Lerner v State of New York

[*1] Lerner v State of New York 2012 NY Slip Op 52502(U) Decided on December 20, 2012 Ct Cl Bruening, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 20, 2012
Ct Cl

Marc Lerner AND BARBARA LERNER, AS EXECUTRIX OF THE ESTATE OF GOLDIE LERNER, et al., Claimants,

against

The State of New York, Defendant.



Marc Lerner AND BARBARA LERNER, AS EXECUTRIX OF THE ESTATE OF GOLDIE LERNER, QUICKWAY METAL FABRICATORS, INC., AND LERNER REALTY COMPANY, et al., Claimants, -v-

against

The State of New York, Defendant. Claim No. 119725



Lerner Pavlick Realty Company, Claimant, -v-

against

The State of New York, Defendant. Claim No. 119726



121150



For Claimants:

YOUNG / SOMMER LLC

By:Joseph F. Castiglione, Esq.

For Defendant:

HON. ERIC T. SCHNEIDERMAN

Attorney General of the State of New York

By:Joseph F. Romani, Esq.

Assistant Attorney General

Glen T. Bruening, J.

Claimants commenced two appropriation actions in 2011 bearing Claim Nos. 119725 and 119726, relating to four parcels of real property located in the Town of Thompson and County of Sullivan, bearing tax map numbers 31.-1-16, 31.-1-19.1, 31.-1-20 and 31.-1-21. The real property was appropriated in furtherance of a highway construction and alteration project that included renovating New York State Route 17 to comply with Federal Highway Administration (FHWA) interstate standards. It is undisputed that this project was a federally reimbursable project, subject to audit and review by the FHWA. On April 11, 2012, Claimants commenced a third action, bearing Claim Number 121150, alleging trespass and seeking property damages sustained to the same parcels of real property that are the subject of the two appropriation actions.[FN1] Specifically, Claimants allege unauthorized use of the property and contend that the construction and alteration project included elevating the highway and shoulders of Route 17, which caused Claimants' properties to suffer from flooding and drainage problems (see Affirmation of Joseph F. Romani, Esq., Exhibit A).

As background, in conjunction with the appropriation of the properties, by correspondence dated November 6, 2007, Pomeroy Appraisal Associates, Inc. (Pomeroy) advised Marc Lerner of Lerner-Pavlick Realty Co. that it had been retained on behalf of the New York State Department of Transportation (DOT) to conduct appraisals of the parcels that were the subject of the project and that it would be inspecting and photographing the parcel of real property bearing tax map number 31.-1-21. It is undisputed that the appraisals prepared by Pomeroy were prepared for the purpose of negotiation and settlement of the appropriation matters.[FN2] [*2]

On or about June 20, 2012, in connection with the property damage Claim (Claim Number 121150), Claimants served Pomeroy with a subpoena ad testificandum and duces tecum pursuant to CPLR § 3101 (a) (4), 3106 (b) and 3120 (1), seeking the following information:

1.Any and all appraisals, valuations, reports or similar documents, or notes related to those materials/information, that the New York State Department of Transportation ("DOT") prepared or were prepared by you or at your direction, relating to the DOT's takings/acquisitions for Claimants' properties at issue in this matter, located on Murran Road, Town of Thompson, New York, identified on DOT Acquisition Maps with PIN number 9066.87, for Parcel Nos. 430 and 451 (Map No. 233) (copies attached hereto), and Parcel Nos. 432 and 433 (Map No. 235 (copies attached), having tax map numbers of 31.0-1-16, 31.0-1-19.1, 31.0-1-20, and 31.0-1-21.

2.Any and all appraisals, inspections, valuations, reports or similar documents, and related notes that Pomeroy Appraisal Associates, Inc., its agents and/or employees, prepared on behalf of the DOT, its agents or affiliates, regarding the subject matter contained in the attached letters (Exhibit A)and legal action.

3.Any photographs, movies or videotapes showing or exhibiting Claimants' properties identified above.

