Eminent Domain FAQ

View Eminent Domain/Condemnation FAQ
Eminent Domain FAQs about Eminent Domain Condemnation Law.

It is a general (although not absolute) rule in eminent domain valuation that the valuation date – i.e., the date on which the property is valued – is the date on which the condemnor formally acquired the property. This is often called the “vesting date”.

In most valuation trials, the comparables relied upon by the respective appraisers are usually sales (or rentals) taking place before the vesting date.

However, it is also appropriate to utilize sales taking place after the vesting date especially in a partial taking where the claimant is claiming a consequential damage to the remaining property (the “Remainder Property”).

A) The General Valuation Standard in a Partial Taking/The “Before and After” Rule

The measure of damages in a partial taking is based on the difference in value of the entire tract before the taking and the fair market immediately after the taking. In McDonald v. State, 42 N.Y.2d 900, 397 N.Y.S.2d 900 (1977), the Court of Appeals held:

“The measure of damages for a partial taking of real property is the difference between the property’s value before the condemnation and the value afterward.”

In Centereach Car Care Center, Ltd. v. State, 271 A.D.2d 391, 705 N.Y.S.2d 634 (2d Dept. 2000), the Court stated:

“The measure of damages in cases involving a partial taking is the difference between the value of the whole before the taking and the value of the remainder after the taking (see, Diocese of Buffalo v. State of New York, 24 NY2D 320, 323; Matter of City of New York [Fourth Ave.], 255 NY 25, cert. denied sub nom. Parlex Holding Corp. v. City of New York, 283 US 860). The measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking (see, Matter of City of New York [Franklin Record Ctr.], 59 NY2d 57, 61; Matter of City of New York [ Shorefront High School – Rudnick], 25 NY2d 146; Keater v. State of New York, 23 NY2d 337).”

The burden of proof to show a consequential and/or severance damage is upon the claimant. See, Niagara Mohawk Power Corp. v. Olin, 138 A.D.2d 940, 526 N.Y.S.2d 278 (4th Dept. 1988). See also, Chemical Corp., Ltd. v. Town of East Hampton, 298 A.D.2d 419, 748 N.Y.S.2d 606 (2d Dept. 2002).1

B) The Exception to the “Before and After” Standard/The Chiesa Rule

Under the Court of Appeals decision in Chiesa v. State, 36 N.Y.2d 21, 364 N.Y.S.2d 848 (1974), the Court established the rule that the property owner is always entitled to the direct damages. The damages for the actual physical taking of the property cannot be reduced by any enhancement to the Remainder Parcel.

The Court of Appeals treatment of enhancement under the Chiesa Rule guarantees the maximum just compensation – whatever the overall enhancements to the remainder, the property owner is assured of his entire direct damage. Direct damage (i.e., the amount the property owner “lost”) may not be reduced by enhancements (the “benefits”) to the remainder. The Court of Appeals’ interpretation in Chiesa and the lower court’s application of the rule is the most favorable interpretation for the property owner whose property is taken. In other states, under other variations of valuation standards, the enhancement (i.e., “the benefits”) could offset or reduce the direct damage. See, 3 Nichols Eminent Domain (3rd Ed.) §8.62 (now in Section 8A.02[1]) and the discussion by the Court of Appeals in Chiesa v. State, id.

In effect, the Chiesa rule, which was later followed by the Appellate Division in Done Holding v. State, 144 A.D.2d 528, 534 N.Y.S.2d 406 (2d Dept. 1988), lv. to appeal denied 73 N.Y.2d 710, 541 N.Y.S.2d 764 (1989), enunciates an exception to the “Before and After” rule. This was most recently reconfirmed by the Court in In re Great Neck Park District [Kings Point Heights, LLC, Claimant], 74 A.D.3d 804, 903 N.Y.S.2d 451 (2d Dept. 2010):

“... Pursuant to New York law, the Supreme Court was precluded from taking that enhanced value into account in rendering the award (see Matter of City of York [Consolidated Gas Co. of N.Y.], 190 NY 350, 360; Done Holding Co. v State of New York, 144 AD2d 528, 529). As the Supreme Court’s damage award was “within the range of the expert testimony” and “adequately explained by the court,” there is no reason to disturb it on this appeal (Matter of City of New York [Reiss], 55 NY2d at 886...”

C) The Use of Sales After the Vesting Date

The Court in Zappavigna v. State, 186 A.D.2d 557, 588 N.Y.S.2d 585 (2d Dept. 1992), stated:

“It is widely accepted that a partial taking does not in itself cause a consequential loss. Damages for such a loss must be based upon either the opinion of an experienced, knowledgable expert, or on actual market data showing a reduction in the value of the remainder as a result of the appropriation (see, Miller v State of New York, 117 Misc. 2d 444, 449-450, 458 N.Y.S.2d 973)...” (Citations omitted) (Emphasis added) 186 A.D.2d at 560.

In determining whether there was, in fact, a diminution or impairment of the remainder property, proof of actual sales taking place after the taking date is therefore admissible and can be probative evidence of the absence or presence of consequential and/or severance damage. See, e.g., In re Clearview Expressway, 9 N.Y.2d 439, 214 N.Y.S.2d 438 (1961); Leider v. State, 69 Misc.2d 998, 332 N.Y.S.2d 45 (1972), aff’d 45 A.D.2d 82, 356 N.Y.S.2d 368 (3d Dept. 1974); Niagara Mohawk Power Authority, supra; Vanech v. State, 29 A.D.2d 607, 285 N.Y.S.2d 636 (3d Dept. 1967); Dormann v. State, 4 A.D.2d 979, 167 N.Y.S.2d 760 (3d Dept. 1957); Grand Union Co. v. State, 59 Misc.2d 678, 300 N.Y.S.2d 248 (1969); Dennison v. State, 48 Misc.2d 778, 265 N.Y.S.2d 671 (1965); Power Auth. v. Gold, 17 Misc.2d 454, 186 N.Y.S.2d 431 (1959). The Leider Court stated:

“... there is before the Court a sale of the major portion of the subject property's remainder in an amount greater than the value of the whole tract prior to the appropriation. While the Court need not accept the sale as conclusive evidence of value, it must accord it substantial weight ... As Coke once said, ‘Reason is the life of the Law.’ In applying the above rule where it appears that there has been an increase in value or the value has remained the same, reason dictates that there has been no consequential damages to the remainder.” (Citations omitted) (Emphasis added) 69 Misc.2d at 1002.2

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

1Application of a “before” and “after” assumes a partial take of a unified property. Ephraim Holding Corp. v. State, 30 A.D.2d 623, 290 N.Y.S.2d 700 (3d Dept. 1968); In re Bd. of Supervisors v. Sherlo, 32 Misc.2d 579, 224 N.Y.S.2d 244 (1961), aff’d 19 A.D.2d 590, 240 N.Y.S.2d 950 (4th Dept. 1963), aff’d 13 N.Y.2d 1172, 248 N.Y.S.2d 52 (1964).

2The reality of what happened after the taking is an important test of the credibility of the position taken by the claimant. United States v. Brooklyn Union Gas, 168 F.2d 391, 397 (2d Cir. 1944):
“It would seem an eerie conclusion that a court must resort to guess, closing its eyes to reality, when its decision must actually be formulated after the true facts have become available...”