Nominal Damages for Technical Trespass Are Discretionary Absent Prescriptive-Rights Risk; Landowner’s Retention of Trespasser’s Materials Constitutes Conversion — Commentary on Fairchild Corp. v. LIRR (2025 NY Slip Op 04705)

Introduction

This commentary examines the Appellate Division, Second Department’s decision in Fairchild Corporation v. MTA Long Island Railroad et al., 2025 NY Slip Op 04705 (Aug. 20, 2025), an opinion affirming the dismissal of a property owner’s trespass and punitive damages claims while granting a contractor’s conversion counterclaim. The case arises from a contractor’s mistaken storage of construction ballast on a vacant parcel adjacent to a Long Island Rail Road (LIRR) project. When the contractor sought to remove the ballast and restore the site, the owner refused, demanding payment instead. The owner later sold the property at fair market value.

The central issues included:

Whether nominal damages are automatically available for a technical trespass where no actual harm is shown.
When punitive damages may be pursued against a contractor and a public benefit corporation.
Whether a landowner’s refusal to allow removal of materials mistakenly placed on its land amounts to conversion.
How New York’s established measures of property damage interact with these facts.

The decision crystallizes an important limitation: nominal damages for trespass are not guaranteed. They may be withheld, in the court’s discretion, where there is no actual injury, no risk that the entry could ripen into prescriptive rights, and the trespasser promptly sought to remediate. The court also confirms that a landowner may commit conversion by withholding a trespasser’s goods, with the contractor retaining ownership of the materials mistakenly deposited.

Summary of the Judgment

The Appellate Division affirmed the Supreme Court’s order granting summary judgment to L.K. Comstock & Co., Inc. (LKC) and to the Long Island Rail Road Company (LIRR) as follows:

Trespass claim dismissed: The plaintiff showed no actual damage to the property. The court further held that nominal damages were not warranted under the case’s unique facts, particularly given the lack of any risk of prescriptive rights and the defendants’ limited entries and prompt remediation efforts, along with the plaintiff’s subsequent sale of the property.
Punitive damages dismissed: LKC’s good-faith conduct defeated any claim of malice or reckless disregard. LIRR, as a public benefit corporation, is immune from punitive damages.
Conversion counterclaim granted in favor of LKC: LKC owned the ballast; the plaintiff wrongfully refused to release it, satisfying the elements of conversion.

Analysis

Precedents Cited and Their Influence

The court anchored its ruling in a solid line of New York cases:

Trespass elements and nature of the tort: The court cited Shrage v Con Edison Co., 216 AD3d 1023, 1025, and related authorities (Huang v Fort Green Partnership Homes Condominium, 228 AD3d 912, 917; Zimmerman v Carmack, 292 AD2d 601, 602; Rosen v Schonbrun, 172 AD3d 771, 773), reaffirming that an intentional, unauthorized entry—“even if innocently or by mistake” (Hill v Raziano, 63 AD3d 682, 683)—constitutes trespass.
Measures of damages in property cases: The court reiterated settled measures—loss of market value or cost of restoration for permanent injury, and loss of rental value for loss of use (Volunteer Fire Assn. of Tappan, Inc. v County of Rockland, 101 AD3d 853, 857). The defendants made a prima facie showing of no actual damage, citing, among others, Matter of Behar v Friedman, 180 AD3d 671, 674; Arcamone-Makinano v Britton Prop., Inc., 156 AD3d 669, 672; and Eisen v County of Westchester, 69 AD2d 895.
Nominal damages and the prescriptive-rights rationale: Although Hill v Raziano states that nominal damages are presumed for trespass, the court relied on the Court of Appeals’ reasoning in Kronos, Inc. v AVX Corp., 81 NY2d 90, 95, clarifying that nominal damages are an “exception” to the general need to show actual injury and are justified principally to guard against continuing trespasses that could mature into prescriptive rights. On the unique facts here—limited, short-lived entries, prompt remediation offers, and later sale of the property—there was no prescriptive-rights concern. The court also referenced Ciminello Prop. Assoc. v New 970 Colgate Ave. Corp., 214 AD3d 447, 448, supporting dismissal where a nominal-damages rationale is absent.
Punitive damages: The court drew on Marinaccio v Town of Clarence, 20 NY3d 506, 511, and Shrage, 216 AD3d at 1026, holding that punitive damages require actual malice, wantonness, or reckless disregard—thresholds not met where the contractor repeatedly offered to correct the mistake. As to LIRR, the court relied on Clark-Fitzpatrick, Inc. v Long Is. R. R. Co., 124 AD2d 534, 537, affd 70 NY2d 382, and Volunteer Fire Assn., 101 AD3d at 857, which establish that public benefit corporations are immune from punitive damages.
Conversion: The court invoked Halvatzis v Perrone, 199 AD3d 785, 786–87, and Amid v Del Col, 223 AD3d 698, 700, to hold that the plaintiff’s refusal to release LKC’s identifiable property (the ballast) satisfied the core elements of conversion: LKC’s superior possessory right and the owner’s unauthorized dominion excluding LKC’s rights.

