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Va. Supreme Court strengthens hand of small businesses facing condemnation

RICHMOND, June 9, 2011 —The Virginia Department of Transportation has systematically low-balled the compensation paid to small businesses it condemns by denying claims for the loss of essential equipment and fixtures.

A June 9 decision by the Virginia Supreme Court halts that practice by VDOT and every other state or municipal agency with condemnation powers.

The court ruled unanimously that the owner of a Fairfax County Taco Bell is entitled to a new hearing to set the just compensation not just for the land and building, but also for 42 pieces of equipment and fixtures excluded from the earlier trial. This includes warming ovens, freezers, refrigerators, wire storage racks, sinks, tables, chairs, computerized cash registers and monitors, plus various aluminum pans and frying baskets, and a drive through neon sign.

"This ruling reverses an injustice that for decades has punished small business people and farmers who were obliged to surrender their property for the public good," said Joseph T. Waldo, the Norfolk eminent domain attorney who defended Taco Bell. "This is but one of many steps needed to ensure that property owners are made whole when the public must take their property."

VDOT took the property on Gallows Road for $1,496,550 in 2008 to widen Lee Highway Route 29. A jury awarded total compensation of $1,726,800.

VDOT refused compensation for the equipment, arguing that it could be removed and resold. The Fairfax Circuit Court sided with VDOT that Taco Bell made a "business decision" to leave the equipment, thus making it ineligible for compensation.

The state supreme court ruled that what mattered most was not whether the equipment could be removed, but whether it was essential to the purpose and nature of the business and whether the owner intended for it to be permanent.

The ruling means Taco Bell will get a second chance to argue for just compensation from the commonwealth.

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