When pursuing a subrogation claim for property damages against a public entity, the claimant carrier must evaluate its potential causes of action (i.e., theories of liability). Two common tort actions, with their differences often misunderstood, are inverse condemnation and negligence. For your quick reference, we compare and contrast the two.
Inverse Condemnation
Authority: The Takings Clause of the 5th Amendment of the United States Constitution (or the applicable clause of a state’s constitution; for example, Article I, Section 19 of the California Constitution) provides that private property may not be taken or damaged for public use without just compensation. Eminent Domain is the taking of private property as initiated by a public authority. Conversely, Inverse Condemnation is a civil action initiated by the property owner (or its subrogating carrier) for reimbursement of the taken or damaged property.
Elements: Inverse Condemnation requires proving that a public agency has taken or damaged the claimant’s property for a public use. Public use is generally defined as a use concerning a community or promoting a general governmental interest. Examples include public distribution systems, such as those for electricity, water, sewage, etc.
For a claim of Inverse Condemnation, it is not necessary to establish negligence or fault; any actual physical injury to property proximately caused by a public improvement as deliberately designed, constructed, and/or maintained is compensable, whether or not the injury was foreseeable or the action was reasonable. The public improvement must be a substantial cause of a claimant’s damages and the claimant must prove it incurred damages. Notably, in contrast to negligence, an inverse condemnation cause of action requires a level of deliberateness on the part of the government entity when it comes to the design, construction or maintenance of the public improvement. In other words, the design, construction, or maintenance of the public improvement, was intentionally or deliberately performed in a manner that increased the risk of property damage, and was the substantial cause of the property damage.
Notice: There are no statutory notice requirements.
Recovery: In addition to recovery of damages for the property, inverse condemnation provides for recovery of attorney fees and expert costs.
Negligence
Authority: Generally, a cause of action for negligence is based in common law. However, in most states there is no standard negligence action against a government entity; instead, a claimant must rely upon statutorily recognized causes of action (e.g, California Government Code sections815, et. seq., 835, et. seq., etc.).
Elements: In addition to any additional requirements of the statute, a claimant must prove the general elements of negligence, which include duty, breach, causation, and harm. A claimant must prove that the government entity owed a duty of care, breached that duty with an improper action or inaction, that breach caused the harm alleged, and that the claimant incurred damages.
Notice: Strict statutory notice requirements apply with short time frames for compliance.
Recovery: Recovery is limited to reimbursement of the claimed property damages.
In subrogation, we can see the best of times and the worst of times. Having the right tort claims in your subrogation tool kit can make all the difference in your recoveries. As always, make sure to check your own state’s laws as they relate to Inverse Condemnation and Negligence.