Legal Reasoning

The court’s analysis proceeds in three coordinated steps: damages, the special role of nominal damages in trespass, and the conversion counterclaim.

No actual damage to the property:
The defendants carried their summary judgment burden by submitting the plaintiff’s interrogatory responses demonstrating that the parcel was vacant, there was no alleged period of loss of use, and the owner sold the property for fair market value without incurring restoration costs. Under New York law, compensable property damages require one of the established measures (market value diminution or restoration costs), or a loss-of-use measure for temporary impairment. None applied. The plaintiff failed to raise a triable issue of fact in opposition (see SJWA LLC v Father Realty Corp., 221 AD3d 552, 554; Matter of Behar v Friedman, 180 AD3d at 676).
Nominal damages are not automatic in trespass:
While New York cases often recite that nominal damages are presumed for trespass (Hill v Raziano), the Second Department drew on the Court of Appeals’ articulation in Kronos that nominal damages are an exception justified to prevent the accrual of prescriptive rights via continuing encroachments. Here, the court emphasized the “unique facts and circumstances”: the contractor’s prompt request to remove the ballast and restore the site; the limited number and duration of entries; and the owner’s sale of the property, extinguishing any realistic prescriptive-rights risk. In that posture, the court held it was a proper exercise of discretion to decline nominal damages. That determination, in turn, supported dismissal of the trespass claim, which sought damages (not injunctive relief).
Punitive damages fail on two independent grounds:
First, without compensable or nominal damages on the underlying trespass, punitive damages cannot stand. Second, as to LKC, there was no evidence of malice or reckless disregard; rather, the record showed repeated good-faith remediation offers. As to LIRR, it enjoys immunity from punitive awards as a public benefit corporation (Clark-Fitzpatrick; Volunteer Fire Assn.).
Conversion is established against the landowner:
The court upheld LKC’s counterclaim because LKC owned the ballast and the plaintiff refused to allow its removal. Those facts satisfy the classic elements of conversion—superior right of possession to a specific identifiable chattel and the defendant’s exercise of dominion in derogation of the owner’s rights (Halvatzis; Amid). The outcome underscores that a landowner cannot leverage an inadvertent deposit into a windfall by conditioning release on payment.

