Check out this article published in the June issue of Maricopa Lawyer.
Maricopa County, along with rest of Arizona, is experiencing a significant amount of residential and businesses growth. With growth comes the need for infrastructure upgrades and additions by state and local governments, as well as public service corporations – especially those entities charged with ensuring the safety of our transportation system and access to reliable power and water. In connection with these public projects, the responsible agencies may need to acquire property via eminent domain (also known as condemnation).
Eminent domain is the power of the State – and those entities to whom the State delegates such power – to condemn private property for a public use, subject to payment of just compensation. While the substance of eminent domain law and the right to compensation are based in our Federal and State constitutions, the process in Arizona is driven primarily by statute. As a result, the details and logistics of a condemnation case can be confusing for many.
The following description is intended to provide a high-level overview of the process, but any party involved in a potential taking should consult with an experienced eminent domain attorney early in the process.
The condemnation process can be broken down into the following seven steps:
- Pre-condemnation planning. The condemning authority first designs the scope and location of the project, which includes preparation of surveys and plans as well as identification of the specific property needed and ownership of the property. Some projects require acquisition of fee simple interests while others may only involve easements, which can be temporary or permanent.
- Pre-condemnation negotiation. According to statute, the acquiring agency must make an offer to the owner and provide an appraisal in support of the offer. This pre-filing offer often forms the basis for negotiation and settlement without the need for litigation.
- Initiation of a condemnation lawsuit. If the offer is rejected and the parties cannot reach agreement, the next step is a lawsuit. The acquiring agency must name all parties with any compensable interest in the property rights being condemned. Thus, defendants in a condemnation lawsuit can include owners, tenants, easement holders, and lienholders.
- Immediate possession. Some condemning bodies have the right to possess the property early in the lawsuit in exchange for deposit of a reasonable estimate of just compensation. Once made, the Court signs an order of immediate possession, which gives the plaintiff the right to take possession of the property and start work on the project.
- Disclosure and discovery. This step in a condemnation case is similar to other civil litigation. All parties are obligated by the procedural rules to disclose facts and evidence to the other parties and may engage in discovery, including depositions of expert witnesses. While motions for summary judgment are rare in eminent domain cases, motions to exclude expert testimony (Daubert motions) are becoming more common. Also, at some point during this stage of the case, the parties typically participate in mediation with a private mediator familiar with the unique aspects of condemnation matters.
- Trial. After discovery is complete, the parties should be ready to present their evidence at a trial. Most condemnation cases are tried before a jury. However, unlike a standard civil trial, the defendant bears the burden of proof on most issues and, therefore, presents its evidence first and has the opportunity to offer rebuttal evidence.
- Final order of condemnation. At the end of the case, either the judge or a jury will have determined the amount of just compensation owed by the acquiring entity. Once the compensation is paid – and assuming no appeal – the judge signs a final order of condemnation, which is the document that officially transfers title to the plaintiff.
Eminent domain cases can be expensive and time consuming to litigate. After the project planning step (which can take years), a condemnation lawsuit may be resolved “quickly” – in 12 to 18 months – or carry on for three years or longer.
For this reason (as well as the fact that, in Arizona, attorneys’ fees generally are not recoverable), many condemnation cases settle prior to trial. If the parties reach agreement on compensation and other terms after the complaint is filed, they may either (1) stipulate to a judgment and obtain a final order of condemnation from the Court or (2) stipulate to a dismissal of the lawsuit and proceed with a private settlement agreement (and acquisition through escrow, if desired).
Click here to ready Jennifer's article published in the June issue of Maricopa Lawyer.
about the author
Jennifer Cranston is a shareholder at Gallagher & Kennedy in Phoenix. Her unique practice includes real estate litigation, insurance coverage, and utility regulation. For the past 25 years, she has counseled private property owners and acquiring agencies in condemnation actions and valuation issues. She is the co-host of the twice-per-year Condemnation Summit, the only all-day educational and networking event of its kind for eminent domain practitioners across Arizona.