Restoration-Cost-Only Damages Charge Where No Diminution Proof Is Offered in Real-Property Injury Claims

Introduction

In Fusco v Town of Colonie (2025 NY Slip Op 02629 [238 AD3d 1226] [3d Dept May 1, 2025]), the Appellate Division, Third Department affirmed a plaintiff’s jury verdict finding the Town of Colonie solely liable for a slope failure/landslide that damaged residential improvements and awarding $700,000 in restoration costs.

The plaintiff owned hilltop property abutting Boght Road; the rear yard sloped steeply to a Town highway and an adjoining drainage ditch. After the Town undertook ditch work at the toe of the slope in March–April 2017, the plaintiff observed slippage and alleged the excavation destabilized the hillside. Following a nine-day trial featuring dueling geotechnical experts, the Town moved under CPLR 4404 to set aside the verdict as contrary to law, based on improper damages instructions, and against the weight of the evidence. Supreme Court denied that motion; the Town appealed.

The key appellate issues were: (1) whether sufficient evidence supported negligence and proximate cause despite the Town’s argument that it owed no duty of lateral support; and (2) whether the trial court properly instructed the jury on damages by charging only restoration costs (and not diminution in market value) where no party offered market-value evidence.

Summary of the Opinion

The Third Department affirmed both the judgment and the order denying post-trial relief. The court held:

  • Liability: Although municipalities generally have “no duty to preserve the lateral support to adjacent land” in highway construction/maintenance, they remain liable for damage to adjoining property proximately caused by negligent construction/maintenance. The record contained a fair evidentiary basis for the jury to find the Town negligent and solely responsible, especially in light of credibility determinations between competing experts.
  • Damages charge: Where the plaintiff offered expert proof of restoration cost and neither side offered evidence of diminution in market value, Supreme Court properly instructed the jury solely on restoration costs; a diminution-based charge would have invited speculation.
  • Weight of the evidence: The verdict was entitled to deference; the Town did not show that the proof so heavily preponderated in its favor that no fair interpretation could support the verdict.

Analysis

Precedents Cited

1) Post-trial review and “weight of the evidence” deference

The decision relies on the Third Department’s familiar formulation that a jury verdict should not be set aside unless the evidence so favors the moving party that the verdict could not have been reached on any fair interpretation:

  • Lisa I. v Manikas, 231 AD3d 1322, 1326 (3d Dept 2024) — quoted for the governing “fair interpretation” test.
  • Aesch v Lambarski, 229 AD3d 945, 946 (3d Dept 2024), lv denied 42 NY3d 912 (2025) — reinforces restraint in disturbing verdicts and deference to juries.
  • Raucci v City School Dist. of City of Mechanicville, 203 AD2d 714, 714-715 (3d Dept 1994) — additional support for the weight-of-evidence standard.
  • Pasternak v County of Chenango, 226 AD3d 1220, 1222 (3d Dept 2024) — “different verdict would not have been unreasonable” is insufficient if credible evidence supports the jury.
  • Endemann v Dubois, 207 AD3d 1009, 1010 (3d Dept 2022), lv denied 39 NY3d 909 (2023) — cited for deference principles.
  • Halvorsen v Ford Motor Co., 132 AD2d 57, 60 (3d Dept 1987), lv denied 71 NY2d 805 (1988) — underscores that credibility conflicts are for the jury.

These authorities frame the court’s methodological posture: it does not re-try the case but asks whether the jury had a rational, credible evidentiary pathway to its conclusions—especially where expert testimony conflicts.

2) Municipal liability: no strict lateral-support duty, but negligence liability persists

  • Colgan v Town of Hillsdale, 68 NY2d 788, 789 (1986) — the cornerstone proposition: municipalities have no duty to preserve lateral support to adjacent land in highway construction/maintenance, but they are liable for damage to adjoining property proximately caused by their negligence.
  • Dorrity v Rapp, 72 NY 307, 309-310 (1878) — historic foundation distinguishing lateral-support concepts from negligence-based liability.
  • Town of Yorktown v Vanguard Tours, 83 AD2d 866, 866 (2d Dept 1981) — maintaining streets and drainage systems is a proprietary function requiring ordinary care.
  • Heeran v Long Is. Power Auth. [LIPA], 141 AD3d 561, 563 (2d Dept 2016), affd sub nom. Connolly v Long Is. Power Auth., 30 NY3d 719 (2018) — when acting in a proprietary capacity, a public entity is generally subject to ordinary tort principles.

