New York Law Review

Tag: partial taking

  • Purchase Hills Realty Corp. v. State, 45 N.Y.2d 836 (1978): Consequential Damages and Limited Access After Partial Taking

    Purchase Hills Realty Corp. v. State, 45 N.Y.2d 836 (1978)

    In a partial taking case, consequential damages for limited access are not recoverable if the reduced access was not caused by the taking itself, and “cost to cure” damages are not available as an alternative when there’s no basis for consequential damages.

    Summary

    Purchase Hills Realty Corp. sought consequential damages from the State of New York following a partial taking of their property, alleging the taking caused limited access. The Court of Claims found that the limited access was not caused by the taking, and the Appellate Division ordered a new trial on valuation. The Court of Appeals affirmed, holding that the factual determination that the taking did not cause the limited access was supported by sufficient evidence and was thus not reviewable. Consequently, consequential damages were properly denied, and “cost to cure” damages (as an alternative) were also unavailable. The Court also upheld the Appellate Division’s decision to order a new trial on the issue of valuation due to dissatisfaction with the claimant’s evidence.

    Facts

    Purchase Hills Realty Corp. owned property that was partially taken by the State of New York. The Realty Corp. sought consequential damages, arguing that the taking resulted in limited access to the remaining property. The Court of Claims, the trial court in this matter, determined the limited access was *not* caused by the taking.

    Procedural History

    The Court of Claims ruled against Purchase Hills Realty Corp. The Appellate Division ordered a new trial concerning the valuation of the property taken, finding the evidence presented by claimants unsatisfactory. The appeal to the Court of Appeals was predicated upon this prior non-final determination of the Appellate Division, meaning the scope of review was limited. The Court of Appeals affirmed the judgment.

    Issue(s)

    1. Whether the Court of Appeals can review the factual finding of the Court of Claims, affirmed by the Appellate Division, that the partial taking did not cause the limited access to the claimants’ property.
    2. Whether the claimants are entitled to consequential damages stemming from the claimed lack of access.
    3. Whether the claimants are entitled to damages for “cost to cure” as an alternative to consequential damages.
    4. Whether the Appellate Division abused its discretion by ordering a new trial due to its dissatisfaction with the evidence presented concerning the valuation of the property taken.

    Holding

    1. No, because the Appellate Division did not disturb the factual finding made by the Court of Claims based on legally sufficient evidence.
    2. No, because the limited access was not caused by the taking.
    3. No, because “cost to cure” damages are merely an alternative to consequential damages and cannot be awarded where there is no basis for any consequential damages.
    4. No, the Appellate Division did not abuse its discretion.

    Court’s Reasoning

    The Court of Appeals stated that its review was limited to the prior “non-final determination of the appellate division.” Because the Appellate Division affirmed the Court of Claims’ factual finding that the limited access was not caused by the taking, that factual determination was not subject to review by the Court of Appeals. As such, the court had to accept that the taking did not cause the limited access.

    Given this factual premise, the court found that the claimants were not entitled to consequential damages for the claimed lack of access. The court further reasoned that “cost to cure” damages were unavailable because such damages are “merely an alternative to consequential damages” and “may not be awarded where there is simply no basis for any consequential damages.” In essence, the court reasoned that you cannot receive cost-to-cure damages if you cannot receive consequential damages. The court cited Mayes Co. v State of New York, 18 NY2d 549 in support of this proposition.

    Finally, the Court of Appeals deferred to the Appellate Division’s discretion in ordering a new trial on the issue of valuation because the Appellate Division was unsatisfied with the evidence presented by the claimants. This highlights the significant deference appellate courts grant to trial courts in matters of evidence assessment and valuation.

  • City of Yonkers v. State, 40 N.Y.2d 408 (1976): Consequential Damages for Partial Taking and Loss of Quietude

    City of Yonkers v. State, 40 N.Y.2d 408 (1976)

    When a partial taking of property diminishes qualities like quietude that are integral to the property’s specific use (e.g., a school), consequential damages can be awarded to compensate for the resulting loss in value, even if the taking doesn’t directly affect the building’s structural integrity.

    Summary

    The City of Yonkers sought consequential damages after the State of New York took portions of land surrounding Roosevelt High School to widen a road. The city argued that the taking diminished the school’s campus-like setting, increased noise, and reduced its overall value as an educational facility. The New York Court of Appeals affirmed the award of consequential damages, holding that the school had a direct functional interest in quietude and that the loss of this quality, along with the diminished aesthetic appeal, warranted compensation. The court distinguished this case from others where traffic noise was not a significant factor, emphasizing the unique importance of a tranquil environment for a high school.

