J.J. Newberry Co. v. City of East Chicago
Court of Appeals of Indiana
441 N.E.2d 39 (1982)
J.J. Newberry Co. (Newberry) (plaintiff) leased retail space under a lease requiring the owner to rebuild if the premises were destroyed by fire; after a 1971 fire destroyed the premises, Newberry sued in 1973 to compel rebuilding, but while that action was pending, the City of East Chicago (defendant) condemned the property through eminent domain. Newberry then sought compensation for the taking of its leasehold, and the trial court awarded $760 plus interest based on expert testimony using the standard fair-market-value-of-remaining-term method; Newberry appealed, arguing it was entitled to greater compensation under a capitalization-of-income approach.
Whether a leaseholder affected by eminent domain is entitled to compensation above the difference between the fair market value of the remaining time on the lease and the rent stipulated to be paid.