The Missouri Supreme Court recently issued a decision affirming a $2.1 million payment for the taking of 15 acres of land in St. Louis County, Missouri. The land was owned by the Novel family, originally purchased by the family patriarch in 1904. Arthur and Stella Novel lived and farmed on the land until their deaths in the late 1960’s. The land, now owned by their descendants, had been vacant since 1968 until the time of the taking in February 2010. The property was acquired in order to construct a portion of Highway 151 known as the “Page-Olive Connector.”
The former property owners were represented by Robert Denlow of the St. Louis law firm of Denlow and Henry, the only law firm in Missouri that limits its practice to eminent domain cases.
The procedure in Missouri for condemnation cases is a bit different than in New York. In Missouri, a trial court appoints commissioners who hold a hearing and file a report indicating a value for the property. The commissioners’ original report calculated a total damages of $320,000 for the property. The Novels filed exceptions to the award and requested a jury trial. Prior to the trial, the commissioners filed an amended report indicating that the Novels had owned the property for more than 50 years, which under the heritage value statute increased the damages value in the comissioners’ report.
At trial, the jury assessed damages for the Novels in the amount of $1.3 million. The Novels filed a motion for assessment of heritage value and entry of judgment. The trial court sustained the motion and added $650,000 for heritage value to the jury’s verdict and assessed interest in the amount of $150,000.
On appeal, the county challenged the heritage value statute on three grounds: (1) the General Assembly impermissibly altered the judicial definition of “just compensation” by permitting the addition of heritage value to fair market value, in violation of article I, section 26 of the Missouri Constitution; (2) the heritage value statutes required that the county expend public funds without a public purpose in violation of article III, section 38(a) and article VI, sections 23 and 25 of the Missouri Constitution; and (3) the statutory requirement that a judge compute heritage value invaded the province of the jury to determine just compensation for land taken by eminent domain, in contravention of article I, section 26 of the Missouri Constitution.
The Court noted that the standard of review for constitutional challenges to a statute is de novo; statutes are presumed to be constitutional. The Court described the history of the heritage value statute as such:
In 2006, the Missouri General Assembly “enacted a statutory definition of just compensation” codifying the judicial determination that “just compensation” means “fair market value” and providing for additional compensation for the taking of homesteads and properties held within the same family for 50 or more years. State ex rel. White Family P’ship, 271 S.W. at 572. Section 523.039 states, in part:
In all condemnation proceedings filed after December 31, 2006, just compensation for condemned property shall be determined under one of the three following subdivisions, whichever yields the highest compensation, as applicable to the particular type of property and taking:
1) an amount equivalent to the fair market value of such property;
2) for condemnations that result in a homestead taking, an amount equivalent to the fair market value of such property multiplied by one hundred 25%; or
3) for condemnation of property that results in any taking that prevents the owner from utilizing property in substantially the same manner as it was currently being utilized on the day of the taking and involving property within the same family for fifty or more years, an amount equivalent to the sum of the fair market value and heritage value.
In rejecting the county’s first argument that the legislature had changed the meaning of the “just compensation” to mean something more than fair market value, the court found that the Missouri constitution serves as a constitutional floor below which the legislature cannot descend. Rather than altering the definition, the court said, these statutes “promote the legislature’s intended policy of providing additional benefits to certain property owners whose real property is taken for public use.” The Court cited Supreme Court jurisprudence in Mitchell v. United States, 267 US 341 (1925) and Joslin Mfg. Co. v. Providence, 262 U.S. 668 (1923) that “the constitutionally required ‘just compensation’ is a minimum measure that must be paid, not a maximum one” and noted that the legislature “has the power to provide for more than the minimum ‘just compensation.'”
In rejecting the county’s second contention, that the statutes confer public funds for private benefit, the Court said:
Here, the county does not argue that its exercise of eminent domain fails to serve some public purpose. Rather, it argues that any compensation it must pay beyond the constitutional minimum to make that acquisition serves no public purposes and is, therefore, unconstitutional.
The court found that the primary objective of the expenditure in the heritage value statute was to compensate a class of persons whose property is acquired through eminent domain for the benefit of the public. Thus, the compensation did not violate the constitutional prohibition against using public funds for a private benefit.
Finally, the Court rejected the argument that the heritage value statute improperly invaded the jury’s duty to determine just compensation. Because heritage value compensation is not part of “just compensation” mandated by the Constitution, the court found there was no constitutional mandate that it be ascertained by a jury.