| 90 Front St. Assoc., LLC v State of New York |
| 2010 NY Slip Op 09108 [79 AD3d 708] |
| December 7, 2010 |
| Appellate Division, Second Department |
| 90 Front Street Associates, LLC, et al., Appellants, v State ofNew York, Respondent. |
—[*1] Andrew M. Cuomo, Attorney General, New York, N.Y. (Peter H. Schiff and Michael S. Buskusof counsel), for respondent.
In a consolidated condemnation proceeding, the claimants appeal, on the ground of inadequacy,from a judgment of the Court of Claims (Lopez-Summa, J.), dated February 26, 2009, which, after anonjury trial and upon a decision of the same court dated October 7, 2008, is in favor of them andagainst the defendant in the principal sum of only $934,489.80.
Ordered that the judgment is reversed, on the law and in the exercise of discretion, with costs, andthe matter is remitted to the Court of Claims for a new trial in accordance herewith, and thereafter, forentry of an amended judgment.
As relevant to the appeal in this consolidated condemnation proceeding, the State of New Yorkappropriated title to a parcel of real property located at 90 Front Street, Mineola. Prior to theappropriation by the State, this parcel, and the contiguous parcel located at 98 Front Street, wereowned by the claimants, 90 Front Street Associates, LLC (hereinafter 90 Front), and 98 Front StreetAssociates, LLC (hereinafter 98 Front), respectively. These corporations were allegedly 100% ownedby nonparties Clara Salvati, and her brother, Benjamin Silvestrone, the prior owners, as tenants incommon, of the subject properties. After learning of the impending takings, 98 Front sold its propertyto nonparty Torsangie Properties, Ltd. (hereinafter Torsangie), on June 10, 2002. The State's taking ofthe fee interest in 90 Front Street vested on September 11, 2003. At the ensuing trial on the issue ofcondemnation damages, the Court of Claims determined that the claimants failed to establish unity ofownership and unity of use of the two parcels as of the date the taking vested and the claimants,therefore, failed to demonstrate the propriety of valuing the two parcels as a single economic unit.Accordingly, the Court of Claims rejected the claimants' appraisal of value and, concomitantly, theirestimation of damages from the taking of title to 90 Front Street, which were based upon a highest andbest use of the property as a vacant parcel unified with 98 Front Street and available for development.The Court of Claims awarded condemnation damages based upon the State's appraisal. The claimantsappeal from the judgment on the ground that the award of damages incurred as a result of the taking ofthe fee interest in 90 Front Street was inadequate.[*2]
To establish the propriety of valuing two separate parcels ofproperty as a single economic unit for the purpose of awarding condemnation damages, "the propertyowner must show that the subject parcels are contiguous, and that there is a unity of use and ofownership" (Johnson v State of NewYork, 10 AD3d 596, 597 [2004]; see Matter of Town of Brookhaven v Gold, 89AD2d 963, 965 [1982]; Erly Realty Dev. v State of New York, 43 AD2d 301, 303-304[1974]; Guptill Holding Corp. v State of New York, 20 AD2d 832 [1964]). "The general rulein New York is that a property condemned by the government is valued as of the date of its actualtaking" (Matter of Nassau, County of v 408 Realty Corp., 283 AD2d 644, 644 [2001];see Matter of City of New York [Salvation Army], 43 NY2d 512, 518 [1978]). Here, it isundisputed that on the date the fee taking vested, 98 Front Street was owned by an entity unrelated tothe claimants. Nevertheless, the Court of Appeals has held that where the sale of a portion of aclaimant's property prior to the vesting of an appropriation by the State "was in time and substance soclearly referrable to the appropriation as to be incidental to and inseparable from it," the claimants'compensation is properly computed "as of the date of the appropriation based on the character of theproperty immediately before the appropriation and the appropriation-related sale" (Wilmot v Stateof New York, 32 NY2d 164, 169 [1973]). More expansively, the Court of Appeals reasonedthat, while the claimants in the case before it could not collect consequential damages relating to theportion of the property they sold prior to the taking since they were no longer the owners of thatproperty, the claimants should not be penalized for so mitigating their damages (id. at168-169). Thus, the Court of Appeals concluded that the claimants' direct damages for the propertytaken were properly calculated on the basis of the highest and best use of the entire tract of land ownedby the claimants prior to the appropriation-related sale (id.).
Similarly, in this case, the direct damages for the taking of 90 Front Street would be properlycalculated based upon a highest and best use of the property as a vacant parcel unified with 98 FrontStreet if the claimants demonstrated, first, that the sale of 98 Front Street "was in time and substance soclearly referrable to the appropriation as to be incidental to and inseparable from it" (id. at 169)and, if so, that immediately prior to the appropriation-related sale, there was sufficient unity ofownership and unity of use of the two properties so as to permit their valuation as a single economicunit.
The claimants correctly point out that the propriety of valuing the two properties as a singleeconomic unit was not contested by the State at trial. To the contrary, the State's appraiser "evaluate[d]90 and 98 Front Street as a single (but divisible) 'larger parcel' " for the purpose of determining itshighest and best use (but ultimately concluded that the properties had their highest and best use asseparate parcels). Similarly, the State's expert engineer evaluated three potential plans for sitedevelopment before the taking, all three of which made use of 90 and 98 Front Street as if they were aunified parcel. The State additionally failed to oppose a pretrial memorandum of law in which theclaimants argued in favor of unified valuation. As a consequence, the issue of whether the damages forthe taking of 90 Front Street could have been properly calculated based upon a highest and best use ofthe property as unified with 98 Front Street was not a contested issue at trial.
Accordingly, under the circumstances of this case, and in consideration of "the paramountconstitutional requirement of just compensation" (Guptill Holding Corp. v State of New York,23 AD2d 434, 437 [1965]), we reverse the judgment, and remit the matter to the Court of Claims for anew trial limited to the issue of the direct damages incurred by the appropriation of the fee interest in theproperty located at 90 Front Street, in order to give the parties the opportunity to develop the factualrecord as to the relationship between the pending appropriation and the sale of 98 Front Street toTorsangie, and as to the unity of use and ownership of the two parcels prior to that sale (see GuptillHolding Corp. v State of New York, 20 AD2d at 833). Skelos, J.P., Eng, Belen and Hall, JJ.,concur.