Business Interruptus: Evidence, Including Costs for Avoiding Business Interruption Claims, Is Liberally Admitted in Condemnation Cases Without a Burden of Proof

In homage to the upcoming season, I am writing the 12 Days of Condemnation, highlighting a dozen of my favorite eminent domain decisions. Seventh, a 1985 Michigan case that confirms that evidence is liberally admitted in condemnation cases while discussing claims for the cost for business interruption.

Detroit v Hamtramck Cmty Fed Credit Union, 146 Mich App 155 (1985), recognized that “[i]t has long been held that damages resulting from business interruption are compensable in condemnation cases provided the damages can be proven with a reasonable degree of certainty.” In doing so, the Court of Appeals recognized that “it is well recognized that strict rules as to the admissibility of testimony are not always enforced in condemnation cases” and validated a “Michigan Standard Jury Instruction” that “recommends that no instruction on the general burden of proof be given in condemnation cases.”

The list of expenses allowed to be presented to the jury was extensive. They included the cost of moving twice, where the speed of the acquisition prevented acquiring and moving directly into a new, permanent location, the cost to build a new facility when a suitable replacement could not be acquired, marketing expenses, and time incurred by employees including overtime as recorded in a diary.

This is a favorite case because it addresses three important legal points by providing examples of valid business interruption, confirming the liberal admission of evidence and doing so after the enactment of the Uniform Condemnation Procedures Act, and affirming that there is no burden of proof for these types of damage. I also like it because it references one of my favorite people from early in my career. The opinion specifically references Tom Czubiak, who performed an expert report quantifying business interruption expenses incurred by the owner. Czubiak provided one of the funniest moments of my career when he had the following dialogue with opposing counsel during a deposition, reconstructed from memory. As you can see, as a former Colonel during the Pacific campaign in World War II and a high-level auto executive before moonlighting as an expert witness in his semi-retirement, he spoke his mind in a way only he could get away with.

Q: What is the goodwill value of the business after it permanently closed?

A: I can’t answer that question.

Q: Why can’t you answer that question?

A: Because it is such a stupid question.