Board of County Commissioners of County of Weld v. DPG Farms, LLC
2017 COA 83
| Colo. Ct. App. | 2017Background
- Weld County condemned a 19-acre strip through DPG Farms’ 760-acre property to extend a public road; county took immediate possession and paid an estimated $148,719 before trial.
- The Property was mainly agricultural/recreational; ~280 acres contained gravel in four "cells" (A–D); the condemned strip crossed Cell C and included ~7.5 minable acres.
- DPG’s experts proposed a development plan: mine gravel from cells over time and convert pits to water-storage reservoirs using slurry walls; DPG asserted mixed highest and best uses (agriculture, mining, water storage).
- DPG’s pre-taking valuation used comparable sales (appraiser $11,500/acre; mining expert $5,000–$10,000/acre). After the taking, DPG attempted to present lost-income calculations from mining/water storage (~$3.1 million) as compensable damages.
- The district court allowed evidence of potential mining income only as relevant to fair market value, excluded DPG’s standalone lost-income/frustration-of-plan damages, and precluded treating water storage as the highest and best use of Cell C as a matter of law due to speculative engineering/geological evidence.
- Jury awarded $183,795 for the condemned strip and nothing for residue damages; court substantially reduced DPG’s requested costs. DPG appealed; the Court of Appeals affirmed.
Issues
| Issue | DPG's Argument | County's Argument | Held |
|---|---|---|---|
| Whether water storage was the highest and best use of Cell C | Cell C could feasibly be mined then used for water storage; experts supported water storage as part of mixed highest and best use | Evidence of slurry-wall feasibility/costs was speculative and insufficient to establish water storage as reasonable highest and best use | Court: district court correctly rejected water storage as a matter of law—evidence too speculative |
| Admissibility of lost-income figures as measure of just compensation (income-capitalization approach) | Lost future income from mining/water storage could be capitalized to measure value and thus compensable | Lost income alone is not the proper measure; only fair market value (via income or comparable-sales approach) is compensable; frustration-of-plan damages barred | Court: lost-income figures admissible only as evidence to inform fair market value, not as standalone damages; district court did not abuse discretion excluding them |
| Proper method to value residue damages | Lost mining income from affected portion of Cell C ($2.1M PV) equals diminution to residue | Residue damages must be measured by change in fair market value of the entire residue (all remaining 627 acres), not isolated lost income from part of it | Court: DPG’s methodology was flawed; lost income is not a substitute for fair market value; jury could reasonably find no residue diminution |
| Award of costs (expert fees) | Sought substantial expert fees (~$248,681) after trial victory | Trial court should reduce costs because success was limited and much expert evidence was excluded | Court: affirmed district court’s cost reductions; no abuse of discretion |
Key Cases Cited
- Bd. of Cty. Comm’rs v. Vail Assocs., 468 P.2d 842 (Colo. 1970) (just compensation measured by fair market value considering highest and best use)
- Dep’t of Highways v. Schulhoff, 445 P.2d 402 (Colo. 1968) (exclude speculative highest-and-best-use evidence)
- State Dep’t of Highways v. Mahaffey, 697 P.2d 773 (Colo. App. 1984) (gravel mining can be highest and best use despite current vacant condition)
- City of Englewood v. Denver Waste Transfer, 55 P.3d 191 (Colo. App. 2002) (broad admissibility of valuation evidence, but exclude merely speculative uses)
- Palizzi v. City of Brighton, 228 P.3d 957 (Colo. 2010) (fair market value is measure of compensation at time of taking)
- Jagow v. E-470 Pub. Highway Auth., 49 P.3d 1151 (Colo. 2002) (valuation focuses on present reasonable market value)
- Bd. of Assessment Appeals v. Colo. Arlberg Club, 762 P.2d 146 (Colo. 1988) (hypothetical plans admissible only to show feasibility affecting market value)