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Soon Duck Kim v. City of New York, 90 N.Y.2d 1(February 18, 1997).

EMINENT DOMAIN - TAKINGS - LATERAL SUPPORT OBLIGATION

OWNER NOT ENTITLED TO COMPENSATION FOR PORTION OF PROPERTY RAISED BY THE CITY BECAUSE A COMMON LAW AND STATUTORY OBLIGATION TO LATERAL SUPPORT OF A PUBLIC ROADWAY EXISTS.

[SUMMARY] | [ISSUE & DISPOSITION] | [AUTHORITIES CITED] | [COMMENTARY]

SUMMARY

In 1978, the City of New York raised the legal grade of a portion of a public road in Queens from 9.1 to 13.5 feet and properly filed a map with the office of the Queens Borough President reflecting the grade change. Plaintiffs purchased a parcel of land along that street ten years later. At the time of purchase, the parcel was nearly five feet below the legal grade. In June 1990, the City of New York regraded the public road to its legal level of 13.5 feet and also placed sidefill on that portion of Plaintiffs' land abutting the road to maintain lateral support for the roadway. Three months earlier, the City had given written notice to Plaintiffs of its intention to regrade the road and advised Plaintiffs of their obligation under the City Charter (New York City Charter § 2904(2)) to raise their property to the legal grade. The City also notified Plaintiffs that it would regrade the property at no cost to Plaintiffs if it received their consent within ten days. If Plaintiffs did not give consent, the City itself would regrade the property and seek reimbursement for its cost from Plaintiffs. Plaintiffs, having already commenced an action in the Supreme Court, did not respond to the notice. The complaint alleged that the City's regrading project would constitute an unconstitutional, uncompensated taking of their property. At trial, Plaintiffs moved and the City cross-moved for summary judgment as to the takings issue. The Supreme Court held that the City was authorized by its Charter to force Plaintiffs to regrade their property. The trial court thus concluded that the City's action did not constitute a taking and denied Plaintiffs' motion for summary judgment. The Appellate Division affirmed. The Court of Appeals granted leave to appeal.

ISSUE & DISPOSITION

Issue

Whether New York City's charter-authorized action in placing sidefill on that portion of Plaintiffs land abutting a recently regraded road constitutes an unconstitutional taking of their property without compensation.

Disposition

No. New York City's enforcement of Plaintiffs' legal obligation to regrade their land does not constitute an uncompensated unconstitutional taking.

AUTHORITIES CITED

Cases Cited by the Court

Other Sources Cited by the Court

  • Department of Transp., N.Y.C.C. § 2904(2) (1992).
  • Kmiec, At Last, The Supreme Court Solves the Takings Puzzle, in Takings: Land Development Conditions and Regulatory Takings After Dolan and Lucas 110-112 (Callies ed.).
  • 1 Joseph Rasch, New York Law and Practice of Real Property § 20:23 (1991).

Cases Relied on by the Dissent

Other Sources Cited by the Dissent

  • 1 Am. Jur. 2d Adjoining Landowners § 40 (1994).
  • Restatement (Second) of Torts § 817 (1979).
  • 3 William X. Weed, Warren's Weed on the New York Law of Real Property, Lateral and Subjacent Support § 2.04(1) (1950).

RELATED SOURCES

  • Anello v. Zoning Bd. of Appeals of Dobbs Ferry, 1997 NY Int. 24, (N.Y. 1997).
  • Hunsiker v. Iowa, 519 N.W.2d 367 (Iowa, 1994).
  • Ganote v. Kentucky, Dep't of Highways, 409 S.W.2d 165 (Ky. Ct. App. 1966).
  • Baltimore & O.R. Co. v. Kane, 92 A 532 (Md. 1914).
  • Smith v. State Highway Comm'n, 126 S.E.2d 87 (N.C. 1962).
  • Thompson v. Seaboard Air Line R.R. Co., 104 S.E.2d 181 (N.C. 1958).
  • Bennett v. Winston-Salem South-Bend Ry.Co., 87 S.E. 133 (N.C. 1915).
  • Grant v. South Carolina Coastal Council, 461 S.E.2d 388 (S.C. 1995).

