Florida Supreme Court Concludes Damages in Eminent Domain Case Must Account For Actual Economic Realities Including A Business's Relocation

In Systems Component Corp. v. Florida Department of Transportation (SC08-1507), the Florida Supreme Court approved the Fifth District's decision in System Components Corp. v. Department of Transportation, 985 So. 2d 687 (Fla. 5th DCA 2008) the decision of the Fourth District in State Department of Transportation v. Tire Centers, LLC, 895 So. 2d 1110 (Fla. 4th DCA 2005).

The issue in the case was "whether an award of business damages in an eminent-domain action under section 73.071(3)(b), Florida Statutes (2004), should include and account for the actual economic realities of the business‘s operations given its relocation following a partial taking."

The court "agree[d] that the actual extent of harm suffered by an affected business is the "sine qua non" of any eminent-domain business damages awarded pursuant to section 73.071(3)(b). Sys. Components, 985 So. 2d at 693. Due to the inherent nature of "damages" in this context, business damages "are not intended to be a windfall unconnected with any out-of-pocket loss." Id. at 690.2 For these reasons, when a qualified partial taking destroys a business at its prior location, and the land/business owner chooses to relocate, the resulting business damages are measured by the "probable" financial impact "reasonably" suffered as a result of the taking. § 73.071(3)(b), Fla. Stat. (2004); see also Sys. Components, 985 So. 2d at 689-93. Under the circumstances presented here, we therefore conclude that if an affected business chooses to relocate, its business damages must be determined in light of its continued existence at its new location. "

***

"In resolving this conflict, we conclude that when a qualified partial taking destroys a business at its prior location, and the land/business owner chooses to relocate, the resulting business damages must be measured by the probable financial impact reasonably suffered as a result of the taking. Therefore, these business damages must be determined in light of the true economic realities of the given case, which, here, involved a relocated business‘s continued existence at its new location."