Energy Transp. Systems, Inc. v. Mackey
| Citation | 650 P.2d 1152 |
| Decision Date | 03 September 1982 |
| Docket Number | No. 5681,5681 |
| Parties | ENERGY TRANSPORTATION SYSTEMS, INC., a Delaware corporation, Appellant (Plaintiff), v. Robert R. MACKEY, Dorothy Y. Mackey, Wyoming Production Credit Association, Appellees (Defendants), Western Minerals Corporation, an Indiana corporation, Farmers Home Administration of the United States Department of Agriculture (Defendants). |
| Court | United States State Supreme Court of Wyoming |
Henry A. Burgess and Kim D. Cannon (argued), of Burgess & Davis, Sheridan, for appellant.
George J. Argeris of Guy, Williams, White & Argeris, Cheyenne, and John D. Raikos (argued), of Raikos & Raikos, Indianapolis, Ind., for appellees.
Before ROSE, C. J., and RAPER, THOMAS, ROONEY and BROWN, JJ.
A condemnation jury verdict upon which a judgment was entered is the subject of this appeal. The condemnor presents as issues:
1. "Is the Judgment awarding condemnation damages supported by competent evidence where it is not based upon any evidence of the 'before and after' values of the ranch unit?"
2. "Is the Judgment awarding condemnation damages supported by any competent evidence where it is not within the range of values testified to by all appraisers?"
3. "Did the Court commit reversible error in failing to give any instruction on the burden of proof and the preponderance of the evidence?"
4. "Did the Court commit reversible error in failing to instruct the jury that it cannot award damages merely because the project causes personal inconvenience, annoyance and discomfort unless such matters cause a depreciation in the value of the land?"
We will reverse and remand for a new trial on the issue of just compensation.
During the course of acquiring a way of necessity for transporting coal slurry and water through two pipelines, buried about eight feet deep with a three foot overburden, Energy Transportation Systems, Inc. (ETSI), appellant, being unable to negotiate a purchase, initiated proceedings to condemn an underground pipeline easement across ranch lands of Robert R. and Dorothy Y. Mackey, appellees (Mackeys). The easement was for a right of way 4,398 feet long by 100 feet wide, occupying 10.1 acres. 1 Possession was granted. Court-appointed appraisers returned a valuation of $7,120. The Mackeys demanded trial by jury pursuant to Rule 71.1(j), W.R.C.P., infra fn. 2. Trial was had accordingly. Other narrative will be set out as required in consideration of the issues.
As to the first issue the jury was instructed:
"The measure of just compensation to be paid to the Mackeys is the difference between the fair market value of the Mackeys' land immediately before the imposition of the easement and the fair market value of the Mackeys' land immediately thereafter."
The jury returned a special verdict on the typed form provided by the court; the jury filled in the money amounts shown:
"1. We, the jury, find the fair market
value of the Robert R. and Dorothy Y. Mackey
property before August 13, 1981 is.............
value of the Robert R. and Dorothy Y. Mackey
property after August 13, 1981 is..............
to be paid to Robert R. and Dorothy Y.
Mackey is......................................
$49,995.00"
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Before the jury was discharged counsel for ETSI moved that it be "set aside as contrary to the evidence, not in conformity with the instructions, and bears no relationship to any of the issues in this case." The motion was denied and the jury excused. ETSI thereafter also timely moved to set aside the verdict and for a new trial on the ground that the verdict was not sustained by sufficient evidence and contrary to law in that the jury ignored the instructions. Rule 59(a)(6), W.R.C.P.
