FLORIDA DOT v. Armadillo Partners, Inc.

• Decision Date: 24 April 2003
• Docket Number: No. SC01-1014.,SC01-1014.
• Citation: 849 So.2d 279
• Parties: FLORIDA DEPARTMENT OF TRANSPORTATION, Petitioner, v. ARMADILLO PARTNERS, INC., Respondent.
• Court: Florida Supreme Court

849 So.2d 279

FLORIDA DEPARTMENT OF TRANSPORTATION, Petitioner, v. ARMADILLO PARTNERS, INC., Respondent.

No. SC01-1014.

Supreme Court of Florida.

April 24, 2003.

Rehearing Denied June 26, 2003.

Charles J. Crist, Jr., Attorney General and Robert I. Scanlan, Assistant Attorney General, Tallahassee; and Marianne A. Trussell, Deputy General Counsel, Department of Transportation, Tallahassee, for Petitioner.

Geoffrey L. Jones of Jeck, Harris, & Jones, LLP, Jupiter, for Respondent.

Mark R. Leavitt of Wilson, Leavitt & Small, P.A., Orlando; and Alan E. DeSerio, Brandon, for Manheim Remarketing Limited Partnership, d/b/a Florida Auto Auction of Orlando and Florida Auto Auction of Orlando, Inc., Amicus Curiae.

PER CURIAM.

We have for review the decision in Armadillo Partners, Inc. v. State Department of Transportation, 780 So.2d 234 (Fla. 4th DCA 2001), on the basis of conflict with the decisions in Rochelle v. State Road Department, 196 So.2d 477 (Fla. 2d DCA 1967), and State Road Department v. Falcon, Inc., 157 So.2d 563 (Fla. 2d DCA 1963). We have jurisdiction. See art. V, § 3(b)(3), Fla. Const. For the reasons set forth below, we quash the Fourth District's decision rejecting the admission of an eminent domain expert's opinion testimony as to the value of the remaining property after a partial taking.

FACTUAL BACKGROUND

In 1997, the Department of Transportation ("DOT") initiated eminent domain proceedings to acquire approximately a nine-foot-wide strip of land bordering Davie Road and a forty-six-foot-wide strip of land along Griffin Road for purposes of a road widening and improvements project in Broward County.¹ At that time, Armadillo Partners, Inc., owned a shopping center, known as Armadillo Square, located at the intersection of Davie Road and Griffin Road. At the time of the taking, the shopping center contained two buildings with 26,013 square feet of retail, office, and restaurant space and a total of 140 parking spaces, 119 spaces in front and 21 spaces in the rear. As a result of the DOT project, a portion of the shopping center's parking lot was taken, resulting in a reduction of usable parking spaces.

In the court proceedings Armadillo sought severance damages in addition to compensation for the property actually taken. At trial, appraisers for both parties testified that the shopping center could not continue to operate if no action was undertaken to renovate the property after the taking. Both appraisers agreed that if no action was taken the value of the remaining property would be limited to the value of the raw land, less the cost of demolition. However, both parties submitted proposals and expert opinion testimony in support thereof as to ways the remaining property could be improved to minimize the effect of the partial taking on the value of the remaining property. These proposals for improvement are also referred to as "cures" to the damage inflicted by the partial taking.

DOT's proposed cure, which reconfigured the shopping center's parking lot to increase the available parking to 97 spaces, involved shifting the front parking lot closer to the north-south building by approximately nine feet. Under this proposed cure, an existing improved area approximately nine feet by 180 feet at the front of the north-south building, consisting of a sidewalk with brick pavers, planted areas, an irrigation system, grass and two wooden arbor structures, would be eliminated. According to the opinion testimony of DOT's expert appraiser, the severance damages incurred as a result of the project would be $308,400, plus an additional $102,300 for the cost to cure under its proposal.

On the other hand, Armadillo's proposed cure as outlined by its expert appraiser entailed removing over 7000 square feet from the north end of the north-south building, closing one of the driveways on Griffin Road, and reconfiguring the parking lot to accommodate 99 parking spaces. Under this so-called "cut and reface" cure, the sidewalk and related amenities eliminated by the DOT plan would be left intact.² Armadillo's appraiser concluded that the severance damages would be $493,000, and the cost to cure under its proposal would be $425,000. DOT's and Armadillo's appraisers estimated total compensation for the entire taking and its effects, including the taking of the forty-six foot strip, at $637,600 and $1,235,000, respectively.

The jury returned a verdict awarding total compensation in the amount of $817,450, including $308,400 in severance damages and $318,750 for the cost to cure. The trial court entered a final judgment pursuant to the jury verdict and Armadillo appealed.

