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Friday, December 2, 2011

Just Compensation Determined at Time of Taking, Not Filing of Condemnation Action

On December 1, 2011, the Illinois Supreme Court decided Forest Preserve of DuPage County v. First National Bank of Franklin Park, 2011 IL 110759 (2011).  The case involved a challenge to a condemnation action filed by the District to take 204 acres of land consisting of an existing public golf course and undeveloped land.  The landowners challenged the condemnation on a number of grounds, including the jury’s determination of value as of the date of the filing of the action.  In this decision, the Supreme Court determined that the taking occurs when the government (1) deposits the amount of compensation that has been ascertained and awarded and (2) acquires title and the right to possess the property and not at the time of filing of the action.

This case began with the filing of the condemnation action by the District in 1999.  The next seven years were spent sorting out the legal rights and responsibilities between the landowners.  No final action could be taken on the condemnation action until the landowners’ legal issues were resolved.  Finally, in 2007, a jury trial on the condemnation action was held where it was determined that the fair market value of the property was approximately $11 million, a valuation only slightly above what the District offered the landowners in 1999.  The jury based the property valuation on the value as of the filing date in 1999.  The landowners challenged that valuation, contending that the property had increased in value from 1999 to 2007 to be more than twice that amount or $25.5 million. The appellate court vacated the jury verdict on the issue of fair market value, and sent the case back to the trial court to determine whether the jury verdict awarded just compensation to the landowners as required under the state and federal constitutions.  On appeal, the Supreme Court affirmed the appellate court.

The dispute as to fair market valuation arose because provisions of Illinois’ Eminent Domain Act suggest that the date of valuation is the date on which the condemnation action is filed.  In vacating the jury’s valuation, the Illinois Supreme Court relied on the U.S. Supreme Court’s decision in Kirby Forest Industries, Inc. v. United States, 467 U.S. 1 (1984), which held that the constitutional fifth amendment right to just compensation entitles a landowner to fair market value on the date of taking, which it defined as payment and the passing of title.  The Illinois Supreme Court explained that establishing a taking at this point in time would (1) enable Illinois trial courts to hold post-trial Kirby hearings to ensure that just compensation is properly awarded to landowners and (2) align Illinois eminent domain law with federal eminent domain law, ensuring its constitutionality. 

Post authored by David Silverman.


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