Tuesday, August 26, 2014

$8.1 Million Eminent Domain Award Affirmed by New York Appellate Court

Last week, the New York Appellate Division, Second Department, affirmed a condemnation award of $7,855,200 plus interest for just compensation to Split Rock Partnership for the taking of its property. In Matter of Western Ramapo Sewer Extension Project, Index No. 2013-03693, 2014 NY Slip Op 05889, decided August 20, 2014, the appellate court held that the measure of damages must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time of the taking.

Split Rock owned 64 acres of vacant land in the Village of Hillburn, Rockland County, New York. In November 2004, Split Rock entered into a contract for sale to sell the property to developer, Wilder Companies.  The sale was never completed as Rockland County Sewer District No. 1 acquired the subject property using its power of eminent domain in February 2005 to construct a new sewer processing facility.

The Court concluded that Split Rock satisfied its burden of demonstrating that the highest and best use of the property was for the commercial development of an office center and that the trial court had properly considered the "unconsummated Wilder Contract" for sale as admissible evidence of the subject property’s value. The Court also noted, that Split Rock's knowledge of the potential condemnation prior to executing a contract for sale of the property did not demonstrate that Split Rock acted in bad faith or simply to inflate the value of the property.

Additionally, the appellate court held that the Supreme Court correctly exercised its discretion in preventing two of the Sewer District’s witnesses from testifying at trial because the District failed to comply with the court rules requiring the timely disclosure of expert witnesses. Remember friends as we've learned from our late night viewing of Law & Order, the "Supreme Court" in New York refers to the trial court and the "Court of Appeals" refers to the state's highest court.  

The case was tried and appeal argued by OCA New York Member Michael Rikon, a partner of Goldstein, Rikon, Rikon & Houghton, P.C., a law firm founded in 1923 which limits its practice to the representation of private property owners in eminent domain matters.

Read the firm's press release about the decision here.

Tuesday, August 19, 2014

A Mississippi Jury Awards Bayfront Restaurant Owners $644K Just Compensation in Inverse Condemnation Action Against the State

The view from the back of Dan B's busy restaurant overlooking the deck and Bay St. Louis before Hurricane Katrina.
On August 29, 2005, Hurricane Katrina destroyed Dan B’s Restaurant and Bar on Beach Boulevard in downtown Bay St. Louis, Mississippi.  The popular beach front restaurant owned by the Murphy family featured a large deck on the beach overlooking the Bay of St. Louis.

Dan B's deck and restaurant as viewed from the water's edge the day before Katrina made landfall (Aug. 28, 2005).
After the storm, a new small boat harbor was included as part of the redevelopment plan for the downtown area by the City of Bay St. Louis and the State of Mississippi. An access ramp and parking facilities for the new harbor were planned on property owned by the Murphy’s and several other downtown property owners.  The State of Mississippi, however, claimed the land was public tidelands of the State of Mississippi.  Construction began on the project and no compensation was paid to the Murphy family for their property.

Brothers Kenneth, Ray and Audie Murphy sought out an experienced eminent domain and property rights attorney to assist them in their legal claims against the government.  They retained OCA Mississippi Member Paul R. Scott of the firm of Smith, Phillips, Mitchell, Scott & Nowak, LLP to file an inverse condemnation suit on their behalf.

Trial began on Tuesday August 12, 2014 in Hancock County, Mississippi.  On Monday, August 18, the jury returned a verdict in favor of the Murphys and against the State of Mississippi in the amount of $644,000.00 for the taking of their property.  The State never made an offer of compensation for their property.

The view from the Murphy property in the "after condition" as construction was ongoing on the harbor (background) and access bridge (foreground). 
The case is Murphy v. State of Mississippi, et. al., Cause No. 12-0453 in the Circuit Court of Hancock County, Mississippi.

*Updated 8/20/14 to include the images above of the Murphy property involved in this inverse condemnation action.

Wednesday, August 13, 2014

OCA & NFIB Join Forces in Support of Private Property Owners in Texas and Nationwide

In July, the National Federation of Independent Business (NFIB) Small Business Legal Center and Owners’ Counsel of America (OCA) joined together to file an amici curiae brief  (copy embedded below) in support of the property owner in State of Texas v. Clear Channel Outdoor, Inc., case number 13-0053, urging the Texas Supreme Court to uphold the award of just compensation to a billboard owner when the land on which its billboards were located was acquired by eminent domain.