By Order to Show Cause filed August 17, 2012, Defendant sought to quash the subpoena served on Pomeroy contending, among other things, that "[t]he project appraisal sought by claimant[s] was prepared in contemplation of an offer of settlement of an eminent domain proceeding and thus enjoys conditional immunity from disclosure conferred on material prepared for litigation" (Affirmation of Joseph F. Romani, Esq., paragraph 11). Claimants oppose Defendant's application. Oral arguments were held on September 5, 2012.

CPLR § 3101 (a) provides for the "full disclosure of all matter material and necessary in the prosecution or defense of an action." Accordingly, disclosure is required "of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test is one of usefulness and reason" (Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 [1968]). However, "unlimited disclosure is not permitted, and [] the supervision of disclosure is generally left to the sound discretion of the trial court " (Silcox v City of New York, 233 AD2d 494, 494 [2d Dept 1996]). In this regard, the trial court can impose restrictions on any disclosure device "to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice" (CPLR § 3103 [a]). To withstand a challenge to disclosure, it is Claimants' burden, initially, to demonstrate that the material and information sought is " material and necessary' " (Kooper v Kooper, 74 AD3d 6, 10 [2d Dept 2010] [quoting CPLR § 3101 [a] [1]). With respect to non-party disclosure, which is what Claimants seek here, such disclosure "may be obtained only upon a showing of special circumstances, i.e., that the information sought to be discovered is material and necessary and cannot be discovered from [*3]other sources or otherwise is necessary to prepare for trial" (Matter of Troy Sand & Gravel Co., Inc. v Town of Nassau, 80 AD3d 199, 201 [3d Dept 2010] [internal quotation marks and citations omitted]). Claimants must also provide notice "stating the circumstances or reasons such disclosure is sought or required" (see CPLR § 3101 [a] [4]). It is Defendant's burden, as the party challenging disclosure, to establish that the information sought is privileged or immune from disclosure (see Marten v Eden Park Health Servs., 250 AD2d 44, 46-47 [3d Dept 1998]).

In support of its Order to Show Cause, Defendant argues that 1) the subpoena is procedurally defective in that it does not give the reason why disclosure is sought; 2) the "subject appraisal"[FN3] demanded was for the purpose of establishing a price for settlement or purchase of the property appropriated in Claim Nos. 119725 and 119726, and is inadmissible and conditionally immune from disclosure; and 3) Claimants failed to establish either substantial need for the information or that Claimants are unable to otherwise obtain the information sought. Defendant submits the Affidavit of Pat Bennison, the Director of the DOT Office of Right of Way, whose duties include, among other things, certifying costs of right-of-way acquisitions for highway projects reimbursable by the FHWA. Mr. Bennison attests that the FHWA did not request or review the project appraisals or A-4s [FN4] relating to this case and the DOT did not provide the FHWA with those documents.[FN5]

