Cnty. of Hennepin v. Laechelt, A19-0473

Decision Date30 September 2020
Docket NumberA19-0473
Citation949 N.W.2d 288
Parties COUNTY OF HENNEPIN, Appellant, v. Tamara J. LAECHELT, Respondent.
CourtMinnesota Supreme Court

Michael O. Freeman, Hennepin County Attorney, Rick J. Sheridan, Assistant County Attorney, Minneapolis, Minnesota, for appellant.

Jon W. Morphew, Morphew Law Office, P.L.L.C., Minneapolis, Minnesota, for respondent.

Keith Ellison, Attorney General, Mathew Ferche, Assistant Attorney General, Saint Paul, Minnesota, for amicus curiae State of Minnesota, Commissioner of Transportation.

Joseph E. Trojack, Assistant Dakota County Attorney, Hastings, Minnesota, for amicus curiae Minnesota County Attorneys Association.

Stuart Alger, Bradley J. Gunn, Malkerson Gunn Martin, LLP, Minneapolis, Minnesota; Gary A. Van Cleve, Rob A. Stefonowicz, Bryan Huntington, Larkin, Hoffman, Daly & Lindrgren, Ltd., Minneapolis, Minnesota; Jason A. Lien, Evan Nelson, Maslon LLP, Minneapolis, Minnesota; and Leland J. Frankman, Frankman Law Offices, Minneapolis, Minnesota, for amicus curiae Minnesota Eminent Domain Institute.

OPINION

ANDERSON, Justice.

Through eminent domain, appellant Hennepin County acquired temporary and permanent easements from respondent Tamara J. Laechelt. A panel of commissioners was appointed to determine the amount of compensation Laechelt should be awarded for the partial taking of her property. Hennepin County appealed the award of the commissioners to the district court. Before trial, Hennepin County moved the court to exclude evidence of construction-related interference because the interference occurred after the date of the taking. The district court denied the motion. The jury awarded damages to Laechelt, and the court denied Hennepin County's motion for a new trial. The court of appeals affirmed.

In State by Humphrey v. Strom , we held that construction-related interference could be considered as a factor in determining the amount of damages resulting from a taking. 493 N.W.2d 554, 560–61 (Minn. 1992). Reaffirming Strom , we hold today that evidence of construction-related interference that arises after the date of taking is admissible to establish the value of the remainder property. Accordingly, the district court did not err by denying Hennepin County a new trial. We therefore affirm the court of appeals.

FACTS

Hennepin County commenced a quick-take eminent domain action pursuant to Minn. Stat. § 117.042 (2018) to acquire temporary and permanent easements from multiple landowners, including Laechelt. The district court granted Hennepin County's petition and ordered title and possession to transfer to Hennepin County on November 13, 2015. The district court appointed three commissioners who held a hearing and awarded Laechelt $35,700 in compensation for the taking. Hennepin County appealed the award to the district court for a trial de novo as provided by Minn. Stat. § 117.145 (2018). Hennepin County moved in limine to preclude any evidence regarding construction-related interference that occurred after November 13, 2015, the date of the taking. The district court denied the motion.

At trial, Laechelt introduced evidence, through her appraiser, of the value of her property that was taken, including the effect of construction-related interference that decreased the market value of the remainder property. The appraiser's testimony was based in part on observations of construction-related interference that had occurred after November 13, 2015. Laechelt also introduced photographs and testified to her experience of the construction-related interferences that had occurred on her property after November 13, 2015. By contrast, Hennepin County's appraiser did not find any diminution in market value due to construction activity.

The jury returned a special verdict awarding $27,915, which included $2,525 for the property actually taken, and $25,390 for severance damages to the remainder property. Hennepin County moved for a new trial, arguing that the construction-related interference evidence was improperly admitted. The district court denied the motion for a new trial, and the court of appeals affirmed the district court. Cnty. of Hennepin v. Laechelt , No. A19-0473, 2019 WL 6112445, at *3 (Minn. App. Nov. 18, 2019). We granted Hennepin County's petition for further review.

ANALYSIS

The issue presented to us is whether evidence of construction-related interferences that occur after the date of a taking but before an award of just compensation is admissible to determine the amount of compensation owed to a property owner, or whether this evidence is admissible only if available at the time of a taking.

We review a district court's new trial decision under an abuse of discretion standard. Moorhead Econ. Dev. Auth. v. Anda , 789 N.W.2d 860, 892 (Minn. 2010). "Under an abuse-of-discretion standard, we may overrule the district court when the court's ruling is based on an erroneous view of the law." City of N. Oaks v. Sarpal , 797 N.W.2d 18, 24 (Minn. 2011). Hennepin County argues that the admission of the posttaking interference evidence was contrary to our law regarding the admissibility of evidence used to determine just compensation.

