Utility Line & Pipeline Easements Damages to the Remainder (Part 1)

John Albers focuses his practice on utility and energy matters at Shay Phillips, Ltd. He has written a three part series of blog posts discussing damages to the remainder of a property (that is, the part of the property that is not taken for the easement) during eminent domain proceedings involving utility transmission line and pipeline easements. This is the first part.

Well established in American jurisprudence is the principle that private property may not be taken for public use without just compensation.  Typically, a governmental entity, or an entity with government authorization, seeks to take or condemn private property through an eminent domain court proceeding after efforts to negotiate the purchase of the property have failed.  A key sticking point in such negotiations frequently relates to the amount of money offered for the property.  In those situations where less than an entire parcel is to be taken, some landowners want compensation for more than just the property interest condemned.  They also expect to be compensated for the impact that the condemnation has on their property that remains after the condemnation.  The impact on the remaining property is commonly referred to as the “damage to the remainder.” Absent a negotiated agreement, the court in an eminent domain proceeding is to determine the amount of money to which the landowner is entitled.  Both parties in the proceeding – the condemnor and condemnee – may present testimony and evidence.

Those entities seeking to take only a portion of a parcel often maintain that there is no impact or damage to the remainder of the parcel beyond the property interest that is actually taken.  Regardless of the condemnor’s assertions, however, to the extent that there is an impact on the remainder, the Illinois Supreme Court has long recognized that landowners may receive compensation for damages to property interests remaining after other property is taken via eminent domain.  In considering the compensation to which a landowner is entitled, the Illinois Supreme Court has held that the owner is entitled to the amount of money necessary to put him in as good financial condition as he was with the ownership of his property prior to the use of eminent domain.  The Court, however, has also made clear that to recover for damages to land not taken it must appear that there has been some direct disturbance of a right, either public or private, which a person enjoys in connection with his property, and which gives it additional value, and that by reason of such disturbance he has sustained a special damage with respect to his property in excess of that sustained by the public generally.  The disturbance need not be a physical disturbance or direct injury.

In cases involving the condemnation of an easement strip (typically between 50 and 150 feet wide), the Court has identified three elements of damage for a jury to consider: (1) the fair cash market value of the land actually occupied by any structures, (2) the diminishment in the fair cash market value of the land burdened by the easement strip, and (3) the diminishment, if any, of the fair cash market value of the remainder of the parcel outside of the easement strip.  Which party has the burden of proving damages to property impacted by eminent domain, and the value of such damages, depends on whether the property is that which is to be taken or lies outside of the property to be taken.  The Court has held that a condemnor bears the burden of proving the value of the property interests actually taken.  In contrast, the landowner bears the burden of proof in seeking to recover for damage to the remainder.

In the next installment of this discussion of damage to the remainder, such damages in the context of utility easements will be examined.  The third installment will consider how Illinois courts have calculated the value of the damages to the remainder.