Handling Construction Changes During the Eminent Domain Process

Any project involving the exercise of eminent domain includes the strong likelihood that there will be a series of changes during the planning and construction phases. Yet, while construction needs may warrant a change in the plans, the tools to effect such changes legally are limited. To state the obvious, this is a difficult issue in that construction is not an exact science and conditions on the ground may require ongoing modifications to the plans for development.

On April 29, 2022, I will be speaking with my colleague, Kelly Sheeran, on this topic at the Virginia Eminent Domain Conference in Virginia Beach in a program entitled “How to Handle the Unforeseeable: Post-Certificate Changes to the Project and Other Unforeseeable Elements of Construction.”

Consider then, changes as it relates to one facet of eminent domain, highway construction. Typically, highway construction plans are impressed with words to the effect that "Design features relating to construction or to regulation and control of traffic may be subject to change as deemed necessary by the department." Yet, any such change must comply with the mandate that "No more private property may be taken than necessary to achieve the stated public purpose."[1]

Recognizing this constitutional directive, the legal framework takes into account the vagaries of construction such that there are statutorily prescribed methods by which to address changes. Generally, the ability of the Highway Commissioner to amend, revise, modify, and reform of alter the certificate of take (by which property is often acquired in eminent domain) remains inviolate even up through the commencement of trial when neither fraud nor arbitrary or capricious action is present.[2]

For example: Virginia Code § 33.2-1024 provides, in part, that: “The court shall have jurisdiction to reform, alter, revise, amend, or invalidate in whole or in part any certificate; to correct mistakes in the description of the property affected by such certificate; to correct the name of the owner in the certificate; to correct any other error that may exist with respect to such certificate; or for any other purpose.” However, “no such amended certificate shall include any land not in the original certificate.”

Consider, now, the following: The landowner contends that the impact of the acquisition is such that she will lose customers by reason that she cannot re-install signage within the replacement utility easement. The condemnor comes back and indicates that an accommodation can be made, i.e., that the utility owner will allow signage within the easement to include even the recordation of an amendment. Has the condemnor now conceded that it has taken more right of way or interests therein than was necessary? As the Supreme Court explained in Hamer v. School Board of the City of Chesapeake:[3]

In Stewart [v. Highway Commissioner][4], we observed that although the necessity and expediency of a road was a legislative question, the discretion of the officials determining its location would be "reviewable by the courts only if it is arbitrarily or capriciously exercised or where there is manifest fraud." In Kricorian v. C & P Tel. Co.[5], we reaffirmed that statement in Stewart, holding that a condemnor's discretion "in determining the specific property and the amount of land to be taken" was subject to judicial review if that discretion is alleged to have been arbitrarily and capriciously exercised. Examining the evidence in Kricorian, we determined that the "condemnor's choice of plans was at least fairly debatable, and action is not arbitrary or capricious if exercised honestly and upon due consideration, when there is reason for a difference of opinion." Id. (citation omitted).

Having alleged an arbitrary and capricious exercise of discretion, the owners were entitled to prove it if they could. In such cases, however, the burden is upon the owner, because it is presumed that an entity to which the legislature has delegated the power of eminent domain "has exercised the power with the wisdom and discretion lodged in it by the legislature. The burden of showing the contrary is upon any person who objects to the proceeding."[6]

Accordingly, we hold that when a condemnee alleges that the condemnor has arbitrarily and capriciously decided upon the location or quantity of property to be taken, the condemnee has both the burden of persuasion and the burden of going forward with the evidence on that issue. If the condemnee establishes a prima facie case, the burden of going forward with the evidence shifts to the condemnor. The condemnor's burden is then only to produce sufficient evidence to show that the issue was "fairly debatable." If the condemnor makes that showing, the court will conclude that the condemnor's discretion was fairly and honestly exercised.

At least one circuit court has addressed the issue of whether the amendment rendered the condemnation jurisdictionally improper. Specifically, a landowner requested to dismiss the case by reason that no bona fide offer was made given that the property taken, as amended, was less than that for which the bona fide offer was made.  Before property can be acquired by eminent domain, a bona fide offer must be made.[7] In granting the amendment and declining to dismiss the case, the court in Commissioner of Highways v. Sadler[8], examined the issue in detail, noting, in part:

The eminent domain statutory scheme allows no increased property take without dismissal of the certificate and petition. The standard urged by the respondent prohibiting reduced take would force trial court dismissal of a petitions when the certificate is amended downward. The Commissioner would be obligated to perfection when planning, designing, offering to purchase and recording certificates of take in eminent domain cases. Simply stated, this is not practical, and no reasonable Court could conclude that the General Assembly would impose this harsh, exacting standard on its delegated agent.

So, with Judge Teefy’s decision in mind, I offer the following points for consideration:

• Provided additional property is not acquired, the condemnor maintains broad discretion to revise the certificate of take.
• Pay attention to design/construction changes and revisions to sheet plans. Where substantive changes occur, consider amending the certificate.  And, preferably, do so earlier, rather than later in the litigation process.
• Consider amendments in the context of settlement negotiations to conform what is being (or has been) constructed with the certificate. If a resolution is had, the amendment can be accomplished within the final order.
• Be mindful of easement language in the certificate; just because I can build a cell tower does not mean that I will. However, if the breadth of the language of easement permits reasonable speculation as to its use now and in the future, be prepared.

[1] Virginia Const., Article I, § 11. See Virginia Code § 1-219(C); ACGS Marine Insurance v. Arlington County, 293 Va. 469, 800 S.E.2d 159 (2017).

[2] See Virginia Code §§ 33.2-1024 & 25.1-316(B); State Highway and Transportation Commissioner v. Herndon, 225 Va. 380, 302 S.E.2d 55 (1983); State Highway and Transportation Commissioner v. Goodrich, 237 Va. 144, 375 S.E.2d 745 (1989); Transportation Commissioner v. Klotz, 245 Va. 101, 104, 425 S.E.2d 508, 510 (1993).

[3] 393 S.E.2d 623 (1990)

[4] 212 Va. at 692, 187 S.E.2d at 159

[5] 217 Va. 284, 288, 227 S.E.2d 725, 728 (1976)

[6] 1A. J. Sackman, Nichols' The Law of Eminent Domain § 4.11[4], p. 4-291 (rev. 3rd ed.1989).

[7] See Virginia Code § 25.1-204

[8] 93 Va. Cir. 74 (Dinwiddie 2016) (Teefy, J.)