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Standing Under Eminent Domain Procedure Law

Reprinted with permission from the June 28, 2011 edition of the New York Law Journal © 2011 Incisive Media Properties, Inc. All rights reserved. Further duplication without permission is prohibited.

“Standing” is defined in Black’s Law Dictionary (8th ed) as “A party’s right to make a legal claim or seek judicial enforcement of a duty or right.” Black’s Law Dictionary also states in a quotation: “The word standing is rather recent in the basic judicial vocabulary and does not appear to have been commonly used until the middle of our own century. No authority that I have found introduces the term with proper explanations and apologies and announces that henceforth standing should be used to describe who may be heard by a judge. Nor was there any sudden adoption by tacit consent. The word appears here and there, spreading only gradually with no discernible pattern. Judges and lawyers found themselves using the term and did not ask why they did so or where it came from.”

Many cases in condemnation proceedings dealing with the issue of standing such as In re George Washington Bridge, 12 AD2d 18, 207 NYS2d 771 (1st Dept., 1960) make the flat out statement: “In order to have standing in a condemnation proceeding, one must show an ownership interest in property (Matter of City of NY (Jefferson Houses – Lombardi), 306 NY 778).” The issue in Jefferson Houses was whether a contract vendee may be heard in a condemnation proceeding, holding that a contract vendee has an equitable title and thus has standing to make a claim. However, see subsequently enacted General Obligations Law 5-1311 which limits a contract vendee to the return of his deposit. It is the term “ownership interest” and the nature of same which has been the subject of judicial interpretation. At the end of the day, the determination appears to be do you have an interest in the condemned property which will or does suffer an injury by reason of the condemnation?

There are two general areas where the issue of standing in a condemnation proceeding becomes an issue. One is the process leading to condemnation and the other on the issue of valuation. In discussing both, there are several sections of EDPL with which we are concerned. The first is EDPL § 101. EDPL § 101, in speaking of the purpose of the Eminent Domain Procedure Law (“EDPL”), mentions, among other things, “the opportunity for public participation in the planning of public projects necessitating the exercise of eminent domain.” Indeed, the procedure for approving a condemnation calls for the public to be heard at a public hearing conducted by the public body seeking the exercise of the power of condemnation. EDPL § 203 provides that “any person in attendance shall be given a reasonable opportunity to present an oral or written statement and to submit other documents concerning the proposed public project.”

Thereafter, the body seeking to condemn is to make specific findings in determining whether to condemn, including in EDPL § 204(B)(3); “the general effect of the proposed project on the environment and residents of the locality.” Further, any review of these findings pursuant to EDPL § 207(3), in the Appellate Division, is whether they were made “in accordance with Article Eight of the Environmental Conservation Law” (SEQRA).

Thus, it is clear that the public has a voice to be heard in determining whether to condemn particular property. But suppose that voice is neither heard nor listened to and it wishes to challenge the right to condemn. Are they then “persons aggrieved,” giving them that right? As hereafter discussed, case law has held that is the end of the public’s participation. There is no such right. Unless you are a potential “condemnee”, you have no right to challenge the right to condemn. Note that we use the term “condemnee” and not owner of property by reason of the EDPL use of that term and the widened net the term casts.

Defining Condemnee

So what is a condemnee? EDPL § 103(C) defines a condemnee as “the holder of any right, title, interest, lien, charge or encumbrance in real property subject to an acquisition or proposed acquisition.” Real property is defined in EDPL § 103(F) in the following way: “real property includes all land and improvements, lands under water, waterfront property, the water of any lake, pond or stream, all easements and hereditaments, corporeal or incorporeal, and every estate interest or right, legal or equitable, in lands or water, and right, interest, privilege, easement and franchise relating to same, including terms for years and liens by way of mortgage or otherwise.” The questions that come up in the cases dealing with this subject are what is meant by an “interest” in the real property and what is “every estate, interest and right, legal or equitable in lands or water, and right, interest, privilege, easement and franchise related to same.”

The Court of Appeals in Matter of East Thirteenth Street Community Association v New York State Urban Development Corporation,84 NY2d 287, 617 NY3d 706 (1994), dealt with some of this subject. There, a community organization, owning no interest in the real estate involved, sought to challenge the determination to condemn both as to the jurisdiction to condemn and as being in violation of the State Environmental Quality Review Act (SEQRA), as well as on other grounds. The Court dealt first with the provision in EDPL § 207(A) which provides that “any person — aggrieved by the condemnor’s determination and findings — may seek judicial review thereof.” The issue, as defined by the Court, was whether that language changed the historic rule that only those “persons having some proprietary interest in property could challenge a governmental taking.”

