Dept. of Transp. v. Gilbert's Auto Serv.

• Court: Georgia Court of Appeals
• Writing for the Court: Mikell
• Citation: Dept. of Transp. v. Gilbert's Auto Serv., 687 S.E.2d 659, 301 Ga. App. 419 (Ga. App. 2009)
• Decision Date: 03 December 2009
• Docket Number: No. A09A2240.,A09A2240.
• Parties: DEPARTMENT OF TRANSPORTATION of Georgia v. GILBERT'S AUTO SERVICE, INC.

687 S.E.2d 659

301 Ga. App. 419

DEPARTMENT OF TRANSPORTATION of Georgia v. GILBERT'S AUTO SERVICE, INC.

No. A09A2240.

Court of Appeals of Georgia.

December 3, 2009.

Power & Cooper, Warren Randall Power, McDonough, for appellant.

Smith, Welch & Brittain, A. J. Welch, Jr., William Albert White, McDonough, appellee.

MIKELL, Judge.

In this inverse condemnation action, appellant Department of Transportation of Georgia ("DOT") appeals from a judgment entered on a jury verdict in favor of Gilbert's Auto Service, Inc. ("Gilbert's Auto"). The trial court denied DOT's motion for directed verdict made at the close of evidence and its motion for judgment n.o.v. In both motions, DOT argued that Gilbert's Auto's action was barred by a consent judgment entered in a prior condemnation action. Applying the appropriate standard of review, which provides that we "can only set a verdict aside, on evidentiary grounds, as being contrary to law in that it lacks any evidence by which it could be supported[,]"¹ we affirm the judgment of the trial court.

The record shows that on April 18, 2005, DOT filed a petition for condemnation of real property in the Superior Court of Clayton County against David Gilbert (the "condemnation action"),² in which it acquired .343 acres of land and certain easement rights from property along Highway 138 (the "property"). Gilbert owned the property in fee simple, and Gilbert's Auto had a leasehold interest therein. On June 22, 2005, Gilbert's Auto filed an inverse condemnation action against DOT ("inverse action"), seeking just and adequate compensation for the taking and damage to its property interests, as well as relocation expenses and attorney fees and expenses. By consent of the parties, Gilbert's Auto was added as a party to the condemnation action on August 8, 2005.

On October 27, 2006, Gilbert's Auto filed a motion to consolidate its inverse action with DOT's condemnation action, which DOT opposed. The trial court denied the motion to consolidate on April 12, 2007, stating as follows:

Though the law generally favors the prevention of a multiplicity of actions, it appears that condemnation law in Georgia rather strictly limits the relevant evidence in condemnation cases and therefore separate suits for different kinds of damages are not uncommon. ... Consolidating the inverse condemnation action with the original condemnation action would interject elements of damages beyond that to be considered pursuant to [applicable law].³

On October 9, 2007, the parties to the condemnation action entered into a consent judgment, which provided that

The Condemnor shall pay to the Condemnees the total sum of $525,000 as just and adequate compensation for the property rights acquired by the Condemnor. ... The Condemnor originally paid into the Court's Registry the sum of $313,700.00, which was taken down by Gilbert. As such, the Condemnor shall pay an additional $211,300.00 to ... attorneys for David Gilbert and Gilbert's Auto Service, Inc., said sums constituting total just and adequate compensation in the amount of $525,000.00, which is due to the Condemnees for all property and rights acquired from the Condemnees, as well as any damages sustained by the Condemnees as a result of the subject condemnation.

After the consent judgment was entered, Gilbert's Auto filed a notice of stipulation for trial in the inverse action, which DOT opposed on the grounds that it had not yet deposed Gilbert's Auto's business valuation witness. DOT deposed the witness on February 29, 2008, and the parties filed a consolidated pre-trial order on July 11, 2008. The trial began on October 13, 2008. Gilbert's Auto presented the testimony of a real estate appraiser, a certified public accountant, and Gilbert, and DOT presented the testimony of a real estate appraiser. The jury awarded damages to Gilbert's Auto in the amount of $1,113,827.

It is well settled that, when a condemnor institutes condemnation proceedings, all legal and equitable issues relating to the taking must be litigated in those proceedings, and the condemnee cannot bring a separate action to dispose of those matters. In condemnation proceedings, however, there are only two elements of damages to be considered: First, the market value of the property actually taken; second, the consequential damage that will naturally and proximately arise to the remainder of the owner's property from the taking of the part which is taken and the devoting of it to the purposes for which it is condemned.⁴

Business damages cannot be sought through a condemnation case; rather they must be pled as a separate item of recovery.⁵

The rationale for this is based upon common sense and has been articulated for many years: The destruction of an established business is and must be a separate item of recovery. The holdings of some cases that the loss of prospective profits is to be considered in determining the value of the real estate is one thing. This means no more than that the potential uses of the property [consequential damages] may be proved for that purpose. The loss of an established business is an altogether different matter; such loss not merely reflects the value of the real estate, for frequently the value of the business greatly exceeds that of the premises where it is conducted. For instance, in a shabby and cheap building a very valuable business may be established. If the business has a value of $100,000 and the property $5,000, by what process of reasoning can the value of the business be included in the appraisal of the property?⁶

DOT relied on this point of law in its opposition to the motion to consolidate, stating "[d]amages that are not alleged to have occurred as a result of the instant condemnation action are properly cognizable in an independent suit for damages, and may not be raised in...