514 So. 2d 22 | La. Ct. App. | 1987
Lead Opinion
In this action expropriating property in 1974 for the 1-220 interchange at Swan Lake Road in Bossier parish under the quick-taking statute, the State appeals a judgment that awarded the landowner $92,-923 in addition to the amount the State deposited for the taking ($107,136). LRS 48:441 et seq.
On the original appellate hearing, two of the three judges agreed with the State’s contention that severance damages should not have been awarded because the completed interstate loop conferred “special benefits” to the remainder of the landowner’s property.
After reargument before a five-judge panel that is mandated by LSA-Const. Art. 5, § 8B, we find the State did not prove a special benefit to the landowner’s remaining properties and affirm the judgment.
FACTS
The State expropriated 65.473 acres in 10 separate parcels, effectively dividing the landowner’s remaining 398.3 acres as follows: Tract 1 (SW quadrant), 81.8 acres; Tract 2 (SE quadrant), 138.2 acres; Tract 3 (NE quadrant), 172 acres; Tract 4 (NW quadrant), 6.3 acres. The landowner owned an additional but unaffected 330 acres that were not contiguous to the 398.3 acres. Improvements were located on both the expropriated acreage and the surrounding 398.3 acres.
This plat shows the acreage remaining in the four tracts affected by the expropriation:
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The trial court awarded:
Value of land taken $143,400.
Value of improvements taken 9,259.
Severance damages 47,400.
Four appraisers submitted appraisal reports and testified as experts: Harvill and Montgomery for the landowner; Willet and Dupree for the State.
This expropriation occurred in 1974. The State is required to compensate landowners for the fair market value of taken property. State, Department of Highways v. Rapier, 246 La. 150, 164 So.2d 280 (1964). The four experts valued the expropriated acreage and the improvements thereon as follows:
LAND IMPROVEMENTS
Mr. Harvill $143,440. $5,400.
Mr. Montgomery 181,551. 10,940.
Mr. Willet 107,709. 9,759.
Mr. Dupree 104,401. 4,769.
The court essentially accepted Harvill’s estimate for land value and Willet’s estimate for the value of improvements. The four experts used comparable sales to arrive at an estimate of the land value.
Trial courts are given much discretion in evaluating the testimony of appraisal experts. We do not overturn the findings of the lower court unless the findings are found to be clearly erroneous. State, Department of Highways v. McPherson, 261 La. 116, 259 So.2d 33 (1972); State, Dept, of Transp. & Dev. v. Stephenson, 480 So.2d 909 (La.App. 2d Cir.1985). We cannot say that the values found by the trial judge for the properties and improvements were clearly erroneous.
SEVERANCE DAMAGES
Where a taking causes a difference in the value of the landowner’s remaining property before and after the taking, the landowner is entitled to compensation to the extent the difference in value is not offset by “special benefits.” See State, Dept, of Hys. v. William T. Burton Indus., Inc., 219 So.2d 837 (La.App. 3d Cir. 1969), writ denied; and Tate, Legal Criteria of Damages and Benefits — The Measurement of Taking — Caused Damages to Untaken Property, 31 La.L.R. 431 (1971). Special benefits are distinguished from general benefits. Special benefits affect the landowner’s remaining property specifically because of the direct relationship of the remaining property to the project for which property was taken, while general benefits are benefits that inure to all property owners in the vicinity of the project. Louisiana Highway Commission v. Grey, 197 La. 942, 2 So.2d 654 (1941).
General benefits do not offset damages resulting from the taking because “the citizen whose property is taken cannot be compelled to bear more of the cost of the public improvement and general benefits resulting therefrom than is borne by other property owners whose property is neither taken nor damaged for the public purpose.” Louisiana Highway Commission v. Grey, supra, at p. 660. While the landowner bears the burden of proving damages caused by the taking, the State must prove the existence of offsetting special benefits. State, Dept, of Highways v. Anderson, 356 So.2d 1086 (La.App. 2d Cir.1978).
Damage, if any, to the landowners’ remaining property is determined as of the date of the trial. LRS 48:453, adopted by Act 107 of 1954. Seemingly contrary to the language of this statute, Louisiana courts have instead consistently applied before and after taking values to determine severance damages. State of Louisiana, Through the Department of Highways v. Bray, 511 So.2d 1300 (La.App. 2d Cir.1987). See State, Department of Highways v. Wells, 308 So.2d 774 (La.1975); and Tate, La.L.R., supra. LRS 48:453 was amended to conform to the case law and now reads as follows:
The measure of damages, if any, to the defendant’s remaining property is determined on a basis of immediately before and immediately after the taking, taking into consideration the effects of the completion of the project in the manner proposed or planned.
