City of Lafayette v. Beeler
| Decision Date | 09 November 1978 |
| Docket Number | No. 2-476A129,2-476A129 |
| Parties | CITY OF LAFAYETTE, Appellant (Plaintiff below), v. Harold E. BEELER, J. Irene Beeler, and Lafayette Savings Bank, Appellees (Defendants below). |
| Court | Indiana Appellate Court |
Gregory J. Donat, Richard T. Heide, Heide, Gambs & Mucker, Lafayette, for appellant.
Paul D. Ewan, Schultz, Ewan & Burns, Lafayette, for appellees.
This appeal arose out of an action in eminent domain brought by the City of Lafayette, Indiana, on September 24, 1974, to condemn, for sewer easement purposes, a portion of property owned by Harold and Irene Beeler.
The property in question lies upon 11.02 acres of undeveloped land located adjacent to other land also owned by the Beelers which has been subdivided and developed. The area condemned for the easement is a strip running irregularly north-south for the entire length of the parcel, averaging approximately 37 feet in width. The strip consists of approximately 1.75 acres and lies on the western edge of the tract. The eastern edge of the parcel faces a developed street which terminates in a cul-de-sac. All paper work, engineering, profiles, surveying, field work on streets and storm drainage, and staking and elevating for sewers had been accomplished in anticipation of subdividing the land. Preliminary approval for the subdivision was attained in 1968, and was extended in 1971 for three years. The Beelers, however, had not received final approval for subdivision from the Area Plan Commission, nor had any plat been recorded. The land was taxed as "farm land" at the time of trial.
On November 6, 1974, the Court entered an order of appropriation and appointed three appraisers, who thereupon filed their report and assessed the Beelers' total damage at $31,000. Both the Beelers and the City filed exceptions to the report.
At trial, the Beelers introduced, over the City's objection, Exhibits Nos. 6 and 8, consisting of two plats, the former showing the land subdivided into lots before the taking and the latter showing the effect upon those lots created by the easement.
The Beelers also presented expert testimony with respect to "just compensation" for the property taken. Wendell Mason, using the "market data" approach (sales of similar properties), testified that he considered the highest and best use of the property to be Residential R-1. He further testified that he considered damages from the taking to be $76,000.
Upon preliminary questioning, counsel for the City inquired into the basis for Mason's fair market value determination. Mason admitted that he had appraised the land on a lot basis by applying a specific value per lot as contemplated by the lot plan submitted by the Beelers. Mason further testified that he had calculated the damage to the remaining property by evaluating the effect the taking would have on each specified lot illustrated by the plat. Upon cross-examination, Mason further explained his appraisal:
"Q. You figured the value of 28 lots at $7500, right?
A. Right. When you asked me to break it down into an acreage cost I had a figure of $12,323.
Q. What you had done though was just take your original per lot basis and then break it down. You hadn't made any evaluation from similar sales of 11 acres or anything like that though? Your evaluation was just a . . . was just an arithmetical computation, right?
A. Right, based upon past development and history of the area.
Q. Now Mr. Beeler . . . I mean Mr. Mason, I'm sorry, the comparables which you used, were those all lots in legally recorded subdivisions?
A. They were.
Q. Were they all improved lots?
A. Part of them were, part of them weren't.
Q. Which ones were improved and which ones were not?
A. The lots in Canterbury are fully improved except for sidewalks. They have city water, city sewers, they have storm sewers, curb and gutters, blacktop streets.
Q. Well, are they improved . . . are they improved to the extent they are going to be improved?
A. Yes."
The Beelers' second expert witness, Eston Hupp, calculated damages at $67,500. Counsel for the City also inquired into the basis for his appraisal. The more revealing portions of his testimony are as follows:
"BY MR. HEIDE: Mr. Hupp, in determining . . . in your determination of the value of the Beeler property, did you make that determination by placing certain values on a per lot basis?
A. This valuation was based on the concept of highest and best use which was a subdivision . . . a potential subdivision, yes.
BY MR. HEIDE: In making that evaluation did you use a specific plan for the development of that land?
