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Franco v. National Capital Revitalization Corp.

July 12, 2007

SAMUEL N. FRANCO, APPELLANT,
v.
NATIONAL CAPITAL REVITALIZATION CORPORATION, APPELLEE.



Appeal from the Superior Court of the District of Columbia (CA5335-05) (Hon. Geoffrey M. Alprin, Trial Judge).

The opinion of the court was delivered by: Fisher, Associate Judge

Argued April 12, 2007

Before GLICKMAN and FISHER, Associate Judges, and KING, Senior Judge.

In July 2005 appellee National Capital Revitalization Corporation ("NCRC"), an independent instrumentality of the District of Columbia, initiated condemnation proceedings against property owned by appellant Samuel Franco. Mr. Franco answered the complaint and raised seven defenses, asserting primarily that this taking was for a private use and that the declared public purpose for the condemnation was a pretext. Mr. Franco also asserted six counterclaims. NCRC moved to strike Mr. Franco's defenses and counterclaims under Civil Rule 12 (f), and the Superior Court granted that motion. The court then granted NCRC's motion for immediate possession of the property. Mr. Franco appeals from the orders striking his defenses and granting immediate possession of the property to NCRC. (He does not challenge the decision striking his counterclaims.)

Although this is an eminent domain action, our analysis centers on proper application of Civil Rule 12 (f). Concluding that the "pretext" defense raises an issue requiring proof, and cannot be stricken for insufficient pleading, we reverse and remand for further proceedings.

I. Facts and Procedural History

Samuel Franco owns a store called Discount Mart, which is part of the Skyland Shopping Center located in the southeast quadrant of the District of Columbia at the junction of Alabama Avenue, Good Hope Road, and Naylor Road. The shopping center contains about thirty businesses, including a Murry's Steaks supermarket, a CVS pharmacy, an AutoZone auto-supply store, a United States Post Office annex, a Kentucky Fried Chicken restaurant, and other retail establishments.

In 1998 the Council of the District of Columbia created the National Capital Revitalization Corporation as an independent instrumentality charged with several public purposes, including "induc[ing] economic development and job creation by developing and updating a strategic economic development plan for the District; . . . [and] removing slum and blight . . . ." D.C. Code § 2-1219.02 (b) (2001). To accomplish its public purposes, NCRC is authorized to acquire and assemble land and real property by exercising the power of eminent domain. See D.C. Code § 2-1219.19 (2001).

In October 2002, NCRC entered into a Joint Development Agreement ("JDA") with four private corporations (together referred to as the "Purchaser/Developer") to redevelop the Skyland Shopping Center along with five acres of adjoining undeveloped land that was privately-owned and residentially-zoned (the "Skyland Site"). NCRC agreed to make "commercially reasonable good faith efforts" to acquire the properties within the Skyland Site through purchase agreements or by exercising the power of eminent domain, if its use was approved by the Council. The Purchaser/Developer agreed to prepare a plan to redevelop the site into a "first-class, quality mixed-use retail center."

A. Authorizing Legislation

On March 2, 2004, Bill B15-752 was introduced to approve NCRC's exercise of the power of eminent domain to acquire the Skyland Site. The draft bill included a finding that the component properties were "necessary and desirable for the public use," but it did not explain why the properties were "necessary" or to what "public use" they would be devoted. On April 28, 2004, the Council's Committee on Economic Development held a public hearing on the proposed legislation.

