Gray v. State Through Dept. of Highways

• Citation: 191 So.2d 802
• Decision Date: 03 November 1966
• Docket Number: No. 1698,1698
• Parties: Reuben F. GRAY et al., Plaintiffs-Appellants, v. STATE of Louisiana, THROUGH the DEPARTMENT OF HIGHWAYS, Defendant-Appellant, W. R. Aldrich & Company and National Surety Corporation, Defendants-Appellees.
• Court: Court of Appeal of Louisiana (US)

Page 802

191 So.2d 802

Reuben F. GRAY et al., Plaintiffs-Appellants, v. STATE of Louisiana, THROUGH the DEPARTMENT OF HIGHWAYS Defendant-Appellant W. R. Aldrich & Company and National Surety Corporation Defendants-Appellees.

No. 1698.

Court of Appeal of Louisiana, Third Circuit.

Nov. 3, 1966.

Dissenting Opinion Nov. 8, 1966.

Rehearings Denied Nov. 29, 1966.

Writ Refused Gray et al., Jan. 20, 1967.

Writ Granted State, Jan. 20, 1967.

D. Ross Banister, Philip K. Jones, Norman L. Sisson, William J. Doran, Jr., and Robert J. Jones, by Robert J. Jones, Baton Rouge, for defendant-appellant.

Fred W. Ellis, C. A. Miller, Jr., Lake Charles, for plaintiffs-appellees-appellants.

Porter, Scofield & Cox, by John B. Scofield, Lake Charles, Breazeale, Sachse & Wilson, by Hopkins P. Breazale, Jr., Baton Rouge, John A. Hickman, Lake Charles, for plaintiffs-appellees.

Before TATE, HOOD, and CULPEPPER, JJ.

TATE, Judge.

The chief issue of this case is the legal measure of recovery by landowners against a State agency which unlawful appropriates their property.

The State agency contends that the landowner's recovery is limited to the diminution of the market value of their property caused by the illegal appropriation, the same as if the property had been lawfully expropriated. If the illegal appropriation had been caused by a private person's similar disregard of property rights, the measure of the landowners' recovery would be substantially greater. A majority of this court holds that the State must likewise pay those greater damages when it illegally appropriates property.

Factual context.

This suit is a sequel to State, Through Department of Highways v. Bordages, La.App. 3 Cir., 156 So.2d 617. (In this related Bordages suit, we are rendering a further opinion this date. 191 So.2d 797, Docket No. 1697.)

The present suit arose in connection with the construction of Interstate Highway 210 across a 650-acre tract of land owned in indivision by some 70 persons. Utilizing the 'quick-taking' procedure provided by LSA-R.S. 48:441--48:460, in the Bordages suit the State Department of Highways had initially expropriated in September 1961 some 26 acres in fee for the new highway. At the same time it expropriated a temporary servitude for borrow pit purposes on an adjacent 22 acres of the parent tract. The borrow pit was to be used to obtain dirt for roadway fill. This initial taking was lawfully accomplished by prior deposit of $104,666, of which some $36,000 was for the borrow pit and the severance damages to be caused by this proposed borrow pit.

In June, 1962, eight months after the original order of expropriation, the Department by ex parte supplemental petition obtained an amendment of the order of expropriation in the Bordages suit. By this amendment the Department sought to expropriate, without making any prior deposit or payment, an entirely different area of 22 acres on the West side of the highway in substitution for the 22 acres on the East side which had previously been lawfully expropriated through the original petition, deposit, and order.

The amended ex parte order was obtained on June 7, 1962. On June 13th and on June 18th, within two weeks, the defendant landowners filed exceptions and motions to rescind, as unlawful, the ex parte amended taking of the west 22 acres.

Despite these pleadings questioning the lawfulness of the substitute expropriation, the Department through its contractor on June 15th began clearing the west 22-acre borrow pit area described in the supplemental order.

It began hauling dirt from the pit on September 15th for roadway fill, and it continued to do so until June 1, 1963, when it completed its highway construction operations utilizing dirt from the borrow pit. The Department never used the borrow pit servitude on the highway's east side which had previously been lawfully expropriated. ¹

In the meantime, the District Court tried the landowners' demand in the Bordages suit to rescind the amended taking. On January 14, 1963, the court signed a formal judgment rescinding as invalid the amending order of expropriation, since it had been obtained without compliance with constitutional and statutory provisions requiring prior deposit or payment before a taking. ² On the Department's appeal, this court on September 11, 1963 affirmed the trial court judgment. 156 So.2d 617, certiorari denied ('The judgment complained of is correct'), 245 La. 462, 158 So.2d 612.

