E-470 Public Highway Authority v. Jagow

• Decision Date: 15 February 2001
• Docket Number: No. 99CA1728.,99CA1728.
• Citation: 30 P.3d 798
• Parties: E-470 PUBLIC HIGHWAY AUTHORITY, Petitioner-Appellant and Cross-Appellee, v. Jeanne Y. JAGOW, Trustee, Respondent-Appellee, and Stephen A. Hellerstein, Trustee; Stephen A. Hellerstein, Successor Trustee to L.A. Hellerstein, Trustee; and Howard L. Farkas, Respondents-Appellees and Cross-Appellants.
• Court: Colorado Court of Appeals

30 P.3d 798

E-470 PUBLIC HIGHWAY AUTHORITY, Petitioner-Appellant and Cross-Appellee, v. Jeanne Y. JAGOW, Trustee, Respondent-Appellee, and Stephen A. Hellerstein, Trustee; Stephen A. Hellerstein, Successor Trustee to L.A. Hellerstein, Trustee; and Howard L. Farkas, Respondents-Appellees and Cross-Appellants.

No. 99CA1728.

Colorado Court of Appeals. Division I.

February 15, 2001.

Certiorari Denied September 10, 2001.

Duncan, Ostrander & Dingess, P.C., Robert R. Duncan, Donald M. Ostrander, Lynn B. Obernyer, James Birch, Denver, CO, for Petitioner-Appellant and Cross-Appellee.

Grimshaw & Harring, P.C., Wayne B. Schroeder, Denver, CO, for Respondent-Appellee.

Opperman & Associates, P.C., Marlin D. Opperman, William M. Schell, Douglas S. Widlund, Denver, CO, for Respondents-Appellees and Cross-Appellants.

Opinion by Judge VOGT.

In this partial taking condemnation case tried to a commission, E-470 Public Highway Authority (the Authority) appeals the judgment entered in favor of respondents, Stephen A. Hellerstein, Trustee; Stephen A. Hellerstein, Successor Trustee to L.A. Hellerstein, Trustee; and Howard L. Farkas (collectively, Hellerstein), and Jeanne Y. Jagow, Trustee. Hellerstein cross-appeals from the trial court's order denying its motion for attorney fees. We affirm in part, reverse in part, and remand with directions.

The Authority filed a petition in condemnation to acquire a portion of respondents' land for use in the construction of Highway E-470. Prior to the valuation trial, the trial court ruled that the Authority had not established that respondents were required to dedicate the property for E-470. Accordingly, it ordered the Authority not to present valuation evidence premised on an assumption that such dedication was required.

The trial court also ruled, following an evidentiary hearing, that the highway project did not substantially impair access to the remainder of respondents' property. It therefore ordered that respondents could not present evidence of damages attributable to loss of access, and instructed the commission that any damages arising from loss of access were not compensable.

At the conclusion of the valuation trial, the commission found that the value of the property taken was $1,323,691.15, damages to the residue were $2,888,272.80, and the value of the special benefit to the residue was $297,000. The trial court denied the Authority's motions for post-trial relief, denied Hellerstein's motion for attorney fees, and entered judgment in accordance with the commission's assessment.

I.

The Authority contends that the sum awarded for the taking of respondents' property should have reflected the fact that the property owner was required to dedicate property for the E-470 highway, and that the trial court erred in ruling that no such dedication was required. We disagree.

The Fifth Amendment to the U.S. Constitution and Colo. Const. art. II, § 15, prohibit the taking of private property for public use without just compensation.

When a portion of a landowner's property is taken for public use, just compensation includes payment for the portion actually taken and compensation for injury to the residue or remainder of the property. As to the latter, the landowner is entitled to recover all damages that are the natural, necessary, and reasonable result of the taking, as measured by the reduction in the market value of the remainder, and is entitled to present any relevant evidence concerning diminution of market value caused by the taking. La Plata Electric Ass'n v. Cummins, 728 P.2d 696 (Colo.1986).

When the taking is for the purpose of highway construction, compensation for a partial taking consists of the value of the property taken and any damages to the residue, "reduced by the amount of any special benefits which result from the improvement or project, but not to exceed fifty percent of the total amount of compensation to be paid for the property actually taken." Section 38-1-114(2)(d), C.R.S.2000.

Evidence of an encumbrance or reservation that diminishes a property's value is admissible in a condemnation proceeding as relevant to the property's fair market value. City of Englewood v. Reffel, 173 Colo. 203, 477 P.2d 361 (1970).

A.

