Kohl Industrial Park Co. (A Partnership) v. The County of RocklandKohl Industrial Park Co. (A Partnership) v. The County of Rockland
Lead Opinion
The County of Rockland (Rockland) appeals from an order of the United States District Court for the Southern District of New York, Gagliardi, J., granting the motion of plaintiff Kohl Industrial Park Co. (Kohl) for enforcement of a settlement agreement signed by the parties. This agreement was incorporated in a May 11, 1981 district court order that Rockland acquire by eminent domain Kohl’s entire legal interest in a thirty acre parcel of land.
Rockland advances three arguments on appeal, namely: (1) the district court’s interpretation of the agreement renders it unconstitutional and illegal; (2) the order of the district court cannot be enforced legally because the Rockland County legislature authorized only the acquisition of a permanent easement over Kohl’s property and therefore the County Executive is powerless to “take” an interest greater than that approved by the legislature; and (3) the district court’s interpretation of the settlement agreement is incorrect both as a matter of fact and law. We are not persuaded by these arguments and accordingly affirm the order of the district court.
BACKGROUND
Evidence was never presented in the underlying case because the parties settled their dispute prior to trial. However, there is no dispute with respect to the relevant facts. During March 1973, Kohl purchased sixty acres of land in Rockland County. Approximately one year prior to this acquisition, Rockland had authorized a feasibility study to determine the most appropriate measures to prevent flooding in the general area of the Kohl property. After the study was completed, Rockland decided to implement a plan whereby approximately thirty
After considerable foot-dragging by Rockland, Kohl commenced a federal court action in November 1980. The gravamen of Kohl’s complaint was that Rockland officials had delayed eminent domain proceedings in an effort to acquire the thirty acre parcel without just compensation. Kohl specifically charged that even though its property was no longer commercially marketable given Rockland’s announced intention to acquire it, the County nonetheless continued to tax this parcel at its former value. According to plaintiff, County officials hoped to delay eminent domain proceedings until Kohl’s interest in the acreage was foreclosed for nonpayment of taxes. Kohl maintained that Rockland’s conduct was actionable under 42 U.S.C. § 1983 (Supp. IV 1980) as an unconstitutional “taking” of property.
Prior to trial, a settlement agreement was reached and a stipulation of settlement and discontinuance was duly executed and incorporated in an order entered by the district court on May 11, 1981. The order provided that Rockland would (1) engage an appraiser to determine the fair market value of the thirty acre parcel; (2) commence condemnation proceedings with the understanding that Kohl would be compensated for the appraised value of its land; and (3) simultaneous with its filing of the condemnation petition, “acquire title to the subject property.” See J. App. at 19 (emphasis added).
Rockland subsequently petitioned the County legislature and received permission to acquire the Kohl property by eminent domain. In the interim, however, counsel for the County apparently determined that Rockland could accomplish its anti-flooding objective more economically by obtaining an easement over the portion of the property needed for the retention basin. Rock-land thereafter obtained legislative approval to acquire the easement and, on motion by the County, Justice Sullivan of the New York State Supreme Court, Rockland County, approved Rockland’s petition to condemn a permanent easement. See J. App. at 61.
Kohl then petitioned the district court pursuant to Fed.R.Civ.P. 60(b)(6) to vacate the stipulation and reinstate the original action on grounds that Rockland had breached the settlement agreement. Kohl charged that the settlement agreement obligated Rockland to acquire a fee interest in the disputed acreage and, by refusing to condemn more than an easement, Rockland had failed to satisfy the terms of the agreement. The court agreed that a breach had occurred, but nonetheless denied Kohl’s Rule 60(b)(6) motion, explaining that plaintiff’s original action was extinguished upon execution of the settlement agreement and could not be reinstated on a Rule 60(b)(6) motion. The court noted, however, that the decision was without prejudice to plaintiff’s making a motion for enforcement of the settlement agreement. See J. App. at 136. Kohl moved for enforcement of the agreement and the court, after finding a breach by Rockland, ordered the County to condemn Kohl’s fee interest in the 30 acres.
A. Jurisdiction
Although not raised by the parties, the issue of subject matter jurisdiction warrants brief discussion. Section 1983 provides in pertinent part:
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.