The court uses these cases to reject the Town’s threshold “no duty” argument. The Town could avoid liability only if the plaintiff’s theory depended on a strict lateral-support duty. Instead, the plaintiff proceeded on ordinary negligence: failure to use reasonable care in excavation/ditch work given known slope instability and site conditions.

3) Real-property damages: restoration costs vs. diminution in value; burden shifting

  • WFE Ventures, Inc. v GBD Lake Placid, LLC, 197 AD3d 824, 834 (3d Dept 2021) — reiterates that the “typical” measure is the lesser of restoration cost or diminution in market value.
  • Lopez v Adams, 69 AD3d 1162, 1166 (3d Dept 2010) — same general rule for injury to real property.
  • Prashant Enters. v State of New York, 228 AD2d 144, 148 (3d Dept 1996) — supports the general framework.
  • Fisher v Qualico Contr. Corp., 98 NY2d 534, 539 (2002) — once a plaintiff offers one proper measure (here, restoration), the burden shifts to the defendant to show a lesser amount would fully compensate.
  • Jenkins v Etlinger, 55 NY2d 35, 39 (1982) — central to the court’s “proof and burden” approach; also supports the court’s handling where market value evidence is absent.
  • Webster v Ragona, 51 AD3d 1128, 1130 (3d Dept 2008) — cited for the burden-shifting proposition.
  • Davies v Lynch, 4 AD2d 1008, 1008 (4th Dept 1957) — cited to support that, absent diminution proof, damages may rest on restoration-cost evidence.
  • Green v Downs, 27 NY2d 205, 208-209 (1970) — invoked to justify excluding a diminution charge that could produce speculative results.
  • Forman v McFadden, 44 AD3d 523, 524 (1st Dept 2007) — supports avoiding speculative valuation measures not grounded in evidence.
  • People v Fink, 18 AD2d 220, 224 (3d Dept 1963) — similarly reinforces the anti-speculation principle in charging/damages proof.

Collectively, these cases drive the Opinion’s most practically significant point: when only restoration-cost evidence is presented, the jury may be instructed solely on that measure, and the defendant cannot complain about the absence of a diminution-based charge where it offered no valuation evidence that would permit a non-speculative alternative.

4) The case’s prior appellate history

The court notes the dispute had already been before it (without revisiting details), citing: 201 AD3d 1114 [3d Dept 2022] and 196 AD3d 956 [3d Dept 2021]. This signals a matured record and underscores that the present appeal concerned trial-proof sufficiency and jury-instruction choices, not pleading-stage or early procedural questions.

Legal Reasoning

1) Duty and theory of liability: negligence, not strict lateral support

The Town attempted to reframe the claim as one requiring a municipal duty to “provide lateral support” to adjoining land and improvements. The Third Department rejected that reframing by applying Colgan v Town of Hillsdale: even if there is no general lateral-support duty, a municipality remains liable for negligent road/drainage construction or maintenance that proximately injures adjacent property. The court further characterized the work as a proprietary function requiring ordinary care (Town of Yorktown v Vanguard Tours; Heeran v Long Is. Power Auth. [LIPA], affd Connolly v Long Is. Power Auth.).

2) Evidence of negligence and causation: the jury could credit plaintiff’s geotechnical narrative

The court emphasized trial facts that allowed a rational jury to find negligence:

  • The Town knew the slope was “prone to slippage,” yet did not convey that risk to the crew and did not inform the excavation foreman of right-of-way boundaries.
  • Evidence supported that excavation extended beyond routine ditch cleaning: removal of soil/vegetation/root systems 17–26 feet from the pavement and into the toe of the slope, potentially beyond the right-of-way.
  • Plaintiff’s expert (Gifford) conducted extensive site work (multiple visits, borings to 40 feet, lab testing, document review) and opined that removing material at the toe reduced slope “factor of safety,” causing failure; he also pointed to water issues (chlorinated water detection; water main break; saturated ground) as conditions demanding investigation.
  • The Town’s own witnesses admitted the work went “above and beyond” ditch cleaning and “a little further than [the crew] probably should have,” yet no slope stability analysis or warnings were provided.

