New York is one of the three states in the union that does not allow a jury trial.
When private property is taken for public use, the condemnor must “compensate the owner so that he (or she) may be put in the same relative position, insofar as this is possible, as if the taking had not occurred.”[1] The award “must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time.”[2] Fair market value of real property is “the amount which one desiring but not compelled to purchase will pay under ordinary conditions to a seller who desires but is not compelled to sell.”[3]
The trial court is the determiner of the facts. In determining a damages award, “the findings must either be within the range of the expert testimony, or be supported by other evidence and adequately explained by the Court.”[4]
New York’s Court Rules require the filing and exchange prior to trial of all appraisals and other expert reports which a party intends to rely on at trial.[5]
This is what it is known as the “appraisal rule.”
The Appraisal Rule
The “Appraisal Rule” makes discovery in a condemnation case particularly unnecessary based on the fact that there are supposed to be no surprises at trial. This is because of the requirement to first exchange a written appraisal or other expert report. 22 NYCRR § 202.61.[6]
In New York, condemnation trials are limited by the information set forth in the parties’ appraisals. After the exchange of appraisals, each side may file a rebuttal report within sixty days after receipt of the document sought to be rebutted. The appraisal reports are required to contain a statement of the method of appraisal relied on and the conclusions as to value reached by the expert, together with the facts, figures and calculations by which the conclusions were reached. The appraisers are also required to provide specific information regarding their comparable sales, leases and photographs of the property under review.
Upon the trial, expert witnesses are limited in their proof of appraised value to information set forth in their reports. Under the rules, the court has the ability to relieve any party of a default. It should be noted that the rule only applies to expert witnesses who are offering opinions. No report needs to be filed by a fact witness. In fact, the Third Department held in Faulkner v State of New York[7] that an expert may be permitted to testify without first submitting an expert report if the testimony is factual and does not constitute opinion evidence. In Faulkner, the issues concerned the testimony of a surveyor who testified as to square footage of the area taken.
The Appraisal Rule allows the parties to prepare for trial with knowledge of each other’s valuations and the foundations and justifications thereof.[8] As the Fourth Department stated in Novickis v State of New York,[9] “[s]imply expressed, the rule attempts to require full disclosure, to take the game aspect out of the case, to prevent surprises, to permit the court to determine just compensation based solely upon the facts unhindered by gamesmanship.” In Matter of White Plains Properties Corp v Tax Assessor of City of White Plains,[10] the Second Department affirmed the trial court’s preclusion of expert testimony when no report was exchanged.
The Appraisal Rule is based on Section 508 of the Eminent Domain Procedure Law, which is titled “Filing of Appraisals; Reports of Other Expert Witnesses.” The text of this rule makes clear that in addition to appraisals, it applies to “all other reports of expected witnesses, intended to be relied upon at trial, other than valuation experts.”
In reviewing a determination after a nonjury trial, the Appellate Division has stated the power of this Court is as broad as that of the trial court, and we may render a judgment we find warranted by the facts, bearing in mind that in a close case, the trial court had the advantage of seeing and hearing the witnesses.[11]
[1] Matter of City of New York (Kaiser Woodcraft Corp.), 11 NY3d 353, 359, 899 NE2d 933, 870 NYS2d 827 (2008); see US Const, 5th Amend; NY Const, art I § 7 [a])
[2] Matter of Queens W. Dev. Corp. (Nixbot Realty Assoc.), 139 AD3d 863, 865, 33 NYS3d 274 (2016), lv denied 28 NY3d 901, 40 NYS3d 349, 63 NE3d 69 (2016); see County of Suffolk v Firester, 37 NY2d 649, 652, 339 NE2d 154, 376 NYS2d 458 (1975)
[3] In re Board of Water Supply of City of N.Y., 277 NY 452, 457, 14 NE2d 789 (1938); see Matter of Metropolitan Transp. Auth. (Longridge Assoc., L.P.), 122 AD3d 856, 857 (2014)
[4] Matter of State of New York (KKS Props. LLC), 119 AD3d 1033 (3d Dept 2014); see Matter of City of New York (Reiss), 55 NY2d 885, 886 (1982).
[5] New York Rules of Court, Sec. 202.61 (2022)
[6] See Miriam Osborn Memorial Home Association v Assessor of City of Rye, 4 Misc3d 1009 (A) (2014); 791 NYS2d 871 (2004) (Westchester Sup Ct, 2004) where the late Justice Thomas A. Dickerson provides a remarkable history of the appraisal rules in New York.
[7] 247 AD2d 798 (3d Dept 1998)
[8] Parisi v State, 62 Misc2d 378, 382 (Ct Cls., 1970)
[9] 44 AD2d 508, 512 (4th Dept 1974)
[10] 58 AD2d 871 (2d Dept 1977), aff’d 44 NY2d 971 (1977)
[11] Ronmar Realty, Inc. v State of New York, 121 AD3d 1085, 1087 (2d Dept 2014)
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