As part of the nationwide reaction to Kelo v. New London, Indiana adopted a statute that in some cases requires the condemnor to compensate property owners at not just fair market value, but at 150% of FMV.
As far as we can tell, the Indiana Court of Appeals' opinion in Guzzo v. Town of St. John, No. 21A-PL-2213 (Jan. 19, 2023) is the first appellate case applying that statute, or any similar law. Read on.
The statute at issue, Ind. Code § 32-24-4.5-8, sets compensation for the taking of "residential property" at 1.5x the fair market value:
Sec. 8. (a) Notwithstanding IC 32-24-1, a condemnor that acquires a parcel of real property through the exercise of eminent domain under this chapter shall compensate the owner of the parcel as follows:....(The limitation noted in subsection (b) deals with the effective date of the statute after the legislature altered the text of the original statute which required the owner to have occupied the taken property.)(2) Subject to subsection (b), for residential property:
(A) payment to the owner equal to one hundred fifty percent (150%) of the fair market value of the parcel as determined under IC 32-24-1;
The court noted the issue was whether "the Guzzos' property met the definition of residential property." Slip op. at 18. The statute defines "residential property" as "real property that consists of: (1) a single[-]family dwelling that is not owned for the purpose of resale, rental, or leasing in the ordinary course of the owner’s business; and (2) the land on which the dwelling is located.” Id. The trial court concluded no, relying on a statement in the Fiscal Impact Statement that the owners had not used the house for personal use. The Court of Appeals saw the issue much more simply:
We agree with the Guzzos that the trial court erred by determining that INDIANA CODE § 32-24-4.5-6.2 was ambiguous, by relying on the Fiscal Impact Statement, and by denying the Guzzos’ request for the Town to compensate the Guzzos at the statutory rate of 150% of the fair market value of the Property as residential property. When entering its order, the trial court ignored the plain language of INDIANA CODE § 32-24-4.5-6.2, which specifically provides that residential property means “real property that consists” of “a single[-]family dwelling that is not owned for purposes of resale, rental, or leasing” and “the land on which the dwelling is located.” When interpreting this statute, we must be “mindful of both what it does say and what it does not say.” City of Lawrence, 68 N.E.3d at 585. The statute does not define residential property by stating that the property must be owned for personal use or that the owner must occupy the property as a residence. Here, the Property contained a single-family dwelling. Indeed, as the trial court determined, the Property contained a structure that had been “the family’s home.” (App. Vol. 2 at 49). Moreover, it is undisputed that it was not owned for purposes of resale, rental, or leasing. However, instead of applying the plain language of the statute, the trial court improperly relied on the Fiscal Impact Statement and injected a personal use requirement into the definition of residential property.
Slip op. at 21.
The court rejected the argument that use of the word "dwelling" implies some kind of habitability, because in a zoning case, the Indiana Supreme Court determined that, absent further definition by the legislature, the common meaning of "dwelling" means a place where people can live, and does not include any requirement of that building being actually habitable. A single-family home like the Guzzo property, is a "dwelling."
Because the Guzzos’ real property consisted of property containing a single-family dwelling that was not owned for purposes of resale, rental, or leasing, we conclude that the trial court erred by denying the Guzzos’ request for the Town to compensate the Guzzos at the statutory rate of 150% of the fair market value of the Property as residential property under INDIANA CODE § 32-24-4.5-8(a)(2).
Slip op. at 22.
One dissent, so this one may be going further.
And yes, this case involves a statutory right, not baseline constitutional principles. But still, a nice win.
Read more from the lawyers who rep the property owner here.
Guzzo v. Town of St John, No. 21A-PL-2213 (Ind. Ct. App. Jan. 19, 2023)
