        SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

875
CA 11-02341
PRESENT: SCUDDER, P.J., SMITH, CENTRA, FAHEY, AND PERADOTTO, JJ.


IRONWOOD, L.L.C.,
PLAINTIFF-RESPONDENT-APPELLANT,
ET AL., PLAINTIFF,

                    V                             MEMORANDUM AND ORDER

JGB PROPERTIES, LLC,
DEFENDANT-APPELLANT-RESPONDENT.


MICHAEL J. KAWA, SYRACUSE, FOR DEFENDANT-APPELLANT-RESPONDENT.

HANCOCK ESTABROOK, LLP, SYRACUSE (JANET D. CALLAHAN OF COUNSEL), FOR
PLAINTIFF-RESPONDENT-APPELLANT.


     Appeal and cross appeal from an order of the Supreme Court,
Onondaga County (Brian F. DeJoseph, J.), entered February 3, 2011.
The order, inter alia, denied the claim of plaintiff Ironwood, L.L.C.
for compensatory damages, granted the motion of plaintiff Ironwood,
L.L.C. to amend the complaint to assert a claim for punitive damages,
and determined that plaintiff Ironwood, L.L.C. is entitled to punitive
damages.

     It is hereby ORDERED that the order so appealed from is
unanimously modified on the law by granting plaintiff’s claim for
compensatory damages and as modified the order is affirmed without
costs and the matter is remitted to Supreme Court, Onondaga County,
for further proceedings in accordance with the following Memorandum:
Ironwood, L.L.C. (plaintiff) is the successor in interest to an
easement granting it a “permanent right of way for a railroad spur
track” over property owned by defendant. The spur track connected
plaintiff’s property with the main railway line. After defendant
removed the spur track over plaintiff’s objections, plaintiff
commenced this action seeking, inter alia, a declaratory judgment,
injunctive relief and damages based upon defendant’s unlawful
interference with the easement. Plaintiff moved for a declaratory
judgment and for partial summary judgment finding defendant liable for
unlawful interference with plaintiff’s use of the easement, and
defendant cross-moved to dismiss the complaint. Supreme Court granted
plaintiff’s motion, declared that plaintiff possessed a permanent
right of way for a spur track across defendant’s property, enjoined
defendant from further interference with plaintiff’s use of the
easement and ordered that a damages inquest be held. After the
damages inquest, the court denied plaintiff’s claim for compensatory
damages, granted plaintiff’s further motion to amend the complaint to
                                 -2-                           875
                                                         CA 11-02341

assert a punitive damages claim and determined that plaintiff was
entitled to punitive damages. The court deferred its determination of
the amount of the punitive damages award until after discovery and a
hearing. Defendant appeals and plaintiff cross-appeals.

      Addressing first plaintiff’s cross appeal, we agree with
plaintiff that the court erred in concluding that the diminution in
rental value of its property caused by defendant’s interference with
the easement is the only permissible measure of compensatory damages
for that interference and thus that the court erred in denying
plaintiff’s claim for compensatory damages. An easement is “an
incorporeal right which is appurtenant to the ownership of the
dominant estate,” i.e., plaintiff’s property, and “which constitutes a
charge upon the servient estate”, i.e., defendant’s property (Rahabi v
Morrison, 81 AD2d 434, 437-438). “An easement is more than a personal
privilege to use another’s land, it is an actual interest in that
land” (Sutera v Go Jokir, Inc., 86 F3d 298, 301; see Rahabi, 81 AD2d
at 438). “In the case of an affirmative easement, the owner of the
dominant tenement–the easement holder–acquires or is granted a right
to use another person’s land in a particular, though limited, way”
(Sutera, 86 F3d at 302). Therefore, the owner of the servient estate
may not “unreasonably interfer[e]” with the rights of the dominant
estate owner to use and enjoy the easement (Green v Mann, 237 AD2d
566, 567-568; see Tagle v Jakob, 97 NY2d 165, 168; Sutera, 86 F3d at
302).

