A new opinion from the Indiana Supreme Court that reminds us somewhat of the "bizarre condemnation" case now awaiting decision in the New Jersey Supreme Court. In Murray v. City of Lawrenceburg, No. 15S04-0907-CV-310 (Apr. 20, 2010), the court held the claims of a property owner who asserted that the government wrongly occupied her land and leased it to another are subject to Indiana's six year statute of limitations for inverse condemnation claims.
Update: here's another summary of the opinion from the Indiana Lawyer Daily.
The plaintiffs alleged they owned a 3/4 acre parcel in Lawrenceberg. In 1995, however, the Central Railroad Company gave the city an affidavit that it owned the property, and quitclaimed its interest to the city. The city then leased it to a casino. In 2005, the plaintiffs filed a lawsuit seeking to quiet title in the parcel to themselves, and to eject all others from occupancy. "It also requested compensation for lost rent under negligence and unjust enrichment theories." Slip op. at 2.
The trial court granted the city's motion for judgment on the pleadings, holding that the only viable cause of action was for inverse condemnation, and that the six year statute of limitations for bringing such actions meant that the lawsuit was filed too late. The court of appeals reversed, holding that inverse condemnation was not the exclusive remedy and that ownership of the parcel had not yet been determined. Murray v. City of Lawrenceburg, 903 N.E.2d 93 (Ind. Ct. App. 2009).
The supreme court reversed, holding that when the government takes property but fails to institute condemnation proceedings, the property owner is entitled to bring an action in inverse condemnation to recover money damages. Slip op. at 4 (citing Indiana Code § 32-24-1-16). Because this was up on a motion for judgment on the pleadings, the court assumed the plaintiffs owned the 3/4 acre lot when the government wrongly acted as the owner and leased it to the casino, which then occupied the property. The court held that this deprived the plaintiffs of their claimed rights and took their use. "As such, it was a proper subject for an inverse condemnation action at least by the end of 1997." Slip op. at 5.
The court then concluded that the inverse condemnation remedy was exclusive. It held that injunction was not available citing two cases. Slip op. at 5-6. In Dible v. City of Lafayette, 713 N.E.2d 269 (Ind. 1999), the court held that property owners cannot enjoin an exercise of the condemnation power that is for public use. In Indiana Dep't of Trans. v. Southern Bells, Inc., 723 N.E.2d 432 (Ind. Ct. App. 1999), the court held that equitable relief was not available when the after-the-fact remedy for money damages (inverse condemnation) was adequate. The court concluded that "inverse condemnation is the only remedy for government’s exercising complete dominance and purported ownership of a piece of land." Slip op. at 7.
In any event, the court determined that it really didn't matter since whether this was viewed as a trespass action or an inverse condemnation action, a six year statute of limitations applied, and had expired. "Giving plaintiffs the benefit of the doubt, the last possible date the action could have accrued was December 1997, when [the casino] began operations at the site. Plaintiffs did not file this suit until November 21, 2005, almost eight years after the action accrued." Slip op. at 8 (footnote omitted).
The result strikes us as a bit odd, since it is hard to square a six year statute of limitations for inverse condemnation or trespass with Indiana's ten year statute of limitations for adverse possession. See Indiana Code § 34-11-2-11 ("An action upon contracts in writing other than those for the payment of money, and including all mortgages other than chattel mortgages, deeds of trust, judgments of courts of record, and for the recovery of possession of real estate, must be commenced within ten (10) years after the cause of action accrues."). If the plaintiffs had ten years to bring an action to confirm their ownership and eject the city, then the property had not yet been permanently "taken" as the court assumed, even if the city purported to act as owner by leasing it to the casino.
Thanks to The Indiana Law Blog for notice of the opinion.