399 Exterior Street Assoc. v. State of New York

Court:	Court of Claims
Claim No.:	135927
Plaintiff:	Eman Corp. (“Eman”)
Defendant:	State of New York

Facts: In 2013, defendant State of New York (“State”) took a permanent easement of frontage property owned by 399 Exterior Street Assoc. (“Claimant”). The easement amounted to 5,203 sq. ft. of Claimant’s property but did not encroach on the existing building. Subsequently, State took two additional easements on adjoining properties owned by Claimant. Originally, State offered $313,000 for the initial easement. After negotiation, there was a settlement between the parties whereby Claimant received $981,000. At that time, State contended that there were no indirect damages involved. Subsequently, in 2018, New York City acquired the entire three lots. Claimant’s appraiser valued the three lots at $40,300,000 and asserted that there was no loss in value for the properties caused by the existing easements. New York City claimed that the properties were worth $15,100,000, with a reduction in value to $12,285,000 caused by the existing easements. In 2020, Claimant discovered, as a result of litigation, that New York City had agreed that the taking of an easement reduced the value of property by 10%. As a result of obtaining this new information, Claimant initiated an action sounding in fraud, equitable fraud and recission. State made a motion to dismiss the action as untimely.

Holding: Court of Claims found that the action was untimely, as the precipitating events occurred in 2013; Claimant learned of the subsequent admissions by New York City in 2020, but did not file this action until 2021. Court of Claims did permit Claimant to file a late notice of claim for fraud and recission.

 

Submitted by: Philip Sanchez, Esq. (psanchez@herrick.com)

Precis: Davida S. Scher