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8/2/2019 Power Local Assign

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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

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