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WANTANABE REALTY CORP. v. CITY OF NEW YORK

February 2, 2004.

WANTANABE REALTY CORP., et al., Plaintiffs, -against- THE CITY OF NEW YORK, et al., Defendants


The opinion of the court was delivered by: LEWIS KAPLAN, District Judge

MEMORANDUM OPINION

In November 2000, the City of New York demolished the Thunderbolt, a roller coaster at Coney Island that had not been used since 1982 or 1983, allegedly on the ground that the structure had become hazardous. Plaintiff, the owner, brought this action for damages, claiming that Page 2 the demolition was unjustified. The trial was bifurcated. The first jury found the City liable for common law trespass. The second jury rendered a special verdict that, in substance, found no damages, so plaintiff recovered nominal damages alone.

Shortly before the damages trial, the Court granted defendants' motion in limine to exclude the testimony of one of plaintiffs proposed expert witnesses, Richard Battaglia, and indicated that an opinion would follow in the event the matter was not resolved in a manner that obviated any need for it. As no such resolution has been reached, this opinion follows.*fn1 The Court assumes familiarity with its previous opinions.*fn2

 The Proposed Testimony

  Plaintiff proposed to call Mr. Battaglia to testify that replicating the Thunderbolt anew would cost $15.8 million,*fn3 that it had an historic value of $4 to $5 million,*fn4 and that the value of the Thunderbolt just prior to its destruction was $10.7 million, of which he attributed $5 million to Page 3 "historic value."*fn5 According to Mr. Battaglia's report, the $15.8 million replication cost*fn6 included, among other things, $8.1 million for a ride system, which was simply a price quote obtained from a Swiss manufacturer, plus $700,000 for shipping the ride from Switzerland and $1.4 million for installing it in Coney Island, and an additional $928,800 to rebuild the so-called Kensington Hotel.

 Qualifications

  The threshold question tendered by defendants was whether Mr. Battaglia was qualified to offer opinions as to the replication cost of the Thunderbolt, its pre-demolition value, and its "historic value."

  Mr. Battaglia has a B.S. in business with a marketing emphasis. For a number of years, he worked for The Disney Company, first as a ride operator and then in supervisory capacities and in the marketing department at Disneyland.*fn7 Later, he joined a three-person project development team that assessed the relative success of different rides at Disneyland in preparation for the development of Disney World in Florida.*fn8 After leaving Disney, Mr. Battaglia joined Ringling Bros. Barnum & Bailey Circus as a vice president of planning where he did similar work.*fn9 Page 4

  Eventually, Mr. Battaglia and another started the firm with which he now is associated, Battaglia Incorporated,*fn10 which develops theme parks and entertainment complexes and resorts for clients on a turnkey basis, developing a concept, participating in design, doing feasibility analyses and preparing architectural and engineering drawings.*fn11 While it does not actually build, it sometimes oversees general contractors on behalf of owners.*fn12 It is involved also in developing revenue estimates in order to evaluate proposed capital investments and in making initial estimates of the costs of constructing proposed amusement rides.*fn13

  It is far from clear that Mr. Battaglia's background, even given the liberality of the standards for qualification, qualified him to testify concerning these matters. It was unnecessary to make such a determination, however, in light of the discussion that follows.

 Replication Cost

  The measure of damages in this case was the lesser of the value of the structure, in its then depreciated condition, immediately prior to demolition, and the amount, if any, by which the demolition reduced the fair market value of the real estate.*fn14 Plaintiff contended that the difference Page 5 between building a new replica of the Thunderbolt and the cost to repair the deteriorated structure was a fair estimate of the roller coaster's depreciated value prior to demolition.*fn15 Testimony regarding the replication cost of the Thunderbolt therefore was relevant, contrary to defendants' contention. There remains, however, defendants' assertion that Mr. Battaglia's opinion as to replication cost was insufficiently reliable and grounded.

  In assessing reliability under Rule 702, Daubert v. Merrell Dow Pharmaceutical,*fn16 and its progeny, a district court should consider indicia of reliability, including, but not limited to, (1) whether the testimony is grounded on sufficient facts, (2) whether the underlying methodology is reliable, and (3) whether the witness has applied the method reliably to the facts.*fn17 Admissibility, when challenged, must be established by the proponent by a preponderance of the evidence.*fn18 "The burden of demonstrating that the testimony is competent, relevant, and reliable rests with the proponent of the testimony."*fn19

  The principal figure in Mr. Battaglia's replication cost estimate was the $10.2 million Page 6 quote for the ride system ($8.1 million), the cost of shipping it from Switzerland ($700,000) and the installation cost ($1.4 million).*fn20 It is clear from his report that the $8.1 million bid was that of Intamin,*fn21 a Swiss roller coaster manufacturer and the only supplier from whom Mr. Battaglia sought a quotation.*fn22 To be sure, Mr. Battaglia asserted that his firm "actually did a cost estimate in-house to determine what we felt it was going to cost to fabricate the roller coaster" and that Intamin's bid "corroborated" that estimate.*fn23 But he never offered his firm's in-house estimate, and he certainly never demonstrated the basis for it. In consequence, even if the Court had accepted the assertion that ...


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