Opinion ID: 1325859
Heading Depth: 2
Heading Rank: 1

Heading: kiriakides's appeal

Text: Kiriakides contends the master erred in denying his claim for inverse condemnation. We disagree. The concept of inverse condemnation was originally conceived as a remedy for the physical taking of private property without following eminent domain procedures. 11A Eugene McQuillin, The Law of Municipal Corporations § 32.132.20 (3d ed.2000) (citing, inter alia, Woods v. State, 314 S.C. 501, 431 S.E.2d 260 (Ct.App.1993)). Inverse condemnation is, therefore, a cause of action against a governmental defendant to recover the value of property which has been taken in fact by a governmental entity although not through eminent domain procedures. Id. One basic difference between condemnation and inverse condemnation is that in condemnation proceedings, the governmental entity is the moving party, whereas, in inverse condemnation, the property owner is the moving party. South Carolina State Highway Dep't v. Moody, 267 S.C. 130, 136, 226 S.E.2d 423, 425 (1976). A landowner has the burden of proving damages for the taking of the landowner's property, whether through condemnation proceedings or by inverse condemnation. Brenco v. South Carolina Dep't of Transp., 377 S.C. 124, 128, 659 S.E.2d 167, 169 (2008) (citing Owens v. South Carolina State Highway Dep't, 239 S.C. 44, 54, 121 S.E.2d 240, 245 (1961)). Not all damages that are suffered by a private property owner at the hands of the governmental agency are compensable. Woods v. State, 314 S.C. 501, 504, 431 S.E.2d 260, 262 (Ct.App.1993). The property itself must suffer some diminution in substance, or it must be rendered intrinsically less valuable. Id. [I]n an inverse condemnation case, the trial judge will determine whether a claim has been established; the issue of compensation may then be submitted to a jury at either party's request. Cobb v. South Carolina Dep't of Transp., 365 S.C. 360, 365, 618 S.E.2d 299, 301 (2005). Inverse condemnation claims can result from two instances: An inverse condemnation may result from the government's physical appropriation of private property, or it may result from government-imposed limitations on the use of private property. Byrd v. City of Hartsville, 365 S.C. 650, 656, 620 S.E.2d 76, 79 (2005). In the second instance, where there is a regulatory inverse condemnation, there are two elements that must be shown: (1) affirmative conduct, and (2) a taking. Id. at 657, 620 S.E.2d at 80. The analysis of whether a taking has occurred is governed by the case of Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978) when the claim stems from an allegation of a temporary denial of less than all economically viable use of the property. Id. at 658, 620 S.E.2d at 80. In the context of a regulatory delay, the Penn Central inquiry is whether the delay ever became unreasonable. Id. at 660, 620 S.E.2d at 81. Until regulatory delay becomes unreasonable, there is no taking. Id. As enumerated in Byrd, two circumstances are particularly important: (1) the economic impact on the claimant, especially the extent to which the governmental entity has interfered with the claimant's investment-backed expectations, and (2) the character of the governmental action. Id. at 659, 620 S.E.2d at 80 (citing Penn Central, 438 U.S. 104, 124, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978)). In the case now before us, the parties conceded, and the master specifically found, that there was never any physical occupation or appropriation of Kiriakides's property, the first type of taking under Byrd. Rather, Kiriakides asserted the stigmatization of his property by the threat of condemnation amounted to a regulatory inverse condemnation under the second prong of Byrd. In rejecting this assertion of a regulatory inverse condemnation, the master found there was no act and no taking by the School District that would come within the parameters of an inverse condemnation claim. The master noted: The parties agree that the School District never imposed any regulations or restrictions on the property of Mr. Kiriakides. The School District's pre-condemnation activities and the service of the Condemnation Notice and Tender of Payment to Mr. Kiriakides certainly did not give rise to a taking, regulatory or otherwise. The master stated that [a] regulatory taking by its very nature necessitates the existence of some regulation, statute, ordinance, zoning law, or similar rule of law that impacts a landowner's use of his property. In other words, regulatory takings exist only in conjunction with affirmative governmental restrictions on the use of land. The master further stated: Such was the essence of the Byrd case, where Mr. Byrd's property was restricted by zoning regulations, and in Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992)[,] where land use restrictions constituted a regulatory taking. That does not exist in this case. The master additionally observed his conclusion was supported by public policy, namely, the construction of public projects would be severely impeded if the government incurred liability for inverse condemnation as a result of merely announcing plans to condemn, citing National By-Products, Inc. v. City of Little Rock, 323 Ark. 619, 916 S.W.2d 745, 749 (1996) (Construction of public-works projects would be severely impeded if the government could incur inverse condemnation liability merely by announcing plans to condemn property in the future.); Santini v. Connecticut Hazardous Waste Management Service, 251 Conn. 121, 739 A.2d 680, 691 (1999) ([I]f the government were to be considered as having accomplished a compensable taking as a result of mere planning that, because of its publicity, harmed the value of property, public planning would be discouraged....); City of Buffalo v. J.W. Clement Co., 28 N.Y.2d 241, 321 N.Y.S.2d 345, 269 N.E.2d 895, 903-04 (1971) (stating the threat of condemnation generally does not constitute a taking and any changes in value are incidents of ownership). The master stated that Kiriakides's arguments, if accepted, would have a devastating impact on government and its citizens. We agree with the master's determination that Kiriakides did not establish a claim for inverse condemnation. We