    Facts

    Roosevelt High School, located on a 500,000 square foot property in Yonkers, NY, featured a classic architectural design and served approximately 1,500 students. The school enjoyed a campus-like setting with ample setbacks from the road, protective trees, and extensive grounds including athletic fields and parking areas. In 1968, the State appropriated portions of the land along Central Park Avenue and Tuckahoe Road for road widening, significantly reducing the setback from Tuckahoe Road (the school’s front) and Central Park Avenue. This resulted in a loss of quietude, increased exposure to traffic, and a reduction in the overall aesthetic appeal of the school grounds.

    Procedural History

    The City of Yonkers, as the claimant, was awarded compensation at trial for the value of the land taken, cost-to-cure expenses, and consequential damages to the school building. The Appellate Division affirmed the trial court’s judgment. The State appealed to the New York Court of Appeals, challenging only the award of consequential damages, arguing it was duplicative and unsupported by evidence.

    Issue(s)

    1. Whether consequential damages can be awarded for a partial taking of property when the taking diminishes qualities such as quietude and aesthetic appeal that are integral to the property’s specific use as a school, even if the taking does not directly affect the building’s structure?
    2. Whether there was sufficient evidence to support the trial court’s award of consequential damages, beyond the opinion of the claimant’s appraiser.

    Holding

    1. Yes, because the school had a direct, identifiable, functional interest in quietude, and the loss of this quality, along with the diminished aesthetic appeal of the campus, constituted a substantial element of consequential damage.
    2. Yes, because in addition to the testimony of the real estate expert, the school principal testified to specific detrimental consequences, and it was undisputed that the grade of the incline at the front of the building to the road was markedly increased and that the setback was significantly diminished. This evidence supported the factual finding that the school suffered substantial consequential injury.

    Court’s Reasoning

    The Court of Appeals distinguished this case from situations where noise is a general issue, emphasizing that the high school had a unique and direct need for quietude as part of its educational environment. The court found that the loss of the campus setting and increased exposure to traffic noise and fumes negatively impacted the school’s value. The court cited Dennison v. State, noting that while that case involved a secluded sylvan setting, the principle applied here because the high school had a “direct, identifiable, functional interest in quietude.” The court also relied on the testimony of the real estate expert, who was familiar with the school and the area, and the school principal, who described specific detrimental consequences of the taking. The court stated that the expert’s opinion, combined with the principal’s testimony, “amply supported the trial court’s factual finding… that substantial consequential injury had been suffered by the school building by virtue of the taking.” The dissent argued that this case was not analogous to Dennison, as the school was not in a secluded area, and that awarding consequential damages based on increased traffic noise was an unwarranted extension of existing law. The majority rejected this view, emphasizing the specific and identifiable need for quietude in an educational setting, distinguishing it from typical urban properties. The court also cited Purchase Hills Realty Assoc. v State of New York, recognizing that loss of enhancement attributable to location and aesthetic qualities of a claimant’s property could be recognized as a consequential damage.

  • City of New York v. Exxon Corp., 39 N.Y.2d 430 (1976): Measure of Damages in Partial Takings Cases

    City of New York v. Exxon Corp., 39 N.Y.2d 430 (1976)

    In a partial taking case involving income-producing property, the measure of damages is the difference between the property’s value before and after the taking, and additional compensation for the taken portion and improvements constitutes double compensation unless the reduced rental income does not reflect the loss of the condemned portion; restoration costs are compensable if not reflected in reduced rental.

    Summary

    This case addresses the proper valuation method in a partial taking of income-producing property (a gas station). The City of New York condemned a portion of the property, leading to reduced rental income. The Court of Appeals held that the owner was entitled to the difference between the property’s value before and after the taking, based on capitalized income. Additional compensation for the land and improvements taken was deemed double compensation because the reduced rental already reflected this loss. However, the court upheld compensation for restoration costs necessary to return the station to working condition, as these costs were not reflected in the reduced rental income.

    Facts

    Exxon (formerly Humble Oil) owned a gas station property in New York City. The City condemned a portion of the property, reducing its size and the size of the service station building. As a result, the tenant requested and received a reduction in rent, reflecting the diminished size of the property and building.

