July 20, 2017

Colorado Court of Appeals: District Court Correctly Characterized Water Storage Plan as Frustrated Plan in Condemnation Action

The Colorado Court of Appeals issued its opinion in Board of County Commissioners of County of Weld v. DPG Farms on Thursday, June 15, 2017.

Condemnation—Highest and Best Use—Lost Income—Costs.

The Board of County Commissioners of Weld County (the County) filed a petition in condemnation to extend a public road over 19 acres of DPG Farms, LLC’s 760-acre property (the property). When condemnation proceedings were initiated, the property was used primarily for agricultural and recreational purposes. The parties stipulated to the County’s immediate possession of the 19 acres and proceeded to a valuation trial. The dispute centered on the highest and best use of 280 acres that contained gravel deposits. DPG’s experts testified about the highest and best use of the property. The district court determined, as a matter of law, that the evidence was too speculative to support a finding that water storage was the highest and best use of the relevant area (Cell C); instead, it determined that the highest and best use of those acres was gravel mining, but not water storage as well. The jury awarded DPG $183,795 in damages for the condemned property and nothing for the residue. DPG then requested costs. The district court rejected a substantial portion of the costs on grounds that they were disproportionate to DPG’s success and that certain expert evidence had been excluded.

On appeal, DPG contended that the district court erred in rejecting water storage as the highest and best use of certain portions of the property. The Court of Appeals reviewed the evidence that the district court’s determination was based on and concluded that the district court did not err in determining, as a matter of law, that the evidence was too speculative to support a jury finding that water storage was the highest and best use of Cell C.

DPG also argued that the trial court erred in excluding evidence of lost income, arguing that it was admissible pursuant to an income capitalization approach to valuing the property. DPG’s evidence of a potential income stream was admissible not as the measure of its damages but rather as a factor that could inform the fair market value of the property. And both the appraiser and the mining expert testified that the potential income stream from mining informed their fair market valuations. Because the lost income evidence, on its own, did not reflect the proper measure of damages, the district court correctly excluded it.

Finally, because the income valuation evidence presented by DPG’s experts was properly excluded, the district court did not abuse its discretion in limiting DPG’s award of costs on this basis.

The judgment and cost order were affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Condemnation Decision Must Consider Each Landowner’s Taken Land and Damages

The Colorado Supreme Court issued its opinion in Department of Transportation v. Amerco Real Estate Co. on Monday, September 26, 2016.

Administrative Law and Procedure—Delegation of Authority—Condemnation Proceedings.

Amerco Real Estate Co. (Amerco) and U-Haul petitioned for relief pursuant to CAR 21 from an order of the district court denying their request to dismiss the Colorado transportation department’s Petition in Condemnation and instead granting the department’s motion for immediate possession of the subject property, which is owned by Amerco and occupied by U-Haul. The district court rejected U-Haul’s assertion that the transportation commission’s authorization for the department to condemn property for highway purposes, in the absence of any resolution by the commission approving the acquisition of the particular property to be taken, at a public meeting, amounted to an unlawful delegation of quasi-legislative power. The Supreme Court issued its rule to show cause and here made the rule absolute, remanding to the district court with orders to dismiss the department’s Petition in Condemnation. The Court held that because the commission’s enabling legislation contemplates that it alone must decide whether the public interest or convenience will be served by a proposed alteration of a state highway, and that decision must be made in consideration of, among other things, the portions of land of each landowner to be taken for that purpose and an estimate of the damages and benefits accruing to each landowner whose land may be affected thereby, the commission’s general authorization, to the extent it purports to delegate to the department the choice of particular properties to be taken for such a highway project and the manner of their taking, constituted an unlawful delegation of its statutorily imposed obligation.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Evidence of Project Funds Inadmissible in Condemnation Proceeding

The Colorado Court of Appeals issued its opinion in Town of Silverthorne v. Lutz on Thursday, February 11, 2016.

