Friday, September 14, 2007

Eminent Domain Abuse Verdict: $12.4 Million

Bad Faith In Branford?
Eminent Domain Abuse Verdict: $12.4 Million

By LYNNE TUOHY | Courant Staff Writer
September 14, 2007

A private development company and the former owners of a 77-acre parcel have secured a staggering $12.4 million verdict against the town of Branford in an eminent domain abuse case that appears to be unprecedented nationally.

A Superior Court jury in Waterbury determined that Branford officials acted in bad faith when they voted in 2003 to take the land, which had been earmarked by the Monroe-based New England Estates development group for multiple-family housing in the range of 268 to 354 units.

Town officials cited an adjacent landfill and concerns about potential soil-contamination lawsuits from the residents of new housing as their primary motive; the possibility of building playing fields on the site was also discussed.

"The crux of the case was that they fabricated reasons for taking the property, and when we proved to the jury the reasons were baseless, the jury acted accordingly," plaintiffs' attorney Timothy Hollister said of this week's verdict. "They did not want housing on that property."

Branford is expected to appeal the ruling, and attorney Kerry R. Callahan, who represents the town, said the case is rife with legal issues that make the verdict "extremely vulnerable" to reversal.

"The portrayal of the town as this power-abusing monster was not accurate," Callahan said.

Aside from the core issue of eminent domain, the Branford case bears no resemblance to the highly publicized challenge brought by homeowners on the Fort Trumbull peninsula against the city of New London and the New London Development Corp. That case, forged by Suzette Kelo and her neighbors, turned on whether the city's seizure of homes for economic development by a private developer is a valid application of the "takings" clause of the U.S. Constitution. The U.S. Supreme Court in 2005 ruled by a 5-4 margin that it is.

At the heart of the Branford case is the process surrounding the taking of the land, and whether the reasons for doing so were valid. The Kelo case didn't challenge the process itself, but its results. New London and the state had done numerous studies and held countless public hearings on the massive redevelopment plan that was designed to bring more jobs and tax revenue to economically distressed New London.

"The contrast in the process between this case and Kelo is just incredible," Hollister said.

He said the Representative Town Meeting group - whose 30 elected members have the final say on major issues in Branford - met for six minutes before approving the acquisition of the land by eminent domain from owners Frank Perrotti Jr. and Thomas Santa Barbara Jr. New England Estates had an option to buy the land for development, and later became lead plaintiffs in challenging the taking of the land.

The jury's verdict Wednesday awarded New England Estates $11.2 million in lost profits and an additional $1.2 million in development costs the company had invested in the property. Santa Barbara and Perrotti were awarded $340,000 in lost option fees they would have collected. Hollister also said his law firm of Shipman & Goodwin and co-counsel James Bergenn will ask to have Branford pay $1.5 million in legal fees. Assessment of legal costs is standard in civil rights/government abuse cases in which the plaintiffs prevail.

But who ultimately prevails in this highly unusual case will probably be left to another day and another court. It is a case rich in anomalies.

Most eminent domain cases get the chaff sorted from the wheat early on, so to speak, through injunctions - court orders to halt the proposed land taking. If a court senses red flags, an injunction is imposed. The government agency in question, reading the writing on the wall, typically abandons the plan. Few eminent domain cases go to trial.

The only other prominent case in which a developer prevailed resulted in a $1.4 million verdict in California, a ruling that was upheld a decade ago by the U.S. Supreme Court. Hollister said of Branford: "This case is unique, maybe in the country."

Branford prevailed at the early stage of its case. Superior Court Judge Trial Referee Anthony V. DeMayo in December of 2003 all but mocked New England Estates' claims of a conspiracy by town officials in his ruling denying the developer's petition for an injunction to stop the town from taking the land. It wasn't until after DeMayo's ruling that Branford consummated the deal and took the land, paying its owners about $1.1 million. But DeMayo also granted the owners and New England Estates the right to appeal, which paved the way for the next oddity.

The plaintiffs appealed on two fronts. First, they claimed that the town hadn't adequately compensated them for the value of the land and the potential profits. At the same time, they also claimed the taking of the land was an abuse of government power under the Civil Rights Act. Both cases were transferred to the complex litigation docket at Superior Court in Waterbury.

Superior Court Judge William T. Cremins ruled earlier this summer on the first case, saying the value of the land - all things considered - was $4.6 million. Both sides have appealed that ruling. The second case, on the eminent domain abuse claim, resulted in this week's $12.4 million verdict. Callahan, representing Branford, says the plaintiffs can't have it both ways.

"It makes no sense that a party gets to prosecute two claims based on the same transaction and run them on parallel tracks, and pick and choose what part of the remedy you like best," Callahan said. "The basic concept is, you don't get to do it twice."

Branford changed lawyers several times during the course of the litigation, and Callahan's firm of Updike Kelly & Spellacy, based in Hartford, was brought in just months before the trial began. As a result, the town missed a crucial deadline to submit its list of expert witnesses to the court and opposing counsel, and was barred from calling expert witnesses to counter the testimony of the plaintiffs' experts. "The jury only got one side of the story," Callahan said. But that sort of lapse in adherence to court rules is seldom entertained on appeal.

Contact Lynne Tuohy at ltuohy@courant.com.

Copyright © 2007, The Hartford Courant

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[click here] for:

5 to 4 in the Supreme Court, THE DAY FREEDOM DIED


A SIGN painted on a Smith Street apartment building in New London opposes the city�s plan to use eminent domain in the Fort Trumbull neighborhood. The sign is addressed to an admiral with the Coast Guard, which had considered using the property. Above the sign, Efrain Caraballo looks out from the window of his second-floor apartment.
(CLOE POISSON)

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