Tcl - Eminent Domain Law in Colorado - Part Ii: Just Compensation - November 2006 - Government and Administrative Law

Publication year2006
35 Colo.Law. 47
Colorado Lawyer

2006, November, Pg. 47. TCL - Eminent Domain Law in Colorado - Part II: Just Compensation - November 2006 - Government and Administrative Law

The Colorado Lawyer
November 2006
Vol. 35, No. 11 [Page 47]

Government and Administrative Law
Eminent Domain Law in Colorado - Part II: Just Compensation
by M. Patrick Wilson

Government and Administrative Law articles provide information to attorneys dealing with various state and federal administrative agencies, as well as attorneys representing public or private clients in the areas of municipal, county, and school or special district law.

Article Editors:

Carolynne C. White, of Brownstein Hyatt & Farber, P.C., (303) 223-1197,; Brad Bailey, Assistant City Attorney, City of Littleton - (303) 795-3725,; Tiffanie Bleau, Denver, of Light, Harrington & Dawes, P.C. - (303) 298-1601,

About The Author:

M. Patrick Wilson, Denver, represents local governments and private property owners in eminent domain and real property disputes. He serves as special counsel at Murray, Dahl, Kuechenmeister & Renaud LLP and is a certified mediator with Landispute, LLC - (303) 493-6670

Part II of this article addresses some of the key procedural and substantive rules governing the assessment of just compensation in a taking of private property, including important concepts in evaluating compensation claims for property actually taken, as well as remainder damages and specific benefits.

This two-part article provides a general overview of the procedural and substantive law of eminent domain - the process by which one party condemns, or "takes" the real or personal property of another, on the payment of just compensation. Part I was published in the September issue of The Colorado Lawyer,(fn1) and addressed the right of eminent domain, the issues of public use and necessity, and the means by which "immediate possession" of the property can be acquired pending a valuation trial. Part II addresses the process and rules by which "just compensation" is to be assessed.

The question of whether the right of eminent domain is being properly exercised - that is, whether there is proper authority, a public purpose and necessity, and a failure of negotiations - is determined in advance of the valuation proceedings. When these questions are not contested or previously have been determined by the court, the parties must resolve the issue of the amount of compensation to be paid for the taking. If not by agreement, the amount of compensation is determined in a valuation trial.

Valuation Trial Proceedings:

Jury or Commission of Freeholders

The property owner (also referred to as the condemnee or respondent) has the right to have the valuation portion of the case tried to a commission of three landowners or to a jury of six landowners who reside in the county in which the petition is filed.(fn2) Only the property owner may demand a jury.(fn3) Unless more than six jurors are requested, a landowner need not advance any jury fee to preserve the right to a trial by jury.(fn4) The respondent may demand more jurors (not to exceed twelve) when the fees for such additional jurors are advanced to the district court.(fn5) A jury must be demanded before the appointment of commissioners and before the time for a defendant to appear and answer has expired.(fn6)

The jurors must be "freeholders." This means they must own real property and reside in the county in which the action has been filed.(fn7) As in any other jury trial, the jurors are subject to voir dire, and a challenge for cause will be sustained if a juror does not qualify as a freeholder.(fn8) In fact, a valuation determination by a jury not consisting entirely of freeholders may be grounds for a mistrial.(fn9) If a jury is requested by the respondent, the case will proceed similarly to a typical civil action, with the court presiding over the proceedings from start to finish.

If the landowner does not request a jury, the case is tried to a panel of three commissioners who also must be "disinterested and impartial freeholders"; however, they do not necessarily have to reside in the same county where the action is filed.(fn10) The three commissioners usually are appointed by the court, but some courts allow the parties to nominate suggested commissioners. Some jurisdictions select commissioners from a pool of retired judges, and others maintain a list of qualified commissioners from which a judge may choose.

