City of St. Louis Park v. Almor Co.

• Decision Date: 09 March 1982
• Docket Number: No. 51793.,51793.
• Citation: 313 NW 2d 606
• Parties: CITY OF ST. LOUIS PARK, petitioner, Respondent, v. The ALMOR COMPANY, et al., Appellants.
• Court: Minnesota Supreme Court

313 N.W.2d 606 (1981)

CITY OF ST. LOUIS PARK, petitioner, Respondent, v. The ALMOR COMPANY, et al., Appellants.

No. 51793.

Supreme Court of Minnesota.

December 17, 1981.

Rehearing Denied March 9, 1982.

Fredrikson, Byron, Colborn, Bisbee & Hansen, Terence M. Fruth and Thomas S. Fraser, Minneapolis, for appellants.

Popham, Haik, Schnobrich, Kaufman & Doty, Wayne G. Popham and Catherine A. Polasky, Minneapolis, for respondent.

Considered and decided by the court en banc.

YETKA, Justice.

This is an appeal from the judgment entered June 20, 1980, on a Hennepin County District Court jury's condemnation award. The former owner and the former lessee of the property taken, appellants here, initially appealed from the award given in an October 20, 1977 report of a district-court-appointed three-person condemnation commission. The jury verdict from the district court was returned March 27, 1980, and appellants' motion for a new trial was denied May 27, 1980. We reverse in part, affirm in part, and remand for a new jury trial.

The issues on appeal are:

1. Whether the district court abused its discretion in receiving evidence of the possibility that in the future the condemnor City would provide alternative access to the otherwise landlocked property.

2. Whether condemnation damages are measured as of the time of the commission award or as of the time of appeal to the district court.

This condemnation action, initiated by the City of St. Louis Park (City) in September 1976, resulted from the City's plans to upgrade and widen "Louisiana Avenue." Louisiana Avenue runs north and south and lies to the west of property owned and occupied by the appellants. The City took a strip of land on the western border of the subject property by eminent domain, thus permanently removing all access to and from the property via Louisiana Avenue. This left appellants formally landlocked: the property to the south and north is owned by a private company and the property to the east, by the City.

Appellant, Cardinal Insulated Glass Company (Cardinal), has occupied the subject property as a leaseholder since 1962, there manufacturing "sealed insulated glass." The property is zoned for industrial use and is occupied by a factory building which contains offices and loading docks for use by "semi" trucks. Appellant, The Almor Company, owns the property in fee. The two companies requested below that their claims be treated as one award, and hereinafter are referred to in this opinion by the singular "Cardinal."

Cardinal first learned of the Louisiana Avenue project in the early 1970's and of the project's final design in 1975. Cardinal and City officials met numerous times throughout the mid-1970's to discuss possibilities for "alternative access" to the Cardinal facility. The parties to this appeal have variously characterized the efforts made by Cardinal and the City to reach an agreement on access. It is clear, however, that, prior to the time of the commission award, there was little possibility of securing access over the privately-held property to the south, mainly because of cost; that Cardinal and the City proceeded in their negotiations on the assumption that the City would ultimately provide access and would secure necessary railroad line easements over the pertinent City land; and that the access provided would be permanent access.

What makes this case unique is that, even as of the time of the later district court award, there was no formal agreement between the parties regarding access. Prior to the commission hearing and again prior to trial, the City passed City Council resolutions directing that free access be provided Cardinal. No agreement was reached, however, mainly because the railroad easement documents included a provision allowing the railroad to terminate any easement over its tracks upon 30 days' notice. This provision was not "dropped" until, at most, 3 days prior to trial.

Thus, at the time of the commission award, there was no agreement on access. On October 20, 1977, the commissioners awarded Cardinal $186,621.75 and added to this award "in kind" damages of access to be provided free by the City. The City had represented that such access would be made available. This award, challenged by appellants as improper because it included more than just money damages, was made moot by the de novo review later afforded in the district court. Minn.Stat. § 117.175, subd. 1 (1980). The date of the commission award remains crucial to this case, however, because it constitutes the date on which damages for the taking are assessed.

At trial in the district court, Cardinal argued for damages representing a total taking of access. Testimony evidence of the commission's findings was given by one of the commissioners. The appraiser for appellants testified that the subject property was worth $525,000 prior to the taking and $130,000 after the taking. At appellants' direction, this appraiser also testified that he arrived at the $130,000 figure by assessing, inter alia, the "cost-to-cure" factor that appellants argue should have been suppressed from the evidence at trial. This appraiser valued the "cost-to-cure" (the cost necessary to make the property as serviceable as it was prior to the taking — relocating machinery, parking, loading dock facilities, etc.) at $229,500. Cardinal asked for damages in excess of $400,000. From such an award, appellants expected to have to pay for their access from the City. The court denied appellants' motion that its appraiser be allowed to testify as to March 1, 1980 figures: i.e., damages for total taking-$490,000; "cost-to-cure" given access-$331,000. This denial was consistent with the court's decision, reiterated throughout trial, that all damages would be assessed as of the date of the commission award (October 20, 1977).

At trial, the City argued that a reasonable buyer of appellants' property would take into account the lack of access, yet would also assess the possibility of obtaining access from the City. Testimony evidence was elicited demonstrating that a reasonable buyer would call City officials and the pertinent railroads in an effort to assess the possibility of later purchasing access. The buyer would note that it would not be in the City's or railroads' interests to keep Cardinal landlocked because the City would lose an industrial tax base and the railroads a potential customer. Respondent's real estate appraiser was read a hypothetical set of facts, which included a conveyance of access at fair market value (i.e., the cost not affected due to the City being the only source), and testified that the damage to Cardinal would be $90,000.

The district court instructed the jury that its determination was "to be made in the light of all facts affecting value as shown by the evidence." After 3 hours of deliberation, the jury returned a verdict for appellants of $256,000.

1. With regard to the admission at trial of "access" evidence, respondent City argues on general principles that it is within the trial court's discretion to admit mitigation of damages evidence. See, e.g., Metropolitan Sewer Board v. Moore, 303 Minn. 110, 113, 226 N.W.2d 314, 315 (1975); Pautz v. American Ins. Co., 268 Minn. 241, 248, 128 N.W.2d 731, 736 (1964); State v. Casey, 263 Minn. 47, 54-55, 115 N.W.2d 749, 755 (1962). Further, the City argues that such evidence is admissible if it "legitimately bears on the market value of the taken property," State v. Gannons, Inc., 275 Minn. 14, 18, 145 N.W.2d 321, 326 (1966). Respondent argues that the reasonable potential buyer would assess potential access in arriving at a purchase offer, just as he or she would assess other valuation factors.

General principles more soundly support appellants' theory that "access" evidence should not have been admitted.

Whatever rights are sought to be appropriated in eminent domain must be taken absolutely and unconditionally. *** Thus, it is agreed that an unaccepted promise, promissory statement, or stipulation, or declaration of future intentions by a condemnor as to what will be done or not done with respect to the property condemned, or to that left untaken and to the landowner in relation thereto, cannot affect either the character or extent of the condemnor\'s rights acquired or the amount of damages it must pay as just compensation.

26 Am.Jur.2d Eminent Domain § 154 (1966). Beyond general principles, the parties cite and distinguish various cases bearing on the admission of evidence of potentially "speculative" cures. These...