The trial in this case occurred over a decade after the taking in 1974. Although the record in this case contains detailed recitations of events after the taking and near the time of trial, this evidence does not control the issue of severance damages.
The record clearly supports the trial court’s finding that the taking damaged the
Harvill calculated the loss of access frontage of the remaining tracts and the reduction in value caused thereby, to reach these severance damages:
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The trial judge apparently deemed that Harvill considered special benefits. Harvill did not, however, expressly refer to a specific dollar amount representing special benefits which he would have subtracted from the amount of total damages. Montgomery found $101,642 in “severance damages,” but it appears that he did not consider any special benefits in arriving at this figure. Nonetheless, it is the State and not the landowner that has the burden of proving special benefits. State, Dept, of Highways v. Anderson, supra. The landowner need only show the existence of damages caused his remaining property by the taking, and in this regard, the landowner met his burden of proof.
Willet and Dupree concede that the taking caused damage to the landowner’s property. The State’s experts, however, opined that any such damage was offset by special benefits. The trial court found that the State failed to prove special benefits of an amount sufficient to completely offset damages proved by the landowner to his remaining property.
The testimony and reports of the four experts leave much to be desired in terms of clarity and precision in their terminology respecting severance damages. The State’s experts did not distinguish special benefits from general benefits in their testimony about enhanced value.
When asked whether he found any severance damages, Dupree responded as follows: “Since the value after was more than the value before, in my opinion there was no severance damages.” This is not the test for the determination of severance damages. Every enhancement from the project is not to be considered when estimating the before and after value of the property remaining after the taking. Only distinct specific benefits are to be considered. Dupree did not specify the percentage of enhancements that were specific as opposed to the percentage of enhancements that were general. When asked how he calculated severance damages or the lack thereof, Willet stated: “Just a mathematical expression of a difference in the before and after value.”
Dupree admitted that had an investor purchased the remaining property in 1974 for the price that he had estimated it to be worth at that time, the investor “might not have made a very good deal” considering the slow development in the area. This illustrates the highly speculative nature of
The burden of proving special benefits requires the State to show enhancements which specifically and directly benefit the landowner, as opposed to the general enhancements which benefit all landowners in proximity to the project.
An interstate exchange in and of itself is not a special benefit. State, Dept, of Hwys v. Westport Develop. Co., Inc., 332 So.2d 918 (La.App. 2d Cir.1976). Anderson, supra. Willet’s assertion that he had “never seen an instance where there hasn’t been appreciation of a diamond interchange anywhere in the State of Louisiana” was obviously and correctly found legally erroneous as well as not credible by the trial court.
The factors employed to determine the special benefit include:
1. The volume of traffic, both from the interstate and from the cross highways;
2. The position of the remainder with regard to being the most available for motorists leaving the expressway;
3. The visibility of the property to expressway motorists before they reach the exit ramp;
4. Readiness of access to and from the expressway and the entrance ramp;
5. The location of the interchange with regard to population center; and
6. Competing cites available at the time or nearby interchanges.
State, Dept, of Hys. v. William T. Burton Indus., Inc., supra, at p. 843.
With respect to the Burton Industries, Inc. factors in the instant case, Mr. Harvill testified that he viewed the placement of the landowner’s property at the interchange as only a general benefit because the landowner could only use the interchange as “everybody else in the city in north Louisiana uses it, same identical reason.” He further stated that volume on 1-220 for years “was just negligible, primarily, of course, because there was no bridge across Cross Lake.”
The assertions of Willet and of Dupree that the landowner’s properties now benefit from their proximity to the railroad, to U.S. Hwy. 80, to 1-20, and to Louisiana Downs race track are benefits that are common to all landowners in the area and are not special to this landowner.
