New England Estates, the proposed housing developer for the 77-acre Tabor parcel that the town of Branford seized by eminent domain, has asked the State Supreme Court to reconsider its unanimous decision to reverse a $12.4 million jury verdict the developer won in 2007.
On the same day, the town of Branford also went back to the high court. Its purpose was to clarify what the court meant when it said the town’s leaders acted dishonestly when they seized the land in 2003-04. The decision to return to the Supreme Court came at a Board of Selectmen meeting last month. The three-member board asked the court to resolve an ambiguous response from the jury on how bad faith is defined.
Last month the state’s highest court, in a major victory for the town, reversed both the $12.4 million damage award and $1.5 million in legal fees that a trial judge previously awarded Shipman & Goodwin, NEE’s attorneys. Now Tim Hollister, a partner in the firm, requested the case be reheard “en banc, ” meaning all seven Supreme Court justices consider it. Two of the sitting judges, including the chief judge, recused themselves in the past. It is not clear even if the court takes the case if appellate court justices would be added to the bench to rehear it.
NEE filed its brief last week, saying the high court wrongly ruled that the option the company had to build on property owned by others was not an interest that can be compensated under the U.S. Constitution. The high court held that the NEE option was an “unrecorded, unexercised option to purchase the property.” That interest, the court 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’ contractual right is not a property right protected by the federal takings clause.”
In effect the court eliminated the federal law question and therefore the jury’s damages. Hollister asked the high court to restore the federal issue.
“The jury’s award of contract damages to the owners was premised on the fact that NEE would have closed and become the fee owner but for the town’s conduct. The constitutional protection issue, then, is whether, under these facts, and federal and state law, NEE’s rights were secure enough to be entitled to protection against abuse of eminent domain,” Hollister wrote.
In his ten-page brief Hollister argued that the court premised its decision on a 1904 case that overlooks key developments in the law since then. The 1904 case centers on an unexercised option to purchase bonds. The Tabor case centers on an unexercised option to purchase property.
“The case [Patterson v. The Farmington Street Railway Co.] also does not reflect the analysis required by federal law and the Court’s own precedents regarding constitutionally protected property interests,” Hollister said in his motion.
The town seized the land by eminent domain in the summer of 2003 after DaRos said the developers were not taking seriously the environmental hazards emanating from the town dump. The Tabor land shares a property line with the dump and hazardous gases in the form of plumes are known to exist.
At the oral argument before the Supreme Court last May Hollister noted that once the town took title, NEE lost its contract, its permits, and to a large degree its ability to appeal “because we no longer had an interest in the land,” Hollister told the justices. “Land Use 101, you need to have an interest in the land. NEE was left with nothing other than a damages remedy because of the town’s conduct.”
Town attorney William H.Clendenden,Jr. had argued that the remedy the owners —not the developers — were entitled to is the just compensation provided by the Fifth Amendment when land is taken. “They [the developers] are not entitled to use federal civil rights laws to create a whole new series of remedies.”
In this set of court papers, Hollister argued that an unintended consequence of the ruling would be to “eviscerate” option holders from seeking just compensation “after even a valid use of eminent domain.” While the developers have not been compensated, the owners of the Tabor land will be. They are entitled to just compensation under the Fifth Amendment and while the town awarded them $1.167 million because the land was zoned industrial, the trial judge said the land was worth $4.6 million, more than the town thought, less than the developer wanted. The reason? The judge said the highest and best use of the land was housing. At the time, the land was vacant and zoned industrial. Town officials said it posed potential health and safety dangers.
Last week the Board of Finance approved a $5.2 million allocation (with interest) to be paid to the property owners, Thomas Santa Barbara and Frank Perrotti, Jr. Santa Barbara and Perrotti purchased the parcel for $2.5 million at a bank auction with the expectation they could use it as a dump. But the state later barred that use.
With this latest appropriation, the town will have spent $10.9 million on Tabor related costs, including $3.64 million in legal fees since the case began in 2003. The latest costs will be bonded and will be paid over the next 15 years, Finance Director Jim Finch told the Representative Town Meeting last night.
