Bd. of Supervisors of La. State Univ. v. Gerson
| Decision Date | 14 November 2018 |
| Docket Number | NO. 2017-CA-0296,NO. 2017-CA-0229,2017-CA-0229 |
| Citation | 260 So.3d 634 |
| Parties | BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY and Agricultural and Mechanical College v. Marshall F. GERSON, Ellvog, Inc. and City of New Orleans Board of Supervisors of Louisiana State University and Agricultural and Mechanical College v. Marshall F. Gerson, et al. |
| Court | Court of Appeal of Louisiana — District of US |
Terry T. Dunlevy, Gayle T. Busch, W. L. West, ROEDEL PARSONS KOCH BLACHE BALHOFF & McCOLLISTER, 1515 Poydras Street, Suite 2330, New Orleans, LA 70112-3720, COUNSEL FOR PLAINTIFF/APPELLEE
John S. Creevy, Maury A. Herman, HERMAN, HERMAN & KATZ, LLC, 820 O'Keefe Avenue, New Orleans, LA 70113, COUNSEL FOR DEFENDANT/APPELLANT
(Court composed of Judge Roland L. Belsome, Judge Sandra Cabrina Jenkins, Judge Tiffany G. Chase )
These two consolidated appeals arise from an expropriation proceeding brought by the Board of Supervisors of Louisiana State University and Agricultural and Mechanical College (the "Board") for the taking of property owned by Marshall F. Gerson. After the parties stipulated as to the compensation due for Mr. Gerson's land and improvements, a bench trial was held to determine the compensation, if any, due for business losses sustained by Mr. Gerson and his privately-held corporation, Ellvog, Inc. ("Ellvog"), resulting from the expropriation.
In No. 2017-CA-0229, the Board appeals the trial court's April 6, 2015 judgment awarding Mr. Gerson and Ellvog (collectively, the "Gerson Defendants") compensation in the amount of $558,475.00 for business losses caused by the expropriation. In No. 2017-CA-0296, the Gerson Defendants appeal the trial court's July 25, 2016 judgment denying them attorney's fees; and its October 14, 2016 judgment limiting their expert fees.
For the reasons that follow, we affirm in part, reverse and remand in part, and amend in part.
Ellgee Uniform Shop ("Uniform Shop"), the business operated on the expropriated property, was established in 1939 by Mr. Gerson's parents in the 1700 block of Tulane Avenue. In 1974, the business was relocated one block away to its location at the time of the taking, 1831-35 Tulane Ave. (the "Property"). The Uniform Shop was a well-established retail uniform supplier to the healthcare, hospitality, and religious communities, and was located in the "heart" of the New Orleans downtown hospital district, which included Charity Hospital, the VA Hospital, and Tulane University Medical Center. Ellvog owned the Uniform Shop. Mr. Gerson owned the building and the land on which Ellvog operated the Uniform Shop. Mr. Gerson also was a salaried employee of the Uniform Shop, and was the sole shareholder of Ellvog. Mr. Gerson did not charge Ellvog rent.
In 2008, Mr. Gerson became aware of expropriations taking place in the foot print of a new downtown medical complex development to replace Charity Hospital and the VA Hospital. Mr. Gerson began searching for comparable property within a one-half-mile radius of his business. In 2009, Mr. Gerson engaged the services of Mark Herman, a real estate broker, to assist in finding a comparable property that could replace the business's unique location on Tulane Avenue. Mr. Herman reported that there was no comparable property available because the expropriation was causing the market to become "choked off" and "stagnant," with the result that available property was too expensive. In April 2011, Mr. Gerson relocated the Uniform Shop into a leased building more than a mile away at 3101 Tulane Ave., which was formerly occupied by an auto repair business. Ellvog paid the landlord monthly rent of $2,500.00.
On March 11, 2011, the Board filed a Petition for Expropriation of the Property, and deposited $365,000.00 into the registry of the court as the estimated amount of just compensation. On March 28, 2011, the Gerson Defendants filed an Answer and Reconventional Demand seeking additional compensation, including: (1) "value in use" of the Property; (2) inconvenience and delay damages; (3) judicial interest on those inconvenience and delay damages; (4) past and future loss of income; (5) specific expenses incurred in connection with the Board's expropriation actions, including professional fees and advertising costs; (6) expenses of a temporary location of the business; (7) leasehold expenses for a temporary location; and (8) the incremental costs of replacement property (land and building). In October 2011, the Gerson Defendants withdrew the $365,000.00 from the registry of the court, with full reservation of their rights to any further compensation.
On October 13, 2013, the Board filed a Motion for Summary Judgment with respect to the amount of "just compensation" owed to the Gerson Defendants. On October 21, 2013, the Gerson Defendants filed an opposition to the Board's Motion for Summary Judgment, arguing that there were genuine issues of material fact as to whether they had been compensated to the full extent of their loss. After a hearing on October 28, 2013, the trial court rendered a December 10, 2013 judgment granting in part, and denying in part, the Board's Motion for Summary Judgment. The trial court granted summary judgment with respect to the fair market valuation of the expropriated Property (land and improvements), which the parties had stipulated to be $365,000.00. The trial court denied summary judgment with respect to a determination of any additional compensation due to the Gerson Defendants.
