Dubrovsky’s attorney, John Houghton, said his office has filed an appeal of the decision and he said, “If it stands, my client must be justly compensated.”
And for the time being, access to the reservoir boat launch remains blocked.
STATE OF NEW YORK
In the Matter 0 f the AppIication of
AER NY-GEN, L.L.C. to acquire a certain easement over
portions of certain roads now or formerly known as Moscoe
Road, Split Rock Road (formerly Town Road 62), Chapin
Trail, Split Rock Road Trail 62, Toronto Dam Road and
Toronto Dam Road Trail in the Town of Bethel necessary
for the project know as the SWINGING BRIDGE
Relating to the following Tax Map Sections, Blocks and
Lots in the Town of Bethel, Sullivan County, New York:
COUNTY OF SULLIVAN DECISION AND ORDER
(Supreme Court, Sullivan County, Special Term, July 18,2011)
Index No. 4012-10 (RJI No. 52-31367-10)
(Acting Justice Michael H. Melkonian, Presiding)
APPEARANCES: Nixon Peabody, L.L.P.
Attorneys for Petitioner (John B. Hood, Esq., of Counsel)
1300 Clinton Square
Rochester, New York 14604
Goldstein, Rikon & Rikon, PC
Attorneys for Respondents Woodstone Lakes
Development, Inc. and Chapin Estate Homeowners'
(M. Robert Goldstein, Esq., of Counsel)
(Jonathan Houghton, Esq., of Counsel)
80 Pine Street, 32m! Floor
New York, New York 10005-1702
The West Finn, P.L.L.C.
Attorneys for Respondents Woodstone Lakes
Development, Inc. and Chapin Estate Homeowners'
(Gregory A. Mountain, Esq., of Counsel)
(Thomas F. Puchner, Esq., of Counsel)
677 Broadway-8th Floor
Albany, New York 12207
In this condemnation proceeding, petitioner AER NY-GEN, L.L.c. seeks pursuant to Eminent Domain Procedure Law to acquire by condemnation a public access easement("PAE") on approximately 1.8 miles of existing road for the purpose of restoring and
ensuring the Public's right to access certain Toronto Reservoir public recreational facilities located near the Toronto Reservoir dam.
Petitioner currently owns and is licensed by the Federal Energy Regulatory Commission ("FERC") to operate a hydroelectric project known as the Swinging Bridge
Project No. 10482 ("Project"). The Project encompasses Toronto Reservoir, Cliff Lake, and Swinging Bridge Reservoir, all of the land beneath the water, between the water and contour
level 1225 feet above sea level, a 50-foot wide zone extending above contour level 1225 feet around most of Toronto Reservoir, and all of the land, tunnels, power houses, recreational areas and other facilities associated with those bodies of water. There allegedly has been open and continued public access to and public use of the recreational facilities located near the Toronto Reservoir dam, Toronto Reservoir and the strip of land surrounding Toronto Reservoir for fishing, boating, bird watching, and other activities since before 1970.
Nevertheless, in 1992 when FERC issued the Project license to petitioner's predecessor Orange and Rockland Utilities, Inc. ("O&R"), the FERC license was specifically conditioned
on O&R's further developing and maintaining the public recreational facilities on Toronto Reservoir and continuing to provide "Public access year round" to those facilities.
By 1993, O&R had complied with FERC's licensing requirement by expanding the existing public recreational facilities at thc site with a 15-car/boat trailer parking lot and boat
launch. The sole avenue of public access to the 15-car/boat trailer parking lot and boat launch and related recreational facilities near the Toronto Reservoir dam continued to be
provided over Town Road 62 and the other roads crossing the surrounding property, then owned by O&R's wholly-owned subsidiary, Clove Development Corporation ("Clove").