The Mackey ranch consisted of approximately 3,840 acres of deeded land, 640 acres under state lease, and 6,400 acres of federally-leased land. This court has repeatedly held that where there is a partial taking of property, as here, which will result in damages to the remainder not taken, the amount of just compensation to be awarded for that taken or affected is determined by application of the before and after rule, i.e., the difference between the fair market value of the entire parcel before the taking and that after the taking. Coronado Oil Company v. Grieves, Wyo., 642 P.2d 423 (1982); State Highway Commission v. Scrivner, Wyo., 641 P.2d 735 (1982); Continental Pipe Line Company v. Irwin Livestock Company, Wyo., 625 P.2d 214 (1981); Wyoming State Highway Department v. Napolitano, Wyo., 578 P.2d 1342, 1346 (1978); Colorado Interstate Gas Company v. Uinta Development Company, Wyo., 364 P.2d 655, 658 (1961); Gillespie v. Board of Com'rs of Albany County, 47 Wyo. 1, 30 P.2d 797, 803 (1934); City of Rawlins v. Jungquist, 16 Wyo. 403, 94 P. 464, 468, reh. den. 16 Wyo. 403, 96 P. 144 (1908). Within each of those cases will be found supporting authority. In the case of taking an easement, then, the measure of just compensation is the difference in value of the whole tract prior to imposition of the easement and the value of the tract after imposition of the easement. Coronado Oil Company and Continental Pipe Line Company, supra.
Mr. Mackey, one of the owners, was asked by his counsel whether he had an opinion "[o]f the value of the land affected by the pipeline." His answer was, "Well, $200,000.00". He gave no testimony as to the value of the ranch before the taking or after the taking. Mrs. Mackey, the other owner, stated she did not know the value of "the property taken out" by the acre nor did she demonstrate any noticeable knowledge of land values. The question and answer which followed was:
She did not demonstrate any knowledge of land values and gave no testimony as to the value of the ranch before and after the taking.
A neighbor was called by the owners as a witness:
That witness gave no before and after testimony relating either to his land or that of the Mackeys. An asking price (offer to sell) of comparable property is not evidence of value, in any event. 5 Nichols on Eminent Domain § 21.4 (3rd ed. 1981).
The owners' expert testified that the value of the Mackey ranch as a "pure grazing entity for just livestock" was $860,000. It was not clear whether that was before or after the taking--in any event it was the only total value he testified to. He valued an acre for grazing at $180. He valued an acre "with subdivision potential" 2 at $1,200. He had no opinion as to the before and after value of the ranch because of imposition of the easement.
That's all there was to the owners' case.
The evidence produced by ETSI explained the laying of the pipeline. The explanation was that upon backfilling the ditch, the area occupied by the easement would be reseeded and restored to its full grazing capability with no fences to interfere with free movement of livestock. ETSI's expert appraisal testimony was by two qualified and experienced professional appraisers, both having used the market-data approach through use of comparable sales. Each reached a before-the-taking value of the entire ranch unit and its value after imposition of the easement. Each made an independent appraisal. One appraiser's valuation before was $642,480 with an after valuation of $641,693; he fixed the fair market value--just compensation--at the difference which was rounded to $800. The other appraiser's opinion was that the fair market value of the ranch before the taking was $580,000 and found no difference in the value after the taking. It was his opinion, gathered from his market investigation, that the presence of a pipeline easement with the surface restored does not affect land value for grazing. He allowed the value of lost grazing use caused by construction and reseeding at $90 per acre, based on animal units, with just compensation rounded to $900 because of the easement across the 10.1 acres.
From this summary, it can be seen that none of the Mackeys' evidence was competent. While an owner may testify to the value of his property, that does not make it competent. An owner is only qualified to express an opinion of value in a reasonable way and in accordance with the proper standards for determining fair market value; what it is worth to him is not a correct basis. If the owner's opinion is not within these rules, it has no probative value in a condemnation case. Coronado Oil Company v. Grieves, supra. The testimony of the Mackeys' neighbor and expert was worthless for valuation purposes in fixing just compensation. There is no way to reach a before and after value from any of the owners' evidence.
The only competent testimony was that produced by ETSI. There is no doubt that the presence of this type of easement affects land value as a detriment, however minor the extent. So with...
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