Defending Eminent Domain Condemnation: Preparing for Trial After a Lawsuit has been Filed Against You
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You have been served with a lawsuit, and a governmental condemning authority is seeking to take your property under an eminent domain petition. Chances are, you anticipated the lawsuit, as you have likely been negotiating with the condemning authority, and the parties simply could not agree on the compensation offered for the taking your property. Every eminent domain proceeding boils down to two major inquiries: (1) Is the condemning authority entitled to take the amount of your property it is seeking, and (2) if so, how much compensation must you be paid for that taking.
In most cases, the condemning authority can establish its authority and entitlement to take your property for a public purpose, so a large percentage of eminent domain proceedings are focused on valuation and just compensation. Your success depends on how well prepared you are to convince a jury that you deserve full compensation for the highest and best use of your property. What follows is a checklist of some key practical considerations and guidelines that every condemnee and condemnee attorney should consider in preparing for an eminent domain trial.
Initial Client Meeting
Gathering all pertinent documents, correspondence and discussing client expectations is an ongoing process, and the initial meeting often occurs well before a petition is filed. However, some condemnees may attempt to negotiate with the condemning authorities themselves, and wait until a petition is filed to retain counsel. In those cases, the initial client meeting is critical. What follows are just a few key considerations for that meeting:
- Assess the client’s goals, and determine whether client seeks to defend the taking of the property, rather than focus solely on compensation.
- Discuss the general elements to compensation, analyzing which types of losses are compensable and which items are not compensable.
- Advise the client on the recovery costs and attorneys’ fees under Florida law.
- Identify all property interests, including easements, leases and mortgages. Review the documents granting those interest to determine how those parties will be treated in condemnation proceedings, including abatement of rents, allocation of condemnation awards and releases required.
- Assess all communications between the condemnee and the condemning authority, including offers to purchase, negotiated terms and appraisals.
- Understand the purpose and scope of the taking, and the effect of the taking on the remaining of the property.
- Consider the costs of relocation and consider recovering losses through the Uniform Relocation Assistance Act.
- Schedule an inspection or tour of the property to assess any needed maintenance or repairs.
- Address any potential environmental waste or contamination issues and discuss liabilities affect the value of the property
Search the Public Records
After the initial client meeting, there is still more due diligence that should be performed in advance of formal discovery. What follows are some key sources of additional information related to valuation of the property:
- Zoning Authorities. Research zoning records to understand ordinances, variances and resolutions affecting purpose of the taking and highest and best use
- County Tax Collectors and Property Appraisers. Evaluate the assessed value of the property, and determine whether the owner has previously challenged the assessments, taking a contrary position on valuation.
- Condemning Authority. Without formal discovery, Florida Statutes require disclosure of the appraisal reports upon which the good faith offer is based. Request published right of way maps, surveys and studies for the project.
- Third party real estate sources. Obtain or order information related to recent sales within the vicinity of the property to determine comparable values.
- Official County Records. These records will show all recorded interests, including mortgages, easements, liens and potential environmental contamination assessments.
Withdraw the Good Faith Deposit from the Court Registry
Presuming that the condemning authority has established its entitlement to take your property, and an order of taking is entered, the petitioner is required to deposit a good faith estimate of the property’s value into the registry of the court. This deposit is typically commensurate with the amount of the authority’s appraisal, which may be less than the last written offer made to the condemnee. Nonetheless, the owner may immediately move to withdraw the deposit. Fla. Stat. § 74.071. The policy behind the owner’s entitlement to the deposit is that title to the property has transferred and vested in the condemning authority, and the owner must be paid for that transfer.
It is advisable to withdraw all of the funds on deposit as soon as possible, because the money does not accrue interest for the benefit of the owner. Further withdrawing the money is not deemed a waiver of the owner’s rights to seek additional compensation for the full value of the property. On the other hand, depositing the funds does not bar the petition from presenting evidence that the value of the property is less than the deposit. After all, the jury must ultimately determine the final award of just compensation. For this reason, the owner must be prepared to return some of the deposit. See Pierpont v. Lee County, 710 So. 2d 958, 960 (Fla. 1998) (finding that where the owner withdraws the deposit, and the final judgment of compensation is less than the deposit, the condemning authority is entitled to judgment against the property owner for the difference).
