Eminent Domain Law in Colorado—Part I: The Right to Take ... · a party with eminent domain authority ... and rules by which “just compensation” is assessed. Eminent Domain

The Colorado Lawyer / September 2006 / Vol. 35, No. 9 / 65

This article provides a generaloverview of the procedural andsubstantive law of eminent do-

main, the process by which one partycondemns or “takes” the real property ofanother on the payment of just compen-sation. It is written for the practitionerwho does not specialize in eminent do-main law, but who may represent eithera party with eminent domain authorityor a property owner faced with theprospect of condemnation.

This article will be published in twoparts. Part I discusses the prerequisitesfor the proper exercise of the power ofeminent domain and the means bywhich “immediate possession” of proper-ty may be acquired pending a valuationtrial. Part II, which will be published inthe November 2006 issue of The Colo-rado Lawyer, will address the processand rules by which “just compensation”is assessed.

Eminent Domain AuthorityThe right of eminent domain (or con-

demnation) is an inherent aspect of sov-ereignty possessed by the federal govern-

ment and each state.1 Although a con-demnation action usually is brought by agovernment authority, in some instances,a private party may condemn propertyrights for certain specified purposes.

The right of condemnation underColorado law is primarily derived fromand constrained by two provisions of theColorado Constitution: Article II, §§ 14and 15. Section 14 addresses the takingof property for private use, and limitssuch acquisitions for private ways of ne-cessity and land rights that are neces-sary for reservoirs, drains, flumes, orditches for agricultural, mining, milling,domestic, or sanitary purposes.2 Privateproperty may be taken for private useonly for one of the specific purposes list-ed.3 This right is available to any partyneeding a right-of-way for such purpose;however, a public entity already possess-ing the power of eminent domain nor-mally may not invoke the right to bringa private condemnation under § 14.4

Article II, § 15 of the Colorado Consti-tution addresses the taking of propertyfor public use. This provision governsmost condemnations in Colorado and

GOVERNMENT AND ADMINISTRATIVE LAW

Eminent Domain Law in Colorado—Part I:The Right to Take Private Property

Column Editors:Carolynne C.White, of BrownsteinHyatt & Farber, P.C., (303) 223-1197,[email protected]; Brad Bailey,Assistant City Attorney, City of Littleton—(303) 795-3725, [email protected];Tiffanie Bleau,Denver, of Light, Harrington &Dawes, P.C.—(303) 298-1601, [email protected]

About The Author:This month’s arti-cle was written byM. Patrick Wilson,who represents lo-cal governmentsand private prop-erty owners in em-inent domain andother real propertydisputes. He servesas Special Counsel at Murray, Dahl,Kuechenmeister & Renaud LLP and is a certified mediator with Landispute, LLC—(303) 493-6670,[email protected].

by M. Patrick Wilson

Part I of this article discusses the exercise of the power ofeminent domain, including sources of authority, public pur-pose, necessity, and negotiations, as well as practical issuesrelated to the filing of a condemnation action and obtainingimmediate possession.

Government and AdministrativeLaw articles provide information toattorneys dealing with various stateand federal administrative agencies,as well as attorneys representingpublic or private clients in the areasof municipal, county, and school orspecial district law.

In 2006, the general assembly passed and Governor Owens signed Senate Bill 154, which isan attempt to collect in a single statutory location all of the circumstances in which eminentdomain authority may be exercised. This information, to be codified at CRS § 38-1-202, liststhe entities that have been expressly granted the power of eminent domain and lists thestatutory source of that authority. This provision does not grant, restrict, or in any other wayaffect the substantive or procedural aspects of eminent domain law, but simply and conve-niently provides one location in the Colorado Revised Statutes where this information canbe found.

CRS § 38-1-202

Reproduced by permission. ©2006 Colorado Bar Association, 35 The Colorado Lawyer 65 (September 2006). All rights reserved.

provides the constitutional requirementthat just compensation be paid for anytaking, whether for public or private use.Furthermore, § 15 states that privateproperty cannot be “taken or damaged”without the payment of just compensa-tion.5 Thus, when only a portion of a land-owner’s property is taken, just compensa-tion may include any resulting diminu-tion in value to the remainder of property,as well as payment for the property rightsactually taken.6

Public EntitiesThe right of eminent domain for a pub-

lic use may be exercised by the federalgovernment, the State of Colorado, or byany political subdivision thereof that hasbeen expressly granted the power of emi-nent domain, including administrativeagencies,municipalities, counties,and cer-tain special districts. The State of Colo-rado possesses the power of eminent do-main as an independent sovereign; how-ever, any agency of the state or otherpolitical subdivision, with the exception ofhome rule municipalities exercising theirauthority under Article XX of the Colo-rado Constitution, must have express ornecessarily implied statutory authority toexercise the power of eminent domain.7Although the right to condemn for certainpurposes may be implied from a legisla-tive scheme that clearly evinces a legisla-tive intent to provide for the right,8 thereis a presumption against finding an im-plied right of eminent domain not ex-pressly granted by statute.9

Thus, statutory cities and towns, coun-ties, special districts, and agencies of thestate usually must be able to point to spe-cific statutory authority to exercise thepower of eminent domain. The statutoryeminent domain authority granted tothese political subdivisions often is limit-ed in scope to acquiring property interestsnecessary to perform specific functions.10

The eminent domain authority of homerule municipalities, on the other hand,arises from Article XX of the ColoradoConstitution and generally may be exer-cised, at least with respect to matters oflocal concern, without regard to statutory

limitations imposed by the general as-sembly.11 Article XX has been held to pro-vide home rule municipalities with asmuch authority over local affairs as con-stitutionally could have been conferred toa municipality by the legislature under arepublican form of government.12 Thus,home rule municipalities have broad emi-nent domain authority with respect tomatters of local concern.

