1.11 Post-award Issues and Appeal

• Library: Eminent Domain Law in Virginia (Virginia CLE) (2017 Ed.)

1.11 POST-AWARD ISSUES AND APPEAL ⁴⁴³

1.1101 Procedure for Appeal. If the report is confirmed, altered, or modified, any aggrieved party may appeal by following the same procedure for appeal as "provided by law and the Rules of Court applicable to civil cases." ⁴⁴⁴ A notice of appeal must be filed within 30 days after confirmation of the report. A writ of supersedeas suspending the award may be granted in the same manner as for other civil cases. ⁴⁴⁵ In Board of Supervisors of Prince William County v. Parsons, ⁴⁴⁶ the Supreme Court of Virginia held that the

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supersedeas affects only the enforceability, not the finality, of an appealable order and thus does not postpone the beginning of the 30-day withdrawal time limit in a condemnation case authorized by then section 25-46.34 (now section 25.1-250) of the Virginia Code.

1.1102 New Trial Order Unappealable. If the report is set aside and new jurors or commissioners are appointed, the case is tried again. Neither party may appeal that order under section 25.1-239(B) of the Virginia Code.

1.1103 Distribution of Award Paid Into Court. ⁴⁴⁷

A. Undisputed Title and Distribution of Proceeds. If title or rights in the condemned property or proceeds are undisputed, the money paid into court with accrued interest is distributed without further inquiry (unless persons under disability are involved). Taxes owed on the property must be paid before distribution of the award. This solves distribution problems when delinquent taxes exceed the award. In addition, if the owner has already paid taxes for the year of the take, the condemnor must reimburse the owner for the pro-rata portion of taxes from the date of take or date of possession to the date of paying the final award. ⁴⁴⁸

B. Disputed Title and Distribution of Proceeds. If there is a dispute as to title or distribution of proceeds, the court must order a separate hearing on those issues and may appoint a commissioner in chancery to take evidence upon conflicting claims. As an example, the trial court ruled that proceeds from the condemnation of real property held by a trust were considered income based on the specific language of the trust agreement even though the Uniform Principal and Income Act ⁴⁴⁹ would characterize such new funds as principal. ⁴⁵⁰ In distributing an award to bond holders, a court must honor contractual provisions such as agreeing to pay the award directly to the bond holders and paying call premiums and interest in addition to the principal. ⁴⁵¹ Final orders by the commissioner affecting distribution of the proceeds are appealable. The cost of the commissioner is taxed as a cost to

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the condemnor if needed to determine proper distribution to someone under a disability. However, the cost of resolving other disputes over ownership is paid by those raising the issue unless the award is less than $500, in which case the condemnor must pay the cost of resolving the dispute. ⁴⁵²

C. Unknown Owners. Although section 25.1-241 contemplates no further proceedings on the issue of just compensation, the existence of unknown owners creates a controversy. ⁴⁵³ If, after a hearing, the court cannot determine entitlement to the proceeds, the case must be continued until enough evidence exists to establish the shares of known owners. The disposition of funds for unknown property owners is governed by statutes applicable to unclaimed funds. ⁴⁵⁴

D. Title Controversies. Condemnation jurors or commissioners do not determine title controversies or related issues. Such issues are determined by the court in order to distribute money paid into the court for property taken or damages to its residue. ⁴⁵⁵ Section 25.1-243 is also used to resolve disputes arising out of the withdrawal of deposits pendente lite.

E. Property Subject to a Lease. There is a single award for property taken even when subject to a lease. The distribution rights of the tenant are determined in a separate post-award proceeding under sections 25.1-240 and 25.1-241. ⁴⁵⁶ The value of the leasehold may include an expectation of renewal when the terms of the lease, standards of the industry, and expert witness support the likelihood of renewal. ⁴⁵⁷ An economic rent valuation is a valid measure of damages. ⁴⁵⁸ Although lessees have the right to be compensated for the value of their leasehold interest, lessees are free to contract away their rights to recover. ⁴⁵⁹

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1.1104 Vesting of Title. ⁴⁶⁰ Ordinarily, title to condemned property does not vest in the condemnor until the court enters a final order confirming, altering, or amending the report of the condemnation commissioners or jurors and such award is paid into court. When the "quick-take" procedure is used, title is vested, albeit defeasibly, with the condemnor and pro rata tax abatement is effective upon recordation of the certificate. ⁴⁶¹ The clerk of court has the affirmative duty to record the order, plat, and description of the property in the deed book of the locality where the property is located. The deed is indexed in the names of the parties and the condemnor must pay the appropriate recording fees. ⁴⁶² "Upon . . . recordation [of the certificate], the interest . . . of the owner of the property . . . shall terminate and the title to such property . . . shall be vested [defeasibly] in the [condemnor] . . . ." ⁴⁶³

1.1105 Withdrawal of Deposit After Award but Prior to Additional Proceedings. ⁴⁶⁴ A landowner, guardian, or conservator may petition the court to withdraw without prejudice his or her share of the money paid into court after the award of just compensation, even though further proceedings will occur in the trial court or on appeal, subject to the following conditions:

1.

The property owner or person with a property interest may withdraw 50 percent of his or her share without a surety bond; or

2.

An owner may withdraw over 50 percent of his share by providing a surety bond in an amount set by the court not exceeding twice the excess over 50 percent. The bond is to secure repayment of the amount withdrawn over the amount of compensation as finally determined by the court, commissioners' panel, or the jury, plus interest as calculated under Section 25.1-243. The condemnor must receive or waive 21 days' notice of any petition to withdraw money and may file objections to

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the applicant's right to the fund or the sufficiency of the proposed bond.

Directors of a dissolved company are liable for any deficiency when drawdown exceeds the final award where at the time of agreeing to distribution of corporate assets, the owners have knowledge of the possibility that the condemnation award will be less than the amount distributed under the "drawdown" order. For that reason, the owners cannot rely on the contrary advice of their attorneys. ⁴⁶⁵

When a landowner appeals only the portion of the award setting damages, the amount of the bond will be set by looking at the total deposited, including the value of the take and damages. ⁴⁶⁶

Any controversy over distributing pendente lite money paid into the court is resolved in the same way as questions involving the proper distribution of the final award. ⁴⁶⁷

The amount of any deposit with the court or certificate amount or any amount withdrawn by the landowner may not be referred to at trial on the issue of just compensation. ⁴⁶⁸

1.1106 Interest. ⁴⁶⁹ The condemnor is required to pay interest on any excess of the final award over the amount paid into court to obtain the right of entry. The...