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Thursday 26th of July 2012

COURT ADDRESSES “INVERSE CONDEMNATION”
Term Describes How Landowner Gets Just Compensation When No Proceedings Have Been Brought

When a taking for a public use is involved, either by government proper or by a nongovernmental agency that has been given the condemnation power, formal proceedings are usually brought to resolve the issues, including, of course, the issue of just compensation.  But what is “inverse condemnation”?   Quoting from the 1980 U.S. Supreme Court decision in U.S. v. Clarke, 445 U.S. 253, the Court of Appeals describes “inverse condemnation” as

the manner in which a landowner recovers just compensation for a taking of his property when condemnation proceedings have not been instituted. 

They were not instituted in Corsello v. Verizon New York, Inc., 18 N.Y.3d 777, 944 N.Y.S.2d 732 (March 29, 2012), in which the defendant utility (D) attached a box to plaintiff’s (P’s) apartment in Brooklyn, to which it attached its cable and from which it then attached wires that went out to other buildings in the area.  It was using P’s building, in other words, as a telephone pole, while all the while misrepresenting to P that this was its right, which it wasn’t, and offering no compensation. 

Reviewing the history of “inverse condemnation”, the Court finds Corsello within that category and holds that it supports P’s damages claim. 

It also finds the claim timely under the applicable three-year period of CPLR 214(4) (injury to property).  While more than three years had apparently passed and would have barred the claim, the Court finds it preserved under § 261 of the Real Property Law, which says that when the claim is based on cables or the like attached to an owner’s building “no lapse of time whatever” shall bring about a prescriptive right that would not otherwise exist. 

Also asserted by P was a claimed violation of General Business Law § 349, which prohibits deceptive practices and allows a money claim as a remedy.  This claim, however, did fall within the bar of the statute of limitations.  The applicable statute is again the three years of CPLR 214.  In this instance the relevant subdivision is the one applicable to statutory claims, subdivision 2.  The injury here was suffered by P more than three years before suit.  And P, relying on D’s representations, did not within that time frame ask that the box be removed or that P be compensated for its use.  (And for this claim, P didn’t have the likes of an RPL § 261 to save it.)

(P also asserted a claim of trespass, but that was still pending below and hence is not addressed by the Court.)

As plaintiffs so often do in even roughly analogous cases, P tried to get the court to invoke an estoppel against D, barring it from pleading the time limitation. 

Trying to estop a defendant from invoking an apparently applicable time limit is a tough cause for any plaintiff.  The major Court of Appeals cases in point are its 1966 General Stencils and 1978 Simcuski decisions (see Siegel, New York Practice 5th Ed. § 56).  Both are cited, and readily distinguished, in Corsello.  To support an estoppel, activities or representations by the defendant made after the accrual of the original claim and designed to get the plaintiff to postpone suit are needed.  That wasn’t this case, which the Court instead finds typical of the great majority of cases, which fail in their estoppel effort: cases in which “the alleged concealment [by the defendant] consisted of nothing but defendants’ failure to disclose the wrongs they had committed”. 

In an opinion by Judge Smith, a claim based on unjust enrichment is also rejected by the Court, admonishing that “unjust enrichment is not a catchall cause of action to be used when others fail”.  It applies only in “unusual” situations “in which the defendant, though guilty of no wrongdoing, has received money to which he or she is not entitled”. 

Class action treatment sought by P is also rejected.  Going over the requirements for class treatment in CPLR 901, the Court finds several of its prerequisites lacking.

New York State Bar Association Publication, July 24, 2012.  Editor:  DAVID D. SIEGEL