City of Mission Hills v. Sexton, 97,151.

CourtUnited States State Supreme Court of Kansas
Citation160 P.3d 812
Docket NumberNo. 97,151.,97,151.
PartiesThe CITY OF MISSION HILLS, Kansas, Appellee, v. Ronald E. SEXTON and Felicia Sexton, Appellants.
Decision Date22 June 2007

Frederick K. Starrett, of Lathrop & Gage L.C., of Overland Park, argued the cause and was on the briefs for appellants.

Neil R. Shortlidge, of Stinson Morrison Hecker LLP, of Overland Park, argued the cause and was on the brief for appellee.

The opinion of the court was delivered by LUCKERT, J.:

In this condemnation proceeding, the jury awarded landowners Ronald and Felicia Sexton $10,900 for the temporary partial taking of their property, via two easements, by the City of Mission Hills (City) for a sewer rehabilitation project. The Sextons contend that the trial court abused its discretion by denying their motion for a new trial. In raising this contention, they specifically argue that, in calculating the amount of compensation, the jury's verdict was contrary to the evidence presented at trial and contrary to Kansas condemnation law because it was based upon an expert opinion that used a flawed methodology not supported by Kansas law. The Sextons further assert that the trial court improperly admitted evidence regarding the City's actual use of the property easements and the limited scope of the taking. Finally, the Sextons contend they failed to receive a fair trial because the court erroneously admitted evidence and permitted arguments previously ruled inadmissible by the court in orders in limine.

We reject these contentions and affirm the jury verdict.

FACTS

The City began the rehabilitation of Mission Hills Sanitary Sewer District No. 1 to meet various state and Johnson County, Kansas, standards so that the system could ultimately be transferred to the Johnson County wastewater system. The project encompassed the rehabilitation of 11,558 feet of sewer pipe and the repair or replacement of 136 manholes. Six hundred platted lots and 548 residences were within the sewer district being rehabilitated.

As part of the sewer project, the City condemned two temporary easements on the Sextons' property, an estate lot covering approximately 2.29 acres in Mission Hills, Kansas, so that the existing pipe and an existing manhole could be replaced. One easement was an access easement, consisting of a temporary road that enabled the City to move its equipment to the construction area. The second easement was a construction easement utilized to put in a new manhole and to rehabilitate the sewer line itself. The two easements covered approximately 5,242 square feet of the Sextons' property, and the duration of both easements was 1 year, running from August 4, 2005, until August 4, 2006.

The City placed mulch over the access easement and installed, per the Sextons' request, construction fencing around both easements. The amended condemnation petition required the City to replace any landscaping within the easements. The City was also required to repair or replace any "hardscape" or improvements such as sidewalks, walls, fences, lighting systems, and sprinkler systems.

George Eib, a consulting arborist and consulting landscape architect for the City, was called by the Sextons to testify. Eib recommended that the City require the contractor to lay 6 inches of mulch over the access easement area to prevent the compacting of tree roots. He testified that, because of the construction, a 7-inch diameter linden tree would be lost, as would five honeysuckle bushes measuring about 8-feet tall. Eib indicated that all landscaping features within the easements were being replaced.

Expert Valuations

Two experts testified regarding the valuation of the Sextons' property.

Ken Wooten, a certified Kansas appraiser and president and owner of a real estate appraisal company in Prairie Village, Kansas, testified on behalf of the Sextons. Wooten did not perform an actual appraisal of the property, but he testified that the fair market value of the Sextons' property before the temporary takings was $3,954,900, and the estimated total damages after the taking were $480,000.

Wooten evaluated the effect of the City's easements on the remainder of the Sextons' property and opined that heavy construction equipment would cause damage to trees outside of the easement areas. He also testified that the property's view was diminished by the construction equipment, workmen, orange fencing, and mulch. According to Wooten, the City's project negatively affected access to the property outside the easements for lawn maintenance. On another note, Wooten observed that the City's construction easement was located only 30 yards from the Sextons' master bedroom. This led him to conclude that the Sextons would have to invest in additional security measures, such as increased outside lighting, digital cameras, protective fences, and 24-hour security personnel during the active construction periods. Wooten also considered noise and pollution factors in his estimation of damages.