The RTM endorsed the latest Tabor allocation in a near unanimous vote. Only one person abstained, Republican Marc Riccio, who announced he was new to the body. He asked James Cosgrove, also new to the body, to do the same, but Cosgrove said he understood the need for the town’s legislative body to act honorably and pay its debt. Cosgrove voted yes, along with all the other Republicans. The Democrats voted unanimously as well.
In a separate motion to the court, the National Association of Home Builders and the Home Builders Association of Connecticut asked the court if it could file a friend of the court brief on behalf of NEE.
“The proposed amici state that their longstanding involvement in researching and advocating four housing opportunities and the protection of private property rights makes the uniquely situated to assist the Court in the resolution of this appeal. “
William Ethier, who represents the associations, argued that but for the eminent domain taking of the land, the developer would have closed its purchase of the property. The court, he argued, “improperly held that NEE had no property interest.” At the time of the taking, NEE sought to build 354 residential condos of which 107 would be designated as affordable housing.
He added that the ruling “throws into doubt long standing decisions of this court and the understandings of the real estate community.” He also said that the judge’s opinion “authorizes, if not invites, government to use eminent domain in bad faith to stop politically unpopular land uses, without liability so long as the sale has not been completed when the taking occurs.”
Hollister wrote that “for profit and especially non-profit housing and economic developers will be deterred from investing funds in due diligence and permit applications if their rights can be taken without just compensation.”
The way the town wound up back before the Supreme Court, an action no one could have predicted, occurred at an emotional Board of Selectmen meeting last month.
Republican Third Selectman John Opie under whose administration the land was formally taken, said he wanted to understand why the court called the town dishonest. “It is a pretty powerful statement to say we were dishonest or deceitful, without any basis,” he said. Long a political opponent of DaRos, ( he has lost to him twice in the race for First Selectman), Opie claimed that DaRos’s “political career is hanging in the balance.”
He seemed perplexed over the bad faith, dishonesty claims, even though Hollister and his partner James Bergenn have insisted throughout the two trials and the aftermath that the town acted in bad faith. It is a phrase the select board knows well.
After a good deal of back in forth, Democrats DaRos and Second Selectman Fran Walsh decided — without fully explaining why — to vote with Opie to send the case back to the court. Town Attorney Clendenen, who sat across from the selectmen during this exchange, said he would go forward if asked. Had DaRos and Walsh said no, Opie would have lost. .
In the end, Clendenen asked Wesley Horton, one of the state’s leading constitutional attorneys and member of the Tabor team, to write the brief. Horton had argued the Tabor land valuation case before the high court. He lost. The town was barred from calling experts in either the land valuation case or the developer’s case because the Marcus Law Firm, which represented the town when Cheryl Morris served as first selectwoman from 2005 to 2007, failed to heed court ordered deadlines. The town has sued the firm.
Horton argued that despite the Court’s statement that Branford acted in bad faith and was dishonest in seizing the land by eminent domain, in fact,” the town never conceded that the jury’s bad faith finding was proper; to the contrary, it challenged the jury charge on this issue in its brief,” he said.
He said the high court overlooked an analysis of the jury’s federal Fifth Amendment Takings clause violation. It answered “yes” to three possible questions, that the town’s conduct was either “pretextual and invalid,” OR “unreasonable” OR an “abuse of power.”
Horton wrote that “the citizens of Branford are entitled to know, in assessing their local government, whether this Court maintains that the record shows (a) that town officials did act dishonestly, or (b) that that is only one of three possible conclusions, one of which is mere unreasonableness.”
The high court does not have to review the case. It can let its decisions stand or it can rehear one or both cases.
Chief Justice Chase T. Rogers and Christine Vertefeuille did not sit in the Tabor case because of conflicts of interest. Justice Rogers’s husband is at Robinson & Cole, one of the law firms in the case. It is not known why Justice Vertefeuille did not sit.
Briefs for the opposing parties will likely be filed by month’s end. .
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