Opinion
No. CV 10 6003228
December 2, 2010
MEMORANDUM OF DECISION
For most of the twentieth century, from 1919 to 1983, the Connecticut Foundry Company manufactured a wide variety of cast iron products in a factory located on ten acres of land on the west bank of the Connecticut River (property) in the town of Rocky Hill. The present owner of the land, Riverfront Future Partners (Riverfront), sees it as the site for a development of mixed commercial and residential uses and for public access to the riverfront. For reasons not claimed to be relevant here, however, it has not brought that vision to fulfillment. The town, through its town manager, Barbara Gilbert (collectively, town), after unsuccessful efforts to purchase the property from Riverfront, has now condemned the property and means to take it by way of its power of eminent domain.
See website, Rocky Hill Historical Society, History of Rocky Hill, Connecticut (2009).
In this case Riverfront seeks to enjoin the town from taking any further steps to pursue that course, claiming that the town is unlawfully exercising its power of eminent domain because it has failed to comply with the town charter in appropriating funds for the taking, failed to obtain the planning and zoning commission approval necessary for a taking and failed to negotiate in good faith with Riverfront in an attempt to acquire the property by agreement before resorting to condemnation.
I
The parties have stipulated to the facts underlying their legal claims and to the admissibility of numerous exhibits. See Joint Stipulation of Facts and Exhibits (stipulation). Based on the stipulation, the court finds the material facts to be as follows. Riverfront is a general partnership which has owned the property since 2003. In that year the property was the subject of an agreement among the town, Riverfront and Riverfront's predecessors in title (2003 agreement) which was intended to settle a tax foreclosure action against the predecessors in title and provide for development of the property by Riverfront. Exhibit 1. The proposed development, however, has not come to fruition. On August 7, 2006 the town council (council) passed an ordinance stating the town's intent to purchase the property from Riverfront or, if necessary, to take it by eminent domain and, pursuant to General Statutes § 8-24, requested the town planning and zoning commission (commission) to report whether it approved or disapproved of the council's proposal. Exhibit 23. After the approval of the commission was obtained; see exhibit 24; the parties engaged in negotiations for the purchase and sale of the land during 2007 and 2008. Stipulation, ¶ 13.
In file, #111. See also joint supplemental stipulations of facts and exhibits, #'s 113, 114.
Additional facts will be found where relevant to the legal issue under discussion.
Paragraph 9 of the parties' stipulation states that this vote occurred on August 10, 2006, but exhibit 23, the minutes of the council's meeting of August 7, demonstrate that the vote took place at that meeting. August 10 was the date of the Commission meeting at which it approved the council's proposal. See exhibit 24.
On April 24, 2008 the town sent Riverfront a proposed purchase and sale agreement for the property; the price was $3,000,000. Exhibit 7. On May 6, 2008 the proposed agreement was returned by Riverfront with suggested changes, but the $3,000,000 purchase figure was unchanged. Exhibit 9. In response the town proposed, in a June 3, 2008 letter, that an independent third party be engaged to mediate the parties' disagreements over the proposed purchase agreement; exhibit 10; a suggestion to which Riverfront did not respond.
The town's counsel described the agreement as a "draft which has not been approved by [the town]." He went on to say, however, that he believed it "satisfies the concerns of the parties" and that it was his intention to present the agreement to the town the following week.
The town reiterated its interest in reaching an agreement to purchase the land, and also stated that, failing agreement, it would "reluctantly" consider invoking the power of eminent domain "as an available last resort."
In November 2008 Riverfront's counsel did float a proposal to use the property as consideration for Riverfront's acquisition of another parcel in town for development. See exhibit 11. The court does not consider that proposal a response to the town's suggestion that the parties mediate their differences over its acquisition of the property, and, in any event, further investigation by Riverfront's counsel uncovered several problems in developing that other parcel; exhibit 12; and its proposed acquisition appears to have foundered.
Time passed, and no agreement between the town and Riverfront had been reached by April 23, 2009, when the town informed Riverfront that an ordinance was to be proposed for the town to acquire the property by eminent domain. Exhibit 13. That ordinance was adopted by the council on May 4, 2009, and the ordinance continued to authorize purchase of the land and set a purchase price of "up to" $962,500 minus the cost of environmental remediation. Exhibit 16.
On June 25, 2009 that offer was communicated to Riverfront. Exhibit 14. The town requested acceptance of the offer by July 2, 2009; otherwise, eminent domain proceedings would be commenced. Id. At this time Riverfront was seeking other counsel to represent it in connection with possible condemnation proceedings. Exhibit 15. On August 17, 2009 the offer communicated in the June 25 letter was restated by the town, this time in a letter to one of the Riverfront partners, and agreement was requested within fourteen days. Exhibit 30. Riverfront's response was forthcoming on August 25, 2009, this time from new counsel. Exhibit 32. That letter expressed Riverfront's willingness to enter into negotiations with the town over the fair value of the land, challenged the town's assertions in its letters of June 25 and August 17 that it had been negotiating with Riverfront for the past year and requested the basis for the town's offer of up to $965,000 minus remediation costs, claiming that it was at variance with appraisals previously obtained by the town and provided to Riverfront. Id.
The town's response came on October 15, 2009: it now offered to purchase the property for $775,512.70. Exhibit 35. This letter set forth the town's basis for the new purchase figure and enclosed a "phase III" environmental remediation action plan, along with a remediation cost estimate of $378,304, and updated demolition cost estimates. It required agreement by Riverfront to the proposed purchase price by October 29 and threatened eminent domain proceedings if no agreement was forthcoming by that date.
