Real Estate & Property Law

Shades Of Loretto From The New York Appellate Division

By Robert Thomas (inversecondemnation.com)

Takings lawyers know Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) stands for the proposition that a regulation allowing a physical invasion of private property -- no matter how de minimus the invasion might be -- is a per se regulatory taking. In those instances, the right to exclude is such a fundamental aspect of what it means to own "property" that even a minor infringement is forbidden. In that case, the U.S. Supreme Court struck down a New York City regulation requiring Loretto allow the installation of a small cable TV box on the roof of her apartment building.

In Corsello v. Verizon N.Y., Inc., No. D25897 (Sep. 14, 2010), the New York Appellate Division revisited those facts for telephone equipment. Over the years, Verizon installed equipment on Corsello's building in New York, and over the years, he demanded that Verizon remove it. The trial court refused to dismiss Corsello's claim for inverse condemnation, and Verizon appealed, asserting that inverse condemnation was not the correct cause of action, since the physical invasion was not permanent because Verizon offered to remove the equipment (and thus trespass, which involves temporary invasions, was the appropriate form of relief). The Appellate Division rejected the argument:

Here, as in Loretto, the installation of the rear-wall terminal involved a direct physical attachment of a box and wires. According to the plaintiffs, the installation of this equipment deprived them of the physical use, possession, and enjoyment of that portion of their property (see Weaver v Town of Rush, 1 AD3d at 923 [noting that a de facto taking by one having condemnation powers constitutes a permanent interference with an owner's physical use, possession, and enjoyment of property]; Feder v Village of Monroe, 283 AD2d at 549; Sarnelli v City of New York, 256 AD2d at 400). Indeed, the plaintiffs alleged that a metal conduit running from the terminal along the building wall had been used by a burglar to enter one of their apartments. Further, according to the amended complaint, the installation was meant to be permanent as it has been attached to the wall for several years.

Verizon responds that there can be no permanent physical occupation of the plaintiffs' property where it has offered to remove the equipment servicing other buildings. As a procedural matter, it would be inappropriate to consider Verizon's offer, which was tendered only after the action was commenced. As this is a motion to dismiss, the Court may look only to the amended complaint and any evidentiary material submitted to remedy defects in the amended complaint in ascertaining whether a cause of action has been stated (see Guggenheimer v Ginzburg, 43 NY2d 268, 275; Rovello v Orofino Realty Co., 40 NY2d 633, 635-636). Moreover, even if Verizon's offer could be considered, it would still not preclude the trier of fact from finding that a de facto taking had occurred, since, where an appropriating entity has interfered with the owner's property rights to such a degree that the conduct amounts to a constitutional taking, it is required to purchase the property from the owner (see O'Brien v City of Syracuse, 54 NY2d at 357; Village of Tarrytown v Woodland Lake Estates, 97 AD2d at 343). In other words, contrary to Verizon's contention, it can indeed be "forced" to acquire an interest in the plaintiffs' property.

Slip op. at 12-13. Inverse condemnation was properly pleaded.

The plaintiff's victory, however, was short lived. In the next section of the opinion, the court held that the inverse condemnation claim was not brought within New York's three year statute of limitations. Thus, when the complaint alleged that the initial invasion of the plaintiff's property was the taking, and that it took place more than three years earlier, it did not matter than the complaint also alleged that additional equipment was added within the limitations period:

Moreover, with respect to Verizon's alleged conduct in attaching additional cables to the plaintiffs' building in 2004 or 2005, even if we afford the pleadings a liberal construction (see Kempf v Magida, 37 AD3d 763, 764), the plaintiffs failed to allege that said conduct constituted another de facto taking so as to trigger a limitations period for a claim of inverse condemnation. In any event, as Verizon correctly contends, viewing the allegations in the light most favorable to the plaintiffs, the initial attachment of the terminal and wiring was a discrete, well-defined taking of property, and the mere addition of cable did not afford the plaintiffs a new limitations period (see Carr v Fleming, 122 AD2d 540, 541 [de facto taking claim would have accrued when the condemnor physically entered upon the land and installed the subject sewer line]).

It should be noted that our interpretation of Real Property Law § 261 does not leave the plaintiffs without a remedy for Verizon's alleged intrusion upon their property. As discussed below, the plaintiffs may still pursue their causes of actions to recover damages for unjust enrichment, trespass, and violations of the General Business Law. We note that our initial discussion regarding whether the plaintiffs stated a cause of action to recover damages for inverse condemnation is necessary notwithstanding our holding that said cause of action is time-barred, inasmuch as those two issues are inextricably linked.

Slip op. at 17-18. The court also ruled on the plaintiff's claims for deceptive consumer-oriented conduct and for unjust enrichment. 

Our thanks to colleague Dwight Merriam for the lead.

Full post as published by inversecondemnation on October 04, 2010 (boomark / email).