42 U.S.C. § 1983 (Supp. IY 1980).
28 U.S.C. § 1343 (1976), the jurisdictional predicate for section 1983 actions, provides in pertinent part:
The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person:
(3) To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States
Where the plaintiffs complaint alleges sufficient facts to state a cause of action under section 1983, the jurisdictional requirements of section 1343 are satisfied, provided the claim alleged is not “obviously frivolous,” “wholly insubstantial,” or “essentially fictitious.” See Parratt v. Taylor,
Section 1983 finds its historical roots in the Civil Rights Act of 1871, 17 Stat. 13, a statute “intended to ‘[create] a species of tort liability’ in favor of persons who are deprived of ‘rights, privileges, or immunities secured’ to them by the Constitution.” Carey v. Piphus,
Official acts of a county satisfy the “under color of state law” component of section 1983. See Morrison v. Jones,
The eminent domain power of the state has long been recognized as a necessary and important incident of its sovereignty. People v. Adirondack Railway,
The New York courts have duly recognized that judicial intervention is necessary where the state seeks to circumvent its constitutional duty to pay fair compensation for private property condemned through eminent domain: “The limits of police power may be extensive, although ill-defined, but common justice requires that such power should not be used to circumvent the constitutional inhibition against appropriating private property for a public use without compensation.” Her-kimer Pulp & Packaging Corp. v. McMorran,
Kohl asserts in its complaint that Rockland intended, through use of governmental taxing and eminent domain power, to “take” its property without just compensation. We are satisfied that the constitutional deprivation alleged here is not “obviously frivolous,” see Hagan v. Lavine,
B. Substantive Claims
1. Constitutionality of Taking
Counsel for Rockland crafts a creative, albeit unpersuasive, constitutional argument in an effort to evade its obligation under the settlement agreement. The County asserts that its eminent domain powers are limited by the constitutional prohibition against “taking” private property in excess of that amount necessary to accomplish the intended public use. Rock-land notes that it could satisfy its anti-flooding objective simply by “taking” an
We agree that a county has no right under its eminent domain power to condemn an estate in excess of that which is needed to accomplish the intended public purpose. See Hallock v. New York,
The “consent doctrine,” first adopted by the New York courts in Embury v. Conner,
The reported decisions fully support the view that the constitutional limitation on the state’s eminent domain power was intended to protect the property owner, not the government. See, e.g., Embury v. Conner,
2. Legality of Taking
Rockland asserts that the district court erred by ordering it to condemn a property interest greater than that necessary for public use. Rockland claims that the acquisition of more than an easement in the Kohl property would be wasteful and illegal and hence potentially would subject the County to a citizen’s suit on these grounds.
We are not persuaded by this argument. Rockland has not shown that it would be liable for waste or illegality for condemning a fee interest rather than an easement. The New York courts show due deference to the state when it exercises sovereign powers:
In the absence of illegality, fraud, collusion, corruption or bad faith, the Court has no power to restrain the city from entering into or carrying out any agreement which it chooses to make. The terms ‘waste’ and ‘injury’, as used in the statute, comprehend only wrongful, dishonest or illegal official acts, and are not intended to subject the action of an administrative official, acting within thelimits of his authority and jurisdiction, to the scrutiny and control of a judicial tribunal.
Hanrahan v. Corrou,
Rockland cites no case where the exercise of the county’s eminent, domain power has been successfully challenged through citizen suit on grounds of waste or illegality. Rather, the County relies on cases where the plaintiff alleges a wrongful award of a government contract, see Campbell v. City of New York,
.3. Compliance with District Court Order
Rockland advances two additional theories under New York eminent domain law to support its claims on appeal.
a. Legality of Compliance Under State Law
The County asserts that it cannot legally comply with the district court order mandating that it “take” by eminent domain Kohl’s entire fee interest in the disputed acreage. Rockland points out that under New York law it must obtain the approval of the County legislature before exercising its “taking” powers. Thus, according to Rockland, since the legislature has indicated that it will approve only the condemnation of an easement over the Kohl property, compliance with the district court order would require it to act beyond its legal authority.
But the County legislature did approve the settlement agreement signed by Rockland and Kohl. See J.App. at 107-09. Indeed, the legislature specifically authorized Rockland to acquire the Kohl parcel abutting the Nauraushaun Brook. See J.App. at 107. Thus, there is no legal bar under this theory to prevent Rockland from condemning a fee interest in the Kohl property.
b. Prior Legislative Approval
Section 204 of the New York Eminent Domain Procedure Law, N.Y.E.D.P.L. § 204 (McKinney 1979), requires a con-demnor to certify and approve the intended public use of a property before commencing eminent domain proceedings. Rockland asserts that the district court usurped the County’s governmental function under section 204 by ordering the County to “take” an interest without certification and approval as necessary for the public good.