The Court concluded that nothing in the legislative history suggests that there was any intent to change the historic rule to limit standing to challenge the condemnation “to those suffering injury, economic or otherwise.” As the Court stated: “eminent domain statutes seek primarily to protect the interests of property owners and to ensure that their property is taken only in accord with proper procedure and for just compensation (see Fifth Avenue Coach Lines v City of New York, 11 NY2d 342; 51 NY JUR2d, Eminent Domain, Sec. 320).” (However, see Brody v Village of Port Chester, 345 F3d 103 (2d Cir, 2003), 434 F3d 121 (2d Cir, 2005) which holds contrary to the essential holding of Fifth Avenue Coach as to who is entitled to notice as part of what is proper procedure.)

But that still left open a further question. Among the issues to be decided in EDPL § 207(3) is whether the Determination and Findings were made in accordance with SEQRA. The issue was whether if a challenge were made as to conformance with SEQRA, did that not give standing under EDPL to anyone, condemnee or otherwise, who had standing to challenge under that statute? Here the Court split the baby. If not a condemnee, you could not challenge under SEQRA in the EDPL context; it had to be in a separate Article 78 proceeding. If, however, you were a condemnee, you had standing to challenge conformance with SEQRA pursuant to EDPL § 207.

Cognizable Interest

So what kind of interest is cognizable for standing purposes under EDPL? Justice Abraham Gerges dealt with that problem in Matter of City of New York (Bushwick Inlet Phase I), 809 N.Y.S.2d 480, 10 Misc3d 1060(A) (not otherwise reported) Sup. Ct. Kings Co. (2005). For this the decision quoted the Court of Appeals in Matter of City of New York (Jefferson Houses – Lombardi), 306 NY 22, 282 (1954): “with the passage of years, the statutes have been renumbered, revised and amended but it has not been made to appear that the interests cognizable by the Supreme Court sitting in condemnation proceedings have been limited thereby. Rather it would appear that, that by the very language used in defining the interests which make one an owner of ‘real property,’ the legislature intended to include as many of those different interests in real property affected by the condemnation proceedings as possible.”

We add to that the further quote from Jefferson Houses which gave the rationale for this expansive view of what is a condemnee, albeit it was in another context, by the decision noting that so restricting the condemnation court “would lead the parties to seek their remedies in other tribunals resulting in ‘multiplicity of actions and delay in justice.’ It was in Jefferson Houses that an executory contract vendee was deemed an equitable owner of the real estate which gave the Court jurisdiction to determine its rights in the condemnation proceeding pursuant to the historic statutory definition of real property as “every estate, interest or right, legal or equitable, in lands—.”

In Johnson v State of NY, 10 AD3d 596 (2004), three individuals held title to three separate contiguous parcels in their individual names but, in accordance with a partnership agreement, filed a single claim as a partnership. Since title was held individually, the Court held as the partnership did not have title to the property, legal or equitable, it had no standing to file a claim. Instead, it converted the claim into one by each owner and proceeded to value the property as a single economic unit, in effect treating it as if the claim had been filed by the partnership.

In Village of Port Chester v Sorto, 14 AD3d 570, 788 NYS2d 422 (2nd Dept., 2005) an occupant of a property, who occupied space leased by his brother in law, but without any written agreement was recognized as a claimant for his trade fixtures. As the Court stated: “The Village’s focus on the fact that the Appellant was not the named tenant and did not have a written assignment or sublease was misplaced in light of the broad and inclusive definition of condemnee.” (cases cited).

In In re Bushwick Inlet, supra, the Court found standing to challenge a taking by the holder of an unexercised option to purchase the property sought to be condemned as the holder of an equitable interest in the property. This appeared to be as much an equitable finding as the finding of an equitable interest. What is interesting in this is how an option is treated in different contexts. As was noted in the decision, for Statute of Frauds purposes, it has been held to be “an interest in real estate” Kaplan v Lippman, 75 NY2d 320 (1990). However, for purposes of compensation in a condemnation proceeding, it was not deemed to be a sufficient ownership interest, (In re Water Front on Upper New York Bay, 246 NY 1 (1927)), and for purposes of having a claim in a condemnation proceeding for an assignment of award which arose upon the failure to exercise the option to purchase, was not deemed a sufficient ownership interest (In re George Washington Bridge, 12 AD2d 18, 207 NYS2d 791 (1st Dept., 1960).

If one were to examine the application of the principle of what constitutes an ownership interest in early cases such as Matter of City of New York (Triborough Bridge), 257 App Dev 267, 12 NYS2d 884 (1st Dept., 1939) and George Washington Bridge, supra, and then compare it to more recent cases, it appears there is now a much broader interpretation as to what constitutes “every estate, interest or right, legal or equitable in lands” so as to give standing in a condemnation proceeding, particularly where required to do justice and avoid a multiplicity of suits. As the Appellate Division pointed out, that is because of EDPL’s “broad and inclusive definition of condemnee” and as the Court of Appeals pointed out in Jefferson Houses, “the legislature intended to include as many of these different interests in real property affected by condemnation proceedings as possible.”

Reprinted with permission from the June 28, 2011 edition of the New York Law Journal © 2011 Incisive Media Properties, Inc. All rights reserved. Further duplication without permission is prohibited.