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By stan_sipple

Missouri Supreme Court in companion case Donna Collier, Respondent v. City of Oak Grove, Missouri, Appellant. : SC88580 rules that apartment building owners who suffered a temporary taking from the City's sewer back-ups were entitled to damages for the rental payments they lost due to the damage and also the cost of repairing the property. The City who operated the sewer system would owe prejudgment interest at the lower rate of 6% per annum from the date each temporary taking took place. See 523.045, RSMo 2000 and Article 1 Section 26 Missouri Constitution.Randolph Akers and Kelly Akers, Respondents v. City of Oak Grove, Missouri, Appellant. : SC88581 Apartment owners who suffered damage to their building when the city sewer system backed-up filed an inverse condemnation claim against the city, seeking diminution in the properties' value and lost rent for the loss of use of the properties, as well as prejudgment interest on any potential award. The parties agreed that, if prejudgment interest would be awarded, it should be determined by the court and not the jury. At trial, the plaintiffs' expert witness estimated a reasonable cost of repairing the apartments at more than $106,200. They also requested $37,350 in lost rental income. The jury awarded the Akerses $110,000, on which the court awarded nearly $25,800 in prejudgment interest. The city paid the damages but appeals the award of prejudgment interest.the Akerses suffered a temporary -- not a permanent -- taking, their damages accrued over a period of time, and, accordingly, the trial court erred in calculating prejudgment interest for all the accumulated damages as if they all originated on the same date. The court also erred in using 9 percent to calculate the interest. Article I, section 26 of the Missouri Constitution encompasses inverse takings, where the government takes or damages land -- permanently or temporarily, intentionally or unintentionally -- without going through an official process.In a temporary taking, the government is treated as having occupied the property for a limited amount of time before returning it to its owner, and damages are the diminution in value of the use of the property's occupancy for the period taken or damaged. A taking also is classified by whether it is partial or total in nature. Here, because the Akerses suffered temporary damage to four of their eight apartment units, they have a claim for a temporary partial taking. the interest on a a temporary taking must be calculated based on the details of the primary damage measurement to ensure that interest is not calculated until the owner theoretically would have received the underlying damages. For example, for damages based on rental value, interest would not accrue until the date each rental payment would have been received. Accordingly, the court should have calculated interest on the Akerses' lost rental payments accrued from the date each payment would have been made, and interest accrued on their repair costs from the date each repair payment was made. The right to interest in a condemnation claim stems directly from the constitutional just-compensation requirement. In Missouri, the 6-percent interest rate provided in section 523.045, RSMo 2000, reflects the legislature's judgment of what constitutionally is required to achieve just compensation for a direct taking. Neither party argues this percentage constitutionally is inadequate for purposes of compensating indirect takings. As such, the trial court erred in calculating prejudgment interest at 9 percent rather than 6 percent per year.

Full post as published by Showmeblawgs on March 21, 2008 (boomark / email).