Case of the Day – Friday, October 13, 2023

Posted on October 13, 2023 by TLRoot tagged.

SELF-HELP CONDEMNATION

Condemnation is the process by which a public entity takes private property. The 5th Amendment requires that due process be followed, in that the taking not be arbitrary and be the result of necessity, that the owner is fairly compensated for the property that has been taken, and of course that the owner have a chance to challenge the taking in court.

Occasionally, the government will take a piece of property by conduct. A good example would be the passage of a state law to preserve wilderness, the effect of which would be to close roads through state forests that cut off access to private property for lumbering. Then, the proceeding is called inverse or reverse condemnation, a suit against a government to recover the fair market value of property which has in effect been taken and appropriated by the activities of the government when no eminent domain proceedings are used.

None of this seems to have much to do with trees, especially your rights to compensation if state employees come onto your land and cut down a tree because they’re geographical klutzes. After all, the state has to intend to take your property (and take specific steps to do so) in a condemnation action. Even where the condemnation is a reverse one, the state has to deliberately do whatever it does to cause your property to lose value.

That’s why I was surprised and a little troubled by the Commonwealth of Kentucky’s response to its highway department employees’ goof in cutting down a boundary line tree without the approval of the private landowner. If the trespassers had been Joe’s Tree Service, we know how it would have turned out: a trespass action, with damages for the trespass and the tree removal. But because the employees worked for the state, poor Gini Grace found out much after the fact that what had occurred was not a trespass, but a reverse condemnation.

To be fair, Gini’s lawyer might have saved the action as a negligence case and not a reverse condemnation had the complaint alleged negligence-type damages beyond the loss of the tree. But to me, that note in the opinion seemed to be a make-weight. Had her complaint alleged a torn-up lawn, driven-over shrubs, and Moon Pie wrappers littered about, I suspect the court would have just found a different way to get to its reverse-condemnation conclusion.

Not only did the rules get rewritten when the state trespassed on Gini’s place, but they were rewritten after the fact. Gini, don’t ever play poker with the Commonwealth of Kentucky, lest you learn too late that a pair of twos really does beat a royal flush.

Grace v. Commonwealth, Case No. 2018-CA-001488-MR (Ct.App Ky. Oct. 11, 2019) 2019 Ky. App. Unpub. LEXIS 727.

The Kentucky Department of Highways (“KYTC”) is responsible for maintaining state highways, including the elimination of hazards. In March 2012, KYTC removed a tree that KYTC believed to be located, at least partly, on the right-of-way and encroaching the highway. Gini Grace filed a complaint with the Kentucky Claims Commission, alleging KYTC negligently trespassed and cut down her tree. KYTC moved to dismiss the claim.

The Commission found that two-thirds of the tree was on the state right-of-way and the remaining portion was on Gini’s land. It found KYTC negligent for failing “to conduct a reasonable inquiry and ascertain where the property lines were before they cut the tree,” and awarded Grace $11,666.66 plus the cost of removing the stump.

The McCracken Circuit Court reversed the order of the Commission and dismissed Gini’s claim, concluding it was a claim for reverse condemnation, rather than negligence. And, because the Commission only has jurisdiction over “negligence claims for the negligent performance of ministerial acts against the Commonwealth,” the Court ruled that it lacked subject matter jurisdiction over Gini’s claim. Gini appealed.

Held: The Commission lacked jurisdiction over Gini’s claim, and the claim thus had to be dismissed.

The Kentucky Claims Commission has “primary and exclusive jurisdiction over all negligence claims for the negligent performance of ministerial acts against the Commonwealth, any of its cabinets, departments, bureaus, or agencies, or any officers, agents, or employees thereof while acting within the scope of their employment.”

Reverse condemnation is a suit against a government to recover the fair market value of property which has in effect been taken and appropriated by the activities of the government when no eminent domain proceedings are used. Gini Grace’s claim form filed with the Commission alleged that a “tree, 3ft in diameter was cut down by the Highway Dept. without my permission.” This was the only injury asserted. Gini did not allege any additional damage to her property arising from KYTC’s negligence. Therefore, the Court ruled, Gini’s claim to recover the value of the tree “is in the nature of a claim for reverse condemnation.”

Gini argued that she claimed negligence because her claim form indicated KYTC “negligently trespassed” onto her property to remove the tree. The Court admitted that a trespass was necessary to cut the tree, but ruled that the damages Gini claimed do not emanate from the trespass, but from the taking.

