House Bill 934

AN ACT TO CREATE NEW SECTION 11-27-8, MISSISSIPPI CODE OF 1972, TO REQUIRE COMMERCIAL BUSINESS OWNERS TO BE COMPENSATED FOR LOSS OF GOODWILL IN EMINENT DOMAIN CASES; TO AMEND SECTIONS 11-27-7, 11-27-19, 11-27-83 AND 11-27-89, MISSISSIPPI CODE OF 1972, TO REQUIRE PLEADINGS AND EVIDENCE PRESENTED TO THE COURT IN EMINENT DOMAIN PROCEEDINGS TO INCLUDE THE VALUE OF GOODWILL TO BE LOST BY AN OWNER OF A BUSINESS CONDUCTED UPON THE SUBJECT PROPERTY OR THE VALUE OF ANY COMMERCIAL FARMING OPERATION, INCLUDING LOSS OF PROJECTED INCOME, CONDUCTED UPON THE PROPERTY; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The following shall be codified as Section 11-27-8, Mississippi Code of 1972:

11-27-8. (1) The owner of a commercial business conducted upon the property taken, or upon the remainder if less than the whole is taken, must be compensated for loss of business goodwill if the owner proves all of the following:

(a) The loss is caused by the taking of the property or the injury to the remainder if less than the whole is taken.

(b) The loss cannot reasonably be prevented by a relocation of the business or by taking steps and adopting procedures that a reasonably prudent person would take and adopt in preserving goodwill.

(c) Compensation for the loss of business goodwill will not be duplicated in the compensation otherwise awarded for the property to the owner of the property.

(2) For the purposes of this section, "business goodwill" consists of the benefits that accrue to a commercial business as a result of its location, reputation for dependability, skill or quality, and any other circumstances resulting in probable retention of old or acquisition of new patronage.

(3) If the owner of the commercial business conducted upon the property taken, or upon the remainder if less than the whole is taken, is a tenant, compensation for lost goodwill to the business presumably belongs to the business owner.

(4) The owner of a commercial business who claims compensation under this section shall make available to the court, and the court, upon terms and conditions that will preserve their confidentiality, shall make available to the plaintiff, the state tax returns of the business for audit for confidential use solely for the purpose of aiding in the determination of the amount of compensation under this section. This subsection may not be construed as affecting any right a party otherwise may have to discovery or to require the production of documents, papers, books and accounts.

SECTION 2. Section 11-27-7, Mississippi Code of 1972, is amended as follows:

11-27-7. The complaint shall be filed with the circuit clerk and shall be assigned a number and placed on the docket as other pleadings in circuit court or county court. The plaintiff shall also file a lis pendens notice in the office of the chancery clerk immediately after filing the complaint. The circuit clerk, or the plaintiff by his attorney, shall forthwith present such complaint to the circuit judge or county judge, as the case may be, who shall by written order directed to the circuit clerk fix the time and place for the hearing of the matter, in termtime or vacation, and the time of hearing shall be fixed on a date to allow sufficient time for each defendant named to be served with process as is otherwise provided by the Mississippi Rules of Civil Procedure, for not less than thirty (30) days prior to the hearing. If a defendant, or other party in interest, shall not be served for the specified time prior to the date fixed, the hearing shall be continued to a day certain to allow the thirty-day period specified. Not less than twenty (20) days prior to the date fixed for such hearing, the plaintiff shall file with the circuit clerk and serve upon the defendants, or their respective attorneys, a statement showing the plaintiff's determination of: (1) the fair market value of the property to be condemned, determined as of the date of the filing of the complaint; (2) the damages, if any, to the remainder if less than the whole is taken, giving a total compensation and damages to be due * * * ~~as determined by the plaintiff~~; (3) if a commercial business is operated upon the property to be condemned, the value of business goodwill to be lost by the condemnation, as required under Section 11-27-8; and (4) if a commercial farming operation is conducted upon the property to be condemned, an appraisal of the farming operation and a projection of income to be lost due to the property being condemned, documented by copies of state tax returns submitted with the appraisal. Not less than ten (10) days prior to the date fixed for such hearing, each of the defendants shall file with the circuit clerk and serve upon the plaintiff, or his attorney, a statement showing the defendant's determination of: (1) the fair market value of the property to be condemned, determined as of the date of the filing of the complaint; (2) the damages, if any, to the remainder if less than the whole is taken, giving a total compensation and damages to be due * * * ~~as determined by the defendants~~; (3) if a commercial business is operated upon the property to be condemned, the value of business goodwill to be lost by the condemnation, as required under Section 11-27-8; and (4) if a commercial farming operation is conducted upon the property to be condemned, an appraisal of the farming operation and a projection of income to be lost due to the property being condemned. In each such instance, both the plaintiff and the defendant shall set out in such statement the asserted highest and best use of the property and shall itemize the elements of damage, if any, to the remainder if less than the whole is taken. The statements required by this section shall constitute the pleadings of the parties with respect to the issue of value of the property itself and of business goodwill, if a commercial business is conducted upon the property, and shall be treated as pleadings are treated in civil actions in the circuit court. The judge, for good cause shown, may increase or decrease the time for pleading by the plaintiff or by the defendant.

