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Saranac Lake village wins appeal in eminent domain case

Taxpayers won’t have to pay most of property owners' attorney fees

March 8, 2012
By CHRIS KNIGHT - Senior Staff Writer ( , Adirondack Daily Enterprise

SARANAC LAKE - A mid-level state appeals court has ruled that the village did follow proper procedure when it used eminent domain to secure sewer line easements from a group of Riverside Drive and Kiwassa Road property owners.

Thursday's decision by the Appellate Division of state Supreme Court rejects a lower court ruling that, if it had been upheld, would have forced the village to pay the property owners' attorney fees and costs, which totaled $225,000.

"It proves we were on the right path and used the right procedures," village Manager John Sweeney said.

The Appellate Division ruling is the latest, but not the final, chapter in a nearly eight-year-old legal battle between the village and the property owners, who include Wayne and Denise Bujold, John and Linda Banta, Ed Dukett, Joseph Fiorile and the owners of Knabe House and Lakeside House. It addressed an August 2010 ruling from state Supreme Court Justice David Demarest that found the village failed to follow the requirements of state Eminent Domain Procedure Law and made "serious misrepresentations" to the court to gain emergency access to the properties and install the sewer line in 2005. Demarest ordered the village to pay the property owners' costs, including their legal fees.

But the Appellate Division justices found nothing on the record to indicate that the village didn't follow the proper eminent domain procedures prior to acquiring the easements. The appeals court also ruled that the village "was entitled to immediate access to the properties in order to repair the sewer line" and found nothing in the record to indicate that the village made serious misrepresentations to the court.

The decision notes that the village was at risk of losing its no-interest financing for the project if the work was delayed. It also says raw sewage from the sewer line had leaked into the lake and that the state Department of Environmental Conservation, state Department of Health and U.S. Environmental Protection Agency "had all expressed concerns about additional raw sewage discharge.

"Under these circumstances, the record amply supports Supreme Court's initial determination that the public interest would be prejudiced by a delay and that petitioner was entitled to immediate access to the properties in order to repair the sewer line," the decision reads.

The appellate justices reversed the portion of Demarest's 2010 decision that awarded the property owners attorney fees, which totaled roughly $225,000, in connection with the village's most recent attempt, in 2007, to obtain the easements by eminent domain.

In a small victory for the property owners, the court upheld Demarest's prior decision to award their legal fees for two previous attempts by the village, in 2005 and 2006, to obtain the easements through eminent domain, both of which were dismissed. Sweeney said those costs amount to about $31,000.

In February 2011, the village board voted 3-2 to appeal Demarest's ruling, with Mayor Clyde Rabideau casting the tie-breaking vote. During that debate, some trustees felt the village should cut its losses and end the costly legal battle. But the majority of the board, including Rabideau, reluctantly took the advice of their attorney, Doug Foss of the firm Harris Beach, and voted to file the appeal.

Sweeney said Thursday that the Appellate Court ruling vindicates the board's decision.

"I'm glad we proceeded in this," he said. "The board's voting majority obviously made the right to decision to move forward with it."

But it's a bittersweet victory because the case, as of February 2011, has already cost village taxpayers a quarter of a million dollars. That doesn't include the attorney fees the village incurred in filing this appeal, which Sweeney wasn't able to provide.

"I would have liked to think this had been resolved up front, but it does prove that what we did was correct," Sweeney said.

Attorney John Muldowney, who represented Lakeside House, Joe Fiorile and the Bantas in the case, conceded Thursday's ruling was a win for the village.

"This is disappointing for my clients," he said. "They don't feel like the village treated them very well, and they've had to expend a lot of money to go through what they've gone through, but that's how the court ruled."

The property owners could appeal the decision to the state's highest court, but Muldowney said he hadn't consulted with his clients to determine what they want to do next.

The next step in resolving the matter is a series of upcoming valuation hearings, which Demarest had ordered in his August 2010 ruling. The hearings will be held later this month, Muldowney said. The judge will hear testimony from appraisers on both sides to determine whether the property owners are entitled to be paid by the village for the taking of an easement across their land.



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