Eminent Domain Law

AppDiv, Second Dept.

(memorandum opinion)

In a condemnation proceeding brought by the Metropolitan Transportation Authority (MTA), both the MTA and the condemnee-landowner appealed from Supreme Court's valuation of the interests taken by the MTA. The Appellate Division affirmed, rejecting condemnee's contention that its land should be valued by reference to the value of the mineral resources on the land, and holding that Supreme Court had properly required the MTA to compensate landowner for consequential damages to land retained by condemnee.

Landowner owned two parcels, used as a sand and gravel quarry, located between Routes 22 and 81 in Dutchess County. The two parcels were separated by the “Luther parcel.” In expanding a Metro-North railroad station, the MTA condemned the western strip of both parcels located along Route 22, impairing access to both parcels from Route 22. This was done in part because Metro North erected guardrails narrowing access along existing driveways, and in part because Metro-North's construction changed the grade, making it unsafe for trucks to enter the driveways because the drivers would not be able to see oncoming traffic. In the condemnation proceeding, landowner contended that the parcels taken should be valued by reference to the value of the minerals on the condemned parcel, minus the cost of extraction, and landowner also sought consequential damages for harm to the remaining parcels resulting from diminished access. The MTA, by contrast, argued that the parcel should be valued by reference to comparable sales, and that because landowner's remaining parcels fronted on Route 81, landowners were not entitled to consequential damages for harm to those parcels. Supreme Court valued the property taken by looking to comparable sales, and held that landowner was entitled to consequential damages for diminished access to the property retained. Both parties appealed.

In affirming, the Appellate Division first held that it would be improper to value mineral property by estimating projected profits and then subtracting projected expenses. The court concluded that a prospective purchaser would not pay a price based on that calculation, and held that landowner is entitled to value based on what a prospective purchaser would pay. Hence the trial court properly based its award on sales of comparable properties. The court then held that when condemnation renders access to neighboring land unsuitable, the landowner is entitled to compensation for the loss of access. Here, because the trial court concluded, based on credible evidence, that landowner would not be permitted to haul minerals on Route 81, the trial court reasonable concluded that impediments to truck access from Route 22 made access to landowner's retained land unsuitable. As a result, the court sustained Supreme Court's award of $65,000 in direct damages for taking of the strip, and $435,000 in consequential damages for loss of access to the retained land.

COMMENT

When part of landowner's land is condemned, landowner is entitled to consequential damages for loss of access to the land not taken where the remaining access is unsuitable for the highest and best use of the land, but not when the remaining access is merely “circuitous.”

Priestly v. State of New York, 23 N.Y.2d 152. Courts are most likely to find the access unsuitable in cases where, as a result of the taking, landowner loses all access to the road most suitable for development of the land. Thus, in Priestly, the court awarded consequential damages when the state appropriated part of landowner's property, including all of its frontage on a bridge approach, reducing access to the hypothetical commercial and residential development (established by expert testimony as the highest and best use). Similarly, in Matter of County of Rockland, 147 A.D.2d 478, the court sustained an award of consequential damages when, while taking 31 of landowner's 61 acres, the town eliminated all access to the larger of two roads abutting landowner's parcel. The reduced access would not support the same sort of industrial park that would have been possible with access to the larger road.

By contrast, when the partial taking leaves landowner with access to the same roads, landowner is not generally entitled to consequential damages merely because the access is somewhat more cumbersome or circuitous. For instance in Sun Oil Co. of Pennsylvania v. State, 50 A.D.2d 983, the landowner was denied consequential damages when the partial taking reduced the frontage of his commercial property on a state highway, but nevertheless left him with significant access to that highway. Similarly, in Lake George Associates v. State, 23 A.D.3d 737, the court denied consequential damages to the owner of a shopping plaza where the state eliminated curb cuts that provided the plaza with access to two rides, but provided substitute access to the same roads through easements over neighboring land.