Note that there may be multiple parties with an interest to the deposit, such as mortgagees, tenants and taxing authorities. In those cases, practitioners should obtain an agreement on the distribution and allocation of those funds.
In addition to your independent due diligence in gathering documents and public records that are readily available, additional discovery is required. Generally, the attorneys in an eminent domain proceeding will stipulate to the exchange of appraisals, experts reports and pretrial depositions. However, formal discovery procedures will be governed in accordance with the Florida Rules of Civil Procedure.
Practitioners should be mindful of other mechanisms to obtain information outside of the formal discovery process. For instance, Florida’s Sunshine Laws (Fla. Stat. Chapter 119), can be an extremely powerful tool in obtaining public records and other information in advance of the filing of a petition—particularly when the owner intends to resist an order of taking, which occurs rather quickly after the filing of the petition. What follows is a list of key documents that may be available through a public records request:
- Appraisals, reports and offers for other parcels on the same project. Note that the records are exempt from disclosure until an option contract or agreement for purchase is approved. Stat. § 119.0711.
- Resolutions depicting the project location, the publication of which establishes the date when there can be no future increase or decrease in value to the property resulting from the project location being known in the market. Stat. § 73.071(5).
- Public hearing transcripts showing the public purpose for the taking
- Right of way maps showing all parcel needed for the project
- Environmental impact studies demonstrating additional maps and surveys
- Construction plans establishing the nature and extent of severance damages anticipated
Choose the Right Consultants and Experts
Sometimes an experienced real estate appraiser is enough to prove your case. More often, you will enlist the aid of several other consultants and experts. Consider some of the following:
- Building Contractors
- Business experts for business damages
When choosing consultants and experts witnesses, consider potential conflicts of interest or their previous positions on other matters to ensure that the witness is not vulnerable to impeachment or bias arguments. Understand that more complicated matters may require experts with specialized expertise, and there is a premium on their education and experience. Also understand when the valuation circumstances require a witness with less formal credentials—albeit a witness with enough knowledge and experience to be credible and objective.
Note that the condemning authorities often retain the same real estate appraisers and firms on other projects, who may have testified in depositions and trial on several other projects. Obtaining transcripts and records of such testimony may prove useful for impeachment purposes. Practitioners should engage in the same process when evaluating the use of their own experts as well.
Think Like a Juror
The jury is the decision maker, and you should continually evaluate your case through the lens of juror. Here are some considerations in that regard:
- Keep it simple. The most direct evidence of value often prevails over complicated analyses that require more explanation. Understand that the jury will have several key findings to make, and you should not burden them with more detail than necessary to make those findings.
- Prioritize facts over opinions. Proving value through recent sales data of true comparables can be more persuasive than the opinions of experts. Understand, however, that valuation is often a matter of opinion. Find an expert that is authoritative, objective and reasonable.
- Be credible. Overreaching is the quickest way to lose credibility.
Don’t forget the importance of the Jury View. The Florida Statutes state that “[t]he jury shall view the subject property upon demand by any party or by order of the court.” Fla. Stat. § 73.071(6). Anticipate what your jury will see—not only at the property, but also on the way to the property. If there is rapid growth in nearby commercial and residential developments, consider taking well-planned routes to show the jury the surrounding areas that will affect the highest and best use of the property.
Many eminent domain takings are negotiated and settled well before a lawsuit is filed against a property owner. However, for various reasons, many owners find themselves defending a petition for eminent domain. In preparing for trial, it is essential to understand what evidence you need, the sources of that evidence, and the most effective ways to present your case to a jury. Experienced eminent domain counsel can employ the most appropriate techniques to efficiently maximize your chances of obtaining full and fair compensation for your property.