mitigate damages in the face of imminent condemnation should not prejudice their compensation claim; the highest and best use of the property is determined as of the date of the appropriation, considering the character of the property immediately before the taking and any appropriation-related sales.
Summary
Wilmot owned 49 acres intended for a regional shopping center. When the state announced plans to bisect the property with an expressway, Wilmot sold 24 acres of the tract, conditional on the buyer’s ability to develop a shopping center. After the state appropriated 11 acres, Wilmot sought damages for the taking and consequential damages to the remaining 14 acres. The Court of Claims valued the land based on its potential as a regional shopping center. The Court of Appeals affirmed, holding that Wilmot’s mitigation efforts shouldn’t reduce compensation, because the sale was directly related to the state’s appropriation.
Facts
In 1958, Wilmot purchased 49 acres near Rochester, NY, intending to develop a regional shopping center.
In 1967, the State announced that the Genesee Expressway would bisect Wilmot’s property, making it unsuitable for a regional shopping center.
Prior to the State’s taking, Wilmot entered an option agreement to sell 24 acres of the tract to Lenrich Associates, contingent on Lenrich’s ability to develop a shopping center on the parcel.
The State appropriated 11 acres on June 13, 1967, leaving Wilmot with two noncontiguous parcels.
Lenrich exercised its option, and the sale closed on October 12, 1967.
Wilmot then sued the State for damages related to the 11-acre taking and consequential damages to the remaining 14 acres.
Procedural History
Wilmot sued the State in the Court of Claims.
The Court of Claims determined the highest and best use of the property was as a regional shopping center and awarded damages accordingly.
The Appellate Division sustained the award.
The State appealed to the Court of Appeals.
Issue(s)
Whether the claimant’s pre-appropriation sale of a portion of the property, undertaken to mitigate damages, should prevent the court from valuing the appropriated land based on the highest and best use of the original, larger tract.
Holding
No, because the claimant took reasonable steps to mitigate damages in anticipation of the imminent appropriation, and these actions should not prejudice their claim for just compensation.
Court’s Reasoning
The court reasoned that Wilmot acted prudently to mitigate damages by selling the 24-acre parcel, relieving the State of potential claims related to that portion of the land. The Court emphasized the principle that a party seeking damages has a duty to make reasonable efforts to minimize their losses, quoting Mayes Co. v. State of New York, 18 N.Y.2d 549, 554: “No recovery may be had for losses which the person injured might have prevented by reasonable efforts and expenditures.”
The court stated that had Wilmot not sold the parcel, the highest and best use would have been predicated on the original 49-acre parcel. It further explained, “The constitutional requirement of just compensation requires that the property owner be indemnified so that he may be put in the same relative position, insofar as this is possible, as if the taking had not occurred” (quoting City of Buffalo v. Clement Co., 28 N.Y.2d 241, 258).
Because the sale was so closely linked to the appropriation, the Court concluded that it was appropriate to calculate compensation based on the property’s character immediately before the appropriation and the related sale.
The dissenting judge argued that damages should be assessed at the time of the taking and that the sale to Lenrich increased the value of the parcel. The dissent argued the method of computing damages resulted in an award in excess of claimant’s actual loss.