Department of Transp. v. McLaughlin

• Decision Date: 16 June 1982
• Docket Number: No. 63332,63332
• Citation: Department of Transp. v. McLaughlin, 292 S.E.2d 435, 163 Ga.App. 1 (Ga. App. 1982)
• Parties: DEPARTMENT OF TRANSPORTATION v. McLAUGHLIN, et al.
• Court: Georgia Court of Appeals

Page 435

292 S.E.2d 435

163 Ga.App. 1

DEPARTMENT OF TRANSPORTATION v. McLAUGHLIN, et al.

No. 63332.

Court of Appeals of Georgia.

June 16, 1982.

Conley Ingram, Charles S. Johnson, III, Atlanta, for appellant.

A. Guy Smith, Jr., Harry L. Cashin, Jr., George B. Haley, Jr., Atlanta, for appellees.

QUILLIAN, Chief Judge.

The Department of Transportation (DOT) brings this appeal from verdict and judgment for Nell Adams McLaughlin, Spartan Investment Corporation and Adams-Cates Company. On December 4, 1979 DOT filed this condemnation action against a parcel of property owned by McLaughlin, leased through her broker Adams-Cates to Spartan as lessee. The taking was for the purpose of widening the existing right-of-way of Interstate 75-85 in downtown Atlanta. This was a "total take" and the condemnees lost the land, a building thereon, and a fast-food restaurant business which was one of a chain known as Hardee's. The lease did not expire for another 14 years.

DOT determined the total value to be $204,800 and deposited that sum in the registry of the court. The court permitted the fund to be dispersed by authorizing McLaughlin to withdraw $141,700, Spartan $57,800, and Adams-Cates received $5,300. All condemnees appealed for a jury trial but Spartan subsequently dismissed and accepted $57,800. The remaining condemnees appeal was tried before a jury which awarded McLaughlin $247,000 and Adams-Cates the sum of $3,500. DOT brings this appeal. Held :

1. It is alleged the trial court erred in directing the jury to return a verdict setting out separate sums to be awarded to the condemnees McLaughlin and Adams-Cates. It was DOT's contention that "the sole issue to be determined by the jury was the total amount of just and adequate compensation for the entire property taken."

DOT's petition was a proceeding in rem against the entire parcel--and McLaughlin, Spartan and Adams-Cates as "owners." A "lessee" is an owner of a property interest in a condemned parcel. 10 EGL 286, Eminent Domain § 71. Just prior to trial DOT filed a Motion in Limine "for an order that the sole issue to be determined by the jury in this case shall be as to the amount of just and adequate compensation for the total property." It was argued that "[a]fter this verdict is returned, it will then be up to the judge to mold the verdict in such a way as to do complete justice and to avoid confusion of interests." DOT's counsel asserts that "the property taken in this case represents all of the interests in this lot ... so we argue that there is one interest that is to be evaluated." It was DOT's position at trial that "[c]ompeting claims between claimants ... are to be determined by agreement or by the judge after a proper hearing or jury trial ... the jury is going to be asked to determine the value of this parcel of property and it will be up to you, Your Honor, after a verdict has come in to determine how that is to be proportioned." The trial court ruled that it would "let the jury determine how much Ms. McLaughlin is entitled to and how much Adams-Cates is entitled to and there will be a place for the jury to determine each figure ..."

The procedure which DOT articulates has been titled the "undivided fee rule" by Nichols. 4 Nichols on Eminent Domain 789-792, § 12.42(2). It is not without its critics. 4 Nichols on Eminent Domain 820, § 12.42(3). Procedural issues on how to arrive at just and adequate compensation for separate interests of condemned property has been the subject of much controversy. See generally 4 Nichols on Eminent Domain 764-820. Absent statutory guidance, different states have adopted differing methodology. The United States Supreme Court, when confronted with this issue held: "But the Constitution does not require a disregard of the mode of ownership--of the state of the title. It does not require a parcel of land to be valued as an unencumbered whole when it is not held as an unencumbered whole. It merely requires that an owner of property should be paid for what is taken from him. And the question is what has the owner lost, not what has the taker gained. We regard it as entirely plain that the petitioners were not entitled as a matter of law to have the damages estimated as if the land was the sole property of one owner ..." Boston Chamber of Commerce v. City of Boston, 217 U.S. 189, 195, 30 S.Ct. 459, 54 L.Ed. 725). The key phrase--what has the owner lost, provides the solution. We are not primarily concerned with what a taker has gained. The taker has gained the whole parcel. The law is concerned principally with what each owner has lost and that each be justly and adequately compensated for the taking of his partial interest. Thus, although there is no Georgia statute prescribing the procedure to be followed in arriving at a jury verdict to compensate partial interests in the whole, our Supreme Court has held that the condemnor is entitled to bring only one action against all claimants. Department of Transportation v. Olshan, 237 Ga. 213, 216, 227 S.E.2d 349. "Code Ann. § 95A-610 provides that the owner, owners, 'or any person having a claim against or interest in said property' shall have a right to file with the court a notice of appeal. Code Ann. § 95A-6123 provides that any person claiming an interest or any rights in the property being acquired may intervene in the condemnation action at any time before a verdict." Id. Accordingly, decisional and statutory guides provide for all claimants to one piece of condemned property to be joined in one action for resolution of all issues by the trial. Further, it is for the jury to determine what is the amount of just and adequate compemsation due to all condemnees. DeKalb County v. Trustees, Decatur etc., Elks, 242 Ga. 707, 251 S.E.2d 243.

The general rule followed by most jurisdictions is to require only one condemnation action, join all parties whose presence is necessary to condemn all interests, and to instruct the jury first to determine the value of the whole, and then secondarily determine the amounts to be awarded to the separate interests. See Annot. 94 A.L.R.3d 696, 698-700, §§ 2(a), 3; 27 Am.Jur.2d 16, Eminent Domain § 247; Polasky, The Condemation of Leasehold Interests, 48 Va. LR 477.

Our Supreme Court has authorized such a procedure. In Olshan, supra, the court held: "It is the responsibility of all such claimants in their own self interest, to cooperate together in seeing that just and adequate compensation for the entire tract is properly determined and deposited into the registry of the court. After that has been accomplished, their competing claims between and among themselves to the total funds deposited must be determined either by agreement, or by the trial judge after a proper hearing, or by a jury if the trial judge allows a jury trial of the issues raised by competing claimants." 237 Ga. at 217, 227 S.E.2d 349. (Emphasis supplied). Here, we had competing claims and testimony of different experts and a non-expert as to the value of each interest. Those opinions did not agree with each other. Determination of value and just and adequate compensation for each claimant was for the jury--not the judge. DeKalb County v. Trustees, Decatur &c. Elks, 242 Ga. 707, 251 S.E.2d 243, supra. There is no constitutional, statutory, or decisional authority for the procedure urged upon the trial court by DOT. The trial judge properly authorized the jury to decide the issues of compensation. Department of Transportation v. Olshan, 237 Ga. 213, 227 S.E.2d 349, supra.

2. In its second enumeration of error DOT argues that the trial court erred in directing the jury to return a verdict awarding a separate sum to each of the two claimants rather than directing the jury "to return a single verdict for the total value...