Eminent Domain

In reversing the award of an additional allowance to landlord, the Appellate Division concluded that Supreme Court's award of $721,671 at trial did not substantially exceed the village's advance payment of $575,000 within the meaning of section 701 of the EDPL. As a result, landlord was not entitled to the additional allowance. With respect to the tenant, the village conceded that the amount of the award was substantially in excess of the advance payment, but emphasized that tenant was unsuccessful as to the bulk of its $973,000 claim. The court concluded that Supreme Court had properly awarded an additional allowance for tenant's attorneys' fees, who were to be compensated on a contingency fee basis. But the court held that tenant was not entitled to an award for the appraiser's full fee, because the appraiser's work did not substantially contribute to the additional compensation the tenant received. Because tenant was awarded only 16.4% of the appraiser's appraisal, the court held that tenant was entitled to only 16.4% of the appraiser's fee. As a result, the court reduced the tenant's additional allowance from $127,064.82 to $70,831.40.

Comment

In order for a condemnee to receive an additional award to cover costs of litigation, the court's principal award must be substantially in excess of the condemnor's offer. In a number of cases, courts have held that an increment of about 20% is not substantially in excess of the condemnor's first offer. See, e.g., CMRC, Ltd. v. State, 16 A.D.3d 204 (20%); Matter of County of Tompkins, 298 A.D.3d 825 (22%); Matter of Village of Johnson City (Waldo's Inc.), 277 A.D.2d 773 (19%). By contrast, when the increment reaches 35%, courts are more likely to hold that the award is substantially in excess of the condemnor's offer. See, e.g., Gelsomino v. City of New Rochelle, 25 A.D.3d 554 (35.5%); Matter of Metropolitan Transp. Authority v. Ausnit, 306 A.D.2d 190 (35.3%); Matter of Village of Haverstraw, where the village offered landowner $575,000 for the condemned property while the court determined the value of the property to be $721,671 falls between these two categories, with an increment of 25.5%, and the court held that landlord-condemnee was not entitled to an additional award.

The trial court's discretion to determine the sum of additional awards is limited to compensating for the costs that were necessary and reasonable for landowner to incur to establish condemnor's offer was inadequate. In Matter of Village of Port Chester, 137 A.D.3d 802, the Second Department upheld the trial court's determination that the landowner was entitled to the less than half of the additional sum requested because the remaining fees were incurred to develop a failed theory to support a claim substantially in excess of the court's ultimate award. Although the village had offered property owner $975,000 and the trial court determined the property was worth $3,062,000, the court awarded only $406,827.44 in litigation costs out of the $832,244 landowner had requested. Additionally, a court's determination of an additional award must be supported by evidence or be within the range of expert testimony provided at trial. In Matter of City of Long Branch v. Sun NLF L.P., 146 A.D.3d 775, the Second Department reversed the trial court's additional award for engineering fees because the property owner did not provide the engineer's report and the engineer did not testify at trial, so the owner could not establish that engineering fees were necessary to achieve just compensation.

When an owner agreed to compensate its lawyer on a contingency fee basis, the owner is generally entitled to reimbursement for the contingency fee if it was necessary and reasonable to prove inadequacy of condemnor's offer. Thus, in Matter of City of Long Branch, supra, where landowner agreed to pay the lawyer 25% of any excess above the city's offer, the Second Department upheld the trial court's award of 25% of the $5,500,000 excess the landowner obtained at trial.