A. Yes.
BY MR. HEIDE: And then did you place a value on the lots on that plan and then accrue those values together to a total value?
A. Basically that's the process although that's not quite correct.
BY MR. HEIDE: It was a specific plan though?
A. Yes, it was a specific plan.
BY MR. HEIDE: Was it a plan that you understood had been accepted as a subdivision?
A. Well, I don't know that I understood . . . it was in a preliminary stage, being preliminarily approved, but in my opinion it looked like the best design to build.
The Beelers' final expert witness was Robert Mennen, who assessed damages at $81,835. His appraisal was also based upon the assignment of values for each lot and then aggregating those values to arrive at a total acreage value. Various portions of his testimony were as follows:
A. Yes sir, I did.
BY MR. HEIDE: Just turn around and . . . was that layout there?
A. Yes, this one here, right.
BY MR. HEIDE: Did you make your evaluation by giving each lot a certain value and then adding all the values together?
A. Yes, I did.
A. Not completely.
BY MR. HEIDE: To what extent did you base it on a per lot basis?
A. My arithmetic to arrive at this figure was based on the fact that 74, 73, 72, 71, 70 and 68 and 66 and 67 as well as 78, 82 and 83 would have an interim period of 8-10 years before they could be really built on. These properties up in the north of approximately five acres would have no damage as I could see so I couldn't put it on a necessarily per lot basis on that area, but these lots here have a holding period of 8-10 years that they can't be used.
BY MR. HEIDE: Was that holding period placed . . . did you place the holding period of a per lot basis and then arrive at your figure?
A. Not on the . . . I took the total amount of those lots and arrived at it.
BY MR. HEIDE: You mean you had a total amount . . . you didn't place a value on each lot as damage?
A. I took the damage on this group of 11 lots then placed the damage on the whole.
BY MR. HEIDE: Was the damage equal to each of them?
A. It would be, except to 66.
BY MR. HEIDE: So you did place it then . . . on certain lots you placed a certain amount on some of them and one of them you damaged it in another way?
A. Yes. 66 I think I have $1000, so we damaged it about $6500, approximately.
BY MR. HEIDE: I'll object to this question and the answer for the reason that it calls for a . . . it uses a purported specific plat which portrays a specific future use . . . a proposed specific future use of the property to arrive at the evaluation."
Upon cross-examination, Mennen further testified:
"Q. Now you have placed a before value of $210,000 on the property, is that correct?
A. That's right, sir.
Q. How did you arrive at that figure?
A. I felt that 28 lots at current value of $7500, and that was my estimate of value.
Q. 28 lots at $7500? Do those 28 lots take up the whole 11.02 acres?
A. I believe so.
Q. So over here where there is no access you placed $7500 value on those just the same as you did over in here?
A. I projected the whole 11 acres into subdivision.
Q. If you hadn't projected that into a subdivision would it have been impossible to arrive at a figure of the amount?
A. I had to do that because it's the highest and best use of the property.
Q. Highest and best use is residential, R1, correct?
A. Right, sir.
Q. But you went beyond that and projected a specific layout of that 11.02 acres, is that correct?
A. I used the one that was already projected.
Q. The one that Mr. Beeler provided to you, is that correct?
A. That's right."
In appealing the jury verdict of $49,500, the City contends that the trial court erred in (1) admitting Exhibits Nos. 6 and 8 into evidence, and (2) admitting the testimony of the Beelers' three expert witnesses due to their respective reliance upon a specific future use as evidenced by the plats and in their evaluation based upon a lot analysis. 1
It is well-settled in Indiana that when land which is taken by condemnation has a fair market value at the time of its appropriation, the measure of damages is the fair market value for which the land could be sold if the owner were willing to sell and a buyer willing to buy, neither under compulsion to do so. State v. Tibbles (1954) 234 Ind. 47, 123 N.E.2d 170. Furthermore, if the land has a higher market value by reason of use or uses to which it may be adapted, but to which it had not been put, the owner is entitled to the greater value. State v. City of Terre Haute (1968) 250 Ind....
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