City of Buffalo v. J. W. Clement Co.

• Decision Date: 09 April 1970
• Docket Number: Nos. 1,2 and 3,s. 1
• Citation: 34 A.D.2d 24,311 N.Y.S.2d 98
• Parties: The CITY OF BUFFALO, Appellant-Respondent, v. J. W. CLEMENT COMPANY, Inc. (Correct corporate name J. W. Clement Co.), Respondent-Appellant. Buffalo Sewer Authority, County of Erie, and People of the State of New York, Defendants. The CITY OF BUFFALO, Respondent, v. J. W. CLEMENT COMPANY, Inc. (Correct corporate name J. W. Clement Co.), Appellant. Buffalo Sewer Authority, County of Erie, and People of the State of New York, Defendants (two cases).
• Court: New York Supreme Court — Appellate Division

Page 98

311 N.Y.S.2d 98

34 A.D.2d 24

The CITY OF BUFFALO, Appellant-Respondent, v. J. W. CLEMENT COMPANY, Inc. (Correct corporate name J. W.

Clement Co.), Respondent-Appellant.

Buffalo Sewer Authority, County of Erie, and People of the

State of New York, Defendants.

The CITY OF BUFFALO, Respondent, v. J. W. CLEMENT COMPANY, Inc. (Correct corporate name J. W.

Clement Co.), Appellant.

Buffalo Sewer Authority, County of Erie, and People of the

State of New York, Defendants (two cases).

Nos. 1, 2 and 3.

Supreme Court, Appellate Division, Fourth Department.

April 9, 1970.

[34 A.D.2d 25] Anthony Manguso, Corp. Counsel, Buffalo, for The City of Buffalo (John P. Egan, Buffalo, of counsel).

Falk, Twelvetrees, Johnston & Seimer, Buffalo, for J. W. Clement Co. (J. Clement Johnston, Buffalo, of counsel).

Before MARSH, J.P., and WITMER, GABRIELLI, BASTOW and HENRY, JJ.

OPINION

WITMER, Justice.

Under the authority of section 555, subd. 1(a) of the General Municipal Law the plaintiff, City of Buffalo, in January 1967 commenced a proceeding in accordance with its charter provisions (Article 21) relating to condemnation of land for municipal purposes (Laws of 1929, ch. 527) to condemn the waterfront property of the defendant, J. W. Clement Company, Inc., hereinafter referred to as 'Clement', in connection with an urban renewal plan known as Water Front Development Project No. U.R.N.Y., R--35. After trial in October 1968 judgment was entered on January 24, 1969 awarding to Clement the sum of $2,030,306.96. Clement appeals from various aspects of the judgment and from two orders made therewith, and the City cross-appeals from the judgment.

The property is located at 227--265 Erie Street in Buffalo, and has 436 feet of frontage on said street and extends northerly therefrom to a navigable arm of Buffalo Harbor known as Coit Slip, upon which it has a frontage of 523 feet. It lies in a general commercial zone and is serviced by a dock and railroad as well as the street. It is improved by a large building originally built for use as a freight and passenger terminal; later used as a warehouse, and since 1946 it has been used by Clement for the conforming use of a printing plant.

Clement tried the case on the theory that the court should find that there was a De facto taking of the property as of April 1, 1963, from which time the City should be required to assume the cost of maintaining the property and should pay suitable interest to Clement upon the principal sums awarded. The trial court adopted this theory, and this is a primary reason for the City's appeal. Consideration of this point requires a review of the factual history of this condemnation proceeding.

FACTS

About December 10, 1954 Clement received a Notice of Hearing to be held at the Buffalo City Clerk's office on December 21, 1954 concerning the Buffalo Waterfront Redevelopment Project. This prompted Clement to request the Chamber of Commerce to inquire into the matter, and on December 16th at a Chamber meeting several City Officials, including members of the City Planning Commission and the Commissioner of the Redevelopment Board, addressed the meeting, described the project and advised what properties, including Clement's were planned to be taken. The record shows that from that time forward there were many meetings, official and otherwise, news releases and advices to owners in the project area as to when it was contemplated that the properties would be taken. In August 1957 the Executive Secretary of the Planning Board advised Clement that the taking would be started between 1960 and 1962; and in December 1957 an Urban Renewal Clinic sponsored by the Buffalo Redevelopment Foundation was held, at which time it was restated that Clement's property would be taken.

Clement's business was and is the printing of nationally read magazines, including Time and Life, and the printing of nearly one hundred million pocket-size paperback books annually. Its printing machines are of enormous size, requiring much time to set up for operation. In the light of its responsibilities to itself and its customers Clement felt a sense of urgency in ascertaining its status with respect to the redevelopment project. It made such efforts as it could to be excluded, but when that failed, it began in 1958 to look for a place to which to move.

