My Ryan, LLC v. State

• Decision Date: 01 November 2021
• Docket Number: Claim 126279,2021-51135
• Parties: My Ryan, LLC, Claimant, v. State of New York, Defendant. WASHING TECHNOLOGIES, LLC, Claimant, STATE OF NEW YORK, Defendant. WASHING TECHNOLOGIES, LLC, Claimant, v. STATE OF NEW YORK, Defendant.
• Court: New York Court of Claims

My Ryan, LLC, Claimant,
v.
State of New York, Defendant. WASHING TECHNOLOGIES, LLC, Claimant, STATE OF NEW YORK, Defendant.

WASHING TECHNOLOGIES, LLC, Claimant,
v.
STATE OF NEW YORK, Defendant.

No. 2021-51135

Claim No. 126279

Court of Claims

November 1, 2021

Unpublished Opinion

For Claimant: HARRIS BEACH, LLC By: Philip G. Spellane, Esquire Thomas P. Smith, Esquire

For Defendant: LETITIA JAMES Attorney General of the State of New York By: Kevin A. Grossman, Esquire Assistant Attorney General

RAMÓN E. RIVERA Judge of the Court of Claims

Claimants jointly seek an additional allowance pursuant to Eminent Domain and Procedure Law (EDPL) section 701 for reimbursement of actual and necessary costs and disbursements incurred in bringing appropriation claims to judgment for the State's taking of a portion of the two parcels that are the subject of these claims. Defendant opposes the requested relief.

My Ryan, LLC, Claim No. 126279

On November 20, 2014 the State appropriated 6, 372 square feet of Claimant, My Ryan, LLC's (Claim No 126279) fee interest in land located at 1081 New York State Route 222, in the Town of Cortlandville, Cortland County, which is at the northeast corner where Route 222 intersects with New York State Route 281. The property is improved and operated as a Squeaky Clean Car Wash. The appropriated land is shown on the appropriation map filed in the Cortland County Clerk's Office on November 20, 2014, identified as Map No. 185, Parcel No. 212 [fee interest] and Map No. 207, Parcel No. 245 [temporary easement], Town of Cortlandville, Cortland County, New York. Claimant personally served the Attorney General with a claim seeking just compensation for the taking on June 11, 2015. The claim was tried before the Honorable Nicholas V. Midey, Jr. on June 12, 2018, and a Decision was rendered by the Honorable Renée Forgensi Minarik on December 3, 2019. In the Decision, Claimant was awarded $47, 800 in direct damages for the land, $178, 500 for site improvements and $10, 925 for the temporary easement, for a total award of $237, 225. No indirect damages were awarded.

Washing Technologies, LLC. Claim No. 126280

On October 30, 2014 the State appropriated 1, 448 square feet of Claimant's, Washing Technologies, LLC's (Claim No 126280), fee interest in land located at 1087 New York State Route 222, in the Town of Cortlandville, Cortland County, which is near the northeast corner where Route 222 intersects with New York State Route 281. The property is improved and formerly operated as a Kentucky Fried Chicken fast food restaurant. The appropriated land is shown on the appropriation map filed in the Cortland County Clerk's Office on October 30, 2014, identified as Map No. 186, Parcel Nos. 213 and 214 [fee interest] and Map No. 208, Parcel No. 246 [temporary easement], Town of Cortlandville, Cortland County, New York. The claim was tried before the Honorable Nicholas V. Midey, Jr. on June 13, 2018, and a Decision was rendered by the Honorable Renée Forgensi Minarik on January 16, 2020. In the Decision, Claimant was awarded direct damages of $9, 425 for the land, $23, 487 for site improvements and $1, 700 for a temporary easement, for a total award of $34, 612. No indirect damages were awarded.

Claimants now bring a joint application for additional compensation for attorney's fees, disbursements, appraiser and engineering fees for each claim. Claimant, My Ryan, LLC seeks an additional award of $79, 597.01 and Claimant Washing Technologies, LLC seeks an additional award of $22, 614.30. Claimant also seeks an award of $14, 114.19 for appraisal and engineering fees for My Ryan, LLC. In support of the application, Claimants have submitted the affirmation and reply affirmation of Philip G. Spellane, Esquire of the firm Harris Beach, PLLC, with exhibits; the affidavit of Gary Sloan, the managing member of both My Ryan, LLC and Washing Technologies, LLC; and the affidavit of John S. Miller of J. S. Miller Appraisal Associates, LLC, the appraiser used for both claims. Claimants argue that these expenses were necessarily incurred in order to receive just and adequate compensation. The State's initial offer for the appropriation for My Ryan, LLC was $127, 925 and for Washing Technologies, LLC it was $15, 075.

In opposition to the motion Defendant argues that for both claims the differences between the initial offers from the State and the Court awards are not substantial. Defendant points to Judge Minarik's trial decision for My Ryan, LLC in which she "wholly rejected" the appraiser's only valuation approach, the Income Capitalization Approach, because it valued the business, an approach she held was not recognized under New York law. For both claims the Court also rejected the appraiser's assessment of indirect damages and did not award any indirect damages. Defendant also notes that attorney's fees were calculated based upon an hourly fee, rather than on a contingency basis which is the commonly used and accepted basis for determining a reasonable fee.

In reply Claimants' counsel argues that the Courts' awards were substantially in excess of the State's initial offers. Counsel indicates that Courts have uniformly held that where the difference between the condemnor's offer and the Court's award was more than 85%, as in these cases, the difference was found to be substantial. With the substantial difference here the inadequacy of the State's initial offer is clear and, counsel argues, the appraisal and counsel fees incurred were absolutely required for Claimants' to receive just compensation. Finally, Claimants' counsel calculates that the hourly fee incurred for the firm's representation of the Claimants was less than the firm would have been entitled to based upon the standard one-third contingency on the award and accrued interest.

EDPL section 701 permits the Court in its discretion to make an additional award for actual and necessary expenses incurred in order for the Claimant to receive just and adequate compensation. The statute provides:

"In instances where the order or award is substantially in excess of the amount of the condemnor's proof and where deemed necessary by the court for the condemnee to achieve just and adequate compensation, the court, upon application, notice and an opportunity for hearing, may in its discretion, award to the condemnee an additional amount separately computed and stated, for actual and necessary costs, disbursements and expenses, including reasonable attorney, appraiser and engineer fees actually incurred by such condemnee."

The statute provides an opportunity for a Claimant whose property has been "substantially undervalued to recover the costs of litigation establishing the inadequacy of the condemnor's offer" (Hakes v State of New York, 81 N.Y.2d 392, 397 [1992]). "The statute requires two determinations: first, whether the award is 'substantially in excess of the amount of the condemner's proof' and second, whether the Court deems the award necessary 'for the condemnee to achieve just and adequate compensation.' Where both tests are satisfied, the Court may award reasonable fees." (id, quoting EDPL...