Housing Authority of the Birmingham District v. Logan Properties, Inc.

The Housing Authority of the Birmingham District (“HABD”) appealed the judgment entered by the Jefferson Circuit Court which awarded Logan Properties, Inc., $350,000 on its inverse condemnation claim against HABD, as well as an additional $100,000 for litigation expenses, and awarding the intervening plaintiff Alamerica Bank $10,000 for litigation expenses. Logan Properties is a real-estate and property-management company that purchases, renovates, rents, and maintains single-family and multi-family residences. In January 2002, Logan Properties purchased “Patio Court,” a 30-unit apartment complex for approximately $101,000. Logan Properties began renovating the vacant units in the complex with the plan of transferring current tenants into the newly renovated units until the entire complex was eventually renovated and leased. Logan Properties financed the purchase and rehabilitation of Patio Court by obtaining a construction loan from Alamerica Bank. In February 2003, Logan Properties obtained an adjacent parcel of property including a triplex unit with the same goal of renovating and leasing the units. Sometime in 2004, Logan Properties learned that HABD had obtained a federal grant to redevelop “Tuxedo Court,” a multi- block public-housing complex located across the street from Patio Court. That project entailed the demolition of the existing Tuxedo Court housing complex and the construction of new housing in its place. After the plans for the Tuxedo Court project were made public, tenants started leaving Patio Court, telling Logan Properties that HABD was going to condemn Patio Court as part of the project. As residents in Tuxedo Court left as well, the general area deteriorated, and the vacant Patio Court apartments became the subject of theft and vandalism. Though Logan Properties had completely renovated 18 of the units, it eventually stopped renovation work, and, at trial conceded that the entire property had become unlivable. The parties tried to negotiate salvaging the area, but Patio continued to deteriorate. HABD subsequently initiated condemnation proceedings, and simultaneously filed a lis pendens notice on the properties. The probate court granted HABD’s application for condemnation and appointed three disinterested commissioners to determine the compensation due Logan Properties for the condemnation of its property. The probate court failed to enter an order adopting the commissioners’ report within a seven-day period required by statute and Logan Properties moved for a dismissal of the condemnation action. The probate court granted that motion and dismissed the action. Logan Properties then initiated an inverse-condemnation action against HABD, alleging that HABD had taken or injured property owned by Logan Properties. Upon review of the trial court record, the Supreme Court concluded that because no evidence was presented at trial indicating that HABD was responsible for a direct physical injury upon Logan Properties’ property, that judgment was reversed and the cause remanded for the trial court to enter a judgment as a matter of law in favor of HABD.

Housing Authority of the Birmingham District v. Logan Properties, Inc.