Department of Transp. v. Acree Oil Co.

• Decision Date: 19 February 1996
• Docket Number: No. S95G1042,S95G1042
• Parties: DEPARTMENT OF TRANSPORTATION v. ACREE OIL COMPANY.
• Court: Georgia Supreme Court

Page 319

467 S.E.2d 319

266 Ga. 336

DEPARTMENT OF TRANSPORTATION v. ACREE OIL COMPANY.

No. S95G1042.

Supreme Court of Georgia.

Feb. 19, 1996.

Reconsideration Denied March 11, 1996.

Appeal from Stephens County Superior Court; Robert B. Struble, Judge.

R. David Syfan, Thomas L. Fitzgerald, Hulsey, Oliver & Mahar, Gainesville, Michael J. Bowers, Atty. Gen., Department of Law, George P. Shingler, Deputy Atty. Gen., Atlanta, for Dept. of Transp.

Alton M. Adams, Adams, Clifton & Sanders, P.C., Toccoa, for Acree Oil Co.

Frank W. Armstrong, Stewart, Melvin & Frost, Gainesville.

HUNSTEIN, Justice.

A portion of Acree Oil Company's property was condemned by DOT for a highway intersection improvement project. Acree Oil appealed from the judgment on the jury's verdict to the Court of Appeals, which reversed in part. Acree Oil Company v. Dept. of Transp., 216 Ga.App. 586, 455 S.E.2d 590 (1994). We granted DOT's application for writ of certiorari to consider the Court of Appeals' rulings as to evidence involving business losses and construction delay.

1. Business losses occurring before the date of taking are not recoverable. Collins v. MARTA, 163 Ga.App. 168(6), 291 S.E.2d 742 (1982). Accord Josh Cabaret, Inc. v. Dept. of Transp., 256 Ga. 749, 353 S.E.2d 346 (1987). Post-taking business losses can be recovered as a separate element in instances when the business belongs to a separate lessee or when the business belongs to the landowner and there is a total taking of the business. In either event, business losses are recoverable as a separate item only if the property is "unique" and the loss is not remote or speculative. Dept. of Transp. v. Dixie Highway Bottle Shop, 245 Ga. 314, 315, 265 S.E.2d 10 (1980).

This condemnation did not involve the taking of any leasehold interest, so there was no lessee to recover business losses as a separate element of damages. Acree Oil, as the owner of property on which the business was not totally destroyed, could not recover any business losses as a separate element of damages. Dept. of Transp. v. Dixie Highway Bottle Shop, supra.

2. The Court of Appeals reversed the trial court's exclusion of business loss evidence on the basis that under our holding in Buck's Service Station v. Dept. of Transp., 259 Ga. 825, 826, 387 S.E.2d 877 (1990), " 'evidence of any business losses which result in a diminution of the value of condemnee's business is admissible.' " (Emphasis omitted.) Acree Oil Co., supra at 588, 455 S.E.2d 590. A review of the transcript establishes that condemnee proffered evidence of "business loss" in the standard, generic sense of that phrase, i.e., as an integral part of the financial history of the property, ¹ and we use that phrase in this division of the opinion solely in the sense of that evidence of the financial history of the property which a willing buyer would consider on the date of taking in arriving at the value of the property.

The admission of evidence of factors which may reasonably influence a prospective purchaser's decision is a matter within the discretion of the trial court. Macon-Bibb County Water, etc., Auth. v. Reynolds, 165 Ga.App. 348, 350-351, 299 S.E.2d 594 (1983). While we agree with the Court of Appeals that the absence of a business in operation on the property on the date of taking does not automatically end all inquiry into the relevancy of business loss evidence, it is clearly a weighty factor in determining whether such evidence is too speculative and conjectural to be admitted as a factor a willing buyer would consider. The evidence in this case established that Acree Oil's lessee departed the property in late 1989 and the property had been vacant for three years prior to the date of taking. Under these facts the trial court did not abuse its discretion by excluding Acree Oil's speculative evidence of its business losses. ² The Court of Appeals erred by reversing the trial court's ruling.

3. A jury is entitled to hear evidence that an ordinary buyer on the date of taking would consider, inter alia, the potential benefits of the condemnor's completed project and the effect of delay or uncertainty in the project's completion. ³ See Wright v. MARTA, 248 Ga. 372, 375-376, 283 S.E.2d 466 (1981) (four year delay until completion); Dept. of Transp. v. Sequoyah Land Investment Co., 169 Ga.App. 20(2), 311 S.E.2d 488 (1983) (37 month delay until completion). Acree Oil contends and the Court of Appeals found that the trial court abused its discretion by excluding relevant evidence of uncertainty and delay. Our review of the transcript reveals, however, in the rulings challenged by Acree Oil, the trial court properly required any testimony as to the speculative effect any future delays and uncertainties might have on the remainder to be tied to the date of taking, see, e.g., Dept. of Transp. v. Benton, 214 Ga.App. 221, 222, 447 S.E.2d 159 (1994), and allowed evidence meeting that criterion. While error was committed by the trial court in its refusal to admit testimony by a DOT official regarding the completion date of the project, that error was harmless given that the official was allowed to testify that the project was "on hold" as the result of a construction hazard created by contamination discovered on a parcel involved in the road project.