As for loss in marketability, Wooten estimated that it was reasonable to expect a 10, 12, or 15 percent adjustment in the sales price of the Sextons' property for a willing buyer in the marketplace on August 5, 2005.

Bernie Shaner, a professional appraiser in Overland Park, Kansas, testified on behalf of the City. He testified that he performed a "limited scope" appraisal on the land because, in his opinion, the house and the Sextons' property outside of the easement area were not impacted by the taking. Also, the parties agreed that Shaner would not appraise the Sextons' home and, instead, would use the value from certain county tax records.

To calculate the value of the Sextons' property immediately before the taking, Shaner first estimated the value of the land separate from the improvements. To do so, he used a comparable sales approach and performed a "bare ground" appraisal of vacant lots in Mission Hills, using six properties that had been purchased for the purpose of tearing down existing improvements and constructing new improvements. Shaner explained that he selected six properties that were among the most comparable to the Sextons' property and were recent in time and fairly similar in location and size. Because the properties were not identical to the Sextons' property, he made adjustments to the sales prices for differences in location and size. With these adjusted sales, Shaner estimated that the land value of the Sextons' property as of the date of the taking was $22 per square foot or $2,195,500 for the lot. He then used the value of the Sextons' home from the county tax records, $1,759,430, and added that amount to his estimated land value. Shaner concluded that the total value of the Sextons' property immediately before the taking was rounded to $3,954,900.

On the question of the value of the property immediately after the taking, Shaner first assigned a fair rental value to the easements taken by the City. He estimated that each temporary easement was rented at a 10 percent annual rate of return, so $2.20 per foot was the fair rental value of the easements for 1 year. Then, Shaner multiplied the area of each temporary easement by $22 per square foot times an annual rate of return of 9.48 percent. (Shaner explained that 9.48 percent was the 10 percent rate based on one lump sum rental payment paid in advance.) Under this formula, the rental value of the access easement was $8,306, and the construction easement rental value was $2,625, with a rounded-down total equaling $10,900.

Shaner calculated the value of the Sextons' property immediately after the taking by subtracting the value of the land ($2,195,500) from the rental value of the temporary easements ($8,306 and $2,625) and then adding to that figure the value of the improvements ($1,759,430). This totaled $3,943,999, which Shaner rounded up to $3,944,000. In Shaner's opinion, the amount of just compensation for the takings was $10,900, which was the difference between his calculated value of the Sextons' property before and after the taking.

The jury ultimately returned a verdict of $10,900 as just compensation to the Sextons for the City's taking of the two easements on their property. The Sextons filed a motion for a new trial which was denied by the trial court.

ANALYSIS

The Sextons now make a timely appeal from the trial court's denial of their motion for a new trial. Specifically, they argue that their right to a fair trial was substantially affected because: (1) the jury's verdict was contrary to Kansas law and the evidence presented at trial; (2) the trial court admitted evidence showing that the two condemned easements were not used by the City for the entire 1-year term of the taking; and (3) the trial court admitted evidence and permitted arguments that violated the court's prior orders in limine and pretrial instructions to counsel. The Sextons raise several arguments relating to each issue.

Issue 1: Was the verdict contrary to Kansas law and the evidence?

The Sextons first contend that they are entitled to a new trial because the jury's verdict awarding them $10,900 as compensation for the City's taking of two temporary easements on their property was contrary to Kansas condemnation law and the evidence presented at trial. In presenting this argument they contend Shaner's opinion and, therefore, the jury verdict which relied upon the opinion were contrary to Kansas law because the opinion: (a) was based upon rental value methodology and failed to account for the factors included in K.S.A. 26-513(d); and (b) used comparable sales rather than comparable rentals as a basis for valuing the land even though the opinion was based upon rental value methodology.

Standard of Review

Granting a motion for a new trial filed pursuant to K.S.A. 60-259(a) is within the trial court's discretion and will not be disturbed on appeal unless there is a showing of abuse of that discretion. Dougan v. Rossville Drainage Dist., 270 Kan. 468,...

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