Private EntitiesIn addition to various government

agencies and political subdivisions, cer-tain private entities have express statuto-ry authority, over and above any rightsgranted by Article II, § 14, to condemn pri-vate property. Among these are pipelineand other transmission companies, aswell as certain utility providers.13 Al-though they may be private, for-profit cor-porations, these companies have the rightto condemn private property in further-ance of their essential functions, largelyon the premise that their functions arepublic in nature, and because their servic-es often are regulated by the government,are available to all citizens, and provide abenefit to the public at large.14

Inverse CondemnationA condemnation action affirmatively

initiated by a party with the power of em-inent domain should be distinguishedfrom an inverse condemnation action. Inan inverse condemnation action, a proper-ty owner initiates a claim that a govern-mental entity, which has the power of em-inent domain, has taken or damaged pri-vate property for a public purpose,but hasfailed to initiate a condemnation action toassess compensation.15 Although notspecifically addressed in this article, in-verse condemnation actions generally aretried pursuant to the same substantiveand procedural rules applicable to tradi-tional condemnation actions.16

Property Subject to Condemnation

Both real and personal property aresubject to condemnation, although thereis little reported use of eminent domain

authority to acquire personal property in-dependent of real property. Usually, thereis no need to condemn personal property,because most types of personal propertyare fungible and can be purchased insteadof condemned. Only specific real propertyis unique.

Property that already is dedicated to apublic use is subject to the “prior publicuse” doctrine. This rule provides thatproperty dedicated to a public use still issubject to condemnation, but only to theextent the new use does not materially in-terfere and is consistent with the priorpublic use.17 As such, a public park maybe subject to condemnation for an under-ground pipeline easement, provided thatthe surface is restored after installation,because the use of underground pipelinesnormally is not inconsistent with the priorpublic use of the surface as a public park.However, a public park would not be sub-ject to condemnation for a new publichighway without express constitutional orstatutory authority allowing what likelywould be considered an inconsistent pub-lic use.

Where a government authority hasbeen expressly granted the power of dom-inant eminent domain, it may condemnother public property irrespective of a con-flict with a prior public use.18 However,property owned by the State of Coloradomay not be condemned by a party claim-ing dominant eminent domain authorityunder Colorado law,19 and property of theUnited States cannot be condemned un-der Colorado law.20

Public Use or PurposeAll condemnations under Colorado law

in some way must be justified as advanc-ing the public interest; the property mustbe used by the public, or the acquisitionmust serve a public purpose or generate apublic benefit. This public use or purposerequirement is a fundamental conceptand the power of eminent domain cannotlawfully be exercised without some con-nection to a legitimate public objective.

There is no set formula for determiningwhat constitutes a public purpose. Whatmay be justified as a public use or purpose

66 Government and Administrative Law September

66 / The Colorado Lawyer / September 2006 / Vol. 35, No. 9

“All condemnations under Colorado law in some way must be justified as advancing the pub-lic interest; the property must be used by the public, or the acquisition must serve a public pur-pose or generate a public benefit.”

in one context may not be considered apublic purpose at a different time or loca-tion, or under a different set of facts.21

Some uses are clearly public, such as theacquisition of land rights for public streetsand highways, parks, schools, water facili-ties, or other instances where a public fa-cility or use will actually be located on theproperty acquired.

However, Colorado law also permits thecondemnation of property even when itwill not ultimately be owned or even usedby the public. Such is the case of privatecondemnations under Article II, § 14, con-demnations by private utilities, and theacquisition of blighted or slum propertiesby urban renewal authorities, which thenconvey those properties to private rede-velopers. Although the property acquiredin this manner eventually may be held bya private party and not actually used forpublic facilities, a public benefit is deemedto arise from the acquisition of the prop-erty.

The condemnation authority granted toprivate utilities and the right of privateparties to condemn ways of necessity andrights-of-way for water works can be con-sidered to advance the public interest to

some extent.22 The private utilities withthe power to condemn generally are re-quired to serve everyone equally witheveryday necessities such as water, elec-tricity, natural gas, or telecommunicationservices. As such, even private utilitieshave been deemed to provide a publicservice and, therefore, have the power ofeminent domain for these purposes.23

The private condemnation provisionsauthorized by Article II, § 14 of the Colo-rado Constitution were drafted at a timewhen the development of the state was ofhigh public importance. Under this think-ing, the act of appropriating and having aright of way for the conveyance of water toa beneficial use was deemed to be a publicbenefit. Similar public objectives weredeemed to be met by the condemnation ofprivate ways of necessity, which promotedthe efficient use of lands by not allowinglandlocked parcels to “go to waste” for lackof access.24 Without at least some connec-tion to the public interest—whether thatbe by actual public use, such as a publicroad, school, or open space park, or by pro-viding rights of way for water, utilities, orfor access to lands—a condemnation for apurely private benefit is unconstitutional.25

The question of whether a contemplat-ed use qualifies as a public use is a judi-cial question to be determined by thecourt without regard to the condemningentity’s assertion that the use is public.26

Deference is not given to the condemningauthority’s finding that a public purposeis being served; instead, the court mustdetermine, in an in limine proceeding,whether the purpose for the taking is pub-lic or private.27 The court’s role is to deter-mine whether the essential purpose of thecondemnation is to obtain a public bene-fit.28 If the primary purpose of a condem-nation is to advance a private interest, theexistence of an incidental public benefitmay not justify the exercise of eminent do-main authority.29

Urban RenewalEminent domain for urban renewal

purposes allows property that has beenfound to be blighted, as defined by statu-tory standards, to be condemned and thenre-conveyed to another private party forredevelopment.30 Some have argued theuse of eminent domain in this contextlacks a sufficient public purpose. Howev-er, the U.S. Supreme Court and the Colo-



rado Supreme Court have found that theuse of eminent domain to rid communitiesof blight and slum conditions satisfies alegitimate public purpose.31

Much of the recent attention on the useof eminent domain for urban renewalstems from the U.S. Supreme Court’s2005 decision in Kelo v. City of New Lon-don,32 in which the Court upheld the useof eminent domain by a Connecticut mu-nicipality to condemn property for a pri-vate corporation’s new headquarters.TheCourt found that the public purpose re-quirement was satisfied on the groundsthat the taking would provide the com-munity with much-needed economic de-velopment.

