Forest Enters. Mgmt. v. The Cnty. of Warren

2022 NY Slip Op 50481(U)

Forest Enterprises Management, Inc., Claimant, v. The County of Warren, Condemnor/Defendant.

Index No. 61956

Supreme Court, Warren County

June 2, 2022

Unpublished Opinion

E Stewart Jones Hacker Murphy, LLP, Troy (Patrick L. Seely Jr., of counsel), for claimant.

Lawrence Elmen, County Attorney, Lake George (Ryan J. Dickey of counsel), for condemnor/defendant.

ROBERT J. MULLER, J.S.C.

The facts of this matter are set forth in a prior decision of this Court and will not be repeated at length. As relevant here, claimant owned 97.48 acres of land located at the intersection of Quaker Road and Quaker Ridge Boulevard in the Town of Queensbury, Warren County, which land was bisected by a National Grid powerline with 84.58 acres lying north of the powerline (hereinafter the "northern parcel") and 12.9 acres lying south of the powerline (hereinafter the "southern parcel"). In April 2015 condemnor/defendant (hereinafter the County) exercised its power of eminent domain over the northern parcel, acquiring 3.86 acres of the land and imposing an avigation easement over the remaining 80.72 acres. The County appraised claimant's loss as a result of the taking of the land and the easement to be $327, 200.00, which amount claimant accepted as an advance payment while reserving its right to pursue additional compensation (see EDPL 304 [A] [3]). Of this $327, 200.00, the parties agreed that $53 294.10 would be paid to the Warren County Treasurer for taxes owed by claimant with the remaining $273, 905.90 paid directly to claimant.

In September 2015, claimant commenced this proceeding pursuant to EDPL article 5 for additional compensation. Issue was joined and experts for both claimant and the County conducted separate appraisals of the property to determine its unencumbered value and the diminution of value caused by the taking of the land and the easement. Claimant's expert appraised the entire 97.48 acres of land under the theory that the entire property was affected by the acquisition. The County's expert, on the other hand, appraised only the northern parcel and omitted the 12.9-acre southern parcel. A trial was held in April 2018, following which the Court issued a Decision, Order and Judgment dated August 16, 2018 finding that claimant was entitled to compensation in the amount of $297, 000.00 for the taking of its land and the easement (60 Misc.3d 1222[A], 2018 NY Slip Op 51208[U] [Sup Ct, Warren County 2018], mod 182 A.D.3d 729 [2020]). In so doing, the Court rejected the testimony of claimant's expert and relied solely upon that of the County's expert (see id. at *9).

Claimant appealed this Decision, Order and Judgment to the Appellate Division, Third Department, which issued a Memorandum and Order on April 9, 2020 finding that the Court erred in failing to consider all 97.48 acres of land as a single property (182 A.D.3d at 731). The Third Department further found that claimant was entitled to compensation in the amount of $520, 242.00; $193, 042.00 more than the County originally paid (id. at 738). Presently before the Court is claimant's motion for (1) an additional allowance of $194, 805.56 pursuant to EDPL 701, which amount is comprised of $142, 252.88 in counsel fees and disbursements and $52, 552.68 in appraisal fees; and (2) interest on the additional $193, 042.00 awarded, at the rate of 6% per annum from the date of the acquisition - May 1, 2015 - to the date of payment - December 10, 2021.

Turning first to that aspect of the motion which seeks an additional allowance under EDPL 701, this statute was enacted by the Legislature "[i]n fairness to a private property owner forced to litigate the value of its property when the [condemnor] comes forward with an unreasonably low offer in effecting a taking of that property" (General Crushed Stone Co. v State of New York, 93 N.Y.2d 23, 25 [1999]; see Hakes v State of New York, 81 N.Y.2d 392, 397 [1993]). The statute provides as follows:

"In instances where the order or award is substantially in excess of the amount of the condemnor's proof and where deemed necessary by the court for the condemnee to achieve just and adequate compensation, the court, upon application, notice and an opportunity for hearing, may in its discretion, award to the condemnee an additional amount, separately computed and stated, for actual and necessary costs, disbursements and expenses, including reasonable attorney, appraiser and engineer fees actually incurred by such condemnee. The application shall include affidavits of the condemnee and all parties that have incurred expenses on the condemnee's behalf, setting forth inter alia the amount of the expenses incurred."

EDPL 701 "requires two determinations: first, whether the award is 'substantially in excess of the amount of the condemnor's proof' and second, whether the court deems the award necessary 'for the condemnee to achieve just and adequate compensation'" (Hakes v State of New York, 81 N.Y.2d at 397, quoting EDPL 701). "Where both tests are satisfied, the court may award reasonable fees" (Hakes v State of New York, 81 N.Y.2d at 397).