Respondent Woodstone Lake Development, L.L.C. ("Woodstone") acquired the property for approximately $4,000,000.00 from Clove in 2000. The deed specifically subjects Woodstone's title to petitioner's predecessor-in-interest's rights "for access to the dam area connected with Toronto Reservoir" and "such state of facts as an accurate survey
Woodstone does not allege that a survey would not have disclosed that the road running through the property provided the only access to the public 15-car/boat trailer parking lot and boat launch at the dam on Toronto Reservoir. Nevertheless, in 2002, Woodstone began interfering with the publie aeeess to the public 15-earlboat trailer parking lot and boat launeh by the Toronto Reservoir dam.
During the intervening years, Woodstone has unsuccessfully attempted to use its ability to interfere with public access to thc Toronto Reservoir dam recreational facilities as
a bargaining chip to force petitioner to stop using Toronto Reservoir for its intended function of supplying water when and as needed by the rest of the Project and to force petitioner to start maintaining the water level in Toronto Reservoir at a stable level. Woodstone has now taken the position that there is no public access to the Toronto Reservoir public recreation facilities. Woodstone also opposes allowing public access across the property claiming that
public access to the public recreational facilities on Toronto Reservoir is inconsistent with Woodstone's development concept and will largely destroy the serenity and security of The
Chapin Estate, the ultra-exclusive gated community Woodstone allegedly envisions building on the property.
On November 18, 2010, FERC found that petitioner was out of compliance with its license because of Woodstone's interferenee with public access and petitioner's lack of
success in reestablishing unrestricted public access to the Toronto Reservoir reereational facilities. Based on petitioner's noncomplianee, FERC denied petitioner's application to transfer its license until such time as petitioner confirms the public's access to the Project
recreational area. Petitioner commenced this condemnation proceeding to establish and enforce public access to the Project recreational area.
Petitioner seeks an order allowing it to file and enter the acquisition map of the PAE in the Sullivan County Clerk's Office; directing that title to the PAE shall vest in petitioner together with the right of possession; providing that the compensation which should be made to the respective owners of or persons interested in the property affected by the PAE shall be ascertained and determined by this Court without a jury; directing that each condemnee shall have a period of six months from the date of the order in which to file a written claim,demand, or notice of appearance and serve a copy on petitioner's counsel, directing that should any condemnee fail to file within the six month period, the owner of the property affected by the PAE shall be deemed to have accepted the amount last offered; and providing, if there is a question regarding condemnees' interests in the affected property, for deposit of the amount last offered in an interest-bearing account.
Respondents Woodstone and Chapin Estate Homeowners Association, Inc. ("Chapin HOA") have attempted to stave off this condemnation proceeding with a barrage of seventeen and nineteen affirmative defenses respectively. The Court begins by rejecting Woodstone's first and sixteenth affirmative defenses that this condemnation proceeding is time barred by Eminent Domain Procedure Law § 401 and 16 USC § 806 because it was not filed within three years or within two years respectively of FERC's 1992 license determination. Woodstone's conclusion that the period during which public access through
its property could be acquired by condemnation ended in 1995 or 1994 is illogical. No condemnation proceeding needed to be commenced previously because there was no interference with public access prior to 2002 when Woodstone began interfering with public access. When FERC issued the license to O&R in 1992 and determined that year-round public access to the public recreation facilities at Toronto Reservoir dam was required, the owner Clove, Woodstone's predecessor in interest, did not deny that its property was burdened by the public's right to continue using the public and private roads to access the recreational facilities at Toronto Reservoir dam.
Woodstone has presented no evidence that Clove interfered with or attempted to terminate public access to the 15-carlboat trailer parking lot and boat launch on Toronto Reservoir. Thus, petitioner is not foreclosed from condemning the easement by the time limitations ofeither Domain Procedure Law § 401 or 16 USC § 806, because those time periods did not begin to run until Woodstone's actions caused FERC to issue its determination on November 18, 2010.