Unlike Connecticut law, however, theColorado Urban Renewal Act does notprovide for the right of condemnation sole-ly for economic development purposes.33

Colorado law allows for the use of emi-nent domain to eliminate blight or slumconditions, and it is this objective that sat-isfies the “public purpose” requirement,even though the property taken may sub-sequently be conveyed to a private con-cern.34 In fact, the elimination of slum orblighted conditions is the only statutorybasis for the exercise of eminent domainby an urban renewal authority.35 After theblighted conditions have been ameliorat-ed, an urban renewal authority loses itsstatutory powers of eminent domain overthat property.36

Despite the existence of statutory limi-tations on the use of eminent domain forurban renewal, political objections to itsuse have resulted in several recent amend-ments to the Urban Renewal Act. In 2004,the legislature amended the law to fur-

ther restrict the basis on which a propertymay be considered to be blighted andtherefore subject to condemnation. Otherprerequisites and restrictions also wereadded at that time.37 In 2006, additionalrestrictions on the ability to condemnproperty for urban renewal were consid-ered by the legislature. One such meas-ure, House Bill 1411, which was passedand signed by the Governor, attempts todefine “public use” so as not to include ataking of private property for transfer toanother private party for purposes of eco-nomic development or enhancement oftax revenue.38

NecessityAn issue closely related to, and often

confused with,public purpose is that of ne-cessity.39 Necessity involves the need forthe property to be acquired for the purposeintended.40 The concept of necessity mayinclude the extent and nature of propertyinterests to be acquired, the timing of theacquisition, and other similar issues, suchas the location or route selected for theproposed public improvement or use.

Necessity for the condemnation is anessential element of the right to exerciseeminent domain authority; however, un-like the “public use or purpose” require-ment, a finding of necessity by the con-demning authority generally will not bedisturbed by the courts absent a finding offraud or bad faith.41 A party may not chal-lenge the necessity of a condemnation byconclusory allegations of bad faith orfraud; the challenge must allege specificfacts that, if true, would amount to badfaith or fraud.42

There are no clear guidelines from thecourts as to what constitutes “bad faith.”In the context of an urban renewal taking,the Colorado Supreme Court held thatbad faith may be supported by a showingthat the purpose of the condemnation wasnot within the scope of action authorizedunder the Urban Renewal Act and wasundertaken as a subterfuge for an im-proper purpose.43 Another decision sug-gested that, where the taking of propertyfor a private way of necessity causes greatloss to the landowner that might readilybe avoidable, this can be a factor in con-sidering an allegation of bad faith.44 AColorado Court of Appeals decision foundbad faith where the primary purpose ofthe taking was to advance private inter-ests where members of the condemningauthority’s board stood to gain personallyas a result of the condemnation.45

The question of necessity is limited towhether the property sought to be takenis necessary for the purpose intended.Whether an enterprise is feasible or prac-ticable and whether it will be a successare not for the court’s determination.46

Similarly, Colorado law does not require acondemning authority to demonstratethat it has obtained development permitsor approvals as a condition precedent toproceeding with a condemnation.47

Failure to AgreeAnother statutory prerequisite of the

right of eminent domain is a showing thatthe condemning authority and the prop-erty owner were not able to agree on thecompensation to be paid.48 Failure toagree on a voluntary transfer of the prop-erty is a prerequisite to the initiation of a

2006 Government and Administrative Law 69


Under current law, an area may be found to be blighted, and thereforesubject to condemnation by an urban renewal authority, if a least fourof the following factors are found to substantially impair the soundgrowth of the municipality, retard the provision of housing accommo-dations, or constitute an economic or social liability, and the area is amenace to the public health, safety, morals, or welfare:

1) slum, deteriorated, or deteriorating structures;

2) predominance of defective or inadequate street layout;

3) faulty lot layout in relation to size, adequacy, accessibility, or use-fulness;

4) unsanitary or unsafe conditions;

5) deterioration of site or other improvements;

6) unusual topography or inadequate public improvements or utilities;

7) defective or unusual conditions of title rendering the title nonmar-ketable;

8) the existence of conditions that endanger life or property by fire orother causes;

9) buildings that are unsafe or unhealthy for persons to live or work inbecause of building code violations, dilapidation, deterioration, de-fective design, physical construction, or faulty or inadequate facili-ties;

10) environmental contamination of buildings or property; or

11) the existence of health, safety, or welfare factors requiring highlevels of municipal services or substantial physical underutilizationor vacancy of sites, buildings, or other improvements.1

If the landowner and tenants consent to the inclusion of the propertyin an urban renewal area, the power of eminent domain may be exer-cised on a finding of any one of these factors.2__________________________________

1. CRS § 31-25-103(2).2. CRS § 31-25-103(2)(l).

Urban Renewal Condemnations

condemnation proceeding, and the peti-tioner has the burden to establish a fail-ure to agree.49 Often referred to as the“good faith negotiations” requirement,this prerequisite is satisfied when the con-demning authority makes a reasonable,good faith offer to purchase the propertyfrom the owner and allows the owner suf-ficient time to respond. It is not necessaryto send the offer to other parties with aninterest in the subject property, such aslessees, mortgagees, and easement hold-ers, because a failure to agree with the feeowner usually satisfies the requirement.

The “failure to agree”prerequisite is notapplicable if the owner is incapable of con-senting to the acquisition, if the ownercannot be located with due diligence, or ifthe owner is a non-resident of the state.50

A “failure to agree” also may be presumedif: (1) the owner does not timely respondto an offer; (2) the owner makes a coun-teroffer that is unacceptable to the con-demning authority; or (3) further negotia-tion otherwise would be futile.51 Lengthyor face-to-face negotiations are not re-quired,52 and there is no requirement to

negotiate with parties having an interestin the property that is not of record.53

Prior to Filing a Condemnation Action

After determining that certain proper-ty rights are necessary for a public pur-pose, the condemning authority must pro-vide notice of its intent to acquire thoserights and that it may do so by eminentdomain if a voluntary conveyance cannotbe achieved.54 The condemning authoritymust provide this notice, along with a de-scription of the property interest to be ac-quired, to the property owner and to any-one having an interest of record in theproperty at issue as soon as it determinesthat it intends to acquire the interest inthe property.55 If the property rights havean estimated value of $5,000 or more, thisnotice also must inform the landownerthat the condemnor is required to pay thereasonable costs of an appraisal obtainedby the property owner.56 The condemningauthority must pay for only one apprais-al, and if the parties with various inter-

ests in the property—such as the fee own-er, a mortgagee, and an easement hold-er—cannot agree on one appraisal, thecondemning authority is relieved of thisobligation.57

As discussed above, in addition to pro-viding notice of its intent to acquire theproperty, the condemning authority alsomust make a reasonable, good faith offerto the landowner for the property rightssought.At least one offer must be in writ-ing.58 The good faith offer must include anadequate legal description of the propertyinterests sought and should be based on acompetent appraisal of those property in-terests. Especially in large, complex, orhigh-value acquisitions, it is important forboth parties to engage the services of aqualified appraiser who is familiar withthe nuances of eminent domain law.