The Committee reported favorably on the Skyland bill on November 3, 2004, and the Council passed it on December 7, 2004. The version approved by the Council included a set of findings that were not in the bill on November 3. These included findings that: "[t]he Skyland Shopping Center is a blighting factor in the Hillcrest and nearby communities"; "[t]he Skyland Shopping Center is characterized by underused, neglected, and poorly maintained properties"; "[t]he fragmented and often absentee ownership of the properties has exacerbated [the shopping center's] problems by allowing individual owners to avoid responsibility for safety and the reduction of crime, trash, and other blighting factors"; and "[n]either the police nor the community have been able to secure the cooperation of the current owners to deal with the numerous problems at the site despite years of efforts." The Council also found that "[t]he assemblage of the properties comprising the Skyland Shopping Center and the construction of a new shopping center on the site . . . will further many important public purposes," including removal of garbage and other unsanitary conditions, reduction of crime, reorganization of the site, provision of needed job opportunities and retail options for residents of the surrounding neighborhoods, revitalization of an economically distressed community, and expansion of the tax base of the District of Columbia. The Council did not hold any additional public hearings before adding these findings. Mayor Williams signed the bill on December 29, 2004, and the act became law after the Congressional review period ended on April 5, 2005.*fn1 NCRC acquired most of the properties contained in the Skyland Site through private negotiations and other condemnation actions.*fn2

B. This Litigation

NCRC filed the complaint to condemn Mr. Franco's property on July 8, 2005. In his answer, Mr. Franco denied that the Skyland Site was blighted and denied that NCRC had submitted a carefully considered development plan designed to serve a public purpose. Mr. Franco also raised seven defenses, asserting most prominently that the proposed condemnation would violate the Fifth Amendment of the United States Constitution because "it would authorize the taking of [the] property for a private use and not for a public use or purpose." Franco alleged that the declared reason for the taking was pretextual and that the true purpose was to confer a private benefit on a particular private party. Additionally, Mr. Franco's answer included six counterclaims, the first entitled "Taking in Violation of the Takings Clause Public Use Provisions of the Fifth Amendment of the U.S. Constitution."

On December 7, 2005, NCRC moved under Civil Rule 12 (f)*fn3 to strike the defenses and the counterclaims in Mr. Franco's answer. A few days later, NCRC moved for immediate possession of the property, arguing that because it had filed its Declaration of Taking with the Superior Court and had deposited its estimate of just compensation in the court registry, it had acquired title to the property pursuant to D.C. Code § 16-1314 (b) (2001). Under the circumstances, NCRC urged that it be granted immediate possession of the property as authorized by D.C. Code § 16-1316.

The Superior Court concluded that Mr. Franco's defenses were "legally insufficient" and therefore granted NCRC's motion to strike them. The court also struck the counterclaims, concluding that they were prohibited by Civil Rule 71A (e).*fn4 It also granted NCRC's motion for immediate possession, explaining that "[s]ince [Mr. Franco's] defenses have been struck by virtue of this order, and title has vested in NCRC, it is appropriate to grant NCRC's Motion for Immediate Possession of the property. There is no principled reason not to do so."

II. Jurisdiction

This court has jurisdiction to review the decision granting NCRC's motion for immediate possession because it is an interlocutory order "changing or affecting the possession of property." D.C. Code § 11-721 (a)(2)(C) (2001). See generally Williams v. Dudley Trust Foundation, 675 A.2d 45, 51 (D.C. 1996). An order granting a motion to strike defenses ordinarily is not immediately appealable, however. See Securities & Exchange Comm'n v. Blazon Corp., 609 F.2d 960, 964 (9th Cir. 1979) (order striking affirmative defenses not appealable before entry of final judgment); United States v. 687.30 Acres of Land, More or Less, in Dakota and Thurston Counties, State of Nebraska, 451 F.2d 667, 670 (8th Cir. 1971) (ruling striking answer and counterclaim in condemnation action was interlocutory and not appealable); 5C CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERALPRACTICE AND PROCEDURE: CIVIL 3D § 1381, at 431 & n.51 (2004) ("an order striking a defense as insufficient is not appealable, unless it is part of a final judgment"); cf. Moss v. W.S. Pratt Scientific Brake Service, Inc., 206 A.2d 403, 404 (D.C. 1965) (order striking allegations from complaint not appealable); Brown v. Randle & Garvin, Inc., 32 A.2d 104, 105 (D.C. 1943) (court has no jurisdiction to hear interlocutory appeal ...


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