Big news in Connecticut which is becoming the Mother of All Condemnation cases. The Town of Branford just got zapped with a $12.4 million verdict in a condemnation case. Actually, as best we can figure it out from local press reports — which are usually something less than the Bible when it comes to accurate portrayal of condemnation cases — there were actually two cases involved here. One was your plain ol’ garden variety condemnation case: the town took a 77-acre tract on which plaintiff-developers had planned to build 354 condominiums, and deposited compensation of slightly above $1 million. In Connecticut, condemnations are non-judicial, but the owner may challenge the taking and/or seek additional compensation in a separate court action. The developers did just that, with a twist. They challenged the taking as being in bad faith and sought compensation beyond the $1 million fair market value paid by the Town when it took the land. The trial court upheld the taking and awarded increased compensation to the tune of $4.6 million for the taken land. Nice result, but no big deal legally. The big deal came in the form of the trial court also allowing the developers to seek compensation for lost profits and collateral losses they suffered as a result of the condemnation which they contended to be in bad faith (just how so is unclear from the local press reports, especially since the trial court upheld the Town’s right to take), which leaves us puzzled as to what the bad faith activity was. Usually, a finding of bad faith on the part of the condemnor puts the kibosh on the taking. But not here. We are sure all that will be explained soon — so stay tuned. Right now it looks to us like the bad faith was contended to be the Town’s desire to frustrate development of the subject property and offering pretextual reasons for the taking.
And so, in addition to the $4.6 million just compensation for the taken land, the developers also received a verdict for $12.4 million “for lost profits and investments costs.” Also, since the developers were evidently optionees rather than owners of the subject property, the land’s owner-optionor also recovered compensation of $340,000.
The facts here are somewhat reminiscent of the New Jersey MiPro case (Mount Laurel Township v. MiPro Homes (N.J. 2006) 910 A.2d 617), where the New Jersey Supreme Court, over a strong dissent by Justice Rivera-Soto, upheld a questionable taking transparently filed to stop a developer from building on his land, and denied recovery for his consequential losses.
Meanwhile, back in Connecticut, Branford officials find these awards outrageous and are vowing to pursue the Mother of All Appeals. It sure will be interesting to see how this one turns out. So like we said, stay tuned. We will update this item as more facts and legal contentions become available.