Department of Transp. v. Lewyn, s. 66690

• Decision Date: 15 September 1983
• Docket Number: 66691,Nos. 66690,s. 66690
• Citation: 308 S.E.2d 684,168 Ga.App. 283
• Parties: DEPARTMENT OF TRANSPORTATION v. LEWYN et al. CARPETS & INTERIORS BY BETTY, INC. v. DEPARTMENT OF TRANSPORTATION.
• Court: Georgia Court of Appeals

Page 684

308 S.E.2d 684

168 Ga.App. 283

DEPARTMENT OF TRANSPORTATION v. LEWYN et al.

CARPETS & INTERIORS BY BETTY, INC. v. DEPARTMENT OF TRANSPORTATION.

Nos. 66690, 66691.

Court of Appeals of Georgia.

Sept. 15, 1983.

Rehearing Denied Oct. 4, 1983.

Certiorari Denied Nov. 30, 1983.

Charles C. Pritchard, Abraham A. Sharony, Sp. Asst. Atty. Gen., for appellant in No. 66690, appellee in No. 66691.

Burt DeRieux, Atlanta, for appellee (case No. 66690).

E.T. Hendon, Jr., Decatur, for appellant (case No. 66691).

BIRDSONG, Judge.

Condemnation. Mrs. Esther Lewyn owned a small tract of land with a building thereon fronting on Chantilly Drive. The building was leased by Mrs. Lewyn to a Mrs. Betty Gano in the name and entity of Carpets & Interiors by Betty, Inc. for a ten-year term. Mrs. Lewyn had purchased the real estate for investment purposes and not for speculative real estate short term gain. After owning the property for several years (during which time she rented the property to a machine shop business) Mrs. Lewyn was offered a purchase price of $185,000 for the property. Because she was holding the property for long term investment, she declined the offer. At the expiration of the lease with the machine shop business, the building was no longer large enough for the machine shop, and the tenant vacated the premises. Mrs. Lewyn then leased the building to Mrs. Gano. In order to facilitate the building as a display location for a carpet and interior decorating business, Mrs. Gano expended considerable time and money cleaning, refurbishing and remodeling the building to provide both office-display and warehousing area for her carpet-decorating materials and supplies. Because of the time and money expended by Mrs. Gano, the landlady, Mrs. Lewyn, entered into a "sweetheart" lease with Mrs. Gano at a rate significantly below what could have been demanded in the open market. Considering the nature and volume of her business, the location required and furnished several (4) parking places in the front (off Chantilly Drive) and additional parking places in the rear of the building.

After Carpets & Interiors by Betty had been in the Chantilly Drive location for several years, the Department of Transportation (DOT) condemned a portion of the land fronting on Chantilly Drive. This was necessitated by the widening of I-85, which ran directly in front of Mrs. Lewyn's property parallel to Chantilly Drive. By widening I-85, Chantilly Drive had to be moved several feet to the east. By the taking in the front of the building, all but one of the four parking places were eliminated. I-85 was raised several feet above its pre-existing level and a protective barrier or wall was built on either side and in the middle of the expanded interstate highway. The result of this protective barrier was significantly to reduce or eliminate any visual exposure of the carpet-interior business to passing motorists, which prior to the widening of the interstate had been exposed to many thousands of motorists each day.

Following the loss of parking places and the greatly reduced exposure of the business to the public, Mrs. Gano experienced a substantial loss of business. Moreover, the loss of parking places caused the business premises to be non-conforming to county ordinances. Mrs. Gano thus was forced to move her location. After examining numerous locations along the I-85 corridor, she discovered a location a short distance further north and on the opposite side of I-85. In order to utilize the newly leased premises, Mrs. Gano was compelled substantially to modify the interior, incurring significant costs. She also had to buy and install a larger sign advertising her business because the business was located further from I-85 and the existing sign was not large enough. This move did not occur until almost a year after condemnation had occurred.

Mrs. Lewyn also experienced great difficulty in leasing the building after Mrs. Gano vacated because of the reduced exposure and loss of parking spaces. As a result, Mrs. Lewyn ultimately sold the property for $155,000, at what she contended was a price significantly less than what the property would have commanded prior to condemnation, i.e., $222,000.