find no merit to his arguments that the mere threat of a condemnation suit stigmatized his property and that the School District's alleged delay in bringing this action entitled him to damages for an inverse condemnation. The Supreme Court of the United States has held that the impairment of the market value of real property incident to otherwise legitimate government action ordinarily does not result in a taking. Kirby Forest Indus. v. United States, 467 U.S. 1, 15, 104 S.Ct. 2187, 81 L.Ed.2d 1 (1984). In Kirby Forest, the Supreme Court concluded the landowner failed to demonstrate that its interests were impaired in any constitutionally significant way before the Government tendered payment and acquired title in the usual course. Id. at 16, 104 S.Ct. 2187. The mere institution of condemnation proceedings does not constitute a taking, as it is a legitimate exercise of the government's authority. See generally 29A C.J.S. Eminent Domain § 90 (2007) (stating the mere planning in anticipation of a public improvement is not an actionable taking of property); J.R. Kemper, Annotation, Plotting or Planning in Anticipation of Improvement as Taking or Damaging of Property Affected, 37 A.L.R.3d 127 (1971 & Supp.2008) (discussing acts performed in preparation for and as part of condemnation proceedings and the imposition of liability therefor). The evidence shows that the School District and Kiriakides engaged in extensive negotiations concerning a voluntary sale of the property until at least April 2002. During this time, no public action was taken by the School District that would stigmatize the property as Kiriakides alleges, as the communications were solely with Kiriakides and there was no public filing of a condemnation action. The first public communication occurred when Kiriakides refused to allow an appraiser to enter his property and the School District filed a motion in April 2002 seeking an order allowing entry. Thereafter, when negotiations failed, the School District followed the statutory procedures for an eminent domain action and served a notice of condemnation in August 2002. Kiriakides challenged the School District's right to condemn within thirty days of being served with notice by the School District by filing the current, separate action, as was his right under state law, which stayed the condemnation proceedings. See S.C.Code Ann. § 28-2-470 (2007) (providing an action [challenging a condemnor's right to condemn] must be commenced within thirty days after service of the Condemnation Notice upon the landowner and that [a]ll proceedings under the Condemnation Notice are automatically stayed until the disposition of the action, if any, unless the landowner and the condemnor consent otherwise). We discern no unreasonable delay or bad faith conduct on the part of the School District in this matter. The School District never tried to obtain possession of Kiriakides land, and until Kiriakides refused to allow an appraiser on his property, it had made no public filing in this case. If anything, Kiriakides's failure to cooperate with the School District's efforts to obtain an appraisal and his challenge to the School District's right to condemn extended these proceedings. Further, Kiriakides presented no evidence of damages. He offered no proof that the value of his property was diminished or that he lost any potential sales of his property due to the proceedings. In fact, Kiriakides admitted that he had not tried to sell his property during this time. The School District's actions were part of the statutorily-mandated process for condemnation, and did not constitute an unreasonable delay in these circumstances that would establish a compensable claim. See Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 335, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002) (A rule that required compensation for every delay in the use of property would render routine government processes prohibitively expensive or encourage hasty decision-making.); Woods, 314 S.C. at 504, 431 S.E.2d at 262 (holding not all damages suffered by private property owners at the hands of the government are compensable). The nine-month period between the time the School District served notice of the condemnation in August 2002 until it notified Kiriakides in writing in May 2003 that it was abandoning the condemnation proceeding due to Kiriakides's opposition and the need to proceed with the project did not establish a taking. Cf. Byrd, 365 S.C. at 661-63, 620 S.E.2d at 82 (finding an eleven-month delay in evaluating the rezoning of certain property did not result in a regulatory taking and inverse condemnation). The master observed that cases from other jurisdictions overwhelmingly hold that normal activities incident to condemnation do not rise to the level of a taking. See Joseph M. Jackovich Revocable Trust v. Alaska Dep't of Transp., 54 P.3d 294, 302 (Alaska 2002) (stating there is no indication the state did anything more than make announcements, prepare and publish plans, and provide publicity concerning the project and no evidence the state interfered with the property rights of the landowners); City of Chicago v. Loitz, 11 Ill.App.3d 42, 295 N.E.2d 478, 480 (1973) (observing the weight of authority in other states and in the Federal courts, is that mere planning by a governmental body in anticipation of the taking of land for public use and preliminary steps taken to accomplish this, without the filing of proceedings and without physically taking or actual invasion of the real estate, is not actionable by the owner of the land). To the extent Kiriakides's alleges the master improperly considered public policy in determining no inverse condemnation occurred in this matter, we find no error. The master merely cited this as additional support for his conclusion that Kiriakides's position was untenable because if it was accepted, the government would be faced with inverse condemnation claims every time it attempted to survey property and obtain an appraisal, which would preclude the government from engaging in normal activities incident to a condemnation. Accordingly, based on the foregoing, we affirm the master's determination that Kiriakides did not establish a claim for inverse condemnation.