City of Indianapolis on Behalf of Dept. of Metropolitan Development v. Heeter

• Decision Date: 07 October 1976
• Docket Number: No. 2--275A22,2--275A22
• Citation: 171 Ind.App. 119,355 N.E.2d 429
• Parties: CITY OF INDIANAPOLIS, on Behalf of the DEPARTMENT OF METROPOLITAN DEVELOPMENT, Plaintiff-Appellant, v. John M. HEETER and Marion County Treasurer, Defendants-Appellees
• Court: Indiana Appellate Court

Page 429

355 N.E.2d 429

171 Ind.App. 119

CITY OF INDIANAPOLIS, on Behalf of the DEPARTMENT OF METROPOLITAN DEVELOPMENT, Plaintiff-Appellant, v. John M. HEETER and Marion County Treasurer, Defendants-Appellees.

No. 2--275A22.

Court of Appeals of Indiana, First District

Oct. 7, 1976.

Rex P. Killiam & John C. O'Connor of Ruckelshaus, Bobbitt & O'Connor, Indianapolis, for plaintiff-appellant.

Harry L. Sauce, III of Webb & Webb, Noblesville, for defendants-appellees.

ROBERTSON, Chief Judge.

This appeal if from the judgment of the Hamilton Circuit Court in a proceeding brought by the City of Indianapolis (City) to appropriate and condemn a parcel of land owned by John M. Heeter (Heeter) for the purpose of redevelopment under the provisions of the Redevelopment Act of 1945.

The cause of action was filed on April 25, 1973. Heeter filed exceptions to the appraisers' report and after a jury trial was awarded damages in the amount of $5,700, plus interest.

The City presents the following issues for our review:

1. Whether the trial court committed error in refusing to give Plaintiff's Tendered Instruction No. 9;

2. Whether the jury's verdict was supported by sufficient evidence;

3. Whether the damages awarded were excessive and contrary to the weight of the evidence; and

4. Whether the trial court committed error in admitting and excluding certain evidence offered by the respective parties.

We find no reversible error and accordingly affirm.

The record reveals that Heeter owned a single unimproved lot, consisting of approximately 424 square feet, located in a redevelopment project known as the West Neighborhood Development Program. The project area, consisting of 7.4 acres, was being condemned by the Department of Metropolitan Development, City of Indianapolis under the authority of the Redevelopment Act of 1945.

Approximately twenty individuals owned lots in the project area. The entire area was virtually undeveloped with few structures existing on the blighted land. At the time of taking, the subject lot was zoned residentially for single family dwelling constructions.

Heeter witness William Wise, an adjacent lot owner, testified that he owned eighteen (18) lots in the redevelopment area. Based upon his prior dealings in real estate transactions and his personal knowledge of the area, he offered an opinion as to the highest and best use and the fair market value of the condemned lot. Wise testified that in his opinion the subject lot was definitely high commercial property with a value of four dollars a square foot or approximately $15,000 for the entire lot.

Further testified was given by Heeter as to the highest and best use and fair market value of his lot. In his opinion the subject lot was prime commercial property with a value of five dollars a square foot or $18,000 for the entire lot.

The opinions offered by Wise and Heeter were based upon the premise that the condemned lot could be combined with the other lots in the redevelopment area so as to make the entire area available for commercial development. Both witnesses felt that this area was prime commercial property because a cloverleaf interchange was being built at Rural Street and Keystone Avenue in Indianapolis as part of Interstate Highway 70. These witnesses believed that the increased flow of traffic resulting from this construction would support various types of commercial development in this area.

The City's expert witness Richard Nichols testified that in his opinion the subject property had a value of four cents a square foot or $175 for the entire area. Nichols stated that in making his appraisal he considered the highest and best use of the condemned lot alone rather than in combination with the other lots in the project area.

I.

The City raises three issues relating to the same legal principle. We will discuss and dispose of these issues collectively.

The legal question underlying these issues is whether or not, for purposes of determining the highest and best use and fair market value of condemned property, the jury may consider as a factor that the land would have a higher and more valuable use if it is combined or assembled with other parcels of real estate not owned by the condemnee so as to make a sufficiently large tract of land for a projected purpose when the condemned property standing alone could not support such a purpose.

