Landowners may still recover damages
2016 Case Notes: Condemnation
December 6, 2016
The South Carolina Court of Appeals recently considered the appeal of Claude Graham and Vickie Graham against the Town of Latta, South Carolina, in the case of Graham v. Town of Latta, 789 S.E.2d 71 (S.C.Ct.App. 2016). The Grahams purchased their home in 1989. They did not have the home inspected or the property surveyed before the purchase. They remodeled the house in 1989 and 2007. Unknown to the Grahams, the Town of Latta ran a sewer line under their home. In 2008, the sewer line overflowed twice, and raw sewage flooded the Graham’s yard and the crawl space under their home. On their physician’s advice, the Grahams moved out of their home. The Town denied any liability for the damage to the Grahams’ home, motor vehicles, and personal property.
The Grahams sued the Town for inverse condemnation and negligence. The trial court granted a directed verdict in favor of the Town for the inverse condemnation claim, but allowed the negligence cause of action go to the jury. The jury returned a verdict in favor of the Grahams for $325,000 for damage to real and personal property. Both parties appealed.
Considering the inverse condemnation claim, the Court affirmed the trial court’s findings that no inverse condemnation had occurred. “An inverse condemnation may result from the government's physical appropriation of private property, or it may result from government-imposed limitations on the use of private property.”
Id., 789 S.E.2d at 85. Quoting Carolina Chloride, Inc. v. S.C. Dep't of Transp., 391 S.C. 429, 435, 706 S.E.2d 501, 504 (2011), the Court of Appeals summarized the requirements for inverse condemnation: “(1) affirmative conduct of a government entity; (2) the conduct effects a taking; and (3) the taking is for a public use.” Id. “To prevail in [an inverse condemnation] action, a plaintiff must prove an affirmative, aggressive, and positive act by the government entity that caused the alleged damage to the plaintiff's property.” Id. The Court found that “most of the acts [supporting] inverse condemnation … are more appropriately characterized as mere failures to act.” Id. Because the Town did not affirmative or positively act to cause the sewage overflow, there could be no recovery for inverse condemnation.
However, the Court agreed that the Town could be liable for negligence. The Town argued it was entitled to discretionary immunity because they chose not to fix or replace the sewer line after they learned it was leaking on the Graham’s property. Id. at 80. The Court rejected this defense, finding the evidence supported an inference that the “Town failed to utilize accepted professional standards in addressing infiltration and inflow problems identified with respect to its sewer line….” Id. at 82. In fact, the Court found that the Town failed to gather the information necessary to “attempt to address” the problems, such that trial court properly denied the motions for directed verdict and JNOV. Id.
The Graham case demonstrates the necessity, in takings cases, of advancing alternate theories of recovery. Had the Grahams simply alleged inverse condemnation, they would have lost the case. But by arguing the Town’s inaction was actionable negligence, they were able to recover the full measure of their damages against the Town. Thus, every landowner, in consulting with their attorney in circumstances such as these, needs to consider every legal claim against the myriad defenses available to governmental entities and municipalities.
Bruce Wallace practices in the business and consumer litigation group. He represents a variety of banking and financial institutions in real estate litigation, commercial litigation, and mortgage foreclosures. He also represents insurers and corporate clients in bad faith and coverage issues, professional liability, business litigation (including disputes involving partnerships, limited liability companies, and closely held companies), and probate litigation matters (including trusts and estates).