Usually, the offer is made only to the feeowner of the property. Under Colorado’sundivided basis rule, the condemnor is re-quired to offer (and ultimately pay) com-pensation for the undivided (and unen-cumbered) interest in whatever propertyright or estate the condemnor has deemednecessary for its intended use. Thus, thecondemnor need not make separate offersto the fee owner, the mortgagee, and theeasement holder, but is required to offerand pay only one amount, representingthe value of the undivided basis in theproperty being acquired.59 The various in-terest holders in the property must agreeor litigate as to their proportional share ofthe compensation paid.60 The issue of ap-portioning the condemnation proceedsbetween the various interest holders is de-cided after the total compensation is as-sessed, and occurs without the participa-tion of the condemnor.

The fact that the property is to be val-ued on an undivided basis does not meanthat the effect of encumbrances on theproperty are ignored for purposes of valu-ation.61 Thus, for example, if a ditch right-of-way bisects a parcel and thereby limitsits potential uses, the property will be val-ued accordingly.The undivided basis ruledoes not preclude a condemnor from tak-ing “subject to” certain property interests



“The attorney representing a condemning authority must ensure that: (1) the condemnor pos-sesses the necessary authority to exercise the right of eminent domain; (2) the acquisition ofthe property is necessary for a proper public purpose; and (3) there has been a failure to agreeon the compensation to be paid for the acquisition of the property.”

that may be compatible with its intendeduse. For example, a city could condemnthe fee interest in a parcel for a municipalpark, but take that property subject to anexisting underground pipeline easement.The undivided basis rule simply allowsthe condemnor to offer (and ultimately topay) one amount, based on the undividedand unencumbered estate it seeks to ac-quire.

For public projects that receive federalfunding, relocation benefits must be pro-vided under the federal Uniform Reloca-tion Assistance and Real Property Acqui-sition Policies Act of 1970 (“RelocationAct”).62 Compliance with the RelocationAct also is required of an urban renewalauthority when the property is to be ulti-mately transferred to another private par-ty.63 Relocation benefits are in addition tothe compensation owing for propertyrights condemned and generally providefor reimbursement of certain moving andrelocation expenses. The Act contains ad-ditional requirements for parties acquir-ing property either by condemnation orwith the threat of condemnation. Issuesrelating to relocation benefits typically aredetermined separately from the eminentdomain compensation issues.64

Filing a Petition inCondemnation

Eminent domain proceedings are spe-cial statutory proceedings that are to beconstrued strictly according to statute.65

Collateral or extraneous issues thatchange the scope of eminent domain pro-ceedings generally are not permitted.66

Constitutional and other objections to theeminent domain proceedings must beraised in those proceedings, instead of be-ing pursued in collateral injunction pro-ceedings.67

Generally, the Rules of Civil Procedureare applicable in eminent domain cases,unless contradicted by statute.68 As withany other civil action, a civil action coversheet should be served with the initialpleadings, pursuant to C.R.C.P. 16. How-ever, as a special statutory proceeding en-titled to preference on the court’s docket,69

expedited eminent domain proceedingsare not subject to the simplified rules ofcivil procedure under C.R.C.P. 16.1, unlessthe parties stipulate to operate underthose procedures.

The attorney representing a condemn-ing authority must ensure that: (1) thecondemnor possesses the necessary au-thority to exercise the right of eminent do-

main; (2) the acquisition of the property isnecessary for a proper public purpose;and(3) there has been a failure to agree on thecompensation to be paid for the acquisi-tion of the property.Also, the condemningauthority must comply with its own rulesand procedures with respect to exercisingthat authority. For example, a municipali-ty may need to refer to its own charter orcode to ensure that it follows its own pro-cedures and policies.This often entails thepassage of a resolution or ordinance from

the city council or other governing body.The same may be true for the exercise ofeminent domain authority by a specialdistrict or a corporation that has the pow-er of eminent domain.

After determining that it can properlyexercise the right of eminent domain, thecondemnor may file a petition in condem-nation with the district court in the coun-ty where all or part of the subject propertyis located.70 A summons served in an emi-nent domain action is somewhat different



from that in other types of civil actions,and service by publication is specificallyauthorized.71

The parties to be named in the petitionare the condemning authority (the “peti-tioner”) and all parties with an interest ofrecord in the property to be acquired (re-ferred to as “respondents”). Condemna-tion counsel often will obtain a title com-mitment and name the fee owner of theproperty,as well as all parties with record-ed interests in the property who are list-ed in the exceptions section of the titlecommitment.Not every exception listed ina title commitment will need to be namedin the action. Counsel should review thevarious instruments of record to deter-mine if they potentially are affected by theproposed taking. Usually, each respon-dent’s recorded interest is listed in the pe-tition in condemnation as the reason fortheir being named in the action. If thenames of interested parties are unknown,the petitioner may name them as “un-known parties” and proceed to serve thoseparties by publication.72

The county treasurer also should benamed, as it has a statutory interest in alltaxable real property.73 If there is a deedof trust on the property, the public trusteealso should be named.There may be addi-tional parties with interests not of recordwho may need to be named as respon-dents in the condemnation action. An ex-ample would be a lessee in possessionwith an unrecorded lease. Also, title com-mitments often do not cover mineral in-terests and, if the proposed taking wouldlimit surface access to, or otherwise affectthe mineral estate, the mineral estateowner may need to be joined.

