Clearwater Corp. v. City of Lincoln

• Decision Date: 03 April 1979
• Docket Number: No. 41890,41890
• Citation: 202 Neb. 796,277 N.W.2d 236
• Parties: CLEARWATER CORPORATION, a Nebraska Corporation, et al., Appellees, v. CITY OF LINCOLN, Nebraska, a Municipal Corporation of the State of Nebraska, Appellant.
• Court: Nebraska Supreme Court

Page 236

277 N.W.2d 236

202 Neb. 796

CLEARWATER CORPORATION, a Nebraska Corporation, et al., Appellees, v. CITY OF LINCOLN, Nebraska, a Municipal Corporation of the State of Nebraska, Appellant.

No. 41890.

Supreme Court of Nebraska.

April 3, 1979.

Syllabus by the Court

1. Generally, in an eminent domain proceeding, evidence as to the sale of the identical property is admissible as evidence of market value, provided there is adequate foundation to show the evidence is material and relevant.

2. The foundation evidence should show the time of the sale, the similarity or dissimilarity of market conditions, the circumstances surrounding the sale, and other relevant factors affecting the market conditions at the time.

3. The trial court has a wide discretion as to whether evidence as to particular sale is admissible.

4. The plaintiff's burden to prove the nature and amount of its damages can not be sustained by evidence which is speculative and conjectural.

5. An expert witness testifying from observation or personal knowledge may be required to disclose and testify to the facts on which his opinion is based.

6. The opinion of an expert witness lacks probative value if assumptions for it are shown not to be true.

7. The value of the opinion of an expert witness is dependent on, and is no stronger than, the facts on which it is predicated. An opinion has no probative force if the assumptions upon which it is based are shown not to be true.

8. Expert testimony should not be received, or if received should be stricken, if it appears the witness is not in possession of such facts as will enable him to express a reasonably accurate conclusion as distinguished from a mere guess or conjecture.

9. Where the opinion testimony of an expert witness does not have a sound and reasonable basis it should be stricken.

Dixon G. Adams, Papillion, for appellant.

Thomas F. Dowd, P. C., Omaha, for appellees.

Heard before KRIVOSHA, C. J., BOSLAUGH, CLINTON and WHITE, JJ., and KNAPP, District Judge.

PER CURIAM.

This is an appeal in a proceeding in eminent domain. The defendant, City of Lincoln, Nebraska, condemned a 122.037-acre tract of land in Sarpy County, Nebraska, owned by the plaintiff, Clearwater Corporation, for use as a water well field. The petition for the appointment of appraisers was filed in the county court on December 8, 1976.

The land condemned was part of a 180-acre tract owned by the plaintiff. It is situated along the east bank of the Platte River south of U.S. Highway No. 6 and north of Interstate Highway No. 80. The land was zoned for agricultural use. Approximately 65 to 80 acres of the land was tillable. There is a 20-acre lake on the property not taken which was formed when gravel was pumped at the time the interstate highway was being constructed. There are three cabins located on the property not taken.

The appraisers appointed by the county judge fixed the damages at $395,235.50. The defendant appealed to the District Court where the jury returned a verdict for $522,700. The defendant has appealed.

The assignments of error relate to evidentiary matters. The defendants contend the trial court erred in refusing to permit the defendant to show the amount which the plaintiff paid for the property, and in permitting the jury to consider the testimony of plaintiff's two expert witnesses.

As a part of its case the defendant called as a witness Joe Koziol, the president of the plaintiff. Koziol testified that the plaintiff purchased the 180 acres on April 20, 1971, from a Mrs. Short. He further testified that the physical condition of the property now was approximately the same as in 1971 except some additional land had been cleared for farming. The access road to the property had been improved, some additional roads had been built on the property, and electric power lines had been installed around the property. Koziol estimated that land values had appreciated approximately 140 percent since 1971 but that economic conditions generally were about the same. When the defendant inquired as to the price paid for the property, an objection on the basis of foundation was sustained. The defendant made no offer of proof but a motion in limine filed by the plaintiff indicated the purchase price was $90,000. The motion further alleged that the seller had no immediate family and the property had not been placed on the market, but the seller had offered the property to Koziol whom the seller had known since he was a child.

