March 3, 2010
Dear City Attorney:
You have the following question: What is the statute of limitations on claims that a utility
line was built across a piece of property where the where the utility easement was not recorded.
The law appears to be clear that Tennessee Code Annotated, ' 29-16-124 contains the
statute of limitations that applies in this case. It is 12 months (except for some exceptions that do
not apply here). However, the problem under that statute is calculating when the statute of
limitations begins to run. It will be seen below that the time the statute begins to run is different for
taking made by entries on land, and for regulatory takings. With respect to the utility line at issue
in your City, it appears to me that the taking is the product of an entry made on the property owners
land before he owned it, the product of which was the construction of a utility line by the city the
easement for which was not recorded. But because the property owner had notice that the utility
lines were in place and operational more than 12 months ago, he had the requisite notice to start the
statute of limitations running at that time. I will let the facts related to me stand by themselves
without reiteration here.
Vowell Ventures v. City of Martin, 47 S.W.3d 434 (Tenn. Ct. App. 2000) (Application for
appeal denied by Tenn. Supreme Court March 19, 2001), actually involves two cases. In the first
case, a developer was denied a building permit by the city on land that he owned, on the ground
that a sewer line crossed the property. The easement for the line was neither recorded, nor
mentioned in the deed that conveyed the property to the developer. He filed a suit the court treated
as a writ of certiorari, seeking an order directing the city to issue the building permit. The trial
court denied the permit, and the court of appeals affirmed the trial court’s decision.
In the second suit, the owner of the property claimed an inverse taking of his property for
which he sought compensation.
The court rejected his claim, pointing to Tennessee Code Annotated, ' 29-16-124, which is
a limitation on actions, and reads:
The owners of land shall, in such cases, commence proceedings
within twelve (12) months after the land has been actually taken
possession of, and the work of the proposed internal improvement
begun; saving, however, to unknown owners and nonresidents,
twelve (12) months after actual knowledge of such occupation, not
exceeding three (3) years and saving to persons under the
disabilities of infancy and unsoundness of mind, twelve (12) months
March 3, 2010
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after such disability is removed, but not exceeding ten (10) years.
Looking at the time line in the first and second cases, the court, citing the plaintiff’s own
complaint in the first case, the City of Martin’s building inspector denied the building permit on
March 9, 1990, because he had found that the sewer line at issue crossed the property. The
plaintiff requested the city to remove the sewer line, then on October 6, 1991, he filed the first suit
against the city, and the second suit against the city on January 31, 1996. The court said in
relation to that time line that:
According to the record in the previous case, that complaint [for
certiorari] was filed on October 16, 1991. Therefore, Vowell
Ventures had knowledge at that time that there was a sewer line and
storm drain across its property. The present action was filed
January 31, 1996. Therefore, the plaintiff’s action for inverse
condemnation is barred by the aforementioned statute of limitations.
[At 437]
It was clear that more than 12 months had passed since October 6, 1991, when the plaintiff
filed his first suit, and January 31, 1996 when he filed his second suit. But the question of
whether the statute of limitations had started running if the plaintiff had known about the existence
of the utility lines on his property before he filed his first suit on October 6, 1991, is not clear. The
court said only that:
Governmental entities are empowered to take private property for
the use and benefit of the public good, but are constitutionally
prohibited from doing so without just compensation being made.
When such a taking occurs, an action may be initiated by the
landowner in an action referred to as inverse condemnation. Such
an action must generally be brought within 12 months after the land
has been actually taken possession of and the work on the proposed
improvements begun. T.C.A. ' 29-16-124 [At 436-47]
It is said in Knox County v. Moncier, 455 S.W.2d 153 (Tenn. 1970), that:
We do not hold that a property owner can sit idly by and wait to
commence his suit at any time which is convenient with him,
thereby circumventing the purpose of the statute of limitations
[T.C.A. ' 29-16-124]. What we do hold is that the onus is on the
property owner to institute his suit within one year after he realizes
or should reasonably realize that his property has sustained an injury
which is permanent in nature. At that time the injury occurs and
March 3, 2010
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the statute of limitations begins to run.... [At 156]
Where a utility line crosses a piece of property, it is difficult to argue that the property has
not sustained an “injury that is permanent in nature.” At the least, it has suffered a diminution in
value. The property owners at issue in the City should have realized, or reasonably realized, that
their property sustained an injury which was permanent in nature: a utility line, of which they had
no legal notice by conveyance or recorded deed, crossed their property. For that reason, the 12
month statute of limitations began to run when they first learned the utility line crossed their
property.
That conclusion is supported by Pleasant View Utility District v. Vradenburg, 545 S.W.2d
733 (Tenn. 1977), beginning in 1964, the utility district’s plant began discharging thousands of
gallons of unpiped water across a certain piece of property, apparently at least once every three
days. In 1974 the plaintiffs bought the property in question, built a lake on it, then filed suit
against the city seeing an injunction to stop the utility district from pouring water on their property
including into their lake.
