City of Buffalo v. J.W. Clement Co., 28 N.Y.2d 241 (1971)
A de facto taking in eminent domain requires a physical entry, physical ouster, legal interference with physical use, or legal interference with the power of disposition; mere manifestation of intent to condemn, even with delays and reduced property values, does not constitute a taking.
Summary
J.W. Clement Co. alleged a de facto taking of its property due to the City of Buffalo’s protracted urban renewal plans. Clement argued that the city’s actions, including public announcements and lowered property assessments, forced them to relocate. The Court of Appeals reversed the lower court’s ruling of a de facto taking, holding that the city’s actions did not constitute a taking because there was no physical invasion, ouster, or direct legal restraint on the property’s use. However, the court acknowledged that Clement could present evidence of “condemnation blight” to ensure fair valuation in the formal condemnation proceedings. The Court remanded for a new trial on the issue of proper valuation.
Facts
J.W. Clement Co., a printing business, owned property in Buffalo since 1946. In 1954, the city announced the Buffalo Redevelopment Project, which included Clement’s property. Over several years, city officials indicated when the properties would be appropriated. Clement, needing to plan its operations, sought clarity on the timeline. In 1960-61, city officials advised Clement it would need to vacate within 18-36 months. Relying on these representations, Clement acquired a new site in Depew, NY and began relocating its operations in 1962, completing the move by April 1963. The city lowered property assessments in the redevelopment area and directed the Department of Buildings to deny building permits. Clement’s property became unsalable and unrentable, but Clement continued to pay taxes and maintain the property. Clement moved to Depew because of the condemnation, the inadequacy of the existing facilities and the firm’s continued growth.
Procedural History
The City of Buffalo initiated condemnation proceedings in 1968. The trial court found a de facto taking occurred on April 1, 1963, and awarded Clement $2,030,306.96. Clement filed objections, which were denied. Clement appealed to the Appellate Division, which modified the judgment, increasing the award for removing machinery and adjusting interest rates. Both parties cross-appealed to the Court of Appeals. The Court of Appeals reversed the finding of a de facto taking and remanded for a new trial on valuation.
Issue(s)
1. Whether the City of Buffalo’s actions, including announcements of impending condemnation and subsequent delays, constituted a de facto taking of Clement’s property prior to the formal condemnation proceedings.
2. Whether Clement was entitled to compensation for moving expenses related to the relocation of its machinery, given that the machinery was moved before the formal taking.
3. Whether the interest rates awarded by the lower courts provided just compensation to Clement.
Holding
1. No, because a de facto taking requires a physical entry, physical ouster, legal interference with physical use, or legal interference with the power of disposition, none of which occurred here.
2. Yes, because just compensation requires indemnifying the property owner for actual losses incurred as a result of the city’s actions, including reasonable moving costs when the city’s representations caused the premature removal.
3. Yes, because the interest rate of 6% provided adequate and just compensation, and the court was jurisdictionally precluded from reviewing affirmed findings of fact indicating the rate was not unreasonable.
Court’s Reasoning
The court emphasized that a de facto taking requires a substantial interference with the owner’s property rights, amounting to an assertion of dominion and control by the condemning authority. The court distinguished between “condemnation blight,” which affects property value, and a de facto taking, which is a complete appropriation. The court stated, “Despite this obvious confusion, it is clear that a de facto taking requires a physical entry by the condemnor, a physical ouster of the owner, a legal interference with the physical use, possession or enjoyment of the property or a legal interference with the owner’s power of disposition of the property.”
The court found that the city’s actions did not deprive Clement of its possession, enjoyment, or use of the property. “We simply have a manifestation of an intent to condemn and such, even considering the protracted delay attending final appropriation, cannot cast the municipality in liability upon the theory of a ‘taking’ for there was no appropriation of the property in its accepted legal sense.” Citing Danforth v. United States, 308 U.S. 271, 285, the court stated “A reduction or increase in the value of property may occur by reason of legislation for or the beginning or completion of a project. Such changes in value are incidents of ownership. They cannot be considered as a ‘taking’ in the constitutional sense.”
The court recognized that Clement could present evidence of value before the “affirmative value-depressing acts” of the city to ensure just compensation in the de jure appropriation. Regarding moving expenses, the court held that because the City’s representations caused the premature removal of the machinery, just compensation required the City to pay the reasonable costs of removing it. The court reasoned that condemning authorities should not benefit from their own actions that caused the condemnee to mitigate damages.
Regarding interest, the court relied on prior decisions, stating that the statutory rate is presumptively reasonable, and Clement did not present sufficient evidence to rebut that presumption.