Bd. of Supervisors of La. State Univ. & Agric. & Mech. Coll. v. Villavaso

• Decision Date: 23 December 2015
• Docket Number: No. 2014–CA–1277.,2014–CA–1277.
• Citation: 183 So.3d 757
• Parties: BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY AND AGRICULTURAL AND MECHANICAL COLLEGE v. Michael P. VILLAVASO.
• Court: Court of Appeal of Louisiana — District of US

183 So.3d 757

BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY AND AGRICULTURAL AND MECHANICAL COLLEGE
v.
Michael P. VILLAVASO.

No. 2014–CA–1277.

Court of Appeal of Louisiana, Fourth Circuit.

Dec. 23, 2015.

183 So.3d 760

Luke F. Piontek, Shelley A. McGlathery, J. Kenton Parsons, Thomas J. Capella, Christian Rhodes, Roedel Parsons Koch Blache Balhoff & McCollister, New Orleans, LA, for Plaintiff/Appellant.

Randall A. Smith, Mary Nell Bennett, L. Tiffany Hawkins, Sara E. Porter, Smith & Fawer, L.L.C., New Orleans, LA, for Defendant/Appellee.

(Court composed of Judge EDWIN A. LOMBARD, Judge MADELEINE M. LANDRIEU, Judge JOY COSSICH LOBRANO ).

JOY COSSICH LOBRANO, Judge.

This case arises from a so-called "quick-taking" of property owned by defendant/appellee, Michael P. Villavaso ("Villavaso"). The Board of Supervisors of Louisiana State University Agricultural and Mechanical College ("LSU") filed a Petition for Expropriation in the Civil District Court for the Parish of Orleans against Villavaso on April 8, 2011, pursuant to La. R.S. 19:1, et seq. and 19:141, et seq., to facilitate the construction of a new academic medical center. The subject of LSU's expropriation was Villavaso's property located at 1837 Tulane Avenue and 318 South Roman Street ("the property") in New Orleans. The property is located across from St. Joseph Church near the Superdome, Claiborne Avenue, the Central Business District corridor/biomedical district, LSU and Charity School of Nursing, and the Veterans Administration Hospital, and is zoned C–l–A, general commercial district.

At the time of the taking, the property improvements consisted of shell and asphalt paving, parking bumpers, posts, and chains. Like the prior owner, Villavaso had used it for special events parking and some daily parking for the eleven years that he owned the property. Villavaso's special events parking fees were competitive with others, which charged up to $40.00 per car. Villavaso testified that the property had been openly used for parking by himself and the former owner for well over a decade without interference by the City of New Orleans or permitting or enforcement agencies. Villavaso therefore concluded that the parking use was legal under zoning or, at a minimum, was grandfathered in as a non-conforming use. Villavaso paid property taxes on the property and income taxes on the parking business revenue.

In May 2010, after Villavaso was first alerted to the forthcoming expropriation, Villavaso contacted real estate appraiser Jimmie Thorns. Thorns had previously worked for LSU appraising property for the academic medical center project, and Villavaso hoped to negotiate a sale to LSU prior to the taking. Thorns provided a valuation for the property of $247,000.00

183 So.3d 761

(approximately $33.00 per square foot). Villavaso also began looking for replacement properties, and testified at trial that similar, available properties were listed in the $33.00 to $34.00 per square foot range. Villavaso provided Thorns' valuation for the property to LSU, but LSU refused to purchase the property at the value assigned by Thorns.

Upon filing the Petition for Expropriation on April 8, 2011, LSU deposited into the registry of the district court the amount of $172,000.00, which it alleged was just compensation for the property, representing the full extent of Villavaso's loss as determined by two Louisiana certified general real estate appraisers, Kevin Hilbert ("Hilbert") and Michael Truax ("Truax"), chosen by LSU.

On April 15, 2011, without notice to Villavaso, LSU entered on to the property, grading it and demolishing the parking improvements, prior to the transfer of title, which occurred on April 25, 2011.

On May 26, 2011, Villavaso filed an Answer and Reconventional Demand seeking additional compensation, including compensation for the land and improvements taken, economic losses, including loss of income, and general damages for mental anguish, loss of use, inconvenience and loss of enjoyment. He did not challenge the public purpose or necessity of the taking. Villavaso retained two experts: Thorns, a real estate appraiser, and Charles Theriot ("Theriot"), a Certified Public Accountant and Forensic Accountant, to support his quantum claim. Thorns issued a report utilizing an appraisers' comparable sales approach and determined that the market value of the property was $247,000.00 as of the date of taking.