The Court also rejects Woodstonc's second, third, fourth, fifth, sixth, eighth, ninth, and tenth affirmative defenses that petitioner violated proper procedure by not noticing and
holding public hearings pursuant to Eminent Domain Procedure Law Article 2. Eminent Domain Procedure Law § 206(A) exempts petitioner from holding a public hearing to determine the need for and location of the property to be acquired because FERC is a federal agency, petitioner submitted the information to PERC, and received PERC's approval to reestablish public access. Woodstone was on notice of petitioner's application to transfer the license and the problems raised by Woodstone's interference with public access. Woodstone participated in that process.
The Court rejects Woodstone's seventh and thirteenth affirmative defenses which rest on Woodstone's own circular reasoning. Woodstone bases its conclusion that petitioner
must pay $30,308,467.00 in damages in order to confirm the public's right of access upon Woodstone's unsupported conclusion that there is no right of public access across the
property. As Woodstone concludes there is no right of public access, Woodstone claims its damages are measured by the difference in value between what the property would be worth
if there were no public access and what it would be worth with public access.
Woodstone attempts to distract attention away from the lack of evidence for its assumption that there is no right of public access by pointing to the vision used by Woodstone to market The Chapin Estate. Woodstone's vision is stated in Woodstone's
appraiser's introductory description:
The Chapin Estate ("Chapin") is a carefully-planned, exclusive, upscale and private ("gated") residential enclave situated on 2,500± acres of undisturbed natural preserve land fronting on two of Sullivan County's largest motorboat
lakes, Swinging Bridge Reservoir (1,100 aces) and Toronto Reservoir (800 acres). The Chapin Estate adjoins more than 13,000 acres of forever wildproperty, ensuring complete seclusion, security and privacy for homeowners and guests without the need for obtrusive external security measures....
Since 2001, The Chapin Estate has been marketed (and perceived in the marketplace) as a unique, gated residential preserve of natural beauty with private road and secluded woodlands solely for its residents.
The Chapin Estate was developed as a contiguous ... and secure residential preserve that provides only two points of entry (security gates) equipped with cameras, lighting and security surveillance to ensure complete privacy and seclusion for its residents.
The attraction of The Chapin Estate for purchasers, is its unique combination of amenities, beauty and security, which enables residents the ability to freely travel throughout the Estate safely, and to rely on that security to deter burglaries and damage to their homes and property while elsewhere.... Once inside the community, residents and their guests can travel freely throughout the preserve on private roads that are maintained by the HOA and that are in keeping with the natural and tranquil surroundings."
In justifying his conclusion regarding the damages that will allegedly be inflicted by public access to the public 15-car/boat trailer parking lot and boat launch on Toronto
Reservoir, Woodstone's appraiser reports that the region surrounding The Chapin Estate is marred by criminality and that when Woodstone previously allowed even limited public
access to The Chapin Estate, "the community was plagued with vandalism, abandoned vehicles, debris, dumping of refuse, motor vehicle accidents, etc," As a result, Woodstone's
appraiser concludes that permitting public access to the public 15-car/boat trailer parking lot and boat launch on Toronto Reservoir will significantly reduce the value of most of the properties within The Chapin Estate, render the properties unattractive to the kind of purchasers who would be attracted to Woodstone's vision of The Chapin Estate, and result in future property buyers building homes that are not as elegant as those that have been constructed thus far.
Once public access is established, the appraiser also concludes that The Chapin Estate will be dismantled, leaving four smaller separate communities, some gated and some public.
Even in the smaller gated communities, the same level of security apparently can only be achieved at the cost of "relegating the community to a prison-like atmosphere" with
measures such as "a constant mobile security force, multiple gates and likely perimeter fencing." Woodstone's appraiser notes that breaking The Chapin Estate into separate
communities will deprive many properties of access to the common facilities, such as the Lake Club and grand main gate, and require most owners to access their properties through
less a impressive access point on a less desirable road.
