Opinion ID: 2609023
Heading Depth: 1
Heading Rank: 2

Heading: time for assessment of damages

Text: The damages were determined as of August 31, 1972, one week prior to trial, rather than as of June 1, 1971, the date found by the trial court to be the date of taking. Each party to this appeal refers the court to cases which hold contrary views as to the proper time to assess damages. The City of Anchorage cites Arlen of Nanuet, Inc. v. State [32] for the holding that compensation should be determined as of the date of taking. Nesbett and McCutcheon rely on Koerber v. City of New Orleans [33] for the contrary proposition that the time for fixing compensation should be the date of the initiation of the condemnation action. A survey of the holding on this question reveals considerable disagreement among the states as to the proper moment to assess damages. [34] However, the Oregon Supreme Court in State v. Stumbo, [35] provides a thoughtful analysis of these divergent holdings and concludes that the proper approach is to assess damages at the time of the initial entry or taking and to grant the property owner legal interest from that time until compensation is paid. In reaching such a conclusion, the court begins with an examination of what it considers to be the most frequently voiced rationale for each holding. With reference to those decisions which assess damages as of the date of the condemnation proceedings, two possible justifications are noted. First, there is the theoretical argument that in a strictly legal sense, no taking occurs until the landowner is divested of his interest in the property by judicial proceedings. Secondly, it is often reasoned that the trespasser should be penalized for his unlawful act and, therefore, compensation should be assessed at the later of the two possible dates. The Oregon court failed to find the first reason persuasive for the practical consideration that regardless of the fact that no legal taking may have occurred by reason of the trespass, the landowner is just as effectively deprived of the use of his property. [36] Regarding the idea of penalizing the trespasser, the court observes that in many cases, the landowner may well have been equally at fault, having not promptly asserted his rights. (We further note that in many situations, as illustrated by the present case, neither party may be at fault). Moreover, such a rationale presumes appreciation of property without exception, for if the property were to decline in value, as it occasionally does, the penalty would fall on the landowner. On the other hand, the Oregon Supreme Court found persuasive reasons for fixing the time for computing the value of the property as of the date of the initial taking. Other than the avoidance of the fictions and problems involved in the justifications for the alternate approach, the court found compelling the fact that under its approach, damages are ascertained at a fixed rather than shifting date. There will be no motive on either side to drag out negotiations in the hope of a favorable moment to demand condemnation; and settlement of claims rather than litigation will be encouraged. [37] The court recognizes that such a result will have the effect of denying the landowner a reasonable rental for the period of unlawful occupation but observed that: ... [L]egal interest on the award of damages, measured from the date of entry, has been widely accepted as a fair value for the use of the lands taken where the condemnor goes into possession before the trial of the condemnation action. [38] We are in agreement with the decision of the Oregon Supreme Court in Stumbo and, accordingly, hold that in this case damages should have been assessed as of June 1, 1971, the date found by the trial court to mark the initial taking, rather than August 31, 1972. This holding is consistent with our opinion in State, Department of Highways v. Crosby, [39] where we stated that, by stipulating to the fact that the date for determination of just compensation would be the date the state appropriated the property without previously instituting condemnation proceedings, the parties recognized the action as being in the nature of inverse condemnation. Since the difference in damages may be significant, [40] we find it necessary to remand this case to the superior court for the limited purpose of determining that difference and recalculating the damages as of June 1, 1971.