Post on 05-Apr-2018
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THE ABCs OF EMINENTDOMAIN AND INVERSE
CONDEMNATION
Sima R. Salek, Esq.Jeffrey F. Kagan, Esq.Orbach, Huff & Suarez LLP
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THE ABCs An Overview
Eminent Domain Direct Condemnation
Public Entity Seeks To Acquire Property
Inverse Condemnation
Property Owner Claims Public Entity Took orDamaged Property
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CONSTITUTIONAL BASIS
United States Constitution:
. . . Nor shall private property be taken for public
use, without just compensation.
California Constitution:
Private Property may be taken or damagedfor publicuse only when just compensation. . . has first beenpaid to, or into court for, the owner.
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Eminent Domain Pre-Condemnation Procedures
Walkthrough with Appraiser and Owner Appraise Property Obtain Approval to Make Offer in Closed
Session Make Offer
No less than appraised value
Good Faith Negotiations
Acquire Property Voluntarily ORProceed to Resolution of Necessity
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Resolution of Necessity
An administrative determination that thestatutory prerequisites for taking have beenmet.
A Resolution of Necessity must contain:
1. A general statement of the public use for which the
property is being taken and reference to the statuteauthorizing eminent domain;
2. A description of the general location and extent ofthe property being taken; and
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Resolution of Necessity Cont.
3. A declaration that the governing board of the publicentity has found and determined each of thefollowing:
- The public interest and necessity require the proposed
project;
- The proposed project is planned or located in the mannerthat will be most compatible with the greatest public goodand the least private injury;
- The property described in the Resolution of Necessity is
necessary for the proposed project; and
- That the public entity made the statutory offer to theproperty owner or did not make the offer because the
owner cannot be located with reasonable diligence.
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Resolution of Necessity Cont.
Must give notice and opportunity to beheard to all owners on last tax assessorroll.
Failure by an owner to file a writtenrequest to appear and be heard within 15days after notice mailed results in waiver.
2/3 vote of governing body
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Conclusive Effect of Resolution
Resolution of Necessity conclusivelyestablishes: The public interest and necessity require the project;
The project is planned or located in the manner thatwill be most compatible with the greatest public goodand the least private injury;
The property sought to be acquired is necessary forthe project.
Resolution of Necessity does not haveconclusive effect if gross abuse of discretion bygoverning body.
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Filing Action/Pleadings
Complaint Names of Plaintiff and Defendants
Description of Property, Map or Diagram
Allegations of Public Use, Necessity, Adoptionof Resolution of Necessity, Statutory Authorityfor Eminent Domain
Answer Nature and Extent of Property Interest
Challenge to Right to Take
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Challenges to Right to Take
In Answer or Demurrer
Grounds:
Plaintiff not authorized to exercise power of eminent
domain Stated purpose is not a public use
Plaintiff does not intend to devote the property to thestated purpose
Property not subject to eminent domain for statedpurpose
No reasonable probability of use in 7 years
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Possession Prior to Judgment
Prejudgment or Immediate Order forPossession/IOP
Must Have Made Deposit
Public Entity Can Obtain Possession: 3 Days if Not Occupied
90 Days if Occupied
Risk of Loss Transfers to Public Entity
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Experts/Discovery
Hire Appraiser
Owner can also testify
Can Conduct Discovery
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Pre-Trial Matters
Statutory Exchange of Appraisal Data 90 Days Before Trial or Date Agreed to by Parties
Final Offer 20 Days Before Trial
Note: Failure by Public Entity to make
reasonable offer, when Owner made reasonableoffer, subjects Public Entity to litigation expenses(attorneys fees, expert fees and costs)
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Trial
Prima Facie Public Entity Burden ofProof to Establish Public Use andNecessity
Valuation Compensation No Burden of Proof
By Jury
Apportionment
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The ABCs of InverseCondemnation
When Person or Entity with Property Interest Claims thata Public Entity Took or Damaged Its Interest WithoutPayment of Just Compensation
The Public Entity Is Not Actively Seeking to AcquireProperty
Philosophical Underpinning: DisproportionateContribution to a Public Undertaking
Often Not Obvious Taking
Fact-Specific and Fact-Intensive
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Interest In Property
Property Owner
Tenant
Trustee
Executor
Mortgagor/Lien Holder
Holder of an unexercised option to purchase
Insurer of merchant as its subrogee
Another public entity
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Public Project
Public entity planned, approved, constructed oroperated a public project.
