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Recent Appellate Court Decisions Address Inverse Condemnation Issues
Posted in Real Estate

Two recent Indiana appellate court decisions have addressed the issue of inverse condemnation. The Indiana Supreme Court held in April that inverse condemnation is a landowner’s sole remedy when the government exercises complete dominance and purported ownership over a piece of land.  

In Murray v. City of Lawrenceburg, 925 N.E.2d 728 (Ind. 2010), a landowner who allegedly owned a small tract of land used as part of the Argosy Casino docking sought to quiet title to the land, eject the defendants (the City of Lawrenceburg, the Conservancy District, and Indiana Gaming Company, L.P.), and set aside the quitclaim deed and leases.  The Court found that these claims were the proper subject for an inverse condemnation claim because they essentially alleged that the government exercised ownership rights over the parcel in dispute, depriving the landowner of all use of it. Citing cases that have prohibited the use of injunctive relief to prevent takings for public purposes, the Indiana Supreme Court reasoned that allowing alternative remedies would circumvent the eminent domain process.  This process includes “provisions designed to compensate landowners but also to permit the public need to be satisfied relatively quickly and at no more than a fair price.”

In August, the Indiana Court of Appeals cited Murray and held that a landowner could not seek to eject the City of Bloomington from a contested easement because inverse condemnation was a the sole remedy for the City’s use of a portion of the landowner’s property for a footpath. See Sagarin v. City of Bloomington, No. 53A01-0909-CV-454 (Ind Ct. App. Aug. 20, 2010).  The landowner alleged that the easement was taken by fraud as opposed to inverse condemnation.  In the same case, the Court of Appeals also ruled that another landowner, who purchased his property after the easement was taken by the City, could not bring an inverse condemnation suit against the City because he knew about the easement before he purchased the property.  His knowledge of the easement defeated any possible economic injury he may have suffered, which precluded an inverse condemnation action.

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