ARTICLE
1 February 2001

The Top Ten Hits Of Condemnation Law

GD
Gary David Strauss

Contributor

Gary David Strauss
United States Litigation, Mediation & Arbitration

Prior to becoming an attorney specializing in condemnation law, I was a professional guitarist specializing in rock and roll. On a subconscious level, I always considered my change of profession to be a logical progression. However, when I communicated my subconscious thought to my former colleagues in the entertainment world, as well as those in the legal profession, they seemed to agree on one thing - I must be nuts.

Faced with this condemnation of my thesis by two seemingly disparate groups of friends, I struggled for many years to discover the link between eminent domain and rock and roll. When the answer finally came to me, it was all so perfectly clear that I wondered how it could have escaped me for so long. In a cathartic moment, I suddenly realized that when the most prominent songwriters penned their greatest hits, they delicately placed pearls of wisdom in their lyrics designed to address major issues in condemnation law.

In much the same way that I have enjoyed the experience of playing music ranging from Bach to Bachman Turner, I also have the good fortune to have represented property owners, as well as condemning agencies in eminent domain proceedings. In my experience as a condemnation lawyer, I could not help but notice that condemning agencies often fail to consider the many ways that certain land acquisition costs can be minimized or even alleviated all together. I intensely began to listen to the songs of the masters in search of the keys to cost containment. That search resulted in this article - The Top Ten Hits of Condemnation Law - Assessing and Controlling the Costs of Land Acquisition.

Before I begin, a brief disclaimer is in order. The use of the lyrics contained herein solely is intended for educational purposes and therefore the use of said lyrics, or any portion thereof, is exempt from payment of royalties pursuant to 17 USC § 107 . More importantly, the information contained herein is intended as general guidance. Application of the principles expressed in this article to a specific case may require legal guidance. Therefore, if any advice gleaned from this article is applied by the reader and a $20,000 project results in a verdict of $2,400,000, there are no grounds upon which you can sue me or any of the songwriters, their heirs, successors, entourage or assigns. But enough about the law! This article is about music - the Top Ten Hits of Condemnation Law.

I0.
I Fought The Law
(Sonny Curtis)
as performed by the Bobby Fuller Four
I needed money 'cause I had none
I fought the law and the law won
breaking rocks in the hot sun
I fought the law and the law won

In this song, the Cricket's Sonny Curtis, emphasized that the acquisition process is a legal process. Even the preliminary steps, such as organizing a downtown development authority, conducting pre-condemnation studies, choosing and providing legal counsel to appraisers, and drafting good faith offers, resolutions of necessity and declarations of taking, must conform to strict legal requirements. The Chief Judge of the circuit court in Wayne County, Michigan, recently dismissed the condemnation complaints for a proposed casino project due to defects in the good faith offer.

On a more practical level, property owners' legal counsel often begin communications with various agents of the condemning agency many years prior to the time a decision is made whether to implement the project. Statements and actions made years before a condemnation action is filed later may effect the posture and outcome of the case. Although the beginning stages of land acquisition should be far from a paranoid and adversarial process, it is necessary to think a few steps ahead and have centralized control over communications. Whatever actions are taken must be made with an understanding of potential legal consequences.

Finally, condemning agencies must play in harmony with controlling legal principles, which are in a constant state of change. It is not uncommon to find that while certain damage theories have been liberalized, others have become more restrictive. It is mandatory that the condemning agency's appraiser(s) receives proper instruction regarding the applicable legal parameters which will govern the particular appraisal process. Few things can be more devastating to a case than an appraiser who has not even considered a viable damage theory and cannot explain why it was rejected. Regardless of the ultimate viability of a particular damage theory, controlling legal principles should be addressed pro-actively so that any position can be defended through an offensive stance rather than through a dangerous patchwork of post hoc explanations.

9.
Can I Get A Witness?
(Holland/Dozier/Holland)
as performed by Marvin Gaye
But it hurts me so inside
To see her treat me so unkind
Somebody, somewhere tell her it's unfair
Can I get a witness? Can I get a witness?
Can I get a witness?

In this song, the immortal Motown songwriting team of Holland/Dozier/Holland underscored the central role of the valuation expert in condemnation cases. Although the vast majority, if not all jurisdictions, permit property owners to testify regarding the value of their property, expert opinions ordinarily are the most important factor in condemnation cases. Therefore, it is crucial to find experts who convincingly can communicate a professional opinion to opposing counsel in a deposition and to a jury. Far too often experts are chosen with no input from the attorneys who ultimately will be charged with defending their opinion.

