City of Billings v. Hunt, 92-158

• Citation: 847 P.2d 715,257 Mont. 99
• Decision Date: 25 February 1993
• Docket Number: No. 92-158,92-158
• Parties: CITY OF BILLINGS, a Montana municipal corporation, Plaintiff, Counterdefendant and Respondent, v. Jean HUNT; Helen Keller; Max H. Heffner; Eleanor M. Heffner; C.M. Heffner, Jr.; Amelia O. Heffner; Internal Revenue Service; United States of America and Department of Revenue State of Montana, Defendants, Dennis J. Rue Co., Inc., a/k/a Dennis J. Rue, Inc.; Angie Jurovich, Thomas L. Ferguson, Trustee; Gary Kainu; Patricia I. Kainu; Edward S. Martyr, a/k/a E.S. Martyr; Betty Martyr; Abby Ferguson, Trustee; Donald L. Ferguson; Thomas L. Ferguson; John Edward Ferguson; Kellie Ann Ferguson; Myrna A. Clark; The Abby Ferguson Trust; The Abby Ferguson Irrevocable Trust; Univest, Inc.; and Robert P. Livengood, Defendants, Counterclaimants and Appellants.
• Court: United States State Supreme Court of Montana

Page 715

847 P.2d 715 257 Mont. 99 CITY OF BILLINGS, a Montana municipal corporation,
Plaintiff, Counterdefendant and Respondent,
v.
Jean HUNT; Helen Keller; Max H. Heffner; Eleanor M.
Heffner; C.M. Heffner, Jr.; Amelia O. Heffner; Internal
Revenue Service; United States of America and Department of
Revenue State of Montana, Defendants,
Dennis J. Rue Co., Inc., a/k/a Dennis J. Rue, Inc.; Angie
Jurovich, Thomas L. Ferguson, Trustee; Gary Kainu;
Patricia I. Kainu; Edward S. Martyr, a/k/a E.S. Martyr;
Betty Martyr; Abby Ferguson, Trustee; Donald L. Ferguson;
Thomas L. Ferguson; John Edward Ferguson; Kellie Ann
Ferguson; Myrna A. Clark; The Abby Ferguson Trust; The
Abby Ferguson Irrevocable Trust; Univest, Inc.; and Robert
P. Livengood, Defendants, Counterclaimants and Appellants. No. 92-158. Supreme Court of Montana. Submitted Dec. 15, 1992.
Decided Feb. 25, 1993.

Page 716

[257 Mont. 100] Mark D. Parker, Parker Law Firm, Billings, for appellant.

Kenneth D. Peterson, Peterson & Schofield, Billings, for respondent.

WEBER, Justice.

This is an appeal from an order of the Thirteenth Judicial District Court, Yellowstone County, refusing to award interest to appellants under § 70-30-302(2), MCA, pursuant to a condemnation proceeding taking vacant, undeveloped land. We reverse.

[257 Mont. 101] Appellants present the following issues for review:

1. Did the District Court err in refusing to award interest under § 70-30-302, MCA, when the City of Billings condemned vacant, undeveloped land?

2. Did the District Court err in awarding out-of-state witness travel expenses?

The appellants are the contract purchasers of real property legally described as Certificate of Survey 1805 consisting of 12.216 acres in Yellowstone County, Montana. The subject land is located on the "rims" south of Highway 318 at the southeast end of Logan International Airport in Billings, Montana. The parties stipulated that the highest and best use of the land was for professional offices.

In 1986, the City of Billings (City) offered to purchase all 12.216 acres of Certificate of Survey 1805 for $293,200. The landowners rejected the City's offer. On September 17, 1987, the City began condemnation proceedings under its power of eminent domain and served summonses on defendants in September 1987.

On February 29, 1988, the City moved for a preliminary condemnation order which was subsequently issued by the District Court on May 4, 1988. In August 1989, after a Condemnation Commissioner's Hearing as required by § 70-30-301, MCA, the Condemnation Commissioners reported that the current fair market value of the property was $320,500. After a trial in February 1992 on the issue of fair market value, a jury found that the fair market value as of September 21, 1987 was $200,000.

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The jury's award did not include interest prior to the judgment date. Although appellants had requested a jury instruction which would have included interest from the date of summons as part of the condemnation award, the verdict form used at the trial did not include interest and the District Court did not instruct the jury to include interest. Appellants seasonably objected to the jury instruction, thereby preserving that question for appeal.

I.

Did the District Court err in refusing to award interest under § 70-30-302(2), MCA, when the City of Billings condemned vacant, undeveloped land?

The Fifth Amendment to the United States Constitution prohibits governmental entities from taking private property for public use under the power of eminent domain without paying "just compensation." [257 Mont. 102] Similarly, Article II, Section 29 of the Montana Constitution prohibits the taking or damaging of private property for public use "without just compensation to the full extent of the loss having been first made to or paid into court for the owner."

"Just compensation" may include interest. Interest has been regarded as a substitute for computing appreciation of land value between the time of taking and the date of payment. See United States v. 156.81 Acres of Land (9th Cir.1982), 671 F.2d 336, 339, cert. denied, 459 U.S. 1086, 103 S.Ct. 569, 74 L.Ed.2d 931 (1982). Section 70-30-302, MCA, provides:

Assessing compensation--date and measure--interest. (1) For the purpose of assessing compensation, the right thereto shall be deemed to have accrued at the date of the service of the summons, and its current fair market value as of that date shall be the measure of compensation for all property to be actually taken and the basis of depreciation in the current fair market value of property not actually taken but injuriously affected....

(2) If an order be made letting the plaintiff into possession, as provided in 70-30-311, the full amount finally awarded shall draw interest at the rate of 10% per annum from the date of the service of the summons to the earlier of the following dates:

(a) the date on which the right to appeal to the Montana supreme court expires or, if appeal is filed, to the date of final decision by the supreme court; or

(b) the date on which the property owner withdraws from court the full amount finally awarded.

. . . . .

(5) No improvements put upon the property subsequent to the date of the service of summons shall be included in the assessment...