    Procedural History

    The Supreme Court awarded compensation to Exxon, including amounts for the land and improvements taken, restoration costs, and relocation of fixtures. The Appellate Division affirmed the award. The City appealed, arguing excessive compensation. Humble also appealed, arguing its award for relocating fixtures was insufficient.

    Issue(s)

    1. Whether the property owner is entitled to additional compensation for the value of the land and improvements taken when the reduced rental income already reflects the loss of the condemned portion of the property?

    2. Whether the property owner is entitled to compensation for restoration costs of the remaining parcel after a partial taking?

    3. Whether the award to Humble Oil for relocating fixtures was properly calculated?

    Holding

    1. No, because additional payments for these items would constitute double compensation where the reduced rental rate already considers the loss of the condemned portion.

    2. Yes, because the affirmed finding of fact showed these expenditures were necessary to restore the station to working condition and this was not reflected in the reduced rental.

    3. Yes, the order of the Appellate Division should be modified by increasing Humble’s award to $10,700, the amount fixed by the Supreme Court, because the record supports the contention that no portion of the $10,700 awarded for relocating the fixtures was attributed to the purchase of new equipment.

    Court’s Reasoning

    The Court of Appeals reasoned that the proper measure of damages in a partial taking is the difference between the value of the whole parcel before the taking and the value of the remainder after the taking (citing Diocese of Buffalo v State of New York, 24 NY2d 320, 323). For income-producing property, capitalization of income is a valid method of valuation (citing Ettlinger v Weil, 184 NY 179, 183; Humble Oil & Refining Co. v State of New York, 12 NY2d 861).

    The court found that because the rent was adjusted to reflect the reduced size of the property, the loss of the condemned portion was already reflected in the reduced rental figure used to calculate the $90,000 award. Therefore, additional payments for the taken land and improvements would constitute double compensation.

    However, the court upheld the $12,000 award for restoration costs, finding that these expenditures were necessary to restore the station to working condition and were not factored into the reduced rental income. This constituted an additional loss to the owners.

    Regarding Humble’s appeal, the court agreed that no portion of the award for relocating fixtures was attributed to new equipment, so the full amount fixed by the Supreme Court ($10,700) should be awarded.

  • Acme Theatres, Inc. v. State, 26 N.Y.2d 385 (1970): Valuation Methods in Partial Takings of Improved Land

    Acme Theatres, Inc. v. State, 26 N.Y.2d 385 (1970)

    In a partial taking of improved land, the proper measure of damages is the difference between the property’s fair market value before the taking and its fair market value after the taking; separate valuation methods for land and improvements are inconsistent if they assume mutually exclusive uses.

    Summary

    Acme Theatres, Inc. sought compensation from the State of New York for a partial taking of land that housed a drive-in theater. The Court of Claims awarded damages based on a “bands of valuation” approach for the land and separate compensation for improvements. The New York Court of Appeals held that this method was flawed because it valued the land as if it were being used for a higher purpose that would require the demolition of the existing improvements, thus creating an inconsistency. The court reiterated that the proper measure of damages is the difference between the fair market value before and after the taking.

    Facts

    Acme Theatres owned a drive-in theater on 4½ acres at the intersection of Routes 9L and 9. The State appropriated a strip of land to widen Route 9, which included the ticket office, a storage building supporting a theater sign, 49 car spaces, fencing, and part of the entrance drive. The highest and best use of the land was determined to be for commercial purposes, including a drive-in theater.

    Procedural History

    The Court of Claims awarded Acme Theatres $20,600, including compensation for land, improvements, and consequential damages. The Appellate Division affirmed the award except for consequential damages. The State appealed to the Court of Appeals, challenging the method of valuing the land.

    Issue(s)

    Whether the Court of Claims properly computed damages in a partial taking of land with improvements by using a “bands of valuation” approach for the land while also awarding damages for the taken improvements.

    Holding

    No, because the “bands of valuation” method valued the land for a use inconsistent with the continued existence of the improvements, creating an illogical result. The damages should be calculated based on the difference between the fair market value of the whole property before the taking and the fair market value of the remainder after the taking.