The town's insistence on a response by October 29 was prompted by the requirement of General Statutes § 48-6(a) that condemnation proceedings be commenced within six months of the vote authorizing them; otherwise that vote is void. The town's vote to acquire the land by purchase or, in the absence of agreement, by eminent domain; see exhibit 16; was taken on May 4; thus, the six-month statutory period would expire on November 4, 2009.
Despite Riverfront's protestations, in letters dated October 23 and 27, 2009; exhibits 36, 37; that it could not, consistent with its duty to exercise due diligence in evaluating the town's offer, respond to the offer by the October 29 deadline, the town commenced the pending condemnation proceeding on October 30, 2009, when it filed a statement of compensation with the clerk of the Superior Court for the Judicial District of New Britain.
Riverfront's letters also indicated its willingness to set a reasonable timeline for settlement discussions and/or mediation.
Gilbert v. Riverfront Future Partners, Docket No. CV 09 5014587.
II
Certain established principles of law govern the court's consideration of the issues raised by the parties.
The town desires to acquire the property to establish a public park, pursuant to General Statutes § 48-7, which provides: "When any town . . . votes to acquire any tract of land within its limits for the purpose of a public square, common or park, and cannot obtain such land by agreement with the owner thereof, it may take the same for such purpose in the manner provided by [section] . . . 48-12 . . ." Pursuant to General Statutes § 48-6, the council voted on May 4, 2009 to purchase the property and, failing that, to acquire it by eminent domain. General Statutes § 48-12 provides: "The procedure for condemning land or other property for any of the purposes specified in [section] . . . 48-6 . . . if those desiring to take such property cannot agree with the owner upon the amount to be paid him for any property thus taken, shall be as follows: . . . any town . . . shall proceed in the same manner specified for redevelopment agencies in accordance with [section] . . . 8-129 . . ."
General Statutes § 8-129, discussed more fully in Part IV B, infra, defines the procedural steps the town must take when proceeding by eminent domain.
The standard for granting a permanent injunction has recently been set forth by our Supreme Court: ". . . A party seeking injunctive relief has the burden of alleging and proving irreparable harm and lack of an adequate remedy at law . . . A prayer for injunctive relief is addressed to the sound discretion of the court and the court's ruling can be reviewed only for the purpose of determining whether the decision was based on an erroneous statement of law or an abuse of discretion." (Internal quotation marks omitted.) Brennan v. Brennan Associates, 293 Conn. 60, 86-87 (2009).
"The extraordinary nature of injunctive relief requires that the harm complained of is occurring or will occur if the injunction is not granted. Although an absolute certainty is not required, it must appear that there is a substantial probability that but for the issuance of the injunction, the party seeking it will suffer irreparable harm." (Citations omitted; internal quotation marks omitted.) Tighe v. Berlin, 259 Conn. 83, 87-88 (2002). "[I]n exercising its discretion, the court, in a proper case, may consider and balance the injury complained of with that which will result from interference by injunction." Id., 88.
"If the plaintiffs have an adequate remedy at law then they are not entitled to the injunction." (Citations omitted.) Stocker v. Waterbury, 154 Conn. 446, 451 (1967). "Adequate remedy at law means a remedy vested in the complainant, to which he may at all times resort, at his own option, fully and freely, without let or hindrance." Milford Education Ass'n. v. Board of Education, 167 Conn. 513, 519 (1975). "Section 8-129 fails to provide the property owner with an opportunity to contest the taking of his property . . . Thus, being without an adequate remedy at law, the property owner is required to seek equitable relief to obtain a review of the taking agency's actions." (Citation omitted.) Simmons v. State, 160 Conn. 492, 501-02 (1971).
The town does not contest Riverfront's right to seek injunctive relief.
"The proper burden of proof for injunctive relief is by a preponderance of the evidence. The party seeking the injunction must prove his own case and adduce whatever proof is necessary to show the existence of the conditions or circumstances upon which he bases the right to and necessity for injunctive relief, and he must establish his right thereto by a preponderance of the evidence." (Internal quotation marks omitted.) Beacon Falls v. Posick, 17 Conn.App. 17, 24 n. 5 (1988), rev'd on other grounds, 212 Conn. 570 (1989). "In Connecticut, it is not the condemner, but rather the plaintiff [who has] the burden of establishing that the taking . . . was unreasonable, in bad faith or an abuse of power." Kelo v. City of New London, 268 Conn. 1, 117 (2004).
III
Riverfront first argues that the council failed to comply with Section 408 of the Rocky Hill town charter (charter) in that it appropriated money to purchase the property that was not in the town budget for the year in question, and some of the money appropriated was required to be the subject of a town referendum. Because compliance with the charter is grafted onto General Statutes § 48-6, Riverfront argues, this failure to comply with the charter renders the taking illegal. The court finds this argument unavailing.
First, the language of § 48-6 does not state that compliance by the town with every section of its charter is a condition precedent to its taking of property by eminent domain. The statute only requires, before the town may "take or acquire" real property, that it "has, in accordance with its charter or the general statutes, voted to purchase the same . . ." § 48-6(a). Here, the ordinance was properly adopted on May 4, 2009 by a vote of the council, and gave the town the authority to acquire the property, either by purchase in an amount up to $962,500 minus remediation costs or, in the absence of an agreement with Riverfront on a purchase price, by taking the property under its eminent domain power.
Second, the charter section upon which Riverfront relies precludes a resolution or ordinance "making an appropriation" which exceeds by $150,000 funds appropriated in the town's annual budget unless there has been a referendum at which a majority of the voters has approved the appropriation. The resolution of May 4, 2009 does not appropriate any town funds; it merely authorizes a purchase of the property for "up to" $962,500 minus remediation costs. Thus, Section 408 has not been violated.