In opposition to Defendant's Order to Show Cause, Claimants counter that they have substantial need for the materials sought in that the condition of the real property "has been permanently and adversely altered by the NYSDOT's actions, and Claimants do not have the ability to fully document the conditions of the properties immediately before the NYSDOT actions, by either notes or photographs" (Affirmation of Joseph F. Castiglione, Esq., paragraph 2). Claimants argue that the documentation sought was sought for the purposes of showing the condition of the properties from the end of 2007 through early 2008 — immediately before the DOT acquired them — rather than "for [the] purposes of seeking expert valuation opinion evidence" (Affirmation of Joseph F. Castiglione, Esq., paragraph 20; see also paragraph 26). Claimants submit the affidavit of Barbara G. Lerner, the Executrix of the Estate of Goldie Lerner and corporate secretary with Quickway Metal Fabricators, Inc., who attests, among other things, that the DOT, in undertaking the alterations and renovations to Route 17, created a bowl-effect to Claimants' property, which caused flooding and drainage problems and transformed the [*4]property into a "rice paddy" (Affidavit of Barbara Lerner, paragraph 4).[FN6] Ms. Lerner contends that three photographs of the "rice paddy" parcel, taken in 1991, depict dry land, while the same parcel today consists of mud and pooling water. However, Ms. Lerner submits that Claimants lack the ability to fully document the conditions of the properties immediately prior to the DOT's actions and, therefore, Claimants have a substantial need for the materials subpoenaed. Ms. Lerner states that the affected properties and their related business entities have been family-owned since the early 1960s and that, while she and other family members have personal knowledge of the general condition of the properties, none has a "detailed documented account of the conditions of the properties, or the specific areas of the properties at issue in this matter, and never made any recording of or documented the conditions of the properties" (Affidavit of Barbara Lerner, paragraph 10). Claimants further argue that, in conjunction with the federally assisted construction and alteration project involving Route 17, the acquisition of Claimants' properties was subject to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (hereinafter the "Uniform Act") (see 42 USC § 4601 et seq.),[FN7] which requires that the real property sought to be acquired be appraised based on standards which are intended to be consistent with the Uniform Standards of Professional Appraisal Practice (see 42 USC § 4651 [2]; 49 CFR 24.102 [c], 24.103 [a]). With respect to the Route 17 project, Claimants argue that the Uniform Act also gives FHWA the right to monitor the DOT's activities, including appraisal activity (see 49 CFR 24.4 [b]). Claimants conclude that the subpoenaed materials are multipurpose in nature, that they are not prepared solely in anticipation of litigation and are, thus, not immune from disclosure.

Clearly, the appraisals conducted by Pomeroy in connection with the appropriation claims, together with related valuations, reports and notes are relevant to the pre-taking condition of the properties for purposes of the trespass action. However, as a general rule, in eminent domain proceedings, an underlying appraisal that is prepared in contemplation of settlement "enjoy[s] the conditional immunity from disclosure which is conferred on material prepared for litigation by CPLR 3101 (d)" (Schad v State of New York, 240 AD2d 483, 484 [2d Dept 1997]; see CMRC Corp. v State of New York, 270 AD2d 27, 27 [1st Dept 2000]; 815 Assoc. v State of New York, 251 AD2d 538, 538 [2d Dept 1998]). As an exception to that rule, if a defendant discloses an appraisal to a third party "in such a way that it can be said to have vouched for its authenticity, the [materials] are discoverable" (815 Assoc. v State of New York, 251 AD2d at 539, quoting Erie Lackawanna Ry. Co. v State of New York, 54 AD2d 1089, 1089 [4th Dept 1976]). Since it is uncontroverted that the appraisals conducted by Pomeroy were never sent or submitted to the FHWA and there is no evidence that those documents were disclosed to a third [*5]party, the appraisals sought by the subpoena did not lose their immunity from disclosure (see Schad v State of New York, 240 AD2d at 484). The fact that the FHWA had the right to view the appraisals, in and of itself, does not render those documents discoverable.

The remaining materials and information sought, including testimony, valuations, reports, notes and photographs related to the Pomeroy appraisals, while also seemingly relevant to the pre-taking condition of the properties, have not been shown to be unavailable from other sources or otherwise necessary to prepare for trial. Claimants contend that the materials are sought for the purposes of showing the condition of the properties from the end of 2007 through early 2008. However, Ms. Lerner expressly states that she walked the properties with a representative from Pomeroy at the "end of 2007, early 2008" (Lerner Affidavit, paragraph 9), and that she and other members of her family have personal knowledge of the pre-taking condition the properties.[FN8] Moreover, she acknowledges that she has a

"general recollection of the historic conditions of the properties, including the general condition of various areas of the properties at issue in this matter immediately before the State acquired the lands as part of its eminent domain takings, and before the State's actions that have significantly damaged and altered the properties, including the drainage"

(Lerner Affidavit, paragraph 10). Furthermore, Claimants attach to the opposition to Defendant's application to quash, three photographs of the "rice paddy" parcel, bearing tax map number

31.0-1-21, taken prior to the DOT project (Lerner Affidavit, paragraph 10-11, Exhibit B).

