Michael Rikon Authors New Article in NYLJ: Discovery in Condemnation and Tax Certiori Proceedings

Michael Rikon has authored a new article that appears in this month’s New York Law Journal, addressing the use of discovery in condemnation and tax certiori proceedings.

The article discusses the prominent provisions of the Eminent Domain Procedure Law (“EDPL”) limiting the use of discovery. Sections 101 and 301 of the EDPL require “rules to reduce litigation” and “expeditious effort to justly compensate persons.” The article points out that the “urgency to quickly dispose of condemnation claims is also evidenced by Section 506 of the EDPL, which mandates that the condemnor file a Note of Issue after the last date to file a claim has passed.”

The general rule in condemnation matters is that the courts will not grant permission to conduct discovery. Justice Leland DeGrasse denied the motion for discovery in the last 42nd Street Development Project taking for Site 8 South, reciting that “circumstances warranting discovery have not been shown as there is no evidence of conflicting claims.”

Judge DeGrasse also noted that the condemnor was able to and submitted an appraisal.  See Matter of New York State Urban Development Corp. (42^nd Street Development) (Index No. 401139/03 Sup. Ct. NY County, November 9, 2006).  In another trade fixture claim in the same proceeding, Justice Martin Schoenfeld denied a motion for pre-trial discovery.  He noted that appraisals were exchanged, an advance payment was made and there was no issue as to who is the proper claimant.  Matter of State of New York Urban Development Corp. (42^nd Street Development) (Index No. 401095/2003 Sup. Ct. NY County, March 20, 2006).  In yet another condemnation matter, Justice Leland DeGrasse denied the City of New York’s motion for discovery noting that even though the City claimed the right to take claimant’s deposition pursuant to the NYC Administrative Code, the EDPL was still controlling and denied the application.  Matter of City of New York (7^th Avenue Subway) (Index No. 404743/2007 Sup. Ct. NY County, February 27, 2008).

However, as the article notes, in White Plains Urban Renewal Agency v 56 Grand Street Associates, 47 AD2d 536 (2d Dept 1975), discovery was granted because of the “circumstances of the case and the interest of justice.” However, this case was decided before the adoption of the Eminent Domain Procedure Law. More recently, courts state that information sought must be “material and necessary to the defense” and will restrict requests accordingly. Matter of Rockland County Sewer District No. 1 (Split Rock Partnership), 13 Misc.3d 1226(A) (Sup. Ct. Rock. Co. 2006). As the article notes:

Most of the information condemnors deem necessary is irrelevant.  Financial information must be provided in a certiorari case according to Court Rules.  In condemnation, the Eminent Domain Procedure Law requires the condemnor to appraise the property before it is condemned.  The condemnor has the right to inspect the property prior to vesting.  The condemnor may also request reasonable pertinent data or information including books and records necessary to prepare an appraisal.  EDPL Section 302.

As further discussed in the article, the EDPL requires both sides to file an appraisal before trial, thereby preventing any sort of “surprise” that may occur at trial and eliminating the need for any further discovery.  As Mr. Rikon writes, “The Appraisal Rule allows the parties to prepare for trial with knowledge of each other’s valuations and the foundations and justifications thereof… simply expressed… the rule… take[s] the game aspect out of the case, to prevent surprises, to permit the court to determine just compensation based solely upon the fact unhindered by gamemanship.” (Citing Novickis v State of New York, 44 AD2d 508, 512 (4th Dept 1974) and Matter of White Plains Properties Corp v Tax Assessor of City of White Plains, 58 AD2d 871 (2d Dept 1977)). Under the law of New York, condemnation and tax reduction trials are limited by information set forth int he parties’ appraisals. Each side may file a rebuttal report within 60 days of the exchange of the appraisal sought to be rebutted. The reports must contain a statement of the method of appraisal relied on and the conclusions as to value reached by the expert “together with facts, figures and calculations by which the conclusions were reached.” Therefore, discovery is generally of little use in condemnation proceeding

The article concludes, “Tax certiori and condemnation cases should be viewed as what they are, summary proceedings to be expeditiously disposed of. Allowing discovery serves little purpose and is incongruous to this objective.”