     It is well settled that the owner of a servient estate may be
required to remove obstructions to an easement (see Pappenheim v
Metropolitan El. Ry. Co., 128 NY 436, 444; Green, 237 AD2d at 568).
Conversely, where, as here, the servient estate owner removes or
destroys an improvement located within an easement, a court may
require the servient estate owner to pay the cost of rebuilding the
improvement and restoring the easement to its former condition (see
e.g. Levy v Morgan, 31 AD3d 857, 858; cf. Green, 237 AD2d at 566).
Consequently, the court should have awarded plaintiff compensatory
damages consisting of the cost of replacing the spur track less what
it would have cost plaintiff to restore the track to an operable
condition had it not been removed inasmuch as plaintiff was obligated
to maintain and repair the track (see Sutera, 86 F3d at 302).

     Plaintiff’s expert testified that it would cost the sum of
$149,500 to replace the spur track, and defendant did not offer a
competing estimate. The parties, however, offered differing evidence
as to the cost of returning the spur track to an operable condition
had it not been removed. We therefore modify the order by granting
plaintiff’s claim for compensatory damages, and we remit the matter to
Supreme Court for the purpose of calculating those damages in
accordance with the foregoing (see Guiffrida v Storico Dev., LLC, 60
AD3d 1286, 1288).

     Turning to defendant’s appeal, we note that defendant’s
contention that the court erred in granting plaintiff’s motion to
amend the complaint to assert a claim for punitive damages is not
properly before us inasmuch as it is raised for the first time on
                                 -3-                           875
                                                         CA 11-02341

appeal (see Ciesinski v Town of Aurora, 202 AD2d 984, 985). In any
event, it is well settled that permission to amend pleadings should be
“freely given” and that the decision whether to grant leave to amend
is committed to the sound discretion of the trial court (CPLR 3025
[b]; see Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959).
We discern no abuse of discretion in this case (see LaPorta v
Wilmorite, Inc., 298 AD2d 920, 921).

     Defendant further contends that the court erred in concluding
that plaintiff is entitled to punitive damages because plaintiff
failed to present any evidence that defendant acted with malice in
removing the spur track. We reject that contention. “In order to
recover punitive damages for trespass on real property, plaintiff[]
ha[s] the burden of proving that [defendant] acted with actual malice
involving an intentional wrongdoing, or that such conduct amounted to
a wanton, willful or reckless disregard of plaintiff[’s] rights” (Ligo
v Gerould, 244 AD2d 852, 853; see West v Hogan, 88 AD3d 1247,
1249-1250, lv dismissed 18 NY3d 915). Contrary to the contention of
defendant, we conclude that the evidence establishes that defendant
acted with actual malice when it removed the spur track and that its
conduct rose to the level of a “wanton, willful or reckless disregard
of plaintiff[’s] rights” relative to the easement (Ligo, 244 AD2d at
853).

     Plaintiff’s property manager testified that defendant’s owner
contacted him and asked if defendant could remove the spur track. The
property manager told defendant’s owner that defendant could not
remove the spur track under any circumstances. Thereafter, plaintiff
sent defendant a letter reiterating that it held a “permanent
easement[]” in the spur track, that it had not “relinquished [its]
rights” relative to the easement and that defendant did “not have the
right to remove or obstruct” the easement. Plaintiff enclosed with
the letter drawings that were filed in the county clerk’s office as
part of a right-of-way agreement and that clearly depicted the
easement. Defendant’s owner admitted that he received plaintiff’s
letter and that he knew of plaintiff’s objections to the removal of
the spur track. Further, the initial contractor defendant contacted
concerning removal of the spur track refused to perform the work
because the track serviced plaintiff and other adjoining property
owners, and that contractor warned defendant that it should not remove
the track. Defendant’s owner then approached a friend about removing
the spur track. That individual was likewise concerned about the
legality of removing the spur track and was initially unwilling to
perform the work. The friend ultimately agreed to remove the spur
track, but only after defendant provided him with a hold harmless
agreement. We thus conclude that the evidence supports the court’s
determination that plaintiff is entitled to punitive damages in an
amount to be determined after a hearing (see Western N.Y. Land
Conservancy, Inc. v Cullen, 66 AD3d 1461, 1463, appeal dismissed 13
NY3d 904, lv denied 14 NY3d 705, rearg denied 15 NY3d 746).

Entered:   October 5, 2012                     Frances E. Cafarell
                                               Clerk of the Court