On September 28, 2012, Theriot issued a separate report in which he considered Villavaso's business losses due to the expropriation resulting in the closure of Villavaso's parking business. In his report and in his trial testimony, Theriot acknowledged that his report did not include the appraised value of the real estate. He valued business losses in the amount of $144,818.00. Nearly one year after the issuance of Theriot's report, over Villavaso's objections, LSU submitted the August 13, 2013 three-page rebuttal report by Henry "Hank" Tatje ("Tatje"), an appraiser, in response to Theriot's report, which evaluated Theriot's report under the Uniform Standards of Professional Appraisal Practice ("USPAP").

On April 9, 2014, Villavaso filed a Daubert Motion to Exclude the Testimony of Hank Tatje arguing that Tatje was unqualified as an expert to rebut Theriot's Lost Profits Report and should not be allowed to testify because he is an appraiser rather than a CPA, and that to allow his testimony would result in undue prejudice. After a hearing on Villavaso's Daubert motion on May 14, 2014, the district court issued a Judgment on May 30, 2014 granting the Daubert motion, and excluding Tatje from testifying as LSU's expert.¹

At the same time that it granted Villavaso's Daubert motion, the district court also granted in part LSU's motion in limine to exclude evidence relating to Villavaso's mental anguish, limiting the testimony only to that mental anguish suffered between the time of the initial trespass on or about April 15, 2011 until the actual expropriation on April 25, 2011.

183 So.3d 762

The case was tried to the bench on June 24 and 25, 2014. At trial, during LSU's cross-examination of Theriot, counsel for LSU attempted to introduce Villavaso's tax returns for the years 2006 through 2010. Counsel for Villavaso objected on the grounds that while the returns had been produced in discovery not later than 2012, LSU had never listed them as an exhibit. In addition, counsel for Villavaso argued that since the returns were Villavaso's, while they might be appropriate to introduce in connection with Villavaso's testimony, they were not an appropriate subject for Theriot's testimony. The district court sustained Villavaso's objection, and allowed LSU to proffer the returns in question.

Following the trial, the district court ruled that Villavaso had demonstrated that the $172,000.00 deposited by LSU was insufficient compensation for his losses, and that he was entitled to an additional $78,000.00 ($250,000.00 minus the $172,000.00 deposited into the registry of the Court) for the property taken; $2,820.00 for the improvements taken; $144,818.00 for business losses; and $50,000.00 for the mental anguish suffered as a result of the trespass, plus legal interest at five percent from April 25, 2011. Following a hearing to set attorney's fees held on August 27, 2014, the district court awarded Villavaso attorney's fees in the amount of $165,000.00.

On appeal, LSU asserts that the district court erred in the following particulars:

(1) The district court's finding that the value of the property taken as of the date of taking, April 25, 2011, was $250,000.00 ($78,000.00 more than LSU deposited);

(2) The district court's findings that Villavaso's business losses as a result of the taking were valued at $144,818.00, that the testimony of Tatje should be excluded, and that Villavaso's tax returns, which LSU sought to introduce at trial, should be excluded;

(3) The district court's finding that Villavaso suffered compensable mental anguish damages valued at $50,000.00; and

4) The district court's award of attorney's fees in the amount of $165,000.00 should be reduced if there is any reduction in damages award.

Villavaso answered the appeal, seeking an increase in the amount of attorney fees and costs awarded by the district court, to compensate him for fees and costs incurred post-trial on appeal.

DISCUSSION

"A court of appeal may not set aside a trial court's findings of fact in the absence of manifest error or unless they are clearly wrong." Allerton v. Broussard, 2010–2071, p. 3 (La.12/10/10), 50 So.3d 145, 146–47 (citations omitted). More specifically, "[t]he trier of fact's factual determinations as to the value of property and entitlement to any other damages in an expropriation proceeding will not be disturbed on appeal absent ... manifest error." Board of Sup'rs of Louisiana State University and Agr. & Mech. College v. 1732 Canal Street, L.L.C., 2012–1370, p. 3 (La.App. 4 Cir. 6/19/13), 159 So.3d 470, 472, writ denied, 2013–2383 (La.1/10/14), 130 So.3d 330. Reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review where conflict exists in the testimony. ...