Unless a trial court has abused its discretion in excluding evidence relevant to factors considered by an ordinary buyer on the date of taking, its rulings thereon must be affirmed. See Dept. of Transp. v. Wright, 169 Ga.App. 332, 334, 312 S.E.2d 824 (1983). Because there was no manifest abuse of the trial court's discretion, the Court of Appeals erred by reversing the trial court's evidentiary rulings as to uncertainty and delay.

Judgment reversed.

All the Justices concur, except FLETCHER, P.J., and CARLEY and HINES, JJ., who concur specially.

CARLEY, Justice, concurring specially.

In January of 1993, the Department of Transportation condemned a part of a tract of land owned by Acree Oil Company (Condemnee). In January of 1994, the issue of just and adequate compensation was tried before a jury. Condemnee appealed from the judgment entered on the jury's verdict,

contending the trial court erred in refusing to admit evidence of post-taking matters to show business losses and evidence of consequential damages caused by the anticipated construction, and erred in excluding evidence of the length and uncertainty of construction and the fact that the project was put "on hold."

Acree Oil Co. v. Dept. of Transp., 216 Ga.App. 586, 587, 455 S.E.2d 590 (1994). The Court of Appeals found Condemnee's contentions to be meritorious and reversed. Certiorari was granted and this court now reverses the Court of Appeals. While I concur in that judgment of reversal, I do not concur in the majority's analysis for the following reasons:

1. Heretofore evidence of "business losses" has been held admissible in only two instances: where such evidence is relevant to the recovery of a separate element of just and adequate compensation or where such evidence is relevant to the value issue of the amount of consequential damages to a remainder. Buck's Service Station, Inc. v. DOT, 259 Ga. 825, 387 S.E.2d 877 (1990). It is undisputed that business losses as a separate element of just and adequate compensation in this case are not recoverable by Condemnee. Department of Transp. v. Dixie Hwy. Bottle Shop, Inc., 245 Ga. 314, 265 S.E.2d 10 (1980). Accordingly, I am not, as the majority erroneously suggests in fn. 1, using the phrase "evidence of 'business loss' " to mean evidence "to support a separate, compensable element of [just and adequate compensation]." To the contrary, I am employing that phrase as it presumably was utilized by the Court of Appeals. Relying upon Buck's Service Station, Inc. v. DOT, supra, the Court of Appeals held that it was error to exclude certain of Condemnee's "business losses" evidence, because that evidence was relevant to the value issue of consequential damages. In Buck's Service Station, Inc., supra at 827(2), 387 S.E.2d 877, this court held

that evidence of any business losses which result in a diminution of the value of a condemnee's business is admissible. However, evidence of temporary loss of business is admissible not for the purpose of recovering for the temporary loss of business but for the limited purpose of demonstrating fair market value of the land not taken immediately after the taking. We reach this conclusion because business property facing loss of business may suffer a diminution in fair market value. (Emphasis in original.)

Buck's Service Station, Inc. v. DOT, supra at 827(2), 387 S.E.2d 877. In Division 2 of its opinion, the majority accepts the premise of the Court of Appeals that Buck's Service Station, Inc. is the controlling authority, but nevertheless concludes that the trial court did not abuse its discretion in excluding Condemnee's "speculative evidence of its business losses." Contrary to the majority, I believe that the Court of Appeals erred in its conclusion that Buck's Service Station, Inc. is controlling in this case.

As Buck's Service Station, Inc. clearly holds, evidence of any "business losses" which result in a diminution in the value of the condemnee's business is admissible as relevant to the issue of consequential damages. Here, however, Condemnee had no business which could be diminished in value and, consequently, Condemnee could have suffered no "business losses." Condemnee merely owned property which it leased to others for the purpose of operating their business thereon. Compare Department of Transp. v. 2.734 Acres of Land, 168 Ga.App. 541, 543(2), 309 S.E.2d 816 (1983) (condemnee also owner of business); Glynn County v. Victor, 143 Ga.App. 198(2), 237 S.E.2d 701 (1977) (condemnee also owner of business). Thus, the only relevant inquiry here was the value of Condemnee's property for business rental purposes. State Hwy. Dept. v....