In Partial Takings, It Is Assumed that the Agency Will Use Its Newly Acquired Property Rights to the Full Extent Allowed by Law

When describing partial takings, Michigan Civil Jury Instruction 90.12 includes the following requirement: “in valuing what is left after the taking, you must assume that the condemning authority will use its newly acquired property rights to the full extent allowed by the law.” This instruction is based on two cases in which property owners challenged an agency’s use of acquired property rights. In both cases, the owners claimed that the agencies had expressed an intent to implement a less intense or intrusive use. However, because the agency statements were not contractually memorialized, the owners were denied relief. Since these decisions essentially hold that agencies are unrestrained by anything other than the written instrument defining their rights and the agencies generally choose what rights they desire to acquire, it makes sense that just compensation assumes that all acquired rights will actually be used.

Detroit Edison Co v Zoner, 12 Mich App 612 (1968), involved proceedings following the conveyance of rights to construct electrical power lines. The property owners argued that they should have been allowed “to introduce evidence that would show that the easement granted was only for smaller towers than the power company now plans to construct, and which would carry less power than is now proposed. They argue that the proffered evidence would show implied conditions and that the power company was seeking to increase improperly the burden of the easement.” The Court of Appeals recognized that the “easement grant clearly allowed the construction of a high-power line. Technical aspects of the transmission line were not denoted in the contracts, nor would we have expected as much. Science and technology do not stand still. Reasonable men would expect some change in tower design, capacity, or material composition in the span of a decade. The law does not require the cessation of scientific advancement and in this case, will not permit the parties to claim they contracted to such a cessation a decade ago, when the written contract itself is clear and does not require such a finding.” As such, DTE was allowed to construct whatever it desired so long as it was consistent with the easements, regardless of what it had told the owners when acquiring them.

Biff's Grills, Inc v Michigan State Highway Commission, 75 Mich App 154 (1977), involved highway construction. The Court of Appeals rejected the owner’s contention that “a private landowner has a cause of action against the government as the result of safety improvements within the existing right of way where the improvements make it more difficult for some customers to reach the landowner's commercial establishment.” The property owner also argued that the Department of Transportation would have paid “a higher price if he had known that the remainder of his property would not have perpetual unlimited access to all the traffic lanes on Orchard Lake Road” due to the later installation of a median restricting turns. “If [the owner] had known about the median, it would have held out for a higher price and developed the remainder of the property in a manner which would have minimized the impact of the median.” The Court of Appeals held that the claim would only be actionable if there were “express agreements by the grantee (usually the government in the exercise of its eminent domain powers) to either do or refrain from doing something to the condemned (or purchased) property.”

The fullest extent language of Mi Civ JI 90.12 is grounded in these cases.

These issues arise in numerous contexts. Recently, I have observed the issue arising in utility easements.

For example, Michigan Electric Transmission Company or METC is actively seeking easements for its Nelson Road to Oneida and Helix to Hiple Electrical Transmission Line projects. It is asking property owners to sign easements that do not restrict the number of transmission lines that it can construct or the level of power that can be transmitted. Similarly, METC is identifying where it intends to place its poles, but it is not obligated to honor those locations either as part of the initial construction, say if soil borings indicate that the location should be moved, or in the future.

Detroit Edison or DTE is seeking pipeline easements for its East Petoskey Pipeline Reinforcement Project that allows unlimited numbers of pipelines or unrestricted size transporting any class of material. DTE’s easement also allows it to partially assign its rights, meaning that it can authorize a different utility company to coexist within the same easement.

Just like the owners in Zoner and Biff’s Grill, property owners who convey those rights will not be paid when they are used in the future. However, it is unlikely that owners unrepresented by counsel will understand what they are giving away.  Furthermore, property owners can challenge the necessity of takings seeking excessive rights. This video blog post addresses necessity challenges.

If you are facing an eminent domain acquisition, please feel free to contact me.

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