The case involves the condemnation of two parcels of land along Interstate 10 leased by Clear Channel Outdoor for its billboards. The state exercised its power of eminent domain to take land for a road expansion project.  It refused, however, to condemn and pay for the billboards located on the land arguing that the billboards were personal property, not "realty," and could simply be relocated. The State ordered their removal and the billboards were damaged during the removal. The owner, Clear Channel Outdoor, filed an inverse condemnation action to recover just compensation for the taking of its billboards.  [Disclosure: Clear Channel Outdoor is represented in this action by OCA Texas attorney H. Dixon Montague.]

At the center of the litigation are two questions: whether the billboards are improvements to the property and must be paid for, and whether the government should compensate an owner for structures removed or damaged when the government condemns the underlying land for a public project.  The trial court opined that billboards are not moveable personal property but rather realty as they are affixed to the land.  Further, the court concluded that the State should have condemned and paid just compensation to the owner.  The Texas Court of Appeals upheld the trial court's order and the State of Texas appealed to the Texas Supreme Court.

“As a baseline principle of federal law, the government cannot avoid its obligation to pay compensation under the Fifth Amendment when it invades, destroys, or physically appropriates private property, which it certainly did here” explained Robert H. Thomas, a Director with Damon Key Leong Kupchak Hastert in Honolulu.  Thomas, the Hawaii member of OCA, worked with NFIB attorney Luke Wake in drafting the brief.

The brief filed by OCA and the NFIB argues that billboards are not designed to be moved and that the most valuable part of a billboard is not the materials from which it is made, but rather its ability to generate income. In view of this reality, the brief stresses two points. First, the trial court and the Court of Appeals both correctly concluded that the State must compensate the owner when it orders a billboard removed if the billboard was previously affixed to the ground, or if removal results in damage or destruction of the billboard. Second, the “income capitalization approach,” which takes into account the billboard’s ability to generate income, is required by the Just Compensation Clause of the federal and Texas constitutions, which require the "full and perfect equivalent" of the property taken. In those circumstances, just compensation owed the owner must account for future income.

OCA was honored to join with the NFIB as amici in this case because the question before the Texas Supreme Court requires the Court to consider fundamental principles applicable in all eminent domain cases where property valuation is at issue which is of concern not only to commercial billboard owners in Texas, but all property owners in the state and nationwide.

The Texas Supreme Court will hear oral argument on September 17, 2014.

More on the case from Robert Thomas including links to all briefs filed with the Texas Supreme Court is available here and here.

Read NFIB's statement on the case here.

Thursday, July 17, 2014

Georgia Supreme Court Victory for Private Property Owners

Last week, the Supreme Court of Georgia issued an opinion in Dillard Land Investments, LLC v. Fulton County, Georgia, case No. S13C1582 (decided July 11, 2014) resulting in a ruling both favorable to the Petitioner-landowner and property owners across Georgia.  The unanimous opinion reversed a Georgia Court of Appeals decision, reinstated a $5,187,500 award of just compensation for the Petitioner and insured that equity remains in Georgia's eminent domain proceedings.

This case involves the taking of private property by the County of Fulton under Georgia’s special master method for condemnation proceedings pursuant to O.C.G.A. § 22-2-2.  Under this method, a special master is appointed to hear testimony relating to the value of the property taken by eminent domain and determines the amount of just compensation to award a property owner for the property acquired.  The purpose of the special master method is "to quicken and simplify the condemnation proceeding..." (O.C.G.A.22-2-107 (g)).

In the Dillard case, the special master filed an award with the trial court which then entered a judgment adopting the award.  Fulton County filed a voluntary dismissal of the condemnation petition two days after the entry of the judgment.  Dillard responded by filing an emergency motion to vacate and set aside the voluntary dismissal, which the trial court granted.  Neither party appealed for a de novo jury determination of value.  On interlocutory appeal by Fulton County, the Georgia Court of Appeals reversed the trial court’s order setting aside the voluntarily dismissal.

The Georgia Supreme Court found that the appellate court erred in allowing Fulton County to unilaterally dismiss a condemnation action after entry of the special master’s award of compensation.  The Court concluded that the relevant event determining the time at which a voluntary and unilateral dismissal by the government is no longer allowable “is when the condemnor knows what the value award will be.”  In the Dillard case, that event occurred before the County moved to dismiss the action.