The funds in the "foundry account" were part of a capital projects account; Stipulation, ¶ 55; which continued in existence from year to year without the necessity of a renewed appropriation. See charter, § 811. Such accounts are not subject to the requirements of § 408 of the charter.
Finally, combining funds in the town's land acquisition account ($158,000) and funds in the "foundry account" ($708,000), the town had $866,000 with which to purchase the property without any additional appropriation. The amount now being offered, and the amount deposited in court when the condemnation action was begun, $775,512.70, is well within the available funds.
Pursuant to the 2003 agreement (exhibit 1), Riverfront had paid $407,000 in back taxes, which was deposited into a capital fund for the "Foundry project." See exhibits 2 3. The parties agree that by the time of the May 4, 2009 ordinance there was $708,000 in the "foundry account." See, e.g., Transcript of argument, August 12, 2010 (transcript), 14, 1.2 et seq.; see also, exhibit 45. The court can see no reason why these funds are not properly available for purchase of the property.
IV
Riverfront next contends that the town's impending taking is illegal because the town failed properly to refer the proposal to purchase the property or take it by eminent domain to the commission, as required by General Statutes § 8-24. Specifically, the town did not refer the proposal contained in its May 4, 2009 ordinance to the commission before initiating condemnation proceedings on October 30, 2009; it did so only after the fact on February 10, 2010. Furthermore, the defendants cannot rely on the town's earlier referral to and approval by the commission in April of 2006 because that proposal was substantially different from the proposal in 2009. Finally, neither the 2006 nor the 2009 referrals were sufficiently detailed to comply with the town's obligation to obtain a report from the commission before taking the property.
General Statutes § 8-24 provides in relevant part: "No municipal agency or legislative body shall . . . acquire land for any . . . park . . . or other municipally owned property . . . until the proposal to take such action has been referred to the commission for a report."
A
The town first referred a proposal to acquire the property for a "public purpose" to the commission on August 3, 2006. The commission gave its approval on August 10, 2006, concluding that the proposal "is consistent with the Plan of Conservation and Development Update adopted effective 10/15/2001. Specifically page 48, Stategy #3 Consider acquiring (the) property whenever river front property becomes available." Obviously, this approval is "timely," in that it precedes by over three years the town's initiation of condemnation proceedings. Riverfront complains, however, that the 2006 referral does not suffice because of differences between it and the 2010 referral in the description of the property proposed for acquisition and because a proposed taking for a "public purpose" is too vague to allow for a meaningful review of the proposal by the commission.
See exhibit 24.
The council's May 4, 2009 ordinance made two de minimis changes in its August 3, 2006 proposal. It specified that the use would be for a "public park" and it made specific reference to the "deep water dock which is part of and/or which adjoins said 125 Meadow Road," as being included in the taking. Use of property for a "public park" certainly would qualify as use for a "public purpose," and the commission's approval of the latter use in 2006 as in conformity with the conservation and development plan (plan) does not militate against approval of the former in 2010. Riverfront cannot be heard to complain because the town had made the proposal more specific. Moreover, by specifying that the deepwater dock would be part of its taking the town did not seek to acquire more or different parcels of land than the commission had approved in 2006. The "125 Meadow Road" parcel, which includes the dock, is specified as part of the proposed acquisition in both 2006 and 2009. Indeed, the quitclaim deed of the property to Riverfront in 2005 demonstrates that the dock is part of the property.
See exhibit 16.
See exhibits 23 21.
See exhibit 44.
The case of Trivalent Realty Co. v. Westport, 2 Conn.App. 213 (1984), holds that, when a municipality significantly changes a proposal previously approved by the commission pursuant to § 8-24, it must make a new submission in order to comply with the statute. In that case, however, after obtaining commission approval of a proposal for a parking lot, the town revised the design layout to incorporate a new tract of land that the town sought to take by eminent domain, while eliminating a tract formerly included in the land to be acquired. Id., 216. The court held that the changes were not de minimis. Rather, the "elimination [of the tract of land] changed the basic configuration of the lot, reduced it in size by nearly one acre, and accounts for approximately one-half of the reduced number of parking spaces. These substantial differences persuade us that the [town] did not comply with General Statutes 8-24 . . ." Id., 218-19. The minor changes contained in the town's 2009 proposal do not require approval beyond that obtained in 2006.
General Statutes § 8-24 does not require that the town's request for commission approval of the municipal improvements described in the statute take any particular form or contain any specific level of detail. Nor does Riverfront cite case law that imposes any such requirements.
Although the statute does not specify its purpose, members of the commission who considered the 2009 referral recognized that their task was to determine whether the proposed use was consistent with the plan which the commission, itself, had developed in 2001, pursuant to General Statutes § 8-23. Members of the commission who considered both the 2006 and the 2009 referrals found that the referrals were consistent with the plan. Two of the commission members who approved the 2009 proposal noted that, given the purpose of the referral, it did not require the level of detail that would be required if they were considering a site plan or a special permit application.
See exhibit 22.
Compare exhibits 22 24.
See exhibit 22.
The facts of this case reveal a piece of riverfront property which, by its geography alone, satisfies the purpose of the town to acquire land, whenever possible, by the river. According to the plan, "[a] system of riverfront and river-related open space is an important step to re-establishing the connection between Rocky Hill and the Connecticut River. These recommendations are mostly strategies since the specific tasks will need to be identified and pursued as opportunities present themselves." Furthermore, the plan provides: "Focus on River-Related Open Space, 3. Consider acquiring the property whenever riverfront property becomes available." Id.
See exhibit 25, p. 138.
