Petrogram - Summer 2009 - (Page 25)
FEATURE FDOT’s Attack on Business Damage Will businesses displaced by eminent domain now bear all the risk of relocation? Joel Roberts and Brian Smith minent domain proceedings often affect petroleum marketers because their businesses are typically located along well-traveled roads and busy intersections. These roads are eventually expanded and improved, requiring governmental property acquisition by eminent domain. One aspect of eminent domain law that is relatively unique to Florida is the provision of compensation for business damages. In addition to the constitutional guarantee of property rights in Florida, Florida’s statutes recognize that a business has value apart from its real estate and, in certain circumstances, provide compensation for businesses in connection with eminent domain actions. System Components Corp. v. Florida Department of Transportation is a case currently pending before the Florida Supreme Court that threatens to greatly reduce the compensation awarded to these qualifying businesses. E Relocation Evidence: The State of the Law Influx A business in operation at a particular location for at least ﬁve years is entitled to compensation for damage to or destruction of the business caused by a partial taking of its property. For example, if a petroleum marketer operating at a particular location for at least ﬁve years loses a portion of their property in an eminent domain action, the business is entitled to compensation for business damages, including loss of goodwill and lost profits. Sometimes the business damages are minimal; often the taking results in a total business wipeout. A business facing an eminent domain taking will sometimes consider relocating. Relocation is not without its risks, and obviously there are no guarantees that a successful business in one location will be equally successful in another. Still, condemning authorities seek to have relocation evidence deemed admissible in court because it would aﬀord them the opportunity to signiﬁcantly reduce compensation paid to business owners. The condemning authority would be able to use evidence of proﬁts at the new location to reduce the compensation paid for the disruption of business at the old location. In 2005, the Fourth District Court of Appeal in Florida Department of Transportation v. Tire Centers, LLC, 895 So.2d 1110 (Fla. 4th DCA 2005), decided that a condemning authority cannot introduce evidence of relocation to reduce the business owner’s business damage claim. In Tire Centers, the condemning authority wanted to introduce evidence showing that the business could mitigate its business damages by relocating to a nearby parcel. Relocation evidence, the court said, is not relevant because an eminent domain action is concerned only with issues aﬀecting the parent tract. Oﬀ-site evidence is not relevant to compensation, and more importantly, the statute makes no allowance for consideration of oﬀ-site relocation evidence. Unfortunately for business owners, Tire Centers is not the end of the story. In 2008, the Fifth District Court of Appeal issued an opposite ruling in System Components Corporation v. Department of Transportation, 985 So.2d 687 (Fla. 5th DCA 2008). FDOT took part of System Components’ property and the remainder was not large enough to continue the business. By the time of trial, the business had relocated to a new facility and was attempting to continue the business. Contrary to Tire Centers, the System Components court allowed FDOT to present evidence of the oﬀ-site relocation of the business. The trial court ultimately entered judgment for damages taking into account the oﬀ-site data. On appeal, the Fifth District aﬃrmed the trial court’s decision, holding that evidence of relocation is admissible to reduce a business damage claim. The court held that ignoring the oﬀ-site relocation evidence gives the business owner a windfall. Petrogram | Summer 2009 | 25
Table of Contents for the Digital Edition of Petrogram - Summer 2009
Petrogram - Summer 2009
2009 Convention and Trade Show Information
What, Another Deadline?
Out & About the Industry
The Un-Comfort Zone with Robert Wilson
FDOT’s Attack on Business Damage
Crime Doesn’t Pay – Neither Should You
The HR Advisor
Meet New Member: WatchDog Calibration
Keep It Local
Index to Advertisers/ Advertisers.com
Petrogram - Summer 2009
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