Two GRRH partners, Michael Rikon and M. Robert Goldstein, recently published an article in the New York Law Journal titled “Condemnors Behaving Badly.” The focus of the article is on one bad-faith practice often utilized by condemnors in New York: making a pre-vesting offer (as required by law), and then when this offer is rejected as full compensation, filing another appraisal for a lower amount. This is a problem for the claimant because the claimant is being punished for asserting its constitutional right to just compensation. This coercive practice is prohibited by law. Additionally, the trial court does not know of the other and higher appraisal, and it cannot be used for impeachment unless the state’s appraiser at trial wrote the earlier higher appraisal. Nor can it be introduced into evidence. The condemnor will often argue that the higher appraisal is protected from discovery because it was used for settlement purposes, although one New York court has found otherwise, ruling the higher appraisal an admission against interest. Cronk v State of New York, 100 Misc2d 680 (Ct. Cls. 1979).
Other jurisdictions do not allow this unfair practice. New Jersey courts hold that once a condemnor makes an offer of just compensation, it is judicially estopped from taking a different position at trial and is not permitted to urge that the property was worth less than this amount. Michigan takes a similar approach.
In the article, GRRH urges the need for legislation to stop this improper practice. Indeed, the prejudicial effect of this practice is not limited to trial. EDPL Sec. 701 allows for additional allowances to be awarded to a claimant whose final award was substantially in excess of the state’s earliest valuation. However, sec. 701 is judged not by the trial appraisal but by comparison with the pre-vesting offer.
Other problematic practices by condemnors are highlighted in the article, including the deposit of the advance payment in the comptrollers account to prevent the accrual of the 9% statutory interest, as well as the increased abuse of discovery in recent cases.
The full article can be accessed by clicking here.
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