E-470 Public Highway Authority v. 455 CO.

• Decision Date: 05 June 2000
• Citation: 3 P.3d 18
• Docket Number: 99SC302,99SC303
• Parties: E-470 PUBLIC HIGHWAY AUTHORITY, Petitioner, v. The 455 COMPANY, a Colorado General Partnership, Respondent. E-470 Public Highway Authority, Petitioner, v. Tower 88 Company, a Colorado General Partnership, Respondent.
• Court: Colorado Supreme Court

3 P.3d 18

E-470 PUBLIC HIGHWAY AUTHORITY, Petitioner, v.The 455 COMPANY, a Colorado General Partnership, Respondent.

E-470 Public Highway Authority, Petitioner, v.Tower 88 Company, a Colorado General Partnership, Respondent.

Nos. 99SC302, 99SC303.

Supreme Court of Colorado, En Banc.

June 5, 2000.

Duncan, Ostrander & Dingess, P.C., Robert R. Duncan, Donald M. Ostrander, James Birch, Special Counsel, Ronald E. vonLembke, Denver, Colorado, Attorneys for Petitioner.

Lowe, Fell & Skogg, LLC, Kenneth K. Skogg, Karen L. Brody, Denver, Colorado, Attorneys for Respondent.

Justice RICEdelivered the Opinion of the Court.

We granted certiorari to review the court of appeals' opinions in E-470 Public Highway Authority v. Tower 88 Co.,No. 97CA1912, (Colo.App.Mar. 4, 1999)(not selected for official publication), and E-470 Public Highway Authority v. 455 Co.,983 P.2d 149(Colo.App.1999).We consolidated these cases for consideration on appeal because they raise identical issues.In both cases, the court of appeals affirmed the trial court's rulings granting Tower 88 Company's (Tower 88) and The 455 Company's (455 Company)(collectively "landowners")motions in limine preventing E-470 Public Highway Authority (the Authority) from presenting any evidence of special benefits in the condemnation valuation proceedings.After separate trials to a board of commissioners, the trial court entered judgments of $1,056,500.00 for 455 Company and $1,479,539.09 for Tower 88.Upon review, we conclude that the court of appeals erred in affirming the trial court's orders granting the landowners' motions in limine.Accordingly, we reverse the court of appeals' opinions and remand for further proceedings consistent with this opinion.

I.FACTS AND PROCEEDINGS BELOW

In December 1995, the Authority initiated condemnation proceedings to acquire property owned by Tower 88 and 455 Company for use in the construction of the E-470 highway.Tower 88 owned approximately 1,250 acres of undeveloped land west of Denver International Airport in Adams County.The Authority condemned a ribbon of land, running from north to south through the middle of the property, consisting of approximately 141 acres.The Authority constructed an interchange at 96th Avenue, allowing access from Tower 88's remaining property to the E-470 highway.

455 Company owned approximately 463 acres of undeveloped land also west of Denver International Airport in Adams County.The Authority condemned a ribbon of land, running from southeast to northwest through the middle of the property, consisting of approximately 95 acres.The Authority constructed an interchange at 104th Avenue, allowing access to the E-470 highway from the north and south ends of 455 Company's remaining property via the 104th Avenue interchange and the 96th Avenue interchange.

The Authority and the landowners entered into a stipulation for possession of the property, leaving the issue of the amount of compensation due to the landowners for trial.Prior to trial, the landowners filed motions in limine seeking to exclude all evidence of any "special benefits"¹ to their property, reflected by an increase in the market value of the property, as a result of the construction of the highway.The landowners alleged that the special benefits evidence the Authority sought to introduce was based on the property's proximity to the highway and interchanges.However, the landowners alleged that they would be paying for those same benefits when the Authority collected the Highway Expansion Fee (HEF)² based on the proximity of new development to the highway.The HEF is a fee collected by the Authority when buildings are constructed on the property for development.The trial court granted the landowners' motions in limine on this issue in both cases and excluded any evidence of special benefits.After separate trials, the trial court entered judgments of $1,056,500.00³ for 455 Company and $1,479,539.09⁴ for Tower 88 as compensation for the property taken by the Authority.

In the companion cases of Tower 88 Co.,No. 97CA1912, slip op. at 2, and455 Co.,983 P.2d at 156, the court of appeals affirmed the trial court's decisions in both cases.⁵The court first noted that section 38-1-114(2)(d), 10 C.R.S.(1999), governing condemnation proceedings for highway acquisition, requires the condemnation award to be reduced by any "special benefits which result from the improvement or project, but not to exceed fifty percent of the total amount of compensation."455 Co.,983 P.2d at 156(emphasis added).The court then defined "special benefits" as "those which accrue directly to the residue as a result of the construction or the improvement and which directly and particularly benefit that residue, as opposed to benefitting the public generally."Id.(citingWestern Slope Gas Co.,32 Colo.App. at 298, 512 P.2d at 644).

