Board of Com'rs of Little Rock Mun. Water Works v. Rollins, CA

• Decision Date: 14 May 1997
• Docket Number: No. CA,CA
• Citation: 945 S.W.2d 384,57 Ark.App. 241
• Parties: BOARD OF COMMISSIONERS OF LITTLE ROCK MUNICIPAL WATER WORKS, Appellant, v. Grady N. ROLLINS and Jeane Rollins, his wife, Ewald J. Graf and Carol Graf, his wife, H. Grady Miller, Jr., and Mary Ann Miller, his wife, and James Lee Eubanks, Appellees. 96-49.
• Court: Arkansas Court of Appeals

Page 384

945 S.W.2d 384

57 Ark.App. 241

BOARD OF COMMISSIONERS OF LITTLE ROCK MUNICIPAL WATER WORKS, Appellant, v. Grady N. ROLLINS and Jeane Rollins, his wife, Ewald J. Graf and Carol Graf, his wife, H. Grady Miller, Jr. and Mary Ann Miller, his wife, and James Lee Eubanks, Appellees.

No. CA 96-49.

Court of Appeals of Arkansas Divisions III and IV.

May 14, 1997.

John P. Gill, C. Tad Bohannon, Little Rock, for appellant.

Christopher O. Parker, Little Rock, for appellee.

BIRD, Judge.

As part of a project to preserve water quality in Lake Maumelle, the Board of Commissioners of Little Rock Municipal Water Works (LRMWW) filed an application for condemnation of 26.7 acres within the Lake Maumelle watershed. Lake Maumelle is used to supply drinking water for residents of Little Rock. The property was owned by Grady N. Rollins and Jeane Rollins, his wife; Ewald Graf and Carol Graf, his wife; H. Grady Miller, Jr., and Mary Ann Miller, his wife; and James Lee Eubanks.

LRMWW filed its application for condemnation on July 23, 1993, alleging that it was proceeding pursuant to Ark.Code Ann. §§ 18-15-301--410 (1985). With its application, LRMWW tendered to the clerk of the court a check for $133,500, the amount that it estimated to be the fair market value of the property. However, the check was not accepted by the clerk and, upon inquiry by the appellees' attorney, the appellees were informed that there were no funds on deposit. Pursuant to an order of the court entered on January 25, 1994, the clerk accepted LRMWW's check into the court's registry, but neither the appellees nor their attorney were provided with a copy of the order or given notice that the deposit had been accepted. Therefore, the funds were not withdrawn by the appellees.

The appellees answered the condemnation application, alleging that LRMWW did not have the authority to condemn the property, that the Circuit Court of Pulaski County lacked jurisdiction, that the taking was unnecessary and unconstitutional, and that the property was valued at more than $133,500.

On December 1, 1994, the condemnation application went to trial. Both parties retained appraisers who testified as expert witnesses about the value of the land. Appellees' expert valued the land at $10,000 per acre. LRMWW's expert valued the land at $4,500 an acre. One of the owners valued the land at $12,000 an acre. The court refused to permit cross-examination of the appellees' expert witness about alleged mistakes made by her in prior appraisals of other tracts of land that were not used by the expert in determining the value of the subject land, and about which she had not testified on direct. The jury valued the property as of July 23, 1993, at $5,900 an acre and awarded the appellees $157,530.

On December 20, 1994, LRMWW deposited an additional $24,030, which was the difference between their initial deposit of $133,500, and the jury award of $157,530. The appellees filed a motion seeking interest on the amount of the jury's verdict, and the court awarded appellees interest at the rate of eight percent per annum on $157,530 from July 23, 1993, to December 1, 1994, and on $24,030 from December 1, 1994, to December 20, 1994.

LRMWW argues three points for reversal. First, it alleges that the trial court erred in determining that July 23, 1993, was the date of taking of the property. Second, it asserts that the trial court erred in awarding appellees interest. Finally, it alleges that the trial court erred when it limited the appellant's cross-examination of the appellees' expert witness.

We find no error and affirm.

I. DATE OF TAKING AND DETERMINATION OF INTEREST

The first two points will be discussed together since they are related. Appellees contend that the date of taking of the land by LRMWW was the date the application for condemnation was filed, July 23, 1993, and that they are entitled to receive interest on the amount of the jury's verdict from that date until the judgment is paid. On the other hand, LRMWW contends that since it did not request an order of entry at the time it filed its application and since the appellees continued to have possession, use, and enjoyment of the land up until judgment was entered (by which date appellant had already paid the full amount of the jury's verdict into the registry of the court), it is not liable for the payment of any interest. In short, LRMWW argues that the date of taking is the date that final judgment was entered (June 13, 1995), whereas the appellees argue that the date of taking is the date the condemnation action was commenced (July 23, 1993).