Neither Woodstone's vision of the ultra-secure Chapin Estate nor the fact that Woodstone has marketed its vision to those people who have already purchased lots within The Chapin Estate can take the place of competent evidence showing that the public's right of access to the public I5-car/boat trailer parking lot and boat launch on Toronto Reservoir
was eliminated prior to Woodstone's purchase of the property from Clove. Also absent from Woodstone's opposition is any competent evidence that the easement that petitioner seeks to establish through this proceeding is any greater than or more harmful to the value of Woodstone's property than the public's existing right of access to the public l5-car boat trailer parking lot and boat launch on Toronto Reservoir and petitioner's existing right to use the road for any purpose. Woodstone has failed to present any evidence demonstrating that
the public's right of access to the public l5-car/boat trailer parking lot and boat launch on Toronto Reservoir was extinguished prior to Woodstone's taking title to the property from Clove or that Woodstone has been successful in extinguishing the public's right of access since acquiring the property in 2000. Not only has Woodstone failed to demonstrate that the public access to the public l5-car/boat trailer parking lot and boat launch on Toronto Reservoir was extinguished prior to Woodstone's purchase, but Woodstone apparently refers to such public access in the deeds by which it transfers title to purchasers of properties within The Chapin Estate. Inclusion of that language implicitly acknowledges that notwithstanding Woodstone's efforts to brand The Chapin Estate as a single cohesive "Gated," "Secluded," and "Special" community, that vision has always been clouded by the public's right to access the Toronto Reservoir recreational facilities via the existing roads running through the property.
The Court rejects the appraiser's conclusion that The Chapin Estate will suffer $30,308,467.00 in damages from this condemnation because the appraiser's conclusion is based on the assumption that Woodstone presently has "good and clear title...free of any encumbrances and/or defects or liens" and there is no evidence to support his assumption that Woodstone presently has "good and c1ear title...free of any encumbrances and/or defects or liens." Expert evidence is insufficient in cases such as this where it is speculative, unsupported by competent evidence, conclusory (Caulkins v Vicinanzo, 71 AD3d 1224,1226 [3rd Dept., 2010]; Reagan v Hartsdale Tenants Corp., 27 AD3d 716, 718 [2nd Dept., 2006]; Schrader v Sunnyside Corp., 297 AD2d 369, 371 [2nd Dept., 2002]) and fails to
address the specific condition that is at issue (Castro v Maple Run Condominium Assn., 41 AD3d 412, 414 [2nd Dept., 2007]).
The Court rejects Woodstone's fourth, eleventh, and twelfth affirmative defenses that petitioner failed to give proper notice to all individuals required to be served by the Eminent
Domain Procedure Law. Woodstone is mistaken first in claiming that Chapin HOA and the owners of the roughly 462 non-abutting lots in The Chapin Estate subdivision were entitled to notice pursuant to Eminent Domain Procedure Law § 402(B). Eminent Domain Procedure Law § 402(B)(2) only requires notice to "the owner of record of the property to be acquired, as the same appears from the record ofthe office in which the acquisition map is to be filed." Petitioner has served all of the owners of record of the 22 lots that abut the roads that will bear the public access. Woodstone has tried to demonstrate that Chapin HOA and all of the non-abutting owners were owners of record of the roads in question.
Even assuming for the purposes of the argument that Chapin HOA and the non-abutting owners should receive notice of the condemnation, it is not be necessary for this proceeding to be dismissed and petitioner forced to recommence by serving notice on all 484 lot owners. Chapin HOA and the non-abutting owners do not have the exclusive right to use the roads in question and petitioner is not taking Chapin HOAs and the non-abutting owners' right to continue using the roads in question. Furthermore, it is clear that most of these entities had actual notice of the proceeding as a result ofthe notice that petitioner gave.
Woodstone owns almost all of the non-abutting lots and therefore the owner of those lots received timely notice. Woodstone's President, Steve Dubrovsky ("Dubrovsky") is also
President of Chapin HOA. Chapin HOA therefore had timely notice. Were further notice necessary, the proper solution would be to order that notice be mailed to all of the nonabuttingowners other than Woodstone and permit the proceeding to continue. Woodstone's allegedly mailing copies of the petition to all of the non-Woodstone non-abutting owners in The Chapin Estate is sufficient to put them on notice.