"It is a generally accepted concept that the preservation of open space . . . is a public purpose to justify the use of the power of eminent domain." 8 Nichols, Eminent Domain (3d Ed. 2006) § 14D.02[5], p. 14D-13. Furthermore, "[t]he preservation of open space is vital for the present and the future. Open space areas provide a place for recreation, for contemplation and rejuvenation and for education about nature. In addition, open space is necessary for environmental preservation and conservation, to preserve and create parks, wetlands, coastal regions, floodplains and other sensitive areas." Id., § 14D.01[1], p. 14D-3.
A commission member considering the 2009 referral remarked that the "plan is quite clear that they are working towards making this area `open space,'" citing that the referral "fits in the Planning and Zoning Commission's planning as a Planning Agency where the Plan of Development adopted in 2001 indicates that the location indicated in the General Statutes § 8-24 is in agreement with the Plan of Development for the development of a public park."
See exhibit 22.
The court finds that the 2006 referral was timely and sufficiently specific to comply with § 8-24, and that the commission's approval of the town's 2006 proposal satisfies that statute's requirement that the town obtain a report from the commission before it acquires the property.
B
Since the town's referral and the commission's report in 2006 satisfy § 8-24, it is, not necessary for the court to decide whether the 2009 referral was timely. The court will do so, however, so as to furnish the parties with a decision on all the issues that might be in play should an appeal be taken.
What the court has held regarding the completeness of the 2006 referral applies equally to the 2009 referral.
Section 8-24 states that no municipality shall " acquire" land until the proposal to take such action has been referred to the commission for a report. Riverfront maintains that the referral had to precede the filing of the statement of compensation (statement) on October 30, 2009, because the bringing of the eminent domain action is effectively an "acquisition" of the property. The filing of the statement with the town clerk acts as a lis pendens; therefore, Riverfront argues, the town has sufficient control over the property to constitute an "acquisition."
General Statutes § 8-129(a)(3) sets forth the procedure for commencing a condemnation action. It requires the town to file a statement of compensation with the court and to deposit with the clerk of the court funds in the amount of the compensation the town proposes to pay the owners of the property. The town must then record a copy of the statement in the town clerk's office, and that filing has the same effect as placing a lis pendens on the property. § 8-129(b).
According to Black's Law Dictionary (9th Ed. 2009), "acquire" means "[t]o gain possession or control of; to get or obtain." (Emphasis added.) There is statutory support in Connecticut, however, for the conclusion that "acquisition" is nothing short of recordation of the certificate of taking (certificate), not just the statement, on the land records. Pursuant to General Statutes § 8-129(e), "[w]hen any redevelopment agency acting on behalf of any municipality . . . in exercising its right of eminent domain has filed a statement of compensation and deposit with the clerk of the superior court and has caused a certificate of taking to be recorded in the office of the town clerk of each town in which such property is located as provided in this section, any judge of such court may, upon application and proof of . . . such filing and deposit and such recording, order such clerk to issue an execution commanding a state marshal to put such municipality and the redevelopment agency, as its agent, into peaceable possession of the property so . . . condemned."
General Statutes § 48-12 provides that a town desiring to condemn property shall proceed "in the same manner specified for redevelopment agencies in accordance with Sections 8-128, 8-129, 8-129a, 8-130, 8-131, 8-132, 8-132a and 8-133."
By General Statute § 8-129's terms, then, there can be no acquisition until the certificate is recorded with the town clerk, which has not occurred in this case. Only then can an execution be issued and the municipality enter into peaceable possession.
There is another aspect of acquisition, however, and that is control. Riverfront argues that filing the statement with the town clerk, which has been done in this case, has the same effect as a lis pendens; thus, the town has gained sufficient control of the property to amount, effectively, to an acquisition.
General Statutes § 8-129(b) provides: "Upon filing such statement of compensation and deposit, the redevelopment agency shall forthwith cause to be recorded, in the office of the town clerk of each town in which the property is located, a copy of such statement of compensation, such recording to have the same effect and to be treated the same as the recording of a lis pendens, and shall forthwith give notice, as provided in this section, to each person appearing of record as an owner of property affected thereby . . ."
The question then becomes the effect of the lis pendens on the property. "The doctrine of lis pendens provides a means for preserving the status quo with regard to property interests that have become embroiled in legal action. Once the doctrine becomes operative, all persons claiming an interest in property involved in a pending lawsuit have constructive notice of the claims being asserted before the court. The property may still be transferred but the purchaser or encumbrancer . . . takes the property subject to the final judgment rendered in the pending litigation. No new interest is created by the existence of a lis pendens notice, but the successful litigant in the court action is granted a priority position based on the date the lis pendens became operative." 14 Powell, Real Property, § 82A.01[1], p. 82A-3. "Unlike a lien, a person obtains no new property interest through the operation of the lis pendens doctrine. However, even though no lien arises under lis pendens doctrine, a prospective purchaser cannot ignore a notice of lis pendens because notice of the fact that the property is involved in litigation places a questionable cloud on the property which may or may not drastically change the purchaser's interest when the court's judgment is rendered." Id., p. 82A-4.
In reviewing Connecticut's lis pendens procedure for purposes of due process analysis, the Supreme Court has stated in Williams v. Bartlett, 189 Conn. 471, 479, cert. dismissed, 464 U.S. 801, (1983), that "the deprivation caused by the notice of lis pendens is considerably less severe than a total deprivation of the property interest, where due process mandates a pre-seizure hearing . . . [U]nless the property owner has any intention of alienating or mortgaging the realty, the effect of the lis pendens procedure is de minimis." (Citations omitted.) The court also referred to the "limited effect caused by the filing of the notice of lis pendens upon the property of the record owner, when balanced against the interests of the state and the party utilizing the lis pendens procedure." Id., 480.