With respect to the first criteria, while EDPL 701 does not quantify the amount by which the award must exceed the condemnor's offer, courts have consistently found increases of 30% or more to be substantial (see e.g. Matter of Metropolitan Transp. Auth., 86 A.D.3d 314, 327-328 [2011] [44.4% increase deemed substantial]; Matter of Gelsomino v City of New Rochelle, 24 A.D.3d 554, 555 [2006] [35.5% increase deemed substantial]; Matter of Town of Islip v Sikora, 220 A.D.2d 434, 436-437 [1995] [32.3% deemed substantial]; Matter of E.D.J. Quality Realty Corp. v Village of Massapequa Park, 204 A.D.2d 321, 322 [1994] [58% increase deemed substantial]; Scuderi v State of New York, 184 A.D.2d 1073, 1073 [41.4% increase deemed substantial]; Karas v State of New York, 169 A.D.2d 816, 816 [1991] [41.6% increase deemed substantial]; compare Matter of Village of Haverstraw, 180 A.D.3d 791, 794 [2020] [25.5% increase not deemed substantial]; Matter of Village of Johnson City [Waldo's, Inc.], 277 A.D.2d 773, 775 [2000] [19% increase not deemed substantial]).

Here, the $520, 242.00 awarded by the Third Department is 59% more than the $327, 200.00 initially paid to claimant by the County. The Court therefore finds that the first criteria has been satisfied.

Briefly, the County contends that "at the time of the offer and taking, the total delinquent taxes owed on the [northern and southern] parcels totaled the amount of $75, 400.72." ^[1] The County further contends that this $75, 400.72 should be deducted from the $520, 242.00 awarded by the Third Department, thus decreasing the award to $444, 841.28 - which, according to the County, does not substantially exceed its initial offer. These contentions, however, are unavailing. The County has offered no legal authority whatsoever to support the proposition that the amount awarded should be reduced by the amount owed by claimant in back taxes - nor does it appear that any such authority exists. Irrespective of whether the funds are used by claimant to pay off a debt, they are nonetheless owed to claimant because of the acquisition of its property. Further, even if the award was decreased to $444, 841.28, it is still 35% more than the initial offer and thus meets the required threshold for "substantially in excess" (EDPL 701; see Matter of Gelsomino v City of New Rochelle, 24 A.D.3d at 555; Matter of Town of Islip v Sikora, 220 A.D.2d at 436-437).

Turning now to the second criteria, where the Court has found the amount recovered to be substantially in excess of the condemnor's offer - and claimant submits proof of the legal and appraisal expenses incurred in prosecuting its claim - the Court will generally find an additional allowance necessary to achieve just and adequate compensation (see Hakes v State of New York, 81 N.Y.2d at 398; Matter of City of Long Beach v Sun NLF Ltd. Partnership, 172 A.D.3d 1061, 1062 [2019]; Matter of Malin v State of New York, 183 A.D.2d 899, 900 [1992]).

Here, claimant has submitted the affirmation of its counsel - Patrick L. Seely, Jr., Esq. - with respect to the $124, 252.88 in legal fees and disbursements incurred, and the affirmation of its expert - Kenneth V. Gardner - with respect to the $52, 552.68 in appraisal fees incurred. Claimant has also submitted the affidavit of its President with respect to the necessity of these fees. The Court thus finds that the second criteria has also been satisfied.

With both criteria having been met, the Court must now determine the "reasonable fees" to be awarded (Hakes v State of New York, 81 N.Y.2d at 397). Turning first to the question of counsel fees, "[c]ontingency fee arrangements are an acceptable factor to be considered by the court in determining reasonable counsel fees" (Matter of City of Long Beach v Sun NLF Ltd Partnership, 172 A.D.3d at 1062; see Matter of City of Long Beach v Sun NLF L.P., 146 A.D.3d 775, 777 [2017]; Matter of New York Convention Ctr. Dev. Corp. [Recycling for Hous. Partnership], 234 A.D.2d 167, 167 [1996]; Matter of Hoffman v Town of Malta, 189 A.D.2d 968, 969 [1993]). "However, in awarding an additional allowance payable by the condemnor, the [C]ourt is not bound by the retainer agreement with the client; the [C]ourt's focus is upon what would be a reasonable fee" (Matter of City of Long Beach v Sun NLF Ltd. Partnership, 172 A.D.3d at 1062; see Matter of City of New York, 52 A.D.3d 387, 388 [2008]; Matter of City of New York v Jamaica Arms Hotel, Inc., 44 A.D.3d 1040, 1040 [2007]). "Even where the [C]ourt takes into account the amount calculated under a contingency fee retainer, the court may reduce the amount where necessary in determining what...