City of Winner v. Bechtold Investments, Inc.

• Decision Date: 20 April 1992
• Docket Number: No. 17624,17624
• Citation: 488 N.W.2d 416
• Parties: CITY OF WINNER, South Dakota, a Municipal Corporation, Plaintiff and Appellee, v. BECHTOLD INVESTMENTS, INC., a South Dakota Corporation, Defendant and Appellant. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 416

488 N.W.2d 416

CITY OF WINNER, South Dakota, a Municipal Corporation Plaintiff and Appellee, v. BECHTOLD INVESTMENTS, INC., a South Dakota Corporation Defendant and Appellant.

No. 17624.

Supreme Court of South Dakota.

Considered on Briefs April 20, 1992.

Decided July 1, 1992.

Stanley E. Whiting of Whiting Law Office, Winner, for plaintiff and appellee.

Rick Johnson of Johnson, Eklund & Abourezk, Gregory, for defendant and appellant.

AMUNDSON, Justice.

Bechtold Investments (Bechtold) appeals from trial court's judgment that the City of Winner (City), South Dakota, could proceed with its condemnation for the construction of a drainage ditch on property owned by Bechtold, and the amount of just compensation awarded by trial court. We affirm in part, reverse and remand in part.

FACTS

In January, 1991, the city council of Winner passed a resolution of necessity indicating it was necessary to install a canal to carry run-off waters in order to complete City's drainage program. One piece of property over which the drainage channel was to pass was owned by Bechtold. This property was also subject to a temporary construction easement during construction of the ditch, which would terminate upon completion of the drainage channel. Accordingly, City served on Bechtold a summons and petition for condemnation with a plat of the drainage easement.

Bechtold answered the petition in February, 1991, and in March, moved for judgment on the pleadings based on City's incorrect use of SDCL ch. 46-16 as the chapter by which City had the power of eminent domain. City moved to amend the pleadings to correctly plead its right of eminent domain as arising under SDCL 9-27-1, which motion was granted by the trial court.

City hired Clarence Mortenson (Mortenson) to appraise Bechtold's property. Mortenson completed his appraisal in March, 1991, and determined just compensation for the taking, including the temporary construction easement, was $1,274.00. City then offered Bechtold $1,300.00 for the taking, which was refused by Bechtold.

At a hearing on the motion to amend and judgment on the pleadings on April 5, 1991, trial court ruled it was not mandatory that City should state in the resolution of necessity and the pleadings themselves, which statute authorized the proceeding and, therefore, the erroneous cite in the petition was not fatal to jurisdiction in this condemnation action. On April 9, 1991, trial court held a separate hearing at Bechtold's request on City's right to take Bechtold's property. Trial court heard testimony from City's engineer, a city councilman, and the landowner, and sustained the resolution of necessity, finding no fraud or bad faith in City council's action.

The condemnation trial to the court, sitting without a jury, was held on May 14, 1991. Trial court heard testimony from Mortenson who, because of an error in his previous calculation, raised his opinion as to just compensation to $1,643.00. Bechtold also presented testimony through its expert Tom Felker (Felker), a real estate appraiser, who testified to just compensation in the amount of approximately $10,000.00. After hearing all the testimony, and accounting for an additional parcel of affected land (Lot J), which was not a part of the original action, trial court found Bechtold was entitled to just compensation of $4,500.00 for the drainage easement and $500.00 for the temporary construction easement, for a total award of $5,000.00. Bechtold appeals this decision. Further facts will be discussed below where relevant to the issues on appeal.

ISSUES

1. Whether trial court erred when it allowed City to amend its petition and City council's resolution of necessity to correct the statute under which the condemnation was being pursued?

2. Whether trial court erred in its damage calculation based on its determination that City had provided Bechtold with sufficient information on the extent of the taking and had sufficiently specified future maintenance requirements on the drainage channel?

3. Whether trial court abused its discretion in setting Bechtold's damages at $5,000.00?

4. Whether trial court abused its discretion in denying Bechtold's attorney fees?

STANDARD OF REVIEW

It is well settled in this jurisdiction that a trial court's findings of fact and decision are presumed correct and we will not seek reasons to reverse. Insurance Agents, Inc. v. Zimmerman, 381 N.W.2d 218 (S.D.1986); Northern Hills Sanitation v. Board of Com'rs, 272 N.W.2d 835 (S.D.1978). In action tried to court without jury, this court will not disturb findings unless evidence clearly preponderates against them. Gross v. Conn. Mut. Life Ins. Co., 361 N.W.2d 259 (S.D.1985) (citing Young v. Huffman, 77 S.D. 254, 90 N.W.2d 401 (1958)); see also City of Huron v. Jelgerhuis, 77 S.D. 600, 97 N.W.2d 314 (1959), which applied this standard in a condemnation case. With these considerations in mind, we address the merits of Bechtold's appeal.