On appeal, the Fourth District reversed the final judgment. See Armadillo Partners, 780 So.2d at 237. Relying on a line of cases from the First District,³ the district court concluded that DOT's appraiser did not properly consider all of the factors necessary for an evaluation of severance damages, and thus his testimony should have been excluded. See 780 So.2d at 236. Specifically, the district court stated that no provision was made in the appraiser's valuation as to severance damages and the cost to cure, for the loss of the shopping center's existing arbor area. See id. In addition, the district court concluded the trial court erred in admitting testimony regarding DOT's proposed cure because it was inconsistent with DOT's existing construction plans for the adjacent roadways. See id. at 236-37.

ANALYSIS

This Court has recognized that "[t]he central policy of eminent domain is that owners of property taken by a governmental entity must receive full and fair compensation." Broward County v. Patel, 641 So.2d 40, 42 (Fla.1994) (citing art. X, § 6, Fla. Const.). When less than the entire property is being appropriated, "full compensation for the taking of private property by eminent domain includes both the value of the portion being appropriated and any damage to the remainder caused by the taking." Division of Admin. v. Frenchman, Inc., 476 So.2d 224, 226 (Fla. 4th DCA 1985); see also Kendry v. Division of Admin., 366 So.2d 391, 393 (Fla. 1978); § 73.071(3)(a)-(b), Fla. Stat. (2001). The damage to the remainder caused by the taking is also referred to as severance damages, damage caused by severing a part from the whole. In calculating the damage to the remaining property, Florida courts have adhered to a "before and after" rule under which severance damages are calculated as the difference between the value of the property before and after the taking. See Canney v. City of St. Petersburg, 466 So.2d 1193, 1195 (Fla. 2d DCA 1985).

Valuation of the "Arbor Area"

It is the calculation of severance damages that is at issue here. As noted above, the Fourth District concluded that the DOT expert's calculation of severance damages did not sufficiently include the loss of the arbor area as contemplated in its cure, and as a result, the court held that the testimony was improperly admitted into evidence. The Fourth District relied on a series of cases from the First District. See State Dep't of Transp. v. Murray, 670 So.2d 977 (Fla. 1st DCA 1996), quashed on other grounds, 687 So.2d 825 (Fla.1997); Williams v. State Dep't of Transp., 579 So.2d 226 (Fla. 1st DCA 1991), disapproved in part by Broward County v. Patel, 641 So.2d 40 (Fla. 1994); State Dep't of Transp. v. Byrd, 254 So.2d 836 (Fla. 1st DCA 1971), disapproved in part by Broward County v. Patel, 641 So.2d 40 (Fla.1994).

In Byrd, as part of a road-widening project, DOT condemned a strip of land that was used by a motel for parking. On appeal, DOT argued that the trial court erred in refusing to admit testimony of the department's appraiser that the taking would not result in severance damages because the lost parking spaces could be relocated on a portion of the motel's property where a shuffleboard court was located. The district court, however, concluded that the trial court properly excluded the appraiser's testimony because it was based upon a misconception of the law of severance damages and failed to take into account the loss of use of the shuffleboard court area. See id. at 837. The district court explained, "The expert's opinion ignores the reality of the missing shuffleboard court or if the same were to be rebuilt on yet another portion of appellees' property, the expert ignores the reduction in value of a motel with smaller grounds for its guests to enjoy or perhaps lesser area for expansion." Id. at 836-37.

Similarly, in Williams the First District held that DOT's expert's testimony was based on a misconception of the law. At trial, the expert first testified that the taking would result in severance damages of $177,000 if nothing was done to correct the loss of parking. However, the expert stated that a rear parking area could be constructed on the remaining property at a cost of approximately $24,000. The expert opined that the value of the remainder property converted to parking was $48,000. Thus, the expert concluded that all of the damages and effects to the remainder could be cured by the payment of $72,000. Relying on Byrd, the district court concluded that the expert's testimony was based on a misconception of the law and should not have been admitted. See579 So.2d at 229. Specifically, the court stated that the expert's opinion ignored the fact that the new parking area would not provide as much space for parking as existed before the taking and that the new parking area would intrude into the service area, and ignored the impact that rear parking for customers might have on the value of the property as a business site, as well as the fact that the new parking area would prevent further expansion of the business. See id.

In State Dep't of Transp. v. Murray, 670 So.2d 977 (Fla. 1st DCA 1996), quashed on other grounds, 687 So.2d 825 (Fla.1997), the First District reaffirmed its previous holdings in Byrd and Williams. In Murray, DOT condemned a portion of a...