Continental Corp. v. Department of Transp., 75368

• Decision Date: 26 January 1988
• Docket Number: No. 75368,75368
• Citation: 185 Ga.App. 792,366 S.E.2d 160
• Parties: CONTINENTAL CORPORATION v. DEPARTMENT OF TRANSPORTATION.
• Court: Georgia Court of Appeals

Page 160

366 S.E.2d 160

185 Ga.App. 792

CONTINENTAL CORPORATION v. DEPARTMENT OF TRANSPORTATION.

No. 75368.

Court of Appeals of Georgia.

Jan. 26, 1988.

Rehearing Denied Feb. 12, 1988.

Certiorari Denied March 10, 1988.

J. Corbett Peek, Jr., James G. Peek, Atlanta, for appellant.

Michael J. Bowers, Atty. Gen., E. Hearst Roane, Jr., Atlanta, for appellee.

BEASLEY, Judge.

This condemnation appeal is from the second trial, which was prompted by Continental Corp. v. Dept. of Transp., 172 Ga.App. 766, 324 S.E.2d 588 (1984), wherein the background facts are set out.

1. Enumerations 1, 2, and 4 deal with condemnee Continental's claims that the trial court erred in several respects relating to the issue of lost rentals.

The original declaration of taking was against both owner Continental and lessee American Dairy Queen Corporation. A fast food restaurant was operated on the property until 1979 when it was closed for reasons unrelated to the later condemnation. Dairy Queen continued to pay rent and property taxes until the condemnation taking in 1981.

During the first trial, Continental sought a determination by the court that the lease was not subject to termination based on the condemnation, thus preserving its right to rentals from Dairy Queen for the term of the lease. The lease allowed termination if the property or "any substantial part thereof" was taken or condemned. The trial court found "as a matter of fact that the taking described in this eminent domain proceeding constitutes a substantial part of the land and the improvements thereon ... and, ... under the language of Paragraph 20 ... American Dairy Queen had the right to exercise its option to terminate said Lease....[;] that the Department of Transportation through this action of eminent domain has taken a substantial part of the demised premises and as such American Dairy Queen Corporation had the right under said Lease to terminate the Lease as of the date the Department ... required possession of the condemned property ... [;] American Dairy Queen Corporation timely and properly exercised the option to terminate...."

In the first appeal, this Court was asked to address the issue of these findings being put before the jury. Id. at 768(3). The ruling that there had been a substantial taking which would permit Dairy Queen to terminate the lease was not appealed.

During the second trial, Continental moved for a directed verdict at the close of all evidence as to the issue of condemnor's liability for lost rents, on the ground that the court order in the first trial was the "law of the case." Its denial is enumerated as error, as are the trial court's failure to give a jury instruction on the court's findings, and its denial of the motions for new trial and judgment notwithstanding the verdict on this ground.

First of all, the requested jury instruction was given. Second, the "law of the case rule" has formally been abolished except as it applies to rulings by one of the appellate courts; they are binding in all subsequent proceedings, including a second trial. OCGA § 9-11-60(h); Westinghouse Elec. Corp. v. Rider, 168 Ga.App. 136, 138(2), 308 S.E.2d 378 (1983). Nevertheless, the earlier ruling by the trial court on whether the taking was substantial enough to allow the termination of the lease was not appealed and is not the question. What is at issue is whether that ruling gives condemnee the right as a matter of law to recover rents lost as a result of the termination. It does not, because the latter does not necessarily follow from the former. More must be established.

There are two elements of just and adequate compensation for a partial taking of property by condemnation: (1) the market value of the portion actually taken, and (2) the consequential damage, if any, to the remainder. Simon v. Dept. of Transp., 245 Ga. 478, 265 S.E.2d 777 (1980). The proper measure of consequential damages to the remainder is the diminution, if any, in the market value of the remainder in its circumstances just prior to the time of the taking compared with its market value in its new circumstance just after the time of taking. Wright v. MARTA, 248 Ga. 372, 376, 283 S.E.2d 466 (1981).

Condemnee relies for its position on Carasik Group v. City of Atlanta, 146 Ga.App. 211, 246 S.E.2d 124 (1978). KFC, the lessee and operator of a restaurant, contended in the condemnation proceeding that it was entitled to a termination of its lease due to the condemnation by the city of a portion of the premises, including five parking spaces. It was held that the trial court was authorized to determine the question of the contract rights between the two competing condemnees and that it correctly concluded that the lease was properly terminated as a result of the partial taking. Where it erred, however, was in concluding as a matter of law that lessor was not entitled to damages arising from the lease termination. This court ruled that, since there was a lease termination, "the lessor, as the fee simple owner, has been further damaged by the taking." Carasik, supra at 216, 246 S.E.2d 124. Carasik did not hold that the damages would necessarily be the lost rent. For one thing, mitigation would have to be considered, and that was not limited, as a matter of law or under the evidence in this case, to efforts to find a...