Damages in a Partial Taking
By Joshua H. Rikon
The measure of damages in a partial taking case is the difference between the fair market value of the property before the taking and the fair market value of the remainder after the taking.[1] Property owners are always entitled to direct damages when there is a partial taking of property.[2] They may also be entitled to remainder damages if those damages can be established.[3] Remainder damages can be either severance or consequential damages, although both terms are often used interchangeably. Technically speaking, however, severance damages are the damages that are sustained by the remainder as a result of the loss of the property taken while consequential damages are the damages that are sustained by the remainder resulting from the condemnor's use of the property acquired.[4] As one court explained:
Consequential damages, also known as severance damages, reflect the fact that in addition to the loss of value of the property actually taken, the condemnee's remaining property may suffer a diminution in value as a result of the loss of the condemned parcels.[5]
In Dennison v State,[6] Justice Fuld (concurring) similarly noted that consequential damages are warranted for "items that would be taken into account by an owner and a prospective purchaser in fixing the property's market value." In that case, the Court of Appeals affirmed lower court decisions which awarded consequential damages for loss of privacy and seclusion, the loss of view, traffic noise, and lights and odors. Consequential damages have also been awarded in cases where there was a loss of enhancement due to the location and esthetic qualities of a claimant's property; where access to the remaining property was found to be unsuitable; where there was a loss of access from the street to the garage on the remaining property; where the remaining property was irregularly shaped as a result of the taking; where the remaining property lost a setback; and where the remaining property lost a buffer zone.[7] Severance damages are also warranted when a partial taking renders remaining property a nonconforming use.[8]
Remainder damages are typically measured by the difference between the before and after values less the value of the land and improvements appropriated.[9] In another formula, the difference between the before and after market value of the remainder area is added to the market value of the land taken.[10] According to Powell on Real Property, the latter formula is sometimes difficult to apply because it may be difficult to assign a pretaking market value to the remainder area since that parcel was part of a larger piece of land before the taking.[11] In some instances, remainder damages are based on a percentage of the market value of the property before the taking.[12] Remainder damages can be based on the opinion of an experienced, knowledgeable expert, or they can be based on market data showing a reduction in value to the remainder as a result of the taking.[13]
In City of Yonkers v State,[14] the Court of Appeals held that consequential damages for loss of enhancement attributable to location and esthetic qualities could be established by the testimony of a real estate expert who converted the injury into an "economic dollar impact, expressed as a percentage diminution of total value." The expert in that case was acquainted with the property at issue and was also qualified by experience to express an opinion as to factors affecting the market value of real estate.
As always, the measure of damages must reflect the fair market value of the property at issue in its highest and best use as of the date of the taking, regardless of whether the property is being put to such use at the time.[15]
[1] Diocese of Buffalo v State, 24 NY2d 320, 323 (1969)
[2] See Chiesa v State, 43 AD2d 359 (3d Dept 1974), affd 36 NY2d 21 (1974) (holding that an award for direct damages cannot be offset)
[3] Klein v State, 187 AD2d 706 (2d Dept 1992)
[4] Condemnation Law and Procedures in New York at 196, Santemma, Jon, ed., New York State Bar Association (2005)
[5] Matter of City of New York (Sewer Easements Between Darlington Ave), 2008 NY Slip Op 52261(U), 21 Misc3d 1128(A) (Sup Ct, 2008) (citing Murphy v State, 14 AD3d 127, 132 (2004)
[6] 22 NY2d 409, 414 (1968)
[7] Matter of City of New York (Sewer Easements Between Darlington Ave), Id. (citing City of Yonkers v State, 40 NY2d 408, 413 (1976); Schreiber v State, 56 NY2d 760, 762 (1982); Priestly v State, 23 NY2d 152, 155 (1968); Meyers v State, 215 AD2d 357, 357-58 (1995); Niagara Mohawk Power v Olin, 138 AD2d 940, 941 (1988); Monser v State, 96 AD2d 702 (1983); Cummings v State, 62 AD2d 1084 (1978), lv denied 44 NY2d 648 (1978), appeal dismissed 44 NY2d 948 (1978)).
[8] Star Enterprise v State, Ct Cl, January 15, 1997, Silverman, J., Claim No. 85217; Matter of City of New York (Sewer Easements Between Darlington Ave), 25 Misc 3d 1240(A) (Sup Ct 2009)
[9] Chem. Corp. v Town of East Hampton, 298 AD2d 419, 420 (2d Dept 2002)
[10] Matter of City of New York (Sewer Easements Between Darlington Ave), 25 Misc 3d 1240(A)(citing13-79F Powell on Real Property § 79F.04)
[11] Id.
[12] Id. (citing City of Yonkers v State, 40 NY2d 408, 411 (1976); Estate of Haynes, 278 AD2d 823, 824 (4th Dept 2000)
[13] Matter of City of New York (Sewer Easements Between Darlington Ave), 2008 NY Slip Op 52261(U), 21 Misc3d 1128(A) (Sup Ct, 2008) (citing Chem. Corp. v Town of East Hampton, 298 AD2d at 422; Zappavigna v State 186 AD2d 557, 560 (1992)
[14] 40 NY2d at 413
[15] Chem. Corp. v Town of East Hampton, 298 AD2d at 420