New York Court awards $3.4 million in fees and costs to Mobil Oil in eminent domain action

New York, NY – Attorneys from the New York law firm of Goldstein, Rikon & Rikon, the only law firm in New York practicing exclusively in the area of condemnation law, recently obtained a decision of more than $3.4 million for Exxon Mobil Oil Corp. in what is believed to be the largest award made under Section 701 of New York’s Eminent Domain Procedure Law. (Read the full press release here.)

The order (embedded below) issued by the Honorable Abraham Gerges of the Supreme Court of Kings County (2010 NY Slip Op 20498) awarded Exxon Mobil $3,474,176.00 for legal fees, expert fees and disbursements in addition to an amount previously awarded as just compensation for the taking of Mobil’s property for the Newtown Creek Water Pollution Control Plant. When the additional allowance under Section 701 of $3,474,176 for fees, costs and disbursements is added to the $14,298,616 award obtained for Exxon Mobil after trial (Mobil Oil v. City of New York, New York Supreme Court, Docket No. 08-03302), the total recovery for Exxon Mobil in this case was $17,772,792. Upon appeal, the trial award was affirmed by the Supreme Court’s Appellate Division, Second Department.

Court Order In Re Newtown Creek Water Pollution Control Plant Upgrade (Eminent Domain Taking)

“In 1987, the Eminent Domain Procedure Law was amended with Section 701 to provide that when an award in a condemnation proceeding was substantially in excess of the condemnor’s proof on the trial, the trial court could award a claimant an additional allowance to cover litigation expenses,” said Michael Rikon, an eminent domain attorney and partner at Goldstein, Rikon & Rikon. “We are very pleased to achieve this remarkable award reimbursing our client for their legal fees, expert fees and disbursements in their litigation against the City of New York. Hopefully, condemning agencies will think twice about making low-ball and unfair offers to property owners.” [Disclosure: Michael Rikon is the New York Member of Owners’ Counsel of America.]

As a result of Mobil Oil v. City of New York, New York state adopted a rule excluding evidence of remediation costs for contaminated property from eminent domain proceedings. In the case of Mobil, the company had experienced a petroleum spill on the site approximately 7 years prior to the initiation of condemnation. After the spill occurred, Mobil entered into consent decrees with both the State and City of New York that required the oil company to create and comply with a remediation program for which Mobil was financially responsible. By the time the City condemned the property in 1997, most of the spilled material had been recovered from the site and the site was substantially clean. Yet, after condemning the property the City filed a separate suit seeking the costs of clean-up, removal, remediation and damages for the property that had since completed the remediation process.

In its appellate opinion, the Court found that “it would be ‘fundamentally unfair’ to allow the City to value the property as contaminated for condemnation purposes, and yet still recover the remediation costs.” The Court quoted from a similar and, at the time, recent case out of New Jersey, Housing Auth. of City of New Brunswick v. Suydam Inv., in which the New Jersey Supreme Court found that devaluing a property in condemnation so that the property is purchased at a discounted rate while also subjecting the former owner to all cleanup costs equates to a “double-take.”

More about this Mobil Oil condemnation case and the topic of valuing contaminated property in eminent domain is available in Current Condemnation Law: Takings, Compensation and Benefits, By Alan T. Ackerman and Darius W. Dynkowski. Chapter 3 focuses upon the valuation of contaminated property in condemnation and Section VI of that chapter discusses the Mobil Oil case specifically.[Disclosure: Alan Ackerman is the Michigan Member of Owners’ Counsel of America.]

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