Defnet Land & Inv. Co. v. State ex rel. Herman

• Decision Date: 03 July 1968
• Docket Number: No. 8312,8312
• Citation: 103 Ariz. 388,442 P.2d 835
• Parties: DEFNET LAND & INVESTMENT CO., an Arizona corporation; Gordon McDowell, a/k/a Charles Gordon McDowell, and Juanita Fern McDowell, his wife; Al J. Defnet and Lena J. Defnet, his wife; Fortner D. Bell, as his sole and separate property; and Charles R. Lowell, a widower, Appellants, v. The STATE of Arizona ex rel. Justin HERMAN, Director, Arizona Highway Department, Appellee.
• Court: Arizona Supreme Court

Page 835

442 P.2d 835

103 Ariz. 388

DEFNET LAND & INVESTMENT CO., an Arizona corporation; Gordon McDowell, a/k/a Charles Gordon McDowell, and Juanita Fern McDowell, his wife; Al J. Defnet and Lena J. Defnet, his wife; Fortner D. Bell, as his sole and separate property; and Charles R. Lowell, a widower, Appellants, v. The STATE of Arizona ex rel. Justin HERMAN, Director, Arizona Highway Department, Appellee.

No. 8312.

Supreme Court of Arizona, In Banc.

July 3, 1968.

Hughes & Hughes, Phoenix, for appellants.

Gary K. Nelson, Atty. Gen., Darrell F. Smith, former Atty. Gen., H. K. Mangum, Special Asst. Atty. Gen., Flagstaff, for appellee.

STRUCKMEYER, Justice.

This appeal arises out of an action brought by the State of Arizona to acquire the necessary right-of-way for the controlled access highway Interstate 40. Judgment for defendants-condemnees was entered in the superior court pursuant to a jury's verdict and defendants, being dissatisfied with the amount that the jury fixed as the value of the land taken, appeal.

The condemnation grew out of the conversion of U.S. 66 to U.S. Interstate 40 between Williams and Flagstaff, Arizona. Defendants' property before the taking consisted of a single tract of 119.83 acres without improvements. Two thousand feet of the tract fronted on Highway 66. The State took 13.10 acres from the north end of the tract, severing one parcel of .86 acre from the remaining approximately 106 acres. The new highway, Interstate 40, is a controlled access highway. As a consequence, defendants lost all direct access to Highway 66 except from the .86-acre tract. About 200 feet to the west of the defendants' property an interchange was constructed. The south tract had access to Interstate 40 only by means of the interchange whereas, as stated, before it had direct access from 2,000 feet of frontage on Highway 66.

There was a wide divergence of opinion as to valuation. Defendants' expert witness testified that the value of the land taken was $53,690. The State's appraisers Ball and Saunders testified to a valuation of $9,825 and $10,330, respectively. Since the jury awarded damages in the amount of $10,000, and that amount is commensurate with the valuation fixed by the State's witnesses, it is evident that basically the jury accepted the State's evidence. Defendants' position is that the State's concept of the appropriate measure of damages for the taking was fundamentally erroneous resulting in inadequate damages and, therefore, the judgment of the court and the jury's verdict should be reversed.

Defendants first complain that the State's witnesses did not take into consideration the highest and best use to which the property was adapted. Both of the State's witnesses acknowledged that frontage along Highway 66 had commercial valuation, although they disagreed as to the extent. Both testified that the remainder, after the taking, had value only for homesites. In arriving at the appraised value, the State's experts considered defendants' parcel of land as a single unit and ascribed to it an average per acre value. The valuation was arrived at by comparison with other tracts of land as single parcels. For example, in the case of the witness Ball, the value before the taking was calculated as $90,563, an average value of $750.00 an acre. The value of the land taken was $9,825 and the remainder $80,738. Thus the 13.10 acres taken was arbitrarily also assigned the value of $750.00 an acre.

The rule in Arizona is that, in eminent domain, valuation is to be determined by the market value of the property--by what a willing buyer would pay and a willing seller would take. See, e.g., City of Phoenix v. Consolidated Water Co., 101 Ariz. 43, 415 P.2d 866. The equivalent in money which places the owner in as good a position financially as he would have been if his property had not been taken is 'just compensation' within the meaning of Arti cle II, § 17, Constitution of Arizona, A.R.S.

Palpably, the State's method of evaluation is not just compensation. We said in State ex rel. Morrison v. Jay Six Cattle Co., 88 Ariz. 97, 353 P.2d 185:

'It follows that prior sales made on an acreage basis which reflected the use of the property for cattle grazing purposes would not necessarily be determinative of the basis upon which the property, which fronted on a highway and had direct access thereto, would be valued for its best use as commercial and investment property.' 88 Ariz. 103, 353 P.2d 189.

Nichols puts it as:

'In assessing the value of the land taken as part of the entire tract it is not proper merely to compute the percentage value on the basis of an artificial average unit value for the entire tract unless the actualities of the case accord with such coverage value. It may be that the part taken is the most valuable part of the tract considered from a qualitative point of view. To attribute an average unit value thereto which is based in part on the lower value of the balance of the tract is inequitable to the owner in a double aspect of the situation. It attributes a value to the part taken which is lower than its actual value and it attributes a higher ultimate value to the remainder area then its actual value, thereby reducing his recovery as to both factors below his actual damages.' Nichols, Eminent Domain, 3rd Ed., Vol. 4, § 14.231, p. 545.

All witnesses acknowledged that the acreage fronting on Highway 66 had commercial valuation and that, by the construction of Interstate 40, the commercial frontage was taken for the highway. While ordinarily in a tract of this size the acreage to the rear would be promoted to frontage acreage and thus there would be no actual loss in commercial acres, the evidence indicates that, because Interstate 40 is a controlled access highway, the remaining acres of defendants' tract were suitable only for homesites.

In People v. Loop, 127 Cal.App.2d 786, 274 P.2d 885, the California court quoted with approval from Green v. Board of Commissioners, 163 La. 117, 111 So. 619, in part, as follows:

"* * * But in our opinion it is not a mere matter of arithmetic. It is quite true that the...