Saturday, August 07, 2010

Easement case gets day in court: does failure to transpose appraisal language to offer document make a difference?

After a late start in state Supreme Court yesterday morning in Brooklyn--the two Atlantic Yards cases were set for 9:30 am, but state Supreme Court Justice Abraham Gerges didn’t arrive until 10:10--the case involving the easement held (and still claimed) by Peter Williams Enterprises (PWE) was heard.

And while the arguments mostly reprised those in the legal papers--that PWE had given up any claim to the light and air above 24 Sixth Avenue (the Spalding Building) when it sold its own property, 38 Sixth Avenue--there was a small twist, suggesting there might be something to PWE's claim.

(Here's a report on the case challenging the eminent domain Determination & Findings.)

Defendants' case

The Empire State Development Corporation (ESDC) wants the case dismissed. ESDC attorney Charles Webb, ruddy and white-haired, began confidently in his gravelly voice. “Lot 7501 is nomenclature for a tax lot that doesn’t exist,” Webb said, noting that, as stated in the legal papers, the city uses such a designation all over.

Moreover, the ESDC acquired both 38 Sixth Avenue and 24 Sixth Avenue, the building to which the easement was associated. “That extinguished the easement,” Webb declared.

And PWE, he said, relinquished all claims. “This is just a fictitious opportunity to try to get more money,” Webb stated with disdain. (Williams has said he's motivated by money.)

Forest City Ratner attorney Jeffrey Braun, in diplomatic tones, added, “It was clear from the document it was intended to run with the land. Contrary to what the complaint tries to say, there’s just nothing out there.”

Plaintiff's case

PWE attorney Matthew Brinckerhoff, who had represented Williams and several others in the Atlantic Yards eminent domain cases, got up, undeterred. He noted that the legal right was described both as an easement and an indenture.

In the contract, PWE’s property was described as “the right to everything in the air above the [building] plane,” Brinckerhoff said. “That’s not how easements are described.”

Moreover, despite the claims in the papers, this was the only condo building in the Atlantic Yards footprint that had such a Lot 7501. “We have a legal and factual dispute that can’t be resolved on a motion to dismiss,” Brinckerhoff said.

The eminent domain declaration designed properties by block and lot, not the metes and bounds physical description, he noted; it also said that, in the case of any confusion, the blocks and lots would control. “There’s a big ambiguity and discrepancy here,” he said.

As for the ESDC’s argument that he didn’t answer all the charges in their motions, Brinckerhoff said they were inappropriate for the motion to dismiss.

Questions of details

The release of claims signed by PWE was limited to 38 Sixth Avenue, and the state appraisal similarly limited, Brinckerhoff said. He read the text of the release, in which PWE disavowed any claims arising from the deal for 38 Sixth Avenue.

Gerges interrupted: “It said all claims, including…

“All claims that could be brought in the condemnation proceeding,” Brinckerhoff responded. “It had never been condemned in the first place. It’s their mistake.”

Webb got up: “What he failed to read was including but not limited to. The release clearly takes care of all possible claims.

Two offers?

Also, Webb said, the ESDC made two separate offers to PWE; for the building and for the easement.

“Was that a written order?” asked Gerges.

Yes, responded Webb.

He paused for several moments, consulted a colleague, and offered a clarification. While the appraisal the ESDC ordered had two parts, “when he made the offer, we lumped them together,” he acknowledged.

Gerges asked Brinckerhoff if PWE had ordered its own appraisal.

No, Brinckerhoff, it never got that far. But it’s clear, he said, that the ESDC’s pre-vesting offer to PWE did not separate the two parts.

“That’s not what I heard,” Gerges said.

Brinckerhoff pointed to the distinction between the appraisal and the offer.

“You never exchanged it,” asked Gerges.

“We never got to that,” Webb acknowledged.

Last points

Brinckerhoff asked for the opportunity to make one more point.

“I never stop people from talking,” Gerges responded drily, with his Borscht Belt timing.

FCR attorney Braun, slightly slower on the trigger had also gotten up to speak, and remained standing for a bit as Brinckerhoff continued.

Brinckerhoff said that the compensation to PWE “was strictly limited to Mr. Williams’s building at 38 Sixth Avenue."

Braun this time had more of an edge in his voice. “The counsel for the plaintiffs,” he said, “urged the court to read the [original sale] document. I join that request. All it does is grant an easement of light and air.”

Gerges said he wanted to get the parties together to perhaps work something out. They’re due back in court on Thursday, August 12 at noon.

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