Matthew Lutz and Edward Lutz (landowners) own a stretch of land over which the Town of Silverthorne wanted to build a trail. The town applied for and received funds from the Great Outdoors Colorado Program (GOCO) to use in construction of the trail. Landowners objected to having a portion of the trail built on their land. The town offered landowners $6,000 to purchase an easement, but landowners did not respond. The town next offered $75,000 for two easements, but landowners again did not respond. The town then filed a condemnation action under its eminent domain powers, and the matter proceeded to an immediate possession hearing and subsequent valuation trial. The district court granted the town’s motion for immediate possession and the landowners were compensated according to the jury’s valuation.

On appeal, the town initially argued the landowners waived any defense by failing to challenge the condemnation proceedings or make a counteroffer. The court of appeals found no error in the district court’s allowance for the landowners to reply to the condemnation proceedings out of time. The court noted, “Technically, there is no need to file an answer in a condemnation case, but it is good practice to do so.” Next, the court addressed the landowners’ assertion that the town was barred from exercising eminent domain power because of its receipt of GOCO funds, and the district court erred in granting the town’s motion in limine to exclude evidence of the source of funds. The court found it was bound by the Colorado Supreme Court’s decision in Pub. Serv. Co. v. City of Loveland, 79 Colo. 216, 233, 245 P. 493, 500-01 (1926), to exclude evidence of the source of funding for the eminent domain action, finding that the source of funds requires analysis of corporate finance which is wholly separate from a home rule city’s eminent domain authority. The court found no error in the district court’s grant of the town’s motion in limine to exclude evidence of the source of funds.

Landowners also argued the town acted in bad faith by planning the development of its trail in such a way as to receive all GOCO funds before commencing the eminent domain action. The landowners argue this is a jurisdictional challenge to the town’s condemnation suit. The court found several flaws with the landowners’ arguments that the town failed to act in good faith, and again affirmed the district court’s decision to exclude evidence of the GOCO funds. The court also rejected landowners’ contention that the district court erred in denying their motion for attorney fees.

The court of appeals affirmed the district court.

Colorado Supreme Court: Judicial Evidentiary Rulings Control in Eminent Domain Valuation Hearings

The Colorado Supreme Court issued its opinion in Regional Transportation District v. 750 West 48th Ave., LLC on Monday, September 14, 2015.

Eminent Domain—Commissioner Proceedings—Duties of Trial Court.

The Supreme Court held that judicial evidentiary rulings control in eminent domain valuation hearings. A valuation commission is bound by the supervising court’s evidentiary rulings. Accordingly, the Court affirmed the portion of the court of appeals’ judgment that approved of the supervising judge’s instruction that the commission disregard previously admitted evidence as irrelevant. The Court reversed the portion of the judgment that permitted the commission to alter the judge’s in limine evidentiary ruling.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Meaningful Remedy May Be Available to Landowners so Summary Judgment Inappropriate

The Colorado Court of Appeals issued its opinion in Sinclair Transportation Co. v. Sandberg on Thursday, June 5, 2014.

Easement — Partial Summary Judgment.

Sinclair Pipeline Company (Sinclair) operates a pipeline system that transports petroleum products from Wyoming to Denver and uses an easement that passes through defendants’ (landowners) properties. The easement was created by agreement in 1963 and provided its owner and “its successors and assigns” the right to “construct, maintain, inspect, operate, protect, repair, replace, change the size of, and remove” a six-inch pipeline across landowners’ property (original pipeline).

In 2006, Sinclair approached landowners to propose amending the easement to allow it to build a ten-inch pipeline on the property (new pipeline). Landowners declined, and Sinclair sought the right through a condemnation proceeding. The district court determined Sinclair had condemnation authority. In 2007, while the case was on appeal, Sinclair installed the new pipeline but did not put it to use. Ultimately, the Supreme Court determined Sinclair did not have statutory condemnation authority.