COMMENTARY

State of the Law Before Soon Duck Kim

According to Loretto v. Teleprompter Manhattan CATV Corp., any permanent, physical occupation of private property by the government is a taking. 458 U.S. 419 (1982). In order to determine whether a taking has occurred, the court must make a threshold inquiry into whether the property right deprived was one encompassed in the plaintiff's title. Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) (stating that the threshold step in a takings case is determining whether the allegedly taken property right was a stick in the "bundle of rights" that the owner possesses). See also Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978) (holding that determination be made on a takings question).

The U.S. Supreme Court outlined the sources of law defining and limiting the bundle of inherent property rights. The Lucas Court held that there is no taking where the state action merely asserts a restriction that already inheres in the title by way of the state's common-law nuisance principles. The Court under the facts of the case focused on nuisance law in discussing the kinds of restrictions inherent in a property owner's title.

Lucas has been read narrowly in the past to mean that restrictions on the bundle of private property rights can only be restricted by states' nuisance laws. See, e.g., K&K Constr., Inc. v. Department of Natural Resources, 551 N.W.2d 413, (Mich. Ct. App. 1996) (specifically stating that statutory law should not be considered in the analysis of those restrictions).

Effect of Soon Duck Kim on Current Law

Prior to Soon Duck Kim, the New York courts had not addressed whether prior statutory restrictions on property rights as well as nuisance law could be considered in defining a landowner's "bundle" of rights. The court cites Lucas to illustrate that takings jurisprudence has "traditionally been guided by the understandings of our citizens regarding the content of, and the State's power over, the 'bundle of rights' that they acquire when they obtain title to the property." Soon Duck Kim, 1997 N.Y. Int. 23 at para. 11 (N.Y. 1997) (quoting Lucas, 505 U.S. at 1027). The court reasons that it would be illogical to ignore statutory law in force when an individual obtains title. The court reads Lucas broadly and finds that preexisting statutory restrictions on property rights must be recognized as limitations on the fundamental property rights of those who obtain title under those laws. The court cites Gombert v. McKay 201 N.Y. 27 (N.Y. 1911), (supporting the proposition that a statute supersedes a common law doctrine when the two are in dispute).

Thus, after Soon Duck Kim it is clear that purchasers must look to the law in force, whether it be statutory or common law, at the time they obtain title to the land. Owners will be considered on constructive notice of any of the rights and restrictions inhering in that property. Thus a takings inquiry is not necessary when the government enforces rights previously reserved by statute because that particular right will not be part of the "bundle of rights" possessed by the owner.

The court concurrently upheld enforcement of preexisting property statutes as not being takings. Gazza v. New York State Dep't of Envtl. Conservation, 1997 NY Int. 25, (N.Y. 1997); Anello v. Zoning Bd. of Appeals of Dobbs Ferry, 1997 NY Int. 24, (N.Y. 1997).

Dissent

The dissent's result is contrary to the majority's for a number of reasons. First, the dissent begins its analysis with an emphasis on the "actions" of the City of New York. "When the city put side fill on [P]laintiffs' property to shore up a roadway, it took their property for public use and [P]laintiffs are entitled to be compensated for the taking." 1997 N.Y. Int. 23 at Dissent para. 1. Once the dissent comes to this conclusion, the remainder of its analysis focuses on whether the City has the authorization to effect such a taking without compensation.

This analysis is fundamentally different from the majority's, which asks the threshold question whether, under Lucas, Plaintiffs ever owned a property right before deciding whether the City's physical action would be considered a taking. The majority firsts asks whether Plaintiffs had a right which was then invaded, while the dissent assumes the invasion was a taking and then looks to the common law and the statutes for a "justification" for the invasion.

