Scott E. Mollen

Condemnation—Claimant's Motion for Undertaking Granted—CPLR 5519(a)(6) Applies to Eminent Domain Proceedings—Decision Rejected Reasoning of Manhattan Decision—Appellate Division, Second Department Has Reduced Backlog and Delays

 A claimant in a condemnation proceeding moved for an order setting an undertaking pursuant to CPLR 5519(a)(6). The court granted the motion.

The claimant is a school bus operator. It was a tenant at the subject property at the time of vesting. The claimant continued to occupy the property to operate its bus business and to park and service its buses. After permitting the claimant to continue occupancy for approximately 15 years after vesting, the city moved for a “writ of assistance to remove the (claimant) from possession of the property, pursuant to Eminent Domain Property Law (EDPL) §405.”

The subject court granted the writ of assistance, and awarded the city possession of the property on Oct. 17, 2018, but stayed removal of its tenant until Jan. 1, 2019. The claimant filed a notice of appeal from such order and now asked the court to set an undertaking pursuant to CPLR 5519(a)(6). That statute “provides for a stay of enforcement, pending appeal, of an order to remove a party from possession of real property when the party files a notice of appeal and give an undertaking in an amount set by the court.”

The city argued that the undertaking should not be set because CPLR 5519(a)(6) “is not applicable to eminent domain proceedings.” The city cited In re New York State Urban Dev Corp., 166 Misc. 2d 909 (Sup. Ct. NY County 1995) (UDC). UDC held that CPLR 5519(a)(6) was inapplicable to a writ of assistance granted pursuant to EDPL. The subject court explained that the UDC court “is a court of concurrent jurisdiction” and therefore its “holding is not binding on this court and this court does not find it persuasive.”

UDC “based its holding that CPLR 5519(a)(6) does not apply to eminent domain proceedings on 'three rationales.'” First, that the EDPL is the exclusive procedure by which property shall be acquired by eminent domain. Second, “that an order vesting title in the condemnor terminates all possessory rights of owners and tenants and that the sole remedy to contest a condemnor's application to vest is by a proceeding commenced directly in the Appellate Division pursuant to EDPL § 207. Third, that the provision in CPLR 5519(a)(6) that the appellant give an undertaking cannot adequately protect the interests of a condemnor that takes property for a public use.” The court found that the foregoing three rationales cannot “withstand scrutiny.”

The court explained that although the EDPL is “the exclusive procedure to acquire property by eminent domain, it contains no provisions governing appeals from orders and judgments issued in eminent domain cases.” Therefore “appeals in eminent domain cases are governed by the CPLR.” The court also cited the text of CPLR 5519(a)(6) which contains “no exceptions for eminent domain cases.” The court further noted that although most of the cases wherein a “stay without court order pursuant to CPLR 5519(a)(6) is invoked are landlord tenant disputes, there is no indication either in the statute or the legislative history that the legislature sought to exclude the availability of a stay without court order from eminent domain cases.”

The court also observed that the Legislature had apparently not considered “whether it was appropriate to provide a stay without court order for appeals in eminent domain cases” and it is not the “role of the court to read into the statute an exception that was not contemplated by the Legislature.”

As to the second UDC rationale, although the vesting order vests “title in the condemnor and terminates any existing right of possession by tenants, it does not grant possession to the condemnor.” “Once title is vested, a condemnor is entitled to seek possession provided that it has made an advance payment available to the tenant. Where a tenant refuses to leave, a condemnor must seek possession either through a motion pursuant to EDPL §405 in the underlying eminent domain proceeding, or by commencing a separate proceeding for possession.”

As to UDC's third rationale, the court stated “the fact that the undertaking pursuant to CPLR 5519(a)(6) does not protect a condemnor's interest in obtaining timely possession of a condemned property to put it to public use, does not relieve the court of its obligation to set an undertaking.”

A CPLR 5519(a)(6) undertaking is “limited on its face, to protecting an owner of property from any waste that may be committed by the tenant and to ensuring that they can recover use and occupancy.” The court noted that the Legislature's omission of “protections for the particular interests that public entities or the public may have in gaining possession of property condemned for public use, is a matter for the Legislature, and not the court to address.” The court further stated that “[m]ore disconcerting however, is that the appeal appears to be without merit and undertaken merely to secure the delay provided by the stay.”

Here, the city permitted the claimant to remain in possession many years after vesting in return for monthly payments of use and occupancy, the city applied for a writ of assistance pursuant to EDPL § 405 and a court granted the writ. The city had made the advance payment to the tenant and thus was entitled to possession. The claimant admitted that the city was entitled to possession, but contended since the city was not ready to build on the facility and claimant had been unable to find a new location, “equity required that it be allowed to continue in possession.”