The chair of the commission often is a practicing attorney and the other two commissioners usually have some real estate experience - such as having worked as a real estate broker, appraiser, or lender - although there is no occupational requirement in the statutes. As with jurors, the commissioners are subject to voir dire, which must take place at least thirty days before trial, and any commissioner is subject to disqualification for cause.(fn11) The commissioners typically are paid a reasonable professional fee that is set by the court and assessed as a cost to the condemnor.(fn12)

The commissioners may serve as both finder of fact and, to a limited extent, finder of law.(fn13) In addition to being authorized to administer oaths and request the issuance of subpoenas to compel testimony, during the valuation proceedings the commissioners may make rulings on the admissibility of evidence.(fn14) The commissioners may request a ruling from the court during the trial on any legal issue, but the district court judge usually does not preside over the day-to-day trial proceedings.(fn15) In a valuation trial to a commission, the court's involvement at the beginning generally is limited to appointing the commissioners, administering their oath, issuing preliminary instructions to the commissioners, and ruling on any pre-trial in limine issues raised by the parties.(fn16)

Because the judge does not preside over a valuation trial to a commission, the court generally is free to continue with its regular docket. In fact, the valuation portion of the case may not even be tried in a courtroom, but may be held in an unused jury deliberation or conference room in the courthouse. By stipulation of the parties and with the court's approval, the valuation trial can even be held outside the courthouse, in counsel's conference room or at another location. By not requiring a jury, a courtroom, or a significant amount of the judge's time, the parties to an eminent domain action potentially can avoid the delays and continuances that afflict many civil trials. This, combined with budget cuts in the court system, may mean that the parties have to provide their own court reporter in commission trials, a cost that also is taxed to the condemning authority.

Valuation Trial Proceedings: Conduct of Trial

The respondent-landowner has the burden of proof in the valuation trial.(fn17) Thus, the respondent puts on its case first, then the petitioner puts on its valuation and rebuttal evidence, and the respondent is afforded an opportunity for rebuttal evidence. At the close of evidence, the parties submit instructions to either the jury or the commission.(fn18) As in any other civil trial, these instructions must be approved by the court before being tendered. If the case is tried to a commission, the commissioners must view the property prior to ascertaining the compensation to be paid for the taking.(fn19) If tried to a jury, on the request of any party, the court, in its discretion, may order the jurors to view the property prior to making an award of compensation.(fn20)

After hearing the evidence, viewing the property, and being instructed on the law, the jury or commission ascertains the amount of compensation owing for the taking and states the same in a report (if tried to a commission) or a verdict (if tried to a jury).(fn21) The commission's report or the jury's verdict must contain an accurate description of the land to be taken, the compensation awarded for the land actually taken, and, in the case of a partial taking, any damages or special benefits to the remainder.(fn22) Any objection to a commission's report or a jury's verdict must be raised when the award is returned, before the commission or jury is discharged.(fn23)

On receiving the verdict or report, the court offsets any damages by any specific benefits that have been shown to exist.(fn24) The court then enters the verdict or report in the court records and calculates interest that may be owing.(fn25) The court also may entertain a request for costs and attorney fees.(fn26) On payment of all compensation owing either to the party entitled thereto or to the court registry, the court will enter a "rule and order" conveying the property to the condemnor.(fn27) This rule and order is recorded with the clerk and recorder, and is deemed to have the same effect "as if it were a deed of conveyance from the owner. . . ."(fn28)

Apportionment Hearing

If more than one party has a claim to a compensable interest in the property, the various respondents either must agree on their respective shares of the award or proceed to an apportionment hearing.(fn29) Pursuant to the undivided basis rule (discussed below) the condemnor pays into the court registry one aggregate amount of compensation for all interests in the property to be acquired. A final rule and order is entered on payment of the amount owing, and title to the estate being acquired passes to the condemnor. A rule and order conveys to the condemnor all interests that the owner and any other named parties may have in the property described therein.(fn30) At that point, the condemnor no longer is involved in the proceedings and the owners of the various interests that were acquired must apportion the proceeds among themselves by...

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