Matter of City of New York

[*1] Matter of City of New York 2006 NY Slip Op 50674(U) [11 Misc 3d 1083(A)] Decided on March 1, 2006 Supreme Court, New York County Schoenfeld, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 1, 2006
Supreme Court, New York County

In the Matter of the Application of the City of New York, relative to acquiring title in fee simple to certain real property where not heretofore acquired for the same purpose required for, MILBANK-FRAWLEY CIRCLE EAST URBAN RENEWAL PROJECT, PHASE 1 located in the area generally bound by East 119th Street on the north, Park Avenue on the east, East 117th Street on the south and Madison Avenue on the west in the Borough of Manhattan, City and State of New York.



402676/01

Martin Schoenfeld, J.

In this condemnation proceeding, Claimant IM Gas Inc. ("Claimant") moves pursuant to New York Rules of Court (22 NYCRR §202.61(e)) to preclude Condemnor, the City of New York ("City") from presenting any evidence on value at trial. The City opposes Claimant's application, and cross-moves pursuant to CPLR 2004 and 22 NYCRR §202.61(a)(1), upon good cause shown, for an extension of time within which to serve its appraisal report. For the reasons stated below, the motion is denied and the cross-motion is granted.

BACKGROUND AND CONTENTIONS

Through the power of eminent domain, the City took title to certain Manhattan properties including Claimant's property located at 1823 Madison Avenue, identified as block 1745, lot 53. Claimant seeks remuneration for the acquisition of its property including fixtures and improvements. Claimant alleges that it timely filed its notice of claim and appraisal report, and

served a copy upon the City. Also, that when the City failed to file its own report, Claimant sent a letter to the Court, and faxed a copy to the City, noting the City's default.

Claimant contends that the City should be precluded from offering at trial any testimony on value because it failed to file an appraisal report within nine months after service of the claim pursuant to 22 NYCRR §202.61(a)(1). It also asserts that the City has not shown good cause for its continued failure to file such report even after a default notice was sent. Again, citing to 22 NYCRR §202.61(a)(1), which further states that a note of issue may not be filed until appraisal reports have been filed, Claimant avers that it has been prejudiced because the trial will be delayed as a result of the City's inaction.

According to the City's attorney, Robert Paparella, it is "well-established practice" within New York City that parties to a condemnation proceeding typically do not submit appraisal reports until after a request for an exchange has been made, and not as was done here, by [*2]Claimant's unilaterally sending a copy of its report to the City. Also, that at the time Claimant's report was sent, Mr. Paparella and most employees of the City's Law Department "were in temporary quarters scattered throughout the City as a result of the events of September 11, 2001." Further, that Mr. Paparella was unaware of any default notification having been faxed to the City, and that there is no copy of such fax in the City's file. In any event, he states that the City is "ready, willing and able" to serve its appraisal report, a copy of which is annexed to the cross-moving papers as Exhibit A.

DISCUSSION

As noted above, it is Claimant's contention that pursuant to 22 NYCRR §§202.61(a)(1) and (e), the City, having failed to file its appraisal report within nine months after service of the claim, should be precluded from offering appraisal testimony at trial. In support of that position, Claimant cites to El Sawah v. Empire State Pipeline, 219 AD2d 839 (4th Dept. 1995), and to In Re City of Albany (Brown Equipment Co.), 199 AD2d 746 (3d Dept. 1993). However, both cases are distinguishable from the present one.

First, both cases involve properties outside the City of New York. As noted by Mr. Paparella, within the City of New York, there has developed a different custom and practice regarding the filing and exchange of appraisal reports. Second, in both cases, the Appellate Courts essentially held that, where good cause was not shown, it was not an abuse of discretion to preclude appraisal testimony on value. Conversely, it would follow that it is not an abuse of discretion to allow such evidence where good cause may have been shown.

In the case of In Re Town of Guilderland (Pietrosanto), 244 AD2d 604 (3d Dept. 1997), despite the excuses offered being "far from compelling," permission to file a late appraisal report was held not to be an abuse of discretion. The Court stated at page 605 as follows:

While...dilatory conduct is not to be condoned, we are not disposed to say

that Supreme Court abused its discretion by granting the requested relief.

In exercising its discretion to determine whether a party has shown good cause' for relieving a default in filing...the trial court must consider all of the relevant

circumstances, not merely the excuse of reason proffered for the delay. Though it has been held otherwise with respect to the filing of an amended or supplemental report...when the belated filing involves an initial report, the obvious and severe

hardship that accrues to the offering party as a result of rejection of that report -

namely, preclusion of the introduction of any appraisal testimony on value'...

has been deemed sufficient basis for granting the relief sought... .

As noted in Gustafson v State of New York, 56 AD2d 695, 696 (3d Dept. 1977): Although the record does not disclose any valid reason for respondent's

failure to file its original appraisal report, excluding it would result in an

obvious hardship. While we do not approve of respondent's disregard of

rule(s), we do not find an abuse of discretion by the Court...in forgiving

its requirements in the absence of prejudice to the Claimant or of undue

advantage to one party by the action or inaction of the other... . [*3]

Interestingly, Claimant herein need not be concerned about trial delay because there is another quirk to the condemnation practice in New York County. When the City acquires several properties in a related project, it generally obtains a single Supreme Court index number. As a result, once a note of issue is filed regarding any of the related properties, the same note of issue is used for the other properties. In the present case, a note of issue was filed approximately eight months ago in a related matter. Thus, Claimant is not substantially prejudiced because its counsel only has to contact the Clerk of the Court, IAS Part 25, request a pre-trial conference, and if the matter remains unresolved, ask for a trial date, without filing another note of issue.

In this case, clearly, the City is far from blameless for having not submitted an appraisal report until Claimant made the instant motion. Nevertheless, taking all the circumstances into consideration including the displacement of the City's Law Department in the aftermath of September 11th, the City's representation, basically undisputed, of an established local practice for the exchange of appraisal reports, and the balancing of respective prejudice or lack thereof, the City should be allowed to file, and use at trial, its appraisal report.

CONCLUSION

For the above-stated reasons, Claimant's motion to preclude the City from presenting any evidence on value at trial is, in all respects, denied. The City's cross-motion for an extension of time within which to serve its appraisal report is granted; and the City's appraisal report, a copy of which is annexed to the cross-moving papers as Exhibit A, is deemed served. The City must also file forthwith another copy of its appraisal report with the Clerk of the Court.

This opinion constitutes the decision and order of the Court.

Dated:March 1, 2006

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J.S.C.