The record supports these conclusions by the trial court:
It requires a person almost to look into the future and see what’s going to happen. And it requires him to say that a purchaser would place a value on the property because he would look into the future and see what was going to happen. This case is a little bit unusual in the sense that we’ve got — we’re twelve years past it. So we can look with hindsight and see what actually did happen, and we get a little bit different appearance from what someone would have had in nineteen seventy-four, when the taking was done, who would have been looking toward us. We’re looking back toward that taking. And of course we have another factor, that less than a year ago, a sale for a very large price was made on the property, which tends to support the theory that back in nineteen seventy-four the property had the enhanced value because purchasers looking to the future would pay more for the property. Had the case been tried in nineteen eighty-four, which would have been ten years after the taking, we wouldn’t have had that sale. In looking back ten years, there wouldn’t have been any — any such sale similar to that. The question is if you stand in nineteen seventy-four and look forward, how far do you look? I don’t think anybody knows that. I don’t — with all due respect to these four gentlemen here, they probably all four have different opinions about that, a difference of some degree at*27 least. I think that the Court would have to find that the owner, Mr. Módica, has proven some severance damages.
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I think it is reasonable to say that there was severance damage — I think that the owner has shown that — to my satisfaction, that there was severance damage. And I think the State has shown that there was some enhanced value, which would have some sort of an offsetting effect. And I think the best figure that I can arrive that takes into consideration both the severance damage and the off— and the enhanced value is that of Mr. Harvill, forty-seven thousand, four hundred dollars ($47,400), and I’m going to make that award.
Willet’s rationale (as well as Harvill’s) that the landowner’s remaining property would become more valuable after the area developed simply because of the presence of the interchange again indicates a general benefit to all landowners fronting on Swan Lake Road.
We agree that severance damages of at least $47,400 were proved and that special benefits to offset such damages were not proved.
DECREE
For reasons given by the trial court, which we here adopt, and to the extent the law permits, we cast appellant with costs and AFFIRM the judgment.
Dissenting Opinion
dissenting.
I take issue with the majority view that the state failed to show an offset to the defendant’s proven severance damages by its failure to prove special benefits in excess of those severance damages.
I am inclined to think the majority is correct in its holding that the measure of any severance damages and offsetting special benefits are to be determined as of the time of taking.
Thus, the comfort the majority finds in the “concession” of Mr. Dupree, the Department of Highways’ primary appraiser, that an investor purchasing the property in 1974 for Dupree’s estimated price would not have made a good deal because of the slow development, is particularly inappropriate. Mr. Dupree’s obvious point was that the property had developed slowly because an integral part of the concept of the 1-220 loop, the bridge over Cross Lake— which will join the northeast and northwest quandrants of the loop — was still not completed at the time of trial, having been delayed by extensive federal litigation. In other words, Dupree’s “concession” was based on the fact that the bridge had not been completed. Thus, I believe that any reliance the majority places on this particular testimony of Mr. Dupree is inappropriate because if damages are determined as of the time of taking, then benefits must be evaluated with the completed project in mind.
If it is correct that we assess damages and benefits as of time of taking, then we may not consider the very interesting fact that Mr. Módica, on September 12, 1985, some eleven years after the taking, in the face of a depressed local economy but with the Cross Lake bridge finally in progress, sold the large southeast remainder of approximately 135 acres for $1.4 million, or just over $10,000 an acre — a fact appellant vigorously asks this court to consider.
Likewise, we probably cannot consider the fact that Mr. Montgomery, one of the landowner’s appraisers, testified that he had negotiated with an asphalt paving corn-pany to buy a portion of the southeastern remainder adjacent to the railroad at about $5,500 per acre. The record is unclear as to the exact point in time when these negotiations occurred. However, they obviously occurred at some point during the eleven years between the quick-taking and the trial. I also assume we cannot consider Mr. Montgomery’s testimony that the sale did not occur because Mr. Módica sought a higher price than the asphalt company offered.
I do believe, however, that we can consider the fact that the asphalt company, which eventually purchased property on the other side of the railroad tracks from Mr. Modi-ca’s property, preferred the Módica site because of its topography. Visibility is an important part of special benefits, as the majority noted.
Mr. Montgomery conceded in his testimony that the existence of the major interchange with four full ramps increased the value of the remaining property and that he did not consider the question of special benefits. Perhaps, as the majority states, it was not part of his task because the state had the burden of proving special benefits. Even so, his knowledge of the topography and his failure to note the reason for the reduced traffic in light of his part in the substantial offer which Mr. Módica refused calls his testimony into question. In other words, while it may be inappropriate to consider the fact of the negotiations with the asphalt company as substantive evidence, I suggest it is an appropriate consideration when evaluating the credibility of Mr. Montgomery’s other testimony.
