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REAL ESTATE 70: The Court held that the trial court had subject-matter jurisdiction over the eminent domain complaint filed by Plaintiff.

Plaintiff filed an eminent-domain complaint requesting the condemnation of certain real property owned by Defendant. Plaintiff sought easements across the land for the purpose of rebuilding and upgrading an existing transmission line. On the basis of an appraisal,Plaintiff submitted a purported good-faith written offer of $84,000 as just compensation for obtaining the proposed easements. There is no dispute that Defendant rejected the offer.  Defendant moved for summary disposition under MCR 2.116(C)(4), arguing that the trial court lacked subject-matter jurisdiction because Plaintiff “failed to make a good-faith offer for all property rights impacted by its taking,” which is a jurisdictional prerequisite under the Uniform Condemnation Procedures Act (UCPA). Defendant contended that Plaintiff’s so-called “good-faith” offer was deficient because it did not fully take into consideration the impact of the condemnation on the remaining surrounding property owned by Defendant. In its supporting brief, Defendant maintained that Plaintiff needed to “make a good faith offer as to all the property rights impacted by the taking.” This included non-easement property belonging to Defendant over which Plaintiff would have unrestricted ingress and egress rights for purposes of accessing the easements, as well as non-easement property that Defendant could otherwise use to derive income now and in the future. Defendant argued that Plaintiff’s taking destroys these property rights, without making any offer of just compensation.  Applying a strict-compliance standard, the trial court ruled that the alleged good-faith written offer was woefully inadequate because the appraisal failed to substantively identify and value all of the various property rights and interests held by Defendant that would be affected by the condemnation. Concluding that it therefore lacked subject-matter jurisdiction, the trial court dismissed the action without prejudice.

STANDARD OF REVIEW

We review de novo the interpretation and application of the UCPA, as well as the question of whether a trial court has subject-matter jurisdiction. Similarly, this Court reviews de novo a ruling on a motion for summary disposition.

ANALYSIS

Private property shall not be taken for public use without just compensation therefore being first made or secured in a manner prescribed by law.  Compensation shall be determined in proceedings in a court of record. The purpose of the UCPA is to ensure that the guarantee of “just compensation” found in the Michigan Constitution is honored.. Under Michigan law, “just compensation” means the proper amount of compensation for condemned property after taking into account all the factors relevant to market value. The UCPA is to be strictly construed, and its jurisdictional conditions must be established in fact and cannot rest upon technical estoppel and waiver. At issue in this case is the interpretation and application of and interplay between MCL 213.55(1) and (3)(a).

 The purpose in requiring that a condemning authority first offer to purchase property for an amount no less than that which it believes to be full and just compensation is to encourage negotiated purchases of property needed for a public purpose and, thereby, avoid condemnation litigation entirely. Where such negotiations fail, however, the UCPA fulfills its constitutional purpose by requiring that just compensation for the property taken be determined by a trier of fact in a court of record.  In order to initially invoke the trial court's jurisdiction, strict compliance with the statutory language of the UCPA require[s] that the fee owners and any other owners of legal property interests be given a good-faith offer. Because a good-faith written offer is a necessary condition precedent to invoking the trial court's jurisdiction in condemnation proceedings under the UCPA, the failure to tender a statutorily compliant goodfaith written offer to all fee owners and any other owners of interests in the properties render[s] the trial court without subject-matter jurisdiction over the action.  In this case, the trial court ruled that the offer was deficient because the underlying appraisal purportedly failed to individually address and value several unique aspects of the property that would be impacted by Plaintiff’s easements. The trial court specifically cited (1) “ingress/egress rights,” (2) the “impact [on Defendant’s] existing operations,” and (3) the “impact on the ability of Defendant to expand and improve.” We conclude that the deficiencies Defendant complained of and found by the trial court did not reflect a failure to tender a good-faith written offer. Rather, the alleged deficiencies effectively pertained to ascertaining the proper amount of just compensation. We recognize that there can be a fine line between an offer that is so unsubstantiated that it can be characterized as revealing a lack of good faith and an offer that is made in good faith but does not accurately reflect an amount that equates to just compensation. But the means of defining that line for our purposes is found in the language of MCL 213.55(3)(a), which expressly concerns the assessment of “just compensation.” And MCL 213.55(3)(a), as indicated earlier, contemplates a situation where an owner claims that the agency is taking property other than the property described in the good faith written offer or claims a right to compensation for damage caused by the taking, apart from the value of the property taken, and not described in the good faith written offer.  This is the essence of Defendant’s argument. Moreover, the record does not support a determination that Plaintiff tendered the written offer in bad faith. Additionally, the trial court ruled that it could not entertain the condemnation action because it lacked subject-matter jurisdiction while at the same time the court effectively concluded that the written offer did not amount to just compensation because all aspects of the loss Defendant might suffer were not considered. This is part of the determination to be made by the trier of fact during litigation, i.e., when jurisdiction is being exercised.  In sum, we hold that the trial court both has subject-matter jurisdiction and that it erred by granting summary disposition in favor of Defendant.

ASSISTANCE WITH PROPERTY ISSUES

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