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					                                  Class #15
   Ch. 6 & 7 -- Rights and Limitations …Ag. Property

   Case           Page                             Reporters                   ?

Dept of Trans. 139            action, issue& facts - Amanda                        *
                               law, holding & rule - Brett
Lehndorf           143        action, issue & facts – Jordan                    *
                               law, holding & rule- Tom
Scott -            147          action, issue & facts – Kristen                *
                             law, holding & rule – Daniel

Michael -          152            action, issue & facts – Jeannna               *
                                law, holding & rule – Jaret
Spur -              153            action, issue & facts – Jordan               *
                                law, holding & rule -- Amanda
* Each student is required to submit a question (something not explained in the case) to me by e-mail or by 10:30 Sunday, Sept. 24.
                     Quiz #5
   1. The law may “correct” an error in the size
    of a farm sold.
   2. Zoning may permit an “adult book store.”
   3. A dominant tenement may have to
    provide a roadway to the servient tenement.
   4. If you “need” a roadway:
     A. You may have to pay for it.
     B. The law will find an ”easement solution.”
   5. If a railroad is “abandoned,” the rail bed
    may revert to the adjoining property owners.
                Eminent Domain
   What are the limits on eminent domain?
   1. Must show a public benefit and a reason for the taking
    the property
   2. Due process of law
   3. Just compensation
   What about “Kelo” the recent U.S. Supreme Court case.
   In 2006 Indiana amended the eminent domain code
    adding limitations on takings by local governments. With
    penalties added if certain new procedures are not
   ? Course paper topic?
                   Due process
       Rights of the Property Owner

   1. Proper notice Uniform Land or Easement
    Acquisition Offer ("Miranda" rights?).
    a. Information must be provided in a specified
    form See Appendix B
   b. With an offer thirty (30) days before filing a
    condemnation suit
   c. Second offer 10 days before trial
                 A day in court

   1. You may challenge eminent domain authority
    and use.

   2. Bring forth witnesses

   3. Gain limited attorney=s fees if award is better
    than offer

   4. Punitive damages may be possible in certain
                A day in court

   C. “Just compensation”

   D. Also may raise environmental issues

   E. May be able to influence how a project is
    Just Compensation for Damages

   A. “Fair market value” of land taken

   B. Fair market value of improvements taken

   C. Decrease in FMV of remaining property

   D. Other damages due to the method of
   E. Add back - Increases in the FMV of residual due
    to the public project
Just Compensation for Damages

    Damages (D) can be expressed as the summation of
    five components:
   D = FMVP + FMVI + Dec. FMVR +Other - Inc. FMVR
     where:

        D = total compensable damages to the property.
       FMVP = fair market value of the condemned property.
       FMVI = fair market value of improvements on the condemne
        Dec. FMVR = decrease in the fair market value of
        the owner=s remaining property (severance damages).
    Just Compensation for Damages

   Other = other damages resulting from methods of
    construction (consequential damages).
   Inc. FMVR = increase in the fair market value of the
    remaining property as a result of the improvement.
    [Note, Indiana law does not allow Inc. FMVR to
    offset FMVP nor FMVI so that D will be at least
    FMVP + FMVI. Dec. FMVR and "Other" may be
    referred to as "severance" damages.]
       Income Tax Consequences
            IRC--Sec. 1033
   A. Postponement of capital. Gain is permitted
     1. net award or payment minus basis equals

     2. Specified (liberal) time to find replacement
       Severance damage cases
     1. May decrease basis on the remainder

     2. Must document which part of an award is

      for property taken and which is for damages
      to the remainder.
     Income Tax Consequences

   Note, If the landowner dies owning the
    replacement property, there is a step-up in
    basis to the fair market value at the date of

   An heir or devisee may sell at the date of death
    price with no capital gains to report.
      Dept. of Trans. IL v. Gass
         App. Ct. of IL, ’88, 519 N. E. 2d 90