Impact and Practical Implications

This decision has several notable consequences for New York property and tort practice:

Recalibrating nominal damages in trespass: The Second Department makes clear that nominal damages are not a foregone conclusion for every technical trespass. Courts may decline to award them where the prescriptive-rights rationale is absent and the trespass is brief, promptly remediated, and noninjurious. Plaintiffs relying solely on nominal damages should be prepared to articulate a concrete reason—such as the risk of prescriptive rights or ongoing encroachment—for why such damages are warranted.
Effect of property sale on remedies: Selling the property at fair market value without restoration costs substantially undermines claims of actual injury and weakens any argument for nominal damages tied to prescriptive-rights concerns. Plaintiffs contemplating sale should consider how it may affect pending property tort claims.
Encouraging prompt remediation: The court positively weighs a trespasser’s immediate offers to rectify the situation. Contractors and utilities facing inadvertent entries should document and persist in good-faith remediation efforts; such conduct can defeat punitive damages and support dismissal of nominal-damages claims.
Conversion exposure for landowners: A landowner who refuses to permit removal of the trespasser’s materials risks liability for conversion. Ownership of chattels is not forfeited merely because they were mistakenly placed on another’s land. Property owners should avoid “hostage” tactics and instead coordinate prompt removal or pursue appropriate compensation through established damages measures when actual injury exists.
Public entities and punitive damages: The reaffirmed rule that public benefit corporations are immune from punitive damages remains a significant shield for entities like LIRR. Plaintiffs should tailor claims accordingly.
Pleading strategy: Where actual damages are uncertain, consider pairing trespass claims with requests for injunctive relief (e.g., removal of encroachments) or declaratory relief, rather than relying solely on nominal damages. Evidence of loss of use, diminution in value, or specific restoration costs will be crucial to avoid summary dismissal.
Departmental guidance: Although the court emphasized the “unique facts,” the opinion provides persuasive guidance in the Second Department that nominal damages are discretionary and purpose-driven, not automatic, in technical trespass cases with no ongoing encroachment risk.

Complex Concepts Simplified

Trespass: An intentional, unauthorized entry on someone else’s land. Mistake is not a defense; the key is the invasion of exclusive possession.
Nominal damages: A small sum awarded to recognize a legal wrong where no actual harm is proven. In New York trespass law, they have been traditionally presumed, but Fairchild clarifies courts can withhold them when their underlying purpose (preventing prescriptive rights) is not implicated.
Prescriptive rights: Rights (like an easement) acquired through continuous, open, and notorious use over time. Nominal damages in trespass help prevent unauthorized uses from ripening into such rights.
Summary judgment: A procedural mechanism to resolve a case without trial when the moving party shows entitlement to judgment as a matter of law and the opponent fails to raise a genuine factual dispute.
Conversion: A tort where someone intentionally exercises control over another’s property without authorization, interfering with the owner’s rights. Refusing to return identifiable property to its rightful owner is classic conversion.
Punitive damages: Damages intended to punish egregious wrongdoing (malice, wantonness, reckless disregard), not to compensate for loss. Public benefit corporations like LIRR are immune from punitive damages.
Public benefit corporation: A government-related entity created to perform public functions. Under New York law, such entities are generally immune from punitive damages awards.
Fair market value sale: Selling a property at a price reflecting its market value tends to negate claims of diminution-in-value damages, especially when no restoration costs were incurred.

Conclusion

Fairchild Corp. v. LIRR marks an important refinement of New York trespass law in the Second Department. The court affirms that:

Nominal damages in trespass are not automatic; they are discretionary and purpose-driven, primarily to guard against prescriptive-rights risks. Where entries are limited, swiftly remediated, and cause no actual harm—and especially where the property is later sold—courts may withhold nominal damages and dismiss trespass claims seeking only damages.
Punitive damages are unavailable absent malice or reckless disregard, and public benefit corporations remain immune from such awards.
A landowner who refuses to allow removal of a trespasser’s identifiable property can be liable for conversion; ownership of mistakenly placed materials remains with the depositor.

The decision encourages practical, good-faith solutions to harmless, inadvertent entries and discourages attempts to monetize technical violations without proof of actual injury. For litigants, Fairchild underscores the importance of evidence-based damages, careful pleading (including injunctive or declaratory relief where appropriate), and prompt remedial conduct. In the broader legal landscape, it advances a pragmatic, policy-sensitive approach to trespass remedies while reinforcing the distinct boundaries of conversion and punitive damages in New York law.