The court noted that although special benefits to the remainder normally may be set off against a condemnation award, "there can be no offset where the remaining property is subject to an assessment for those same benefits."Id.The court stated that the purpose of this rule is "to avoid the inequity of forcing the condemnee to pay twice for the same benefits, which would in effect constitute double taxation and would deny the condemnee its constitutionally guaranteed just compensation."Id.

In analyzing the issue, the court noted that there was evidence that the landowner would be paying for the benefit of being near Highway E-470 and its interchanges when it paid the HEF.Id.Therefore, the court concluded that it was not an abuse of discretion for the trial court to preclude the Authority from introducing evidence of special benefits.Id.

The Authority petitioned this court for review of the court of appeals' decisions.We granted certiorari review⁶ and consolidated the cases for consideration.

II.ANALYSIS

The Authority argues that the trial court abused its discretion by excluding evidence of special benefits because the HEF is a speculative fee due to the fact that the landowners may never pay the fee.Additionally, the Authority contends that revenues generated by the HEF are not used to pay for capital improvements that benefit the property.The Authority contends that the landowners' property has been immediately benefited by the construction of Highway E-470 and the interchanges and that the existence of the speculative HEF should not prevent the Authority from introducing evidence of the amount of special benefits accruing to the property as a result of the construction of the highway.

The landowners contend that the trial court properly excluded the Authority's evidence of special benefits because allowing the Authority to introduce this evidence would require the landowners to "pay twice" for the same benefit and, thus, would deny them their just compensation for their property.The landowners' argument is based on their contention that they will pay for the special benefits to the property when they pay the HEF and, therefore, it would be unfair to allow their compensation award also to be offset by evidence of these special benefits.

After reviewing the record and considering the parties' arguments, we conclude for the reasons stated below that the trial court abused its discretion by precluding the Authority from presenting evidence of special benefits.

A.Standard of Review

We consider these cases in the context of reviewing the trial court's grant of the landowners' pretrial motions in limine.The trial court's rulings excluded all evidence of special benefits from consideration at trial as a matter of law.The trial court relied on a principle of law adopted in other jurisdictions holding that no evidence of special benefits to the remaining property resulting from the improvement can be presented in a compensation proceeding when the government has levied a "special assessment" for the same improvement.SeeOro Loma Sanitary Dist. v. Valley,86 Cal.App.2d 875, 195 P.2d 913, 917(1948);City of Detroit v. Loula,227 Mich. 189, 198 N.W. 837, 838(1924);City of St. Louis Park v. Engell,283 Minn. 309, 168 N.W.2d 3, 7(1969);City of Raleigh v. Mercer,271 N.C. 114, 155 S.E.2d 551, 557(1967).See generally3 Julius L. Sackman, Nichols on Eminent Domain§ 8A.02[7](rev.3d ed.1999)[hereinafter Sackman].In accordance with this legal principle, the trial court made findings of fact that the HEF was a special assessment that charged for the same special benefits that the Authority sought to introduce at the condemnation proceedings to offset the condemnation award.As such, the trial court's rulings present a mixed question of law and fact.

Findings of fact are generally reviewed under a clear error or abuse of discretion standard, whereas conclusions of law are generally reviewed under a de novo standard.SeeValdez v. People,966 P.2d 587, 598(Colo.1998)(Kourlis, J., dissenting).When the issue before the appellate court is a mixed question of law and fact, the court may take a number of different approaches.Seeid.The court may treat the ultimate conclusion as one of fact for purposes of review and apply the clear error standard.Seeid.Alternatively, the court may conclude that a mixed question of fact and law demands de novo review.Seeid.;see alsoLewis v. Colorado Rockies Baseball Club, Ltd.,941 P.2d 266, 271(Colo.1997).Finally, the court may review the findings of fact for clear error and still look de novo at the legal conclusions that the trial court drew from those factual findings.SeeValdez,966 P.2d at 598;see alsoPeople v. Smith,926 P.2d 186, 188(Colo.App.1996).As the trial court made evidentiary findings of fact in support of its application of a legal principle from other jurisdictions, we find it appropriate to conduct an abuse of discretion review of the evidentiary factual findings and a de novo review of the legal conclusion.Because we hold...