It is well settled that in condemnation proceedings, interest shall be paid for the period between the date of taking and the final payment of the money due. Arkansas State Highway Comm'n v. Stupenti, 222 Ark. 9, 257 S.W.2d 37 (1953). Interest is designed to give a property owner the full value of the land as if the property owner was paid the full value at the time of taking. Wilson v. City of Fayetteville, 310 Ark. 154, 835 S.W.2d 837 (1992). Therefore, it is necessary to determine the date of taking in order to determine how much, if any, interest is due.

The determination of the date of taking is a fact issue and the trial court's finding should not be reversed unless it is clearly against the preponderance of the evidence. Ozark Auto Transp., Inc. v. Starkey, 327 Ark. 227, 937 S.W.2d 175 (1997); Ark. R. Civ. P. 52(a). The judge made a factual finding that July 23, 1993, was the date of taking and that the jury should value the property as of that date. In addition, in ruling on an objection by appellant, the judge barred any evidence as to sales that occurred after July 23, 1993.

Under Arkansas law, the date of taking may be established by different methods, depending upon the circumstances of the case. It may be determined by the date entry is made upon the land, Stupenti, supra; it may coincide with the date of valuation of the property, Arkansas State Highway Comm'n. v. Choate, 256 Ark. 45, 505 S.W.2d 731 (1974); it may be determined by the date of the Order of Entry, Greig v. Crawford County, 256 Ark. 202, 506 S.W.2d 523 (1974); or the date of taking might be determined to be the date the petition is filed, United States v. Herring, 750 F.2d 669 (8th Cir.1984); Newgass v. St.Louis, A. & T. Railway Co., 54 Ark. 140, 15 S.W. 188 (1891). The Arkansas Supreme Court has stated that when there is "any invasion of private property by lawful authority for a public use and the property is damaged thereby, there is a taking within the meaning of our law, and, where the damage is such as to deprive the owner of the beneficial use of his property, he may require that its value be paid to him." Keith v. Drainage Dist. No. 7 of Poinsett County, 183 Ark. 384, 392, 36 S.W.2d 59, 62 (1931).

The date of taking is frequently determined by the date of entry upon the land, and interest is awarded from that date. Stupenti, supra. This rule is most often applied when the Arkansas State Highway Commission enters upon the land to make improvements and the date of entry becomes the date of taking. Stupenti, supra; Arkansas State Highway Comm'n v. Security Savings Ass'n, 19 Ark.App. 133, 718 S.W.2d 456 (1986). The date of entry was determinative in these cases because the property owners were deprived of the land when the State entered upon the land to begin highway construction or road improvements. Stupenti, supra.

Appellant contends this rule should apply in the case at bar; therefore, they argue, appellees are not entitled to interest because they were not deprived of the possession or use of their land before the judgment was entered. Appellant argues that if the appellees are not deprived of the use of their land, then they are not entitled to interest. Arkansas State Highway Comm'n v. Vick, 284 Ark. 372, 682 S.W.2d 731 (1985); Housing Authority of Little Rock v. Rochelle, 249 Ark. 524, 459 S.W.2d 794 (1970). Appellant cites Arkansas State Highway Comm'n v. Security Savings Ass'n, supra, for the rule that interest is due to a landowner only if the landowner is deprived of the use of property before the judgment was entered.

However, the facts in this case distinguish it from these condemnation proceedings in which entry is made immediately upon the land. In the case at bar, the land was undeveloped and was taken not for the purpose of construction, but for the purpose of preserving the land in its natural state. LRMWW was not going to engage in construction, develop or change the land. While it may or may not be true that the appellees continued to have the use and enjoyment of the property after the filing of the application for condemnation, it is certainly true that from the time that the application was filed, the appellees' rights to use and enjoy the land were no greater than the rights of the public in general. Clearly, after appellant's application was filed, the appellees did not have the right to use the property in any manner that was inconsistent with the purposes for which it was being taken by LRMWW. It is equally clear that from and after the filing of its condemnation application, LRMWW became the beneficial owner of the property, with the only issue remaining unresolved being how much it would be required to pay. For all intents and purposes, appellees' beneficial use of the property was lost when appellant filed its application, notwithstanding that appellees still could, if they wanted to, look at and walk on the property.

The provisions of Ark.Code Ann. §§ 18-15-301--410 contemplate that the condemning authority will have the need to enter upon the land for the purposes of commencing construction or otherwise advancing its purpose for taking the land. However, when, as here, there is no need for the condemning authority to enter upon the land to accomplish its objective (to preserve the land for the protection of the public water supply), that purpose...