It is extremely important to chose the correct expert for the particular issue. For example, if the appraisal problem depends upon the feasibility of building on a site, it is advisable to retain an expert who actually is involved in construction near the project area. I was involved in litigation which largely turned on the experts' assessment of various infrastructure costs associated with a residential subdivision. At deposition, it was learned that although the condemning agency's expert was a partner in a nationally renowned firm, he had not been involved with construction of a residential subdivision for over six years. The property owner's experts were locally involved in subdivision development on a day to day basis. Needless to say (but worth writing) - the case quickly settled.

After the proper expert is chosen, he or she should be given the opportunity to do a complete job. All necessary information must be obtained and the expert should have reasonable latitude to retain any support staff necessary to support the ultimate opinion. For example, if the possibility of obtaining a variance is at issue, the relevant municipality's history of dealing with similar situations should be closely examined. The additional money spent to substantiate an opinion is not really "additional" money at all. Lack of preparedness seldom results in lower cost.

In many jurisdictions, the condemning agency must reimburse the property owner's reasonable expert fees. This statutory obligation often results in the curious situation where the agency pays top dollar for the owner to retain an effective expert, while spending a fraction of that amount for its own expert opinion. While high fees are not the sole determinant of expertise, hopefully the agency is not in a position of having to choose experts based on competitive bidding. It is all to common to find that an attempt to save money on the front end results in a substantially higher total cost of acquisition.

8.
You Can't Always Get
What You Want
(Jagger; Richards)
you can't always get what you want,
but if you try sometime you find
you get what you need.

In this song, Jagger and Richards suggest that condemning agencies consider the feasibility of taking a lesser property interest, especially where a reduction in the acquisition will minimize damages. It is not unusual for the width or location of the right-of-way to be altered in some road projects to avoid taking adjacent property or to accommodate the wishes of potentially affected property owners. The decision as to precisely what property interests must be acquired to achieve the objectives of a given project should not be viewed solely as an engineering decision. Practical, as well as legal considerations should influence the ultimate siting of the project. Relevant areas for inquiry might include the freedom for alteration of the site, the property owners affected by the taking, whether a given siting will have an effect on the number of total/partial takings, and the extent to which a given siting will affect viable businesses operating on the property.

I was involved in a case where a municipality took 30 feet of frontage for relocation of utilities incident to road widening. The taking virtually eliminated the parking for a five unit apartment building, resulting in the owner's claim that the taking resulted in a total taking of the apartment building. After receipt of the appraisal, the municipality discovered that it really didn't need the land in fee in order to bury the wiring for the traffic and street lights. The court permitted an amendment to the complaint whereby the taking was reduced to a 10 foot easement, effectively alleviating severance damages. Although substantial costs for acquiring the real estate were eliminated, the condemning agency was liable for the owners costs and attorney fees to the degree made necessary by the original taking. Had the city properly assessed what was necessary for the project prior to filing the complaint, all of these additional costs would have been avoided.

7.
We Can Work It Out
(McCartney, Lennon)
Try to see it my way, Try to see it my way,
Do we have to keep on talkin till I can't go on?
We can work it out
We can work it out
We can work it out.

Tempered by peace/love movement of the 1970's, John and Paul encouraged condemning agencies to consider creative solutions that might serve the interests of both parties and avoid potentially costly delays associated with litigation. Consonant with this philosophy, the "mop tops" suggest that the condemning authority consider whether it has any non-monetary items that it can offer as part of an overall settlement. In a recent case in Detroit Michigan involving acquisition of property for the dual Detroit Tigers/Lions stadium project, the city worked out a deal with the owner of an historical theater which involved moving the building to a new location.

A condemning agency also might consider offering an "incentive" in excess of the estimated just compensation indicated by the appraisal, as an attempt to avoid litigation expenses. Prior to making such an offer, it is advisable to examine the law in a particular jurisdiction in order to be sure that if the amount which includes the incentive will not be viewed as the good faith offer in the event that a lawsuit must be filed. In determining a proper incentive amount, the agency should consider all of the factors that effect the actual range of costs and attempt to make an incentive that will catch the owner's attention.

6.
Dancing In The Dark
(Bruce Springsteen)
you can't start a fire
can't start a fire without a spark
this gun's for hire
even though we're just dancing in the dark

In this song, the "Boss," perhaps the most cryptic writer included in the top ten, evidently was referring to expert appraisers when he alluded to the gun "for hire." The subsequent reference to "dancing in the dark" clearly serves as a cautionary note that appraisers must obtain all of the necessary relevant information prior to tackling the appraisal problem.

