When Can the Government Physically Occupy Property Without Facing Inverse Condemnation Liability?

When the government physically takes or occupies property without first going through the rigorous procedural requirements under California eminent domain law, usually it's a clear-cut case of inverse condemnation liability.  But a recent California Court of Appeal case provides a unique exception involving property subject to dedication.

In Prout v. California Department of Transportation (Dec. 18, 2018, 2018 Cal. App. Unpub. LEXIS 8523),  Caltrans sought to use a 1.3-acre strip of land to make improvements to Highway 12 in Calveras County.  Caltrans started with the traditional eminent domain process by sending the impacted property owner a letter indicating that an appraisal would be prepared to determine compensation.  However, Caltrans later discovered that the strip of land was supposed to have been dedicated 20 years earlier as part of the property owner's subdivision; Caltrans therefore asked the owner to sign a grant deed for the property.  The owner refused.

Despite the owner's refusal to sign the grant deed and complete the dedication process, Caltrans began physically occupying and using the property for the highway improvement project.  The property owner filed an inverse condemnation action claiming Caltrans had taken the property without the payment of just compensation.  Caltrans defended its actions, claiming that the owner dedicated the property 20 years earlier, and that while Caltrans had not formally accepted the dedication, its physical occupation of the property amounted to acceptance.  The owner also claimed that the dedication was for a small access road, not the entire 1.3-acre strip, as such a large dedication would be unconstitutional.

At trial, the court sided with Caltrans, concluding that its physical occupation amounted to acceptance of the dedication, and upon Caltrans' "acceptance," the property owner no longer owned the strip and there was no taking of private property.  The court likewise ruled that the owner's challenge to the illegal dedication was untimely.

On appeal, the Court confirmed the trial court's rulings.

  • The Dedication was "Accepted" by Implication:  The Court explained that a dedication requires both an offer of dedication and acceptance of that offer by the public.  Both the offer and the acceptance may be made either expressly or by implication, and acceptance is implied where the public has made use of the property for a period of time demonstrating intent to accept dedication without any formal action by the governmental agency.  Here, the owner's offer of dedication appeared in a subdivision map, and 20 years later, Caltrans validly accepted the dedication by implication by physically occupying the property for highway improvements.  Because the property was dedicated, there was no taking of private property.
  • The Challenge to the Dedication Requirement was Untimely:  With respect to the owner's challenge to the dedication requirement, the Court explained that the "government cannot, as a condition for issuance of a development permit, impose a requirement that the landowner dedicate land for public use, unless there is an "essential nexus" between the condition and the projected impact of the proposed development."  Here, the highway did not need to be widened because of the subdivision, thereby failing the nexus requirement (i.e., it was likely unconstitutional).  However, the Court explained that a property owner cannot accept the benefits of a permit (here, the subdivision of the property), and then later challenge the constitutionality of the permit conditions (here, the dedication).  As a result, despite the dedication likely being improper, the owner's challenge to the dedication requirement was untimely.

The case serves as a lesson to public agencies and property owners.  For public agencies, it serves as a reminder to formally accept dedications before the property is utilized to avoid this type of fight.  For property owners, it serves as a reminder that if you believe a permit condition requiring a dedication or exaction is improper, you must timely challenge that condition -- you cannot accept the benefits of a permit, such as approval of a subdivision map, and preserve the right to challenge the dedication down the road.

California Eminent Domain Report is a one-stop resource for everything new and noteworthy in eminent domain. We cover all aspects of eminent domain, including condemnation, inverse condemnation and regulatory takings. We also keep track of current cases, project announcements, budget issues, legislative reform efforts and report on all major eminent domain conferences and seminars in the Western United States.

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