Under the prod of the Uniform Relocation Assistance Act, states have adopted statutes requiring that before filing eminent domain actions, condemnors must make an effort to acquire the desired properties by negotiating with the owners. But as in the case of most of eminent domain laws ostensibly intended to protect the rights of condemnees, courts have been generally lukewarm about enforcing this law (except, perhaps, in Illinois). Typically, any sort of perfunctory “offer” by the condemnor is deemed by courts to be in compliance with the statutory requirements. Now, we get a ray of light from New Jersey, in the form of an Appellate Division case captioned New United Corporation v. Essex County Vocational-Technical Schools Board, No. A-2014-110T2 and A-2302-10Ts, opinion filed on April 1, 2012.

This was an effort to by the Board to take a condominium unit, for which the Board offered $4,850,000. The owners responded with two letters from their lawyer, pointing out that the offer was based on a deficient appraisal, and that it disregarded a number of the property’s features. They made no counteroffer because they needed additional information from the Board concerning the taking and the basis for its offer. They did mention a value of $26,000,000. The Board responded by ignoring the letters and filing an eminent domain action. After the trial court upheld the right to take, notwithstanding the owners’ argument that they never received a proper offer that complied with the New Jersey statute, the owners appealed. Held: reversed and remanded with directions to dismiss the condemnation action without prejudice and to do it right, should the Board decide to try again.

What makes this opinion remarkable is the court’s tone and its extensive collection of case law holding that in eminent domain cases, the coondemnor must meet a high standard of fairness in the treatment of condemnees. Check out the opinion on this point. So what, you say. Eminent domain cases often ccontain lofty judicial rhetoric about fairness and justice and other good stuff, which they then fail to apply to the facts before the court. But not here. Said the court:

We are convinced that the Board of Education failed to fulfill its statutory duty to negotiate in good faith. We appreciate that it was faced with an adversary that was actively challenging its very right to exercise the power of eminent domain. However, the record only reveals New United’s overarching insistence that it be paid just compensation, and that it would be satisfied once that occurred. New United never expressed a stubborn reluctance to hold onto its condominium unit at all costs. If that were the case, or even something approaching such adamancy, we would agree that any negotiations regarding price would have been futile. However, New United expressly identified what it viewed as the errors and omissions of the appraiser’s opinion of value, which needed to be addressed, or at least acknowledged, before the eminent domain action was filed. We will not speculate on what would have been the outcome if the Board of Education had responded to New United’s letters. The Board of Education cannot fulfill its statutory responsibility to engage in bona fide negotiations by burying its head in the sand. Willful blindness does not satisfy the square corners doctrine.

 

I was looking into Indiana’s property market the other because I heard that it’s in a good position at the moment. It’s looking strong so if you’re wanting to sell a property quickly for money then I would definitely start looking for companies that buy houses in Indiana soon. However, while I was looking into the market, I can across a very interesting court case based in the state. As you know, I’m fascinated by these types of cases so looked into the details. State of Indiana v. Murphy, No. 45A03-1106-PL-261, March 30, 2012. The basic facts regarding recovery were as follows: valuation by Appraisers (Commissioners) – $23,000. Jury verdict – $332,172.

The bone of contention was the fact that the owner paid only $3900 for the subject property in 2003 at a tax sale, and the state wanted to get that fact into evidence. This was problematic because that sale was remote in time and, being a tax sale, it was probably not a voluntary, open market, arm’s length transaction likely to shed light on fair market value. But it looks like we’ll never know in this case. At the beginning of trial the owner made a successful motion in limine to exclude the state’s evidence of that sale. But the state did not make an offer of proof or object further at trial; it only raised the exclusion as an asserted error when it got to the appellate court. With the aid of an appellate law firm, they were able to shine a light on this error in relation to the sale.

The court held that in order to preserve a record on appeal, an objection or an offer of proof must be made in the course of trial. This the state failed to do, and thereby waived the point. A trial court’s earlier ruling on a motion in limine, before the objectionable evidence is actually sought to be introduced into evidence is not sufficient to make an adequate record on appeal.

So trial counsel beware! At least in Indiana.