KYTC was negligent in failing to determine whether the tree was on the state right-of-way, but Kentucky law holds that where an entity possessing the power of eminent domain prematurely enters upon private premises, the exclusive remedy of the landowners is based on Kentucky Constitution, Section 242, which provides that ‘just compensation for property taken’ shall be made. This rule preempts claims asserting negligent trespass that result in a taking.

Because Grace’s injury arose due to KYTC prematurely entering her property and removing the tree, her sole remedy lies in an action for reverse condemnation. Therefore, the Commission lacked subject matter jurisdiction of her claim.

– Tom Root

Case of the Day – Tuesday, March 21, 2023

Posted on March 21, 2023 by TLRoot tagged.

BEATING AROUND THE BUSHES

When the telephone company built a substation on Mr. Doelle’s land, he didn’t beat around the bush. He sued for trespass.

The phone company replied that it intended to take a corner of his place under the doctrine of eminent domain. The trial court agreed the phone company could do so, upheld Mr. Doelle’s claim of trespass, and awarded $300 for the value of the land taken under eminent domain. In addition, the trial court granted Mr. Doelle an extra $400 for “shrubbery support.”

Sounds more like a divorce, doesn’t it? The idea was that Mr. Doelle could screen the substation from his view with a few strategically-placed bushes, and the money was to enable him to plant whatever he wanted.

Despite the trial court’s crafty decision, no one was happy. Mr. D appealed the eminent domain, and the phone company appealed the “shrubbery support” award.

The Court of Appeals cleaned things up. It upheld the trespass and the phone company’s right to take the property for the public good. It approved the $300 value for the land, but it reversed the “shrubbery support.” You see, Mr. Doelle had never asked for trees or shrubs to screen his view of the substation. The trial court has certain inherent powers to fashion an appropriate set of damages for the wrongs brought before it, but the “shrubbery support” award appeared to be based more on the trial court’s sympathy for Mr. Doelle’s visual plight than on any evidence.

Doelle v. Mountain States Tel. & Tel., 872 F.2d 942 (10th Cir. 1989). In this case (which primarily involved questions of easement and eminent domain), Mr. Doelle sued Mountain Bell for trespass, alleging it had put a substation on his property without his permission. Mountain Bell laid claim to a small portion of Mr. Doelle’s property in order to build and maintain a substation. Mountain Bell sued to have him evicted from his property.

The trial court upheld the trespass but found Mr. Doelle hadn’t been damaged. It also awarded Mountain Bell to claim the property for the common good, awarding Mr. Doelle $300 for the value of the land that was taken. The Court then awarded him an additional $400 to install shrubbery to screen his view of the substation, thereby making the intrusion less onerous. Mr. Doelle appealed the eminent domain ruling, and Mountain Bell appealed the $400 in “shrubbery support.”

These are not the Bushes we are talking about.

The Bush family – remember them? They are not related to the bushes involved in today’s case.

Held: The Court of Appeals upheld the trespass and Mountain Bell’s right to claim the property by eminent domain. However, it reversed the $400 shrubbery award to Mr. Doelle.

The Court observed that Utah’s law of eminent domain does not provide for equitable damages. Rather, the trial court found authority to make the award entirely from its inherent power. Even assuming that the trial court had the equitable power to fashion an appropriate remedy, the Court of Appeals said, Mr. Doelle never sought equitable relief in the form of trees to screen his view of the substation nor presented evidence concerning the cost of planting trees.

While a trial court’s award of damages will not be set aside unless it is clearly erroneous, an award must be based on reasonable inferences rather than on mere sympathy. When damages cannot be fixed with the desired certainty, the proof must be reasonable under the circumstances.

This damage award was not reasonable.

– Tom Root

Case of the Day – Thursday, November 17, 2022

Posted on November 17, 2022 by TLRoot tagged.

WHEN YOU CAN’T SEE THE FOREST FOR THE GOODS

You can see why Hocking Hills is a good place for a park.

I’m always looking for ideas, and I am rather shameless about appropriating them. So when an Ohio lawyer friend, himself from a timber-harvesting family, mentioned a case that delineated when trees were attached to the real estate and when they were “goods,” I chased down the decision. Or, in this case, the decisions – one from the court of appeals, and a second from the Ohio Supreme Court.

