Condemnor’s Lowball Trial Appraisal – Bad Faith? Effective Strategy?

 

LowBall Picture We have all heard about this and many have experienced it. The Condemnor negotiates pre-trial based upon a valid appraisal of your client’s property.  It doesn’t settle at mediation for whatever reason.  The Condemnor orders a new appraisal in preparation for trial.  Oh what a surprise!  The new appraisal comes in lower that the initial acquisition appraisal.  Isn’t it strange that a Condemnor can always come up with a trial report by their “unbiased” appraiser that is lower, many times significantly lower, than the appraisal by their first “unbiased” appraiser?

Just posted at inversecondemnation.com is the following: “Va. high court to look at Beach eminent domain appeal,” from the Hampton Roads newspaper, about a case which the Virginia Supreme Court just accepted. The case was triggered when the trial court refused to allow the jury to hear evidence of the DOT’s first appraisal and deposit, which was higher than its final appraisal which it relied upon in trial. Adding insult to injury: the property owner withdrew the deposit, and were later forced to repay the difference, with interest, when the DOT submitted its second, lower appraisal. This is a troubling trend nationwide, and this appeal is a good vehicle to expose the tactic.”

The Virginia DOT’s official position on their lower trial appraisal is that “second appraisals sometimes find more detailed information about a property’s development Balognapotential, causing large swings in the valuation.”

Logical? Makes sense, right?

If this is a credible explanation, then why are the Condemnor’s “large swings” consistently downward and in their favor?   Could it be a trial strategy knowing that the trier of fact will “split the baby”?  You decide . . .  is the Condemnor’s “troubling trend nationwide” a  valid trial strategy?  Is it bad faith? Is it the unethical manipulation of an appraiser who is willing to compromise his/her professional ethics for regular Condemnor work?   Your thoughts?

Upcoming:  Early 2015 will see the ABA’s 2nd Edition of “Attacking Adverse Experts” by Stephen D. Easton.  We can expect the 2nd edition to reflect the 2010 amendment to Rule 26 of the Federal Rules of Civil Procedure and changes in disclosure and discovery regarding expert/attorney communications.  We will let you know when it is available.

LAWYERS BEWARE: EMAIL ETHICS AND PROFESSIONALISM

 

ETHICS

Lynda Shely of The Shely Firm, PC in Phoenix Arizona just published this important LyndaShelyarticle on emails for lawyers.  Lynda’s expertise on this topic is founded in ten years as the Director of Lawyer Ethics for Arizona’s State Bar.

The article, published by ABA a few weeks ago, introduces the topic as follows:

“Email messages are just another form of written communication for lawyers. They are considered “writings” according to the ABA Model Rules of Professional Conduct, and as such, lawyers should treat them in the same way they treat letters and pleadings. The following sets forth some of the basic ethical obligations related to emails.”

Topics addressed include:

  • Emails are “writings”
  • Emails are part of a Client “File”  . . .
  • Lawyers must as if Clients want to communicate by email
  • Lawyers must be “competent in relevant technology”
  • The ethical duty to promptly respond to emails
  • The ethical duty to train and supervise staff on use of email
  • And other ethical and professional responsibilities.

The link to the complete ABA article is HERE.

New Paper on Fracking from the Stanford Environmental Law Journal – “Local Government Fracking Regulation: A Colorado Case Study”

Abstract:

The recent unconventional oil and gas development boom, better known as the “fracking” boom, is rapidly transforming communities nationwide. Substantial scholarly FrackingChemicalsattention has focused on state and federal fracking regulations, but little has focused on local regulations. Articles that have addressed local government regulation have generally considered only whether local governments can regulate fracking and not how they should do so.But while scholars continue to debate which level of government should regulate fracking, local governments nationwide have already begun enacting regulations. Accordingly, this Article explores how local governments may regulate fracking under state preemption law, using Colorado as a case study. Colorado has a longstanding legal framework for local government oil and gas regulation due to the industry’s continuous presence in the state prior to the recent fracking boom. Some eastern states have recently adopted Colorado’s approach. But lingering questions remain about the details of local authority, and conflict is brewing as many local governments begin to regulate fracking in their communities.This Article addresses how the fracking boom presents unique challenges to local governments, their regulatory authority under Colorado law, and how they can approach regulation in a manner most likely to survive judicial review. It begins by explaining fracking’s socioeconomic and environmental impacts, focusing on impacts in rural Western communities. It emphasizes fracking’s socioeconomic impacts, which have been largely overlooked by other legal scholarship, yet constitute the strongest ground for local government regulation. The Article then addresses the legal basis for local government fracking regulation under Colorado law. It highlights that Colorado local governments, especially home rule municipalities, enjoy broad authority over land use matters. Next, the Article critically examines four frameworks for local government regulation — guides published by two organizations, and ordinances already enacted in several Colorado cities. It concludes by advocating that Colorado local governments regulate the fracking boom through land use ordinances targeting the boom’s socioeconomic impacts, rather than ordinances that directly regulate fracking or that target the fracking boom’s environmental impacts.
TO READ THE ENTIRE PAPER BY JOEL MINOR — CLICK ON THE FOLLOWING LINK AT SOCIAL SCIENCE RESEARCH NETWORK (SSRN) OR TYPE IN:

 

 

To Ban or Not to Ban? The Fight over Fracking Intensifies

fracking

Just published today is a paper by Phelps T. Turner, an associate at Sugarman, Rogers, Barshak & Cohen, P.C., in Boston, Massachusetts.

“This article examines recent developments in the regulatory frameworks for fracking in Pennsylvania, New York, California, and Massachusetts. Recent case law and state and local action on fracking in shale-rich Pennsylvania, New York, and California represent significant and rapidly evolving developments in the fight over whether to ban fracking. Meanwhile, the proposed legislative ban on fracking in Massachusetts is representative of preemptive initiatives in states that are not rich in shale. These four states are thus bellwether states in which the fight over fracking is being closely scrutinized.”

Here is a direct link to: “To Ban or Not to Ban…”

 

 

WINNING THE JURY’S ATTENTION

winningjury

Today’s jurors, consumed in their own demanding personal and professional lives, are not going to just hand over their undivided attention for as long as you want to stand in front of them and talk. In the courtroom, you cannot demand attention, you must attract attention. To do this, you must do a very good job of choosing the right message, presenting it in the right way, and doing so in the right amount of time. Winning the Jury’s Attention presents seven principles for communicating effectively with a jury:

  • The Personal Credibility Principle: Demonstrate competence, accuracy, leadership and efficiency to gain credibility.
  • The Signaling Principle: People learn better when the material is presented with clear outlines and headings.
  • The Segmentation Principle: People learn better when information is presented in bite-sized chunks.
  • The Multimedia Principle: People learn better from words and pictures than from words alone.
  • The Coherence Principle: People learn better when extraneous material is excluded.
  • The Stickiness Principle: Make your themes and ideas “sticky.”
  • The Jolt Principle: Periodically jolt your jury so they don’t bolt.

Implementing these practical techniques through each phrase of trial will help you connect with the jury, direct and hold a jury’s attention where you want it, and promote understanding and memory. In addition to the seven principles, the book examines courtroom-tested techniques recommended as part of preparation for trial.

Available at: http://bit.ly/winning-jury

Courtesy of the American Bar Association and  Grant Austin, your blog Editor (also Co-Chair of ABA’s Real Estate Litigation and Eminent Domain Committee, Website) and one of America’s leading real property valuation experts for impaired property, construction defects, eminent domain, standard of care, and a wide variety of complex real estate litigation matters - experience in 38 States.

 

 

The case of Fulton County Georgia and it’s Abuse of Eminent Domain – 2014 Georgia Supreme Court Decision

supreme court of georgia

Preface by Grant Austin:  Today’s blog is about a county’s attempt to abuse the eminent domain system. In summary, January 2012 the Fulton County Commission (Atlanta, GA area) adopted a resolution declaring that they needed about 12 acres for a library expansion project.  Skipping the details of the process for now, in March 2012 a special master found that the market value was $5,187,500.  The County did not pay the award and instead filed a voluntary dismissal of the condemnation action.  Too bad, sour grapes, the Supreme Court of Georgia said pay up!