The analytical difference explains how both majority and dissent cite the same for cases to support different propositions. Thus the dissent cites Lucas as well as Haverstraw as supporting its position, cases the majority relies on as well. While the majority cites the Lucas analysis as necessary to determine if there has even "been" a taking. Id. at Majority para. 24 (quoting Lucas, 505 U.S. at 1031-32) ("plaintiffs never owned the property interest they claim was taken"). The dissent considers the Lucas analysis as coming into play after a determination has been made that there has been a physical taking. Id. at Dissent para 18. (quoting Lucas, 505 U.S. at 1031) ("Accordingly, under the guidance of Lucas, the circumstances presented here may only be validated without compensation if respondent can show that a "pre-existing limitation" upon plaintiffs' title may be found in state law").

The majority and dissent both look to the applicable common law and statutes in determining whether Plaintiffs ever held the property right they claim the City took. While the majority and dissent agree that Plaintiffs had constructive notice of the legal grade, the dissent distinguishes the effect of this notice. It argues that although they were under constructive notice that their property was below the legal grade, this knowledge does not automatically obligate them to act affirmatively to meet the lateral support obligation, especially since College Point Boulevard was itself below the legal grade. Id. at Dissent para. 2-6. The dissent's interpretation limits Plaintiffs' obligation. In other words, Plaintiffs "may not" actively take any step which will cause deterioration to the existing lateral support. 1997 N.Y. Int. 23 at Dissent paras. 27-32. The dissent would not read the statutes as requiring that Plaintiffs "must" maintain the legal grade where the roadway was below legal grade or where the city by enactment raises that grade.

The dissent also disagrees with the majority's interpretation of the underlying common law lateral support duty. The majority finds that even if there were not a basis in the City charter for the existence of such an easement, the common law recognizes the proposition that Plaintiffs had an "obligation to preserve and maintain the legal grade." Id. at Majority para. 14 (citing Village of Haverstraw v. Eckerson, 192 N.Y. 54 (N.Y. 1908)). The dissent also cites Haverstraw, but focuses on its holding that a municipality may restrain a landowner's continuance of actions which "menace the condition of a highway in a direct mannerr, or indirectly , by so digging or excavating . . . as to affect the lateral support." Id. at Dissent para. 31 (citing Haverstraw, 192 N.Y. at 60). Thus, conceptually, the dissent sees the duty imposed upon Plaintiffs' property (under either common or statutory law) as a negative easement, one forbidding them from any action altering the requisite lateral support. Therefore, the dissent contends that if Plaintiffs had no obligation to affirmatively act to raise their property, no pre-existing limitation existed. And as a result, if no pre-existing limitation existed, the city had no "authorization" to invade the property under Lucas. Id. at Dissent paras. 18 - 19.

The dissent analogizes the present facts to the invasion addressed by the U.S. Supreme Court in Loretto. 1997 N.Y. Int. 23 at Dissent paras. 11-12. And it distinguishes the support obligation from the kind of regulations the Loretto court discussed in favorable terms, charaterizing it as one which dedicates Plaintiffs property "to the public benefit without regard to plaintiffs' property interests." Id. at Dissent para. 12. By contrast the hypothetical regulations discussed in Loretto were "directed toward the public safety and health of those persons invited to the landowner's property by the landowner." Id. In the present case, the dissent viewed the city's actions as indeed dedicated solely to the public benefit.

Unanswered Questions

The court underscores the fact that Plaintiff had constructive notice of the City's interest in the property prior to purchase, indicating the importance of this factor in deciding a takings question. Filing a notice of raised legal grade with the Queens Borough President provided constructive notice. In the future, will anything short of such a filing be deemed constructive notice? For instance, will a news article or public meeting regarding a proposed change be deemed to put prospective purchasers of the affected property on notice?

The court also hints that the purchaser paid a reduced price for the property precisely because of the City's limiting interest, but this analysis implies that the seller received a correspondingly lower price. In any similar situation, the regulation in question will have to begin during some owner's tenure, so that at some point in time an owner will not be given notice prior to the purchase of the property . Will future owners in this position be able to recover from the City by characterizing the diminution in property value as a regulatory taking? The answer seems to be "probably not," given the United States Supreme Court's reluctance to sanction such claims. See Penn Cent. Transp. Company, 438 U.S. 104, at 131 (1978) (holding that land restriction resulting in diminished property value not a taking).