Of course, the condemning authoritytakes subject to the interest of any partywho is not named in the action. Further,any party who is not named in the action,but who claims an interest in the propertyto be taken or damaged, may file a crosspetition and seek to intervene in the ac-tion.74

The petition should allege, with respectto the property rights sought:

1) the authority to condemn;2) that the taking is for a public use or

purpose;3) that there is a need for the property

to be acquired; and4) that the parties have failed to agree

on the compensation to be paid.The petition also should specify the pur-pose for which the property is sought.75

An adequate legal description of the prop-erty to be acquired should be attached as

an exhibit to the petition.76 If an easementor some other estate less than a fee inter-est is to be taken, a description of the usesand restrictions associated with the ease-ment should be provided so that the land-owner may assess the impact of the tak-ing.77

After filing the petition in condemna-tion, condemnation counsel should recorda lis pendens with the county clerk andrecorder in each county where the subjectproperty is located.78 This places would-bepurchasers, lenders, and others on noticeof the pending condemnation. A copy ofthe lis pendens must include a copy of thelegal description and also must be filedwith the court and served on all parties.

Responding to the Condemnation

Counsel representing a property ownernamed in a condemnation action shouldgather as much information from the con-demning authority as possible to under-stand the project and its impact on the re-mainder parcel if only part of the propertyis being taken. Right-of-way plans andproject construction documents provideuseful information and usually can be ob-tained from the condemning authority orits right-of-way agent.

Although there is no requirement thata property owner respond to an offermade by a condemning authority, by com-municating with a condemnor early on, alandowner sometimes may be able to ne-gotiate certain changes in the taking, itstiming, and/or the project construction it-self that may alleviate some of the land-owner’s concerns, and possibly eliminateor reduce potentially compensable dam-ages. However, the condemnor is underno duty to negotiate and may proceedwithout considering the landowner’s re-quests.

If an appraisal is warranted, the land-owner should retain a qualified appraiserto value the taking and assess damages toany remainder property. If the estimatedvalue of the property to be acquired is$5,000 or more, the cost of the appraisal isborne by the condemning authority.To en-sure that the reasonable costs of this ap-praisal will be reimbursed promptly, theappraisal must be submitted to the con-demnor within ninety days of the date ofthe condemnor’s notice of its intent to ac-quire the property, although an extensionoftentimes can be negotiated.79 If othersare named as respondents, the partiesshould work to agree on one appraisal.

Technically, there is no need to file ananswer in a condemnation case,80 but it isgood practice to do so. Private propertymay not be taken without the payment ofjust compensation even when a land-owner fails to file an answer and the courtnormally would enter default. However,filing an answer ensures the right of thelandowner to object to the taking.81 Atimely answer also sets an “at issue” datefor purposes of the Rules of Civil Proce-dure and enters landowner counsel’s ap-pearance so that subsequent filings areproperly served.

Immediate PossessionAn eminent domain action theoretically

is made up of three phases: immediatepossession (discussed below), valuation(wherein compensation is assessed), andapportionment (wherein final condemna-tion proceeds are allocated). The immedi-ate possession phase of an eminent do-main action is the process by which thepetitioner may obtain possession and useof the subject property pending a determi-nation of compensation owed for the tak-ing. Thus, where a project’s schedule de-mands that the property rights be avail-able prior to the final determination ofcompensation, the petitioner may file andserve a motion for immediate possessionand obtain a hearing before the court onthat issue.82 A petitioner may not “need-lessly disturb” the respondent’s possessionof the property,83 but can move the courtfor a hearing on its motion for immediatepossession as early as thirty days afterservice of the petition in condemnation.84

If quick possession of the property isneeded on account of a project’s construc-tion schedule, or for any other legitimatereason, the motion for immediate posses-sion may be served with the summonsand petition, along with a notice to set ahearing on immediate possession. Giventhat dates for a valuation trial usually areset many months or even years after thecommencement of suit, this procedureprovides the petitioner with an irrevoca-ble right to possess, use and improve theproperty at issue, thereby allowing a pub-lic project to go forward pending a valua-tion trial.

Immediate possession proceedings aretried to the court and all issues regardingthe “legal sufficiency”of the condemnationaction are heard and determined at thistime.85 At this stage of the proceedings,the following usually are determined:

• the condemnor’s authority to con-demn



• the public purpose or use of the sub-ject property

• the necessity of the taking• whether the parties were unable to

agree on the compensation• the amount of security the petitioner

must deposit with the court in orderto have possession.

The respondent must raise any challengeto the condemnation on these or any othergrounds during the immediate possessionphase; failure to do so may result in awaiver of the challenge.86 A property own-er who successfully challenges the peti-tioner’s right to condemn is entitled to re-cover reasonable attorney fees and costs.87

A condemnor generally may abandon acondemnation at any time before takingtitle, but may be liable for any damagessuffered by the property owners, in addi-tion to costs and attorney fees.88

The issue of a deposit also is deter-mined at the immediate possession hear-ing.89 If the petitioner is awarded immedi-ate possession, it must deposit with thecourt registry an amount that serves assecurity for the ultimate payment of com-pensation, once ascertained.The petition-er is entitled to possession only after the

court has entered an order for immediatepossession and the required deposit ismade with the registry of the court. Theamount of the deposit often is stipulatedto by the parties. However, a landownermay challenge the petitioner’s proposeddeposit and offer evidence that a largeramount should be required. After the de-posit is made, at the direction of the court,the respondents may withdraw up to 75percent of the highest valuation evidencepresented by the petitioner, or a greateramount if the petitioner consents.90 Ofcourse, any amount deposited with thecourt will offset the amount finally award-ed as just compensation.91 No pre-judg-ment interest is awarded on any portionof a final award that is offset by theamount of the deposit.92

An urban renewal authority can obtainimmediate possession of the property andalso may obtain fee title to the propertypending a final valuation trial.93 Obtain-ing title at the outset of the condemnationaction through vesting proceedings en-ables an urban renewal authority to im-mediately begin work to eliminate blight-ed conditions by conveying or encumber-ing the property as needed as part of the

redevelopment plan. In urban renewalvesting proceedings, a more formal proce-dure is followed to determine the amountof the deposit required pending a final val-uation trial.94

Parties often will stipulate to immedi-ate possession, which may be entered intoat any time after the initiation of the con-demnation action. By stipulating to pos-session, the property owner usuallywaives any challenge to the condemnationitself, reserving only the right to contestthe amount of compensation. If the partiesagree to the terms of possession prior tothe initiation of a condemnation action,the parties may enter into an agreementfor possession and use.Typically, after thecondemnor obtains possession, whetherby court order, stipulation, or agreement,the only remaining issues to be tried arethe amount of compensation owed for thetaking and the subsequent apportionmentof the condemnation proceeds among thevarious respondents.