Also, one of Mr. Montgomery’s major concerns was the limited number of automobiles on the bypass. This assessment was obviously based on his observation of the effect of the bridge litigation. I suggest this fact also calls Mr. Montgomery’s
Indeed, the trial judge does not seem to have placed much weight on the testimony of Mr. Montgomery in finding severance damages, but seems to have accepted the testimony of Mr. Harvill, the other appraiser for the landowner. Although Harvill did testify that he considered special benefits, I do not find that the details of that consideration were specified by him. The import of Harvill’s testimony, as I appreciate it, is that the property at issue only received the same general benefits as the other property in the neighborhood and that any special benefits were minor in nature. In other words, this property, bordering on and enjoying direct full access to a major roadway and separated from an industrial park by a railroad, only had a general benefit “just like everybody else.”
Thus, I am concerned with the trial court’s determination on this record that an assessment of severance damages is appropriate. Further, I find little support for the assessment thereof in the oral reasons of the trial court. The value of the trial court’s reasons to me is that they illustrate the difficult problems of evaluation presented by this case due to the complexity of the law, the significant period between the taking and the trial, and the failure to complete the project for which the property had been taken as envisioned even by the date of the trial.
In all fairness, it would seem that the majority’s primary contention is not the value of Harvill’s testimony but the fact that all appraisers found some severance damages and that the state failed to bear its burden of proving special benefits.
As the majority points out, this circuit has specifically stated that the fact that the remainder “is within the quadrant of an interchange” does not in and of itself establish enhanced value. See State, Department of Highways v. Anderson, 356 So.2d 1086, 1089 (La.App.2d Cir.1978).
The benefits or advantages, if any, which may result from the construction of the work are either general or special. General benefits are those which are shared alike by all property owners in the neighborhood or community. Such damage as a property owner may sustain as a result of the construction and use of a public work cannot be offset by these general benefits. The reason is that the citizen whose property is taken cannot be compelled to bear more of the cost of the public improvement and general benefits resulting therefrom than is borne by other property owners whose property is neither taken nor damaged for the public purpose.
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*30 The rule is different as to peculiar or special benefits, or those affecting a particular estate by reason of its direct relationship to the improvement. If, as a result of constructing a new work, the remaining land or part of it is left fronting on a road or street, and the land fronting the road or street is more desirable and more valuable because of the frontage, the advantage thus gained is a special or peculiar benefit, and damages to the remaining property may be offset by such benefits. * * * *
Louisiana Highway Commission v. Grey, supra, 2 So.2d at 660-661. [Emphasis supplied.]
Indeed, the Grey court was impressed by the United States Supreme Court’s United States v. River Rouge Improvement Company, 269 U.S. 411, 46 S.Ct. 144, 70 L.Ed. 339 (1926), where the court determined that the property immediately adjoining an improved stream enjoyed a special benefit, while other lands in the vicinity obtained only a general benefit.
I am aware that it has been suggested that the Louisiana Supreme Court has retreated from Grey. Comment, The Confusing Death of the Special Benefits Doctrine in Louisiana Expropriation Law, 34 La.L.Rev. 820 (1974). However, I do not read State, Through Department of Highways v. Trippeer Realty Corporation, 276 So.2d 315 (La.1973), and State, Through Department of Highways v. McPherson, 261 La. 116, 259 So.2d 33 (1972), to the same effect as does the author. I suggest those cases represent more of a modification than an extinction of Grey,
Certainly, common sense and our every day experience with major interstate interchanges tells us that Mr. Modica’s “briar patch” is one into which most of us would enjoy being thrust.
We cannot disregard the fact that a railroad separates the large southeastern remainder from the Bossier industrial park. Thus, it is obvious that the property not only enjoys direct railroad access but, as Mr. Dupree emphasized, is well located for access to the west by proximity to 1-20 and for access to the north by proximity to Highway 1 and Highway 171 by virtue of the fact that the property adjoins and has immediate access to 1-220. These features pertain even without the completion of the Cross Lake bridge which will furnish access to southern and southwestern routes.
Furthermore, Mr. Dupree noted that the clear visibility of the property was an obvious asset. Mr. Willet also testified to the exemplary access the property enjoyed and to the fact that the diamond interchange significantly raised the highest and best use of the remainder.
My review of the record is that the trial court failed to seriously contrast this testimony with the previously noted testimony of the landowner’s appraisers. When I do so, particularly keeping in mind the abutting interstate and railroad, which this property alone enjoys, I am struck by what I perceive to be an error by the trial court.
I respectfully dissent.
