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

Decision Date08 April 1971
Citation28 N.Y.2d 241,321 N.Y.S.2d 345,269 N.E.2d 895
Parties, 269 N.E.2d 895 CITY OF BUFFALO, Appellant-Respondent, v. J. W. CLEMENT COMPANY, Inc. (Correct Corporate Name J. W. Clement Company), Respondent-Appellant, et al., Defendants.
CourtNew York Court of Appeals Court of Appeals

Louis J. Lefkowitz, Atty. Gen. (Julius L. Sackman, Ruth Kessler Toch, Jean M. Coon and Emil Woldar, New York City, of counsel), in his statutory capacity under section 71 of the Executive Law and amicus curiae.

SCILEPPI, Judge.

This is a case of first impression which requires that we consider in detail the somewhat amorphous and apparently perplexing concept of De facto appropriation in the hope of clearly defining and firmly establishing its perimeters. Specifically, we have before us the question of whether there can be a De facto taking absent a physical invasion or the imposition of some direct legal restraint. Needless to say, the dictates of precedent, practicality and public policy guide us in seeking a just result.

On or about December 10, 1954, J. W. Clement Company received notice of a hearing to be held in the office of the Buffalo City Clerk on December 21, concerning what has since come to be known as the Buffalo Redevelopment Project. This in turn prompted a request of Clement, directed to the local Chamber of Commerce, that the matter be further investigated. Pursuant to that request, a meeting of the chamber was held at which several city officials, including members of the City Planning Commission and the Commissioner of the Redevelopment Board, spoke, describing the project and advising what properties were to be taken. The record shows that from that time there were frequent meetings, official and otherwise, news releases and advice to owners in the project area indicating when the properties would be appropriated. 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.

The record further discloses that Clement's business was and continues to be the printing of national magazines, including Time and Life, as well as paperback books, the latter approximating some one hundred million per annum. Significantly, its printing machines are enormous, requiring, therefore, an appreciable amount of time to prepare for operation and production. Considering both the nature of production and demands of publication, it is readily apparent that, as the Appellate Division found, Clement felt a sense of urgency in ascertaining its status with respect to the project. Apparently, total exclusion was initially sought; and only when those efforts proved futile did Clement undertake a relocation project.

In June, 1960 the secretary of the City Planning Commission informed the company's president that the premises would have to be vacated within three or possibly four years. By September of that year the estimate was reduced to within two or three years. Finally, in February, 1961 the Commissioner of the Redevelopment Board advised that all industry would have to vacate within the next 18 to 24 months. Relying on these 'official' representations, Clement embarked on its relocation location project; and having successfully applied for a building permit in Depew, New York, brought a site for the projected plant. A new press which it had purchased 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 negotiations for the subject property were scheduled for the following spring.

With appropriation imminent, Clement continued to redirect machinery to the Depew site, then in the final stages of construction. Early in 1963, Clement was advised via letter that acquisition was scheduled for May, 1963. The substance of this correspondence was orally confirmed soon thereafter. Removal was completed by April of that year.

The record, of course, is replete with instances of widespread publicity, including various newspaper reports and the minutes of concerned public agencies, all of which demonstrate what loosely may be termed a pattern of continous agitation. Additionally, the City Assessor testified that as early as 1959 the city had begun lowering property assessments in the redevelopment area; and, the Department of Buildings had been directed to deny all applications for building permits in the area, issuing perhaps one temporary permit after 1962.

Additional evidence was furnished to show that vacancies were common and that the subject area fell into general disrepair. Indeed, the city's principal appraisal witness acknowledged that by reason of the threat of condemnation property values were drastically reduced. Defendant Clement's property was characterized as both unsalable and unrentable after 1963, and all efforts to procure even a short-term tenant proved unsuccessful. Clement, however, as owner in fee, continued to pay taxes and insurance and to maintain the property at its own expense while urging the city to complete the condemnation.

By way of background, Clement has been the owner of the improved parcel which is the subject matter of this proceeding since 1946. Designed as a freight and passenger terminal, the premises had originally been improved, and included certain of the subject buildings since 1929. On taking possession, Clement's improvements included the addition of a full wing, pouring a new concrete floor, and raising the roof 15 feet for a portion of the middle part of the warehouse. The addition, in 1954, of the west wing indicates that subject premises were fully operational and reflects at least a moderate growth factor. A general corporate history of continued growth and expansion suggests the same conclusion.

Incorporated in 1908, J. W. Clement Company remained a resident of Buffalo until the recent move to Depew. From store front to plant, business growth necessitated the construction of a home plant at Seneca, Lord and Seymour Streets. A pioneer in color printing, increased volume required the purchase of the subject premises. However, within five years of their having added Erie Street to their Lord Street facilities, it became necessary for them to acquire a future plant site in Cheektowaga in 1951.

As noted above, Clement began moving out of Erie Street in 1962, when it started transferring its operation to a newly constructed plant in Depew, New York. Simultaneously, they also caused the premises at Lord Street (which location is outside the waterfront project limits) to be vacated and also moved to Depew. It is not disputed that the new structure at Depew is a tremendous printing plant, said to be eight times as large as Erie Street and contains 35% More space than the combined locations of Erie and Lord Streets. The Depew plant, which was opened in 1962 was in the planning stage for better than two years, has already been expanded and additional facilities are on the 'drawing boards'.

It was testified that Clement has become one of the major printers in the world, that the number of employees has approximately doubled since 1945, and an indication of their success is illustrated when reference is had to their Depew plant's printing seven to eight million copies of Reader's Digest every month. Significantly, testimony was introduced tending to establish that the fact of condemnation was only one of three reasons motivating the move, the other two being the inadequacy of existing facilities. Even at that time, it appeared that, despite the threat of condemnation, Clement would not have to vacate for another five years. It should be noted that the building permit that was secured in September, 1961, for Depew, evidently was the result of corporate thinking that existed in 1960, which was only six years after the addition that had been made at Erie Street in 1954. While affirmed findings of fact preclude the inference that growth considerations were the sole motivation for the move, the above factors demonstrate the probability of a mixed motivation. This of itself warrants more than mere passing consideration, for to expand the current concept of De facto taking on the facts herein may well be to allow all property owners to seek refuge under the broader umbrella of De facto appropriation as soon as the proposed condemnation is announced, irrespective of their underlying motivation; and, perhaps even more importantly, despite the fact that the owner has the right to remain in quiet possession for as many as four or five additional years.

Pursuant to section 555 (subd. 1, par. (a)) of the General Municipal Law, Consol.Laws, c. 24, the city commenced a proceeding in accordance with its charter provision (art. 21) to condemn Clement's waterfront property for redevelopment purposes under its urban renewal plan, denominated Waterfront Development Project No. U.R.N.Y. R--35, and funded in large part by Federal and State grants. After trial, judgment was entered awarding Clement $2,030,306.96, whereupon, pursuant to the City Charter, Clement filed objections to the decision and moved for modification on the grounds that (1) inadequate interest was awarded, and (2) that Clement was not reimbursed for certain moving expenses. In addition, Clement moved, by way of what appears to have been an omnibus motion, for an order assessing costs and fees, disbursements and expenses incurred in the proceeding. Separate orders denying both motions were entered on January 22, 1969, whereupon Clement prosecuted...

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