Although a petitioner may seek imme-diate possession at any time, it is not re-quired. If the petitioner does not seek im-mediate possession before the valuationtrial, possession and title transfer at the



conclusion of the valuation trial, whencompensation is paid and the final ruleand order is entered. Also, if immediatepossession is not sought, there is no re-quirement that the condemnor make adeposit into the court registry and pre-judgment interest does not accrue. Ofcourse, even in the absence of an immedi-ate possession hearing, the condemnorstill must establish its authority, the pub-lic purpose, and necessity for the taking ofthe property, and the parties’ failure toagree; these issues would be tried to thecourt immediately prior to the valuationtrial.

The determinations made by the courtat the immediate possession hearing (au-thority, public purpose, necessity, and fail-ure to agree) are interlocutory and maynot be appealed until after the conclusionof the valuation trial. If a party wishes toimmediately appeal one of these in liminerulings, its only recourse is to seek an ex-traordinary writ under Rule 21 of theColorado Appellate Rules.95

ConclusionWith the recent public attention drawn

to the use of eminent domain, in particu-

lar by the Kelo decision,96 it is importantto recall that condemnation is a valuabletool that must be contemplated in any so-ciety where growth, economic develop-ment, and the development of public facil-ities are desirable. Parties exercising theright of eminent domain, however, mustdo so only in appropriate circumstancesand only as a last resort. The law of emi-nent domain must continue to strike abalance between the competing interestsof the larger community’s welfare and in-dividual private property rights.

NOTES1. City of Thornton v. Farmers Reservoir &

Irr. Co., 575 P.2d 382 (Colo. 1978). The Courtstated:

The power of eminent domain is an inherentattribute of sovereignty limited only by ap-plicable portions of the State and FederalConstitutions; the exercise of the right of em-inent domain is the exercise of the sovereignpower.2. For condemnation of private ways by ne-

cessity, see Bear Creek v. Genesee Foundation,919 P.2d 948 (Colo.App. 1996); West v. Hinks-mon, 857 P.2d 483 (Colo.App.1992);Bear CreekDev. Corp. v. Dyer, 790 P.2d 897 (Colo.App.1990). For condemnation of land rights related

to the use of water, see Colo. Const., Art. XVI,§ 7 (providing for the taking of right-of-way forthe purpose of conveying water); Bd. of CountyComm’rs of County of Park v. Park CountySportsmen’s Ranch, LLP, 45 P.3d 693, 709(Colo. 2002).

3. Crystal Park Co. v. Morton, 146 P. 566(Colo.App. 1915).

4.Dep’t of Highways v.Denver & Rio GrandeWestern R.R. Co., 789 P.2d 1088 (Colo. 1990);Clear Creek School Dist. RE-1 v. Holmes, 628P.2d 154 (Colo.App. 1981). The Colorado Su-preme Court has strictly construed this provi-sion of the constitution. See, e.g., Coquina OilCorp. v. Harry Kourlis Ranch, 643 P.2d 519(Colo. 1982) (holding that an oil and gas lesseedoes not have the power to acquire a privateright of way by necessity on the grounds that itwas not the fee owner of land needing access).

5. Note the constitutional requirement forjust compensation not only for property rightsthat are actually “taken,” but also those thatare “damaged.”

6. La Plata Elec.Ass’n, Inc. v. Cummins, 728P.2d 696 (Colo. 1986); E-470 Public HighwayAuth. v. 455 Co., 983 P.2d 149 (Colo.App. 1999),aff’d, 3 P.3d 18 (Colo. 2000).The compensationowed for the taking and damaging of privateproperty will be more thoroughly discussed inPart II of this article.

7. Bd. of County Comm’rs v. IntermountainRural Elec. Ass’n, 655 P.2d 831 (Colo. 1982);



Mack v.Town of Craig, 191 P. 101 (Colo. 1920);Town of Parker v. Colo. Div. of Parks, 860 P.2d584 (Colo.App. 1993).

8. Dep’t of Transp. v. Stapleton, 97 P.3d 938,941 (Colo. 2004); Beth Medrosh Hagodol v. Cityof Aurora, 248 P.2d 732 (Colo. 1952) (the rightto condemn private property, if not expresslygranted by statute, can be found only throughnecessary implication).

9. Town of Eaton v. Bouslog, 292 P.2d 343(1956) (authority to exercise the power of con-demnation, being against the common right toown and keep property, must be given express-ly or by clear implication; it can never be im-plied from doubtful language); City of Aurora v.Commerce Group Corp., 694 P.2d 382, 385(Colo.App. 1984).

10. See, e.g., CRS §§ 31-25-201 (statutorycities may condemn property for park purposesonly under certain specified conditions), 38-6-101 (statutory towns generally may not con-demn property outside of the town bound-aries), 30-20-402(1) (counties may condemnland necessary for water or sewer facilities), 22-32-111 (school districts may acquire schoolsites), and 43-3-106 (State Department ofTransportation may condemn rights of accessand land for local service roads).

11. City of Thornton, supra note 1.12. Fishel v. City and County of Denver, 108

P.2d 236, 240 (Colo. 1940) (finding that Denverpossessed “full power to exercise the right ofeminent domain in the effectuation of any law-ful, public, local and municipal purpose”); Den-ver v. Hallett, 83 P. 1066 (Colo. 1905).

13. See, e.g., CRS §§ 38-2-101 (certain corpo-rations), 38-4-101 (common carriers), 38-5-101(transmission companies), and 38-5.5-101(telecommunication providers).