After a four-day trial by jury, verdicts were returned in favor of Lewyn and Gano's business in amounts of $50,000 and $25,000 respectively. DOT filed the main appeal (Case No. 66690) enumerating twelve alleged errors. Mrs. Gano, as Carpets & Interiors by Betty, Inc., filed a cross appeal (Case No. 66691) asserting four alleged errors. Inasmuch as both cases arise out of the same transaction and are based upon the one record and transcript, we will consolidate the appeals and dispose of both in this one opinion. Held:

CASE NO. 66690

1. In its first three enumerations of error, DOT argues that the trial court erred in allowing Mrs. Lewyn to offer evidence of an unaccepted, informal offer for the purchase of her property for $185,000 and then by using that figure as fair market value as of the time of the offer, extend value by appreciation to a figure of $222,000 as of the time of the taking. See Merritt v. Dept. of Transp., 147 Ga.App. 316, 318, 248 S.E.2d 689, reversed on other grounds, 243 Ga. 52, 252 S.E.2d 508; Sutton v. State Hwy. Dept., 103 Ga.App. 29, 30(4), 118 S.E.2d 285.

While it is certainly an accurate statement of law that an unaccepted offer to buy, sell or lease property, standing alone, is not in and of itself any evidence of true market value, such an offer is competent evidence as one factor utilized by an expert rendering an opinion as to true market value. See Sutton v. State Hwy. Dept., supra. In this case, Mrs. Lewyn testified that she had been involved in the purchase and sale of real estate for a number of years and had compared prices of many pieces of property along the I-85 corridor before buying the property in litigation. It clearly was her opinion based upon her experience that the offer of $185,000 at the time of the offer was a fair price on the then current market. Thus, we are not confronted with an isolated, unsupported offer to purchase the land, parroted by an inexperienced seller as the true market value. Moreover, Mrs. Lewyn testified as to her knowledge of escalating accretions in value of real estate along the I-85 corridor and as to the increased square foot value of property in that area generally. It was her opinion that based upon normal inflationary processes and increasing property values, her property had increased at a percentage rate sufficient to make the true market value of her property as of the time of the taking of a value of $222,000. Though she applied the percentage increase to the $185,000 offer to purchase in order to reach the $222,000 figure, Mrs. Lewyn had already testified that in her opinion, with reasons in support thereof, the property indeed had that market value. Thus we conclude that the complaint made by DOT to the admission of this opinion evidence is without merit and falls without the ambit of the cases cited by it precluding the use of an unaccepted offer to purchase as the basis for establishing market value. See State Hwy. Dept. v. Whiddon, 109 Ga.App. 744, 137 S.E.2d 377.

2. In enumerations 4 and 5, DOT contends that the court erred in allowing Mrs. Gano to testify as to her "renovation" expenses at the new location totalling over $15,000. DOT contends these renovations were "replacement" expenses (i.e., capital expenditures) which had to be, but were not, depreciated. See Housing Auth. of Atlanta v. Goolsby, 136 Ga.App. 156(3), 220 S.E.2d 466. DOT also contends that to allow the lessee to recover "renovation" expenses at the new site would allow double compensation inasmuch as the lessee was recovering the value of her loss resulting from her displacement from the Chantilly Drive location. See Peek v. Dept. of Transp., 139 Ga.App. 780, 229 S.E.2d 554.

Our disagreement with this argument stems from our conclusion that the expenses incurred by Mrs. Gano at the new location were not renovation expenses but were correctly attributable as "relocation" costs. Mrs. Gano testified that the nature of her business required the use of a fork lift truck to move heavy carpets. She was required to have somewhat unique floor arrangements to accommodate her display area, her office area and her warehousing area. She looked at many new locations and the one ultimately selected was not useful to her in its then condition but required the modifications to make the building appropriate as her new business location. Similarly, she was required to purchase a new, large sign advertising her business because the old sign was not large enough considering the increased distance of her business location from the thoroughfare. We consider the evidence offered by Mrs. Gano properly may be considered as relocation costs, equally compensable as her costs of moving. See DeKalb County v. Fulton Nat. Bank, 156 Ga.App. 253(1), 274 S.E.2d 649; Bowers v. Fulton County, 221 Ga. 731, 740(3), 146 S.E.2d 884. Relocation costs are recoverable as a part of just and adequate compensation. Bowers, supra.

3. In enumerations 6 and 7, DOT contends the trial court erred in allowing Mrs. Gano to offer as evidence the lease at her new location and using the difference between rent under new lease and under the old lease as an indication of the value of her leasehold interest in the Chantilly Drive property. DOT particularly urges that this was error in that the cost differential between the two leases was not reduced to its present value. See Dept. of Transp. v. McLaughlin, 163 Ga.App. 1, 5-6, 292 S.E.2d 435.

In seeking to establish the value of the leasehold interest in the Chantilly Drive property, Mrs. Gano sought to show the uniqueness of that building and its location to the operation of her business, the "sweetheart" rental agreement made with the owner, Mrs. Lewyn, the "total eviction" resulting...