Charles Pursley of the Atlanta based law firm of Pursley Friese Torgrimson represented charles pursleythe Condemnee in this matter and writes the following blog entitled “An Insider’s Look at the Georgia Supreme Court Decision in Dillard v. Fulton County.”

The complexities of eminent domain law can baffle inexperienced lawyers. Appraisal methods, procedural stipulations, and over two centuries of jurisprudence form an intricate network that dictates how and when private property can be taken. However, regardless of how convoluted the field is, there are concrete principles that remain certain. In Dillard Land Investments, LLC v. Fulton County, the Supreme Court spoke clearly and decisively about Fulton County’s attempt to abuse the system.

After a special master awarded $5,187,500.00 as compensation for the taking of Dillard’s land, Fulton County attempted unilaterally to dismiss its case without paying the just and adequate compensation owed the plaintiff. The trial court vacated and set aside the County’s attempt to dismiss its case and ruled that the County was required to pay the award because it failed to file an appeal for a jury trial to contest the amount. The Court of Appeals found much differently and reversed the decision. An ultimate appeal to the Georgia Supreme Court resulted in a ruling that, after entry of the award of the special master, Fulton County was no longer entitled to dismiss the condemnation proceeding.

The Court reasoned that an award of a special master has the same legal effect as an assessor’s award. When the award was entered, it became the judgment of a tribunal fixing the rights and liabilities of the parties, including Fulton County’s liability to pay the $5,187,500.000. Attorney Charles Pursley Jr., who represented Dillard Land Investments in the case, said the opinion “reinforces the principle that condemning authorities must operate within the constraints of the law”. The Court of Appeal’s decision would have deprived property owners of the right to be compensated for a government’s actions in taking private property. “Legally and ethically, eminent domain must be exercised with utmost good faith”, Pursley went on to explain “the Court of Appeals decision would have given condemning authorities the right to simply walk away and leave the condemnees without just and adequate compensation.” Condemnation cases “usually take years before they even get to a special masters hearing.   They begin with public information meetings – after which tenants may move out and it’s impossible to sell the land.  You generally can’t recover for pre-condemnation damages.  When you can’t sell, you can’t rent, and your property is losing value; damages accrued by the time the special masters award is decided are much more than attorney’s fees.   Allowing the condemning authority to require the property owner to go through a protracted process, possibly multiple times, and still allow the condemning authority unilaterally to withdraw would be an abuse of property owner’s rights”.

The Supreme Court opinion dissects how the Court of Appeals came to a position contrary to their own ruling by pointing out that the court misread the only case addressing the condemnation statute in question, and misinterpreted the intention behind the statute. The Court of Appeals decision would inequitably allow condemnors to pick and choose the appraisal value they prefer by rejecting an unfavorable award and using multiple special master’s hearings instead of filing an appeal and facing a jury trial. As Pursley points out, “if condemning authorities are confident in their appraisals, there should be no objection to following the statutorily prescribed appeals process to defend it in court.” The Supreme Court’s decision ensures that all condemnation procedures will continue to be used consistently and correctly.
_____________

LINK TO THE SUPREME COURT OF GEORGIA DECISION at FindLaw.com

Charles N. Pursley, Jr. has litigated condemnation, eminent domain, business valuation and other real-estate cases for more than four decades. His practice includes a national client base of commercial, mixed-use and shopping center developers and owners with properties and businesses taken or damaged for a public project.

Because you hired a local appraiser for an important case!

thebar 

The real name of the research paper Is “Select the Out-of-Town Appraiser: New Social Science Research on Real Estate Expert Witness Selection” by your blog Editor, Grant W. Austin, M.S., MAI, CMRS, MRICS

Abstract:

This paper adds to the literature on the selection of the real property appraisal expert witness. The existing appraisal expert witness selection literature indicates that when the out-of-town expert witness overshadows the knowledge and experience of the local expert, the out-of-town expert is the clear choice yet most lawyers base their appraiser selection on factors that are irrelevant to winning the case such as convenience, proximity to their office, proximity to the subject property, a client’s recommendation or the expert’s cost. The results of this two-part social science research study indicate that in situations where there will be contentious valuation issues or, where the appraisal expert witness will be called upon to criticize the work of the opposing appraiser, it may be in the best interest of the client and outcome of the case to select an appraisal expert who is located outside of the appraisal services area of the opposing appraiser.