The court observed that the plaintiff’s had filed the suit in the wrong court, that their claim
was for an inverse taking rather than an injunction:
Having the power of eminent domain, any action of petitioner, in
carrying out the purposes for which it was created, which destroys,
interrupts, or interferes with the common and necessary use of real
property of another is a ‘taking’ of such property, and the
landowner’s remedy is an action for damages under the inverse
condemnation statute (T.C.A. s. 23-143) [now T.C.A. ' 29-16-124]
not injunctive relief; and the action for damages is subject to the one
year time limitation set forth [in that statute] .... [At 735]
Subsequent language in that case makes an important point relative to the City’s case:
T.C.A. ss 23-1423 and 23-1424 apply even in the cases where there
is no actual entry upon the land. Jones v. Hamilton County, supra;
Morgan County v. Neff, 36 Tenn. App. 407, 256 S.W.2d 61 (1952);
Hollers v. Campbell County, 192 Tenn. 442,241 S.W.2d 523
(1951). And, as is pointed out in Morgan County v. Neff, supra,
‘where the land is taken either without a conveyance or a
condemnation proceeding, there is no hardship in holding that the
period (of limitation) begins, as the statute expressly provides, when
the land is taken possession of.’[At 435] [My emphasis.]
March 3, 2010
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As in Vowell Ventures, above, this case is not clear as to the precise date when the statute
of limitations started running. But the court said this about the running of the statute of
limitations:
There is no question in this case but that throughout the ten year
period immediately preceding the filing of this suit, the petitioner
intentionally, regularly, and necessarily discharged a large volume
of water onto and across the land now owned by the respondents.
This action of petitioner [Pleasant View Utility District] was a
‘taking of a flowage easement’ across the land-a taking for which
petitioner was liable in damages, provided an action was filed in the
circuit court by the then landowner within twelve months of the
‘taking.’ But, here, no action was taken by the landowner for more
than ten years; and, when taken, the action was filed in chancery
court, not circuit court as required by the inverse condemnation
statute. The action being filed in the wrong court and also being
barred by the time limitation set forth in T.C.A. s. 23-1424 [now
T.C.A.' 29-16-124, we hold that the chancellor correctly dismissed
the action on proper plea. [At 735-36]
This case can be read to mean that the statute of limitations with respect to the purchasers
of the property in 1974, might have begun to run ten years earlier when the purchasers’
predecessors in title owned the land. But that appears not to be a logical reading of that case. In
any event, we probably do not need to resolve that question when the purchasers-defendants
bought the property in 1974, they undoubtedly had immediateBor nearly immediate notice-- that
thousands of unpiped gallons of water were being regularly exhausted by the water plant onto their
property. In the City’s case, the water was piped, but the only significance of that fact appears to
be that the city actually entered the land to install the piping system without a conveyance or a
condemnation proceedings; the effect is the same in both casesBwater running across the property.
However, because the water was piped in the City’s case, there is obviously questions of whether
the property owners had notice of the pipe running across their property twelve or more months
after they purchased the property, and whether 12 o4 more months have passed since they had such
notice. Under the facts related to me, the answer is yes to both questions.
Even though the water in the City’s case flowed through a line installed by that city, that
installation still reflected the city’s “taking of a flowage easement,” and the property owner had
notice more than twelve months ago that the pipes were installed on the property. It is said in
Pleasant View Utility District, that, “where the land is taken either without a conveyance or a
condemnation proceedings there is no hardship in holding that the period (of limitation) begins
when the land is taken possession of.” The defendants in that case, having bought the property in
1974, and having filed suit in the wrong court sometime after that, saw the 12 months statute of
March 3, 2010
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limitations contained in Tennessee Code Annotated, ' 29-16-124 expire.
The court in Vowell Ventures, above, went so far as to say in Footnote 4, that the statute of
limitations in Tennessee Code Annotated, ' 29-16-124 was not even tolled pending the appeal of
the certiorari action in the first case:
The plaintiffs also contend the doctrine of equitable tolling saves the
day; however that doctrine has not been recognized in Tennessee.
Norton v. Everhart, 895 S.W.2d 317, 321 (Tenn. 1995) As our
Supreme Court has explained, Aour existing doctrine of ‘equitable
estoppel,’ with its requirement that the opposing party have engaged
in misconduct, more appropriately strikes the balance between the
need for predictable procedural rules on the one hand and the need
to relieve innocent parties of the consequences of the expiration of
the limitation period on the other. [At 437]
Also see the unreported case of B & Enterprises of Wilson County, LLC v. City of
Lebanon, 2009 WL 130188 (Tenn. Ct. App.). That case considers the distinction between the time
when the statute of limitations found in Tennessee Code Annotated, ' 29-16-124 starts to run in
regulatory takings cases compared to when it starts to run in cases involving actual entries onto
land:
.... In most cases, the running of the statute of limitations is triggered
by the landowners knowledge of entry onto the land or the
improvements affects the land and its use. STS/BAC, 2004 WL
2752809, at 9. However, in matters arising out of adverse
decisions by regulatory agencies, “the triggering event in a
regulatory takings case is the date the landowner knew that the
government was depriving it of the economic use of its property.”
Id. [At 3]
It seems clear that the City’s case involves an entry onto the land without the benefit of
condemnation or the recording of an easement, which is obviously how the utility line at issue was
constructed, and under the facts related to me, the property owners had notice more than 12 months
that the utility line was on the property.
Sincerely,
Sidney D. Hemsley
Senior Law Consultant
March 3, 2010
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SDH/