Eminent Domain FAQ

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Eminent Domain FAQs about Eminent Domain Condemnation Law.

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In my initial article on the subject of recovery of attorney’s and expert fees under Section 701 of the New York Eminent Domain Procedure Law (EDPL), I discussed the general policy underlying EDPL §701 and the cases construing that provision. There have been numerous cases decided by the condemnation courts since the initial article. This article is an update on more recent condemnation cases on the subject.

A. EDPL §701

Pursuant to EDPL §701, the Court has the discretion to grant an additional award to claimant for the recovery of claimant’s expenses, including attorney’s and expert fees which are necessary to achieve an award of just compensation. The Court’s discretion is properly exercised where the final award after trial is “substantially in excess” of the initial offer of settlement made by the condemnor.

Specifically, EDPL §701 states:

“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 application shall include affidavits of the condemnee and all parties that have incurred expenses on the condemnee's behalf, setting forth inter alia the amount of the expenses incurred.”

The principle underlying EDPL §701 is the recognition that where the advance payment offer is inadequate, a claimant must necessarily incur additional attorney’s and expert fees in order to obtain the just compensation to which he or she is entitled. See, e.g., Lee-Hi Fuel Corp. v. State, 179 A.D.2d 494, 578 N.Y.S.2d 562 (1st Dept. 1992); Taylor v. State, 200 A.D.2d 273, 613 N.Y.S.2d 743 (3rd Dept. 1994); Malin v. State, 183 A.D.2d 899, 584 N.Y.S.2d 596 (2d Dept. 1992).

B. The Basis from which “Substantially in Excess” is Computed

One aspect of EDPL §701 has been well established. The standard for determining both “substantially in excess” and the computation of the contingency legal fee is the initial advance payment made under EDPL §303. The base from which the Court determines whether the claimant achieved an award “substantially in excess” is NOT based on the condemnor’s proof at trial. Rather, the basis utilized is the initial advance payment. See, General Crushed Stone v. State of New York, 93 N.Y.2d 23, 686 N.Y.S.2d 754 (1999); First Bank & Trust Co. of Corning v. State, 184 A.D.2d 1034, 585 N.Y.S.2d 261 (4th Dept. 1992); Lee-Hi Fuel v. State, 179 A.D.2d 494, 578 N.Y.S.2d 562 (1st Dept. 1992). This is logical and consistent with the statutory intent. Only by having retained counsel and hiring experts could a claimant reach trial so as to realize the award. In re New York City Transit Authority, 160 A.D.2d 705, 553 N.Y.S.2d 785 (2d Dept. 1990) (“... the only interpretation which would fulfill the legislative intent of the amendment, and the policy of the EDPL, is that the city’s initial offer ... be utilized for comparison purposes).” See also, In re Village of Johnson City, 277 A.D.2d 773, 715 N.Y.S.2d 775 (3d Dept. 2000); Powers v. State, N.Y. Ct. Cl. Claim No. 109651 (McCarthy, J., March 3, 2009); Geragosian v. State, N.Y. Ct. Cl. Claim No. 103487 (Collins, J., February 13, 2009) (see footnote 2); and Brown v. State, N.Y. Ct. Cl. Claim No. 88093 (Read, J., March 27, 2001).

C. What is the Threshold Increment?

At just what point does the Court consider that the amount achieved after trial is “substantially in excess”?

Based on the reported cases, it would appear that about 25% above the advance payment would qualify to provide at least the minimal justification for the Court to exercise its discretion to award some of the costs. See, e.g., Miller Place v. State, N.Y. Ct. Cl. Claim No. 92748 (Sise, J., April 5, 2001).1 The actual amount awarded for attorney’s and expert fees is in the discretion of the Court and the Court can grant some amount as it deems appropriate. However, the cases indicate that the Court will be inclined to make a full award of attorney’s fees – usually equivalent to a one-third contingency fee – once the increment reaches above 40%. Almost invariably, the Court will make the full attorney’s fee award as well as most of the expert fees when the increment reaches above 75%.2 City of Yonkers v. Celwyn Co., Inc., 221 A.D.2d 437, 633 N.Y.S.2d 578 (2d Dept.1995) (132%); Scuderi v. State, 184 A.D.2d 1073, 585 N.Y.S.2d 271 (4th Dept. 1992) (41.4%); Zappavigna v. State, 186 A.D.2d 557, 588 N.Y.S.2d 790 (2d Dept. 1992) (76.5%); Miller Place v. State, N.Y. Ct. Cl., Claim No. 92748 (Sise, J., April 5, 2001) (88%); Falank v. State, N.Y. Ct. Cl. Claim No. 98692 (Hanifan, J., September 28, 2000) (36%). See also, Malin v. State, 183 A.D.2d 899, 584 N.Y.S.2d 596 (2d Dept. 1992) (79%); Karas v. State, 169 A.D.2d 816, 565 N.Y.S.2d 185 (2d Dept. 1991) (42%); and most recently Hage v. State, N.Y. Ct. Cl. Claim No. 105406 (Fitzpatrick, J., March 1, 2010) (197.95%); Grossman v. State, N.Y. Ct. Cl. Claim No. 111139 (Schaewe, J., February 11, 2010) (193%); Village of Spring Valley v. N.B.W. Enterprises, Ltd., 25 Misc.3d 1231(A), 2009 N.Y. Slip Op. 52364(U) (2009) (197%); Lake George v. State, N.Y. Ct. Cl. Claim No. 104481 (Collins, J., September 20, 2007) (57%).

1In evaluating the extent of the incremental over the advance payment and in the computation of attorney’s fees, the Court may also include in its computation the interest accrued on the additional principal amount achieved. See, e.g., Lee La v. State, N.Y. Ct. Cl. Claim No. 101705 (Sise, J., April 5, 2005); Brown v. State, N.Y. Ct. Cl. Claim No. 88093 (Read, J., March 27, 2001). See also, Allen v. State, N.Y. Ct. Cl. Claim No. 105867 (Patti, J., January 22, 2009).

2A one-third contingency fee based on the total award inclusive of interest has consistently been found to be a reasonable fee arrangement and is an appropriate factor in the Court’s exercise of its discretion in awarding the additional allowance.See prior cited cases and also Overseas American v. State, N.Y. Ct. Cl. Claim No. 101771 (Sise, J., March 7, 2005); and Rapp & Shapiro v. State, N.Y. Ct. Cl. Claim No. 100111 (Marin, J., December 4, 2003).

For questions or to discuss items presented in this topic, please contact Saul Fenchel.