How much can a condemnor alter the scope of the taking before the good faith offer required by state law also needs to be re-done?
That’s the question the Wyoming Supreme Court resolved in EOG Resources, Inc. v. Floyd C. Reno & Sons, Inc., No. S-20-0013 (July 23, 2020).
There, the condemnor’s original good-faith offer to the property owner was for a take of rights-of-way, easements, and surface use rights on 2,100 acres. Later, however, it amended the complaint to take only 70 acres. The owner objected to the amended take, arguing that the condemnor had not complied with the statute’s good faith offer requirement. The condemnor responded that the 70 acres it now wanted was within the 2,100 acres its original offer covered, so what’s the big deal?
It is a big deal in this case, held the court. The point of the good faith offer requirement is to give owners information so the parties can negotiate, and here, the taking had been altered so much that it did not “significantly resemble” the original offer:
The property EOG ultimately sought to condemn was a needle in the haystack of the original offer. While true that the 70 acres sought in the condemnation proceeding were contained within the roughly 2,100 acres addressed in EOG’s initial offer, Reno could not have known that it had the option to accept the offer only as to those 70 acres (nor is it evident that it was, in fact, an option at the time). It was not at all clear that the discrete 70 acres were the subject of the negotiations. See Dzur, 278 N.E.2d at 566. Indeed, it seems that even EOG was uncertain as to what it was negotiating for, given its confusion concerning the extent of its rights under the existing surface use agreement and its withdrawal of the vast majority of the acreage from its condemnation action once those rights became clear. … Contrary to EOG’s assertions, we do not find it reasonable to expect Reno to have deduced that the offer contained a discrete sub-offer for the 70-acre pipeline easement from the map, financial summary chart, and proposed agreements covering 2,100 acres and containing a multitude of well-site locations, access roads, pipelines, compressor stations, communication towers, water sources, water ponds, etc.
Slip op. at 11-12 (footnote omitted).
The court noted that the original and amended takings need not be “an exact match,” but that whether an amended taking is covered by the original offer, and whether the condemnor must re-boot the offer process, is a case-specific inquiry:
EOG claims the district court’s holding deprives condemnors and condemnees of the ability to negotiate to acquire the property sought via contract because it erroneously relied on the difference between an offer for a surface use agreement and a condemnation action for an easement to conclude that there was no good-faith offer for the property sought.5 EOG asserts this conclusion will require a burdensome, exact match between a purchase offer and property rights to be condemned. It does not. The type of property right sought to be acquired is one of several factors that could bear on whether an initial offer sufficiently described the property sought in a subsequent condemnation action. We do not hold that the property sought to be condemned must be identical to the property described in the offer. We do hold, as a matter of law, that there must be a sufficient resemblance between the two to allow a court to conclude that the subject of the negotiation was clear to both parties and that the offer might have been accepted as it related to the property ultimately sought to be condemned. The record supports the conclusion that EOG failed to meet that standard.
Slip op. at 12.
Offer no good, (amended) complaint dismissed, owner entitled to attorneys’ fees because the condemnor had not made a (valid) good faith offer.
EOG Resources, Inc. v. Floyd C. Reno & Sons, Inc., No. S-20-0013 (Wyo. July 23, 2020)