14. Pub. Serv. Co. of Colorado v. Shaklee, 784P.2d 314 (Colo. 1989) (condemnation of private

property by private electric utility company forconstruction of transmission line was for publicuse).

15. Collopy v.Wildlife Comm’n, 625 P.2d 994(Colo. 1981); Thompson v. City & County ofDenver, 958 P.2d 525 (Colo.App. 1998). See alsoCity of Northglenn v. Grynberg, 846 P.2d 175(Colo. 1993); Ossman v. Mountain States Tel.& Tel. Co., 520 P.2d 738 (Colo. 1974) (inversecondemnation claims may be viable whenthere is a physical taking or occupation ofproperty rights). But see Pub. Serv. Co. of Colo-rado v. Van Wyk, 27 P.3d 377, 388 (Colo. 2001)(rejecting inverse condemnation claim wherethe invasion is by intangible elements, such asnoise, electric fields, or radiation). Coloradolaw also recognizes claims for “regulatory tak-ings,” in which the property owner claims a“taking” of property through the application ofregulatory standards or requirements. See An-imas Valley Sand & Gravel, Inc. v. Bd. ofCounty Comm’rs, 38 P.3d 59 (Colo. 2001);Quaker Court Ltd. Liability Co. v. Bd. of Coun-ty Comm’rs of County of Jefferson, 109 P.3d1027 (Colo.App. 2004).

16. Grynberg, supra note 15; Ossman, supranote 15; Hayden v. Bd. of County Comm’rs, 580P.2d 830 (Colo.App. 1978).

17. Beth Medrosh Hagodol, supra note 8(land devoted to one public use cannot be con-demned for inconsistent public use, unless leg-islative authority for such condemnation isgranted, either expressly or by necessary im-plication).

18. Town of Parker, supra note 7 at 588(“‘dominant eminent domain’ means that thepower of eminent domain is superior to that ofother specific governmental subdivisions of thestate, but not the state itself”). Only a few enti-ties have been granted the power of dominanteminent domain; among them are water and

sanitation districts, fire protection districts,metropolitan districts, municipal public im-provement districts, water conservancy dis-tricts, the Urban Drainage and Flood ControlDistrict, and the Regional Transportation Dis-trict.

19. Id. But see CRS § 38-5-102 (certain utili-ties may condemn state lands).

20. United States v. 161 Acres of Land, 427F.Supp. 582 (D. Colo. 1977).

21.Buck v. Dist. Court for Kiowa County, 608P.2d 350, 351 (Colo. 1980); Thornton Dev.Auth.v. Upah, 640 F.Supp. 1071, 1077 (D.Colo. 1986).

22. See, e.g., Pine Martin Mining Co. v. Em-pire Zinc Co., 11 P.2d 221 (Colo. 1932).

23. Shaklee, supra note 14.24. Pine Martin Mining Co., supra note 21.25. City and County of Denver v. Block 173

Assocs., 814 P.2d 824 (Colo. 1991).26. Colo. Const., Art. II, § 15; Potashnik v.

Pub. Serv. Co., 784 P.2d 314 (Colo. 1952).27. Larson v. Chase Pipe Line Co., 514 P.2d

1316 (1973); Upah, supra note 21 at 1076.28. City and County of Denver v. Eat Out,

Inc., 75 P.3d 1141, 1144 (Colo.App. 2003).29. Denver West Metro. Dist. v. Geudner, 786

P.2d 434, 436 (Colo.App. 1989).30. See CRS § 31-25-103.31. Berman v. Parker, 348 U.S. 26 (1954)

(finding that elimination of blighted or slumconditions satisfies the public use requirementof Article V of the U.S. Constitution); Rabinoffv. Dist. Court, 360 P.2d 114, 120 (Colo. 1961).

32. Kelo v. City of New London, 125 S.Ct.2655 (2005).

33.This fact was re-emphasized by the Colo-rado General Assembly in 2006 with the pas-sage of House Bill 1411, discussed below.

34. Auraria Businessmen Against Confisca-tion, Inc. v. Denver Urban Renewal Auth., 517P.2d 845, 849 (Colo. 1974); Rabinoff, supra note31 at 121.

35. Block 173 Assocs., supra note 25.36. Arvada Urban Renewal Auth. v. Colum-

bine Prof’l Plaza Ass’n, Inc., 85 P.3d 1066, 1073(Colo. 2004).

37. See CRS § 31-25-105.5.38. House Bill 1411 also states that any con-

demning entity must establish, by a prepon-derance of the evidence, that the taking is for apublic use, unless the condemnation is for theeradication of blight, in which case the urbanrenewal authority must show that the takingis necessary for the eradication of blight by“clear and convincing evidence.”

39. Silver Dollar Metro. Dist. v. Goltra, 66P.3d 170,172 (Colo.App.2002) (dissenting opin-ion); Upah, supra note 21 at 1077.

40. Mortensen v. Mortensen, 309 P.2d 197(Colo. 1957).

41. Block 173 Assocs., supra note 25 at 829;Mack v. Bd. of County Comm’rs, 381 P.2d 987(Colo.1963);Goltra, supra note 39 at 172;Tracyv. City of Boulder, 635 P.2d 907, 909 (Colo.App.1981).

42. Colorado State Bd. of Land Comm’rs v.Dist. Court, 430 P.2d 617 (Colo. 1967).

43. Block 173 Assocs., supra note 25 at 829.



44. Arizona-Colorado Land and Cattle Co. v.Dist. Court, 511 P.2d 23 (Colo. 1973).

45. Geudner, supra note 29.46. Mortensen, supra note 40; Goltra, supra

note 39. See also Ambrosio v. Baker Metro.Wa-ter and Sanitation Dist., 340 P.2d 872, 873(Colo. 1959) (the expediency of the project orthe fact that those seeking to condemn theland for the project might proceed in anotherway are not appropriate matters of defense incondemnation proceedings).