1. Amendment of Pleadings

The applicable statute which gives the power of eminent domain to a city is SDCL 9-27-1, which provides in pertinent part as follows:

[W]henever the governing body of any municipality shall deem it necessary to appropriate or damage any private property ... it shall, by a resolution passed by a two-thirds majority of all the members elected thereto, declare such appropriation necessary, stating the purpose and extent of such appropriation.

City's attorney, through admitted carelessness, pleaded the right of eminent domain in the resolution of necessity and its petition for condemnation, as arising under SDCL ch. 46-16, the chapter on water user districts. ¹

The required contents of a petition for compensation when property has been condemned under the power of eminent domain are set out in SDCL 21-35-2 as follows:

A petition filed pursuant to Sec. 21-35-1 [Petition for ascertainment of compensation] shall name the person, group, or corporation desiring to take or damage private property as plaintiff, and all persons having interest in or liens upon the property affected by the proceeding as defendants, so far as they shall be known at the time of filing the same. It shall contain a description of the property to be taken or damaged. The purpose for which the property is to be taken or damaged shall be clearly set forth in the petition. It shall not be necessary to specify the interests or claims of the several defendants in the land or property affected by the proceeding.

Trial court found it was not mandatory under either SDCL 9-27-1 or SDCL 21-35-2, to state the precise statute under which City was proceeding and, therefore, allowed City to amend the resolution of necessity and its petition for condemnation. Bechtold argues trial court erred in this decision because eminent domain statutes are to be strictly construed in order to preserve due process guarantees.

Bechtold cites us to Ehlers v. Jones, 81 S.D. 351, 135 N.W.2d 22 (1965), for the proposition that condemnation statutes must be strictly construed. The precise language in Ehlers is as follows:

Proceedings to take private property by condemnation are special in character and must be conducted in strict accordance with governing statutes. Consequently, condemnation proceedings in which statutes have been ignored or with which there have been no substantial compliance are void. Town of Wayne v. Caldwell, 1 S.D. 483, 47 N.W. 547 [1891].

81 S.D. at 353, 135 N.W.2d at 23 (emphasis added).

Neither SDCL 9-27-1 nor SDCL 21-35-2 mandate specifically pleading the source of statutory authority for the condemnation in the resolution of necessity or the petition for condemnation. Bechtold has not set forth any facts or evidence that show noncompliance or total ignorance of the statutes on condemnation proceedings. Further, there is no question whatsoever that City had the authority to condemn irregardless of the statute cited, and the petition filed in this matter contains all data required by the statute. Accordingly, trial court's decision to let City amend the resolution of necessity and petition for condemnation was not an abuse of discretion and is affirmed.

2. Future Maintenance Requirements and 3. Damages

We will address issues 2 and 3 together as they both concern the issue of just compensation for the taking of Bechtold's property. First, Bechtold argues trial court erred when it calculated its damage award because the evidence was unclear as to who would be responsible for maintenance on the ditch, and did not clearly establish what the estimated maintenance costs would be. As to Bechtold's assertion that it is unclear who will maintain the ditch, our review of the pleadings, trial transcript, and other evidence reveals City has accepted all maintenance responsibilities. Further, there is ample evidence that the drainage ditch was to be constructed in such a manner as to allow for relatively simple long-term maintenance, and City planned it that way since it intended to maintain the ditch. Thus, we find it clear City has assumed responsibility to maintain the ditch.

The second portion of Bechtold's argument is that it is difficult to ascertain any potential damage from a failure to maintain the ditch and trial court, therefore, could not have included such an amount in its damage calculations. When discussing the calculation of the potential damages, Bechtold's expert testified as follows:

Q: (by Mr. Johnson) What about the future maintenance plans on this channel?

A: (by Mr. Felker) There is no agreement of record that I am aware of as to that.

Q: Okay, and does this complicate the making of an appraisal of this property?

A: Yes, it does....

Q: What about the damage done to the remainder, what did you figure on that?

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