The power company needed an easement across Hylton's land for a transmission line. It made him an offer, backed by an appraisal. But that appraisal didn't account for Hylton's mineral rights, although it acknowledged that the property did contain two coal deposits, at least according to Hylton.
The parties "signed an agreement granting [the utility] the right to enter Hylton's property and construct the transmission line." But the following month, the utility filed an eminent domain action to condemn the easement, which alleged that it had fulfilled its "statutory obligation" and made a "bona fide offer to purchase," one of the prerequisites to its filing of the condemnation action.
Not quite, countered Hylton. The offer wasn't sufficient -- those coal deposits were rendered worthless as a result of the taking -- so the offer which was based on an appraisal which didn't account for the mineral rights wasn't "bona fide." This, he argued, went to the court's jurisdiction and he sought to dismiss the case. The trial court agreed, concluding that the offer was deficient because the appraiser didn't take into account all the things related to the minerals, and "an appraisal with such deficiencies could not be considered a bona fide offer." The court also allowed the owner to introduce evidence of the separate value of the coal.
The Virginia Supreme Court, however, disagreed on both counts.
In Virginia Elec. & Power Co. v. Hylton, No. 150877 (June 16, 2016), the court concluded first that the issue wasn't truly "jurisdictional," because this wasn't an attack on the trial court's ability to hear a condemnation case. Besides, "jurisdictional" challenges must be made within 21 days of service of the condemnation petition. Hylton didn't file an answer asserting this defense within that time, which meant that "the question before this Court is limited to whether Hylton sufficiently asserted his objection to the trial court's jurisdiction to thear the case and the grounds therefore in his answer and grounds of defense." Slip op. at 11.
His pleadings didn't "mention the terms 'object,' 'objection,' or 'jurisdiction.'" Slip op. at 11. Yes, there were general denials, but Hylton "ultimately elected to proceed with the empanelment of a jury for the determination of just compensation." Slip op. at 12. Simply because the owner isn't likely to accept the condemnor's offer doesn't mean that it isn't a "bona fide" offer:
We note, however, that an offer deemed insufficient by a landowner will almost always involve a figure not likely to be accepted. As we have expressly recognized that a bona fide offer 'need not be the figure likely to be accepted," it is clear that an insufficient offer, without more, is not a valid basis for finding that an offer was not a bona fide offer.
Slip op. at 12 (citation omitted). Having not formally objected to the court's jurisdiction during the 21 day objection window, it was too late to do so.
The Supreme Court also held that Hylton's evidence of the value of the coal deposits should not have been admitted. The valuation of the coal was "speculation and conjecture because they are based on 'conditions which did not, in fact, exist on the condemned land' at the time of the take and 'future circumstances that may or may not occur.'" Slip op. at 13 (citation omitted). Hylton failed to also introduce evidence of when (or if) the coal he says was in the ground might actually be mined, and that was fatal.
Finally, the court disagreed with the condemnor about the "unity of lands" doctrine, aka the "larger parcel" issue. Hylton argued that the taking of the easement diminished the value of his adjacent tracts. The utility asserted that there was no evidence of a unity of use between the property taken and these separate tracts, but the court held that unity of use was the "most significant" of the three-part larger tract question. It's up to the jury to make the determination whether the tracts were used together. Slip op. at 16 ("In the present case, there is evidence from which a jury could find a unity of use, given that, on the date of the take, Hylton was receiving royalties related to an existing underground mine on his property which partially extended under the parcel subject to the take.").
Virginia Elec. & Power Co. v. Hylton, No. 150877 (Va. June 16, 2016)
