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ANNE MULLEN ET AL. v. HENRY JACOBS (11/06/68)

SUPREME COURT OF NEW YORK, SCHENECTADY COUNTY 1968.NY.43407 <http://www.versuslaw.com>; 294 N.Y.S.2d 636; 58 Misc. 2d 64 November 6, 1968 ANNE MULLEN ET AL., PLAINTIFFS,v.HENRY JACOBS, DOING BUSINESS AS TRANSPORT OIL COMPANY, ET AL., DEFENDANTS Houlihan & Martin (Bruce L. Martin of counsel) and Friedman, Ladd & Maksail (George Maksail of counsel), for plaintiffs. Carter & Conboy (James Carter of counsel), for defendants. John J. O'Brien, J. Author: O'brien


John J. O'Brien, J.

Author: O'brien

 These three cases were consolidated and tried before me. Each was an action to recover damages based on defendants' negligence. On February 15, 1964, a tanker of defendants loaded with gasoline left the highway and struck a building located at 1551 Van Vranken Avenue, Schenectady, New York, resulting in an explosion and fire and causing the complete destruction of the building and its contents. Prior to trial, defendants admitted their liability and the trial was confined to the issue of damages.

The owner of the property is Thomas Mullen. The premises consisted of a one-story concrete block building fronting on Van Vranken Avenue with one side on Hattie Street. On the Hattie Street side with frontage on Van Vranken Avenue was a post office operated by Anne Mullen under contract with the United States Post Office Department. Adjoining it on Van Vranken Avenue were a restaurant, bar and grill operated by John De Novio. In the rear of the concrete structure was a two-story frame building, the first floor of which was used as a kitchen for the restaurant and the upper floor was rented for residential purposes. The frame structure was erected about the year 1900. The concrete block structure was added in 1930 and along with the first floor of the frame structure occupied as a restaurant.

The building was on a lot 66 feet wide on Van Vranken Avenue and extending 119 feet along Hattie Street.

For the owner, an eminently qualified real estate broker and appraiser testified that the structure at the time of the incident on February 15, 1964 had a reasonable market value of $30,297.

CPLR 4515 provides that "Unless the court orders otherwise, questions calling for the opinion of an expert witness need not be hypothetical in form, and the witness may state his opinion and reasons without first specifying the data upon which it is based. Upon cross-examination, he may be required to specify the data and other criteria supporting the opinion."

The owner's expert, before giving his valuation, stated that he had been in the building many times as a patron and on one occasion had been escorted through the premises. After he gave his opinion, defendants failed to cross-examine him to ascertain the facts upon which he based his opinion.

Defendants' expert, also well qualified in the real estate appraisal field, acknowledged that appraisal posed a problem for him because the structure he had been called upon to appraise had been destroyed and the ruins removed, and therefore his appraisal was based on notes and records of others. He estimated the value of the entire property to be $25,000 of which $8,900 was for land and $16,100 was for the buildings. His appraisal was made on October 30, 1967, just less than four years after the accident and the destruction and removal of the buildings. The appraisal did not impress me.

It was based on hearsay and assumed facts. He lacked any knowledge of the condition of the structure, the layout of the rooms and the condition of the interior -- not having been in the premises except once so long previously that he could not remember when it was. He had never examined the premises and did not know the condition of the walls, of the plumbing, of the electric wiring, of the plaster or of the heating plant. Upon cross-examination, it became apparent that the facts underlying the appraisal were not subject to cross-examination because not in evidence. In People v. Crossland (9 N.Y.2d 464, 467) the court reaffirmed the principle "that an opinion of an expert must be based upon facts which are produced in evidence before the jury". In Cassano v. Hagstrom (5 N.Y.2d 643, 646) the court said that "opinion evidence must be based on facts in the record or personally known to the witness * * *. He cannot reach his conclusion by assuming material facts not supported by evidence". Plaintiffs objected to the receipt in evidence of said expert's appraisal. At that time, I overruled the objections, stating that they affected the weight to be given the appraisal but not the admissibility. I now find that such appraisal has no weight whatsoever.

Other reasons for rejecting the appraisal exist. There are errors in the capitalization of income approach. The appraiser characterized the income as the fair rental value. With respect to the rental income from the post office which was leased to the owner's wife, and thus might have tended to be well below the fair rental value, he gave no explanation for considering it to be the fair rental value. Normally, an appraisal based on capitalization of the fair rental value is the best method of determining the value of a property (Matter of Woolworth Co. v. Commission of Taxation of City of Plattsburgh, 45 Misc. 2d 701, mod. A.D.2d 759). Under the circumstances here, the capitalization of income approach had little weight.

The reproduction cost less depreciation method also was defective. The expert assumed a reproduction cost based on a contractor's estimate and the contractor was not produced. Moreover, the depreciation deduction of 60% was too high.

The comparables used to determine value were also wide of the mark. They bore no relation to the subject property.

Finally, the appraisal was more suited to a tax reduction case or to a condemnation, because of its stress on both structure and land. In this case, the land remains in the owner's possession, untouched, not one square foot having been taken. Under the circumstances, the appraisal should have been geared to the value of the structures only.

Although defendants had the opportunity to cross-examine plaintiffs' expert to determine the factual basis for his valuation, they declined to do so. It is regrettable the defendants chose not to bring out the facts on which plaintiffs' expert based his valuation. It would have given the court a wider base on which to judge the fair market value. The choice was defendants', and I assume they were content with the factual base of the valuation. I conclude that plaintiffs' expert valued the property more nearly in accordance with its ...


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