SECTION 3. Section 11-27-19, Mississippi Code of 1972, is amended as follows:

11-27-19. Evidence may be introduced by either party, and the jury may, in the sound discretion of the judge, go to the premises, under the charge of the court as to conduct, conversation and actions as may be proper in the premises. Evidence of fair market value of the property, the value of business goodwill, if a commercial business is conducted upon the property, and the value and projected loss of income of any commercial farming operation conducted upon the property shall be established as of the date of the filing of the complaint. Any judgment finally entered in payment for property to be taken and for business goodwill, if any, and for projected loss of income from any commercial farming operation conducted upon the property shall provide legal interest on the award of the jury from the date of the filing of the complaint until payment is actually made; * * *~~provided,~~ however, * * *~~that~~ interest need not be paid on any funds deposited by the plaintiff and withdrawn by the defendants prior to judgment. At the conclusion of the trial, the court shall instruct the jury in accordance with the Mississippi Rules of Civil Procedure.

SECTION 4. Section 11-27-83, Mississippi Code of 1972, is amended as follows:

11-27-83. If a plaintiff eligible to claim the right of immediate possession under the provisions of Sections 11-27-81 through 11-27-89 shall desire immediate possession of the property sought to be condemned, other than property devoted to a public use, the plaintiff shall so state in the complaint to condemn property filed with the circuit clerk pursuant to Sections 11-27-1 through 11-27-49 * * *~~, Mississippi Code of 1972,~~ and shall therein make and substantiate the following declaration concerning the governmental project for which the property is being condemned:

That the plaintiff shall suffer irreparable harm and delay by exercising the right to condemn * * *~~said~~ the property through eminent domain proceedings pursuant to Sections 11-27-1 through 11-27-49, as opposed to claiming the right of immediate possession of * * *~~said~~ the property pursuant to Sections 11-27-81 through 11-27-89.

The court, or the judge thereof in vacation, as soon as practicable after being satisfied that service of process has been obtained, shall appoint a disinterested, knowledgeable person qualified to make an appraisal of the property described in the complaint to act as appraiser. The appraiser, after viewing the property, shall return to the clerk of court within ten (10) days after his appointment, his report in triplicate, under oath, which report shall state: (1) the fair market value of the property to be condemned, determined as of the date of the filing of the complaint; (2) the damages, if any, to the remainder if less than the whole is taken, giving a total compensation and damages to be due as determined by the appraiser; * * *~~and~~ (3) if a commercial business is operated upon the property to be condemned or upon the remainder if less than the whole is taken, the value of business goodwill to be lost by the condemnation, as required under Section 11-27-8, determined as of the date of the filing of the complaint; (4) if a commercial farming operation is conducted upon the property to be condemned, the value of the farming operation and a projection of income to be lost due to the condemnation, determined as of the date of the filing of the complaint; and (5) his opinion as to the highest and best use of the property * * *, and a narrative of the facts pertaining to his appraisal.

SECTION 5. Section 11-27-89, Mississippi Code of 1972, is amended as follows:

11-27-89. The appraiser shall receive as compensation for his services such sum, plus expenses, as the court allows, which shall be taxed as cost in the proceedings. The sum allowed shall be based upon the degree of difficulty and the time required to perform the appraisal, but may not exceed One Thousand Dollars ($1,000.00) unless, in the opinion of the court, special circumstances warrant a greater sum. An order granting a sum greater than One Thousand Dollars ($1,000.00) must describe in detail the special circumstances that warrant payment of a greater sum.

The making of a deposit by the plaintiff or the withdrawal of * * *~~said~~ the deposit by the defendant or defendants shall not prejudice the right of any party to a trial by jury in the special court of eminent domain to determine: the fair market value of the property to be condemned and the damages, if any, to the remainder if less than the whole is taken * * *,; the value of business goodwill to be lost by the condemnation if a commercial business is upon the property to be condemned or upon the remainder if less than the whole is taken; or the value of the farming operation and a projection of income to be lost due to the property being condemned if a commercial farming operation is conducted upon the property, as provided in Sections 11-27-1 through 11-27-49 * * *~~, Mississippi Code of 1972~~.

SECTION 6. This act shall take effect and be in force from and after July 1, 2021.