Court Opinion

ID: 8878184
Source: CourtListenerOpinion
Date Created: 2022-11-26 19:45:27.575316+00
Date Added: 2024-06-11T17:06:29.240871
License: Public Domain

WATERMAN, Circuit Judge
(dissenting) :
I agree with the majority of the court that in many instances the short-term tenant will be able to negotiate a renewal or an extension of the lease. This I recognize, but in the absence of some legally enforceable assurance that a tenant will be able to remain on his rented premises I cannot assume that he will be able to derive any value from his fixtures beyond the expiration of his lease, and therefore it is, to my mind, doubtful that any legal basis exists to compensate a tenant for any presumed use of fixtures beyond his lease expiration date.
The procedure outlined by the majority which permits the Government to prove that the tenant could neither renew his lease nor sell his fixtures to the landlord or to a successor tenant will give the condemnor the opportunity of fairly disposing of the issue of whether a tenant is entitled to any compensation at all when there exists the possibility or likelihood that the landlord himself intended to raze the building in which the tenant’s fixtures were located. As of now it is undisputed that this issue exists here as to some of the appellants. It does not, however, eliminate a more subtle and frequent windfall which may unfairly advantage the tenant at the expense of the condemnor. Not all tenants will be able to convince their landlords to renew their leases or will choose to do so. Absent condemnation, these tenants would have lost the in-place value of their fixtures unless they could arrange to sell them to the landlord or to a successor tenant. I cannot believe, as the majority holding implies, that such a selling tenant would be able to recover an amount from such a purchaser equal to the in-place working value of the fixture, i.e., the replacement cost1 *603less straight-line depreciation computed on the basis of a useful life of twenty years. The prospective purchaser, whether the landlord or the successor tenant, has the selling tenant at a great disadvantage, for, faced with the possibility of abandoning the entire working value of the fixture, he will be delighted at the prospect of recouping whatever he can cajole out of the prospective purchaser. I do not agree with the footnote to the majority opinion where it is suggested that the tendency of depreciation rates to exceed the actual loss in functional value will compensate for the low price obtainable by the tenant at his forced sale.
Indeed, often the prospective purchaser will have no need for or interest in the fixtures offered for sale. Under the applicable New York law, this middle category of fixtures we are considering includes, for example, a walk-in refrigerator and the plumbing and wiring which service it. Aber-Dulberg, Inc. v. State, 15 A.D.2d 712, 223 N.Y.S.2d 853 (App.Div. 3rd Dep’t 1962). Unless the next tenant is going to be a butcher or a grocer, he is not likely to be interested in purchasing such an item even at greatly reduced prices.
At the very least, I would enlarge the procedure outlined in the majority opinion to permit the condemnor to prove that the tenant could not or would not renew his lease, and to permit presentation of any other evidence tending to show that the tenant would not be able to recoup the entire working value of his condemned fixtures.

. It seems to me that original cost, not replacement cost, should be the figure from which the depreciation is taken. If, because of a decline in the dollar’s purchasing power, the fixture after half its useful life has been exhausted now costs *603twice as much as when it was originally purchased, the tenant will receive from the condemnor what the fixture cost him ten years ago. The Government should not be required to assume the whole burden of inflation.