The Town presented a contrary expert (Symmes) disputing the mechanism/timing of failure and suggesting plaintiff’s backyard improvements contributed. The Third Department treated this as a classic credibility contest reserved for the jury, citing Aesch v Lambarski and Endemann v Dubois. Under the weight-of-evidence cases, the existence of credible evidence supporting plaintiff’s theory required affirmance.

3) Damages: why a restoration-cost-only instruction was proper on this record

The court’s damages reasoning proceeds in three steps:

  1. Baseline rule: Injury to real property is typically measured by the lesser of restoration cost or diminution in market value (WFE Ventures, Inc. v GBD Lake Placid, LLC; Lopez v Adams; Prashant Enters. v State of New York).
  2. Proof and burden shifting: A plaintiff may present evidence of only one proper measure; once plaintiff offers restoration-cost proof, the defendant bears the burden to show that a lesser sum would suffice (Fisher v Qualico Contr. Corp.; Jenkins v Etlinger; Webster v Ragona).
  3. No valuation evidence; avoid speculation: Here, neither party offered market-value evidence “immediately before and after” the damage. Without such proof, charging diminution would invite speculation and risk an incorrect result (Green v Downs; Forman v McFadden; People v Fink). Therefore, the court approved a restoration-only instruction, consistent with the record and with Jenkins v Etlinger and Davies v Lynch.

Importantly, the jury’s $700,000 award was supported by “uncontroverted” restoration-cost testimony and was less than the expert’s stated amount—an additional factor supporting the award’s reasonableness.

Impact

  • Municipal excavation/ditch-work exposure: The Opinion reinforces that municipalities cannot defeat adjacent property claims by invoking “no lateral support duty” when the plaintiff’s theory is ordinary negligence in construction/maintenance. As long as the challenged conduct is framed as unreasonable performance of a proprietary function, standard tort principles apply.
  • Operational practices: Fact patterns involving known unstable slopes, unclear right-of-way limits, and failure to communicate subsurface risk to field crews are likely to be pleaded and tried as negligence failures in planning, supervision, and site risk management.
  • Damages strategy in property cases: The decision incentivizes defendants to develop admissible before-and-after valuation proof if they want a diminution cap or an alternative measure presented to the jury. Absent such evidence, courts may properly charge restoration costs alone.
  • Appellate posture in expert-driven trials: Where both sides present credentialed experts and the jury chooses one narrative, this case illustrates how difficult it is to overturn the verdict on weight-of-evidence grounds.

Complex Concepts Simplified

  • CPLR 4404 motion: A post-trial request asking the judge to set aside a jury verdict (or order a new trial), often arguing legal error, insufficiency, or that the verdict is against the weight of the evidence.
  • “Against the weight of the evidence”: Not “could the jury have decided differently,” but whether the evidence so strongly favored the losing party that the verdict cannot be justified on any fair reading of the record.
  • Lateral support: The support that neighboring land provides to keep adjoining land from collapsing. The case distinguishes between a no-duty rule in certain highway contexts and liability for negligent work that causes collapse.
  • Proprietary function: When a municipality performs tasks comparable to a private entity (e.g., road and drainage maintenance), it is generally held to ordinary negligence standards rather than special governmental immunity rules.
  • Measure of damages (restoration vs. diminution): Courts often use the lesser of (a) cost to repair/restore or (b) the decrease in market value. But the jury can only apply measures supported by evidence; without valuation proof, diminution becomes guesswork.
  • Slope “factor of safety”: An engineering concept describing how close a slope is to failure. Excavating at the toe can reduce stability, making failure more likely.

Conclusion

Fusco v Town of Colonie cements two practical trial rules in New York property-damage litigation involving municipal infrastructure work: (1) municipalities remain answerable in negligence for road/drainage maintenance that proximately damages adjoining land, notwithstanding lateral-support doctrine; and (2) when the record contains restoration costs but no non-speculative evidence of diminution in market value, a court may properly instruct the jury on restoration-cost damages alone—leaving defendants to carry the burden of producing a credible lesser-compensation measure.