Opinion ID: 1651686
Heading Depth: 1
Heading Rank: 3

Heading: Actions for takings and related damages

Text: Property Owners' claims include that the City's actions and inactions following its blight declaration for the property resulted in a de facto taking that violates Missouri Constitution article I, section 26, which provides that private property shall not be taken or damaged for public use without just compensation. While the mere declaration of blight and other initial steps authorizing condemnation, even if they result in a decline in property values, do not constitute a taking requiring compensation to the property owner . . . governmental action short of acquisition or occupancy may constitute a constructive or de facto taking. Thomas W. Garland, Inc. v. City of St. Louis, 596 F.2d 784, 787 (8th Cir.1979) (internal citations and quotations omitted) (discussing a takings claim alleging property damages and lost rental income suffered after a blight declaration; finding that physical invasion or appropriation of the property is not essential to a claim of de facto condemnation; stating that [t]o constitute a taking . . . it is sufficient if the action by the government involves a direct interference with or disturbance of property rights). When a taking occurs, the owner `is entitled to be put in as good a position pecuniarily as if his property had not been taken.' Akers v. City of Oak Grove, 246 S.W.3d 916, 919 (Mo. banc 2008) (quoting Olson v. United States, 292 U.S. 246, 255, 54 S.Ct. 704, 78 L.Ed. 1236 (1934)). This concept encompasses both direct takings, wherein the government formally takes land for public use via eminent domain, and inverse takings, where the government takes or damages land, sometimes unintentionally, without going through an official process. Id. [5] Traditionally, actions for inverse condemnation provide a landowner a remedy when a condemnor physically accomplishes a taking or damaging of private property without completing the procedural or compensatory requirements of a regular eminent domain action. State ex rel. Chiavola v. Vill. of Oakwood, 931 S.W.2d 819, 824 (Mo.App.1996) (discussing a claim by plaintiffs that they suffered inverse condemnation because they were deprived of all economically viable use of their property and deprived of reasonable, investment-backed expectations). Inverse condemnation does not require the landowner to show a physical taking where an invasion or appropriation of a valuable property right that caused an injury can be shown. Id. (noting that police power actions that limit use of private property can sometimes constitute a de facto exercise of eminent domain; and citing Roth v. State Highway Comm'n, 688 S.W.2d 775, 778 (Mo.App.1984), wherein a claim for inverse condemnation was based on alleged aggravated delay by the condemnor coupled with a conditional offer). [I]t is not uncommon for a lengthy period of time to elapse between the time when the area is declared blighted by the legislative body and the time when the property is taken for condemnation purposes[, and] [b]etween the time of blighting and the time of taking, the property frequently has substantially deteriorated in value at great loss to the landowner. State ex rel. Washington Univ. Med. Ctr. Redevelopment Corp. v. Gaertner, 626 S.W.2d 373, 375-76 (Mo. banc 1982). The damages suffered when a cloud of condemnation hangs over a property and an actual taking is never effectuated or is long-delayed have been labeled as condemnation blight. Dale A. Whitman, Eminent Domain Reform In Missouri: A Legislative Memoir, 71 Mo. L.REV. 721, 757 (2006). Condemnation blight can be marked by departure of rental tenants, unmarketability, and declines in rentability, capital values, and profits. Id. The first Missouri case discussing the concept of condemnation blight was Land Clearance for Redevelopment Authority of Kansas City v. Massood, 526 S.W.2d 354, 356-58 (Mo.App.1975) (rejecting property owners' complaints about how their condemnation damages were calculated, but stating in dicta that adoption of the doctrine of condemnation blight could aid in providing just compensation in condemnation actions). [6] Massood discussed the court's growing awareness that the debilitating effect of threatened condemnation is a recurring problem because [i]n a given situation a premature announcement of condemnation may well cast a devastating pall over property in a given area with the end result that by the time a de jure taking occurs the fair market value of the property has become noticeably depressed. Id. at 357. Several jurisdictions recognize claims for condemnation blight under a theory of inverse condemnation. Whitman at 757. Cases recognizing such actions include: Reichs Ford Road Joint Venture v. State Roads Commission of the State Highway Administration, 388 Md. 500, 880 A.2d 307, 319-20 (2005) (holding that a property owner was entitled to seek compensation in inverse condemnation action for lost rental income and costs of maintaining property caused during 14-year delay in condemnation proceedings); Johnson v. City of Minneapolis, 667 N.W.2d 109, 115-116 (Minn.2003) (finding that city's precondemnation activities constituted a taking under the state's constitution); State ex rel. Dep't of Transportation v. Barsy, 113 Nev. 712, 941 P.2d 971, 976 (1997) (recognizing a right to recover damages caused by precondemnation activity when extraordinary delay or oppressive conduct by the