Acquisition of Real Property by Iroquois Gas Transmission System L.P., Matter of

• Decision Date: 04 April 1996
• Parties: In the Matter of the ACQUISITION OF REAL PROPERTY BY IROQUOIS GAS TRANSMISSION SYSTEM, L.P., Respondent. Iroquois Gas Transmission System L.P., Respondent; James G. Kudlack et al., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 295

640 N.Y.S.2d 295

226 A.D.2d 808

In the Matter of the ACQUISITION OF REAL PROPERTY BY IROQUOIS GAS TRANSMISSION SYSTEM, L.P., Respondent Iroquois Gas Transmission System L.P., Respondent James G. Kudlack et al., Appellants.

Supreme Court, Appellate Division Third Department.

April 4, 1996.

Herzog, Engstrom & Koplovitz P.C. (Frank W. Lang, of counsel), Albany, for appellants.

E. David Duncan, Albany and Cullen & Dykman, New York City, for respondent.

Before MERCURE, J.P., and CASEY, YESAWICH and SPAIN, JJ.

YESAWICH, Justice.

Cross appeals from a judgment of the Supreme Court (Conway, J.H.O.), entered December 27, 1994 in Albany County, which, in a proceeding pursuant to EDPL article 5, determined the compensation due claimants as a result of petitioner's acquisition of real property.

Claimants own a farm comprising 127.9 acres (hereinafter the property), in the Town of Westerlo, Albany County, over which petitioner acquired, by eminent domain, a permanent easement of 3.39 acres for the placement of a natural gas pipeline. When the parties were unable to agree on mutually acceptable compensation for the taking, litigation designed to determine the amount of claimants' damages ensued.

Following a plenary hearing, Supreme Court, after adopting some of each party's proposed findings of fact and conclusions of law, rejecting others, and making additional findings, concluded that claimants had sustained damages of $13,034. Judgment was entered accordingly, but the amount of the judgment was later reduced by stipulation to $11,034, to take into account a portion of an advance payment made by petitioner that was attributable to the permanent easement. The parties cross-appeal from the judgment. Because the findings adopted by the court are inconsistent in several ways, the judgment must be reversed and the matter remitted for further proceedings.

Although Supreme Court specifically found that the infirmities in claimants' appraisal were such as to render it "incapable of review, and afford[ing] no basis to justify an award and therefore [that it] must be disregarded", the court nevertheless relied on important aspects of that appraisal in arriving at its valuation. Particularly, the court adopted the view of claimants' appraiser that the highest and best use of at least a portion of the property was for the sale of residential building lots, and that 13 such lots, eight of which had scenic views, were available for sale before the taking, but only eight lots (several of which were diminished in value by the taking) could be sold thereafter. The only justification in the record for these findings is claimants' appraisal, which the court purportedly disregarded.

Furthermore, this highest and best use finding conflicts with the appraisal and opinion of petitioner's expert, also explicitly adopted by Supreme Court, that the highest and best use of the property is as agricultural/recreational land. It is unclear whether the court's intention, in making these different highest and best use findings, was to indicate that the agricultural/recreational classification applies only to the remainder of the land, other than the building lots, or that the highest and best use of claimants' property is as agricultural/recreational land, with a potential...