Speaking of “appropriating,” that was exactly the context in which the case was decided. It seems that Dudley DeBolt had a pretty nice place in Hocking County, beautiful Appalachian foothill country. In fact, Dudley’s place was so nice the government wanted it for a park. Governments being what they are, the appropriate agency – an entity called the Board of Park Commissioners of the Columbus and Franklin County Metropolitan Park District – sued Dudley to take 40 acres of his wooded land for its purposes.

Under the laws governing eminent domain, not to mention the 5th Amendment, when the government takes private property for public purposes, it must pay just compensation. But it seems that the Park Board didn’t want to pay Dudley for the timber contract he had already signed with a local timber merchant, one for the select cutting of about 150,000 board feet of hardwood. The land itself was worth $58,000, Dudley claimed, but there was also the timber contract that he now would be unable to fulfill, for an additional $14,000.

Nope, the Park Board argued, the trees are attached to the land and had no value separate from the land. That had been Ohio law prior to the adoption of the Uniform Commercial Code. The trial court agreed with the Park Board.

The Court of Appeals did not. Rather, it held that the UCC had changed everything, and as a result, Dudley was given a chance to prove to the jury the existence and value of the timber contract. The Ohio Supreme Court agreed, and the case went back to the trial court.

Board of Park Comm’rs v DeBolt, 1984 WL 4248 (Ct.App. Hocking County, Ohio, 1984). The Board of Park Commissioners of the Columbus and Franklin County Metropolitan Park District sued landowner Dudley DeBolt, Jr., appropriate 40 acres of his land. Mr. DeBolt believed the fair market value for the land to be $73,970, including $32,000 for the land at $800 an acre, $26,000 for the home and $14,000 for his profit from the removal of certain timber on the property. The trial court agreed with the Park Board that Mr. DeBolt was not allowed to calculate the value of his standing timber separately from the land, and it refused to allow Mr. DeBolt to put in any further evidence of the value of his timber. The jury returned a verdict of $58,000 as compensation for the land and improvements taken. Mr. DeBolt appealed.

Held: Mr. DeBolt was allowed to value the timber separately. Although the Board argued that Ohio law prohibited setting a market value for trees on land to be appropriated separate and apart from the value of the land, the Court pointed out that the decision which included that holding was made well prior to the adoption by Ohio of the Uniform Commercial Code. The UCC provides that a “contract for the sale apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto… or of timber to be cut is a contract for the sale of goods within sections 1302.01 to 1302.98 of the Revised Code, whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting, and the parties can by identification effect a present sale before severance.” Thus, the Court ruled, the UCC had abrogated prior Ohio law by making a contract for the sale of timber into a contract for the sale of goods.

Here the evidence showed that in the summer of 1981, a timber merchant and DeBolt had a contract for cutting timber and had agreed on a price. Therefore, the Court said, DeBolt ought to have had the right to prove the existence and value of the timber contract. It was a contract for the sale of goods, and Debolt thus had a vested contractual right which was frustrated by the Park Board’s appropriation. The Court said that “the enactment of the UCC has in our opinion changed the character of standing timber from realty to personalty when there is a contract under R.C. 1302.03.” Once the contract was made, the trees were “goods” under the UCC and no longer a part of the land.

People who have to pay attention to the bottom line make careful decisions about whether appealing an adverse decision is worth the time and legal costs. Not so governments, which hire lawyers by the gross and pay them with taxpayer dollars. Unhappy at having to part with an additional $14,000, the Board of Park Commissioners appealed to the Ohio Supreme Court. Even in 1984, a for-profit entity would have easily seen that legal fees and wasted time would easily exceed that.

Board of Park Comm’rs v DeBolt, 15 Ohio St.3d 376 (Supreme Court of Ohio 1984). The Ohio Supreme Court agreed with the Court of Appeals that the record supported a finding that a contract may have existed for the sale of the timber. The Supreme Court found some evidence that Dudley DeBolt was to receive $14,000 for the sale of some 150,000 board feet of lumber, and that such lumber was to be obtained in a select cutting, which was permitted under the terms of his mother’s will. The timber cutter said 150,000 board feet of lumber could be obtained in a select cutting and stated that he had first surveyed the property some eighteen months prior to the trial.

The Supreme Court ruled that a contract for the sale of timber is a contract for the sale of goods, not realty. ORC § 1302.03(B). Such a contract is protected against a governmental taking without just compensation, as it was part of the property taken by the Board of Park Commissioners. Because such a contract is an asset separate and apart from the land, it is subject to separate valuation. The case was sent back to the trial court to give Dudley a chance to prove his case.

– Tom Root