Although all of the non-Woodstone non-abutting owners in The Chapin Estate now appear to have notice of this proceeding, the Court exercises its discretion by ordering that petitioner mail notice of this proceeding and a copy of this Decision and Order to the purchasers that Woodstone has listed. Those individuals probably do not have any greater rights and will not suffer greater compensable damages to their properties for the purposes of this proceeding than Woodstone would have suffered if it retained possession of the properties, but given Woodstone's appraiser's conclusions regarding the significant reduction in the value ofthe non-abutting properties within The Chapin Estate, the owners of those properties deserve to be put on notice and given an opportunity to represent their own interest in this proceeding.
The Court rejects Woodstone's fourteenth affirmative defense that the petition is invalid pursuant to Eminent Domain Procedure Law § 402(B) because the petition was signed by Joseph Klimaszewski, Jr. and he is not one of petitioner's officers. As the Vice President-Operations and New Development for Alliance Energy Group, L.L.C., the sole member of Alliance Energy Renewables, L.L.C., which is the sole member of petitioner, Klimaszewski is authorized to sign the petition.
The Court rejects Woodstone's conclusory fifteenth affirmative defense that petitioner failed to make a valid offer of advance payment as required by Eminent Domain Procedure Law §§ 301, 302, 303, and 304.
The Court rejects Woodstone's seventeenth affirmative defense that petitioner is not entitled to deposit the advance payment with the Clerk of the Court in an interest-bearing account if there is a question regarding condemnees' interests in the affected property as a result of mortgage, judgment, tax lien or other encumbrance or to the extent that more than one condemnee may have and interest in the easement. Upon the vesting of title in a condemnation proceeding, all lien interests in the subject property by virtue of mortgages,
unpaid taxes, or unsatisfied judgments, are extinguished and replaced by equitable liens against the condemnation award to the extent of each lien and interest thereon as of the date
title vested (In re County of Nassau [Gelb-Siegel], 24 NY2d 621, 626 ; Matter of County of Rockland (Kohl Indus. Park Co,), 172 AD2d 607, 609 [2nd Dept., 1991]). Eminent Domain Procedure Law § 304(D) provides, in relevant part, that:
"In the event an owner accepts the offer as payment in full or as an advance payment for property in an acquisition under supreme court jurisdiction pursuant to subdivision (B) of section five hundred one of this chapter and the condemnor determines that there is a conflict of title or a conflict arises over the percentage of the condemnation award which should be paid to each of several owners of interests in the condemned property, the condemnor shall, unless it is otherwise agreed, deposit the full or advance payment, as the case may be, with the clerk of the supreme court having jurisdiction of the claim."
Thus, in the event that there is a question regarding condemnees' interests in the affected property as a result of mortgage, judgment, tax lien or other encumbrance or to the extent that more than one condemnee may have an interest in the easement, petitioner is entitled to deposit the advance payment with the Clerk of the Court in an interest-bearing account.
For the foregoing reasons, the Court rejects all seventeen of Woodstone's affirmative defenses. Before considering Chapin HOA's nineteen affirmative defenses, the Court must resolve petitioner's challenge to Chapin HOA's standing. The Court concludes that Chapin HOA has standing in this proceeding. Chapin HOA claims to represent the real property owners affected in this condemnation proceeding. The Court notes the potential for a conflict of interest between Woodstone and any of Chapin HOA's property owners, who may have based their decisions to purchase property within The Chapin Estate on
Woodstone's promises of a "secure residential preserve that provides only two points of entry (security gates)" and Woodstone's assurances of "complete privacy and seclusion for
its residents" while they "freely travel throughout the Estate safely, and  rely on that security to deter burglaries and damage to their homes and property while elsewhere."
Notwithstanding such a conflict of interest, the property owners are entitled to choose to be represented by Chapin HOA and Woodstone's counsel and, as noted, will also be given
notice and another opportunity to participate on their own in this proceeding.
