California Eminent Domain Report

The California Court of Appeal has issued a new published decision involving an unusual set of circumstances surrounding an eminent domain and inverse condemnation case.  In Cobb v. City of Stockton, the City filed an eminent domain action to acquire the owner's property; shortly thereafter, the City obtained prejudgment possession and constructed a public roadway on the property.  So far, seems typical.

Here's where things get unusual.  After nine years, the matter had not made its way to trial, and the court dismised the action for "lack of prosecution."  (I'm not entirely sure how the agency, the property owner, or the court could allow this to happen.)  The City promised to re-file the action, but apparently never did so.  The property owner turned around and filed an inverse condemnation action against the City. 

The owner's inverse action was initially dismissed on the grounds that it was time-barred (the City took the property over nine years ago, well outside the statute of limitations for an inverse condemnation claim).  On Appeal, the Court reversed, logically holding that the inverse claim did not accrue until the City's occupation of the property became wrongful, which only occurred after the eminent domain action was dismissed.

The Court explained why the trial court's decision to dismiss the inverse condemnation claim made no sense:

Taken to its logical conclusion, the trial court's ruling would mean that every time a condemning authority takes prejudgment possession of the subject property, the owner would have to file a protective inverse condemnation claim in the event the eminent domain action is later dismissed. Such action would then remain dormant while the eminent domain action ran its course.

Not surprisingly, this case involved an issue of first impression.  It is unlikely to come up very often, but it serves as a reminder that public agencies can be on the hook for inverse claims where eminent domain actions are not prosecuted in a timely fashion.  With the hook of the inverse claim, this likely means that the property owner can now recover attorneys' fees as well.

For a bit more on the decision, take a look at Robert Thomas' blog post, "Cal Ct App: Inverse Condemnation Statute Of Limitations For Physical Taking Begins When Invasion Becomes Wrongful."