Eminent Domain: Settlement or Trial?
In the vast
majority of condemnation cases, the condemning authority has the undisputed
right to take the target property and the issue for determination is the “just
compensation” due as a result of the taking. Ultimately, the decision to settle or
take the case to trial will have to be made by the landowner. This decision should not be taken
lightly. Rather, numerous factors
must be weighed in order to make the right choice.
Over 90% of
all civil lawsuits settle prior to trial.
Because condemnation cases are limited to the issue of damages, the
percentage of settlements in these cases probably exceeds 95%. Condemnation cases settle for a number
of reasons. Sometimes the
condemning authority’s valuation is at least “fair” and there is little argument
that the taking will adversely affect the remaining property. For example, valuing a residential house
and lot is less controversial than valuing undeveloped property because the
property’s use is defined and there are generally multiple comparable sales of
similar properties to help set a value.
In other situations, the amount in controversy is so small that spending
thousands of dollars on experts and attorneys is not justified. In some cases, the Commissioners’ Award
is returned high enough that the chance of exceeding the award by 10% at trial
(and thus entitling the landowner to attorney fees) is too risky to justify the
costs of trial. Generally, complete
takings (when the condemning authority takes the entire property) are easier to
resolve than partial takings because the issue is limited to value rather than
value plus the depreciation of the remaining property.
complicated cases are often settled.
Utilization of credible experts and experienced and reputable attorneys
allows landowners to equalize the negotiation leverage. Condemning authorities are not unmindful
of their risks. The Oklahoma
Department of Transportation (ODOT) maintains statistics that analyze its
condemnation costs and exposure.
These statistics reveal that ODOT will almost always settle for an amount
much higher than its initial offer.
Condemning authorities generally desire non-adversarial resolutions
rather than having to pay attorney and expert fees of their own and being
exposed to trial risks and the cost of paying the landowners fees. Landowners who can present a solid
argument supporting their view of value and damages can often successfully
negotiate settlements that double and triple the initial offer.
those cases that need to be tried to a jury. Some cases present unusual or novel
valuation issues that the condemning authorities refuse to recognize. For example, valuing the effect that an
intangible right to conduct a licensed business with grandfathered status can be
difficult to resolve. In some
controversial cases, landowners get to a point where they have to try the case
in order to recoup the attorneys and expert witness fees that have been
Taking a condemnation case to
trial is not the worst remedy.
ODOT’s statistics reveal that jury verdicts often exceed the initial
“fair market offer” by 500%. Juries
are comprised of citizens who relate to the plight of a landowner whose property
is being taken against his will by the government. Recently, the government’s use of
eminent domain has been under attack by the public. While everyone agrees that roads and
bridges are needed, the use of public funds to condemn property for commercial
shopping centers and development are viewed less friendly. In all cases, jurors will initially be
sympathetic toward landowners, want to believe them and give them the benefit of
the doubt. However, sympathy only
goes so far. Condemning authorities
will often present a trial theme that the taking is necessary for the common
good, that the taking will actually enhance the value of the landowner’s
remaining property and that the landowner is simply being greedy and asking for
a windfall from the jurors who are taxpayers.
At trial, a landowner must be prepared to back up his value and damage
theory with facts, documentation and expert testimony. Studies show that juries like and expect
visual aides and computer generated graphics similar to what they see on the
news, at work or even at church.
Good quality pictures and graphics speak “ten thousand words” at
trial. Jurors also expect
landowners’ theories to make common sense.
If the landowner testifies that the property has future commercial
development potential, the property needs to have access, visibility and a
realistic potential for development.
In the end, the jury will
ultimately determine a landowners’ Constitutional right to “just compensation”
which is the value of the property taken plus any damage caused to the remaining
property. As in life, credibility
means everything at trial. A well
reasoned and supported conservative approach will generally reap great
rewards. On the other hand, if a
landowner is viewed as overreaching or being greedy, the jury’s award can be
punishing. In condemnation cases
the golden rule is, “Pigs get fat, but hogs get slaughtered.”