Title: Lincoln Loan Co. v. State, State Highway Com'n
Citation: 545 P.2d 105
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: January 22, 1976

545 P.2d 105 (1976)
LINCOLN LOAN CO., an Oregon Corporation, Petitioner,
v.
STATE of Oregon, by and through Its State Highway Commission, Composed of Glenn L. Jackson, et al., Respondent.

Supreme Court of Oregon.
Argued and Submitted October 10, 1975.
Decided January 22, 1976.
Steven E. Benson, Milwaukie, argued the cause and filed a brief for petitioner.
Al. J. Laue, Asst. Atty. Gen., Salem, argued the cause for respondent. With him on the brief were Lee Johnson, Atty. Gen., W. Michael Gillette, Sol. Gen., and Mary Deits, Asst. Atty. Gen.
Before O'CONNELL, C.J., and McALLISTER, DENECKE, TONGUE, HOWELL and BRYSON, JJ.
*106 McALLISTER, Justice.
Plaintiff Lincoln Loan Co. brought this inverse condemnation[1] action against the Oregon State Highway Commission to recover damages for an alleged taking of plaintiff's property in the process of the construction of the East Portland Freeway by allegedly placing a "cloud of condemnation" over the property, which resulted in a "condemnation blight" and a de facto taking, not of the possession of the property, but of a substantial use and benefit thereof.
Plaintiff alleged that about ten years prior to the filing of the complaint in this action the defendant, by resolution, declared plaintiff's property necessary in the construction of the said East Portland Freeway. We quote paragraph VI of plaintiff's complaint:
Plaintiff alleged that the value of its property was reduced by $5,000 and that the rental income from the property was also reduced. Plaintiff further alleged that it has been deprived of its property without just compensation in violation of its rights under the Fourteenth Amendment to the United States Constitution.[2]
Defendant demurred to plaintiff's complaint on the ground that the facts alleged failed to state a cause of action. The trial court sustained the demurrer. The Court of Appeals affirmed. Lincoln Loan v. State Highway Commission, Or. App., 536 P.2d 450 (1975). We granted review.
The sole issue is whether plaintiff's complaint states a cause of action in inverse condemnation.
*107 The demurrer admits "as true all the facts therein well pleaded and all the intendments and inferences therefrom that can properly and reasonably be drawn." Mattoon v. Cole, 172 Or. 664, 669, 143 P.2d 679, 681 (1943); Lyden v. Goldberg, 260 Or. 301, 306, 490 P.2d 181 (1971).
This court has long been committed to the rule that "any destruction, restriction, or interruption of the common and necessary use and enjoyment of the property of a person for a public purpose constitutes a `taking' thereof." Morrison v. Clackamas County, 141 Or. 564, 568, 18 P.2d 814, 816 (1933). In that case the water of the Sandy River was diverted by a jetty
In Morrison the court further said:
The rule stated in Morrison v. Clackamas County was again applied in Tomasek v. Oregon Highway Com'n, 196 Or. 120, 248 P.2d 703 (1952). Tomasek was a similar inverse condemnation case in which the Highway Commission, by constructing a new bridge across the Santiam River caused said river at times of high water to erode plaintiff's land located about one-half mile downstream from the bridge and to change the channel of the main river to a place over and across the lands of plaintiff. There was evidence that the erosion of plaintiff's land extended back from the original bank of the river for a distance of approximately 400 feet and that a total of 63 acres had been eroded. In affirming a judgment for plaintiff based on a jury verdict, the court quoted from and relied on Morrison v. Clackamas County, supra.
In Tomasek the court said:
Moeller et ux. v. Multnomah County, 218 Or. 413, 345 P.2d 813 (1959) was another inverse condemnation action in which the plaintiffs alleged that Multnomah County had "taken" its property by blasting operations conducted in a nearby quarry at Rocky Butte, which caused "jars and concussions" similar to earthquake tremors, which in turn caused cracks in the concrete basement and patio floors and in the walls and ceilings of some rooms and other damage to the property.
We held that, tested by demurrer, the complaint stated a cause of action. We then held that the evidence offered in support of the complaint was not sufficient to prove
We further held that "taking" as defined in Morrison v. Clackamas County and as shown in Tomasek v. Oregon Highway Com'n, both supra, was still the proper rule in Oregon.
In Cereghino v. State Highway Commission, 230 Or. 439, 370 P.2d 694 (1962) the theory of inverse condemnation was broadened. In that case the plaintiffs recovered judgments against the State Highway Commission because of a "taking" caused by the relocation of the Columbia River Highway and the consequent collection of surface waters in large quantities which were discharged together with mud, dirt and silt upon the lands of plaintiffs. This court said that the word "property" as used in Article I, § 18, was not
It is therefore the landowner's rights which are "taken" by the state in inverse condemnation, not part of the land itself. 230 Or. at 450, 370 P.2d 694. The state need not benefit from the "taking" for the action to lie. 230 Or. at 450, 370 P.2d 694.