This argument is circular. The district court did not usurp the County’s governmental function under section 204, it merely accepted a settlement agreement voluntarily entered by the parties and approved by the County legislature, pursuant to section 204.
Finally Rockland asserts that the parties could not have contemplated the “taking” of an entire fee simple interest because the Kohl property was encumbered by several outstanding easements. Hence, according to Rockland, the Court should interpret the parties’ use of the term “acquire title” as a reflection of their intent to condemn an easement as opposed to a fee interest.
This argument is frivolous. As with any settlement agreement or contract, we look first at the plain language of the agreement. Sanchez v. Maher,
Here, Rockland never identified in the settlement agreement the type of estate that it expected to “take” from Kohl except to note that it would “acquire title.” Because, in the absence of limiting language, “title” is commonly undérstood to mean a fee interest, Rockland cannot now be heard to complain when it failed to specify its intent to condemn a lesser estate. Moreover, Rockland’s conduct during the settlement negotiations belies its assertion that at the time the agreement was executed it intended only to condemn an easement in the Kohl property. See Raymond v. New York,
Affirmed.
Notes
. In his first decision Judge Gagliardi found that the settlement agreement obligated Rock-land to acquire from Kohl a fee simple absolute interest in the disputed parcel. It was later brought to the attention of the court that several easements encumbered the acreage in question and hence it would be impossible for Rock-land to take a fee simple absolute from Kohl. The court duly noted this fact and ordered Rockland to acquire Kohl’s total interest subject to outstanding encumbrances. See J.App. at 168, 169.
. We reject Rockland’s argument that a public hearing should be held to ascertain the appropriate estate necessary for public use. Section 206 of the E.D.P.L. provides that:
The condemnor shall be exempt from compliance with the provisions of this article when:
(A) pursuant to other state, federal, or local law or regulation it considers and submits factors similar to those enumerated in subdivision (B) of section two hundred four [i.e. public use, environmental effects, etc.], to a state, federal or local governmental agency, board or commission before proceeding with the acquisition and obtains a license, a permit, a certificate of public convenience or necessity or other similar approval from such agency, board, or commission____
N.Y.E.D.P.L. § 206 (McKinney 1979). Rock-land presented its plan of acquisition to the County legislature in April 1981. The legislature considered Rockland’s request and approved the “taking” of “title” to the Kohl property. No hearings are necessary. Aswad v. City School District of Binghamton,74 A.D.2d 972 , 972-73,425 N.Y.S.2d 896 , 898 (3d Dep’t 1980).
Dissenting Opinion
(dissenting):
I respectfully dissent. The federal courts should not permit § 1983 to be used as a means to obtain undeserved payment from public funds. In this action, Kohl never had a valid claim; the complaint alleges an uncompensated “taking”, but presents no facts which would allow a court to find a fifth amendment violation. Moreover, the relief Kohl seeks, an order compelling the condemnation of a fee simple interest, is not a remedy any court could provide to Kohl. As discussed below, this action should be remanded to the district court for the purpose of entertaining a motion to dismiss for failure to state a cause of action.
Despite Kohl’s allegations of extensive activity by Rockland, no formal steps toward condemnation were ever taken. Most importantly, none of the actions taken by Rockland, nor the totality of its conduct, amounts to a de facto taking of the Kohl property. Ordinarily, a taking does not result before formal condemnation proceedings are commenced. As courts have repeatedly acknowledged public projects often go through many formative steps and alterations, and may even be abandoned, before condemnation proceedings are necessary. The state simply does not incur liability for a taking each time it speculates as to whether a particular property owner’s land might be made subject to eminent domain.
In Danforth v. United States,
“The State Supreme Court correctly rejected the contention that the municipality’s good-faith planning activities, which did not result in successful prosecution of an eminent domain claim, so burdened the appellants’ enjoyment of their property as to constitute a taking.. .. Even if the appellants’ ability to sell their property was limited during the condemnation proceeding, the appellants were free to sell or develop their property when the proceedings ended. Mere fluctuations in value during the process of governmental decision-making, absent extraordinary delay, are ‘incidents of ownership.’ ” Id. at 263 n. 9,100 S.Ct. at 2143 n. 9 (citation omitted; quoting Danforth, supra).
