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Indiana Supreme Court to Decide Scope of Eminent Domain Statute - Government Practice News

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Government Practice News

Posted on: Apr 15, 2019

By Mark J. Crandley, Barnes & Thornburg LLP

The Indiana Supreme Court recently granted transfer to review a case that will dictate when increased compensation is owed for the condemnation of residential or agricultural property. When taking property, Indiana government entities typically must pay the full value of property condemned for public use. In 2006, the General Assembly passed a statute that required governments to go further and pay additional compensation for condemnation of residential or agricultural property. See Ind. Code § 32-24-4.5-8. For residential property occupied by the owner, the government must pay 150 percent of the property’s value. For agricultural property, the payment must be 125 percent of the property’s value.

In Guzzo v. Town of St. John, the Supreme Court will construe this statute for the first time and determine what type of property falls into these categories. The owners in Guzzo claim that the Town of St. John needed to pay extra compensation when it condemned their property because it is either an owner-occupied residence or agricultural property. These claims give the Supreme Court an opportunity to weigh in on what factors will trigger the heightened compensation requirement under either subsection of the statute.

The owners in Guzzo primarily argue that they were entitled to 150 percent of their property’s value because it was owner-occupied. They acknowledge that no one actually lived in the property at the time the St. John initiated the condemnation. But the owners claim that the property qualifies because they previously lived on the property and continued making repairs and attending to its upkeep after they movied. They claim there is no “temporal” criteria in the statute’s language so that any property will qualified for increased compensation so long as it was “occupied” at some point in time.

The owners alternatively claim that their property is “agricultural” and entitled to 125 percent of its value under the other subsection in the statute. The property was not being used for agriculture at the time of the taking. But the owners claim it could be put to that purpose because of its character and how it is zoned. Based on that possibility, the owners claim they are entitled to have their property treated as agricultural.

Both the trial court and the Court of Appeals rejected these arguments, but the Supreme Court granted transfer in a 5-0 vote. That vote suggests that the Court sees some merit to the arguments made by the owners. If they prevail, it would greatly expand the circumstances in which governments would be compelled to pay a higher amount for takings and could create a substantial impediment to future condemnations.

Oral argument has not yet been scheduled but will be in the near future. A decision in the case should come out later this year. 

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