Eminent domain reversed for failure to give proper notice

The Gary Housing Authority, which tried to exercise eminent domain and take a property with an appraised value of $325,000 for $75,000, will have to cancel the demolition crew after the Court of Appeals of Indiana found the agency failed to give at least 30 days’ notice of its plans.

The Gary Housing Authority initiated eminent domain proceedings against 624 Broadway LLC to acquire a property as an administrative taking under Indiana Code §§ 32-24-2-1 to -17, known as “Chapter 2.” A public hearing date on the resolution allowing the housing authority to exercise eminent domain was set for Sept. 19, 2019, but the housing authority did not publish notice until Aug. 21 and 28. Also, the housing authority did not mail a notice of the resolution to 624 Broadway’s registered agent, John Allen.

At the Sept. 19 hearing, the housing authority confirmed the resolution, then adopted a second resolution that listed 624 Broadway as the only affected property owner and established a damage award of $75,000 for the taking of the land. Another hearing was scheduled for Oct. 17, but notice was not published until Sept. 21 and 28 and Oct. 5.

Although he again had not received written notice, Allen learned of the Oct. 17 hearing and, at the proceeding, asked the housing authority to wait until 624 Broadway’s appraiser had completed the valuation. But the housing authority confirmed the Sept. 19 resolution and issued a check to 624 Broadway for $75,000. Less than two weeks later, the appraiser determined the property had a fair market value of $325,000.

Seeking injunctive relief, 624 Broadway filed a complaint alleging a violation of its constitutional and statutory procedural rights along with a request for damages. The housing authority filed a motion for summary judgment, which Lake Superior Judge Stephen Scheele granted.

On appeal, the Court of Appeals agreed with 624 Broadway that the way the housing authority used eminent domain violated the property owner’s state statutory rights to notice and an opportunity to be heard.

The unanimous panel found the housing authority violated I.C. 32-24-2-6(b) by failing to notify Allen of the resolution and by not giving the public at least 30 days’ advance notice of the meeting. Also, the court noted the housing authority ran afoul of I.C. 32-24-2-8(b) by not serving Allen notice of the Oct. 17 hearing and did not comply with I.C. 32-24-2-8(d) when it did not provide at least 30 days’ notice of that hearing.

Finding the housing authority did not follow the procedural notice requirements of Chapter 2, the appellate court reversed the grant of summary judgment.

“The Gary Housing Authority’s failure to properly serve 624 Broadway and its failure to hold its damages hearing no fewer than thirty days after the date of last publication contributed to 624 Broadway’s inability to obtain its own appraisal of the property prior to the October 17 hearing and to 624 Broadway’s inability to present competing evidence of its damages at that hearing,” Judge Paul Mathias wrote for the court. “We cannot say with confidence that, had the Gary Housing Authority complied with Chapter 2, as it was required to do, it would have assessed the same damage award for the property to 624 Broadway.”

The case is 624 Broadway, LLC v. Gary Housing Authority, 21A-CT-653.

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