October 08, 2015

Mitigating Damages: The Owner's Duty in a Condemnation Case

When a property owner is faced with a condemnation case, what is its responsibility for maintaining the property and reducing damages? In most cases, the owner still has a duty to responsibly care for the property.

The Rule

The rule of law concerning duty to mitigate damages is: a property owner in a takings case must exercise reasonable diligence to minimize her damages, but the extent of the duty depends on the facts of each case. This rule of law applies in most U.S. jurisdictions. To the extent the landowner incurs costs associated with the mitigation action, the owner is entitled (in most jurisdictions) to reimbursement of reasonable costs, even if the mitigation effort ultimately proves unsuccessful.

The Point of the Rule

You can’t get money in a condemnation case for property harm or damage that could have been avoided or reduced with reasonable effort or actions. This means that once your property is in a condemnation case, if something happens that damages or otherwise “harms” the property, you will not receive compensation for that damage or harm if it is something that could have been avoided by reasonable actions or efforts.

Why Is This the Law?

A fundamental principle of American civil law is that all parties in any type of lawsuit have an affirmative duty to mitigate, or reduce, damages in the case. In other words, a party cannot idly stand by and let something happen that increases the damages in the case if those damages could have been avoided. This is a duty to take affirmative action when possible, and the duty applies in condemnation cases just as it applies in other types of lawsuits.

To Whom Does the Duty Apply?

It applies to anyone with an interest in the property that is in condemnation and has the authority and ability to correct harmful conditions on the property. Thus, the duty extends to the fee owner, if the fee owner is in control of the property, or to a tenant, if the tenant is in control of the property. The duty could also extend to an easement holder, if the harm that is occurring affects the property encumbered by the easement and the easement holder has the authority and ability to correct the harmful condition.

When Does the Duty Arise?

To the extent that a landowner does have a duty to mitigate damages, the time at which that duty arises may vary between jurisdictions and based on the facts of each case. For example, in some jurisdictions the duty may arise even before the condemning authority files its initial pleadings commencing the condemnation case; in some the duty may arise only after the initial pleadings have been filed; and in some the duty may arise as of the date on which the condemning authority takes title and possession to the land taken.

Burden of Proof

If the condemning authority takes the position that it need not pay for a particular landowner claim because the damage could have been mitigated, the condemning authority carries the burden of proving that the damage could have been mitigated by the taking of specific actions. Conversely, if the landowner asserts a claim based upon an argument that the damage could not be mitigated or has been mitigated to the greatest extent possible, the landowner carries the burden of proof with respect to that claim.

A Few Examples

If, during construction of a project pursuant to a taking, a portion of a home or building is damaged and exposes the interior to the elements, the owner cannot leave the interior exposed to elements and then claim damages for the loss of interior features if it could have prevented damage to the interior by covering the opening until it was permanently resealed.

If a water pipe is turned on and starts flooding a building, the landowner cannot stand idly by and allow the flooding to continue, essentially ruining the structure and its contents, and then claim that the condemning authority has to pay for a new building and replacement of its contents, if the owner could have turned off the main water pipe into the building.

Consider a taking from a car dealership that removes 10 of the 30 customer parking stalls on the property. The landowner makes a claim in the condemnation case related to the loss of parking stalls, and the condemning authority responds saying “just ask your customers to park in the lot you own five blocks away from the car dealership, and ask them to walk to the car dealership. Then you won’t have any problem, and you’ll have plenty of parking available.” This is not an acceptable solution to the loss of parking problem. The landowner’s duty to mitigate damages extends only to the four corners of the property that is the subject of the taking. If the damages cannot be mitigated on that property, the landowner has no duty to mitigate her damages on another, wholly separate and distinct parcel of land.

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