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Christopher W. Kramer

Christopher W. Kramer. Condemnation 101. Condemnation 101 International Right of Way Association September 10, 2013. Christopher W. Kramer Dickinson Wright/Mariscal Weeks 2901 North Central Avenue, Suite 200 Phoenix, Arizona 85012 602-285-5000 ckramer@dickinsonwright.com

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Christopher W. Kramer

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  1. Christopher W. Kramer Condemnation 101

  2. Condemnation 101International Right of Way AssociationSeptember 10, 2013 Christopher W. Kramer Dickinson Wright/Mariscal Weeks 2901 North Central Avenue, Suite 200 Phoenix, Arizona 85012 602-285-5000 ckramer@dickinsonwright.com dickinsonwright.com.com

  3. Real Schedule

  4. 20 days to acquire Right of Way ? • Appraisal/review takes 90 days +/-. • Appraisal should be evaluated before finalized and reviewed • Condemnation requires offer based on appraisal 20 days before filing • 30 days if federal money • Possession takes 30-60 days from filing

  5. Eminent Domain • Inherent Right of Sovereign • Necessary • Constant • Inextinguishable • Not Created or Granted by Constitution

  6. Hugo Grotius “The property of subjects is under the eminent domain of the state, so that the state or he who acts for it may use and even alienate and destroy such property…but that when this is done the state is bound to make good the loss to those who lose their property.” Circa 1625.

  7. Ahab and Naboth And Ahab* spake unto Naboth, saying, “Give me thy vineyard, that I may have it for a garden of herbs, because it is near unto my house: and I will give thee for it a better vineyard than it; or, if it seem good to thee, I will give thee the worth of it in money.” 1 Kings 21, King James version *King of Samaria, circa 900 BC

  8. United States Constitution Nor shall private property be taken for public use, without just compensation Fifth Amendment

  9. Arizona Constitution No private property shall be taken or damaged for public or private use without just compensation having first been made…. Arizona Constitution, Article II, Section 17.

  10. Just Compensation Defined Just compensation is the amount of money necessary to put the property owner in as good a financial position as if the property had not been taken. City of Phoenix v. Wilson

  11. Reality Check: some things are not compensable • Business losses • Relocation/Re-establishment • Good will • Direct access (?) • Alteration of traffic flow • Change of Access • Temporary interference during construction • Interference with view

  12. Just Compensation, Reprise Fair market value of property taken plus the reduction in market value of any remaining property, less special benefits.

  13. Market Value Fair market value is the most probable* cash price a willing buyer would pay a willing seller on the open market where the seller has a reasonable time to find a buyer and the buyer knows everything about the property. * “highest” if before 8/22/02 and not ADOT

  14. Severance Damages The decrease in value of the remainder resulting from the take (decrease in the value of remainder before and after).

  15. Cost to cure Cost to cure is the amount of money that can be expended to eliminate or reduce severance (must be less than the severance cured). Cost to cure is a measure of severance damages. Owner cannot be required or forced to cure (but cannot “elect” to take full amount of severance instead)

  16. Special Benefits Special benefits are the increase in value of the remainder due to the special relationship of the remainder to the project • Federal Rule: Special benefits are offset against just compensation • Arizona rule: Special benefits are offset against severance only

  17. Just Compensation, Revisited Just compensation is 1) fair market value of the part taken, plus 2) the lesser of a) severance damages or b) incurable severance plus cost to cure or c) cost to cure (if no remaining severance), less 3) special benefits (to the extent of claimed severance).

  18. Valuation Concepts • Larger Parcel • Highest and Best Use • Project Influence Rule • Probability of Rezoning • Valuation of Easements • Date of Valuation

  19. Legal Concepts • Who can condemn • What can be condemned • For what purpose • Public use • Necessity • “More necessary” public use • Immediate Possession

  20. Why you need a lawyer, Part I A municipality may exercise the right of eminent domain outside its corporate limits to acquire rights of way for public utility and public park purposes ARS 9-511

  21. So we’re good? • No. • Utilities and parks means the use of eminent domain must be to acquire property for both a utility and a park at the same time City of Phoenix v. Harnish

  22. But wait, there’s more • A municipality may acquire property by eminent domain for a utility undertaking outside its corporate limits • ARS 9-522 • Utility undertaking includes “recreational facilities” including parks • ARS 9-521.01

  23. So we’re good, right? ARS 9-521.01 applies only to municipalities of 75,000 or less.

  24. Why you need a lawyer, Part II The interests, estates and rights in land subject to be taken for public use are a fee simple, when taken for use in connection with a right of way ARS 12-1113(1)

  25. Fee simple means the whole bundle of rights • Except in connection with eminent domain • Whatever interest is taken is taken in its entirety and in perpetuity In re Forsttrom

  26. Why you need a Lawyer, Part III The right to compensation and damages shall be deemed to accrue at the date of the summons, and its actual value at that date shall be the measure of compensation and damages ARS 12-1123(A)

  27. When is the date of the summons NOT the date of value When application of the statutory date of value deprives the owner of Constitutional just compensation Miller v. Filler City of Scottsdale v. GPC Aberdeen

  28. Interdisciplinary Design Team • Experienced infrastructure lawyer • Legal documents (IGAs, purchase agreements, CMAs, etc.) • Identification of legal issues (i.e., jurisdiction, title problems, service problems, bankruptcy, liens) • Coordination and/or compliance with other entities • Risk assessment • Selection and evaluation of appraisers/appraisals and other potential expert witnesses • Scheduling

  29. Interdisciplinary Design Team II • Right of Way • Relocation (30 and 90 day notices) • Coordination with other agencies • Coordination of acquisitions (project consistency) • Communication with property owners • Negotiation vs. litigation • Scheduling

  30. Interdisciplinary Design Team III • Appraiser • Cost assessment (retaining wall or slope?) • Consistency • Scheduling

  31. Recommended Reading • Revised Arizona Jury Instructions, 4th Edition, State Bar of Arizona (2005), Eminent Domain • The Law of Eminent Domain, American Bar Association (2011/2012). • Eminent Domain in Arizona, State Bar of Arizona (2013)

  32. Conclusion Christopher W. Kramer Dickinson Wright/Mariscal Weeks 2901 North Central Avenue, Suite 200 Phoenix, Arizona 85012 602-285-5000 ckramer@dickinsonwright.com dickinsonwright.com

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