Court Opinion

ID: 9861282
Source: CourtListenerOpinion
Date Created: 2023-09-24 23:51:57.742593+00
Date Added: 2024-06-11T11:27:56.381961
License: Public Domain

JUSTICE LYTTON, dissenting: It is important to understand what happened here. After the complaint was filed, after discovery, after trial, and after a judgment setting the fair cash market value of the land, it was revealed that defendants sold off valuable easement rights in the property. The sale of these easements, like any other valuable asset in the land, depreciated its value. 1 The Illinois Constitution and the Eminent Domain Act both provide for “just compensation” for the taking of private property. Ill. Const. 1970, art. I, § 15; 735 ILCS 5/7—101 (West 2000 & Supp. 2001). The measurement of just compensation is, in most cases, the property’s fair cash market value. Fair cash market value is defined as the “highest and best use upon the date that the condemnation petition is filed” (City of Chicago v. Giedraitis, 14 Ill. 2d 45, 49 (1958)) and is “ ‘the amount of money necessary to put [the property owner] in as good condition financially as he was with the ownership of the property’ ” (Housing Authority v. Kosydor, 17 Ill. 2d 602, 605-06 (1959), quoting City of Chicago v. Koff, 341 Ill. 520, 527-28 (1930)). In a condemnation, the land is valued as a whole, not by its constituent parts. 735 ILCS 5/7—121 (West 1992). Department of Transportation ex rel. People v. Farnsworth, 273 Ill. App. 3d 631 (1995). For example, in valuing land containing mineral deposits, the court does not value the minerals separately from the value of the land without the minerals. See Department of Public Works & Buildings v. Oberlaender, 42 Ill. 2d 410, 415-16 (1969); Farnsworth, 273 Ill. App. 3d at 633 (citing the “unit rule” for valuing land). The same rule applies to timber or crops. Forest Preserve District v. Caraher, 299 Ill. 11 (1921); Peoria, Bloomington & Champaign Traction Co. v. Vance, 234 Ill. 36 (1908). Thus, while the existence of mineral deposits, timber or crops is considered in valuing the property and may increase its fair cash market value, they are not valued separately from the whole. Oberlaender, 42 Ill. 2d at 415-16. Easements constitute a valuable interest in the land. See SuperPower Co. of Illinois v. Sommers, 352 Ill. 610, 618 (1933); Illinois Power & Light Corp. v. Peterson, 322 Ill. 342, 349 (1926). The sale of an easement can lessen the value of the land. See Illinois Power & Light Corp. v. Barnett, 338 Ill. 499 (1930) (aboveground power lines); Peoples Gas Light & Coke Co. v. Buckles, 24 Ill. 2d 520, 531 (1962) (underground gas storage); Illinois Pattern Jury Instructions, Civil, No. 300.18, Comment, at 551 (2000). 2 Ordinarily, the date of valuation in a condemnation is the date of the filing of the action. Department of Transportation v. La Salle National Bank, 102 Ill. App. 3d 1093 (1981). The general rule fixing the date for valuation of the property as the date of the filing of the petition operates to prevent “unjust enrichment to and unfair penalization of the property owner” due to fluctuations in the value of the property after the petition was filed. La Salle National Bank, 102 Ill. App. 3d at 1095. Valuation on the filing date also helps prevent fluctuations in value due to the condemnation itself. See generally City of Chicago v. Blanton, 15 Ill. 2d 198 (1958). While a defendant in a condemnation action continues to have ordinary use of property after the commencement of the proceedings, the owner cannot make substantial changes in the condition of the property that lowers the value of the real estate. Suncrest Lumber Co. v. North Carolina Park Comm’n, 30 F.2d 121 (W.D.N.C. 1929). The land is valued at the date of the filing of the action, and the right to compensation rests in the condemnee on the filing date. Acts occurring after filing may, under certain circumstances, be considered to mitigate damages. See, for example, Michigan State Highway Comm’n v. Davis, 38 Mich. App. 674, 197 N.W.2d 71 (1972) (evidence allowed in quick take of lesser damages because of a lesser taking); In re Briggs Avenue, 196 N.Y. 255, 259, 89 N.E. 814, 815 (1909) (“[w]hen the property is taken, the compensation should be just to the owner, but it should also be just to the public. Good faith should be exercised by all parties affected by the enforced intervening time during the pendency of the proceeding”); People ex rel. Canavan v. Collis, 20 A.D. 341, 345, 46 N.Y.S. 727, 730 (1897) (condemnee changing the nature of the land is equivalent to waste and cannot be permitted). The mere recitation of the general rule for fixing value is an insufficient analysis. Rules fixing the date of compensation are intended to set a time that gives complete and full indemnification to a condemnee. It gives a measure of certainty to both parties and supports the intent of just compensation, i.e., putting the owner in as good financial condition as he was when the property was condemned. Buckles, 24 Ill. 2d at 531. However, just compensation does not mean that owners can receive an additional return on their investment. While the condemnor cannot take undue advantage of the condition of the land, neither can the owner unfairly profit therefrom. United States ex rel. Tennessee Valley Authority v. Powelson, 319 U.S. 266, 87 L. Ed. 1390, 63 S. Ct. 1047 (1943). The general rule prevents unjust enrichment or penalization of both parties. If a party acts in a way that causes an unjust enrichment and penalizes the other party, restitution must be made to provide equity and to balance both parties’ interests. See In re Briggs Avenue, 196 N.Y. 255, 89 N.E. 814 (1909). 