Sinclair then abandoned the condemnation proceeding and instituted this declaratory judgment action under CRCP 57 and CRS § 13-51-106 to determine its rights under the easement and prevent landowners from removing the new pipeline. The district court dismissed the condemnation action and addressed all other claims in this case.

Sinclair moved for partial summary judgment and the district court ruled, as a matter of law, that Sinclair had the right to treat the new pipeline as a replacement of the original one, as long as it removed the original one. The partial summary judgment was certified as a final judgment under CRCP 54(b) for purposes of appeal.

Sinclair removed the original pipeline and began using the new one. Four months after the summary judgment order was issued and Sinclair had begun using the new pipeline, landowners moved to stay the order, which the district court denied because Sinclair had “already fully executed” it and there “was nothing left . . . to stay.”

On appeal, landowners argued Sinclair lacked standing because factual disputes existed as to whether Sinclair was a successor in interest to the original owner of the easement, and an easement of the type involved in this case could not be assigned. The Court of Appeals disagreed, finding that the evidence presented by Sinclair was sufficient to prove its successorship interest in the easement.

The Court rejected landowners’ argument that Sinclair lacked standing, because ownership interests in this type of easement cannot be assigned. The language of the easement itself was a conveyance to Old Sinclair and its “successors and assigns.”

Landowners argued that partial summary judgment was inappropriate because any right to replace the pipeline was subject to numerous conditions as to which factual disputes exist and was defeated by Sinclair’s non-compliance with other parts of the agreement. The Court disagreed, finding that the reasonable expectation of the parties to such an agreement would be that the new pipeline could be put in before the old one being removed so as not to disrupt service.

Landowners further contended that Sinclair abandoned the contract right to the easement because it acted as though that right had expired when it sought to use condemnation authority to install the new pipeline. The Court disagreed. Sinclair’s condemnation action was an attempt to install the new pipeline and not remove the old pipeline after landowners had denied them the permission to do so. The order was affirmed.

Summary and full case available here.

Tenth Circuit: Tax Court Did Not Err in Concluding Highest and Best Use for Property Was Agriculture Before Conservation Easement Was Granted

The Tenth Circuit Court of Appeals published its opinion in Esgar Corporation v. Commissioner of Internal Revenue on Friday, March 7, 2014.

On December 17, 2004, the Taxpayers (Esgar Corporation, George and Georgetta Tempel, and Delmar and Patricia Holmes) each donated a conservation easement over their respective property to the Greenlands Reserve. The donations granted a perpetual easement over the properties, giving Greenlands the right to preserve the natural condition of the land and protect its biological, ecological, and environmental characteristics.

The Taxpayers claimed charitable deductions on their 2004, 2005, and 2006 tax returns for “qualified conservation contributions” under I.R.C. §170(f)(3)(B)(iii). The Taxpayers engaged William Milenski to appraise their contributions. Mr. Milenski concluded that, had the conservation easements not been granted, the properties would have realized their greatest potential as a gravel mining operation. Based on the value of that relinquished use, Mr. Milenski valued each of the Taxpayers’ conservation easements. Also as a result of their donations, the Taxpayers received transferable tax credits from the State of Colorado. Within two weeks of receiving the credits, the Taxpayers sold portions of their credits to third parties.

After an audit of the Taxpayers’ 2004, 2005, and 2006 returns, the Commissioner determined that the Taxpayers’ conservation easements were in fact valueless and that the sales proceeds from their state tax credits should be reported as ordinary income. The Commissioner issued notices of deficiency for the 2004, 2005, and 2006 tax years.

A trial was held where the only issue was the highest and best use of  property before the easement. The Commissioner argued it was agriculture and the Taxpayers argued it was gravel mining. The Tax Court sided with the Commissioner and this appeal followed.

