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February 21st, 2014 — By — In News & Events

A Virginia Jury Sides with Property Owners in Eminent Domain Trial, yet VDOT Wins?

Last week a Virginia jury awarded property owners $234,000 for property taken by Virginia Dept. of Transportation (VDOT) for a highway improvement project in Virginia Beach.  While it appeared as a victory, unfortunately, it was not.  While the jury came in with an amount of just compensation approximately $142,000 above the value VDOT presented at trial, it was $14,000 less than VDOT’s original offer and initial deposit in the case.  As such, nearly 5 years after their property was acquired via a “quick-take” procedure, the homeowners owe VDOT, purchaser of their property, nearly $14,000 back.  This situation has been likened to purchasing a new car at sticker price, then returning to the dealer years later and demanding some of your money back because the car just really was not worth what you paid for it.  In the real world that would simply not occur (or, at least not fly with the dealer, if you tried it).  However, in the”alternate universe” of Virginia, and perhaps other states around the country, this is the reality.

Here’s a little history of the Ramsey case.  In 2009, VDOT acquired .4 acre of private property from Virginia Beach property owners James and Janet Ramsey The property had been owned by Janet Ramsey’s family for nearly a century and she and her husband have resided in a home built on it for 40 years.

At the time VDOT sought to acquire the property, it commissioned an appraisal to determine the fair market value which concluded the property to be acquired plus damages to the remaining property totaled approximately $248,000.  Because the property was needed for the public purpose of constructing a new on/off ramp for I-264 and because the two sides could not agree through negotiations on the amount of just compensation to be paid, VDOT initiated “quick-take” proceedings to obtain title.

Under the law, “quick-take” proceedings allow the condemnor to acquire the needed property in order to move forward with the project provided that the condemnor deposit with the court the amount of compensation at which it estimates the property is valued.  Under this type of proceeding, the landowner is permitted to withdraw the deposit without giving up his or her right to a jury trial to determine the amount of just compensation.  In essence, quick-take procedures allow the government to purchase the property with an amount it feels is fair at the time while allowing the owner to an opportunity to contest that amount and seek a different, higher value.  Remember friends, eminent domain is not a “friendly seller, friendly buyer” arms-length sale.  It is a forced transaction permitted by law in which the seller generally does not wish to be involved.  So, although there is a formal period of negotiations, and often continual negotiations throughout condemnation litigation, the property owner/seller is never really an interested and motivated seller and the taking authority is never really a friendly buyer.

In the Ramsey case, VDOT deposited $248,707 with the court representing its estimate of compensation based upon the initial appraisal it commissioned in 2009.  Then, it acquired title to the .4 acre and began construction.  The Ramseys no longer owned that portion of the property and, legally under quick-take procedures, withdrew the deposit.  Then they continued, with the help of their attorneys at Waldo & Lyle in Norfolk, Virginia, to seek just compensation.  [Disclosure: Joseph T. Waldo of Waldo & Lyle is the Virginia attorney-member of Owners’ Counsel of America.]

Fast forward a few years, as both sides prepared their case for trial, VDOT commissioned a second appraiser to value the land. This second appraisal estimated value at $92,127 with no damages to the remaining property.  In fact, VDOT argued that the proximity of the property to the highway, improved with additional lanes, added value to the property (hence no damages).  Five lanes of freeway run approximately 30 yards from the Ramsey’s bedroom window and despite the proximity, the Ramsey’s property does not have direct access to the on/off ramps of I-264.  As the Ramsey’s attorney explains in this interview,no experienced real estate agent would agree with VDOT’s argument that the proximity of the freeway increased the value of the property.  Rather, as common sense would suggest, the remaining property has a lower value to a future buyer as who in their right mind would want to sleep 30 yards from a freeway every night yet not be able to directly access it every morning to make their work commute?

When VDOT offered this second appraisal it also asked the Ramsey’s to repay the difference between VDOT’s initial deposit of $248,707 and the updated report of value of $92,127 – a difference of nearly $158,000.

As this opinion piece points out, Virginia law did not allow the Ramseys’ attorneys to introduce at trial the initial deposit as evidence of VDOT’s earlier opinion of value.  All that the jury heard was the $92,000 appraisal from VDOT and the owners’ opinion of value.  On the other hand, Virginia law requires that the owner provide all estimates of value it has obtained for the property.  This seems to be a double standard in favor of the government or other agency with the “awesome power” of eminent domain.  It provides VDOT and other taking authorities with an opportunity to commission additional appraisals if, perhaps, the first was more than they wanted to pay.  Or, as the Ramsey’s attorney and other Virginia lawyers have suggested, a bullying tactic to punish landowners for fighting for just compensation and a way to strong-arm owners into accepting the initial offer.

Now that the jury has reached a verdict in this case, the Ramsey’s are on the hook to repay $14,000 to the buyer of their property who after purchasing it and using it felt it was worth less than it originally offered.  However, the case will not end here.  The Ramseys’ and their attorneys plan to appeal and hope to achieve a ruling that will not only benefit the Ramseys but also all Virginia property owners.

This is certainly on our radar, so stay tuned…