Small Claims Court Determines Amount of Damages Due to Unintentional Taking
In his small claims complaint, James K. McCormack sought $3,480.00 for an alleged encroachment of approximately twenty feet onto his property resulting from a new leach field associated with repairs to the septic system on the neighboring property owned by Derrick and Cystalyn Miller. The complaint stated that “this ruined the value of the property for me and an encroachment as such would make it difficult to sell my property and reduce its value. I want the appraised value of the property the leach field is on and its surrounding area (79′ × 25′) and the cost to separate it from the rest of my property.”
This was a unique case where the McCormack and the Millers agreed as to the facts. Their disagreement was in the value that should be afforded over an acknowledged encroachment.
The facts were fairly simple and not in dispute, and testimony was taken somewhat out of turn considering that the parties were in agreement as to the facts of the complaint. McCormack and the Millers own adjoining properties. The Millers had repair work done to the septic system on their property, which required a new leach field. The work was facilitated by the non-profit entity, Opportunities for Chenango, but also involved Adsit Excavating, which was the business that installed the septic system, the engineer from Depot Engineering, and a person acting on behalf of the Town of McDonough. Amongst them, it was agreed that the best location for the septic system was at the far end of the Millers’ property abutting up to approximately 3 feet of the McCormack’s land. While minutes from the town meeting strongly suggested that the placement of the septic system in that fashion would be in violation of 75A Sanitation Laws, there appeared to be an understanding that the Town could overcome that law via a process of “home rule”.
Whatever was ultimately the case, all parties involved at the time were relying on the “old” tax map, which placed the leach field very close to McCormack’s property. While McCormack had notice of the project and did not object to the work as it was being done, he testified to having a feeling that the Millers’ property was expanding. That suspicion prompted his own survey of his property months later, which revealed that the leach field had crossed onto his property by approximately 20 feet, resulting in McCormack seeking to separate a 79′ by 25′ feet parcel, the area surrounding the leach field, to maintain clear title on his property.
The Millers did not dispute the encroachment or McCormack’s need to partition the parcel from his property to protect his title interests. And McCormack did not allege that the Millers intentionally encroached on his property; only that they should have noticed that the leach field expanded beyond some boundary stakes that Derrick Miller acknowledged to moving back once realizing that the system encroached beyond the wooden stakes. Derrick Miller also testified to maintaining the area where the leach field encroached for approximately 6 years, which was not disputed by McCormack.
Ultimately, both parties acknowledged an oversight by all parties involved in building, engineering, and approving the system as constructed. The parties also agreed that there should be some compensation for this encroachment. The parties did not agree, however, on the amount of the compensation.
McCormack submitted a letter from David Thomas of Chenango County Realty opining that a fair price for the 79′ × 25′ parcel to be partitioned from his property would be $2,500.00. Additionally, McCormack sought reimbursement for a survey, estimating the cost to be approximately $380 to $400, based upon verbal estimates he received. He also included a lawyer fee of $400 to update and file a new deed description, along with transferring the parcel to the Millers and $200 for recording fees. McCormack initially sought reimbursement for the cost of having the property surveyed, but did not include that in his offer to resolve the matter. There were no written estimates or documentation to otherwise address those additional costs.
The Millers offered calculations extrapolated from other local properties in order to price out the value of the parcel to be partitioned. In so doing, the Millers came up with a price of less than $200.00 for the small parcel, but felt that $500 was a reasonable value and would have agreed to split the cost of the $380 survey.
While the parties negotiated on the record, they could not come to a resolution. As a result, the Court was left to decide on an appropriate amount of damages to be awarded to McCormack for the Millers’ encroachment onto his property, installation/upgrade of their septic system and specifically their new leach field.
In small claims cases, the plaintiff bears the burden of proving a claim by a preponderance of the evidence. The court has the obligation to apply the facts to the relevant law, keeping in mind the statutory mandate of substantial justice.
While small claims matters are not bound by the rules of evidence, a determination may not be based solely on hearsay. Even at small claims, with its relaxed rules of procedure and evidence, the fundamental right to confront a witness by cross-examination must be preserved.
This of case typically was litigated in Supreme Court, where jurisdiction lies to award injunctive relief. But the Small Claims Court was without such jurisdiction, it could only consider a verdict for money damages, which would also be an option had the case been brought in Supreme Court. In this regard, the appropriate measure of damages is the difference between the value of McCormack’s property with and without the encroachment. And in a small claims action, the reasonable value (to make a party whole) may be established by an itemized bill or invoice, receipted or marked paid, or two itemized estimates for services or repairs.
Initially, it was important to note that McCormack testified that when he first saw the (septic system and leach field) under construction, he did not pursue his rights because he was unaware that the Millers were encroaching on his land. It was only after it was installed that McCormack questioned its placement and had his property surveyed. While the Court did not place the onus on a property owner to always be vigilant of encroachments on their property, the situation could have been remedied at the time that the project was being contemplated if McCormack had been aware of his property boundary, or at least had concerns regarding the placement of the septic system. While the not placing fault upon McCormack, the Court noted that, in some regard, there was a mutual mistake by not only those involved in coordinating the placement of the septic system, but also by McCormack who did not take any action despite the obvious nature of the project and encroachment and still did not take any legal action for over one year after the new system was installed. Nevertheless, the Court did not find any specific legal impediment to McCormack’s action under those set of circumstances.
Even in the ordinary course of seeking equitable relief, an award of damages would be appropriate under the circumstances where there was no willful action by defendants or that the encroachment emanated from any claim of right. Ultimately, damages should include the reasonable cost (to ensure that the plaintiff is able to protect the value and worth of his property.
While McCormack shared a letter/estimate of the value of the infringement itself, he failed to produce any evidence as to a diminution in the value of his property which resulted from the encroachment. Even with that, McCormack only offered one “estimate”, as opposed to two as called for by law. As a result, it was difficult to assess damages, without the amount being speculative and improper. With that said, the Court considered McCormack’s cost to have the parcel surveyed, subdivided, and transferred to the Millers to ensure that there is no impediment to his title for a future sale of the property.
While the costs outlined by McCormack failed to include any written estimates or the like, the Millers did not contest the costs and the Court took judicial notice that the estimates were not unreasonable. As a result, the Court found that McCormack estimated costs to complete a conveyance of the encroached upon property of $980—representing attorney costs ($400); survey costs of the subdivision ($380); and recording costs ($200)—to be reasonable. Normally in such a conveyance, the Court would also take judicial notice that the parties would typically share those costs. As a result, the Court found that the Millers were responsible for half of those approximate costs and awarded McCormack $490 for the costs of completing such a conveyance.
The Court was then left to decide on the reduction of the value of McCormack’s property as a result of the encroachment or conveyance of the parcel encroached upon. Without an appraisal in that regard, coming up with an amount for the property was extremely difficult and speculative. However, as this was a small claims action, the goal of the Court was to do “substantial justice” between the parties. Considering the very small portion of land taken out of the approximate 11-acre McCormack parcel, the Court found $750.00 to be a reasonable reduction of value of McCormack’s property as a result of the encroachment and anticipated conveyance of the parcel containing the encroachment.
For all of those reasons, McCormack was entitled to half of his costs of conveying the encroachment to the Millers and the determined amount of the reduction of value of his property as a result of the encroachment. McCormack was awarded Judgment in the amount of $1240.00, with the parties to split court costs.