UPDATE — In a unanimous decision, the Connecticut Supreme Court today reversed a $12.4 million jury damage award against the Town of Branford. The case stemmed from the town’s decision in 2003 to seize under eminent domain a 77-acre tract of land known as Tabor.
In a major victory for the town, the high court held that New England Estates, the proposed developer of the Tabor site, was not entitled to the jury’s hefty damage award, issued in September, 2007. Nor were lawyers for Shipman & Goodman entitled to nearly $1.5 million in legal fees the judge awarded them.
Had the town lost the New England Estates case, it could have faced a $28 million bill, including interest fees, legal fees and $ 8 million in debt service over twenty years, Jim Finch, the town’s finance director, told the Eagle late today. As it turns out, the town’s costs to the actual property owners, Thomas Santa Barbara, Jr. and Frank Perrotti, Jr. will be about $5.2 million, he said. The town now owns the land.
The controversial case has enveloped Branford politics for nearly seven years. It took the state’s highest court 21 months to render its decision. The town filed its appeal in April, 2008. Oral arguments were held in May, 2009 — 13 months later — and a decision was rendered today. Click here to read it.
The high court ruled that New England Estates was not entitled to any damages because it did not own the land; it only had an option to build on the land. And that option was clouded to begin with. Justice Ian McLachlan, who was appointed to the high court a year ago this month, wrote the decisions in which four other justices concurred.
The developers claimed that the town took the property to prevent an affordable housing development. New England Estates claimed that they had the right to recover lost business profits as if they had purchased and developed the property as a profitable enterprise. New England Estates never purchased the property.
Town Attorney William T. Clendenen Jr., who gathered a group of the state’s top attorneys to appeal the case and others emanating from it, said in an interview that he has litigated in the area of civil rights law since 1967. “I did not believe they had a legally cognizable cause of action. I did not believe that that an unrecorded ‚unexercised option created a protection to property as required. There was no legally compensable right. And that is what the court said today. That was the central issue, the fundamental issue and we kept to that issue.”
He said when Unk DaRos, the town’s First Selectman, hired him to be the town counsel in 2007 “ these cases presented a crisis for the town. His direction to me was to try to extricate the town in the best way I could. I said I would leave no stone unturned to take the burden off the town.”
His strategy was to keep his eye on the big picture. He said he raised key issues before the court, but not all the issues that he could have raised. He said he felt some of these issues “ would detract from core of the case. I am sure I will be criticized by some.”
In fact the town’s case before the Supreme Court was only as good as the trial record below and while he wasn’t saying so, that trial record was extremely problematic for the town, which essentially found itself unable to put on a case because the town’s prior counsel, The Marcus Law Firm failed to meet a key deadline that would have permitted expert witnesses to testify at the trial. The town has since sued the law firm.
The high court’s decisions came down at 11:30 a.m. and by 1 p.m. DaRos had asked his department heads, close associates, RTM members, past and present from both sides of the aisle and Clendenen to come to Town Hall. “I wanted to thank the staff, to say that through all the turmoil they stayed steady and moved the town forward. There were some rough goings out there. But the town hung together,” he told the Eagle .
He said he was deeply grateful to the towns’s Board of Finance and the Representative Town Meeting (RTM) for providing unanimous, bi-partisan support and funding for the set of appeals that led to today’s decision. Click here and here and here to read about it.
State Representative Lonnie Reed joined DaRos to await the decisions. She was involved in the Tabor Drive battle while still a member of the RTM. “Our little town has been fighting for years against the incredible forces arrayed against us. We knew we were right. We refused to give up. We refused to give in. We stood together and we stood our ground. It is an incredible victory for our entire community,” she said later in the day.
DaRos said he had not changed his mind one iota when it came to the risk of contamination on the Tabor site, the key reason why he moved in the first place to take the land by eminent domain.
“We have once and for all put an end to the threat of lawsuits that you know would have generated out of the property over the course of generations. He cited several towns in Connecticut, all facing lawsuits from residents living on or near a contaminated town dump. “Why do you want the risk? It was right then. It is right now. …The biggest thing we never lost sight of was the goal to protect the public. That is our obligation, our moral obligation.” Lawyers for New England Estates have maintained the property with the exception of a small area was not contaminated.
The New England Estates appeal had been consolidated with the Santa Barbara — Perrotti appeals. The trial judge Willliam T. Cremins Jr., valued the Tabor parcel at $4.6 million in 2007. Today’s court decision affirmed his finding, which he based on his belief that the highest and best use of the land was for residential housing. The town said the land was zoned for industrial use and it should pay the owners less. The town had originally set aside $1.167 million for the 77 acres. The high court also remanded the owners’ case to the trial court for a determination “of reasonable attorney’s fees” in their case. Click here to read the Santa Barbara appeal.
The major case centered on New England Estates, the developers. They asserted they were entitled to major damages because the town acted in bad faith. And while the justices at one point said they viewed the town’s actions with suspicion, declaring the town “was dishonest about its reasons for taking the land,” they did not throw out the case based on their conviction that the town acted in bad faith in employing the eminent domain action. They reversed the jury’s verdict on a less complex finding, that Connecticut law does not permit two sets of damages on a piece of property that is owned by an owner who options the land to another party.
New England Estates’ primary argument was that the Fifth Amendment’s “federal takings clause” had been violated. Today’s court ruling removed that argument, making the case strictly a state issue.
The court’s decision stated that New England Estates had an “unrecorded, unexercised option to purchase the property.” That interest, it said, “was not an interest that is compensable under the takings clause of the Fifth Amendment, which provides just compensation to an owner of the land if the land is seized by eminent domain.
“We conclude that because such an interest is not considered a property interest under Connecticut state law, New England Estates’s contractual right is not a property right protected by the federal takings clause.”
By eliminating the federal law question, and ruling in a unanimous way on state law, it may be difficult for attorneys Tim Hollister and Jim Bergenn of Shipman & Goodman, the lawyers who represented New England Estates, to appeal.
The town officially took the land in January, 2004, shortly after John Opie became Branford’s First Selectman. Current and former first selectman DaRos, the architect of the decision to seize the property in 2003, moved to take the land shortly before he left office.
At the time, New England Estates had an option to build, but had no town permits to put up a housing development. The high court in effect said an option is just an option, an argument that the town had made to Superior Court Judge Cremins without success.
The Supreme Court’s ruling will not be come official until it is published in the Connecticut Law Journal on Feb. 16. New England Estates will have the option to have the entire court reconsider the issue. But the remaining two members of the court, including the chief judge, recused themselves from hearing the case last year. It may also seek review from the U.S Supreme Court.
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This really is a split decision. It will likely cost as much as $6 million for Perrotti and Santa Barbara, plus whatever the Town spent defending the suits. What should also be noted is that the Supreme Court slapped the Town's hands for the manner in which it acted in taking the property. They agreed with the lower court that the Town acted dishonestly and took the land under false pretext. Branford won on the law, not on any moral highground here. At least the hit on the taxpayers is a bit less than it might have been....