47. Shaklee, supra note 14; Buck v. Dist.Court, 608 P.2d 350 (Colo. 1980); Goltra, supranote 39.

48. CRS § 38-1-102(1).49. Bd. of County Comm’rs of Jefferson

County v. Blosser, 844 P.2d 1237, 1239 (Colo.App. 1992).

50. CRS § 38-1-102(1).51. See Interstate Trust Bldg. Co. v. Denver

Urban Renewal Auth., 473 P.2d 978 (Colo.1970) (where landowner rejected the condemn-ing authority’s offers and by its actions de-clined invitation to negotiate, court rejected ar-gument that no showing of good faith negotia-tions was made); Bd. of County Comm’rs v.Blecha, 697 P.2d 416 (Colo.App. 1985) (wherecounty made offer and respondents failed to re-ply, court found that county negotiated in goodfaith); Blosser, supra note 49 at 1239 (land-owner’s silence in response to good faith offerdeemed to satisfy failure to agree prerequisite).

52. City of Holyoke v. Schlachter FarmsR.L.L.P., 22 P.3d 960, 963 (Colo.App. 2001).

53. Eat Out, Inc., supra note 28 (no need forcity to negotiate with lessee with unrecordedlease).

54. CRS § 38-1-121(1).55. Id.56. Id.57. CRS § 38-1-121(2).58. CRS § 38-1-121(6).59. Montgomery Ward & Co., Inc. v. City of

Sterling, 523 P.2d 465, 467 (Colo. 1974).60. CRS § 38-1-105(3).61. Gifford v. City of Colorado Springs, 815

P.2d 1008, 1011 (Colo.App. 1991) (under Colo-rado’s undivided basis rule of fair market valu-ation, the condemnor must value the propertyas a whole,assuming ownership by one person,while taking into consideration the value of en-cumbrances on the fair market valuation of theproperty).

62. 42 U.S.C.A. §§ 4601 et seq. Colorado hasadopted the requirements of this federal legis-

lation for projects receiving federal funding.SeeCRS §§ 24-56-101 et seq.

63. CRS § 31-25-105.5(4).This provision alsorequires the payment of certain “business in-terruption” expenses.

64.Denver Urban Renewal Auth. v. MarshallMfg. Co., 532 P.2d 746, 748 (Colo.App. 1975).See also Auraria Businessmen Against Confis-cation, supra note 34.

65. Bd. of Comm’rs v. Poundstone, 220 P. 234(Colo. 1923); Denver Urban Renewal Auth.,supra note 64.

66. Denver Power & Irrigation Co. v. Denver& Rio Grande R.R., 69 P. 568, 571-72 (Colo.1902); Dep’t of Transp. v. Auslaender, 94 P.3d1239, 1241 (Colo.App. 2004).

67. Auraria Businessmen Against Confisca-tion, supra note 34 at 847; Ambrosio v. BakerMetro. Water and Sanitation Dist., 340 P.2d872, 873 (Colo. 1959) (injunction will not lie toprevent suits in eminent domain, becausethere is adequate remedy at law for damagesfor the property taken).

68. Stalford v. Bd. of County Comm’rs, 263P.2d 436 (Colo. 1953); Cucharas Sanitation &Water Dist. v. Mounsey, 805 P.2d 1177, 1179(Colo.App. 1990). See also C.R.C.P. 81(a).

69. CRS § 38-1-119.70. CRS § 38-1-102(1).71. CRS § 38-1-103.72. CRS § 38-1-103; C.R.C.P. 4(e).73. CRS § 39-3-134.74. CRS § 38-1-109.75. CRS § 38-1-102.76.Boxberger v. State Highway Comm’n, 251

P.2d 920 (Colo. 1953); Colorado Fuel & Iron Co.v. Four Mile Ry., 66 P. 902 (Colo. 1901).

77. State Dept. of Highways v. Woolley, 696P.2d 828 (Colo.App. 1984).

78. See C.R.C.P. 105(f).79. CRS § 38-1-121(1) and (2).The cost of an

appraisal, if not submitted/reimbursed understatute, usually may be subsequently recov-ered as costs under C.R.C.P. 54(d).

80. CRS § 38-1-109 states: “Except for suchcross petition, there shall be no written plead-ings. . . .”

81. Kaschke v. Camfield, 102 P. 1061 (Colo.1909).

82. CRS § 38-1-105(6).83. Colo. Const.,Art. II, § 15.84. CRS § 38-1-105(6)(c). See also CRS § 24-

56-117 (for condemnations subject to the relo-cation act).

85. CRS § 38-1-109.

86. CRS § 38-1-109 provides:at the [immediate possession] hearing . . . thecourt shall hear and dispose of all objectionsthat may be raised touching the legal suffi-ciency of the petition or cross petition or theregularity of the proceedings in any other re-spect.

CRS § 38-1-105(1) states:“The court shall hearproofs and allegations of all parties interestedtouching the regularity of the proceedings andshall rule upon all objections thereto.” See alsoPine Martin Mining Co. v. Empire Zinc Co., 11P.2d 221 (Colo. 1932).

87. CRS § 38-1-122 (1).88. Piz v. Housing Auth. of the City and

County of Denver, 289 P.2d 905, 910 (Colo.1955);Johnson v. Climax Molybdenum Co., 124P.2d 929, 930 (Colo. 1942).

89. CRS § 38-1-105(6)(b).90. Id.91. Id.92. CRS § 38-1-116.93. See CRS §§ 37-7-101 et seq.94. CRS §§ 38-7-102 and -103.95. Potashnik, supra note 26 at 138; Swift v.

Smith, 201 P.2d 609 (Colo. 1948) (because anorder for temporary possession clearly is inter-locutory,any review must be by an original pro-ceeding).

96. Kelo, supra note 32. ■



CBA–CLE Offers Online ProgramsOnline programs are individual sessions selected from recent CLE programs that

have been digitized and made available through the CBA–CLE website for on-demandviewing or listening. Check them out at http://www.cobar.org/cle (roll over the “OnlineProducts” menu option and select “Online Programs”).

For complete information, contact Jessica Levental: (303) 860-0608.

Documents

Eminent Domain Law in Colorado—Part I: The Right to Take ... · a party with eminent domain authority ... and rules by which “just compensation” is assessed. Eminent Domain