Furthermore, Black's Law Dictionary (9th Ed. 2009) defines "lis pendens" is "[t]he jurisdiction, power, or control acquired by a court over property while a legal action is pending." (Emphasis added.) According to 29A C.J.S § 121, p. 263 a " governmental filing of a lis pendens is not a taking." (Emphasis added.) While filing the statement with the town clerk cannot be said to have no effect on the property rights of Riverfront, it does not mean that sufficient control over the property has been ceded to the town such that it amounts to an acquisition for purposes of eminent domain. For example, Riverfront is still free to sell or mortgage the property, as long as it is willing to make adequate concessions to the buyer or mortgagee.
A willing buyer might be one who believes it will have greater success than Riverfront in negotiating a purchase deal with the town.
Case law says little about the timing of a § 8-24 referral. Riverfront contends that § 8-24 should be read in conjunction with the Supreme Court's decision in Sheehan v. Altschuler, 148 Conn. 517, 523 (1961), and that the referral to the commission must precede the filing of the action in order to protect the landowner. In that case, in discussing the creation of General Statutes § 8-24, along with complementary §§ 8-19 8-23, the court stated that "[i]t was the apparent intent of the legislature to afford interested property owners the protection of the consideration and judgment of the local planning commission before any redevelopment plan could be legally adopted." In Sheehan, however, at issue was a referral to the commission of a redevelopment plan, governed by General Statutes § 8-128, with its own legislatively imposed protection requirements.
The cases cited by Riverfront are inapposite. In Leoni v. Water Pollution Control Authority, 21 Conn.App. 77 (1990), the water pollution control authority filed a certificate of taking by eminent domain of property for a sewer line without ever referring it to the planning commission for a report. Therefore, its action was invalidated for failure to comply with the statute. The case does not, as Riverfront contends, stand for the proposition that compliance with § 8-24 was required before condemnation proceedings could be instituted. See also Jeschor v. Guilford, 143 Conn. 152 (1956) (court upholding trial court judgment for plaintiff, finding the dump established on the acquired land was not legally established because the proposal for acquisition had never been referred to and approved by the commission). Similarly, in Vegliante v. East Haven, Superior Court, judicial district of New Haven, Docket No. CV 06 4021562 (March 29, 2007), the court merely noted the town's argument that it followed statutory requirements, including "that it obtained General Statutes § 8-24 approval from the planning and zoning commission and the legislative council prior to the underlying condemning action." The court did not hold that referral or approval was required before the condemnation action was initiated.
The court finds that the 2009 referral occurred before the town acquired the property and thus complied with § 8-24.
V
Finally, Riverfront argues that the town failed to exhaust good faith negotiations prior to its initiation of eminent domain proceedings. Riverfront asserts that the town acted in bad faith in three ways; namely, in making an offer to purchase the property for an amount that lacks any plausible basis, in withholding information necessary for Riverfront to evaluate the offer and in foreclosing the possibility of meaningful settlement discussions by tendering its first bona fide purchase offer only two weeks before the statutory deadline for filing the condemnation action.
A
The standards that a municipality must meet prior to filing an eminent domain action are prescribed both by statute and in case law. General Statutes § 48-6 provides that "(a) Any municipal corporation having the right to purchase real property for its municipal purposes which has, in accordance with its charter or the general statutes, voted to purchase the same shall have power to take or acquire such real property, within the corporate limits of such municipal corporation, and if such municipal corporation cannot agree with any owner upon the amount to be paid for any real property thus taken, it shall proceed in the manner provided by Section 48-12 within six months after such vote or such vote shall be void. (Emphasis added.)" Grafted onto the statutory requirement of an "inability to agree" is a requirement on the part of the condemner that it "exhaust all reasonable efforts to obtain the land it desires, by agreement . . ." (Internal quotation marks and internal citations omitted.) Pequonnock Yacht Club, Inc. v. Bridgeport, supra, 259 Conn. 601.
Thus, the standard in Connecticut is "exhaustion of reasonable efforts" to come to an agreement. Neither the General Statutes nor Connecticut case law specifically requires "good faith negotiations" as do some other jurisdictions. Common sense tells us, however, that there is an underlying implication that negotiations between a municipality and a property owner must always be undertaken in good faith, and Connecticut courts have defined what constitutes negotiating in "good faith." "Good faith negotiations may be described as including honest and sincere efforts to engage in discussions and pursue reasonable possibilities to resolve the matters in dispute, with the parties taking into consideration their own respective needs, requirements and legal obligations. By definition, good faith and fair dealing exclude fraud and deceit . . ." United Illuminating Co. v. Bridgeport, Superior Court, judicial district of Fairfield, Docket No. CV 06 4015338 (May 16, 2006). Cf. Elliott v. Staron, 46 Conn.Sup. 38, 47-48 (1997), aff'd, 54 Conn.App. 632 (1999).
See, e.g., Board of County Comm'rs. of .Jefferson v. Auslaender, 710 P.2d 1180 (Colo. Ct.App. 1985), rev'd on other grounds, 745 P.2d 999 (Colo. 1987) (good faith negotiations are a jurisdictional prerequisite to condemnation); Kerr v. Raney, 305 F.Sup. 1152 (D.W.D. Ark. 1969) (implicit in the statute is the requirement that the board of trustees negotiates in good faith, once it has made the determination to acquire a particular piece of property); Unger v. Indiana Michigan Elec. Co., 420 N.E.2d 1250 (Ind. Ct.App. 1981) (as a condition precedent to the right to maintain an action in eminent domain, the condemner is required to attempt to negotiate a purchase of the land or interest; a good-faith effort to purchase entails an offer of a reasonable amount and a reasonable effort to induce the owner to accept it, i.e. good faith negotiations).