In June 1960 the Secretary of the City Planning Commission told Clement's President that the Company would have to be out of the property within three years, and at least by 1964. In September 1960 Clement was advised that it would be notified within 2 or 3 years to get out. In February 1961 the Commissioner of the Redevelopment Board told Clement that all industry must be out of the area within 1 1/2 to 2 years.

In October 1961 Clement bought a site for a new plant in Depew, New York, having successfully applied the previous month for a permit to build there; and it began at once to build its new plant. A new press which it had bought for installation in the subject plant, was deferred and redirected for placement in the new plant. On July 18, 1962 the Mayor of Buffalo and the Commissioner of Urban Renewal advised Clement's President that in the Spring of 1963 they would negotiate with him on the price to be paid for the subject property.

In October 1962 Clement began to move its machinery to its new plant. In February 1963 Clement received a letter from the Urban Renewal Commissioner stating that acquisition of property in the project area would begin in May 1963 and the Commissioner confirmed this by personal conversation with an officer of Clement. Clement completed moving out of the subject property in April 1963.

The record also contains evidence from the minutes of the City Council meetings, the Board of Redevelopment and the Board of Urban Renewal and the City Planning Board from 1954 to 1962 showing continuous agitation and actions concerning this project; and also many newspaper reports with respect thereto. In addition, the City Assessor testified that since 1959 the City had been lowering its assessments in the waterfront redevelopment area; and the City Director of Buildings testified that his Department had been directed not to issue building permits in that area for new construction, and that except for one temporary permit, none was issued after 1962; but that 'perhaps' permits for repairs, but not for improvements, would be issued.

There was evidence that during this period owners in the area failed to maintain their buildings, to replace broken windows or to repair the buildings after a fire; and many were vacant. Indeed, the City's principal appraisal witness acknowledged that by reason of the threat of condemnation in this area, values were drastically reduced (and see City of Buffalo v. Irish Paper Co., 31 A.D.2d 470, 299 N.Y.S.2d 8 affd. 26 N.Y.2d 869, 309 N.Y.S.2d 606, 258 N.E.2d 100 (3/5/70); and City of Buffalo v. Strozzi, 54 Misc.2d 1031, 1035, 283 N.Y.S.2d 919, 923, et seq.), and he testified that Clement's property by 1963 had become unsalable and unrentable. With reference to leasing, he expressed the opinion that it might have been possible to obtain a short-term tenant of the property for storage purposes, if City officials consented. In that respect, however, while Clement was moving from the property in the winter of 1963 it began making efforts to find a tenant, but those efforts were unsuccessful at all times. Thereafter Clement paid the taxes and insurance and maintained the property at its own expense, but on many occasions it advised the City of this situation and urged the City to complete the condemnation.

De facto Taking

The trial court found that the acts of the City, including its protracted delay, 'destroyed the value of the property to the defendant and made the property no longer fit to be used as the defendant had been using it and had planned to use it in the future'. The trial court further found that 'the city, by its threat of condemnation, forced the Clement company to move its business operation', and that in view of the nature of its business Clement 'waited to do this (move) until the last possible moment that a prudent businessman could wait'. We affirm such findings. Based upon such findings the trial court held that there was a De facto taking of Clement's property by the City as of April 1, 1963, and that its value should be determined as of the year 1962; and he charged the City with the expense of maintaining the property from such date, and he also allowed Clement interest at the rate of 4 per cent per annum from such date upon the award for the value of the property.

The City contends that it was contrary to law to find a De facto taking prior to the entry of the judgment herein (see City Charter, Article 21, §§ 382 and 388, Laws of 1929, ch. 527). The argument is that even if the City's acts did cause a loss of use in Clement's property, such is merely a consequence of condemnation as must be accepted without recompense by any citizen whose property is condemned.

This brings us to the crucial question of the limits of the theory and remedy of De facto taking in the State of New York. While the general rule in eminent domain cases is that a condemning authority does not become liable to a condemnee until title to the property is officially taken (Condemnation Law, § 4; Court of Claims Act, § 10; 17 Carmody-Wait, 2d, § 108.19, and 19 N.Y.Jur., Eminent Domain, §§ 78 and 79), it is settled that a De facto taking does occur when there has been a physical invasion of a condemnee's property or a direct legal restraint on its use (Leeds v. State of New York, 20 N.Y.2d 701, 282 N.Y.S.2d 767, 229 N.E.2d 446; Matter of Keystone Assoc. v. Moerdler, 19 N.Y.2d 78, 278 N.Y.S.2d 185, 224 N.E.2d 700; Oswego & Syracuse R.R. Co. v. State of New York, 226 N.Y. 351, 124 N.E. 8; Forster v. Scott, 136 N.Y. 577, 32 N.E. 976; Lambert v. State of New York, 30 A.D.2d 582, 290 N.Y.S.2d 412; ...