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January 16, 2014

Court rules for utility in eminent domain case

JACKSON, Miss. — The Mississippi Court of Appeals has sided with a south Mississippi utility authority in a dispute over the use of eminent domain to take private property for a massive sewage plant built with federal Hurricane Katrina money.

The court's ruling on Tuesday overturns about $47,000 in attorney's fees that had been awarded to the owner of the land in Biloxi that the Harrison County Utility Authority wanted for water lines for a sewage plant. It also sent the case back to the Harrison County Special Court of Eminent Domain for further proceedings consistent with the appeals court's opinion.

After Katrina, the Harrison County Utility Authority used eminent domain as part of an ambitious plan to spend its share of $653 million in Department of Housing and Urban Development money to build several new wastewater and water plants. HUD's Office of Inspector General recently questioned the need for the plants and what it considered unsupported population growth estimates used to justify the need for them.

In November 2008, the utility authority offered to purchase a 50-foot section of Helen Walker's land in Biloxi for some $9,000 to run water pipes to a new sewage plant just down the street. Walker and her son, who said the easement would destroy the value of the property, made a counter offer to sell the entire four acres for $500,000, according to the court record. A later appraisal put the value of 50-foot easement at $11,340, though the Walker family says that's still way too low.

In April 2009, the utility filed an eminent domain case to take the easement. In response, the Walkers filed a lawsuit that said Jim Walker Jr. and his father, Jim Walker Sr., had interest in the land by way of a 2003 warranty deed that had mistakenly been recorded in the wrong judicial district in Harrison County. Jim Walker Jr. and his father argued that they weren't given proper notice of the eminent domain action.

The Appeals Court said the "filing of the deed in the wrong judicial district is tantamount to filing in the wrong county and does not constitute constructive notice."

Jim Walker Jr., and his lawyer, Gary White, blamed the misfiling on the chancery clerk's office.

"What other duty does the landowner have?" White asked in a phone interview Wednesday. "You take the deed and give it to the chancery clerk. I don't know how the property owner can make the chancery clerk file it properly."

The utility authority's lawyer, Jim Simpson, said the appeals court found that the utility had not done anything wrong and he looks forward to resolving the matter.

"We're glad to be vindicated," he said.

In April 2011, the Walkers filed a motion for a protective order to keep the utility off the land. But before a hearing could be held on the matter the following week, workers cut down trees and laid pipes over the weekend.

Harrison County Judge Michael Ward called that an "obvious effort to rush to complete that part of the project before a possible adverse ruling." He threw out the eminent domain case, ordered the water line to be removed and awarded the Walkers $47,359 in attorney fees, according to the court record.

The Mississippi Court of Appeals overturned that ruling.

Even though the 2003 property deed had been recorded in the wrong court, Jim Walker Sr. and Jim Walker Jr. were aware of the proceedings, the appeals court wrote. Jim Walker Jr. had power of attorney for his mother.

"This is not a situation where record owners have no notice of the procedure against their property," the court said.

While the dispute was still being tried, the Walkers said the utility filed a second eminent-domain action for the easement, which was granted in February 2013. That action was not part of the appeal.

Simpson, the utility authority's lawyer, said a jury in the second case will decide a fair price for the easement.

Jim Walker Jr. has said his family's four acres slope away from the easement, which runs parallel to the street, so water pipes there make it impractical to build on the land. He also says the proximity to a sewage plant makes the land essentially unsellable.

"Of course we're disappointed, but we're going to ask for an immediate rehearing," he said Wednesday in a phone interview. "If we need to go to the (Mississippi) Supreme Court, we will."


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