Riverfront claims that a mere inability to agree without a showing that attempts to agree have been exhausted is insufficient grounds for a condemner to invoke its power of eminent domain. The Appellate Court has addressed this precondition to condemnation under § 48-6 in Halloran v. North Canaan, 32 Conn.App. 611 (1993).
In Halloran the town's attorney sent a letter to the property owners requesting easements across their property for a sewer line; in response, the owners requested $5,000 from the town and that the location of the easements be changed. The town's attorney told the owners' attorney that the location of the easements would not be changed and that she needed documentation for the $5,000 demand, which the landowners never provided. The town's attorney offered $2,500 for the easements and told the owners' attorney that, if they accepted that offer, she would obtain approval from the first selectman. She made the offer twice more, advising the owners that, if the offer was accepted, the town would not initiate a condemnation proceeding. The landowner never responded, either to accept or reject, and the condemnation proceeding was initiated.
The court in Halloran noted "numerous discussions with the plaintiffs' attorney in an attempt to obtain the easements." Id., 616. The negotiations took place over a period of five months, and the court held that the trial court had not abused its discretion in finding from the evidence before it that the town had authorized its attorney to negotiate a purchase price with the owners, and that the town's obligation to exhaust efforts to agree with the owners on a purchase price had been satisfied.
In a Supreme Court case, Connecticut Light Power Co. v. Costello, 161 Conn. 430 (1971) (CL P), the plaintiff power company sought an easement for a line for the transmission of electric current across land of the defendants. The trial court determined that the electric company had engaged in meaningful negotiations and had exhausted all reasonable efforts to obtain the easement by agreement. In CL P the negotiations proceeded as follows. The power company offered the landowners $20,000 plus a release of an existing right-of-way across their land and conveyance to them of land of a third party they sought to acquire. The following month, the offer was repeated. The defendants countered with $46,500. The plaintiff increased its offer to $24,000 sans the release of easement and conveyance of the land. The defendants raised their asking price to $123,800. After the condemnation action was served on the defendants, the plaintiff increased its offer to $30,000. Id., 440. Similar to this case, the landowners in CL P argued that the "plaintiff did not exhaust reasonable efforts to reach an agreement . . . [in part] because they were not furnished with survey maps . . ." Id., 440-41.
The court in CL P found that "[t]he wide disparity between the offer and the asking price indicated that the parties could not agree on the amount to be paid." Connecticut Light Power Co. v. Costello, supra, 161 Conn. 441. It held that the trial court's conclusion "that the plaintiff had engaged in meaningful negotiations with the defendants and exhausted all reasonable efforts to obtain by agreement the easement it desired prior to the filing of this petition [was] amply supported by the finding." Id., 442. "`It is sufficient if the negotiations proceed far enough to indicate that an agreement is impossible, and, where it is apparent that the parties cannot agree on the amount to be paid, a formal effort to agree is not necessary . . . [W]here estimates of value entertained by petitioner and the owner differ so widely as to render it almost certain that an offer to purchase would be rejected, no further effort to agree is necessary.' 29A C.J.S. 1004, 1005, Eminent Domain, § 224(2). The question whether a `reasonable effort' had been made by the plaintiff to secure an agreement with the defendants as to the damages to be paid for the taking is a question of fact. See West Hartford v. Talcott, supra, 138 Conn. 91; Williams v. Hartford N.H.R. Co., supra, 13 Conn. 410." Id., 442.
In CL P there were a number of counteroffers, but the end result is that the landowner's last offer shot up quickly from $46,500 to $123,800, and that spelled the end of the negotiations.
In West Hartford v. Talcott, supra, 138 Conn. 89, the court found that in large part because the plaintiff refused the defendants' demand to rezone a part of their property, inability to agree upon the amount to be paid for the property was sufficiently established. In upholding the trial court's conclusion that the necessary steps to condemnation were taken, the court looked to the statements of the defendant landowners' counsel to the town manager referencing the town's offer for the entire tract of land and the tract without a 50-foot strip, which was an attempt at a compromise. Id., 90. The defendants' counsel wrote, "My clients . . . are not willing to make the substantial sacrifice which an acceptance of either of your offers would entail . . . [I]n view of our Friday's conversation I gather that any further discussions would be fruitless. If this impression of mine is correct, I venture to express the hope that you will take promptly whatever steps you deem necessary, unless of course the project is being abandoned altogether as my clients earnestly hope will be the case . . ." Id.
In Pequonnock Yacht Club, Inc. v. Bridgeport, supra, 259 Conn. 592, the trial court found that the plaintiff had made numerous efforts to discuss with the defendants the integration of its property into a development plan, the court concluding that, "it is unreasonable for a redevelopment agency, even with broad legislative authority delegated to it, arbitrarily to reject repeated requests to negotiate some form of assimilation into the overall redevelopment plan when the subject property is in good condition and is economically viable." The trial court granted a mandatory injunction, ordering the city to reconvey real property it had taken by eminent domain.
Nichols on Eminent Domain provides a useful overview of the government's obligation to bargain in good faith in the context of a governmental taking. "It is, of course, perfectly competent for a legislature to grant the power of eminent domain subject to the condition that the land cannot be obtained by a good faith attempt to purchase it, and further that, unless there is a bona fide, reasonable or `best efforts' attempt on the part of the condemner to induce the owner to sell the land at a reasonable figure, the condition under which the power is granted is not fulfilled, and any attempt to exercise the power of eminent domain under the circumstances will be unauthorized and consequently void."