The court explained that it is “not necessary for a condemnor to show that it has an immediate need for the condemned property in order to obtain a writ of assistance pursuant to EDPL §405. Once title has vested, the only condition for granting the writ is that the condemnor has made the advance payment to the condemnee.”

The court noted that although there was “no apparent meritorious basis” for the claimant's appeal, such “showing of merit was not required by CPLR 5519(a)(6).”

The city had requested an undertaking of $16 million. The court found such request to be “excessive as it goes beyond what is needed to protect against waste and to ensure payment of use and occupancy.” The court stated that the “possible consequential damages on which the city bases its figure, such as the costs in renting alternative locations to park its sanitation trucks, and increased costs in constructing the new facility in event the current low bidder must be released from their bid because of the delay, are not losses that the undertaking pursuant to CPLR 5519(a)(6) is designed to protect against.”

Here, the monthly use and occupancy had been set by stipulation of the parties in 2011. The stipulation provided that the claimant would pay use and occupancy of “$20,600 from the date of title vesting until it vacated the premises or gave possession to the City. Although the agreement provided that the city would not seek possession before January 1, 2015,” it did not provide “for adjusting the use and occupancy” if the “claimant continued in possession after that date.”

The undertaking had to cover “the use and occupancy for the length of time the appeal is expected to take.” The court then stated that given the “extremely heavy caseload of the Appellate Division Second Department, it is reasonable to set the amount of the undertaking to guarantee 2½ years of use and occupancy, which would total $618,000.” The court stated that an additional amount is necessary “to protect the city against potential waste of the property during the pendency of the appeal.”

Although there had been no allegations that the claimant had committed waste or was about to commit waste, the court recognized “a potential for environmental contamination from oil and gasoline discharges or spills.” The court concluded that “precise calculation of the amount necessary to protect against potential waste is not practicable….” The court held “an undertaking in the amount of $400,000 reasonable” to protect against such “potential waste during the expected pendency of the appeal” and ordered “a total undertaking in the amount of $1,018,000.”

Comment: Commercial tenants, like the claimant, often argue that their type of business is difficult to relocate. The difficulty may arise from land use restrictions, special equipment or other business reasons which limit the availability of alternate sites.

Condemnors often emphasize that the tenant knew that the property is needed for a public project and that they had substantial notice and should not count on remaining on the property for a long period of time, even if they were in fact permitted to remain in possession for a long time. Public projects often take a long time to complete. This is especially so given the need to assemble multiple lots, to arrange funding, publicly bid contracts, etc.

In considering the amount of the bond, the court cited lengthy delays with respect to appeals before the Appellate Division (Second Department). That was understandable given the length of the appellate process. The appellate delays were partly attributable to the enormous volume of cases in the Second Department. The Second Department covers 10 counties and approximately half of the state's population. Moreover, the number of appellate filings has significantly increased during the last four years.

Additionally, the court operated with less than a “full bench,” since there had been delays in filling several judicial vacancies on the court. The good news is that the appellate justices and staff have materially decreased the backlog. The court established special calendars, effectively utilized a mediation program, for a period of time it had increased the number of cases heard on a daily basis and it has taken other initiatives to reduce delays.

Matter of Sanitation Garage v. Brooklyn District 3 & 3A, Supreme Court, Kings Co., Case No. 37905/03, decided Jan. 11, 2019, Saitta, J. 

Prescriptive Easements—Dimensions of Easement Should Be Reasonably Definite and Limited to Actual Use—Slight Deviations to an Accustomed Route Will Not Defeat an Easement—Few New York Cases Addressed the Issue

A prior court decision held that the plaintiff had an easement by prescription (easement) “over a patch of vacant paved land owned by defendant…that is adjacent to (plaintiff's) property. The land has been used for decades by trucks delivering and receiving goods to and from the loading bays of (plaintiff's) building.” The defendant now sought to secure the subject area with a fence in connection with its proposed development of the property. Therefore, the defendant wanted the “precise dimensions of the easement” to be determined.

The court heard testimony from the plaintiff's architect and manager of operations. No testimony was provided by the defendant.

The court noted that “for decades trucks seeking to access (plaintiff's) loading bays have traversed an identified portion of (defendant's) property to do so.” The defendant argued that no easement by prescription could be declared since the plaintiff could not “identify a sole path utilized by the trucks over its property.” The defendant cited different diagrams provided by the plaintiff's architect.

