South-Western Legal Studies in Business

No Compensation for Loss of Business Value Due to Eminent Domain Taking
Description

Appeals court held that in the District of Columbia there is no recovery for the loss of business value that occurs when property is taken by eminent domain. The business owner receives the value of the property taken, but not damages for the loss of business.

Topic Constitutional Law
Key Words

Eminent Domain; Business Losses; Damages

C A S E   S U M M A R Y
Facts

Mamo owned a gas station for 20 years in the District of Columbia. The District took the land that had Mamoís business and specified that the value of the land was $680,000 for just compensation purposes under eminent domain. The company that supplied his gas, BP, then terminated his franchise because of the condemnation of the property. Mamo sued the District for the value of the franchise he lost, his leasehold interest, and goodwill. He demanded $500,000 payment for the value of his business beyond the value of the real property taken. The trial court dismissed his suit; he appealed.

Decision

Affirmed. Mamo was not entitled to compensation for business losses, goodwill, or other consequential damages under the Fifth Amendment. Since BP cancelled his franchise, it had no value. The taking of the property ended any leasehold interests. The Districtís compensation law did not authorize recovery of business loss or goodwill, so he has no claim.

Citation

Mamo v. District of Columbia, 934 A.2d 376 (Ct. App., D.C., 2007)

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