Matter of Metropolitan Transp. Auth.
Annotate this CaseDecided on October 31, 2006
Supreme Court, New York County
In the Matter of the Application of the Metropolitan Transportation Authority, relative to acquiring title in fee simple to certain real property required for Station Improvements at Penn Station (Parcels 6A and 7A) consisting of subsurface portions of a parcel of real property known as Block 783, part of Lot 34, as said property is shown on the current Tax Map of the Borough of Manhattan, City and State of New York.
47062/90
Martin Schoenfeld, J.
Michael J. Greco, a well-known condemnation attorney, seeks an order awarding his client Bank ("claimant") $415, 671 as an additional amount to be paid pursuant to section 701 of the Eminent Domain Procedure Law ("EDPL") regarding the taking by the Metropolitan Transportation Authority ("MTA") of claimant's property as part of the Penn Station Improvement Project.
Simply stated, Mr. Greco contends that this was a time consuming complex matter, complicated by MTA's failure to initially pay requisite advances and by its substantially undervaluating the subject property, ultimately requiring a trial and court determination. In support of this request, claimant submits inter alia the court's decision on valuation, the appraiser's invoice, and several retainer agreements including a 25% contingency legal fee arrangement with Mr. Greco's firm for amounts awarded in excess of MTA's offer. Claimant also seeks costs for a written tax report, and miscellaneous expenses, which are not documented.
MTA, in opposition asserts that claimant's application for allowances should be denied or substantially reduced. MTA states that the complexities of the encumbrances on the parcels to be acquired required both proof of title and a determination of how the advances were to be apportioned before making payment. Also, that claimant's legal fee calculations are based upon an erroneous reading of its retainer agreement and that, in any event, such contingency fee arrangements are not determinative of what a reasonable counsel fee should be. Further, that much of the trial court's decision is spent on rejecting the valuation analysis of claimant's appraiser.
The purpose of EDPL §701, which permits the discretionary awarding of additional sums, is to promote fairness to a private property owner forced to litigate the value of its property. General Crushed Stone Company v. State of New York, 93 NY2d 23, 25 (1999). The statute requires two determinations: first, whether the award is substantially in excess of the amount of condemnor's proof; and second, whether the court deems the additional award necessary for the condemnee to achieve just and adequate compensation. Hakes v. State of New York, 81 NY2d 392, 397 (1993). As part of the additional allowance, where a counsel fee is to be given, a contingency fee of 25% [*2]may be considered reasonable. In Re New York Convention Center Development Corp., 234 AD2d 167 (1st Dept 1996).
While the trial court's ultimate award of $1,880,282 was much less than claimant's appraisal value, it was however, $877, 282 above MTA's revised pre-vesting offer of $1,003,000 and $623, 282 more than MTA's trial appraisal of $1, 257, 000. Thus, the award substantially exceeded the amount of MTA's proof. Further, although the taking was on May 21, 1991, the first advance payment of $400, 000 was not made available until March 8, 1995. While arguably the delay was partly caused by the parties having to resolve complex proprietary issues, nevertheless MTA, by exercising its eminent domain power, triggered the need to make such determinations. As a result, claimant was deprived for nearly four years from receiving any compensatory value for the taking of its property. In all respects, this case warrants an additional allowance because it clearly required counsel's effort, as well as the expenditure of time and money for claimant to achieve just and adequate compensation.
As part of the request for an additional allowance, claimant initially seeks legal fees of $370, 070. This is based upon the trial court's award ($1, 880, 282) less the first advance payment ($400, 000) leaving the sum of $1, 480, 282. Claimant then applies the retainer contingency fee of 25% to the $1, 480, 282 which amounts to $370, 070. In opposition, MTA suggests that if the contingency fee method is to be considered at all, the trial court's award must first be reduced by the "aggregate principal advance payments", and not just by the first advance payment. Further, according to MTA, when the trial courts's award is reduced for certain offsets and interest payments, "Greco's fees should be no more than $156,193.06 to $181, 118.27."
Having considered all the circumstances, including the attorney's expertise, the time needed and the result; and after reviewing the terms of the retainer agreement, this Court finds that a 25% contingency fee is reasonable. Further, that it should be applied to the difference between MTA's revised initial offer ($1,003,000) and the total amount awarded at trial ($1,880,282), which is the same basis used in determining whether an EDPL §701 award is warranted. See, First Bank & Trust Co. of Corning v. State of New York , 184 AD2d 1034 (4th Dept 1992); See, In Re N.Y.C. Transit Authority [Superior Reed & Rattan Furniture Co.]; 160 AD2d 705, 709-710 (2nd Dept 1990). Claimant is therefore awarded as an additional allowance for reasonable attorney fees the sum of $219,320.
In opposing claimant's request for appraisal fees of $22,500, MTA notes that the trial court's award was significantly closer to its appraisal than to claimant's appraisal claims, "the bulk of which were rejected." However, this does not change the fact that a trial was necessary herein to obtain just compensation, where the issues were complex, and the property had been substantially undervalued by condemnor. Under these circumstances, it is not unreasonable to award to claimant one-half of its appraisal fees, which amounts to $11,250.
Claimant, referring to other agreements, requests an additional allowance totaling $17,801 for legal fees related to obtaining a reduction of use and occupancy, and the resolution of a rent claim; and for the preparation of a gains tax report. While these ancillary matters are associated with the taking, they are not essentially a part of the value determination. In any event, the legal fee award of $219,320 reasonably covers this, any offsets, and all other work and transactions related to the condemnation proceeding. Claimant's further request for miscellaneous expenses of $5,300 is denied as not sufficiently documented.
For the above stated reasons, the motion for an order awarding claimant an additional [*3]allowance in accordance with EDPL §701 is granted. MTA is directed to pay $219,320 for attorney's fees and $11,250 for appraisal fees, the total sum of which is $230,570.
This opinion constitutes the decision and order of the Court.
DATED:October 31, 2006________________________
J.S.C.
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