6 Nichols, Eminent Domain (3d Ed. 2006) § 24.13[1][b], p. 24-200-01. "If the issue of negotiations reaches the court, the only question of law for the court in that regard is whether the negotiations constituted, in fact, a bona fide attempt to purchase the land." 6 Nichols, Eminent Domain (3d Ed. 2006) § 24.13[1][b], p. 24-202, 204.
Riverfront believes that case law imposes on the town a higher obligation than an ordinary litigant because the town has the power to take by eminent domain. The law in Connecticut does not dictate so specifically what the town should have done in this case. It appears that Riverfront is cobbling together law in its favor from other jurisdictions to create the standard that it wishes was followed. See, e.g., County of Morris v. 8 Court St. Ltd., 537 A.2d 1325, 1326 (N.J.App.Div. 1988) (a condemnation action was dismissed because the landowner was never provided with appraisals and "never advised of the manner in which the original offered amount was calculated.") N.Y. State Elec. Gas Corp. v. Morrison, 44 Misc. 2d 145, 148, 252 N.Y.S. 2d 971 (1964) (condemnation action proceedings were dismissed because the condemner ignored "a letter from the [landowner's] attorney which expressed a continued willingness to negotiate." State v. Bair, 365 P.2d 216 (Idaho 1961) (the "mere act of making a good faith offer to an owner by letter is insufficient to satisfy the prerequisites for condemnation proceedings."); In re Rogers, 220 N.W. 808, 811 (Mich. 1928) ("[t]here must be an offer made honestly and in good faith, and a reasonable effort to induce the owner to accept it."; Paducah Ice Mfg. Co. v. City of Paducah, 157 S.W. 2d 490, 491 (Ky.App.Ct. 1941) ("a take it or leave it offer is not a good faith offer.").
B
The parties agree that they engaged in negotiations in 2007 and 2008. Riverfront takes the position, however, that only those negotiations after the town adopted the ordinance of May 4, 2009 are relevant to the court's determination because only then was Riverfront negotiating under threat of an eminent domain action. But, the court's focus must be on the town's entire course of conduct in dealing with Riverfront, and just when Riverfront knew of the town's decision to take the property by eminent domain is irrelevant to the court's determination of whether the town was negotiating in good faith and whether it had exhausted reasonable efforts to acquire the property by purchase before it began condemnation proceedings.
Stipulation, ¶ 13.
In response to Riverfront's allegation that the town made its first bona fide offer on October 15, 2009, the town points out that it offered to purchase the property for $3,000,000 on April 24, 2008, when a draft purchase and sale agreement was sent to Riverfront. Riverfront did not accept this offer; on May 6, 2008 its counsel returned the agreement with revisions and a request for the defendants' counsel to review it and call him. Approximately a month later, however, on June 3, 2008, the town sent a letter to Riverfront informing it that the council had decided that it would be beneficial to have an independent third party assist the parties in the mediation of an agreement concerning the potential purchase of the property. The town then stated that it "is interested in reaching an agreement to purchase these properties. However, the town may reluctantly consider the use of the power of eminent domain as an available last resort if an agreement cannot be reached."
See exhibit 7.
See exhibit 9.
See exhibit 10 (emphasis added.).
So, an offer of $3,000,000 was extended, and the parties, with the exchange of the purchase and sale agreement and suggested revisions thereto, were in the process of negotiating. While the offer to use a mediator might be seen as a revocation of the original offer; 1 Corbin, Contracts (Rev. Ed. 1993) § 2.20, p. 226-27; it is clear from the town's letter of June 3, 2008 that it was still serious about negotiating an agreed-upon purchase price. Riverfront made no response to the town's offer of continued negotiations.
The parties did not reach an agreement for the purchase and sale of the property prior to April 23, 2009, and on that date the town forwarded the property appraisals to Riverfront. On June 25, 2009, it informed Riverfront that the town had passed the ordinance of May 4, 2009 to acquire the property for up to $962,500 minus environmental remediation costs and asked for a reply by July 2, 2009. Absent a response by that date, the town stated that it would consider its offer rejected and commence condemnation proceedings. Riverfront's response was to advise the town that it was seeking new counsel.
See exhibit 14.
See exhibit 15.
Hearing nothing further, the town sent a copy of its June 25, 2009 letter on August 17, 2009 to a Riverfront partner, restating the offer of June 25. Finally, on August 26, 2009 Riverfront responded. It expressed its amenability to entering into negotiations, strongly disagreed that the town had been negotiating with Riverfront for the past year, characterized the town's appraisals as "flawed" and demanded to know the town's basis for its offered price.
See exhibit 30.
The parties' stipulation is that they had been negotiating throughout 2007 and 2008, and other stipulations and evidence admitted by agreement demonstrate that those negotiations continued into 2009.
See exhibit 32.
Riverfront repeated its request for the basis of the town's offer on September 29, 2009. On the same day the town forwarded demolition estimates for the property and explained that the environmental reports would be forthcoming shortly.
See exhibit 33.
See exhibit 34.
In a letter of October 15, 2009, the town laid out all the numbers, from both appraisals, and included updated demolition estimates. It explained how it came to its present valuation and made a new offer to purchase for $775,512.70. It imposed a deadline of October 29, 2009 by which date Riverfront must respond or an eminent domain action would be filed. In its response of October 23, 2009 Riverfront again asked the town how it came up with its first offer of up to $962,500 minus the cost of environmental remediation, especially in light of the fact that the town had adopted a new approach for valuing the property by averaging its appraisal values and deducting the average of the demolition estimates. It proposed a different method of evaluating the property, which would yield an offer of $1,186,696, and suggested that the town credit Riverfront for state funding earmarked for demolition. Riverfront also stated that it needed more time to evaluate the offer, specifically, that it must review a 1,700-page environmental report, and could not simply take the town's estimates for demolition and remediation work at face value. It made a counteroffer of mediation, and in its follow-up letter of October 27, 2009 Riverfront proposed that it could reach a position on the demolition estimates by December 1, 2009, environmental remediation by February 1, 2010, and the fair market value by March 1, 2010. On October 30, 2009, the town commenced the pending condemnation action by filing a statement of compensation with the New Britain Superior Court. It notified Riverfront of this in a letter dated November 6, 2009.
