{1} Primetime Hospitality, Inc. (Prime-time) had begun constructing a hotel on its Albuquerque property when it accidentally ruptured an encroaching City of Albuquerque (the City) waterline, causing it to incur excess construction costs and delaying the hotel’s opening. The City stipulated to liability for inverse condemnation, admitting that it deprived Primetime of all use and enjoyment of its property for the duration of the taking. As the issue of liability is not before us, the only question we must address is whether Primetime’s lost profits and excess construction costs may be awarded as damages in inverse condemnation proceedings. The district court found Primetime’s losses to be the direct result of the City’s taking and awarded it damages, along with expert witness costs. The Court of Appeals reversed, holding that although lost profits might be considered, the direct award of lost profits in this case would constitute the impermissible award of the full measure of tort damages, and that the portion of the excess construction costs covering Primetime’s damage-mitigating buttress wall must be subject to a test of reasonableness. Primetime Hospitality, Inc. v. City of Albuquerque,
{2} We hold that in an inverse condemnation proceeding, lost profits may be recovered when they are the best measure of the value of the lost use and enjoyment of condemned land. In addition, in such proceedings, excess construction costs directly resulting from a temporary taking are awardable. Accordingly, we reverse the Court of Appeals and reinstate the district court’s award of damages and costs.
I. BACKGROUND
{3} The facts in this case are not in dispute. Primetime is a New Mexico corporation that develops hotels. It owned land in Albuquerque and had taken significant steps toward building a hotel on its land. Prior to construction, Primetime entered into a license agreement with Hilton Inns that obligated Primetime to construct a Hilton Garden Inn or face $385,000 in liquidated damages. In preparation for construction, Primetime hired an architect to draw up plans and employed a general contractor at a cost of $130,000 each. To finance the hotel’s construction, Primetime took out a construction loan of $4,435,000.
{4} Not long after construction began in the spring of 2001, Primetime’s contractor accidentally breached a 24-inch city waterline, flooding the property. Shortly thereafter, Primetime discovered a 12-ineh waterline on the property as well. The City subsequently removed both waterlines and Primetime sued, seeking damages under New Mexico’s inverse condemnation statute, NMSA 1978, § 42A-1-29 (1983), or, in the alternative, for trespass.
{6} At the conclusion of trial, the district court made several findings of fact that are not challenged on appeal. It found that construction was delayed 142 days, that the amount of lost profits due to the delay was $456,242, and that Primetime also incurred additional construction costs in the amount of $153,518.45 due to the delay. The additional construction costs included the costs of repairing water damage, the costs of the delayed construction, and the costs of constructing a buttress wall that had not been in the original design. Addressing the issue of lost profits, the district court concluded that “[w]hen reliable proof of damage and its amount is presented by a methodology other than a before and after appraisal, such proof is admissible on the damage issue,” and found that evidence of lost profits was “reasonably ascertainable” with Primetime’s methodology. Pursuant to its findings, the district court awarded damages for the additional construction costs and lost profits, and awarded the costs of Primetime’s experts.
{7} The City appealed the district court’s decision, claiming that the court erred in awarding lost profits, excess construction costs, and expert fees because such damages are consequential, and thus not recoverable in an inverse condemnation action. Prime-time,
{8} Next, the Court of Appeals considered the award of lost profits, observing that no single measure of damages could apply in all temporary takings cases. Id. ¶ 22. However, finding guidance in federal cases, it held that rental value would be an appropriate measure in this ease. Id. ¶¶ 37, 38. In defining rental value, the Court of Appeals held that the ultimate question must be “[w]hat would an objective property owner accept to delay construction of a hotel facility in this circumstance for a period of 142 days?” Id. ¶41. Under this standard, the Court held that lost profits should not be directly allowed, but might be considered as a component of rental value. Id. ¶¶ 39^10. As a result, the Court remanded the case to the district court to apply this measure, leaving “the details of the calculation to the parties’ accounting and economics experts.” Id. ¶ 41.
