County Law Update

Condemnation by county — measure of damages

The measure of damages in a condemnation case depends on whether the land is taken by the sovereign or by another entity. When the sovereign exercises its right to take a portion of a tract of land, the proper measure of compensation is the difference in fair market value of the entire tract immediately before and after the taking. This measure precludes any claim for value that would be added by a different use contemplated by the taking entity, such as changing the use of the land from growing pine trees to a county landfill.

Market value “Immediately Before and Immediately After” the taking

When a governmental entity like a county exercises its right to take a tract of land, the proper measure of compensation is “the difference in fair market value of the entire tract immediately before and after the taking,” according to Property Owners Improvement Dist. v. Williford, 40 Ark.App. 172, 843 S.W.2d 862 (1992). When another entity such as a railroad, telephone company or, in this case, an electric company, exercises the right of eminent domain, just compensation is measured by the value of the portion of the land taken plus any damage to the remaining property. See Id; see also Arkansas La. Gas Co. v. Howell, 244 Ark. 86, 423 S.W.2d 867 (1968); Arkansas La. Gas Co. v. James, 15 Ark. App. 184, 692 S.W.2d 761 (1985). DeBoer v. Entergy Arkansas, Inc., 82 Ark.App. 400, 109 S.W.3d 142, (2003).

Measure of damages is same for either condemnation or inverse condemnation

In DeBoer v. Entergy Arkansas, Inc., 82 Ark. App. 400, 109 S.W.3d 142, (2003), a landowner sued an electric utility for the replacement value of trees cut by the electric utility. The utility claimed that the measure of damages was that permitted by the laws of condemnation, and that the landowner was precluded from utilizing any other theory for a higher measure of damages. The court explained that an electric utility may exercise the power of eminent domain by filing a condemnation petition in court, and, in that proceeding, damages for the taking are assessed; however, if the utility takes an owner’s land but does not file an eminent domain proceeding, the owner may initiate his own inverse condemnation action. The court said that, in either event, the same measure of damages would be used. See Thompson v. City of Siloam Springs, 333 Ark. 351, 969 S.W.2d 639 (1998). Fault has nothing to do with eminent domain or inverse condemnation; it is the taking of property that is actionable. Recovery under the condemnation statute is exclusive. See Missouri & N. A. R. Co. v. Chapman, 150 Ark. 334, 234 S.W. 171 (1921).

No additional compensation allowed

Article 12, Section 5, of the Arkansas Constitution states “No county ... shall ... obtain or appropriate money for, ... , any corporation, association, institution or individual.” It would, therefore, be an unconstitutional gift for a county to somehow compensate over and above the difference in fair market value of the entire tract immediately before and after the taking.

“The difference in fair market value of the entire tract immediately before and after the taking” is the exclusive remedy absent a statutory abrogation of the common law rule.

Negligence immunity still applies to claims of “Damages”

All counties, county boards, county commissions, county agencies, county authorities and the officials and employees thereof, are immune from negligence liability for conduct arising from their official capacity. Immunity from negligence liability is a legislative gift.

Arkansas Code Annotated 21-9-301 states, “It is declared to be the public policy of the State of

Arkansas that all counties, … and all other political subdivisions of the state and any of their boards, commissions, agencies, author- Mike Rainwater ities, or other Risk Management governing bodies Legal Counsel shall be immune from liability and from suit for damages, except to the extent that they may “The proper measure of compensation is ‘the difference in fair be covered by liability insurance. No tort action shall lie against any such political subdivision because of the acts of its agents and employees.” The immunity granted to a counmarket value of the entire track immediately before and after the taking.’” ty extends to a county official or employee if the official or employee was discharging a county function at the time of the alleged negligent act. See Matthews v. Martin, 280 Ark. 345, 658 S.W.2d 374 (1983); Autry v. Lawrence, 286 Ark. 501, 696 S.W.2d 315 (1985) and Cousins v. Dennis, 298 Ark. 310, 767 S.W.2d 296, 297 (1989).

But, no immunity for intentional torts

Many condemnation lawsuits also allege the intentional tort of trespass. The Arkansas Supreme Court has ruled that statutory tort immunity does not apply to prevent liability for an intentional tort (e.g., assault, battery, false imprisonment, defamation, outrage, trespass). See Battle v. Harris, 298 Ark. 241, 766 S.W.2d 431 (1989). (Mike Rainwater, a regular contributor to County Lines and lead attorney for AAC Risk Management, is principal shareholder of Rainwater, Holt, and Sexton, P.A., a state-wide personal injury and disability law firm. He has been a lawyer for more than 30 years, is a former deputy prosecuting attorney and has defended city and county officials for more than 25 years.)