The Taxpayers first argued that the Tax Court erred by placing on them the burden of proving the before value of their properties. Generally, deductions are a matter of legislative grace, and a taxpayer bears the burden of proving entitlement to any claimed deduction. However, Section 7491(a) of the I.R.C. shifts the burden of proof to the Commissioner on any factual issue that the taxpayer supports with credible evidence. The Taxpayers argued that they introduced credible evidence that gravel mining was their properties’ highest and best use, thus shifting the burden to the Commissioner. However, the Tenth Circuit held that Section 7491 does not require burden shift when, as here, both parties produced evidence and the evidence weighed in the Commissioner’s favor.

The Taxpayers also argued that the Tax Court erred by drawing an adverse factual inference against them. The Tax Court stated: “Neither [the Taxpayers] nor their experts provided us with an estimate of remaining aggregate. [The Taxpayers] own the land on which the Midwestern Farms Pit is situated and chose not to provide information on the amount of aggregate remaining. Their failure to introduce evidence “which if true, would be favorable to . . . [them], gives rise to the presumption that if produced it would be unfavorable.”

The Taxpayers argued that it was impermissible to use this “missing evidence” inference against them, given that the burden of proof rested with the Commissioner. The Tenth Circuit disagreed. It is the function of the Tax Court to draw appropriate inferences, and choose between conflicting inferences in finding the facts of a case.

Next, the Taxpayers argued that the Tax Court applied erroneous legal standards to value their conservation easements. They made two arguments: (1) that the Tax Court erred by adopting the properties’ current use as its highest and best use rather than taking a “development-based approach,” and (2) that the Tax Court erred by citing eminent domain principles in reaching its valuation determination.

Valuation does not depend on whether the owner actually has put the property to its highest and best use. Rather, courts must focus on the highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future. After taking into account the properties’ current use and the fact that the likelihood of development was remote, the Tax Court certainly could find that the properties’ current use, agriculture, was its highest and best use. The Tax Court applied the correct highest and best use standard, looking for the use that was most reasonably probable in the reasonably near future, and it did not clearly err by concluding that use was agriculture.

The Taxpayers argued that eminent domain principles—standards used to value property to determine just compensation—were inapplicable when valuing conservation easements. Just compensation valuation requires an identical finding, i.e., the “highest and most profitable use” for which the property was suited before the taking. The objective assessment that the Treasury Regulations require do not materially differ from those used to determine the highest and best use of property for just compensation valuation.

Finally, the Taxpayers argued that their state tax credits, which they held for about two weeks, were long-term capital assets. However, the Tenth Circuit held that the Tax Court correctly concluded that the Taxpayers had no property rights in a conservation easement contribution State tax credit until the donation was complete and the credits were granted. The credits never were, nor did they become, part of the Taxpayers’ real property rights. Instead, the Taxpayers’ holding period in their credits began at the time the credits were granted and ended when petitioners sold them. Since petitioners sold their State tax credits in the same month in which they received them, the capital gains from the sale of the credits were short term.

AFFIRMED.

Colorado Court of Appeals: Property Valuation Commissioner Need Not Be Held to Judge’s Standard of Appearance of Impropriety

The Colorado Court of Appeals issued its opinion in Regional Transportation District v. 750 West 48th Ave LLC on Thursday, December 5, 2013.

Eminent Domain—Just Compensation—Evidentiary and Instructional Rulings—Commissioner Standards.

In April 2011, Regional Transportation District (RTD) filed a petition in condemnation and acquired from Landowner approximately 1.6 acres for RTD’s FasTracks Gold Line light rail project. It was agreed that RTD would take possession in exchange for a deposit of $1.8 million. The only issue at trial was determining the amount owed to Landowner for the condemned property. Landowner elected to have a commission trial, and the trial court appointed a commission of three freeholders to determine the property’s reasonable market value. RTD appealed pretrial and instructional rulings by the trial court and certain evidentiary rulings of the commission.

RTD contended the trial court erred in not disqualifying Kittie Hook, a real estate broker with Cassidy Turley, as a commissioner because it did not employ the “appearance of impropriety” disqualification standard applicable to judges. The court denied the request. CRS § 13-1-105(1) requires disqualification if the court determines that any of the proposed commissioners is not impartial. The trial court held that the applicable standard was not an “appearance of partiality,” but whether the commissioner was in fact interested and partial. The Court of Appeals agreed, concluding that the plain language of the statute required RTD to demonstrate that Hook was interested and partial. Because no such showing was made, it was not an abuse of discretion to not disqualify Hook.