{9} Finally, because the Court of Appeals remanded the ease to the district court for a determination of rental value, it vacated the district court’s award of expert fees to “allow the judge to redetermine the costs to be awarded once it makes a proper award of eminent domain damages.” Id. ¶ 45. Thus,
II. DISCUSSION
A. STANDARD OF REVIEW
{10} This ease first asks us to review, as a matter of law, whether the lost profits and excess construction costs awarded to Primetime were properly compensable in this temporary physical taking. We review these questions of law de novo, without deference to the district court’s legal conclusions. See New Mexicans for Free Enter, v. City of Santa Fe,
{11} We are also asked to decide whether the district court’s award of expert witness costs was proper. This issue is reviewed for abuse of discretion. Pioneer Sav. & Trust, F.A. v. Rue,
B. LOST PROFITS
{12} The district court found that “[a]s a direct result of the City’s encroaching waterlines and their removal, the opening of the Hilton Garden Inn was delayed for 142 days such that Plaintiff incurred lost profits from operations for the period June 8 through October 28, 2002.” (Emphasis added.) The City did not challenge either this finding or the finding that the lost profits totaled $456,242. Therefore, the question of whether Primetime’s claimed lost profits were an accurate reflection of its loss is not before us. Thus, the district court’s findings bind us to the premise that they were. We also emphasize that the district court made no separate award of damages for the property’s value in addition to its award of lost profits. We conclude that the district court’s award of lost profits was a permissible award to Primetime for the value of its lost use and enjoyment of the land.
{13} The Court of Appeals held that the district court erred in “directly allowing lost profits” because this would amount to an award of “full consequential damages,” which the Court found objectionable. Primetime,
{14} The New Mexico Constitution provides that “[p]rivate property shall not be taken or damaged for public use without just compensation.” N.M. Const, art. II, § 20. A would-be condemnor normally institutes a condemnation proceeding to determine the compensation due, but “[i]f the condemning authority has taken or damaged property for public use without making just compensation therefor or without initiating proceedings to do so, the property owner has recourse through inverse condemnation proceedings.” North v. Pub. Serv. Co. of N.M.,
{15} Our case law has defined the purposes of just compensation broadly. In State ex rel. State Highway Commission v. Pelletier,
{16} PDR Development Corp. v. City of Santa Fe,
{17} The district court found that the City of Santa Fe’s actions did not cause PDR’s damages, and PDR appealed this finding. Id. at 225,
the measure of damages in temporary-takings cases is the market rate of return on the difference in the fair market value of the property without the restriction and the fair market value of the property with the restriction for that period of time during which the restriction was in place.
PDR,
{18} In Primetime, the Court of Appeals held that the market rate of return measure of damages from PDR “is not a cure-all.”
{19} Market rental value seems to us to be a reasonable way to measure Prime-time’s compensable loss under our Takings Clause. As the United States Supreme Court pointed out in General Motors, “property” as protected by the Takings Clause denotes “the group of rights inhering in the citizen’s relation to the physical thing, as the right to possess, use and dispose of it.”
{20} In the case at bar, the identification of rental value as the measure of damages raises as many questions as it answers. Chief among them is the question of whether rental value should reflect the value of the land to a third party in its condition at the time of the taking — partially excavated and possibly worth less than at the time of purchase — or whether rental value should instead take into consideration the revenue that the unfinished hotel could have produced 142 days earlier were it not for the delay. Had Primetime’s land been completely undeveloped, and had Primetime taken no steps to set its plan of building a hotel in motion, it would receive as compensation for a temporary physical taking nothing more than the market rental value of the empty land, determined, for example, by similar sales. See United States v. 883.89 Acres of Land,
{21} To make our market rental value measure comprehensible in this unusual case, we must determine the perspective from which the value will be ascertained. The district court’s findings and conclusions clearly imply that it considered the loss to the property owner to be the appropriate focus. The Court of Appeals agreed, observing that “[s]ince the goal of just compensation is to measure and pay for what the owner has lost, we must analyze this question from Prime-time’s viewpoint.” Primetime,
{22} We agree that it is the loss to the condemnee which must guide a court’s determination of fair rental value, especially in cases of temporary takings. See, e.g., Kimball,
{23} In the Court of Appeals’ judgment, however, the district court failed to use its objective person measure when it awarded Primetime its lost profits. Primetime,
{24} We recognize, however, that lost profits may be considered consequential damages, and that there are different opinions regarding whether consequential damages ai*e recoverable in inverse condemnation proceedings. Compare Gen. Motors,
{25} Drawing a clear distinction between consequential and non-consequential damages is no easy task.
2
Black’s Law Dictionary defines “consequential damages” as “[l]osses that do not flow directly and immediately from an injurious act but that result indirectly from the act.” Id. at 416 (8th ed.2004) (emphasis added). Similarly, it defines “consequential loss” as “[a] loss arising from the results of damage rather than from the damage itself.” Id. at 964. PDR indicates a similar understanding, explaining that “this case involves a public body’s enforcement of a general zoning law that had consequential effects on PDR’s contracts.”