condemnor has been shown), overruled on other grounds by GES, Inc. v. Corbitt, 117 Nev. 265, 21 P.3d 11 (2001); Lincoln Loan Co. v. State Highway Commission, 274 Or. 49, 545 P.2d 105, 109-10 (1976) (recognizing a cause of action in inverse condemnation for seeking recovery of alleged condemnation blight damages); Conroy-Prugh Glass Co. v. Dep't of Transportation, 456 Pa. 384, 321 A.2d 598, 602 (1974) (recognizing a remedy for a de facto taking where the property owner alleged precondemnation damages); Klopping v. City of Whittier, 8 Cal.3d 39, 104 Cal.Rptr. 1, 500 P.2d 1345, 1350-51, 1355, 1360 (1972) (discussing availability of damages for decline in property value caused by condemnation cloud resulting after announcement of intent to condemn; noting plaintiff should show unreasonable delay or conduct in addition to diminution of property values; recognizing a plaintiff's claim for inverse condemnation based on lost rents following a precondemnation announcement); Luber v. Milwaukee County, 47 Wis.2d 271, 177 N.W.2d 380, 384 (1970) (finding that alleged precondemnation damages for loss of rental income deserved compensation under the just compensation provision of the state's constitution); and City of Detroit v. Cassese (In re Elmwood Park Project Section 1, Group B), 376 Mich.311, 136 N.W.2d 896, 900 (1965) (recognizing that where condemnation proceedings are protracted the whole character of an area may be changed to the detriment of the property owner and, if an area has been made a wasteland by the condemning authority, the property owner should not suffer the reduced value of his property). [7] But, this Court has previously rejected claims alleging damages resulting from condemnation blight. In State ex rel. Washington University Medical Center Redevelopment Corp. v. Gaertner , a property owner claimed he suffered an unlawful taking in violation of Missouri Constitution article I, section 26, because the city's blight designation on his property had put it under a cloud of condemnation during the period the property was declared blighted, but was not yet under an order of condemnation. 626 S.W.2d at 374-75. [8] In dicta, [9] Washington University rejected the owner's argument that he had suffered an unconstitutional taking. Id. at 377-78. Washington University stated that a blighted property designation is treated much the same as the threat of condemnation proceedings, the initiation of condemnation proceedings, and negotiation by the condemnor with property owners for the purchase of their property, all of which are considered neither taking nor damaging within the meaning of Mo. Const. art. I, [section] 26. Id. at 376. Further dicta in Washington University also suggested that remedies after a blight designation can be sought via a cause of action separate from a condemnation proceeding  such as a personal tort action  in order to seek damages equal to the amount of rent allegedly lost by reason of the pending condemnation proceeding. Id. at 377-78 (stating that actions related to loss of rental income are akin to tort actions because the damages at issue are not damages directly to the property itself). But, claims for precondemnation damages, if asserted in the form of a tort action as Washington University suggested might be permissible, ultimately would fail to provide property owners an adequate remedy for their damages because municipalities, acting in their governmental capacity, may claim sovereign immunity from such actions. See Parish v. Novus Equities Co., 231 S.W.3d 236 (Mo.App.2007) (finding that a city was protected by sovereign immunity in a negligence action alleging failure to properly oversee a TIF developer's financing; declaring that a city's participation in a redevelopment agreement with a private developer is a governmental function protected by sovereign immunity because the city's role is to carry out the broader governmental mandate of protecting public health, safety, and welfare by seeking to rehabilitate a blighted area). As Tierney v. Planned Industrial Expansion Authority of Kansas City noted, however, a claim asserting that condemnation blight constituted a form of inverse condemnation would not be subject to the same concerns about sovereign immunity raised by a tort claim. 742 S.W.2d 146, 155 (Mo. banc 1987). Tierney discussed that condemnation blight actions are inverse condemnation actions brought under the theory that there has been an unconstitutional taking and observed that sovereign immunity cannot protect a city from inverse condemnation claims because it would negate the constitutional command that property not be taken without just compensation. Id. Tierney applied the dicta from Washington University in rejecting a property owner's effort to sue a city for condemnation blight where the claim for relief was based on the city's passage of the blighting ordinance and the ordinance approving the initial redevelopment plan. Id. at 154 (discussing that a taking does not occur when a blighting ordinance is passed because there is not any assurance in a blight declaration that development of the property will proceed). This Court found against the condemnation blight plaintiffs in Tierney based on the record in that case, such that nothing in Tierney forecloses recognizing a cause of action for condemnation blight that resembles a claim for inverse condemnation. See id. at 155-56 (finding that the claim was properly dismissed for insufficient evidence).