RTD also argued that trial court erred by instructing the commission not to consider evidence concerning amenities at the property leased by Landowner’s lessee after condemnation. The Court found no abuse of discretion. The trial court’s instruction on the relevancy of evidence constituted a legal issue. Because CRS § 38-1-105(1) requires the trial court to instruct the commission on the applicable law, the court properly instructed the commission how to determine the reasonable value of the property.

RTD argued that the commission erred in reversing the trial court’s motion in limine ruling to admit an expert witness’s testimony as to the average value of industrial properties under the income approach. The Court disagreed. The Court held that the commissioners can modify the court’s determination of a motion in limine after hearing further evidence, and that the commission’s ruling was not an abuse of discretion.

Landowner requested attorney fees in defending the appeal. A landowner is entitled to recover its attorney fees where the award by the commission equals or exceeds 130% of the last written offer given to the property owner before the filing of the condemnation action. That was the case here, so the trial court awarded Landowner attorney fees. CAR 39.5 provides for an award of appellate attorney fees when there is a legal basis for such an award. Landowner therefore was entitled to appellate attorney fees and remanded for a determination of the amount. The judgment otherwise was affirmed.

Summary and full case available here.

SB 13-021: Reaffirming Grant of Power of Eminent Domain to Pipeline Companies Conveying Petroleum Products

On Wednesday, January 9, 2013, Sen. Mary Hodge introduced SB 13-021 – Concerning Technical Revisions to Article 5 of Title 38, Colorado Revised Statutes, that Reaffirm that the Provisions of that Article Relating to Rights-of-Way for Transmission Companies Apply to Pipeline Companies Operating Pipelines that Convey Petroleum and Hydrocarbon Products. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Article 5 of title 38, C.R.S., governs rights-of-way for transmission companies and grants the right of eminent domain to any domestic or foreign electric light power, gas, or pipeline company authorized to do business in Colorado for the purpose of obtaining rights-of-way for wires, pipes, regulator stations, substations, and systems needed to conduct its business. Until May 2012, it was commonly understood that article 5 applied to and granted the right of eminent domain to all pipeline companies authorized to do business in Colorado, including companies operating pipelines that convey oil, gasoline, or other petroleum products.

In May 2012, the Colorado Supreme Court held that article 5 grants the right of eminent domain only for acquisition of rights-of-way for pipelines involved in delivering electric power or natural gas and not for pipelines that convey oil, gasoline, or other petroleum products. The bill reaffirms that article 5 grants the power of eminent domain to pipeline companies operating pipelines that convey petroleum products by defining the term “pipeline company” to include such companies and by making additional clarifying technical revisions. Assigned to the Local Government Committee.

Tenth Circuit: Opinions, 4/29/11

The Tenth Circuit on Friday issued two published opinions and nine unpublished opinions.

Published

In United States v. Harrell, the Court affirmed the district court’s decision. In eminent domain proceedings, Petitioners claimed they were the “prevailing party,” as defined by the Equal Access to Justice Act (EAJA). The district court disagreed even though Petitioners were awarded $3.8 million, and denied their request for $2 million in attorney fees. The Court agreed with the district court by reviewing the issue under the necessary strict construction of the EAJA; the statute must be strictly construed when considering “under what circumstances Congress was willing to require the government to pay the attorney’s fees of other parties” under the “mathematical prevailing party standard” set out in the EAJA. The Court held that the district court’s “$3.8 million judgment in favor of appellants was closer to the highest valuation testified to by the government’s expert, $186,500, than to the highest valuation testified to by [Petitioners]’ expert, $33 million, and that [Petitioners] therefore were not the prevailing party” entitled to attorney fees.