3 This conclusion is buttressed by cases focusing on the risk of loss involving intentional, accidental or negligent damage to the property after the original valuation date, but before title passes to the condemnor. In Illinois, title does not pass to the Department of Natural Resources (DNR) until the deposit of the funds into the county treasurer’s office. See Foss Park District v. First National Bank of Waukegan, 9 Ill. App. 3d 560 (1973); 735 ILCS 5/7—127 (West 1992). Until title passes, the risk of loss falls upon the condemnee. The Model Eminent Domain Code agrees: “(a) Unless the court otherwise directs, the defendant may use the property sought to be taken for any lawful purpose before the date on which the plaintiff is authorized to take possession. *** (b) As between the plaintiff and defendant, the defendant has the risk of loss due to damage, destruction, or unauthorized removal of improvements or crops situated upon the property until the earliest of (1) the date after which, by order of the court, the defendant’s right to use the property is substantially limited or forbidden; (2) the date upon which the [DNR] is authorized to take possession; or (3) the date upon which title is transferred to the [DNR].” Model Eminent Domain Code § 1009, 13 U.L.A. 100 (2002). Section 1009 makes logical and common sense. “In effect, the risk of loss follows the right to use.” Model Eminent Domain Code § 1009(b), Comment, 13 U.L.A. 101 (2002). It is also good policy. See Ford v. City of Bowling Green, 780 S.W2d 613 (Ky. 1989); Redevelopment Agency v. Maxwell, 193 Cal. App. 2d 414, 418, 14 Cal. Rptr. 170, 173 (1961) (following the general rule, leaving “risk with owner who retains both title and possession”); In re Hudson Toll Bridge, 81 Misc. 324, 142 N.Y.S. 949 (1913) (events occurring prior to actual divesting of title may be to the detriment of owner where such facts show a reduction of value); Farmer v. Town of Hooksett, 28 N.H. 244 (1854) (same). Here, the defendants retained title to the real estate; their right to use the property was not limited in any way by statute or court order. Title had not passed and the DNR had not entered on or possessed the land in any way. The defendants had enough possession and control, certainly, to sell valuable easement rights on the property prior to the DNR taking title. Moreover, the defendants’ act was purposeful and intentional. No fire or earthquake reduced the value of the land. The burden of the loss of property value is on the condemnee, most particularly any loss caused by the condemnee’s deliberate, unauthorized acts. Without leave of court or the DNR’s authorization, the defendants sold valuable rights in the property. The resulting reduction in value of the property has to be charged to the defendants. The general legal principles of risk of loss certainly apply to the purposeful acts of a condemnee that reduce the value of the property prior to the transfer of title. More pointedly, when a vendor reduces the value of the property by acts amounting to waste during a contract’s executory period, the reduction of the value must be borne by the vendor. See Bliss v. Carter, 26 Mich. App. 177, 182 N.W2d 54 (1970). 4 Ordinarily, the measure of damages for such loss would be the property’s value prior to the sale of the easements measured against its value after the sale. However, because the acts of the defendants causing the lost value were deliberate, I believe full restitution of defendants’ gain is appropriate. See May v. Muroff, 483 So. 2d 772 (Fla. App. 1986); Laurin v. DeCarolis Construction Co., 372 Mass. 688, 363 N.E.2d 675 (1977). The DNR should receive restitution for that loss, just as surely as if any other kind of waste had been committed upon the property. The defendants’ profit from the sales should be deducted from the award and the monies awarded to the DNR. Lombard v. Chicago Sinai Congregation, 64 Ill. 477, 486 (1872) (where real property destroyed by fire, vendor’s wilful, prejudicial acts entitled purchaser to full deduction of damages from his purchase money). 5 The verdict in this case was for $1,154,250. If easements had been sold for $1 million instead of $35,000, would the majority still argue that there was no unjust enrichment? The majority’s decision encourages condemnees to unfairly profit from a condemnation, selling off timber, mineral rights, and easements. The intentional acts of the defendants devaluing the property cannot fit under the general rule fixing the valuation date. See Suncrest, 30 F.2d at 128. Defendants must not gain financially from actions that reduce the value of the land from the fair cash market value determined on the filing date. The DNR must have recompense for its loss. Therefore, I would affirm the decision of the trial court.