Atlantic Refining Co. v. Director of Public Works

Decision Date18 August 1967
Docket NumberNo. 10860,10860
Citation102 R.I. 696,233 A.2d 423
PartiesThe ATLANTIC REFINING COMPANY v. DIRECTOR OF PUBLIC WORKS for the State of Rhode Island. Ex.
CourtRhode Island Supreme Court
Letts & Quinn, Andrew P. Quinn, Daniel J. Murray, Jerome B. Spunt, Providence, for petitioner
OPINION

POWERS, Justice.

This is an amended petition for the assessment of damages brought on the authority of G.L.1956, § 37-6-18. It was heard by a superior court justice sitting without a jury and from his decision the respondent, hereinafter referred to as the state, duly prosecuted a bill of exceptions.

The parties agree that on January 19, 1962, petitioner was the owner of certain property hereinafter described, a substantial portion of which was on that date taken by the state for freeway and highway purposes, pursuant to the applicable provisions of chap. 10 of title 24 and chap. 6 of title 37 of G.L.1956, respectively.

It is also agreed that petitioner's property comprised 257,170 square feet or 5.9 acres located in the city of Providence, described as an irregularly shaped lot with a frontage of approximately 250 on Elmwood avenue and approximately 249.17 on Roger Williams avenue. The premises were otherwise identified and designated as being lot 113 on assessor's plat 88 in the land records of the city of Providence.

On the day of condemnation and for some time prior thereto, petitioner had devoted the premises to conducting the business of a petroleum bulk plant and distribution center, a detailed recital of which is not necessary to this opinion. In connection with its business, however, petitioner owned several improvements which were taken by the state, along with 152,645 square feet of the tract in question. These improvements, or structures, consist of a gasoline service station, an office building, a warehouse, a transport loading platform, an incoming transport loading platform and fuel storage tanks of varying capacities, but having a total capacity of 250,000 gallons.

Further, as mentioned above, while it would serve no useful purpose to recite in detail all of the functions, processing and general activities incidental to the use that petitioner made of the condemned property in the conduct of its business, some indication thereof is desirable in light of the award of damages assessed by the trial justice.

Briefly summarized, the property was used for five distinct purposes, which were: a furnace oil distributing terminal; a gasoline service station; storage and distribution centers for ordinary lubricating and heavy industrial equipment oils; processing oils for plastics, for dry package petroleum chemicals, packaged motor oils, greases, waxes; and as a spare part distribution center. For a period of ten years prior to condemnation, the business grossed sales of 20 million gallons of furnace oil and over 5 million pounds of packaged petroleum products annually.

It is also agreed that on the day of condemnation, and for some time prior thereto, the property was put to its highest and best use. Further, in connection with the business to which the land was devoted, it enjoyed a non-conforming use.

In any event, petitioner's experts appraised its property as having a value before the taking of not less than $831,942 and after the taking of not more than $160,675. Thus, petitioner's evidence tended to show that it had sustained damages of $671,267.

The expert testimony offered by the state was that the value of petitioner's property before the taking was $460,700 and $176,300 thereafter. This tended to support the state's contention that the damage to petitioner, resulting from the condemnation, was $284,400.

The trial justice found that the damages or fair market value to which petitioner was entitled by reason of the taking were $513,529, plus interest. From this decision the state duly prosecuted a bill of exceptions, and from those both orally argued and briefed it postures 13 issues in support of its position that justice requires remitting the case to the superior court for a new trial. In its oral argument and briefs petitioner has sought to refute the state's contentions point by point and in the main it is as thus presented and answered that we shall consider the issues raised by the state.

However, because by its very nature it lies at the threshold of the state's claim that justice requires a new trial, we shall first consider the state's contention that the trial justice committed prejudicial error in denying its motion that the case be passed.