The direct link to this paper is Available at Social Science Research Network (SSRN): http://ssrn.com/abstract=2448010 or http://dx.doi.org/10.2139/ssrn.2448010

 

Fracking: Lessons Learned from the Gulf Oil Spill

oilspill

Heidi Robertson is a Professor of Law and Associate Dean for Academic Enrichment at the Cleveland-Marshall College of Law.  She has written a paper entitled “Applying HeidiRobertsonSome Lessons from the Gulf Oil Spill to Hydraulic Fracturing,” published in the summer 2013 edition of the Case Western Reserve Law Review.  The paper is also downloadable via SSRN and I include the link here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2303883.

In this thoughtful and well-researched paper are words of advice for everyone involved in fracking.  Although Heidi’s paper focuses on Ohio’s regulation of hydraulic fracturing, her lessons are equally applicable to other States.  Topics in her paper include:

  • Conflicts of interest within the Minerals Management Service.
  • Need for greater research and planning to protect life, property and the environment – note the 2011 blowout during fracking in a well near Killdear, North Dakota that pierced the aquifer with drinking water that the town relies on.
  • Use of cleanup methods that have been tested and an emergency cleanup plan.
  • Necessity of a regionally unified spill response plan.

Again, Professor Robertson’s paper is downloadable via the Social Science Research Network at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2303883.

Hydraulic Fracturing Contamination: Problems of Proof

fracking

Keith B. Hall from the Louisiana State University Law Center has an upcoming paper in the Ohio State Law Journal entitled “Hydraulic Fracturing Contamination Claims: Problems of Proof.” Mr. Hall is an Assistant Professor of Law and Director of the KenHallLouisiana Mineral Law Institute.

 

 

 

Abstract: 
Hydraulic fracturing is controversial. Many people believe that hydraulic fracturing has caused contamination of groundwater and that the process should be prohibited because it is likely to cause additional contamination if it continues to be used. Many other people believe that hydraulic fracturing has not caused contamination and that little additional regulation is needed because fracturing is a useful process that poses little risk. Notably, this disagreement is not merely a difference of opinion regarding how society should balance economic development and environmental protection. Instead, the disagreement concerns facts – whether fracturing already has caused contamination and how much risk the process entails.

In part, the disagreement about facts arises from the difficulties in proving whether water is contaminated and, if so, what caused the contamination. It is important to consider ways to deal with these difficulties because determining whether hydraulic fracturing has caused contamination in specific circumstances can shed light on the general level of risk involved in using fracturing. It also can be important for purposes of resolving the numerous individual lawsuits in which plaintiffs allege that their groundwater has been contaminated by hydraulic fracturing.

This article contains four sections. The first two sections discuss what hydraulic fracturing is and the reasons why proving contamination claims is often difficult. The remaining sections discuss ways to deal with two “problems of proof.” Specifically, the third section examines new state regulations that require or encourage baseline testing of groundwater before oil or gas drilling takes place. The absence of pre-drilling data has often been a problem when evaluating contamination claims. The fourth section of this paper discusses Lone Pine orders, a procedure that courts can use in an effort to quickly resolve cases in which plaintiffs lack evidence to support an essential element of their claim.

If you would like to download Professor Hall’s entire paper it is available via the Social Science Research Network.  Go to:  http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2281457.

Eminent Domain Abusers Are Making a Comeback

eminentdomain

Cities and states are back to grabbing private property for the private profit of others.

In Atlantic City, a state agency recently decided to bulldoze the home that Charlie Birnbaum’s parents bought 45 years ago and that he now uses as a piano studio and a base for his piano-tuning business, as well as renting out two suites. New Jersey’s Casino Reinvestment Development Authority wants to replace it with an unspecified private development around the Revel casino, which emerged from bankruptcy a year ago.