Because the parties had stipulated that the fair market value of the Property was $365,000.00, "[t]he only issue for the court [was] the business economic loss resulting from the expropriation of [the Property] and resulting relocation of [the Uniform Shop]." A bench trial was held on January 12 and January 13, 2015. On April 6, 2015, the trial court rendered a judgment in favor of the Gerson Defendants in the amount of $558,475.00 as compensation for the business losses caused by the expropriation.1 The judgment provided that each party was to bear its own costs.
On April 13, 2015, the Gerson Defendants filed a Motion for New Trial, seeking to recover attorney's fees, expert fees, and costs. On July 25, 2016, the trial court rendered a judgment in which it amended its April 6, 2015 judgment by awarding the Gerson Defendants court costs in the amount of $2,120.89, and copy and printing costs in the amount of $4,113.98. The July 25, 2016 judgment denied the Gerson Defendants' Motion for New Trial with respect to their request for attorney's fees.
Thereafter, the trial court conducted a hearing on the issue of expert fees. The Gerson Defendants sought $59,985.00 for their two testifying experts. In a judgment dated October 14, 2016, the trial court awarded the Gerson Defendants $9,000.00 in expert fees.
The Gerson Defendants appealed the July 25, 2016, and October 14, 2016 judgments denying attorney's fees, and awarding only $9,000.00 in expert fees. The Board appealed the trial court's April 6, 2015 judgment awarding the Gerson Defendants $558,475.00 as full compensation for business losses sustained as a result of the taking.
In general, "expropriation proceedings derogate from the right of individuals to own property"; thus, "the law governing these proceedings is strictly construed against the expropriating authority." Bd. of Supervisors of Louisiana State Univ. & Agric. & Mech. College v. Villavaso , 14-1277, p. 7 (La. App. 4 Cir. 12/23/15), 183 So.3d 757, 763.
Prior to the 1974 revision of the Louisiana Constitution, Louisiana courts limited compensation for expropriation to damages reflected in the value of the property taken. See Tracy Lee Howard, Compensating an Owner to the Full Extent of His Loss: A Reevaluation of Compensable Damages in LouisianaExpropriation Cases , 51 LA. L. REV. 821, 822 (March 1991) (hereinafter, Howard, Louisiana Expropriation Cases ). The Louisiana Constitution of 1921 had simply required payment of "just compensation" for an expropriation, and the owner could only receive fair market value and any severance damages for the property taken through expropriation. LA. CONST. of 1921, art. 1, § 2. Thus, damages were not awarded to compensate the landowner for incidental losses he personally may have suffered as a result of the taking. Howard, Louisiana Expropriation Cases .
In 1974, however, the Louisiana Constitution was rewritten to provide that a landowner in an expropriation case "shall be compensated to the full extent of his loss ," and that "the full extent of his loss shall include, but not be limited to, the appraised value of the property and all costs of relocation, inconvenience, and any other damages actually incurred because of the expropriation ." LA. CONST. art. 1, § 4 (emphasis added). "This has been interpreted to mean that a landowner whose property is expropriated is entitled to be placed in the same pecuniary position in which he would have been if the property had not been taken ." Villavaso , 14-1277, p. 7, 183 So.3d at 763 (emphasis added).
" Article 1, § 4 does not specify how to fully compensate a landowner whose property is taken." State, Dept. of Transp. & Dev. v. Dietrich , 555 So.2d 1355, 1358 (La. 1990). The Louisiana Supreme Court, however, has declared that full compensation includes loss of profits from the taking of business premises, so that landowners are compensated for their full loss, not merely for the loss of their land and improvements. South Lafourche Levee Dist. v. Jarreau , 16-0788, 16-0904, p. 10 (La. 3/31/17), 217 So.3d 298, 306, cert. denied , ––– U.S. ––––, 138 S.Ct. 381, 199 L.Ed.2d 279 (2017). The Louisiana Supreme Court also has extended business losses to include not only present losses, but also estimated future business losses. Dietrich , 555 So.2d at 1359.
Applying these principles, we will first discuss the Board's appeal, which challenges the trial court's award of...
To continue reading
Request your trial
-
Mathes Brierre Architects v. Karlton/ISG Enters., LLC
...in La. C.C. art. 2002 and applicable to tort and contract law in Louisiana. Bd. of Supervisors of Louisiana State Univ. v. Gerson , 17-0229, 17-0296, p. 24 (La.App. 4 Cir. 11/14/18), 260 So.3d 634, 652, writ denied , 18-2054 (La. 2/25/19), 266 So.3d 292. La. C.C. art. 2002 provides "[a]n ob......
- Bayou Bridge Pipeline, LLC v. 38.00 Acres
-
State v. Ducote
...Any private conversations between a defendant and a spouse that occurred prior to the defendant being jailed would still be protected 260 So.3d 634by marital privilege. Moreover, the fact that these calls are monitored does not preclude discussions concerning bond.For the reasons stated, we......