In support of its argument that the property at issue here was subject to a required dedication for the E-470 highway, the Authority relied on a 1987 annexation agreement between the property owner and the City of Aurora. The trial court concluded that the agreement was unambiguous and that it did not require a dedication for E-470. We review these rulings de novo, see Dorman v. Petrol Aspen, Inc., 914 P.2d 909 (Colo.1996), applying well-settled principles of contract interpretation.

Contracts must be construed to give effect to the intent of the parties. In determining intent, we construe the contract as a whole, giving effect to every provision. In re Application for Water Rights of Estes Park v. Northern Colorado Water Conservancy District, 677 P.2d 320 (Colo.1984). A contract is not to be interpreted in a vacuum. Rather, a court must consider the subject matter of the contract, the object of making it, the sense in which the parties naturally understood it at the time it was made, and the parties' purposes and objects. Total Petroleum, Inc. v. Farrar, 787 P.2d 164 (Colo. 1990).

In appropriate circumstances, the parties' intent may be determined by construing together separate documents that pertain to the same subject matter, even if the documents are not executed by the same parties. This is particularly true of documents executed simultaneously. Powder Horn Constructors, Inc. v. City of Florence, 754 P.2d 356 (Colo.1988); Ainsworth v. Colorado Division of Gaming, 973 P.2d 727 (Colo.App.1999).

Further, it is a basic principle of contract interpretation that a more specific provision controls the effect of general provisions. Holland v. Board of County Commissioners, 883 P.2d 500 (Colo.App.1994).

B.

The annexation agreement provision on which the Authority relies states:

ANNEXOR agrees to dedicate, at the time of each platting, all necessary street rights-of-way for the full width thereof . . . for streets lying within the Property. ANNEXOR also agrees to dedicate principal arterials and highways within the Property to CITY earlier than platting, if such dedications are reasonably required by CITY for commencement of construction of such roadways.

The Authority argues that the term "highways," as used in this provision, unambiguously includes the E-470 highway, and that the trial court erred in considering extraneous evidence to reach a contrary conclusion. In our view, the Authority's interpretation is erroneous because it focuses on the meaning of "highways" in a vacuum, without considering the circumstances existing at the time of the agreement and without considering a simultaneously executed summary of the agreement that sheds light on whether E-470 was included in the "principal arterials and highways within the Property" that the annexor agreed to dedicate to the City of Aurora.

It is undisputed that the general development plan attached to the annexation agreement does not contemplate any multi-lane, limited access highway across the property. Rather, at the time the agreement was drafted, the proposed Highway E-470 was to be constructed 1.5 miles away from the property.

Moreover, along with the agreement itself (dated May 18, 1987), a summary of the agreement was provided to the Aurora City Council at its May 18, 1987, meeting. The summary outlines the ways in which the agreement differs from the City's model annexation agreement. As relevant here, the summary states that, while the model agreement required "E-470 dedication and financing," dedication was "not required" under the annexation agreement at issue here.

The trial court appropriately considered both the circumstances existing when the annexation agreement was entered into and the specific reference to E-470 in the agreement summary in determining whether the E-470 highway was intended by the parties to be encompassed in the phrase "principal arterials and highways within the Property." Contrary to the Authority's argument, the summary was not a "pre-contract" or prior agreement extinguished by the merger clause in the annexation agreement, but was a simultaneously executed document that could properly be considered in determining the parties' intent. See Ainsworth v. Colorado Division of Gaming, supra.

In sum, we agree with the trial court that the 1987 annexation agreement unambiguously did not require a dedication for E-470. Thus, the court did not err in precluding the introduction of valuation evidence based on an assumption that such dedication was required.

II.

The Authority next contends that the commission's award of $2.88 million for damages to the residue of the property was unsupported by the evidence and excessive as a matter of law, and that the trial court therefore erred in denying its post-trial motion to set aside that award. We agree.

Respondents' expert appraisers were prepared to testify at the valuation trial that the value of the residue was significantly diminished by the loss of access to Gun Club Road that would result from the construction of Highway E-470. One of the experts had assigned a pre-taking value of $8,230,000 and a post-taking value of $4,330,000 to the residue, resulting in damages of $3,900,000, with no amount awarded for special benefits. Respondents' second expert assessed total damages to the residue at $4,033,600, which represented the difference between a pre-taking value of $6,913,100 and a post-taking value of $2,948,400. The Authority's expert valued the residue at $2,517,000 before the taking, found that it had not been damaged but had benefitted in the amount of $281,000, and thus valued the residue after the taking at $2,798,000.

At the conclusion of a pretrial hearing on the Authority's motion to...