By: Michael Rikon and Jamie Sinclair
As a result of a decision by the Honorable Jaime A. Rios of Supreme Court, Queens County, dated April 25, 2013, Willets Point was awarded the reimbursement of attorneys fees and expenses against the City. The EDPL authorizes, in the event that a procedure to acquire property is abandoned (or a court determines the condemnor was not legally authorized to acquire the property), the reimbursement for a condemnee’s actual and necessary costs, disbursements, and expenses (including attorney fees, appraisal fees, engineering fees, and other damages) incurred as a result of the acquisition procedure. N.Y. Em. Dom. Proc. Law § 702 (McKinney).
Almost two years ago, our firm filed a legal challenge to a “Determination and Findings” authorizing the condemnation of some 20 acres of land in Willets Point, Queens, New York.
Our Petition was filed directly in the Appellate Division and challenged the proposed taking on many grounds. Among the many challenges to the decision to condemn was the fact that “there [were] no specific development plans.” Rather, this was a case of “condemn first, decide what to do with the property later.” Both the United States and New York State Constitutions provides that private property cannot be taken by the exercise of eminent domain absent a public use. Even though the City knew that there were over 150 Spanish-speaking businesses in Phase 1, it failed to provide Notice of the Public hearing in Spanish or advise of the consequences of the hearing being conducted completely in English.
Just days before the argument was scheduled, the City announced it would withdraw its “Determination and Findings.” It requested Petitioners to withdraw their Petition which was now moot.
On May 2, the parties stipulated that:
[I]n consideration for the City’s agreement not to proceed under its Determination and Findings, adopted by the City on May 2, 2011, or to acquire any properties by eminent domain under the same, petitioners hereby withdraw this proceeding. This stipulation is without prejudice to Petitioners’ right to seek any relief under the Eminent Domain Procedure Law. This stipulation is also without prejudice to the City’s right to issue a new Determination and Findings upon compliance with Article 2 of the Eminent Domain Procedure Law.
After the City ignored a claim for legal fee reimbursement, Willets Point commenced a§ 702(B) motion seeking an order and judgment directing the City to reimburse them for the actual costs, disbursements and expenses which they incurred as a result of the City’s abandoned acquisition procedure. The City filed a motion to dismiss, contending that the Willets Point Project had not been abandoned and that EDPL 702(B) did not authorize payments when the procedure to acquire property was abandoned prior to an EDPL Article 4 Acquisition proceeding.
With regard to the City’s first contention, the court noted that condemnation usually occurs in two phases. In the first step, the condemnor makes a determination to condemn after invoking the hearing and findings procedures required by EDPL Article 2. In the second step, the condemnor seeks to transfer title to the property by commencing a judicial proceeding known as the “vesting proceeding” in EDPL Article 4. Here, the project was abandoned at the first step of condemnation. With regard to reimbursement for expenses incurred at this early stage, the court found that:
By the plain language of the statute, the abandonment which may serve to impose liability on the condemnor for the condemnee’s costs, disbursements and expenses is the abandonment of the procedure to acquire property in eminent domain rather than the abandonment of the underlying Project in furtherance of which the procedure to acquire the property was instituted.
With regard to the City’s second contention, the court found that upon rescinding the determination and findings, the City was no longer authorized to acquire the property in eminent domain. Therefore, there was “no apparent reason” for distinguishing between situations where the court determines that the condemnor was not legally authorized to pursue the proposed acquisition in eminent domain and rejects the condemnor’s determination and findings and those where the condemnor stipulates not to pursue the proposed acquisition in eminent domain and agrees not to proceed on its determination and findings.
There are only a few New York cases dealing with§ 702 motions in New York. In Village of Copenhagen v. Terrillion, 26 Misc3d 1228(A), 2010 NYSlipOp 50295(U) (SupCt. Lewis Cty 2010), the Village’s Petition to Condemn was withdrawn prior to the return date because the Village failed to obtain a necessary water supply permit. A Stipulation of Discontinuance, without prejudice, was filed. Thereafter, the Village obtained the necessary permit and initiated a new condemnation. Id.at *1. With respect to the initial condemnation, the condemnee filed an EDPL § 702 action. The Village opposed on the grounds that the condemnation was not abandoned and proceeded forward after the necessary water permit was obtained. The Court in Terrillion held that the condemnation had been abandoned and awarded the condemnee its attorneys’ fees under Section 702. Said the Court:
Because of the overriding legislative intent to cautiously guard property rights, the constitutional requirement of fair and just compensation for an involuntary taking, and because of the consistent belief that condemnees should not be required to incur unneeded expense, the Court concludes that a discontinuance of a vesting proceeding at the behest of the condemnor, no matter how many times it occurs and no matter for what reason it takes place, is equivalent to an abandonment within the meaning, spirit and intent of the statute (EDPL 702(B)). The discontinuance here by the condemnor is equivalent to a successful challenge to the proposed taking within this court’s interpretation of the rule. The fact that the Respondents’ attorney stipulated to the discontinuance does not inure to the benefit of the Petitioner, especially given the language of that document in which Respondents “…reserve and retain all of their rights under Eminent Domain Procedure Law Article 7”.
Were the discontinuance not agreed to by Respondent, Petitioner could apply for a court Order, in which case, a court would likely condition such discontinuance on reimbursement to a condemnee of unneeded costs incurred by the property owner in any event. Id., at *2 (emphasis added).
Additionally, the Court of Appeals in Hargett v Town of Ticonderoga, 13 NY3d 325 (2009) held that Section 702(B) provides for reimbursement to the condemnee just as it does for condemnees who are successful in EDPL Article 4 proceedings.
EDPL § 702(B) motions are rare but powerful resources for condemnees in condemnation proceedings. The statute was written to protect property owner’s rights and ensure they are reimbursed for expenses incurred as a result of a proposed condemnation which is later abandoned or found to be without lawful authority. There is a major difference between additional allowances granted after trial of a claim which results in an award which is substantially more than a pre-vesting offer under EDPL 701 and an award of incidental expenses incurred when there has been an abandonment of a project, or a finding that the condemnor was not authorized to acquire the property under EDPL 702. In an additional allownace under EDPL 701, the Court has discretion regarding whether to make the award. In an EDPL 702 motion, the statute provides that the condemnor “Shall reimburse the condemnee.” In other words, reimbursement under Section 702 is mandatory.