The court found that the defendant had ignored “clear and convincing evidence that trucks had utilized a substantially identical path over (defendant's) unmarked pavement for an identical purpose: to back into and out of (plaintiff's) loading bays.” The court was not “surprise[d] that different truck drivers of varying skills attempting to back 75‑foot rig into a narrow loading bay over unmarked pavement would not follow a single, specific line of travel.”

The court explained that the “inconsequential variations of the drivers' paths, as reflected in the (plaintiff's architect's drawings), did not alter the conclusion that the adverse use of (defendant's) property was identifiable, so that (defendant) was placed on fair notice of (plaintiff's) hostile use.”

The court further stated that to “satisfy the open and notorious element of a prescriptive easement claim, a party's use of another's land should be substantial and reasonably definite.” Further, “[e]quity also dictates that the acquisition of a right to utilize another's land be limited at least to the actual past use made of such land.”

The court also noted that there were few New York cases that addressed the “scope of a prescriptive easement and none similar to the facts before the court.” However, courts in other jurisdictions had addressed the issue. A California court decision “held that slight deviations from an accustomed route will not defeat an easement.” A Vermont court held that the extent of the use “must be proved not with absolute precision, but only as to the general outlines consistent with the pattern of use throughout the prescriptive period.”

The subject court explained that “[i]rrespective of whether New York were to adopt the 'pattern of use,' 'substantial identity,' or 'definite line of travel' test, (plaintiff) has set forth sufficient evidence to establish its right to the claimed easement. It produced an eyewitness attesting to the consistent pattern of travel utilized by the delivery trucks with only slight deviations and evidence delineating this pattern was introduced.”

The court acknowledged that the plaintiff had not “helped its cause” by providing diagrams with “varying descriptions of its claimed easement.” However, the court found that the discrepancies, although significant to the defendant “because every foot of property burdened could affect its desire to proceed with submitted and approved development plans—are not substantial given the overall size of the vacant lot in question.”

Moreover, some of the discrepancies emanated from plaintiff's architect's “inclusion in certain diagrams of additional space to provide a cushion for less-skilled drivers and for convenience.” The court declined to include such additional space as part of the prescriptive easement.

The court emphasized that the “touchstone remains that the easement be limited to actual use.” Moreover, “given the varying paths used by the trucks, equity dictates in these circumstances that the right of way be limited to the area necessary for the purpose of the easement.” The court concluded that an easement depicted on a certain exhibit was the “least intrusive use of (defendant's) land and, therefore, are the appropriate dimensions of the easement.”

Bedik Corp. v. Herrick Rd. Holdings, Supreme Court, Nassau Co., Case No. 004517/2016, decided Dec. 14, 2018, Steinman, J.  

Commercial Landlord-Tenant—Alleged Mutual Mistake as to Whether Lease Omitted Use of Basement—Issues Included Whether New Owner Was a Bona Fide and Innocent Purchaser for Value

A landlord appealed from a final judgment of a trial court, which dismissed a petition in a hold-over proceeding. The Appellate Term (court) reversed, reinstated the petition and remanded the matter for further proceedings.

The trial court determined that the commercial tenant respondents (tenant) had “proved, by clear and convincing evidence,” that the present lease agreement between the former landlord and two of the respondents “did not accurately express the parties' intentions and that, as a result of mutual mistake, the agreement failed to include the 'basement' space in the description of the demise commercial premises….”

The “unequivocal testimony of the corporate respondent's principal and the principals of the prior owner—who drafted and executed the lease without the benefit of legal counsel—showed that for more than 20 years the basement had 'always' been included in the leases, but that, due to an 'oversight,' the term 'basement' was mistakenly omitted from the most recent lease.”

The court explained that based on the parties' “course of performance, which is 'the most persuasive evidence of the agreed intention of the parties'…,” it was evident that “the lease agreement contained a mutual mistake.”

However, the court held that the trial court had “prematurely dismissed” the hold-over petition seeking to recover the basement which had been brought by the new owner of the building, “since an issue was raise as to whether the petitioner was a bona fide and innocent purchaser for value, i.e., whether the petitioner had prior knowledge of the mistake or was charged with such knowledge.…” That issue had been “raised by petitioner in its papers in opposition to respondents' cross motion for summary judgment, and at a hearing itself, where petitioner unsuccessfully sought to induce testimony on this issue.”

58 Elizabeth NY LCC v. Ho Wou Bake Shoppe, Appellate Term, 1st Dept., Case No. 570070/18, Shulman, P.J., Cooper, Edmead, JJ.

Scott E. Mollen is a partner at Herrick, Feinstein.