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Court News Ohio

Court Upholds $1.3 Million Takings Judgment Against Westerville for Streetscape Project

The city of Westerville may not have intended to wall off a U.S. Bank branch from its customers as it acquired land for its gateway beautification project, but the manner in which it took control of the land gave it the right to and now it owes the property owner $1.3 million in damages.

The 10th District Court of Appeals upheld a Franklin County Common Pleas Court ruling in favor of James R. Taylor, owner of the commercial property where the U.S. Bank branch is located on Heatherdown Drive.  The city acquired land and easements along South State Street and side streets to install landscaping, ornamental fencing, a brick plaza and other features to promote the city.

Taylor’s property features two driveways, one on the northern side to enter and leave onto  Heatherdown, and the other slightly more west as the street curves. The city’s reconstruction project was initiated on 2012 and it paid Taylor nearly $146,000 to take two small parcels in fee simple across the northern entrance and a landscape easement to allow for the ornamental beautification of the property on Heatherdown.

During the reconstruction bank customers never lost access to the branch and during the course of the initial litigation, U.S. Bank renewed its lease for the property through 2018. Taylor raised concerns that the decorative new entrance and limited access to the driveways would diminish the value of the property severely even though the city pointed out in its plans it had no intention to shut off the northern property entrance once the upgrades were completed. The other entranced to the west was in dispute and potentially could be closed.

Taylor argued that by taking the land in fee simple rather than just seeking permanent easements, his property was at risk for being rendered completely useless as a commercial property. Jurors in the case were given a jury instruction that would allow them to consider the city’s action doing the maximum possible damage to the property’s value. The jury awarded Taylor $182,000 for the actual value of the property and $1.13 million for diminishing the bank building’s potential usefulness.

Westerville appealed and the ruling has drawn the attention of Ohio government and business advocates. The State of Oho and the Municipal League filed amicus curiae briefs in support of Westerville and the National Federation of Independent Business Small Business Legal Center, the Ohio Council of Retail Merchants and the Ohio Association of Realtors filed a joint amicus brief in support of Taylor.

Writing for the court, Judge Gary Tyack said when lands are taken in fee simple, without reserving any rights to the landowner, the city is taking all the rights and interest in the land, including the right of access to the property. The court said the leading case in this dispute is Masheter v. Diver, 20 Ohio ST. 2d 74 (1969) that states a fee simple ownership is the highest right, title and interest one can have in land and it is the “full and absolute estate in all that can be granted.”

“If the City chose to, it could erect a barrier across the driveway and essentially close the bank to banking customers,” Tyack wrote. “The City may not have intended to deny all access to the U.S. Bank branch on Taylor’s property, but the fee simple property interest it received as a result of the appropriation action gives it the power to do just that.”

Westerville argued the case of  Masheter v. Blaisdell, 30 Ohio St. 2d 8 (1972) issued three years after Diver should control the matter and it limits what a government owes for taking the land to what is presented in the plans and specifications of construction projects. Since Westerville’s plans indicated it never intended to close off the property, the jury should never been instructed to consider the maximum potential damage, but just the costs associated with beautifying the area.

The court noted that Blaisdell dealt with permanent easements and not fee simple titles. The court said if the city had only sought an easement, the Blaisdell decision might apply.

Judges Julia A. Dorrian and Amy C. O’Grady concurred in the decision.

Westerville v. Taylor, 2014-Ohio-3470
Civil Appeal From: Franklin County Court of Common Pleas
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: August 12, 2014

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