In Efagene v. Holder, Jr., the Court reversed the Board of Immigration Appeals’ (BIA) decision. Petitioner, a citizen of Nigeria, has been a lawful United States resident since 1991. In 2005, Petitioner pleaded guilty to misdemeanor sexual conduct-no consent and was sentenced to 364 days’ imprisonment, and ordered to register as a sex offender for the next ten years. In 2007, Petitioner failed to meet a registration deadline and was arrested. He pleaded guilty to a misdemeanor failure-to-register offense, and was sentenced to thirty days’ imprisonment and a $100 fine. He now petitions for review of a final order of removal issued by the BIA, arguing that “the BIA erred in concluding that the Colorado misdemeanor offense of failure to register as a sex offender constitutes a crime involving moral turpitude under the Immigration and Nationality Act.” The Court agreed, refusing to find Petitioner’s failure to register as a sex offender as a crime involving moral turpitude. “Colorado’s own courts have described the sex offender registry statute at issue here as regulatory in nature. . . . While there is no question a sex offense itself often involves serious harm to the victim and constitutes a depraved act, an individual can be convicted of failure to register if he, for example, changes residences and notifies law enforcement six rather than five business days later.” Failure to register within the appropriate time does not rise to the level of moral turpitude, but rather is a violation of a regulatory requirement designed to aid law enforcement.

Unpublished

Henshaw v. Wayne County

Johnson v. Kansas Parole Board

United States v. Thompson

United States v. Chacon

United States v. Garcia-Ruiz

United States v. Roe

United State v. Lockhart

United States v. Smith

Novell, Inc. v. Vigilant Ins. Co.

Colorado Court of Appeals: District Possessed the Power to Condemn an Absolute Fee Interest in Land, Including Mineral, Oil, and Gas Interests

The Colorado Court of Appeals issued its opinion in Steamboat Lake Water and Sanitation District v. Halvorson on January 6, 2011.

Eminent Domain—Condemnation—Appeal—Bond—Defeasible Fee Interest—Remainder Interest—Attorney Fees.

Respondents Vance and Sharon Halvorson challenged the trial court’s order granting title to the Steamboat Lake Water and Sanitation District (District) pursuant to its eminent domain powers. The order was affirmed.

The Halvorsons owned certain real property, located within the District’s boundaries and known as Lot 78. The trial court granted title to the District pursuant to its eminent domain powers, and described the title as an absolute fee “free of all rights of reversion or reversionary interests, including but not limited to the possibility of reverter and rights of entry for conditions broken.”

The District argued that the Halvorsons’ appeal should be dismissed because they accepted the benefits of the judgment by withdrawing the $90,000 bond. A party is prohibited from both accepting the benefits of a judgment and prosecuting an appeal, but not when the adjudication of that appeal would not put in issue the party’s right to the entirety of the benefit he has accepted. Here, the withdrawal of the bond precluded the Halvorsons from challenging the title description’s failure to exclude gas, oil, and mineral interests. However, they were permitted to appeal whether the interest passed was a defeasible or absolute fee.

The Halvorsons argued that the court’s description of the title is erroneous because the District was empowered only to condemn a defeasible fee interest that excluded mineral, oil, and gas interests. The Halvorsons contended that they still own a remainder interest in their land, which consists of the mineral, oil, and gas interests, and either a reversionary interest or a right of entry for condition broken if the District ever abandons the property or attempts to sell it to a private party. The District possessed the power to condemn an absolute fee interest in land. Because the District explicitly sought, and paid for, an absolute fee interest in Lot 78, the trial court did not err in so describing the District’s title.

The Halvorsons also argued that the court erred in refusing to award attorney fees pursuant to CRS § 38-1-122. However, the District was authorized by law to acquire the property, and the Halvorsons did not prove that the award equaled or exceeded 130 percent of the condemnor’s last written offer to purchase the property or interest. The order was affirmed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on January 6, 2011, can be found here.