{26} In this case, the district court made the unchallenged finding that “as a direct result of the City’s encroaching waterlines____Plaintiff incurred lost profits----” (Emphasis added.) This description is clearly at odds with the definition of consequential damages in Black’s Law Dictionary and is easily distinguishable from PDR, in which the district court found that PDR’s injury was not directly caused by the City of Santa Fe. Moreover, even if causation had been established in PDR, the causal connection was more attenuated than it is in Primetime, according to the unchallenged findings of the district court. Given the district court’s findings, our rules of appellate procedure weigh in favor of holding the lost profits damages to be non-consequential. Rule 12-216(A) NMRA (“To preserve a question for review it must appear that a ruling or decision by the district court was fairly invoked ...”). However, the issue of lost profits merits a closer look, given the cases that seem to disallow awards that are, at first glance, similar to Primetime’s. We have already pointed out the distinction between lost profits in Prime-time and PDR, the primary New Mexico case. We now consider cases from other jurisdictions.
{27} In a number of leading cases, recovery of lost profits has been denied not (as sometimes claimed) because the lost profits were consequential, but for other reasons that are inapplicable to Primetime. In Wheeler, the case from which the PDR Court derived its measure of damages, a property owner and the development company to which it had intended to sell its land sought damages in inverse condemnation after a local ordinance unconstitutionally attempted to deny their right to build an apartment complex.
{28} This situation is readily distinguishable from Primetime, in which neither the parties nor the courts have advocated the “market rate of return” measure, rendering the Wheeler court’s specific concern about double recovery irrelevant. It is, however, true that if we were to remand this case for a determination of rental value, it would pose a risk of double recovery if lost profits were to be awarded in addition to rental value. This is readily apparent by considering the hypothetical posed above about the temporary taking of an operating hotel; in that case, lost profits would be a means of determining rental value and would not be awarded separately. Avoiding this concern, as we discuss below, we conclude that a remand is not required to determine a separate and additional measure of rental value.
{29} Other cases have denied lost profits out of a concern that they are too speculative. In Yuba Natural Resources, Inc. v. United States,
{30} We agree that speculative damages should be excluded from just compensation awards. See, e.g., Kistler-Collister Co.,
{31} Some courts go further and hold that certain non-duplicative, non-speculative lost profits awards should be denied solely for the reason that they are consequential. In Mitchell v. United States,
consequential damages for losses to their business, or for its destruction. No recovery therefor can be had now as for a taking of the business. There is no finding as a fact that the government took the business, or that what it did was intended as a taking. If the business was destroyed, the destruction was an unintended incident of the taking of land.
Id. at 345,
{32} Although Mitchell seemingly condemns the award of even ascertainable lost profits when they constitute consequential damages, we do not believe that Mitchell can be read to proscribe every award of lost profits. The Court of Appeals itself held in Primetime that lost profits may be considered in determining the value of temporarily seized property,
{33} Such was the case in Primetime. First of all, in Primetime, there is an unchallenged finding of fact that, in essence, the government took Primetime’s business, directly preventing it from making nearly $500,000. Cf. Kimball,
{34} Where lost profits are so direct a measure of the value of the temporary taking — just as they would be for an operating hotel — it is unnecessary to remand to the district court to re-award the same lost profits under the guise of calculating rental value. The district court found that lost profits were the best evidence of the measure of the property’s value, which the City admitted it had inversely condemned:
2. The New Mexico Constitution, as well as the inverse condemnation statute, mandates compensation both when a governmental action results in a taking and when such action damages property.
3. When reliable proof of damage and its amount is presented by a methodology other than a before and after appraisal, such proof is admissible on the damage issue.
4. “Property” refers not only to the physical object itself, but to the group or bundle of rights granted to the property owner, including the right to the use and enjoyment of the object.
(Emphasis added.) This does not suggest that the district court intended to award purely consequential lost profits, but rather to use lost profits to measure the injury to Primetime’s property, defined correctly to include use and enjoyment.
{35} In this context, we disagree with the Court of Appeals’ holding that the district court’s award did not satisfy its objective person fair rental value measure of damages. The award of lost profits seems to us to be intended as a measure of the lost use and possession of the property; in other words, it is a measure of rental value. It is the answer to the Court of Appeals’ question about what an objective property owner would accept to delay this project for 142 days; the answer being, as rental value, the profit the owner would reasonably expect to make during that same period of time. In other words, it seems to us that the trial court already answered the question to be posed on remand, making remand superfluous under the circumstances.
{36} The absence of the words “rental value” in the district court’s order will not prevent us from finding that this was the measure of damages, since all other signs are consistent with such a conclusion. We do not decide whether, in other circumstances, lost profits might not accurately reflect this value, or might have to be modified, as in Keystone, to accurately reflect rental value.