Just compensation must be paid when private property is taken for public use. U.S. Const. amend. V ; Minn. Const. art. I, § 13. In partial taking cases, when only a portion of the property is acquired by the government, "just compensation includes (1) damages for the value of land actually taken, and (2) the severance damages to the remaining property resulting from the land actually taken." State by Comm'r of Transp. v. Elbert , 942 N.W.2d 182, 192 (Minn. 2020). Damages in partial taking cases are calculated using the "before and after" rule. Id. at 188. This rule measures "the difference between the market value of the entire tract immediately before the taking and the market value of what is left after the taking." State by Lord v. Pahl , 254 Minn. 349, 95 N.W.2d 85, 90 (1959). The date used to determine the before and after taking market values—i.e., the valuation date—is the date of the taking for both quick-take and nonquick-take cases. Anda , 789 N.W.2d at 873.

Evidence of any matter that would "influence a prospective purchaser and seller in fixing the price" may be included when assessing severance damages. City of St. Paul v. Rein Recreation, Inc. , 298 N.W.2d 46, 50 (Minn. 1980) (quoting 5 P. Nichols, The Law of Eminent Domain § 18.11 (3d ed. rev. 1979)). But damages "must arise from changes in the land actually taken, and not merely from the impact of the construction project as a whole." Cnty. of Anoka v. Blaine Bldg. Corp. , 566 N.W.2d 331, 334 (Minn. 1997). When determining the fair market value of property in a condemnation proceeding, we consider any competent evidence that legitimately bears on the market value. Strom , 493 N.W.2d at 559. Evidence must be competent, relevant, and material. Elbert , 942 N.W.2d at 192. We have said that "because a constitutional provision for just compensation was inserted for protection of the citizen, it ought to have a liberal interpretation, so as to effect its general purpose." Anda , 789 N.W.2d at 876 (quoting Adams v. Chicago, Burlington & N. R.R. , 39 Minn. 286, 39 N.W. 629, 631 (1888) ) (internal quotation marks omitted).

One factor that may be considered in applying the "before and after" rule is construction-related interference. Strom , 493 N.W.2d at 560. In Strom , we noted that our past precedent held that "damages sustained ‘by reason of inconvenience affecting the use and enjoyment of the remainder may be considered by the jury not as an independent item of loss but as an element which affects the market value of the remaining area.’ " Id. (quoting State by Lord v. Hayden Miller Co. , 263 Minn. 29, 116 N.W.2d 535, 538 (1962) ); see also Underwood v. Town Bd. of Empire , 217 Minn. 385, 14 N.W.2d 459, 462 (1944) ("It is well settled that, where part of the owner's land is taken, resulting inconvenience affecting the use and the enjoyment of the remainder is proper for consideration as affecting the market value of the land after the taking."); State by Youngquist v. Wheeler , 179 Minn. 557, 230 N.W. 91, 93 (1930) (stating that inconvenience from a taking "is a proper element of damages in arriving at the depreciation in the market value"). For example, we said that temporary construction-related interference such as "vibration, noise, and dust" is a factor that can be considered as affecting the market value of the property. Strom , 493 N.W.2d at 560.

Although the general rule is that a property owner "is not entitled to compensation for any element resulting subsequently to or because of the taking," that rule is not violated when the later-acquired evidence is used not to claim a new basis of compensation but to show the impact on the value of the remainder property at the time of the taking. Anda , 789 N.W.2d at 884 (quoting Minneapolis–St. Paul Sanitary Dist. v. Fitzpatrick , 201 Minn. 442, 277 N.W. 394, 399 (1937) ) (internal quotation marks omitted). This after-acquired evidence simply provides the benefit of hindsight. Thus, in Anda we distinguished between a condition on a property that is discovered after a taking and a change in condition that occurs after a taking. Id.

Hennepin County advances several arguments urging us to conclude that posttaking evidence is inadmissible. The core of its argument is that the "decisional law" was changed in Anda , moving the date of valuation for quick-take cases from the date of the commissioners’ award and thereby calling into question the reasoning of Strom . But we have never held, in either quick-take or traditional eminent domain proceedings, that the date of valuation is based on anything other than the date of the taking. As discussed in Anda , the compensation for partial taking claims is determined as of the time of the taking. Id. at 873. Anda thus corrected an erroneous court of appeals view of the law, namely, that the valuation...

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