    Action?
   Condemnation of land with cross complaints.
   Issue?
    What is compensable with respect to a farm?
    What is allowable as severance damages, and
    can drainage (value of) contemplated be
   Facts: I-255 was not only taking land from Gass
    but dividing his “farm,” part of which was rented.
    Dept. of Trans. IL v. Gass
   Gass wanted paid not only for the “fee
    taking,” but also severance damages due to
    the splitting of his total farm operation.
   Gass wanted paid for an infeasible drainage
    project—due to the road project.
   Jury allowed $103,000 for taking and
    $102,000 for severance damages (to the
    remainder). The trial ct. allowed $76,000, and
    interest for the difference with the “quick
    take” amount awarded.
   Note, there was a “quick take” proceeding,
    and a payment at that time.
       What is that?
             Dept. of Trans. IL
    Applicable Law?
   “Just Compensation” for takings for public
   Holding: For Gass to recover severance
    damages on real estate there must be “unity
    of title.”
   The leased land does not satisfy unity of title
    and is not compensable even though it is
    contiguous with the owned land.
   The above applies even though Gass can
    show loss of profits in the new circumstance.
   No abuse of the trial court’s power when they
    disallowed testimony about the drainage
    plan -- planned after the condemnation
    proceedings started!
               Dept. of Trans. IL
   Holding: the trial court’s handling of testimony
    about the Dept.’s proposed drainage project was
   Trial ct. did not error in the handling of the
    frontage road access for Gass.
   If Gass could make out a loss of access in the
    future that could be litigated at a future time.
   Affirmed in total the circuit court’s opinion.
   Rule: Compensation is due only for loss due to
    severance damages where there is unity of title
    in addition to continuity of parcels, and future
    problems must be raised when they occur.
    Lenhdorff Geneva, Inc. v. Warren
       S. Ct. of Wis., 1976, 246 N. W. 2d 815
   Action?
   Enforcement of a law limiting number
    of acres a non-US citizen could own in
   Issue?
   Is the WI Statute on limiting foreign
    ownership of WI land constitutional?
   Facts: Owners of land via a limited
    partnership were Germans.
   The acquisition would have exceeded
    the 640 acre limit.
        Lenhdorff Geneva, Inc.

   Law?
    In WI there is (was?) a 640 acre limit for
    foreign ownership.
   Holding: The law is constitutional under
    established criteria.
   The “burden then the benefits” argument did
    not support the defendants.
   “Limiting the benefits of land ownership to
    those who share in the responsibilities and
    interests of residency is not an unreasonable
    exercise of legislative choice.”
   Nuisance: Condition that is obnoxious to
   e.g., offensive: to smell, to view, to hearing, to lungs
   nuisance per se -- a nuisance on the face, in all
     e.g., dead animals --left unburied

   nuisance in fact -- one that may become such by
    reason of the circumstances, location, or
     a hog operation near a subdivision

   Private -- affects one party
     Remedy– money damages & corrective
      behavior or an injunction (halt the activity--stop
   Public -- affects several individuals or a
     Remedy – an injunction, i.,e, , “cease and
      desist” perhaps payment for the defendant,
      depending on the facts.
              Scott v. Jordan
    Ct. of Appeals, N. Mex., 1983, 661 P. 2d 59

   Action?
    nuisance, injunctive relief and damages
   Issue?
   Is the cattle feeding operation a nuisance?
   Facts:
   Plaintiff‟s residence is located across the road
    from the def. farmer‟s feedlots in an ag setting.
   Plaintiff was there since 1966, and the defendant
    since 1979.
   Defendant added 600 to 1,200 head cattle
    feedlot within 607 ft of plaintiff‟s residence
   Pl complains of odors, flies, and dust--a
    nuisance, leading to deprivation of enjoyment of
    their property.
   --property value dropped from $140,000 to
   Trial court issued an injunction against any
    further cattle feeding, but allowed no damages.
   Trial court found there was a nuisance caused by
    the defendant
   Law?
   A private nuisance is a civil wrong based upon a
    disturbance of rights in land.
   Holding: This is an “in fact” nuisance rather than a
    nuisance “per se,” and in the process the trial court did
    “balance the equities” despite the defendant‟s
    argument to the contrary.
    Remedies: When monetary damages are
    inadequate an injunction must be issued!
   Rule?
   A private nuisance is with liability, if, but only
    if, conduct is a legal cause of an invasion of
    another’s interest in the private enjoyment of
    the land, and the invasion is either:
   a. intentional and unreasonable, or
   b. unintentional, and otherwise
    actionable under the rules controlling
    liability for negligent or reckless
    conduct, ….
             Michael v. Michael
          S. Ct. of Iowa, 1990, 461 N.W. 2d 334
   Action?
   Injunction-- enjoining spreading of manure.
   Issue?
    How soon does the manure have to be
    incorporated? Or, is injunctive relief appropriate?
   Facts: Pl sought an injunction from spreading
    manure from a hog confinement operation a
    quarter mile from the pl.
   trial court enjoined the def. from spreading
    manure on a specific 80 acres between April 1 -
    Dec.1 unless the hog slurry could be
    incorporated within 48 hours of spreading. (see
 Law: According to Valasek, a 1987 case,
   spreading of hog manure constitutes a nuisance,
  and that it is reasonable to require same day
 Pl has established by clear and convincing evidence
  that a nuisance exists.
 Appeals court agrees with the trial court as to the
  injunctive relief, but shortens the time required to
  incorporate the manure to the “same day”