Generally, evidence as to the sale of the identical property is admissible as evidence of market value, provided there is adequate foundation to show the evidence is material and relevant. The foundation evidence should show the time of the sale, the similarity or dissimilarity of market conditions the circumstances surrounding the sale, and other relevant factors affecting the market conditions at the time. Roush v. Nebraska P. P. Dist., 189 Neb. 785, 205 N.W.2d 519.

Here the evidence did not show the circumstances surrounding the sale. A contention had been made that the sale was not an arm's length transaction and there was no evidence to show what the circumstances were surrounding the sale. The sale had occurred more than 5 years previously, there had been some improvement made to the property, and there had been a substantial rise in property values.

The trial court has a wide discretion as to whether evidence as to particular sale is admissible. Morehead v. State, 195 Neb. 31, 236 N.W.2d 623. The defendant's experts testified that the value of the entire tract was $252,000 and $292,050 respectively. Under these circumstances, evidence that the property had sold for $90,000 5 years earlier would have been of little probative value.

The objection as to foundation was meritorious and the ruling was clearly within the discretion of the trial court.

The plaintiff's first expert witness was Joseph Gerald Strawn, a licensed real estate appraiser. Strawn testified over objection that the land taken had a value of $3,650 per acre or $445,435 and that the damages to the remainder amounted to $95,638, the total damages being $542,000.

Strawn testified that the highest and best use of the property was for gravel mining followed by development and use for recreational purposes. Over objection he was permitted to testify that he considered that 13,974,693 cubic yards of gravel could be removed from the land over a 40-year period at a royalty of 11 cents per cubic yard. In making this calculation the witness assumed there was 70 feet of gravel available in the 122.037 acres. This would be a production of approximately 350,000 cubic yards per year for 40 years. The witness was not qualified as a geologist and based his estimate of the gravel supply upon test wells that had been drilled upon adjacent property and his knowledge of the lake on the property, which had been dredged to a depth of 55 to 60 feet.

Strawn also testified that he considered sales of lots in developed recreational areas in reaching his opinion as to the value of the plaintiff's land.

Strawn further testified that he considered five sales of property in the area which he considered to be comparable sales. Of these he admitted that four were not arms length transactions involving a willing buyer.

The first sale was a 150-acre tract approximately 10 miles east of the plaintiff's land. This property had been used for gravel mining and the lake was in existence at the time of the sale in 1973 or 1974. This property had sold for $2,083 per acre.

The second sale was a tract purchased by the city of Papillion as a well field. Upon objection by the defendant the witness was not allowed to testify further in regard to this transaction.

The third sale was an 83-acre tract near Yutan, Nebraska, in eastern Saunders County, that had been purchased by Metropolitan Utilities District for well field purposes.

The fourth sale was a 25-acre tract located near the property involved in the first sale which had been purchased by the city of Papillion.

The fifth sale was a 150-acre tract located 3 miles northeast of Yutan, Nebraska, to Metropolitan Utilities District. This was rough land suitable for pasturage but containing a large deposit of gravel.

On cross-examination the witness testified there had been no gravel mining on the property since 1965 and the only gravel mining in the immediate area was by the operator of a ready-mix business in Gretna, Nebraska. The cost of hauling gravel amounted to 6 to 10 cents per ton mile.

The defendant produced evidence that the entire production of gravel in Sarpy County for 1973 and 1974 was less than the 700,000 yards that the witness had assumed could be produced in a 2-year period from the plaintiff's land.

The plaintiff's second expert witness was James W. Warren, also a licensed real estate appraiser. Warren testified over objection that it was his opinion that the land taken...