The Court rejects Chapin HOA's first affirmative defense that petitioner cannot provide "sure and certain compensation" to the condcmnees. Chapin HOA's conclusion rests on its speculation and Woodstone's rejected appraisal.
The Court rejects Chapin HOA's second, third, fourth, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, twelfth, thirteenth, fourteenth, fifteenth, sixteenth, and eighteenth
affirmative defenses for the same reasons that Woodstone's same defenses were rejected.
The Court rejects Chapin HOA's seventeenth affirmative defense that petitioner lacks a valid license. Chapin HOA has produced no evidence to suggest that Chapin HOA is authorized to invalidate petitioner's license or that would support its conclusion that petitioner's license was invalidated.
The Court rejects Chapin HOA's conclusory nineteenth affirmative defense that this Court lacks subject matter jurisdiction to grant the Notice of Petition to Condemn because
the property proposed for condemnation allegedly lies outside ofthe Project Boundary and accordingly is outside the jurisdiction and regulatory reach of FERC. Chapin HOA did not
support its conclusion with any evidence and FERC has confirmed that the public right of way is part of the Project.
Accordingly, petitioner's application is granted to the extent of ordering petitioner to file and enter the acquisition map of the PAE in the Sullivan County Clerk's Office; directing that title to the PAE Shall vest in petitioner together with the right of possession; ordering that petitioner file a bond in the amount of $402,000.00 with the Court Clerk in the
event that Woodstone and the other abutting owners and non-abutting owners do not agree between themselves regarding the proper apportionment of the bond by November 1,2011,
providing that the compensation which should be made to the respective owners of or persons interested in the property affected by the PAE shall be ascertained and determined
by this Court without a jury; ordering that a copy of this decision and order be mailed to all owners of properties within The Chapin Estate as listed previously by Woodstone and
directing that each property owner and condemnee shall have a period of six months from the date of the order in which to file a written claim, demand, or notice of appearance and
serve a copy on petitioner's counsel, directing that should any property owner or condemnee fail to file within the six month period, the owner of the property affected by the PAE shall be deemed to have accepted the amount, if any, last offered; and providing, if there is a question regarding condemnees' interests in the affected property, for deposit of the amount last offered in an interest-bearing account.
This constitutes the Decision and Order of the Court. This Decision and Order is returned to petitioner's counsel. All other papers are delivered to the Supreme Court Clerk
for transmission to the County Clerk. The signing of this Decision and Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable
provisions of this rule with regard to filing, entry and Notice of Entry. Memorandum constitutes the Decision and Order of the Court.
Dated: Troy, New York
January 3, 2012
MICHAEL H. MELKONIAN
Acting Supreme Court Justice
(I) Notice of Petition dated December 6, 2010, with exhibits annexed;
(2) Notice of Pendency dated December 6, 2010, with exhibits annexed;
(3) Answer dated January 3, 2011, with exhibits annexed;
(4) Reply Affirmation of Jonathan Penna dated January 7, 2011, with
(5) Affidavit of Steve Dubrovsky dated May 13, 2011, with exhibits
(6) Amended Answer dated June 6,2011, with exhibits annexed;
(7) Memorandum of Law dated June 6, 2011, with exhibits annexed;
(8) Affirmation of Gregory A. Mountain dated June 6, 2011, with
(9) Memorandum of Law dated June 6, 2011;
(10) Affirmation of John B. Hood dated June 8, 2011, with exhibits
(11) Affidavit of Robert Barrett dated May 19, 2011, with exhibits
(12) Affidavit of Timothy O'Sullivan dated May 13, 2011, with exhibit
(13) Memorandum of Law dated June 8,2011, with exhibits annexed;
(14) Affirmation of M. Robert Goldstein dated July 14,2011, with
(15) Reply Memorandum of Law dated July 14,2011;
(16) Reply Affirmation of John B. Hood dated July 15,2011, with
(17) Affidavit of Joseph Klimaszewski, Jr. dated July 14, 2011;
(18) Reply Memorandum of Law dated July 15,2011.