Planned Roadway Was Not Inverse Condemnation

On October 7, 2020, the Iowa Court of Appeals issued an opinion concerning a city’s intent to develop land for a park and new high school. A landowner claimed the city committed an unconstitutional taking when it “earmarked” approximately nine acres of land for a potential right-of-way. Because the plans to acquire the land were theoretical, the court affirmed that the city did not create a servitude or uneconomical remnant.

Background

The plaintiff owned approximately 137 acres of agriculturally assessed land. The city attempted to acquire about five acres of the plaintiff’s land to build a city park and a public high school. After the parties were unable to reach an agreement, the city initiated condemnation proceedings.

In its condemnation application, the city included a plat showing the five acres it sought to acquire. The plat also showed a potential right-of-way to extend a major road through an additional nine and one-half acres of the plaintiff’s land. Because the city was only attempting to acquire the original five acres, neither the right-of-way nor the additional acres were addressed in the application.

The plaintiff then brought a lawsuit alleging that the application reserved the additional nine and one-half acres of land for public use. The plaintiff claimed this amounted to an inverse condemnation and created a servitude and an uneconomical remnant. The city filed a motion for summary judgment claiming the additional land was just a “possible location of a future extension” of the road. The district court granted the motion finding that the city had not committed to the construction through the plaintiff’s land and, therefore, no taking had occurred. The plaintiff appealed.

Inverse Condemnation

Inverse condemnation occurs when a government body—such as a city—takes all or part of the owner’s property without starting formal condemnation proceedings. To determine if inverse condemnation has occurred, the court will determine whether a property owner is substantially deprived of the use and enjoyment of their property. A servitude, which is a right to the limited use of a piece of land without the possession of it, can be a taking. An easement or a right-of-way can be such a servitude, but it depends on the “continuance or permanency of the government action” at issue.

The plaintiff claimed that the city created a servitude and limited the use of the property without taking possession of it. The plaintiff claimed that through the acquisition plats, the city put potential buyers on notice that a portion of the plaintiff’s property had been designated for a public purpose. Additionally, the plaintiff claimed the city had created a servitude by completing construction, such as extending truck sanitary sewer lines, to prepare to build the road through the property. Finally, the plaintiff submitted a letter from a large developer stating that the road expansion was a factor that limited the developable acres and ultimately the price a developer could pay for the plaintiff’s property.

The court determined that there was no permanent action by the city which resulted in plaintiff having a limited right to use his land. The court stated that city planning or a potential condemnation, which did occur here, is not enough to constitute a taking. Additionally, the city has not impacted the plaintiff’s use of the property. While there was evidence that the city’s actions may impact the plaintiff’s ability to develop or sell the property in the future, there was no evidence that the plaintiff had submitted a plan for the city to approve any development. The court concluded that the record failed to sustain any present cause of action related to any servitude.  As such, the record did not support a takings claim.

Uneconomical Remnant

Finally, the court concluded that the city had not created an uneconomical remnant. An uneconomical remnant is “a parcel of real property in which the owner is left with an interest after the partial acquisition of the owner’s property, where the acquiring agency determines that the parcel has little or no value or utility to the owner.” Iowa Code § 6B.54(8). A taking must have occurred in order for an uneconomical remnant to be created. Because no such taking had occurred, there was no uneconomical remnant.

The court affirmed the district court’s order granting summary judgment to the city.