C. EXCESS CONSTRUCTION COSTS
{37} Primetime sought compensation for the following amounts as excess construction costs.
Buttress Wall 76,856.94
Hussein Salary 37,864.14
Mayan Construction 23,196.77
LSC Landscaping 1,465.50
Cartesian 507.04
Custom Grading 5,400.00
Vineyard 502.61
Builders Risk 1,089.14
Pat Richardson 1,236.64
Fence 400.00
Total: 153,518.45 3
{38} The district court found that “[a]s a direct result of the City’s encroaching waterlines, [Primetime] incurred additional construction costs it would not have otherwise been required to spend in the amount of $153,518.45.” (Emphasis added.) This finding is not challenged by the City. Instead, the City argued on appeal that these expenses represent consequential damages not recoverable in New Mexico in an inverse condemnation proceeding. Primetime,
{39} Without directly answering whether these excess construction costs were consequential damages, the Court of Appeals upheld all of the expenses awarded by the district court with the exception of the buttress wall as excess construction costs incurred as the direct result of the taking. Id. ¶¶ 23-24. The Court of Appeals reasoned that these costs were imposed on Primetime by the City and were similar to the repair and restoration expenses allowed in General Motors and Kimball, and the special damages allowed in partial takings cases in New Mexico under UJI 13-705 NMRA. Primetime,
{40} The Court of Appeals singled out the expenses for the buttress wall, finding that the expenses were not “strictly required by the City’s taking.” Id. ¶24. The Court of Appeals agreed that these expenses represented an effort by Primetime to mitigate its damages. Id. However, the Court of Appeals correctly declined to invalidate the damages simply because they might represent an effort to mitigate harm. See id. ¶ 25. The Court of Appeals reasoned that to disallow all awards for mitigation efforts would discourage remedial efforts designed to reduce losses. Id. As a result, the Court of Appeals concluded that where costs are incurred to mitigate damages caused by a temporary physical taking, courts must apply a test of reasonableness under the circumstances to determine whether the costs of mitigation were justified. Id. ¶ 26. The Court of Appeals believed that the district court had not fully demonstrated whether the cost of the buttress wall was reasonable, and remanded for this determination. Id. ¶¶ 25-26.
{41} We agree with the Court of Appeals’ basic holding that remedial construction costs are awardable in condemnation cases when they are the direct result of the taking. In temporary takings cases, the government must compensate for the losses resulting from damage to the condemnee’s property. See, e.g., General Motors,
{42} In this case, the characterization of the damages for the buttress wall as mitigation damages is not necessary to determine whether they were compensable. The question is whether such expenses were the direct result of the City’s admitted inverse condemnation of this property. If so, such damages should be recoverable as just compensation. The district court’s unchallenged finding was that the excess construction costs, including the buttress wall, were a
{43} Of course, the expenses must also be reasonable, as the Court of Appeals correctly observed. We note that at trial, uneontradicted testimony was elicited that the buttress wall had reduced construction time by about a month. Primetime points out that since the loss for 142 days was $456,242, the loss for 30 days, calculated by taking the average loss for each day, came to $96,386.15, a significantly higher sum than the $76,856.94 spent on the buttress wall. Therefore, there is substantial evidence in the record demonstrating the reasonableness of this expenditure to reduce delay and its concomitant cost to the City. We need not remand to the trial court to restate what appears well-supported in the record. Accordingly, we affirm the district court’s award of $153,518.45 for excess construction costs.
D. COSTS
{44} We agree with the Court of Appeals that there was no abuse of discretion in awarding costs to Primetime under Rule 1-054(D)(1) NMRA and NMSA 1978, Section 38-6^1(B) (1983). Further, given our conclusion that the district court’s award of lost profits satisfied the Court of Appeals’ legal standard, we hold that Primetime’s expert testimony was reasonably necessary, and as such should be recompensed. The district court’s award is therefore reinstated.
III. CONCLUSION
{45} We reinstate the district court’s awards of lost profits, excess construction costs, and expert costs.
{46} IT IS SO ORDERED.
Notes
. Like the Court of Appeals, we turn to federal cases for guidance, since "[o]ur state Constitution provides similar protection” to the Takings Clause in Amendment V of the United States Constitution. Moriarty Sch. Dist. Bd. of Educ. v. Thunder Mountain Water Co.,
. However, we note our agreement with the Court of Appeals that some New Mexico eminent domain cases use the term "consequential damages” to refer specifically to injuries to adjacent property, such as loss of access to roads, when a parcel of land is taken. See, e.g., Public Serv. Co. of NM. v. Catron,
. The sum of these amounts is actually $153,518.78, but the figure cited above has been used throughout these proceedings.