The City cogently argues that this combination of property may not be considered in fixing valuation when such combination or assemblage is not shown to be a reasonable probability. The City maintains that while the opinions offered at trial by Heeter's witnesses were based upon the premise of combining the subject lot with other property in the development area for commercial use, there was no showing by Heeter that such assemblage was a reasonable possibility and, thus, the jury's verdict, presumably being based upon such speculative testimony, was not supported by sufficient evidence and was grossly excessive.

At trial, the City tendered the following instruction on assemblage adaptability which the trial court refused to give:

'Plaintiff's Tendered Instruction No. 9--You are instructed that if the adaptability of the defendant's lot depends upon it being assembled with other lots so as to make a tract of land sufficient in size for a projected purpose, such artificially created adaptability is too remote and speculative to be considered by you in determining the valuation of the defendant's lot.'

The City argues that this tendered instruction would have correctly informed the jury on the law governing the assemblage issue and that failure to give the instruction was reversible error.

We do not agree with the City's contentions.

In a condemnation case, the jury is charged with the duty of determining the fair market value of the condemned real estate. Fair market value has been defined by our Supreme Court in Southern Indiana Gas & Electric Co. v. Gerhardt (1961), 241 Ind. 389, 393, 172 N.E.2d 204, 205, to be the following:

'The 'fair market value' is a determination of what the land may be sold for on the date of the taking if the owner were willing to sell. Anything affecting the sale, value at that time is a proper matter for the jury's consideration in attempting to arrive at a 'fair market value'.'

In determining the fair market value, the jury may properly consider as a factor the use to which the condemned property might reasonably be adapted even though the property was not being devoted to such use at the time of taking. The rule governing the adaptability factor was succinctly stated in State v. Tibbles (1954), 234 Ind. 47, 49, 123 N.E.2d 170, 171:

'It has long been the established rule that in determining the value of property taken by condemnation or appropriation the availability and adaptability of property for uses other than that to which it is applied at the time of taking, so far as it may appear from the evidence, may be taken into consideration, but inquiry as to damages cannot go into an intended specific use.' (cases omitted.)

When the value of the land taken is enhanced by uses to which the condemned property might be adapted, the owner is entitled to the market value as so enhanced. State v. City of Terre Haute (1968), 250 Ind. 613, 238 N.E.2d 459; State v. Tibbles, supra.

The City does not contend that adaptability is not a proper element of value to be considered in determining the amount of damages to be assessed in eminent domain proceedings. However, the City urges us to limit the applicability of adaptability when, as in the case at bar the adaptable use depends upon the principle of assemblage.

The City states that the following general rule of law, upon which its tendered instruction was based, has been universally accepted and urges that we accept this rule as law in Indiana.

'If adaptability depends upon the particular parcel being assembled with other parcels, so as to make a tract sufficient in extent to render it useful for the projected purpose, such artificially created adaptability is considered too remote and speculative to be considered in fixing valuation.' 3, 4 Sackman, Nichols on Eminent Domain, § 8.61 n. 2 and § 12.21 n. 5 (3rd Ed. 1971).

We are not able to approve the City's proposition.

This Court has previously stated in State v. Williams (1973), Ind.App., 297 N.E.2d 880, 882, quoting from 4 Sackman, Nichols on Eminent Domain § 12.314 (3d Ed. 1971), that:

'A use for which a piece of land is especially available need not be excluded from consideration merely because the availability depends upon extrinsic conditions, the existence or continuance of which is not within the control of the owner of the land.

In fact, it is not necessary that the extrinsic improvement which will make the land specially available for a particular purpose be in existence when the land is taken, if the probability of its being constructed in the immediate future is so strong as to have an effect upon present market value. Thus, where the adaptability for a specific use depends upon the land being used in combination with lands belonging to other persons, such use may be shown if the possibility of such combinations is so great as to have a definite effect in enhancing the market value of the property.' (Emphasis added.)

We are of the opinion that if the highest and best use of a parcel of land can be made only in combination with other parcels and that the adaptability of such condemned property depends on this combination, then such adaptability may properly be considered by the jury in determining the amount of damages if the possibility of such combination is reasonably sufficient to affect the market value. See: United States v. Fuller (1973), 409 U.S. 488, 93 S.Ct. 801, 35 L.Ed.2d 16; Olson v. United States (1934), 292 U.S. 246, 54 S.Ct. 704, 78 L.Ed. 1236; State v. Williams, supra. If the trial court had given Plaintiff's Tendered Instruction ...