OCA previously filed an amicus brief in this case urging the Supreme Court to overturn a Court of Appeals decision which permitted Fulton County to unilaterally dismiss a condemnation suit after learning the amount of just compensation awarded to the landowner following a valuation hearing before a special master. Charles L. Ruffin, a shareholder with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC and the Georgia representative of OCA filed the brief on behalf of OCA.  OCA's brief argued that, if the appellate decision became final it would unfairly disadvantage property owners in eminent domain proceedings by allowing condemnors the opportunity for a “do-over” if the condemnor was dissatisfied with a special master’s award.

“The Georgia Supreme Court affirmed that no condemnor should have an inequitable advantage over individual landowners," said Ruffin. "Had the Court of Appeals decision been allowed to stand, condemnors would have effectively been given two shots at trying a condemnation case.”

“The Dillard decision is a victory for Georgia property owners and insures that condemnation proceedings remain fair and equitable for landowners throughout Georgia.”


Wednesday, June 11, 2014

Church Fights Back Against City's Eminent Domain Suit

Members of the congregation of Faith Deliverance Temple in front of the church building the City of Orlando hopes to take by eminent domain for the construction of a new MLS soccer stadium in Downtown Orlando.
For nearly a year, the City of Orlando has attempted to negotiate a voluntary acquisition of property owned by a small community church in downtown Orlando, Faith Deliverance Temple. The City of Orlando wants to build a multi-million dollar sports and entertainment arena on the very spot this church stands, only a stone's throw from the Amway Center, home of the Orlando Magic, and a mile from the Citrus Bowl.  

Why, you might ask, does Orlando need another sports stadium?  The City of Orlando's Petition argues that the stadium is a necessary public project that will bring jobs, tourism and economic development to the area.  Is this, however, a true public purpose?  

Florida’s eminent domain laws are codified in Article X, §6 of the Florida Constitution and in Chapters 73 and 163 of the Florida General Statutes.  Following the infamous 2005 U.S. Supreme Court decision in Kelo v. City of New London, 545 U.S. 469, the Florida Legislature acted quickly to provide greater protections for property rights.  

First, the Legislature drafted a constitutional amendment which was passed by 69% of Florida voters on November 7, 2006.  Article X, §6 of the Florida Constitution was amended to require a three-fifths vote of the membership of both houses of the Legislature to approve any exception to Florida's eminent domain laws, specifically before eminent domain could be used to convey private property from one private entity to another.

The Legislature also amended Chapter 73 and 163 of the Florida Statutes (House Bill 1567, signed into law in 2006) to limit the opportunities for government abuse of the power of eminent domain.  Section 73.013, specifically, prohibits the transfer of private property acquired by eminent domain to another private entity listing only a few exceptions:  utilities, common carriers, entities providing public works infrastructure, road rights-of-way, or leases of incidental portions of otherwise public spaces.        

“When the City of Orlando initially approached my family to negotiate a voluntary acquisition of the church’s property, we resisted because we did not want to sell.  However, the City informed us that we wouldn’t have a choice as it would be using its eminent domain power to take the property,” said Jonathan Williams, son of the church’s founders. 
“When it became apparent we wouldn’t reach an agreement with the City, we made inquiries about how we might fight off eminent domain. We hired attorney Andrew Brigham and made our decision to defend the church's property rights.  We would rather stay on the property and continue to use it for our church, than have it taken,” he added.

“Faith Deliverance Temple may have been a willing seller in a voluntary acquisition at a certain price,” said attorney Andrew Prince Brigham. "However, because the City was not willing to transact at that price, the church wants to defend against the City’s use of eminent domain.” [Disclosure:  Andrew Brigham is the Florida member of Owners' Counsel of America.]

Brigham added, “The City’s proposed taking is not for a public purpose.  The City is simply a conduit for eminent domain to take from one private entity, a church, and transfer the use of the property to another private entity, a soccer franchise.  The Constitution of the State of Florida and Florida’s Eminent Domain Code were amended in 2006 to prohibit such an abuse of power.”

Brigham noted that the City did not seek approval of the Florida Legislature before it filed its eminent domain petition nor did the Legislature list sports franchises or stadiums as exceptions to the prohibition against private transfer.   