By this evidence, Claimants possess a long history of information, accessible from several individuals, regarding the condition of the properties from as early as the 1960s up

through the present time. Accordingly, the Court finds that Claimants have failed to establish that evidence regarding the pre-taking condition of the properties could not be discovered from other sources or otherwise is necessary to prepare for trial. Thus, Claimants have failed to show the requisite "special circumstances" required for non-party discovery (Matter of Troy Sand & Gravel Co., Inc. v Town of Nassau, 80 AD3d at 201). While the evidence Claimants possess may not be in their desired medium, it is nonetheless available. In any event, there being no evidence that discovery was commenced prior to service of the subpoena, the subpoena should be quashed (see e.g. Soho Generation of NY v Tri-City Ins. Brokers, 236 AD2d 276, 277 [1st Dept 1997]).[FN9] [*6]

Accordingly, Defendant's application (M-82036) to quash the subpoena is granted.

Albany, New York

December 20, 2012

GLEN T. BRUENING

Judge of the Court of Claims

The following papers were read and considered by the Court:

Order to Show Cause, filed August 17, 2012;

Affirmation of Joseph F. Romani, Esq., dated August 1, 2012, with Exhibits A-G;

Letter Memorandum, dated August 2, 2012;

Affirmation of Joseph F. Castiglione, Esq., dated August 21, 2012, with Exhibits A-M;

Affidavit of Barbara G. Lerner, sworn to on August 21, 2012, with Exhibits A and B;

Claimants' Memorandum of Law, dated August 21, 2012;

Stipulation and Order, filed November 29, 2012. Footnotes

Footnote 1: By Stipulation and Order filed November 29, 2012, the three actions were joined for trial.

Footnote 2: New York's Eminent Domain Procedure Law requires that the "[r]eal property to be acquired by the exercise of the power of eminent domain shall be appraised on behalf of the condemnor by an appraiser" (EDPL 302; see also EDPL 303, 304).

Footnote 3: At the oral argument on this matter, Defendant's counsel clarified that Defendant objects to all materials sought by the subpoena, including the photographs, appraisals and background notes, while Claimants' counsel argued that Defendant's application was limited to the appraisal itself.

Footnote 4: Mr. Bennison states that the A-4 is a "form produced by the real estate division wherein we summarize and review the project appraisals and set forth our recommendations."

Footnote 5: At oral argument, Defendant also asserted that the subpoena was improper as it was being used for purpose of discovery and to ascertain the existence of evidence.

Footnote 6: Claimants also submit the report of Illing Engineering Services (IES), which conducted an evaluation of lots 31.-1-16 and 31.-1-21, to support Ms. Lerner's claims that the condition of the properties has been significantly altered based on DOT's actions, resulting in drainage and flooding problems (see Affirmation of Joseph F. Castiglione, Esq., paragraph 26; Exhibit M).

Footnote 7: The Uniform Act establishes a policy for reimbursement of relocation costs incurred as a direct result of the condemnation of private property for federally financed programs or projects (see 42 USC §§ 4621 [b], 4631; see also 49 CFR 24.1).

Footnote 8: Ms. Lerner identifies herself, her brother (Steven Lerner), Quickway Metal's plant manager (William Fersch) and her father (Marc Lerner) as individuals who have personal knowledge of the general condition of the properties (see Lerner Affidavit, paragraph 10).

Footnote 9: In light of the remedies available to Defendant, including a motion for a protective order pursuant to CPLR § 3103 and a motion to quash pursuant to CPLR § 2304, the Court is not persuaded that Defendant lacks standing to challenge the production of photographs and written material held by Pomeroy, as argued in Claimant's Memorandum of Law (see e.g. Connors, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3101:23, 2012 Pocket Part, at 50). The Court also concludes that Defendant's assertions that the subpoena was defective based on its failure to set forth the reasons why such disclosure is sought has been cured by Claimants' response to Defendant's Order to Show Cause (see Hauzinger v Hauzinger, 43 AD3d 1289, 1290 [4th Dept 2007], affd 10 NY3d 923 [2008]; Velez v Hunts Point Multi—Serv. Ctr., Inc., 29 AD3d 104, 111 [1st Dept 2006]).