Follow up. The original version of the second paragraph of the above post was screwed up by your faithful servant. The corrected version appears there now. Our apologies.

The Florida Court of Appeal has just decided a case dealing primarily with Florida law that governs awards of attorneys’ fees to condemnees. It tells us more about Florida law of attorneys’ fees and the statutory scheme governing them than we ever wanted to know, but we are sure it will be useful to Florida counsel The case is Orlando/Orange Grove County Expressway Authority v. Tuscan Ridge, No. 5D10-3470, March 30, 2012.

Anyway, we glean the following facts from the opinion: Offer – $4,914,221 (“subject to apportionment claims”), later raised to $5,500,000. Verdict – $5,744,830, plus attorney fees of $816,000, $194,000 for “supplemental proceedings,” $277,422 in expert fees, and $19,000 for “reimbursements.”

The $5,500,000 verdict was not contested, but the attorneys’ fees award was vacated, and the matter remanded for recalculation of fees using only the benefit obtained for the owners by the lawyers, and for consideration of the issue of whether the Florida Constitution requires a different, more generous measure of attorneys’ fees.

The basic news is that the U.S. Supreme Court granted certiorari in a case from Arkansas, in which the state is suing the feds for  temporary flooding of state land thereby destroying some forest land and effecting a physical taking. You can get the details and the question presented at www.inversecondemnation.com and we recommend that you do. Click here.  

Since the lower court (the U.S. Court of Appeals for the Federal Circuit which handles all inverse condemnation cases against Uncle Sam) reversed the trial court award of compensation on the grounds that the taking was temporary and as such noncompensable, there is hope for improvement in the law. But living up to our reputation as a curmudgeonly pessimist, we aren’t holding our breath. Every time SCOTUS has messed with a taking case involving water recently (e.g., SWNCC and Rappanos, come to mind) it left the law in shambles. We hope it won’t happen again. Then again, to invoke the line of Brendan Behan, “I cannot conceive of a situation so wretched that the appearance of a policeman couldn’t make worse.” Substitute “water case” for “situation,” and “SCOTUS” for “a policeman,” and you are likely to get it right.

Our own view, for whatever that may be worth, is that the entire temporary-flooding-is-not-a-taking shtick doesn’t make much sense. For if it would be a taking if permanent, it’s also a temporary taking when its duration is less than in perpetuity. After all, the federal government can take property temporarily by eminent domain when it condemns a lease, even a short-term lease. So why wouldn’t a short-term taking sans the required legal niceties of an eminent domain action be any less a taking? Didn’t SCOTUS hold in the Dow case that physical seizure unaccompanied by a court order, and indeed without any judicial proceedings, is a constitutionally acceptable way of the government exercising its power of eminent domain? If anything, an inverse taking should be deemed a taking a fortiori. We see no rational, moral, or doctrinal reason why, when the government obeys the Uniform Relocation Assistance Act and files an eminent domain action to effect a temporary taking, it has to pay just compensation, but when it acts in a scofflaw fashion and just seizes land temporarily (or, as here, floods it temporarily, depriving its rightful owner of its use, damaging the land in the process, and thus effecting a physical taking) it should get a constitutional free pass.

The duration of the taking should go to the quantum of compensation, not to liability. But, of course, SCOTUS has ruled both ways on the issue of liability in temporary taking cases — see Tahoe Sierra Preservation Council and compare the First English Evangelical Lutheran Church case. So maybe SCOTUS took this case to straighten things out. Can that be? Let’s hope so.

Horrifying afterthought. The First English case was decided in 1987. That’s 25 years ago — a quarter of a century. Which means that your typical U.S. Supreme Court clerk has no independent memory of it.

Follow up. An eagle-eyed reader points out that we may be barking up the wrong tree. The claim in this case is inter alia that the flooding caused the destruction of timber owned by the State of Arkansas. That, it would seem, has nothing to do with whether the taking of the subject land was temporary or permanent, since either way, government destruction of timber is in itself a taking. See Cooper v. United States, 827 F.2d 762 (Fed.Cir. 1987). So we better keep watching this one.