Pleadings and Issues.

The present suit by Gray et als. was filed on June 5th, 1963, four days after the last dirt was removed. By it, the plaintiff landowners seek recovery both for the damage to the parent tract caused by the illegal appropriation of the borrow pit on the west side of the new highway right of way, and also for the manufactured value of the 120,000 cubic yards of dirt removed from the two borrow pits, 6--10 feet deep, excavated in the west 22-acre area described by the illegally taken servitude. The demand of the petition approaches $600,000.

Made defendants were the Department of Highways, the contractor (Aldrich) which had excavated the borrow pit at the direction of the Department, and also Aldrich's liability insurer (National Surety).

All defendants denied liability. The Department further reconvened to pray for an allowance of an offset against any award allowed the plaintiff landowners up to the amount of the compensation paid to the landowners for the properly expropriated (but unused) borrow pit on the east side of the highway. The Department claimed that otherwise the landowners would be unjustly enriched.

The trial court concluded that the plaintiff landowners' recovery is limited by law to the diminution in market value caused by the Department's illegal trespass upon and taking of their land; namely, $33,625. The trial court held the Department and the contractor Aldrich solidarily liable for this amount. It likewise dismissed the plaintiffs' claim against National Surety, the contractor's insurer, as not within the intended coverage of National Surety's contract of insurance. Both the plaintiff and the Department appeal.

The principal issues raised by these cross-appeals are:

I. The legal measurement of the recovery by the landowner for an unlawful appropriation of or trespass upon private property by the State or its agencies: Whether it should be the diminution in market value or instead the value of the dirt taken or the cost of restoring the invaded land to its condition prior to trespass.

II. The coverage provided by the liability insurance policy issued to Aldrich by National Surety: Whether the landowners' claim against Aldrich resulted from damages to property 'caused by accident' so as to be within the insuring clause.

III. The Department's claim by its reconventional demand that it is entitled to an offset against any recovery by the landowners because of the latter's alleged unjust enrichment.

I.

The measure of recovery against the State for an illegal intentional taking of private property for a public purpose.

Where a temporary servitude is Lawfully expropriated for borrow pit purposes, the landowner's compensation is determined, not by the value of the dirt or gravel removed from his land, but by the taking's effect on the market value of his tract. State, Through Dept. of Highways v. Hayward, 243 La. 1036, 150 So.2d 6. But where one without valid title removes dirt from the property of another, then, as will be discussed more fully below, the measure of the true owner's recovery for the trespass may be the converted value of the dirt removed, the cost of restoring the property to its former condition, or such other award as will fully compensate the owner. See, e.g., East v. Pan American Petroleum Corp., La.App. 3 Cir., 168 So.2d 425.

In the trial court the Department successfully contended that for the illegal appropriation the present landowners cannot recover the greater damages awarded for intentional trespass but instead are limited to the market-value diminution allowed for a lawful expropriation.

This conclusion is based upon the erroneous assumption that the landowners can recover from the State the greater trespass damages only if the State's invasion of their property rights for a public purpose was inadvertent or unintentional. If on the other hand the taking was deliberate and intentional, the argument goes, then it is an eminent-domain taking for which market value is the sole measure of compensation. Thus, allegedly, the State must pay less for a deliberate and illegal damaging than for a merely negligent damaging of private property.

The Department deduced this erroneous conclusion from dicta or loose expressions in several inapposite decisions. The distinguishable issues decided in those cases concern, for instance:

(a) A negligent damaging by a governmental agency of property not physically appropriated or invaded, the cited decisions merely distinguishing the tort action thus involved from a cause of action for the intentional damaging of property for a public purpose (for which under Article I, Section 2, Louisiana Constitution, the property owner must be compensated by the State regardless of negligence on its part): Aleman v. Sewerage and Water Board, 196 La. 428, 199 So. 380; Marie v. Police Jury of Terrebonne Parish, La.App. 1 Cir., 161 So.2d 407; Beck v. Boh Bros. Const. Co., La.App.Orl., 72 So.2d 756; or

(b) The measure of the award (i.e., market-value diminution) for consequential damages caused by governmental action affecting private property which itself is not physically invaded or otherwise illegally appropriated: Harrison v. Louisiana Highway Commission, 191 La. 839, 186 So. 354; or

(c) A good faith trespass by a private contractor, in which the court held the trespassing contractor liable for the value of the dirt ($16,005) rather than the diminution in market value ($6,044) caused by the tortious taking of dirt by the trespass:...