In the significant case of Thornburg v. Port of Portland, 233 Or. 178, 376 P.2d 100 (1963), the rule of inverse condemnation was further clarified and applied in a case based on alleged noise nuisance caused by jet planes flying near plaintiffs' property. In Thornburg the plaintiffs owned and resided in a house located about 6,000 feet beyond the end of one runway of the airport and directly under the glidepath of aircraft using it. The home was also about 1,500 feet beyond the end of a second runway and about 1,000 feet to the side of the glidepath of aircraft using that runway. The court said:
The Thornburg case was significant because it expanded the rule of inverse condemnation from purely trespassory actions to actions based on nuisance. As a result, it is not important whether the complaint in the instant case alleges a cause of action in trespass or in nuisance or a combination of both trespass and nuisance. We quote again from Thornburg:
We remanded Thornburg for a new trial and pointed out that if the activities of the government unreasonably interfere with the owner's use of his property and in so substantial a way as to deprive him of the practical enjoyment of his land there has been a taking proscribed by Article I, § 18, of our constitution.
The Thornburg case was retried and again appealed to this court, 244 Or. 69, *109 415 P.2d 750 (1966), and again reversed because of erroneous instructions to the jury. In considering the test to be applied by a jury in deciding whether the evidence establishes a taking, we said:
Viewed in the light of our precedents as set out above, we hold that plaintiff's complaint states facts sufficient to constitute a cause of action in inverse condemnation and that the trial court erred in sustaining the demurrer. Plaintiff has alleged adequate facts which indicate a substantial interference by the state with the use and enjoyment of its property. The combination of the acts alleged in plaintiff's complaint, the alleged pervasive extent of that combination of acts and the alleged duration of those acts over a ten-year period unite to allege a substantial interference with the use and enjoyment of its property by plaintiff.
We have examined the cases from other jurisdictions and find that the following authorities support our conclusion in this case: Conroy-Prugh Glass Co. v. Commonwealth Dept. of Trans., 456 Pa. 384, 321 A.2d 598, 602 (1974); Klopping v. City of Whittier, 8 Cal. 3d 39, 104 Cal. Rptr. 1, 500 P.2d 1345, 1356 (1972); Luber v. Milwaukee County, 47 Wis.2d 271, 177 N.W.2d 380, 384 (1970); Foster v. City of Detroit, 254 F. Supp. 655 (E.D.Mich. 1966), aff'd 405 F.2d 138 (6th Cir.1968); City of Detroit v. Cassese, 376 Mich. 311, 136 N.W.2d 896, 900 (1965); City of Cleveland v. Carcione, 118 Ohio App. 525, 190 N.E.2d 52, 56-57 (1963). The following is quoted from Conroy-Prugh Glass Co. v. Commonwealth Dept. of Trans.:
The Court of Appeals, in affirming the trial court, relied on City of Buffalo v. J.W. Clement Co., 28 N.Y.2d 241, 321 N.Y.S.2d 345, 269 N.E.2d 895 (1971). Clement has been strongly criticized, Kanner, Condemnation Blight: Just How Just is Just Compensation?, 48 Notre Dame 765, 794-800 (1973), and it is not in harmony with our cases and we find it unpersuasive. The following cases cited by the Court of *110 Appeals squarely support its holding: Freeman v. Paterson Redevelopment Agency, 128 N.J. Super. 448, 320 A.2d 228, 233 (1974); City of Chicago v. Loitz, 11 Ill. App.3d 42, 295 N.E.2d 478, 480 (1973); City of Houston v. Biggers, 380 S.W.2d 700, 705 (Tex.Civ.App. 1964), all of which held that preliminary steps taken to exercise the power of eminent domain without an actual physical taking or invasion are not actionable by the landowner. As with Clement, these cases are not persuasive.
We find that the Court of Appeals erred in affirming the action of the trial court in sustaining the demurrer to the plaintiff's complaint. As we have said, the complaint contains facts sufficient to state a cause of action in inverse condemnation. It will be for the trier of fact to determine whether the evidence establishes an interference with the use and enjoyment of its property by plaintiff substantial enough to constitute a taking. The case is remanded to the trial court with instructions to overrule defendant's demurrer to plaintiff's complaint and for further proceedings not inconsistent with this opinion.
[1]  Inverse condemnation is the term used to describe a cause of action against a governmental agency to recover the value of property taken by the agency although no formal exercise of the power of eminent domain has been completed by the taking agency. Thornburg v. Port of Portland, 233 Or. 178, 180, 376 P.2d 100 (1963).
[2]  Since Article I, § 18, of our Oregon Constitution is identical in language and meaning with the Fifth Amendment of the Constitution of the United States, as applied to the states by the Fourteenth Amendment, we prefer to rest our decision in this case on our Oregon constitutional provision. In fact, the briefs and the opinion of the Court of Appeals refer to Article I, § 18, as the controlling constitutional provision.