In situations where the property maintains a business or is in the process of development at the time of appraisal, essential information is only available from the owner. Many jurisdictions have specific statutes, in addition to general court rules, that may provide a right for the condemning agency to obtain information relevant to the determination of just compensation. Because the request for information later might be the key exhibit in a subsequent court hearing, requests should be made in writing. The form and substance of the requests should be specifically tailored to the information actually needed.

5.
Time Has Come Today
(J. Chambers, W. Chambers)
Now the time has come
there are things to realize
Time has come today
Time has come today

In this classic hit, the Chambers Brothers emphasized that the passage of time alone may have a substantial effect on the cost of land acquisition. Premature announcement of a project invites land speculation and often inflates the fair market value of the property to be condemned. Although most, if not all jurisdictions, preclude consideration of any increase in value attributable to the project, often it is impossible to extricate any "illegal" cause of the increase. Generally, the greater the time between knowledge of the project area and the condemnation, the more difficult it will be to isolate the effect. To the extent possible, the site of a project should not be made public until it is apparent that the project will go forward within a reasonable time frame.

Similarly, the good faith offer should be made as close as possible to the time when the condemning authority is prepared to file the necessary complaints. Additionally, the good faith offer should be based upon a recent appraisal of the property. In many jurisdictions, reimbursable attorney fees are calculated on the difference between the final verdict or settlement and the initial good faith offer. If the offer is based upon a "stale" appraisal, it is possible that the passage of time alone will produce a substantial increase. Further, it is not uncommon for the highest and best use of the property to change over a few years - especially if the public has been aware of the project for some time.

4.
Taking Care Of Business
(R. Bachman)
I've been taking care of business
every day
taking care of business
every way

In this song, the Canadian songwriter, Randy Bachman of Bachman Turner Overdrive attempted to curry favor with the American legal community and various governmental agencies by his in depth analysis of potential business related damages in a proposed project area. The assessment of potential business-related damages is of paramount importance in assessing potential land acquisition costs as well as finalizing the boundaries of the project site.

The predominant types of business-related damages are damages resulting from a loss of going concern and business interruption damages. Generally, in order to set forth viable claim for loss of going concern damages, the condemnation must foreclose the possibility of the relocation of a business.

If a business can be moved, as is commonly the case, business interruption damages must be considered. Business interruption damages include the additional costs associated with the relocation or the business, such as increased rental expenses, advertising expenses and labor. Due to their speculative nature, damages for lost profits are not recoverable in a business-interruption case.

A taking of a commercial building might involve potential damage claims of numerous business lessees. Additionally, in many jurisdictions, it is important to consider whether taking might involve a business that has multiple locations. Business valuations can be costly and expert opinions can widely differ due to the many factors involved in making a determination. As Holland/Dozier/Holland caution, particular attention should be paid to choosing the proper expert, who can effectively communicate his or her opinion, evaluate the owner's claims and educate counsel relative to the applicable methodology. .

3.
Taxman
(G. Harrison)
Should five per cent appear too small
Be thankful I don't take it all
'Cause I'm the taxman,
yeah I'm the taxman

In "Taxman," George Harrison brilliantly underscores the importance of considering interest, costs and attorney fees. Throughout his early touring days in the United States, Harrison reportedly was struck by the fact that many jurisdictions required the condemning agency to reimburse the condemnee for appraisals costs and attorney fees and to pay a healthy interest rate on additional just compensation payments. Although technically considered to be incidental costs, these factors substantially can increase the cost of land acquisition.

Depending on the type of issues involved in a case, expert fees can be considerable . It is mandatory that these costs are assessed prior to entering into settlement negotiations.

2.
The Gambler
(Kenny Rogers)
You've got to know when to hold 'em
know when to fold 'em
Know when to walk away
when the dealing's done

In this song Kenny was advising condemning agencies to ascertain the value of case prior to beginning the expense of going to trial. If the case has been properly prepared from the beginning stages of the acquisition process, the condemning agency should have a good idea of a reasonable settlement figure.

Before attempting to arrive at a reasonable settlement position, relevant considerations may include:

  • Range of value opinions of just compensation
  • Relative strength of expert opinion[s]
  • Range of value associated with potential attorney fees, costs and interest if case continues

1.
Money That's What I Want
(Bradford, Berry Jr.)
money don't get everything, it's true
what it don't get, I can't use
give me money
that's what I want

If all attempts at settlement fail, the only thing at issue will be the subject of Barrett Strong's classic hit, "Money." If the condemning agency has followed the advice of the masters, as well as the writings of others, the agency will be litigating from a position of strength and will be able to accept the final verdict with the knowledge that the odds of success have been maximized .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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