However, the court does note that the present ruling does not extend to the situation where the legal grade requirement is instituted or changed after purchase. For example, the court does not answer the question that would have been raised if an owner had purchased property meeting the legal grade and the city then changed that legal level. (See Soon Duck Kim, 1997 N.Y. Int. 23 at Majority n. 7 (N.Y. 1997)). Would it matter if the property did not meet the legal grade before the city raised it? For example, if an owner had purchased the property in question with notice that it was five feet below the published legal grade and the city then raised that legal grade another two feet, would that additional two feet be a taking even though the first five would not? Forced compliance with a newly instituted legal grade may present a case of physical taking while promulgation alone might not present a case of regulatory taking. Note, however, that the court has recognized a common law duty to lateral support of public roadways; thus, the court may still refuse to find a taking in the former situation.

At trial, Plaintiffs argued that the previous owners willfully failed to disclose the City's intention to raise the legal grade. The Court of Appeals notes that this argument is irrelevant to Plaintiffs' claim against the City of New York and suggests that this claim should be brought against those involved in the transaction. Id. at Majority n. 9. This leaves open the question whether Plaintiffs could have prevailed had they brought their action against the seller of the property for damages or rescission of the purchase. Since Soon Duck Kim forecloses parties similarly situated to Plaintiffs from prevailing against a municipality, it remains to be seen whether those parties would be more successful bringing suit against the sellers of such encumbered property.

Survey of the Law in Other Jurisdictions

"[T]here are few propositions better settled by the authorities than that an owner of land adjoining a highway . . . is not constitutionally entitled to compensation for injury resulting from a change in the grade.'" Smith v. State Highway Comm'n, 126 S.E.2d 87, 90 (N.C. 1962).

Generally, one of the public rights in a highway is that of changing the grade as public necessity and convenience may periodically require. A municipality's power to further grade and improve streets is continuing, and because municipalities hold streets in trust for the public, changes to the grade should be contemplated. Bennett v. Winston-Salem South-Bend Ry. Co., 87 S.E. 133 (N.C. 1915). See also Thompson v. Seaboard Air Line R.R. Co., 104 S.E.2d 181 (N.C. 1958).

Stemming from these principles is the general rule that the owner of property abutting a street cannot recover damage to property caused by a change in the grade of the street under proper municipal authority. Any damage resulting from such a change is considered damnum absque injuria, loss without injury. Compare Smith, 126 S.E.2d at 87; and Bennett, 87 S.E. at 133; and Thompson, 104 S.E.2d at 181; and Ganote v. Commonwealth of Kentucky, Dep't of Highways, 409 S.W.2d 165 (Ky. Ct. App. 1966); and Baltimore & O.R. Co. v. Kane, 92 A 532 (Md. 1914). In the above cited cases except Thompson, the increases in grade of the relevant streets did not amount to a taking of a private owner's property right for which compensation was due. In Thompson, however, a railroad company that raised the elevation of a street was not cloaked with governmental immunity and therefore liable to individuals whose property was damaged by the change.

In regard to the issue of taking in the face of state or local statutes, case law supports the holding in Soon Duck Kim. It has been held that the "bundle of rights" to property does not include the right to use land contrary to statutory law in force when the owner acquired title. Owners purchase real property subject to existing statutory restrictions. Hunziker v. Iowa, 519 N.W.2d 367 (Iowa, 1994) (holding that there was no taking without just compensation when the state prohibited disinterment of human bones on private property). See also Grant v. South Carolina Coastal Council, 461 S.E.2d 388 (S.C. 1995) (holding that a statute forbidding property owners from filling "critical areas" of their property after a hurricane does not constitute a taking requiring compensation).

Prepared By:

  • Quentin C. Faust, 97
  • H. Marlow Green, 97
  • Pamela T. Harris, 98
  • Farah Mollo, 97
  • Phillip M. Pippenger, 98
  • Jared B. S. Steele, 98