    Court’s Reasoning

    The court found that the lower court erroneously departed from the established “before and after” rule for calculating damages in partial taking cases. The “bands of valuation” approach assigned a higher unit value to the land nearest the highway, implying a potential use for other commercial establishments. This valuation was incompatible with the award for improvements because achieving the higher-value use would require demolishing the theater buildings. The court stated, “It is illogical to award damages for buildings that must be destroyed to achieve the use contemplated in the award of damages for the land.” The court emphasized that the claimant had not lost the value attached to the land’s proximity to the highway since the remaining land still fronted Route 9. The court noted, “If, as claimant alleges, the value of his land increases as it nears the highway, the value of his remaining land must obviously be increased by the widening of Route 9 these few feet.” Regarding consequential damages for the reduced visibility of the theater sign, the court reaffirmed that there is no right to have traffic pass by one’s property or to be visible to passing motorists, citing precedent such as Bopp v. State of New York, 19 N.Y.2d 368. The court suggested the State’s per-unit basis for calculating damages or determining the total value of land and improvements before and after the taking as reasonable methods. The case was remanded for a redetermination of damages for the land taken consistent with the “before and after” rule.

  • Dennison v. State, 22 N.Y.2d 409 (1968): Consequential Damages and Noise Pollution After Partial Taking

    Dennison v. State, 22 N.Y.2d 409 (1968)

    When a portion of a property is taken for public use, the decrease in value to the remaining property due to factors like noise, loss of view, and loss of privacy, all resulting from the public use, can be considered in determining consequential damages.

    Summary

    The State of New York condemned a portion of the Dennisons’ secluded, quiet property to construct a highway. The Dennisons sought compensation for the partial taking, arguing that the new highway caused a loss of privacy, seclusion, and view, as well as increased noise. The Court of Claims awarded damages, considering these factors, and the Appellate Division affirmed. The Court of Appeals affirmed, holding that while noise alone might not be compensable, it can be considered as one factor in determining the overall decrease in the value of the remaining property after a partial taking. The court emphasized the difficulty of separating the noise element from other valid elements of consequential damage.

    Facts

    The Dennisons owned a secluded, quiet property in Lake George, New York, characterized by wooded and landscaped land. The property featured tall trees, underground utility services, and a stream, providing privacy and a scenic view. The State condemned a portion of the property to construct a highway, which ran approximately 200 feet from the Dennisons’ residence. The highway embankment stood about 20 feet above the Dennisons’ lawn, obstructing their view, eliminating their privacy, and introducing traffic noise and odors.

    Procedural History

    The Dennisons filed a claim in the Court of Claims seeking damages for the partial taking of their property. The Court of Claims awarded damages, considering the loss of privacy, seclusion, view, and the increase in noise. The Appellate Division affirmed the Court of Claims decision. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether, in determining consequential damages for a partial taking of property, the court can consider the impact of noise, loss of privacy, and loss of view resulting from the use of the condemned portion, even if noise alone might not be compensable.

    Holding

    Yes, because the courts below did not make a separate award for damages due to noise but rather considered it as one factor in determining the decrease in value to the remaining property along with loss of privacy, seclusion and view. The court reasoned that segregating the noise element from other elements would be practically impossible, and any reduction on remand would be arbitrary and speculative.

    Court’s Reasoning

    The Court of Appeals reasoned that consequential damages, which result from the use of the parcel taken, are entitled to consideration in a partial taking case. While the State argued that damages common to the public, such as highway noise affecting properties adjoining a public highway, should be excluded, the court found that the lower courts did not make a separate award for noise. Instead, the court considered noise as one factor in determining the overall decrease in the property’s value. The court emphasized the practical difficulties of separating the noise element from other conceded elements of damage, such as loss of privacy and view.

    The court cited precedent (South Buffalo Ry. Co. v. Kirkover) which has recognized that, where there has been a partial taking of property of the kind present here, the noise element may be considered as one of several factors in determining consequential damages. The court also acknowledged the argument that property owners must endure certain inconveniences for the benefits of modern transportation but concluded that the practical difficulties in separating noise damages outweighed any benefit from applying the State’s theory. Chief Judge Fuld, in his concurrence, noted the specific tranquility of the property as a factor distinguishing the case. The dissent argued that the burden is on the claimant to show consequential damages flowing from the taking and that traffic noise is a universal condition of modern life, not unique to the claimant, and should thus be excluded as an element of damage. The dissent further argued that damages from future traffic noise should be segregated or be excluded if the party cannot prove the specific injury to them not shared by the general public.