Christopher W. Kramer
Condemnation 101
Condemnation 101
International Right of Way Association
September 10, 2013
Christopher W. Kramer
Dickinson Wright/Mariscal Weeks
2901 North Central Avenue, Suite 200
Phoenix, Arizona 85012
602-285-5000
ckramer@dickinsonwright.com
dickinsonwright.com.com
Real Schedule
20 days to acquire Right of Way ?
• Appraisal/review takes 90 days +/-.
– Appraisal should be evaluated before finalized
and reviewed
• Condemnation requires offer based on
appraisal 20 days before filing
– 30 days if federal money
– Possession takes 30-60 days from filing
Eminent Domain
• Inherent Right of Sovereign
– Necessary
– Constant
– Inextinguishable
• Not Created or Granted by Constitution
Hugo Grotius
“The property of subjects is under the
eminent domain of the state, so that the
state or he who acts for it may use and even
alienate and destroy such property…but that
when this is done the state is bound to make
good the loss to those who lose their
property.” Circa 1625.
Ahab and Naboth
And Ahab* spake unto Naboth, saying,
“Give me thy vineyard, that I may have it for
a garden of herbs, because it is near unto
my house: and I will give thee for it a better
vineyard than it; or, if it seem good to thee, I
will give thee the worth of it in money.”
1 Kings 21, King James version
*King of Samaria, circa 900 BC
United States Constitution
Nor shall private property be taken for
public use, without just compensation
Fifth Amendment
Arizona Constitution
No private property shall be taken or
damaged for public or private use
without just compensation having first
been made….
Arizona Constitution, Article II, Section 17.
Just Compensation Defined
Just compensation is the amount of
money necessary to put the property
owner in as good a financial position as if
the property had not been taken.
City of Phoenix v. Wilson
Reality Check: some things are not
compensable
•
•
•
•
•
•
•
•
Business losses
Relocation/Re-establishment
Good will
Direct access (?)
Alteration of traffic flow
Change of Access
Temporary interference during construction
Interference with view
Just Compensation, Reprise
Fair market value of property taken plus the
reduction in market value of any remaining
property, less special benefits.
Market Value
Fair market value is the most probable*
cash price a willing buyer would pay a
willing seller on the open market where the
seller has a reasonable time to find a
buyer and the buyer knows everything
about the property.
* “highest” if before 8/22/02 and not ADOT
Severance Damages
The decrease in value of the remainder
resulting from the take (decrease in the
value of remainder before and after).
Cost to cure
Cost to cure is the amount of money that
can be expended to eliminate or reduce
severance (must be less than the severance
cured).
Cost to cure is a measure of severance
damages.
Owner cannot be required or forced to cure
(but cannot “elect” to take full amount of
severance instead)
Special Benefits
Special benefits are the increase in value of
the remainder due to the special relationship
of the remainder to the project
– Federal Rule: Special benefits are offset
against just compensation
– Arizona rule: Special benefits are offset
against severance only
Just Compensation, Revisited
Just compensation is 1) fair market value
of the part taken, plus 2) the lesser of a)
severance damages or b) incurable
severance plus cost to cure or c) cost to
cure (if no remaining severance), less 3)
special benefits (to the extent of claimed
severance).
Valuation Concepts
•
•
•
•
•
•
Larger Parcel
Highest and Best Use
Project Influence Rule
Probability of Rezoning
Valuation of Easements
Date of Valuation
Legal Concepts
• Who can condemn
• What can be condemned
• For what purpose
– Public use
– Necessity
• “More necessary” public use
• Immediate Possession
Why you need a lawyer, Part I
A municipality may exercise the right of
eminent domain outside its corporate
limits to acquire rights of way for public
utility and public park purposes
ARS 9-511
So we’re good?
• No.
• Utilities and parks means the use of
eminent domain must be to acquire
property for both a utility and a park at the
same time
City of Phoenix v. Harnish
But wait, there’s more
• A municipality may acquire property by
eminent domain for a utility undertaking
outside its corporate limits
– ARS 9-522
• Utility undertaking includes “recreational
facilities” including parks
– ARS 9-521.01
So we’re good, right?
ARS 9-521.01 applies only to municipalities
of 75,000 or less.
Why you need a lawyer, Part II
The interests, estates and rights in land
subject to be taken for public use are a
fee simple, when taken for use in
connection with a right of way
ARS 12-1113(1)
Fee simple means the whole
bundle of rights
• Except in connection with eminent domain
• Whatever interest is taken is taken in its
entirety and in perpetuity
In re Forsttrom
Why you need a Lawyer, Part III
The right to compensation and
damages shall be deemed to accrue at
the date of the summons, and its actual
value at that date shall be the measure
of compensation and damages
ARS 12-1123(A)
When is the date of the
summons NOT the date of
value
When application of the statutory date
of value deprives the owner of
Constitutional just compensation
Miller v. Filler
City of Scottsdale v. GPC Aberdeen
Interdisciplinary Design Team
• Experienced infrastructure lawyer
– Legal documents (IGAs, purchase agreements,
CMAs, etc.)
– Identification of legal issues (i.e., jurisdiction, title
problems, service problems, bankruptcy, liens)
– Coordination and/or compliance with other entities
– Risk assessment
– Selection and evaluation of appraisers/appraisals and
other potential expert witnesses
– Scheduling
Interdisciplinary Design Team II
• Right of Way
– Relocation (30 and 90 day notices)
– Coordination with other agencies
– Coordination of acquisitions (project
consistency)
– Communication with property owners
– Negotiation vs. litigation
– Scheduling
Interdisciplinary Design Team III
• Appraiser
– Cost assessment (retaining wall or slope?)
– Consistency
– Scheduling
Recommended Reading
• Revised Arizona Jury Instructions, 4th
Edition, State Bar of Arizona (2005),
Eminent Domain
• The Law of Eminent Domain, American
Bar Association (2011/2012).
• Eminent Domain in Arizona, State Bar of
Arizona (2013)
Conclusion
Christopher W. Kramer
Dickinson Wright/Mariscal Weeks
2901 North Central Avenue, Suite 200
Phoenix, Arizona 85012
602-285-5000
ckramer@dickinsonwright.com
dickinsonwright.com