“While it may be that a new MLS franchise and soccer stadium will do tremendous things for Orlando, the City must use other means than exercising its eminent domain power to acquire the property owned by Faith Deliverance Temple,” said Brigham.

“The City’s Memorandum of Understanding and Facility Use Agreement with Orlando Sports Holdings, LLC, the MLS franchise, is prima facie evidence that the new stadium is less about the City’s ownership or control and more about the soccer club’s ownership or control.” he said. “It’s a classic example of the tail wagging the dog.”

The church, through its counsel, released a statement announcing that its leaders have retained Brigham Property Rights Law Firm and Shannon Keith Turner, P.A. to defend the church’s property rights against the City's use of eminent domain.

The case is City of Orlando v. Faith Deliverance Temple Inc., et al, case number 2014-CA-005081-O, filed May 15, 2014 in the Circuit Court for the Ninth Judicial Circuit, Orange County, Florida.  

This will be one to watch.

Monday, June 9, 2014

New Blog: "Property Rights Montana"

Owners' Counsel of America member-attorney Hertha Lund and members of her firm, Lund Law, PLLC, have launched a new blog, "Property Rights Montana."

The blog will focus on issues facing Montana landowners including private property rights, state and federal agency overreach, eminent domain, and water rights.

Check out a recent post "From Lies to Truth: Why the CSKT Water Rights Compact is Good for Montana" with a link to Hertha's white paper of the same title presenting factual information about the CSKT Compact and likely impacts to people living on and off the reservation should the state fail to approve the negotiated settlement.  (CSKT refers to the Confederated Salish and Kootenai Tribes.)  

Monday, May 5, 2014

Koontz Wins Again - Unconstitutional Exactions Are Still Unconstitutional and Money Remains Private Property Deserving Constitutional Protection

Last week, Florida’s Fifth District Court of Appeal once again ruled in favor of Coy Koontz, Jr. in the case concerning his late father's regulatory takings claim against the St. Johns River Water Management District.

In St. Johns River Water Management District v. Koontz, No. 5D06-01116 (Apr. 30, 2014) the Fifth DCA held that the Koontz family is entitled to damages under Florida law for the temporary taking of the family’s property for the time that the Water Management District's unconstitutional demands, which Koontz refused, denied use of the property.  Last June, the United States Supreme Court held that the Water Management District’s exaction was an unconstitutional permit condition that evaded the long standing land-use doctrines established in  Nollan v. California Coastal Comm’n, 483 U. S. 825 (1987), and Dolan v. City of Tigard, 512 U. S. 374 (1994).

The Fifth DCA's opinion in short and can be summed up in this excerpt below:
Because our decision in Koontz IV is entirely consistent with the decision of the United States Supreme Court, we adopt and reaffirm Koontz IV in its entirety and affirm the judgment below. We deny Appellant’s request to reopen the briefing. The constitutional issues decided by the United States Supreme Court were fully briefed here, and that Court’s holding does not set forth a new legal construct with which we must re-analyze these issues. To the extent that Appellant seeks to brief the state law issues left open by the Supreme Court, we conclude that those issues were either disposed of in Koontz I or Koontz IV, or they were not preserved and presented in those proceedings.
Slip op. at 3 (footnote omitted).

Justice Griffin dissented arguing that nothing was really “taken” from Koontz that would require the payment of just compensation under the Fifth Amendment, coming to a similar conclusion as that handed down by the Florida Supreme Court in 2012 and subsequently overturned by SCOTUS.  However, as Paul Beard of the Pacific Legal Foundation, the attorney and firm that represented Koontz before the US Supreme Court and again in these remanded proceedings, points out here the dissent misunderstands the purpose of the Florida statute providing for damages in such cases:  “The family’s injury lies, not in the taking of its money, but in the years of lost use of its property.  It is that injury that the Florida statute redresses…”.

As our friends and fellow bloggers Gideon Kanner (here) and Robert Thomas (here) have noted, this decision marks the fifth Koontz opinion from the District Court of Appeal and the eighth appellate decision over a nearly 20-year legal battle between the St. Johns Water Management District and the Koontz family.
While we believe the legal issues posed by Koontz (all 8 of 'em) have been settled by SCOTUS and this most recent appellate decision, whether or not the litigation will end is unknown.