Our Owners' Counsel colleague John Hamilton deserves kudos for the Kansas Supreme Court's recent decision in Nauheim v. City of Topeka, No. 114271 (Jan. 25, 2019).
The case is about a subject often overlooked, relocation benefits. In this case, the condemning agency's duties under the Kansas statute which dictates their duties towards a "displaced person." The usual case is where the owner or tenant has to move because of condemnation. The twist here was that the property owner negotiated a purchase under the cloud of eminent domain and the City never had to actually exercise its condemnation power. The tenants who were forced to relocate sought -- but were denied -- relocation benefits under the statute, as "displaced persons."
The Kansas statute provides that when "federal funding is not involved" (which it was not here), "and any real property is acquired ... through negotiation in advance of a condemnation act or through a condemnation action ... the condemning authority shall ... [p]rovide the displaced person [as defined by the federal URA] relocation assistance..."
The City claimed it did not owe assistance because "it never intended to condemn the property had the negotiation failed." Slip op. at 1. The trial court agreed, concluding that the tenants were not displaced persons, and that the negotiated acquisition was not "in advance of a condemnation action" as a matter of law.
The court of appeals partially disagreed. The tenants qualified as displaced persons. However, the court agreed with the City and the trial court that the tenants had not shown the City intended to condemn, because they did not prove that the City "either threatened or took affirmative action towards condemnation prior to the acquisition." Slip op. at 5.
On discretionary review, the Kansas Supreme Court reversed, concluding that a displaced person (note that the City did not cross-petition on that issue, and thus the court of appeals' conclusion that the tenants fit the URA's definition remained) need not prove the City actually threatened condemnation or took affirmative action to condemn the property before acquisition. This is a question of fact, and the displaced person need only show by a preponderance of the evidence that the negotiation is in advance of a condemnation action in light of all the actions of the acquiring authority.
The court held that "the statutory phrase 'negotiation in advance of a condemnation action,' the language is both temporal and contextual." Slip op. at 9.
To be entitled to relocation benefits, a displaced person must show: (1) a negotiation resulted in the property's acquisition before any eminent domain proceedings commenced; and (2) a condemnation would have followed had that negotiation failed. A plain reading of the statute demonstrates this.
Slip op. at 9-10.
Temporally, "before" means in advance of something. No question that this was met in this case. Slip op. at 10. The contextual aspect needed deeper analysis:
The lower courts erred by requiring a specific evidentiary showing that the condemning authority either threatened or took affirmative action towards a condemnation action. And while that evidence would be relevant, it is surely not the only evidence that could cause a fact-finder to conclude a condemning authority would have resorted to eminent domain after unsuccessful negotiation.
The record in this case highlights our point—without so narrowly requiring a specific threat, affirmative action, or even proof of actual intent. It includes: (1) the City's Ordinance No. 19553, which authorized the project but never mentioned condemnation; (2) an engineering study providing two options to address the Butcher Creek drainage issues, one of which did not require the property acquisition; (3) City staff emails; and (4) City officials' statements, reflected in an affidavit supplied by the landlord.
Slip op. at 11.
Yes, municipalities can acquire property without condemnation, but when a deputy city attorney told the owner, "I don't want the City to have to exercise its eminent domain power to purchase the leasehold interest," and a real estate officer similarly stated, "I suppose, if we do not close this transaction, that the City will then have to condemn to get these properties," slip op. at 12, well, then, there's a disputed issue of fact about the City's intention, and that issue should not be resolved summarily as the trial court here did.
More here ("Kansas Supreme Court reinstates lawsuit against city of Topeka").
Nauheim v. City of Topeka, No. 114271 (Kan. Jan. 25, 2019)