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Condemnee Entitled to Consequential Damages

Matter of Metropolitan Transportation Authority v. Washed Aggregate Resources, Inc.

NYLJ 1/22/13, p. 24, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In a condemnation proceeding brought by the Metropolitan Transportation Authority (MTA), both the MTA and the condemnee-landowner appealed from Supreme Court's valuation of the interests taken by the MTA. The Appellate Division affirmed, rejecting condemnee's contention that its land should be valued by reference to the value of the mineral resources on the land, and holding that Supreme Court had properly required the MTA to compensate landowner for consequential damages to land retained by condemnee.

Landowner owned two parcels, used as a sand and gravel quarry, located between Routes 22 and 81 in Dutchess County. The two parcels were separated by the “Luther parcel.” In expanding a Metro-North railroad station, the MTA condemned the western strip of both parcels located along Route 22, impairing access to both parcels from Route 22. This was done in part because Metro North erected guardrails narrowing access along existing driveways, and in part because Metro-North's construction changed the grade, making it unsafe for trucks to enter the driveways because the drivers would not be able to see oncoming traffic. In the condemnation proceeding, landowner contended that the parcels taken should be valued by reference to the value of the minerals on the condemned parcel, minus the cost of extraction, and landowner also sought consequential damages for harm to the remaining parcels resulting from diminished access. The MTA, by contrast, argued that the parcel should be valued by reference to comparable sales, and that because landowner's remaining parcels fronted on Route 81, landowners were not entitled to consequential damages for harm to those parcels. Supreme Court valued the property taken by looking to comparable sales, and held that landowner was entitled to consequential damages for diminished access to the property retained. Both parties appealed.

In affirming, the Appellate Division first held that it would be improper to value mineral property by estimating projected profits and then subtracting projected expenses. The court concluded that a prospective purchaser would not pay a price based on that calculation, and held that landowner is entitled to value based on what a prospective purchaser would pay. Hence the trial court properly based its award on sales of comparable properties. The court then held that when condemnation renders access to neighboring land unsuitable, the landowner is entitled to compensation for the loss of access. Here, because the trial court concluded, based on credible evidence, that landowner would not be permitted to haul minerals on Route 81, the trial court reasonable concluded that impediments to truck access from Route 22 made access to landowner's retained land unsuitable. As a result, the court sustained Supreme Court's award of $65,000 in direct damages for taking of the strip, and $435,000 in consequential damages for loss of access to the retained land.

COMMENT

When part of landowner's land is condemned, landowner is entitled to consequential damages for loss of access to the land not taken where the remaining access is unsuitable for the highest and best use of the land, but not when the remaining access is merely “circuitous.”

Priestly v. State of New York, 23 N.Y.2d 152. Courts are most likely to find the access unsuitable in cases where, as a result of the taking, landowner loses all access to the road most suitable for development of the land. Thus, in Priestly, the court awarded consequential damages when the state appropriated part of landowner's property, including all of its frontage on a bridge approach, reducing access to the hypothetical commercial and residential development (established by expert testimony as the highest and best use). Similarly, in Matter of County of Rockland, 147 A.D.2d 478, the court sustained an award of consequential damages when, while taking 31 of landowner's 61 acres, the town eliminated all access to the larger of two roads abutting landowner's parcel. The reduced access would not support the same sort of industrial park that would have been possible with access to the larger road.

By contrast, when the partial taking leaves landowner with access to the same roads, landowner is not generally entitled to consequential damages merely because the access is somewhat more cumbersome or circuitous. For instance in Sun Oil Co. of Pennsylvania v. State, 50 A.D.2d 983, the landowner was denied consequential damages when the partial taking reduced the frontage of his commercial property on a state highway, but nevertheless left him with significant access to that highway. Similarly, in Lake George Associates v. State, 2 3 A.D.3d 737, the court denied consequential damages to the owner of a shopping plaza where the state eliminated curb cuts that provided the plaza with access to two rides, but provided substitute access to the same roads through easements over neighboring land.

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