Colorado Court of Appeals: Summary Judgment Appropriate for Eminent Domain Proceeding; No Genuine Dispute over Value

The Colorado Court of Appeals issued its opinion in City of Steamboat Springs v. Johnson on August 6, 2010.

Eminent Domain—Greenbelt—Summary Judgment—Easement Appurtenant—Value.

Charles Johnson and Johnson Excavation, Inc. (collectively, Johnson) appealed the district court’s partial summary judgment on valuation issues regarding Johnson’s Lot 4 and Johnson’s interests in a greenbelt. The judgment was affirmed in part and reversed in part, and the case was remanded for further proceedings.

The City of Steamboat Springs (City) decided to construct a new highway on what once was greenbelt area. To do so, it obtained a judicial decree that it owned the greenbelts, condemned or acquired property owners’ appurtenant rights to restrict use of that area to anything but greenbelts, and acquired adjoining properties. The district court granted the City’s motion for partial summary judgment as to the value of most of Johnson’s interests, including Lot 4 and the greenbelt interests.

Johnson argued that summary judgment is unavailable in takings cases because property owners have a constitutional right to require that a jury determine the amount of compensation. However, the summary judgment rule, C.R.C.P. 56, plainly applies to eminent domain proceedings.

Here, there was no genuine dispute as to the value of Lot 4. Therefore, summary judgment was proper on this issue. Johnson’s greenbelt interests were an easement appurtenant to his Lot 4 property. The value of that lost interest depends not on the effect on the greenbelts themselves, but rather on the effect on Lot 4. Because the district court did not measure before and after values of Lot 4 but relied on appraisals of the greenbelts themselves, the case was remanded to determine the proper amount by which loss of the greenbelts diminished the value of Lot 4.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on July 22, 2010, can be found here.

Colorado Court of Appeals: Penalties for Government’s Undervaluing of Property in Eminent Domain Do Not Include Consideration of Prejudgment Interest

The Colorado Court of Appeals issued its opinion in City of Colorado Springs v. Andersen Mahon Enterprises, LLP on July 22, 2010.

Eminent Domain—Offer—Award—Attorney Fees—Prejudgment Interest—CRS § 38-1-122(1.5).

In this eminent domain proceeding, petitioner City of Colorado Springs (City) appealed the trial court’s order awarding attorney fees to respondent Andersen Mahon Enterprises, LLP. The order was reversed.

The City and Andersen Mahon were unsuccessful in negotiating just compensation for the taking of Anderson Mahon’s property, which was to be used by the City to widen a roadway. Andersen Mahon rejected the City’s final written offer of $1.2 million. On August 15, 2008, the City filed a Petition in Condemnation. On September 4, 2008, the City took possession and deposited into the court registry $1,024,000, a sum equal to its appraised value of the property. After the valuation trial in April 2009, a court-appointed board determined that the value of the property on September 4, 2008 was $1,542,294. This award was 28.5 percent higher than the City’s final written offer of $1.2. Andersen Mahon then moved for an award of attorney fees pursuant to CRS § 38-1-122(1.5). It argued that prejudgment interest should be added to the board’s valuation award in determining whether the City’s final written offer had been exceeded by 30 percent. The trial court agreed with Andersen Mahon and awarded attorney fees.

On appeal, the City argued that prejudgment interest is separate from the “award by the court,” within the meaning of CRS § 38-1-122(1.5). The Court of Appeals agreed. Under § 38-1-122(1.5), property owners are entitled to reimbursement for attorney fees they incur in challenging the governmental entity’s valuation of their condemned property if the court’s award exceeds the condemning entity’s last written offer by 30 percent. The phrase in this statute, “award by the court,” means only the property valuation award, and not the valuation award plus prejudgment interest. Because the award (not including prejudgment interest) did not exceed the 130 percent threshold of the last written offer by the City, Andersen Mahon was not entitled to attorney fees. Therefore, the award of attorney fees was reversed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on July 22, 2010, can be found here.