Department of Transp. v. Old Nat. Inn, Inc.
| Decision Date | 09 April 1986 |
| Docket Number | No. 71918,71918 |
| Parties | DEPARTMENT OF TRANSPORTATION v. OLD NATIONAL INN, INC. et al. |
| Court | Georgia Court of Appeals |
Michael J. Bowers, Atty. Gen., Marion O. Gordon, Roland F. Matson, Beryl H. Weiner J. Mathew Dwyer, James S.S. Howell, Asst. Attys. Gen., for appellant.
W. Lyman Dillon, Leslie A. Dent, Atlanta, for appellees.
Appellant-condemnor Department of Transportation (DOT) filed a declaration of taking against property owned by appellee-condemnee Old National Inn, Inc. (Old National). Old National was dissatisfied with the amount of the estimated compensation, $180,760, and filed a notice of appeal and answer. A jury awarded "just and adequate compensation" of $324,000 for both actual and consequential damages, and the judgment required DOT to deposit the additional amount into the court registry. DOT's amended motion for new trial was denied, and it appeals.
1. DOT contends as error the striking of a portion of the testimony of two of its expert witnesses pertaining to the calculation of consequential damages.
Old National operates a Holiday Inn hotel which had been constructed in 1981 with a view toward future expansion. The common areas and equipment were expressly designed to accommodate additional units. DOT concedes that the prospect for expansion is a reasonable probability.
The land taken by DOT consisted of .8 acre that adjoined the hotel, with frontage on Old National Highway, and its intended use was as additional surface parking whenever the proposed expansion would occur.
DOT's appraiser expert witness, Upton, testified that at some time there would be a market for future expansion and diminution of future parking capacity due to taking of the property created consequential damages to the remainder. Upton originally assessed consequential damages at $233,600 representing the cost of constructing a parking deck over the existing parking lot on the remainder of the property. An alternative remedy, he said, would be to acquire an additional acre of property for a surface parking lot. Contiguous land was available for sale behind the hotel. Assuming an acquisition of the rear acreage, Upton calculated consequential damages at $10,000. He stated that the revision in his appraisal assumed that there is a legal basis for off-setting consequential damages against the land to be acquired.
A second DOT expert witness, Schultz, testified that he originally calculated consequential damages at $237,600, the cost of constructing a parking garage on the existing site. However, since adjacent land was available for $150,000 an acre, he also revised his computation of consequential damages downward to $13,080.
Schultz revised his calculations when he was provided by DOT with an option for Old National to purchase the adjacent acre. He calculated consequential damages by taking the cost of replacement land and subtracting from that the value of the land that was taken. This appraisal assumed Old National's purchase of the additional acre with its own funds or with funds received from the taking of the .8 acre.
Both experts were requested by DOT to revise their original calculations based on the existence of the option; neither had previously used this method of appraisal.
Old National moved to strike the testimony of Upton and Schultz, claiming that their revised figures were based on an improper measure of consequential damages. The trial court agreed and advised counsel that it would instruct the jury to disregard the experts' testimony only as it pertained to off-setting the actual damages against the value of the substituted land.
The trial court granted the motion and instructed the jury to disregard the two experts' revised calculations of consequential damages (the value of the taking minus the value of the substituted land). The court further instructed that the jury may or may not find any consequential damages as a result of the taking and that the value of any substituted land may be considered in determining the measure of any consequential damages.
Article I, Sec. III, Par. I of the Georgia Constitution provides inter alia that "private property shall not be taken or damaged for public purposes without just and adequate compensation being first paid." 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 circumstance just prior to the time of the taking compared with its market value in its new circumstance just after the time of the taking. Wright v. MARTA, 248 Ga. 372, 376, 283 S.E.2d 466 (1981); Simon, supra. Fair market value is defined as the price that a seller who desires but is not required to sell and a buyer who desires but is not required to buy would agree is a fair price after due consideration of all the elements reasonably affecting value. Wright, supra at 375, 283 S.E.2d 466; Housing Auth. of Savannah v. Savannah Iron, etc., Works, 91 Ga.App. 881, 887, 87 S.E.2d 671 (1955).
The measure of actual damages and the measure of consequential damages after a partial taking are two distinct bases for compensation to the condemnee and are to be calculated separately using two different formulae. "Actual value is determined separately from consequential damages which may be added to but cannot be deducted from the value of the part taken." Dept. of Transp. v. Gunnels, 175 Ga.App. 632, 334 S.E.2d 197 (1985), rev'd 255 Ga. 495, 340 S.E.2d 12 (1986).
There was no dispute as to the actual damages to the condemned acre. The issue in question was the measure of compensation owed to Old National for consequential damages to the remainder after the taking. In determining whether consequential damages resulted, and if so in what amount, we apply the definition provided in Wright v. MARTA, supra, 248 Ga. at 376, 283 S.E.2d 466: "[T]he diminution, if any, in the market value of the remainder in its circumstance just prior to the time of the taking ..." (The market value of the property just prior to the time of taking included the .8 acre, giving condemnee the capability of additional parking upon future expansion of the hotel.) "[C]ompared with its market value in its new circumstance just after the time of the taking." (After the taking, that .8 acre was gone as was its availability for parking upon future expansion.) Condemnee is to be compensated in actual damages for the property taken, but that amount is not considered in calculating consequential damages. The fact finder must look only to the market value of the remainder in its new circumstance after the taking and compare that amount to the market value of the property prior to the taking. Since "new circumstance" was to be considered, the availability of the adjacent acre suitable for the same use, to replace the one taken was relevant in determining the degree and amount of consequential damages to the remainder. The jury was made aware of the existence of the adjacent acre and the option for its purchase.
Old National was not seeking loss of future profits which might have resulted from its inability to expand. Instead, it was asking for adequate compensation which would permit it to correct the parking deficit, thereby eliminating future losses and in that way mitigating the damages. When the option was presented to it, Old National made certain revisions and returned it to the seller in an effort to effect a purchase of the property.
The jury heard testimony that there were two possible means of correcting the parking deficit. Old National could construct a parking deck on the remainder property or acquire an adjacent acre for surface parking. There was expert testimony as to the estimated costs for each. The jury was then charged with the responsibility of determining what, if any, consequential damages to the remainder were suffered by Old National. DOT's argument that the condemnee is required to...
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