Corsello v. Verizon New York, Inc., 18 N.Y.3d 777 (2012)
A property owner can bring an inverse condemnation claim against an entity with eminent domain power for a permanent physical occupation of their property, and a statute barring claims related to attachments of wires or cables to a building precludes a statute of limitations defense.
Summary
The Corsellos sued Verizon for attaching a terminal box to their apartment building without compensation, enabling Verizon to provide phone service to other buildings. The Corsellos claimed inverse condemnation, unjust enrichment, trespass, and deceptive trade practices. The New York Court of Appeals held that the Corsellos stated a valid inverse condemnation claim, which was not time-barred due to Real Property Law § 261. However, the Court found the General Business Law § 349 claim time-barred and the unjust enrichment claim legally insufficient. The Court also upheld the denial of class certification, finding that individual issues predominated.
Facts
The Corsellos owned an apartment building in Brooklyn. Verizon’s predecessor attached a terminal box to the building, which connected Verizon’s “Block Cable” to “Station Connection wires,” providing telephone service to multiple buildings, not just the Corsellos’. The Corsellos alleged that Verizon never disclosed their right to compensation and falsely implied it had a right to attach the box. A Verizon representative allegedly told William Corsello in 1986 that Verizon “had a right” to put the box on the wall.
Procedural History
The Corsellos sued Verizon, seeking damages and injunctive relief on behalf of themselves and similarly situated building owners. The Supreme Court dismissed the unjust enrichment claim but upheld the other claims. It later denied class certification. The Appellate Division modified the Supreme Court’s order, dismissing the inverse condemnation claim as time-barred, reinstating the unjust enrichment claim, and affirming the General Business Law claim. It also affirmed the denial of class certification. The Court of Appeals modified the Appellate Division’s order, reinstating the inverse condemnation claim but dismissing the other two claims. It affirmed the denial of class certification.
Issue(s)
1. Whether the attachment of a telecommunications box to a building constitutes a taking for which an inverse condemnation claim may be brought.
2. Whether Real Property Law § 261 saves the inverse condemnation claim from being time-barred.
3. Whether the claim under General Business Law § 349 is barred by the statute of limitations.
4. Whether the plaintiffs stated a valid claim for unjust enrichment.
5. Whether the lower courts abused their discretion in denying class certification.
Holding
1. Yes, because the complaint alleges facts from which a continuous and permanent occupation of the plaintiff’s property—a de facto taking—could be found.
2. Yes, because Real Property Law § 261 precludes a statute of limitations defense based on the attachment of wires or cables to a building.
3. Yes, because the alleged deception occurred more than three years before the suit was brought, and no subsequent deceptive act was alleged to justify equitable estoppel.
4. No, because an unjust enrichment claim is not available where it duplicates or replaces a conventional tort claim.
5. No, because the courts were justified in finding that common questions of law or fact did not predominate and that the claims of the representative parties were not typical of the class.
Court’s Reasoning
The Court reasoned that inverse condemnation is a means for a landowner to recover just compensation when their property has been taken without formal condemnation proceedings. The Court rejected Verizon’s argument that inverse condemnation is only available when an entity chooses to exercise its eminent domain power. The Court clarified that a continuous, permanent trespass could constitute a de facto taking. Regarding the statute of limitations, the Court held that Real Property Law § 261 prevents a lapse-of-time defense. It emphasized that the statute aims to protect property owners from losing remedies due to the passage of time when a company unlawfully attaches wires or cables to their property. The Court determined that the General Business Law claim was time-barred because the injury occurred when the plaintiffs refrained from demanding payment or removal of the box, which was more than three years before the suit. The Court stated that the unjust enrichment claim was duplicative of the trespass and taking claims. Lastly, the Court found no abuse of discretion in denying class certification. Evidence submitted by Verizon cast doubt on the existence of a uniform policy of attaching apparatus to buildings furtively and without consent. Verizon presented evidence specific to the plaintiffs’ building, suggesting that individual issues predominated over common ones. The Court quoted United States v. Clarke, 445 U.S. 253, 257 (1980) in defining inverse condemnation as “the manner in which a landowner recovers just compensation for a taking of his property when condemnation proceedings have not been instituted.”