Opinion ID: 1651686
Heading Depth: 1
Heading Rank: 4

Heading: Should Property Owners' precondemnation damages be remedied?

Text: This Court has long-recognized that the common, long delays associated with blight designations and condemnation proceedings can damage property owners' interests. See Washington Univ., 626 S.W.2d at 375-76. In Washington University this Court noted: This case involves a problem which has plagued the judiciary of this state for some time without satisfactory resolution. It arises with increasing frequency because of redevelopment of metropolitan areas. To start redevelopment, the area involved is declared blighted by the municipal legislative body and becomes subject to redevelopment. . . . Because of the blight designation and the general public knowledge that the property will be acquired for redevelopment, an exodus of tenants ensues, sometimes allegedly encouraged by the redevelopment authority, and no equivalent influx of similar tenants occurs. Often times the property depreciates and deteriorates, the neighborhood declines, vandalism and destruction of the property occurs, and the landowner, anticipating the eventual taking of the property, does not expend money to improve his unproductive asset. Id. at 375. But, Property Owners' case illustrates that the problems at issue in Washington University remain a challenge nearly two decades later. And, it places squarely before this Court the issue addressed in dicta in Washington University  whether Missouri law provides a remedy for precondemnation damages of the type alleged by Property Owners, and what form of action that remedy will take. In Washington University, this Court recommended that [t]he ideal solution to precondemnation damage problems would be for the legislature to make [a] provision for the allowance of damages in appropriate circumstances and upon proper proof of loss or damage, or to provide for a different time of taking in cases where the condemnor has cast a cloud of blight upon the property in advance of the actual taking. Id. at 378. In 2006, the legislature provided some relief to landowners that suffer damages under the cloud of condemnation. The new legislation, however, covers landowners' damages only if the condemnor abandons the condemnation proceedings. Section 523.259, RSMo Supp.2007, provides: 1. If any condemning authority abandons a condemnation, each owner of interests sought to be condemned shall be entitled to recover: (1) Their reasonable attorneys' fees, expert expenses and costs; and (2) The lesser of: (a) The owner's actual damages accruing as a direct and proximate result of the pendency of the condemnation if proven by the owner; or (b) The damages required to be paid to an owner in the event of an abandonment under the terms of the applicable redevelopment plan or agreement. In the event that the applicable redevelopment plan or agreement is silent as to damages required to be paid to an owner in the event of an abandonment, a court shall order the condemning authority to pay the owner's actual reasonable attorneys' fees and expenses, and shall award damages accruing as a direct and proximate result of the pendency of the condemnation if proven by the landowner. 2. The provisions of this section shall only apply to redevelopment plans or agreements entered into after December 31, 2006. Section 523.259, RSMo Supp.2007, however, provides no remedy to plaintiffs like Property Owners because there has been no abandonment in this case. Also, Property Owners' case predates the applicability date in the statute. Professor Whitman has noted, though, that it is not easy to see how adverse precondemnation activities of governments or redevelopers can be effectively remedied by statute[  because] [t]he lines between reasonable and unreasonable delay, between legitimate and illegitimate activity by condemnors and between advance public disclosure of planned takings and `defamation' of neighborhoods may be too blurred to be defined usefully by legislation. Whitman at 758. For these reasons, he has posited that courts may be much better suited than the legislature to address how precondemnation damages should be remedied, because courts can better allocate the risk of imposing unfairly on private landowners the costs of projects, whether successful or failed, that were designed and intended to meet public needs. Id. While statutes may be helpful in outlining remedies available to property owners, they are not determinative. Property owners enjoy constitutional protections that ensure that their property shall not be taken or damaged for public use without just compensation. Mo. Const. art. I, section 26; see also U.S. Const. Amend. V (providing that private property shall not be taken for public use without just compensation). These constitutional guarantees require that courts recognize that property owners are entitled to a remedy even where statutes do not provide one. As noted above, several jurisdictions recognize claims for condemnation blight under the theory of inverse condemnation. Although a property owner has never been successful in bringing such a claim in Missouri, Missouri courts have suggested property owners can prevail against condemning authorities for claims relating to condemnation blight where they provide specific evidence demonstrating aggravated delay, bad faith, or untoward activity by the condemning authority. See Land Clearance for Redevelopment Auth. of the City of St. Louis v. Morrison, 457 S.W.2d 185, 199 (Mo. banc 1970) (denying a property owner relief for claims alleging damages from loss of rental tenants and vandalism of his property suffered after condemnation proceeding began on the property, noting that the condemnation action at issue did not involve a situation of aggravated delay or untoward activity on the part of the Authority such as has been found to have constituted a taking in other states' cases [10] ); State ex rel. Mo. Highway & Transp. Comm'n v. Edelen, 872 S.W.2d 551, 558 (Mo.App.1994) (denying a property owner relief where his property was under the threat of condemnation for 10 years, because property owner did not have evidence to prove aggravated delay, bad faith, or untoward activity by the condemning authority); Roth, 688 S.W.2d at 777-78 (citing Morrison, 457 S.W.2d at 198-99, for the proposition that there is no perfect system of reimbursement in eminent domain cases, but noting that Morrison discussed aggravated delay or untoward activity by the condemning authority as a prerequisite to recovery; and finding that the plaintiffs had shown substantial evidence of aggravated delay where seven years passed after announcement of condemnation plans until the condemnation award was entered; and finding that there was evidence of untoward activity shown by denial of building permits and threatening statements by condemnor's attorney). Considering the constitutional prohibition against takings without just compensation, this Court holds that actions for condemnation blight are inverse condemnation claims that property owners may advance in order to recover consequential precondemnation damages, such as the claims brought by Property Owners in this case for increased operating costs and for lost rental and lease income. [11] Because some delays relating to condemnation proceedings are natural and unavoidable, before property owners have a viable cause of action for precondemnation damages, they must establish that there has been aggravated delay or untoward activity in instituting or continuing the condemnation proceedings at issue. Without this standard requiring a showing of aggravated delay or untoward activity, every condemnation case would give rise to a separate cause of action based on precondemnation activity, because the condemnation process involves governmental and judicial decisions that are endemic with delays. Determining whether a condemnor has acted with undue delay should include consideration of the time limitations for condemnation proceedings established by the legislature. [12] See section 99.810.1(3); section 523.274.2, RSMo Supp. 2007. Where a condemning authority's delays have not exceeded statutory limitations, the delays should not be labeled as aggravated without additional evidence of related untoward activity. [13] Additionally, plaintiff property owners must prove that their damages were caused by the condemning authority's actions or inactions. Proving causation in condemnation blight cases is inherently challenging, as presumably cities usually do not attach blight designations to properties that are not already in decline.