Mr. Birnbaum is represented by my organization, the Institute for Justice, in trying to save his business and his parents’ former home. He was served with condemnation papers on March 14, and the first hearing will be on May 20. After a lull in cases of eminent-domain abuse over the past several years, we are increasingly hearing complaints from home and business owners about government attempts to take property for private development projects.

If Mr. Birnbaum’s story sounds familiar, that’s because it is a repeat of what the Casino Reinvestment Development Authority tried in 1996. In that case the New Jersey authority tried to take the home of an elderly widow, Vera Coking, as well as Sabatini’s Italian Restaurant and a jewelry store, for a proposed limousine parking lot for Donald Trump‘s Plaza Hotel and Casino.

The case garnered national attention and started a groundswell of interest in eminent-domain abuse. In 1998 a New Jersey district court denied the taking for the parking lot. Mrs. Coking stayed in her house for many years. Meanwhile, across the country home and business owners started resisting eminent domain. Courts began to take notice.

Then in 2005, the U.S. Supreme Court ruled by 5-to-4 in Kelo v. New London that a whole neighborhood in the Connecticut town could be condemned on mere economic speculation—on the hope that new homes and businesses would be built in the same location and that these would produce more property taxes and “economic development.”

The decision shocked the nation. In the years that followed, 44 states changed their laws to make eminent domain for private development more difficult. State courts also stepped into the gap—nine high courts, including New Jersey’s, placed state constitutional limits on eminent domain. Chastened by this wave of opposition, most cities and agencies became much more careful in their use of eminent domain.

Unfortunately, this breathing spell seems to be ending. This latest condemnation by the Casino Reinvestment Development Authority is part of a new wave of eminent-domain abuse, as cities and redevelopment agencies try to regain some of the power they lost:

• California actually abolished its redevelopment agencies in 2011. Now cities and powerful development interests have launched a ballot initiative to restore the redevelopment agencies and greatly expand their power to seize properties for private projects.

• In Colorado, Denver suburbs and other cities have been on a spree of condemnations for shopping malls.

• Minnesota, Alabama and Illinois have added powers to state and municipal agencies to condemn for such projects as sports stadiums, industrial developments and business-district economic development.

• Philadelphia is taking an artist’s studio for a private development.

• A Louisiana port agency is taking one private commercial port to be replaced by . . . another private commercial port.

• New York never stopped abusing eminent domain—taking property for Columbia University, the Brooklyn Nets and the ever-present “mixed-use development” across the state.

This renewed eagerness to seize private property for the private profit of others comes despite its poor track record.

• Nine years after the Kelo taking in New London, Conn., nothing but weeds occupies the area once populated by more than 70 homes and businesses.

• The 22-acre Atlantic Yards project in Brooklyn, N.Y., was supposed to include several office towers, thousands of housing units, retail, parks and other amenities to accompany the Barclays Center sports arena. But construction plans change, and the project will now include far less than originally promised.

• A thriving cigar and coffee lounge in San Diego was bulldozed in 2005, supposedly for a hotel. The space remains an empty parking lot nine years later.

The condemnation of Charlie Birnbaum’s building in Atlantic City is a classic example of eminent-domain abuse. The agency has no plan for the property. Promises of economic growth are made with no plausible substantiation of how it will happen. Mr. Birnbaum’s house is at the very edge of the area being taken and could easily be left alone. A judicial decision should come this year at the trial court, and the case is almost certain to be appealed.

The last outbreak of eminent-domain abuses spurred a grass-roots movement that seemed to chasten land-grabbing bureaucrats. With luck, these latest manifestations of government arrogance may prompt more pushback by home and business owners and result in greater private-property protections.

Ms. Berliner is the litigation director for the Institute for Justice, which represents Charlie Birnbaum, and represented the homeowners in both the Atlantic City eminent domain battle and the Kelo U.S. Supreme Court case.

This opinion piece originally appeared in The Wall Street Journal on Saturday/Sunday, May 17 – 18, 2014, A11.