Eminent Domain Law Update: School Property Takings
Recently the Indiana Court of Appeals heard a case between Indiana school corporations and the State of Indiana regarding a political subdivision’s ability to assert a Takings Clause claim for the taking of its property in Lake Ridge School Corporation and School City of Hammond, West Lafayette Community School Corporation v. Eric Holcomb, Indiana State Board of Education, Indiana Department of Education, and Todd Rokita, Case No. 22A-PL-423. In that case, Lake Ridge School Corporation, School City of Hammond and West Lafayette Community School Corporation learned that as political subdivisions, the State could force them to sell or lease their schools, once they were no longer in use, to a charter school or state education institution for $1.
In 2019 and 2020, Lake Ridge and School City of Hammond closed schools in their districts. Under Indiana Code, once the school closed, the schools should have notified the State within 10 days, made the building available to a charter school or state educational institution and sell that building to the interested charter school or state educational institution for $1. The Schools sued the governor, the attorney general, the Indiana Department of Education and the Indiana State Board of Education contesting the validity of the statute and claimed that the statute constituted a taking of the Schools’ property. The State argued that the Schools could not sue the State for an unconstitutional taking because “the Takings Clause has no role to play in intragovernmental disputes between a State and one of its agencies or political subdivisions”.
The Court of Appeals agreed with the State. In its decision for the State, the Court cited a US Supreme Court case that political subdivisions are created as convenient agencies for exercising such governmental power of the state as may be entrusted to them. “The state, therefore, at its pleasure, may modify or withdraw all such powers, may take without compensation such property, hold it itself, or vest it in other agencies, expand or contract the territorial area, unite the whole or a part of it with another municipality, repeal the character and destroy the corporation.” The Court went on to explain because a political subdivision is merely a department of the state and held that the state may withhold, grant or withdraw powers and privileges as it sees fit, that political subdivisions cannot sue their states under the takings clause.
This case may have lingering effects on the rest of political subdivisions and municipalities throughout Indiana, as the State may now seize any property of a political subdivision for any reason or any purpose, with no compensation. I have practiced eminent domain condemnation law for over a decade and accept case referrals from attorneys across Indiana and represent commercial, agricultural and residential landowners to assert their rights and maximize compensation in land acquisition transactions.
Article by: Lindsey M. Bennett, Attorney
Update on Indiana Eminent Domain Law: Duke Energy, LLC v. Bellwether Properties, LLC
Bellwether Properties, LLC, (“Bellwether”) owned property encumbered by a 10’ utility easement owned by Duke Energy, Indiana (“Duke”). Duke owned a transmission power line that ran through the property centered within the easement area. Bellwether wanted to build a warehouse on its property abutting the easement. Duke informed them that the electrical safety code would not allow Bellwether to build within 12.5 feet of the power line, some of which was outside of the 10’ Duke easement. Bellwether sued Duke for inverse condemnation, claiming that Duke had taken part of its land without compensation by disallowing Bellwether to utilize the property abutting the easement for the warehouse.
The parties disagreed whether Bellwether’s claim was an issue of a physical taking or a regulatory taking. A physical taking is one where the government acquires the private property for a public purpose as opposed to a regulatory taking where the government’s regulation of the property is so onerous that it in effect has taken the property. The court recognized two categories of regulatory action that are deemed regulatory takings: (1) where government requires an owner to suffer a permanent physical invasion of her property and (2) regulations that completely deprive an owner of all economically beneficial use of their property.
The Court treated the claim as a regulatory taking and examined the case under the lens of Penn Central Transportation Co. v. New York City and weighed the factors created by the US Supreme Court for regulatory takings – (1) the economic impact of the regulation on the property owner, (2) the character of the governmental action and (3) if there was a physical invasion as opposed to a public program adjusting the benefits and burdens to the property owner to promote the common good. Using the Penn Central factors, the court determined that the economic impact to the Bellwether property was minimal. The warehouse to be built had to be resized by only 150 square feet and it reduced the number of storage racks in the building from thirty to twenty-nine. The court also found that the electrical code clearance standard had already been in the Indiana Administrative Code when Bellwether purchased the property and property owners are charged with knowledge of the laws that affect their property. Further, the clearance was intended to protect lives and property from being too close to electric transmission lines, which is applied across the board, not just to the Bellwether property.
Because Bellwether did not meet the standard set forth in Penn Central, the court ultimately found that the prohibition of building the warehouse, even outside the easement area, was not a compensable taking by Duke. The decision in Duke Energy, Indiana, LLC v. Bellwether Properties, LLC affirms a condemnor’s rights within right of way easements and should serve as a caveat to landowners to carefully consider easements when considering current and future property improvements. I have practiced eminent domain condemnation law for over a decade and accept case referrals from attorneys across Indiana and represent commercial, agricultural and residential landowners to assert their rights and maximize compensation in land acquisition transactions.
Article by: Lindsey M. Bennett, attorney
The Impact of IndyGo Red Line Project for Broad Ripple Property Owners
The City of Indianapolis’ most recent effort in “rapid transit” is the IndyGo Red Line. Phase 1 of this project is estimated to cost $96 million. It will travel from College Avenue in Broad Ripple, along 38 Street, down Meridian Street, through Fountain Square and ending at the University of Indianapolis. The 13.5-mile stretch of bus line will require the elimination of travel lanes, parking spots, and driveways on College Avenue, 38th Street, Meridian Street and Virginia Avenue. The project is almost certain to have a significant impact on vehicular traffic both during and after construction for those drivers who use these streets in Broad Ripple and downtown Indianapolis. However, some property owners will bear a much more significant burden.
How to Read a Right-Of-Way Appraisal
If you’ve ever bought or sold a home or any type of real estate, you have almost certainly seen (and hopefully) read a real estate appraisal. Typically, appraisals are in the standard 6-page Uniform Residential Appraisal Report format. However, appraisals for eminent domain/condemnation purposes Right-of-Way (“ROW appraisals”) are much different.
How Does An Eminent Domain Action Affect Your Mortgage?
Generally speaking, your mortgage won’t be negatively affected by a partial land taking. However, depending on the status of your mortgage, your mortgage holder may get involved in your condemnation case and attempt to claim some or all of the proceeds. However, it’s still a good idea to keep your mortgage holder informed of a possible land taking.
How much does it cost to hire an eminent domain attorney?
Landowners are often concerned that they can’t afford to hire an attorney or that, if they do hire an attorney, the attorney will take most of the settlement proceeds. This is not the case with contingent fees in eminent domain cases. These fee agreements have become commonplace as potential clients prefer not to spend money upfront to hire an attorney and want to have a way to encourage the attorney to get them the most money possible out of their case. Contingent fee contracts are created to do exactly that. In its most basic form, a contingent fee agreement says that a client will not owe an attorney any money for representing them until and unless the attorney obtains a settlement or secures a favorable verdict at trial. In that event, the attorney takes his fee out of the proceeds the clients gets from their case. If an attorney is not able to settle the case and does not win at trial, then the clients owe the attorney no money for his work.
Eminent Domain Answers for Landowners
The idea that the federal government can seize your private property sounds unfair. However, the United States Constitution gives the government the right to do just that as long as it is in the interest of the public to do so. What rights do landowners have when the government invokes its right of eminent domain? This article will answer a few questions if you are faced with this situation.