Cooperatives & Condominiums

Condominium Unit Owner Lacks Standing to Seek Consequential Damages in Eminent Domain Proceeding

Murphy v. State of New York

NYLJ 1/6/05, p. 18, col. 1

AppDiv, Second Dept

(Opinion by S. Miller, J.)

In a proceeding by a condominium unit owner seeking to recover consequential damages resulting from the state's taking of land owned by the condominium, the state appealed from an order of the Court of Claims denying the state's motion to dismiss. The Appellate Division reversed and dismissed the claim, holding that only the condominium itself had standing to bring the claim for consequential damages.

The unit owner owns one of 48 residential units in Fairways at North Hills, a condominium development located near the intersection of the Long Island Expressway and Shelter Rock Road. The condominium's bylaws provide that in the event that all or part of the common elements are taken in condemnation proceedings, the award shall be paid to the Board of Managers. The bylaws also make provision for distribution of the award, depending on whether the award is applicable to unrestricted common elements or irrevocably restricted common elements. In 2000, the state appropriated two parcels of undeveloped land owned by the condominium. The condominium filed a notice of claim seeking direct damages of $2 million and consequential damages of $4 million. Unit owner filed a separate notice of claim seeking direct damages of $100,000 and consequential damages of $400,000, alleging that the taking caused harm to her unit separate and apart from the harm to the condominium. The state moved to dismiss, but the Court of Claims denied the motion, concluding that nothing in the condominium's bylaws precluded unit owner from seeking consequential damages. The state appealed.

In reversing, the Appellate Division held that the unit owner sustained no loss of individual property rights that would require the state to pay her individual consequential damages. The court concluded that the land taken by the state was owned by the condominium for the benefit of all unit owners, and that the land taken could not serve as a basis for an individual claim by a single unit owner. Even if the unit owner was injured disproportionately, the court concluded that her remedy lies with the discretion of the condominium board, acting within the bounds of the condominium bylaws.

Condominium Unit Owner Lacks Standing to Seek Consequential Damages in Eminent Domain Proceeding

Murphy v. State of New York

NYLJ 1/6/05, p. 18, col. 1

AppDiv, Second Dept

(Opinion by S. Miller, J.)

In a proceeding by a condominium unit owner seeking to recover consequential damages resulting from the state's taking of land owned by the condominium, the state appealed from an order of the Court of Claims denying the state's motion to dismiss. The Appellate Division reversed and dismissed the claim, holding that only the condominium itself had standing to bring the claim for consequential damages.

The unit owner owns one of 48 residential units in Fairways at North Hills, a condominium development located near the intersection of the Long Island Expressway and Shelter Rock Road. The condominium's bylaws provide that in the event that all or part of the common elements are taken in condemnation proceedings, the award shall be paid to the Board of Managers. The bylaws also make provision for distribution of the award, depending on whether the award is applicable to unrestricted common elements or irrevocably restricted common elements. In 2000, the state appropriated two parcels of undeveloped land owned by the condominium. The condominium filed a notice of claim seeking direct damages of $2 million and consequential damages of $4 million. Unit owner filed a separate notice of claim seeking direct damages of $100,000 and consequential damages of $400,000, alleging that the taking caused harm to her unit separate and apart from the harm to the condominium. The state moved to dismiss, but the Court of Claims denied the motion, concluding that nothing in the condominium's bylaws precluded unit owner from seeking consequential damages. The state appealed.

In reversing, the Appellate Division held that the unit owner sustained no loss of individual property rights that would require the state to pay her individual consequential damages. The court concluded that the land taken by the state was owned by the condominium for the benefit of all unit owners, and that the land taken could not serve as a basis for an individual claim by a single unit owner. Even if the unit owner was injured disproportionately, the court concluded that her remedy lies with the discretion of the condominium board, acting within the bounds of the condominium bylaws.