After the taking of evidence had been concluded, petitioner filed a memorandum at the request of the court. It included the information that after the filing of the petition, the state had made an offer to petitioner of $332,778. This figure was $48,378 in excess of petitioner's damages as testified to by the state's expert. Evidence of such offer, the state argues, could not have been introduced at the trial, if objected to by it, relying on several Rhode Island cases 1 which hold that under the circumstances of those cases an offer of compromise was prejudicial.

Continuing, the state urges that the manner in which the offer of $332,778 was brought to the attention of the trial justice denied the state an opportunity to object, and being in excess of the state's expert evidence of the damages suffered by petitioner, knowledge of such offer prejudiced the state's case with the trial justice.

In denying the state's motion to pass the case, the trial justice stated in substance that his decision would be predicated on the evidence adduced by the parties, uninfluenced by reason of the state's offer. An examination of his decision on the evidence adduced at trial convinces us that it was reached without regard to or influenced by the matter complained of by the state. This circumstance, quite apart from others 2 which militate against the state's complaint that it was prejudiced, warrants our conclusion that the state's position on the denial of its motion to pass the case is without merit. The cases on which it relies and referred to in footnote 1 are not in point, completely unavailing and require no discussion.

Turning to another facet of the state's appeal on its bill of exceptions, we consider two more or less related contentions on the issue of the fair market value of petitioner's property on the day of condemnation. From the outset, petitioner contended that there were no comparable sales of a bulk plant and that its evidence as to what constituted just compensation would deal with the cost of reproduction less depreciation approach. The state, however, proposed to offer a real estate expert through whom it could establish a comparable sale. The parties stipulated that the state's evidence of a comparable sale would be received subject to petitioner's objection on which the trial justice would rule before turning to a consideration of the evidence on which his decision as to fair market value would be predicated.

In an attempt to prove a fair comparable sale, the state offered as a qualified expert James E. Leary, a licensed Rhode Island real estate broker and an officer of a Massachusetts corporation which owns and leases gasoline service stations, and also owns a bulk plant. He testified to extensive experience in the setting up, maintenance and operation of gasoline stations and bulk plants while employed by the Lamson Oil Company, and similar experience acquired during wartime service with the government.

He testified in detail as to what the Lamson plant consisted of when assembled and through him pictures of the plant were introduced into evidence. This plant, he further testified, was sold in 1959 to the Richfield Oil Corporation of New York and of this sale he had personal knowledge, having participated therein. When asked what were the assets that passed in such sale, counsel for petitioner objected on the ground that the contract of sale was the best evidence.

Queried by the court as to this objection, counsel for the state replied that he would introduce the deed. Before offering it in evidence, counsel then asked the witness if in his opinion the Lamson sale was of property so similar as to be comparable. Counsel for petitioner objected for the reason that there was at that point no evidence before the court on which the witness's opinion could be based. The trial justice sustained petitioner's objection and the state made an offer of proof. It was that, if permitted to answer, the witness Leary would testify that in his opinion the properties were so similar as to qualify the Lamson sale as comparable.

Subsequently a certified copy of the deed was marked for identification. It described the land by metes and bounds but contained no mention of the improvements and the trial justice refused to admit it as a full exhibit.

More or less combining its exception on which the offer of proof is predicated and that to the refusal of the trial justice to admit the certified copy of the deed as a full exhibit, the state argues that it is reversible error for the trial justice to base his decision on evidence of reproduction cost less depreciation when there was competent evidence of a comparable sale, citing Hervey v. City of Providence, 47 R.I. 378, 133 A. 618.

While we are in full accord with the principle on which the state relies, we are not persuaded that the trial justice erred in holding that there was no evidence of a comparable sale. The witness Leary offered no evidence of what the Lamson sale consisted of in 1959, and it was on the basis that no such evidence was before him that the trial justice expressly rejected the fact of the Lamson sale as constituting a sale of property so similar to that of petitioner's as to be comparable. If refusing to accept the certified copy of the deed as a...

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