Public entity substantially participates in someactivity for the public use or benefit.
Note:Mere approval of plans/issuance of permits isnot, in and of itself, sufficient substantialparticipation to create inverse condemnationexposure.
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Causation
Strict liability
Any actual physical injury to real propertyproximately caused by the improvement as
deliberately designed and constructed,irrespective of foreseeability.
Exceptions:
1. Exercise of Police Power2. Where state had the right to inflict
damage at common law.
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Causation
When Intervening Force:
Substantial Factor Test
Whether governmental action, acting alone,
could have produced the damage.
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Damage or Taking
Fact-based specific inquiry
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Types of Inverse Condemnation
Physical Intrusion
Intangible Intrusion Not Causing PhysicalDamage (noise, dust, fumes)
Intangible Intrusion Causing PhysicalDamage (vibration, land stability)
Loss of Access
Klopping Precondemnation Delay
Regulatory Takings
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Physical Intrusion
Water damage
- Streams
- Flood control
- Riparian rights
Land Stability
- Subsidence
- Lateral/subjacent support
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Physical Intrusions
Loss/Interference with Access
Good Faith Mitigation
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Intangible Intrusion No PhysicalDamage
Overflying aircraft
Highway, airport noise
Public works construction projects
Utilities No liability for electromagnetic fields.
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Intangible Intrusion CausingDamage
Vibrations
Land Stability / Subsidence
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Loss of Access
Complete deprivation is actionable
No right to expect that access will be maintainedindefinitely
Public policy favors public improvements,especially to traffic
As long as property remains accessible, there isno inverse condemnation liability
Unreasonable construction activity is actionable Vehicles and equipment
time
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Klopping
Unreasonable precondemnation delay or otheractivity
Dont announce intent to condemn before youmean it!
Also statutory basis: If Public Entity does not
initiate eminent domain action within 6 months ofAdoption of Resolution of Necessity (Code ofCivil ProcedureSection 1245.260)
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Regulatory Takings
The facial or as applied challenge to a land
use restriction or ordinance.
Per Se Taking: Ordinance takes or denies all economically viable
uses of property. Lucas v. South Carolina CoastalCouncil(1992) 505 US 1003.
Partial Taking:
Ad hoc analysis of factors. Penn Central Transp. Co.v. New York City(1978) 438 US 104.
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Key Penn CentralFactors
The economic impact of the regulation ofthe claimant.
The impact of the regulation on theinvestment-backed expectations.
The character of the governmental action.
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Common Regulatory TakingsContexts
Zoning
Down zoning v. open space overlays
Development Moratoria
Generally, not a taking
30 years temporary moratorium is not a taking
Weigh state interest v. burden on owner
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Common Regulatory TakingsContexts
Permits
If total denial (=denial of all economically
viable use) must compensate owner unlessdenial was for public safety (police power) orunless delay in issuing permit was normal inthe permissible regulation of development.
Mere delay in issuing permit is generally not ataking.
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Mitigation
Good faith mitigation measures arecompensable in inverse condemnation.
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Date of Value
Eminent Domain:
Date of Commencement of Action if broughtto trial within 1 year
Date of Trial if after 1 year
Date of Prejudgment Deposit
Inverse Condemnation: Date of Taking v. Date of Trial
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Date of Value Current Hot Issuein Eminent Domain Case Law
Saratoga Fire Protection District v. Hackett(2002) 97 Cal.App.4th 895
Mt. San Jacinto Community College District v.
Superior Court(2005) 126 Cal.App.4th 619
San Diego Metropolitan Development Board v.RV Communities(2005) 127 Cal.App.4th 1201
New Case: City of Santa Clarita v. NTS TechSys. (2006) 2006 WL 255080
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Additional Considerations inInverse Condemnation
Statute of Limitations
Three Year Statute of Limitations: Code of Civil Procedure Section 338(j): An action to recover for
physical damage to private property under Section 19 of Article I
of the California Constitution
Note: Five Year Statute of Limitations for Adverse Possession
Date of Accrual Constructive or Actual Knowledge
Continuing Takings
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Additional Considerations - General
Furniture, Fixtures and Equipment
Fixtures Are Actionable In InverseCondemnation
Relocation Benefits
Loss of Goodwill