See exhibit 35.
See exhibit 36.
See exhibit 37.
See exhibit 38.
The court can well understand the town's frustration with Riverfront's failures to respond to the town's suggestion of mediation in 2008 and to respond promptly to its offer to purchase of June 25, 2009. The question, however, is whether the town had exhausted reasonable efforts to acquire the property before attempting to condemn it.
Although the town provided Riverfront with its two property appraisals in April 2009, it never provided the demolition estimates until September 29, 2009, one month before the deadline imposed for an acceptance of the town's offer, even though it had them since April. Just two weeks later, along with its final offer to purchase the property, it sent Riverfront "updated" and different demolition estimates. Since its purchase offer of June 25, 2009 purported to be based on the appraisals and the demolition estimates, Riverfront was in no position to evaluate the purchase offer in the interim. In addition, the environmental remediation cost, which would determine the town's final offer, had yet to be determined. What counter could Riverfront have made to an offer to purchase the property for "up to" $962,500 minus undetermined environmental remediation costs and in the absence of up-to-date demolition estimates? Riverfront's description of the town's purchase offer as "an unliquidated, floating sum subject to future determinations by unknown third parties" is apt, and its inability to make a counter to such an offer does not indicate an unwillingness to negotiate.
See exhibits 28 29.
Memorandum of Law in Support of Application for Permanent Injunction, 9 (April 7, 2010).
More importantly, the amount offered by the town on June 25, 2009 was incorrect even by its own standard, and the town has admitted as much. The offer was supposedly arrived at by subtracting the average of the two demolition estimates from the average of the two appraisals. That computation yields a purchase offer of $1,153,817, an offer that exceeds the town's actual offer by almost $200,000.
It is impossible to predict whether Riverfront's response to an accurate purchase offer by the town might have been more positive than its response of August 26, 2009, but that possibility was foreclosed by the town's error. When it ignores the querulous tone of Riverfront's letter of October 23, 2009, the court finds in it an offer "to set a reasonable timeline for settlement discussions and/or mediation"; it indicates that counsel for Riverfront has already explored the availability of the former state ombudsman for property rights to mediate the matter and found him to be available. That letter is followed up with a proposal of a specific schedule for Riverfront to respond to the constituent elements of the town's offer, which would have led to settlement discussions by the following spring, less than six months away. These letters show the presence, albeit belatedly, of a serious negotiating partner.
The only number put forward by Riverfront as a possibly appropriate figure for purchase of the property was $1,186,696, not so far from the figure the town should have offered. See exhibit 36. There was not such a "wide disparity" between those numbers as to indicate "that the parties could not agree on the amount to be paid." Conn. Light Power Co. v. Costello, supra, 161 Conn. 441. Though Riverfront's mention of that figure was not an offer to sell and was hedged around with several reservations, successful negotiations have begun with less.
See exhibit 37, Riverfront letter of October 27, 2009.
The town had delayed seven weeks, from August 26 to October 15, 2009, before it even responded to Riverfront's offer to enter into negotiations to determine a fair purchase price for the property. Then, it gave Riverfront only two weeks to accept a greatly reduced purchase price. For the town to insist on its take-it-or-leave-it offer under these circumstances does not demonstrate a genuine attempt to agree on an amount to be paid for the property or a willingness to negotiate in good faith. The evidence does not show that further negotiations would have been a "useless and futile act" on the town's part. See Halloran v. North Canaan, supra, 32 Conn.App. 615. The evidence shows that there was simply not enough time in the two-week window provided for Riverfront to evaluate the town's changing figures.
At argument, as evidence that Riverfront was not truly interested in negotiating a fair purchase price for its property, the town pointed to an adversarial letter it received on August 25, 2009 from counsel representing Riverfront in an action brought for breach of the 2003 agreement, accusing the town of violating Riverfront's constitutional rights. Exhibit 31. Riverfront is represented by different counsel in the condemnation action, and he explicitly disassociated himself from contract counsel's claims when he made his offer to enter into negotiations over the fair value of the property. Exhibit 32.
While the town would have had to pass a new ordinance authorizing condemnations if later negotiations proved unsuccessful, there is no evidence that there was an immediate intent on the town's part to carry into effect its plans for the property or any prejudice to the town in waiting a while longer to take the property.
VI
Condemnation is the ultimate deprivation of private property. "The authority to condemn is to be strictly construed in favor of the owner and against the condemner." State v. McCook, supra, 109 Conn. 630. Accord: Pequonnock Yacht Club v. Bridgeport, supra, 259 Conn. 601-02. Riverfront has met its burden of proving that it will suffer irreparable injury; viz., the taking of its property by eminent domain, without the issuance of the injunction sought. It has proven by a preponderance of the evidence that the town failed to exhaust reasonable efforts to come to an agreement for its purchase of the property. Accordingly, the town is PERMANENTLY ENJOINED from proceeding further with the pending condemnation proceeding.
At argument the court was told by counsel for the town that, if this injunction was issued, the pending eminent domain action would be withdrawn. Transcript, p. 5, 11. 17-22. Based on that representation, it is FURTHER ORDERED that the condemnation proceeding be withdrawn within thirty days, and, if it has not been withdrawn by January 2, 2011, it will be DISMISSED.