   A single spreading of the slurry (manure) causes an
    extreme odor problem that lasts for about a week.
   The staggered applications may extend the problem
    for 20 days.
   April to Dec. 1 is when the winds are from the south,
    and toward the pl.
             Spur Industries, Inc. V.
   S. Ct. of AZ, 1972, 494 P. 2d 700
   Action?
   An injunction--to remove a feedlot.
   Issue:?
   Must Del Webb pay Spur for loss of his operation?
   Facts: Farming began in the disputed area in 1911
    and in 1950 it still was a rural area.
   In 1959, Del Webb began the development, Sun
    City with a pair of ranches bought for $15 mil at a
    price below the cost of land near Phoenix.
      Spur Industries, Inc.

   By 1962, Spur had expanded from 35 acres
    to 114 acres, both to the north and south of
    Spur‟s original facilities.
   First housing units were offered in 1960, 2.5
    miles from Spur with 450 to 500 houses
         Spur Industries, Inc.

   Law?
   A public nuisance will be enjoined (stopped).
   Holding: The injunction to stop the feedlot was
   Courts have a responsibility to the public and will do
    more than for a private nuisance.
   In this case, the court must deal with the
    encroachment of the public upon the nuisance!
             Spur Industries, Inc.

   Holding:
   There is no evidence that Spur and his predecessors,
    at the time they located, expected a city to spring-up,
   and that a court would order Spur to move not
    because of any wrong doing, but in deference to the
    public rights and interests.
   Webb gets the injunction, but not because his
    development is free of liability.
            Spur Industries, Inc.

   Holding:
   Webb “brought the people to the nuisance,”
   therefore, he must pay!
   back to lower court, each side must “bear its
   Rule: A nuisance per se will be enjoined, but the
    law is to balance the equities, without a rigid rule.
           Farming and Farmland
        Protection Tools & Activities

   Property Tax Relief
   Reduced or no Federal Estate Tax
   Ag Zoning and Districting
   Conservation Easements
     See Harrison‟s publication

   Purchase and/or Transfer of Development
   Right to Farm (Nuisance Defense)
       IC-32-30-6-9
         Indiana’s Right to Farm
   Public policy:
   to conserve, protect, and encourage the
    development and improvement of ag land
   aimed at probable nuisance suits as “city meets
   to prevent the cessation of ag and industrial
   and to encourage investment in farming.
   An ag or industrial operation does not become a
    nuisance by any changed conditions in the vicinity
    if the ag or industrial operation can satisfy several
         Right to Farm - Conditions to

   Activity in place at least one year.
   No significant change in hours or “type” of
   Operation not initially a nuisance.
   Nuisance is not a result of negligent activity.
Laux v. Chopin Land Assoc.,
   Ct. of Appeals of Ind., 3rd Dist. 550 N.E. 2d 100
   Action?
   Abatement of nuisance
   Issue? Is there a nuisance with hogs in a
    housing development? Or, Does the right to
    farm law provide a defense for Laux?
   Facts: the entire area was zoned for ag use at the
    time of Lauxes‟ sale to Chopin.
   Lauxes were advised at the time of the sale of
    Chopin‟s intent to set up large residential tracts.

   By August of 1987 Chopin had learned of Lauxes‟
    hogs and had notice served to Laux to abate the
   Chopin sued on Jan. 19, „88 to abate the hog
   Lauxes raised the Indiana “Right to Farm” statute
    IC 34-1-52-4 as a defense.
     A trial court held for Chopin.

   Holding:
   For a farmer (or industry) to obtain the “nuisance
    defense” of the “Right to Farm” law they must
   more than a continuous year of performance
    before the suit
   no significant change in hours of operation
Laux -- Holding

   not an actionable nuisance when it began
   a negligent operation gets no protection by
    this defense statute
   thus, if activities come to the nuisance,
   The trial court didn‟t rule the Lauxes were a
    Laux ---Holding cont.

   The trial court felt the adding of hogs was a significant
    change in the type of operation, and the increase in
    size was a significant factor.
   The Appeals court feels that “type” is not changed by
    the increase (or decrease) in number of animals.
   Because there was a lack of evidentiary basis for the
    trial ct. ruling, the case was returned for a retrial.
Laux v. Chopin -- retrial
   Noble Co. Cir. Ct., 6/4/92
   Holding:
   Hogs must be confined
   Max.: 70 sows and 5 boars, and 100 piglets
    all from these sows; 100 pigs not exceeding
    50 pounds!
   Facilities must be “shipshape”
       Manure and dead must be transported immediately
        on the defendants 10 acres
   If there is any loss of enjoyment on the pl‟s
    property the def can expect further action to
    abate said nuisance.

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