The Danforth and Agins decisions both concerned condemnation proceedings which had been commenced and abandoned. More specific to the Kohl action, the highly regarded, well-reasoned New York Court of Appeals decision in City of Buffalo v. J. W. Clement Company,
Rejecting Clement’s argument that a de facto taking actually occurred in April 1963, the Court of Appeals held that the threat of condemnation could never constitute a taking. The court distinguished a de facto taking, which it found to involve “a physical entry by the condemnor, a physical ouster of the owner, a legal interference with the physical use, possession or enjoyment of the property or a legal interference with the owner’s power of disposition of the property.” Id. at 255,
The court found meritless assertions that a de facto taking could result from extensive municipal planning, and refused to award damages based on losses incurred at any time during the planning period. The court reasoned:
“We simply have a manifestation of an intent to condemn and such, even considering the protracted delay attending final appropriation, cannot cast the municipality in liability upon a theory of a ‘taking’ for there was no appropriation of the property in its accepted legal sense....
“Moreover, strong policy considerations prohibit a finding of a de facto taking in the instant case. To hold the date of the announcement of the impending condemnation, whether directly to the con-demnee or by the news media, constitutes a de facto taking at that time, would be to impose an ‘oppressive’ and ‘unwarranted’ burden upon the condemning authority. At the very least, it would serve to penalize the condemnor for providing appropriate advance notice to a property owner. And to so impede the actions of the municipality in preparing and publicizing plans for the good of the community, would be to encourage a converse policy of secrecy which ‘would but raise [greater] havoc with an owner’s rights.’ ” Id. at 255-56, 321 N.Y.S.2d at 357-58 ,269 N.E.2d at 903-04 (emphasis in original; citations omitted).
Not only is Kohl’s action controlled by City of Buffalo, but Kohl presents a far less compelling allegation of hardship than that case. The record here is devoid of any indication of Kohl’s ability or desire at any time to develop this land; apparently, Kohl never sought to improve, rent, or sell the property, and in fact purchased it well after Rockland’s flood control plans were being investigated. The complaint reveals that Kohl failed to pay property taxes for some time in 1977 and 1978, and that Rockland had already obtained all of the Kohl property through a tax sale, subject to Kohl’s right to redemption within three years. The settlement agreement presently at issue itself reveals that Kohl’s imminent loss of the property, resulting from its own inability to pay its taxes, precipitated this lawsuit: Kohl’s two concerns were that Rock-land would obtain title through condemnation before the end of the redemption period, and that Kohl would be absolved of liability for unpaid taxes.
Certainly nothing in the Constitution protects Kohl from the burden of paying taxes. Furthermore, whatever Kohl’s plans when it purchased this property, Rockland cannot be made liable simply because Kohl mis-predicted the timing of the condemnation: “The just compensation clause ... [is] certainly not intended to relieve real estate developers of the burdens of business decisions that do not turn out to be correct.” Thompson, supra n. 1,
Kohl’s claim was dismissed initially, however, not because it was meritless, but because the parties settled. To enforce that settlement, however, the district court would be required to order Rockland to condemn more of Kohl's property than the county legislature has found to be necessary for the public use. See Hallock v. State,
The timing of condemnation, and the extent and nature of the estate to be condemned, are decisions which can be made only by a legislature. E.g., In re Board of Water Supply of the City of New York,
Kohl now asks that a federal court supplant that legislative decision and state court action with its own order. No court could force Rockland to exercise its powers of eminent domain when it has expressly chosen not to do so. Absent a de facto taking by state action, no court could condemn an interest in property without legislative authorization. However commendable the district court’s efforts to settle this action, the settlement agreement simply cannot be enforced.
Moreover, Kohl’s insistence on the condemnation of a fee interest rather than a permanent easement seeks a windfall at Rockland’s expense. The parties agree that a permanent easement and a fee simple would be valued so as to result in the same compensation, and Rockland has agreed to assume the tax obligations, if any, Kohl may incur by remaining the technical owner
By retaining a fee interest in the condemned thirty acres, Kohl would be entitled to develop its remaining thirty acres according to a density allowance based upon the entire sixty acres. If Rockland instead condemned a fee interest, the density allowance would be reduced accordingly, and Kohl would be entitled to consequential damages. Because the thirty acres retained by Kohl do not appear conducive to this developmental opportunity, Kohl is attempting to manufacture the increased consequential damages.
Kohl has already received more through its settlement of this meritless action than it ever was entitled to by law. To assist Kohl in its efforts to obtain increased and undeserved consequential damages through a highly questionable exercise of judicial authority would be to encourage similar actions brought in an abuse of § 1983 jurisdiction. I cannot condone such a result, and I am compelled to dissent.
. Accord, e.g., Chacon v. Granata,