Eagle Creek Land Res., LLC v. Woodstone Lake Dev., LLC

• Decision Date: 09 May 2013
• Citation: 964 N.Y.S.2d 743,108 A.D.3d 71,2013 N.Y. Slip Op. 03362
• Parties: In the Matter of EAGLE CREEK LAND RESOURCES, LLC, et al., Respondents, v. WOODSTONE LAKE DEVELOPMENT, LLC, et al., Appellants.
• Court: New York Supreme Court — Appellate Division

108 A.D.3d 71
964 N.Y.S.2d 743
2013 N.Y. Slip Op. 03362

In the Matter of EAGLE CREEK LAND RESOURCES, LLC, et al., Respondents,
v.
WOODSTONE LAKE DEVELOPMENT, LLC, et al., Appellants.

Supreme Court, Appellate Division, Third Department, New York.

May 9, 2013.

[964 N.Y.S.2d 744]

Goldstein, Rikon & Rikon, PC, New York City (Jonathan Houghton of counsel), for appellants.

Hiscock & Barclay, LLP, Buffalo (Mark R. McNamara of counsel), for respondents.

Before: PETERS, P.J., ROSE, STEIN and EGAN JR., JJ.

STEIN, J.

[108 A.D.3d 71]Appeal from an order of the Supreme Court (Melkonian, J.), entered February 23, 2012 in Sullivan County, which, in a proceeding pursuant to EDPL article 4, granted an application by AER NY–GEN, LLC to acquire a public access easement over real property.

[108 A.D.3d 73]AER NY–GEN, LLC is a power company licensed by the Federal Energy Regulatory Commission (hereinafter FERC) to [108 A.D.3d 74]operate a hydroelectric facility known as the Swinging Bridge Project (hereinafter the project). The project encompasses three reservoirs, including the Toronto Reservoir (hereinafter the reservoir) located in the Town of Bethel, Sullivan County.

[964 N.Y.S.2d 745]

As a condition of the FERC license, AER was required to maintain, among other things, a public recreational area on the southeast bank of the reservoir.¹ From 1971 through 2000, access to this recreational area was provided by AER's predecessor in interest ² via an easement through property—now owned by respondent Woodstone Lake Development, LLC—that surrounds the reservoir. Woodstone obtained the property in 2000 from Clove Development Corporation, a wholly-owned subsidiary of Orange and Rockland Utilities, Inc. (hereinafter O & R).³

Following Woodstone's acquisition of the property, the public continued to use roads that traversed such property in order to access the recreational area. In the meantime, Woodstone developed the property into an exclusive, private, gated residential community called Chapin Estate. Disputes arose regarding the public's use of the private roads and, ultimately, Woodstone began blocking the public's access to the recreational area across its property.

In April 2010, while the issue of the public's access through Woodstone's property remained unsettled, AER filed an application to transfer its license to operate the project to petitioners. In November 2010, FERC dismissed the application without prejudice on the ground that AER had not met the requirement of the license that it ensure that the public have access to the recreational area. As a result, AER commenced this EDPL article 4 proceeding seeking to acquire by condemnation a public access easement to the recreational area across the subject roads through Woodstone's property. ⁴ Woodstone and respondent Chapin Estate Homeowners Association, Inc. filed separate answers to the petition containing various affirmative defenses, including claims that AER had failed to comply with the public [108 A.D.3d 75]hearing requirement of EDPL 201 and that the petition was untimely. Supreme Court dismissed the affirmative defenses, granted the petition, and directed AER to, among other things, file a bond in the amount of $402,000. Upon respondents' appeal,⁵ we now affirm.

Initially, respondents assert that Supreme Court's order was based upon an incorrect factual determination that the subject roads located on Woodstone's property were already burdened by a right of public access and that this finding was contrary to the parties' agreement that such roads were private. While petitioners agree that the roads were private, it is undisputed that the deed by which O & R transferred the property to Clove in 1971 specifically reserved to O & R the right to enter and use certain private roads for “any purpose, including without limitation the right to unrestricted travel along said roads with any vehicle, equipment or machinery.” ⁶ Clove's conveyance of the

[964 N.Y.S.2d 746]

property to Woodstone in 2000 recognized that easement.⁷ It is also undisputed that, for decades, the public enjoyed access to the recreational area at the reservoir through the property now owned by Woodstone until Woodstone permanently blocked such access in 2005. Simply put, Supreme Court's decision properly reflected the existence of the reserved easement, as well as the public's prior access to the reservoir by use of the roads across Woodstone's property.

We turn next to the merits of respondents' challenge to Supreme Court's conclusion that AER was not required to conduct a public hearing pursuant to EDPL 201. In that regard, the EDPL prescribes a two-step process for the condemnor to obtain title. The first step requires compliance with the procedures set forth in EDPL article 2 which, among other things, calls for a condemnor to determine whether condemnation is required by either conducting a hearing or by following an alternate procedure under EDPL 206 ( see [108 A.D.3d 76]Matter of City of New York [Grand Lafayette Props., LLC.], 6 N.Y.3d 540, 543, 814 N.Y.S.2d 592, 847 N.E.2d 1166 [2006] ). Thereafter, the condemnor must seek acquisition of the property by commencing a vesting proceeding pursuant to EDPL article 4 ( see id.).

“The principal purpose of EDPL article 2 is to insure that [a condemnor] does not acquire property without having made a reasoned determination that the condemnation will serve a valid public purpose” (Matter of 265 Penn Realty Corp. v. City of New York, 99 A.D.3d 1014, 1014, 953 N.Y.S.2d 141 [2012] [citations omitted] ). Thus, the function of a preacquisition public hearing is “to inform the public and to review the public use to be served by a proposed public project and the impact on the environment and residents of the locality where such project will be constructed” (EDPL 201). Following the public hearing, the condemnor is required to make written determinations with respect to, among other things, “the public use, benefit or purpose to be served by the proposed public project” (EDPL 204[B][1] ).⁸

However, there are five exemptions that allow a condemnor to dispense with the hearing requirement of EDPL article 2 ( seeEDPL 206; City of Buffalo Urban Renewal Agency v. Moreton, 100 A.D.2d 20, 23, 473 N.Y.S.2d 278 [1984] ). Here, AER claimed that three of these exemptions applied ( seeEDPL 206[A], [C], [D] ). As the condemnor, AER bore the burden of demonstrating that it was entitled to an exemption ( see Matter of Sanitation Garage Brooklyn Dists. 3 & 3A, 32 A.D.3d 1031, 1034, 822 N.Y.S.2d 97 [2006],lv. denied7 N.Y.3d 921, 827 N.Y.S.2d 686, 860 N.E.2d 988 [2006] ). Supreme Court found such entitlement pursuant to EDPL 206(A). As relevant here, that section provides that a hearing is not required when, in relation to a federal law or regulation, a condemnor considers factors similar to those set forth in EDPL 204(B) and obtains a license or “similar approval” from a

[964 N.Y.S.2d 747]

federal agency or commission...