. However, the further I delve into this subject, the more confusing it becomes. The first espousal of this problem that I can locate is in State, Department of Highways v. Tyler, 326 So.2d 349 (La.1976), authored by Justice Calogero. The author conceded the statute then in effect, LSA-R.S. 48:453 per Act No. 107 of 1954, provided that severance damages were to be determined at the time of trial. Then Justice Calogero stated that the test therefor was the difference between the market value of the remainder ‘before and after the taking.” Only one Louisiana Supreme Court case was cited for that proposition. Through an apparent printing error, the name and citation appear as "State, Through Department of Highways v. M.G. Real -La. 1035, 229 So.2d 89 (1969);". This citation is actually for the case of State, Through Department of Highways v. Mason, the complete citation of which is 254 La. 1035, 229 So.2d 89 (1969). Since Mason is on point, I assume that this is the intended authority. In Mason, Justice McCaleb in turn cited: 4 Nichols on Eminent Domain, § 14.232 (3rd ed.), and several Louisiana cases on the subject, the latest of which was State, Through Department of Highways v. Central Realty Investment Company, 238 La. 965, 117 So.2d 261 (1960). However, this latter case involved a May 1954 expropriation which was before the effective date of Act 107 of 1954. Obviously, the other cases also preceded the act.
In Tyler, Justice Calogero also cited State, Through Department of Highways v. M.G. Realty Company, 276 So.2d 918 (La.App.3rd Cir.1973), a court of appeal opinion which was not concerned with the time aspects of valuation. M.G. Realty simply held that the "market value” approach was the appropriate gauge rather than "cost to cure.”
Compounding the foregoing is that in State, Through Department of Highways v. Trippeer Realty Corporation, 276 So.2d 315 (La.1973), three years before Tyler, Justice Calogero specifically stated that the time of trial is the time of valuation, based on LSA-R.S. 48:453. Justice Tate was on the court at that time and his law review article cited by the majority in the instant case had been published in 1971. My reading of that article is that Justice Tate accepted, but criticized, the time of trial rule.
Moreover, I am unable to read State, Through Department of Highways v. Wells, 308 So.2d 774 (La. 1975), cited by the majority in the instant case as support for this proposition. While the pertinent paragraph at page 776 does espouse this proposition (and we know the author, Justice Tate, was not in favor of the time of trial rule), I suggest that the purpose of the pertinent paragraph was to make the point that the time of trial rule should not penalize a landowner for an appreciating economy.
Surely, it can’t be reasonably argued that the holding of Tyler is that LSA-R.S. 48:453 at that time meant that value was to be assessed at trial but was to be measured as of the taking. That
. Of course, if value is determined at the time of trial, then Mr. Módica obviously has enjoyed extensive special benefits.
. I will concede that my concern about Montgomery’s point here may be legal rather than factual as it may involve Louisiana’s definition of special benefits — a question perhaps as confusing as the old law on time of evaluation of severance damages, as I will discuss subsequently-
. Of interest is that in the Anderson case, the state had expropriated three acres from 4.5 acres located at only one quadrant of a diamond interchange. Also, Anderson cites State, Through Department of Highways v. Westport Development Company, 332 So.2d 918 (La. App.2d Cir.1976), in support of that proposition. Westport did indeed involve the dissection of the landowner’s property by a major interchange. (This interchange, known as 1-20 and Pines Road, has become one of the busiest and most well-developed in this area.) The major point in Westport, however, was that the state did not attempt to prove special benefits but only argued that special benefits overcame the landowner's proven severance damages. I suggest the facts of those cases are of no real help in evaluating the quality of the state’s evidence concerning special benefits attendant to the instant interchange. Anderson involved only a very sm'all remainder in one minor quadrant, and the primary point in Westport is that the Highway Department offered only an argument rather than proof. The only value of these cases to the instant case is that they assert the general proposition that a diamond interchange is not by definition a special benefit which was relied on by the majority.
. For a view which seems midway between mine and that of the comment’s author, see State, Through Department of Highways v. Moseley, 390 So.2d 951, 955-956 (La.App.2d Cir. 1980).
. Also, it seems unfair to allow a landowner to inordinately benefit at public expense in such difficult financial times for our state.
Dissenting Opinion
dissenting in part.
I respectfully dissent from that portion of the majority opinion which awards severance damages. The evidence clearly shows that following the taking for the construction of this diamond interchange, special benefits inured to the remaining property, and its value was significantly increased. The landowner’s remaining property derived special benefits by virtue of the location of this interchange which were different from and more significant than the general benefits derived by other landowners in the vicinity of this project. These special benefits enhanced the value of the remainder of the property and far outweighed any damages which resulted from the taking.
