Opinion ID: 1436844
Heading Depth: 1
Heading Rank: 5

Heading: Overpayment to Ocean Road Partners

Text: Last, we address the state's cross-appeal seeking reimbursement for the overpayment to Ocean Road Partners. The state has requested that this Court reverse the trial justice on this issue and enter judgment for the state in the amount of $348,000, the difference between the prelitigation payment of $6,448,000 and the fair-market value of $6.1 million. Ocean Road Partners argued that the statute does not authorize the entry of judgment in favor of the state in condemnation proceedings and that the state is required to pursue a separate action to collect the funds in question. [3] The question before us is one of statutory construction, and this Court as the final arbiter of such questions will construe the condemnation statute. Matter of Falstaff Brewing Corp., 637 A.2d 1047, 1049 (R.I. 1994); Krikorian v. Rhode Island Department of Human Services, 606 A.2d 671, 675 (R.I. 1992). In interpreting a statutory provision, we shall adopt the interpretation most consistent with the statute's policies or obvious purposes. Bailey v. American Stores, Inc./Star Market, 610 A.2d 117, 119 (R.I. 1992). The statute governing the state's exercise of its power of eminent domain, G.L. 1956 (1990 Reenactment) chapter 6 of title 37 (the statute), does not provide expressly for entry of judgment for the state in an assessment proceeding in which the state has paid a condemnee more than the assessed fair-market value of the subject property. Although § 37-6-23 requires the state to satisfy judgments in condemnation proceedings, there is no analogous provision requiring a landowner who has been overpaid to return the excess payment. We note, however, that § 37-6-25, entitled Liberal construction  Technicalities  Severability, states: The provisions of this chapter    shall be construed liberally in order to accomplish the purposes hereof, and where any specific power is given to the state properties committee or the acquiring authority by the provisions thereof, the statement thereof shall not be held to exclude or impair any implied and incidental powers and such additional powers, not inconsistent with any express provisions of this chapter    which may constitutionally be conferred upon it, as may be proper and reasonably necessary to effectuate the purposes of this chapter   . Further, the statute requires that the state pay a condemnee 100 percent of the acquiring authority's initial offer, pending final disposition of a court proceeding. Section 37-6-17. Consequently, we are of the opinion that the statutory-condemnation procedure was designed to award fair compensation for land taken for public use but was not intended to provide unjust enrichment to a condemnee at the expense of the state. Our holding on this issue is in accord with the holdings of other jurisdictions. In State Department of Transportation v. Montgomery Ward Development Corp., 79 Or. App. 457, 719 P.2d 507 (1986), for example, the Oregon Court of Appeals held that a property owner whose land had been condemned by the state was not entitled to a windfall simply because the state deposited excess funds prior to trial. The court concluded that [b]ecause the state is required to pay amounts by which the verdict exceeds the deposit    common sense indicates that it should likewise be entitled to recover the amount by which its deposit exceeds the verdict. Id. at 462, 719 P.2d at 511; see, e.g., United States v. 40.75 Acres of Land, 76 F. Supp. 239, 246 (N.D.Ill. 1948) (in dicta, court indicated that, in case of overpayment, Government will then be entitled to a judgment of restitution for the excess); State ex rel. Missouri Highway and Transportation Commission v. Wilson, 864 S.W.2d 341, 343-44 (Mo. Ct. App. 1993) (citing State ex rel. State Highway Commission v. Morganstein, 588 S.W.2d 472, 477 (Mo. banc 1979), for proposition that taking agency has the right to obtain restitution for any excess amount finally awarded over the    award and this right is rooted in principles of equity and fairness). As further justification for entry of judgment in its favor, the state has argued that by requiring the state to initiate a separate lawsuit in order to recover overpayments, state officials face a disincentive to make fair offers for condemned land. Such a concern was evidenced in the United States Supreme Court's holding in United States v. Miller, 317 U.S. 369, 381, 63 S.Ct. 276, 284, 87 L.Ed. 336, 347, reh. denied, 318 U.S. 798, 63 S.Ct. 557, 87 L.Ed. 1162 (1943), in which the Court warned that: to encourage federal officials to underestimate the value of the property [would cause] the Government [to] be saddled with interest on a larger sum from date of taking to final award, and would    deny the owner the immediate use of cash approximating the value of his land. We are of the opinion that were we to require the filing of a separate lawsuit, state officials would be encouraged to underestimate the value of condemned property and consequently to promote unnecessary litigation. Such a result would contradict the clear legislative intent behind the statute, particularly § 37-6-17, which encourages the resolution of takings claims without litigation. Finally, our holding reinforces the state's position that a separate action would be a costly and an unnecessary formality in which no issues remain to litigate, inasmuch as the fair-market value of the land would have been previously established. It is clear that the state is entitled to the return of the overpayment and that the most expeditious procedure for remedying the overpayment is the entry of judgment in favor of the state at the conclusion of the trial that assessed the fair-market value of the condemned property. In conclusion, therefore, the appeal of Ocean Road Partners is denied and dismissed. The cross-appeal of the state is sustained. We modify the judgment of the Superior Court by directing entry of judgment in favor of the state in the amount of $348,000. The papers may be returned to the Superior Court with direction to enter judgment for the state in accordance with this opinion.