Doug Garber Construction, Inc. v. King – Stegall – Affirmed
113732
| Kan. | Jan 27, 2017Background
- KDOT (via the Secretary) condemned a half-acre parcel in Lawrence for relocation of 31st Street as part of the South Lawrence Trafficway (SLT) project; relocation was mitigation for impacts to Baker Wetlands.
- Garber owned the property, received a court appraiser award of $105,000, and appealed; jury later awarded $112,000. Garber appealed further challenging pretrial exclusions.
- Garber offered expert Richard Caplan, whose highest-and-best-use report tied large commercial development value to the SLT/31st Street improvements and estimated multimillion-dollar enhancement from the project.
- The district court granted the Secretary’s motions in limine excluding Caplan’s valuation under the Project Influence Rule (excluding enhancement caused by the project prompting the taking) and excluding portions of owner Bernice Garber’s lay testimony as speculative or based on noncompensable business profits.
- The Supreme Court reviewed whether the court abused its discretion in excluding (1) Caplan’s expert testimony as impermissibly influenced by the condemned project and (2) portions of Bernice Garber’s lay valuation based on improper comparables and business-profit projections.
Issues
| Issue | Plaintiff's Argument (Garber) | Defendant's Argument (Secretary) | Held |
|---|---|---|---|
| Whether Caplan’s valuation should be excluded under Project Influence Rule | Caplan’s report used comparable/highest-and-best-use analysis; enhancement not separable from value | SLT and 31st Street are a single, related project so enhancements caused by it are excluded | Court affirmed exclusion: projects treated as one; Caplan’s opinion improperly relied on project-driven enhancement |
| Whether district court erred in finding projects are one for valuation purposes | The 31st Street relocation was a City project separate from SLT | Evidence (including Caplan’s report and later testimony) shows 31st St. relocation contingent on SLT | Court affirmed factual finding: substantial evidence supported treating them as one project |
| Whether Bernice Garber’s $40M comparable-sales estimate admissible | Owner may testify from familiarity; comparable-sales approach permissible under statute | Her comparables (miles of highway sales) lacked probative value and logical connection | Exclusion affirmed: her comparison was unreliable and lacked probative value |
| Whether Bernice Garber’s $347M valuation ("Golden Gateway") admissible | Owner’s lay estimate based on projected revenue/cap rates | Business profits from a venture are noncompensable in condemnation | Exclusion affirmed: profits from business use are not compensable; testimony inadmissible |
Key Cases Cited
- Hudson v. City of Shawnee, 790 P.2d 933 (Kan. 1990) (Project Influence Rule: exclude value enhancement caused by the project prompting condemnation)
- Miller v. Preisser, 284 P.3d 290 (Kan. 2012) (appellate review and scope of issues on appraisal-amount appeals)
- City of Wichita v. Denton, 294 P.3d 207 (Kan. 2013) (business profits are noncompensable in condemnation)
- Kansas City Power & Light Co. v. Strong, 356 P.3d 1064 (Kan. 2015) (statutory interpretation of fair market value measured at time of taking)
- In re Eminent Domain, 320 P.3d 955 (Kan. 2014) (property-owner lay testimony limits and admissibility)
- Morgan v. City of Overland Park, 483 P.2d 1079 (Kan. 1971) (court’s authority to strike valuation testimony based on noncompensable elements)
- Eisenring, 7 P.3d 1248 (Kan. 2000) (valuation of real estate is largely subjective; trial court discretion on evidence)
- Manhattan Ice & Cold Storage v. City of Manhattan, 274 P.3d 609 (Kan. 2012) (standards for orders in limine)