HAMMOND, IND. v. INDIANA'S LAST REAL ESTATE DEV.

• Decision Date: 19 April 1996
• Docket Number: No. 2:94-CV-244-RL-2.,2:94-CV-244-RL-2.
• Parties: CITY OF HAMMOND, INDIANA, a Municipal Corporation, Plaintiff, v. INDIANA'S LAST REAL ESTATE DEVELOPMENT CORPORATION, et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

923 F. Supp. 1097

CITY OF HAMMOND, INDIANA, a Municipal Corporation, Plaintiff, v. INDIANA'S LAST REAL ESTATE DEVELOPMENT CORPORATION, et al., Defendants.

No. 2:94-CV-244-RL-2.

United States District Court, N.D. Indiana, Hammond Division.

April 19, 1996.

Patrick J. Galvin, Galvin, Galvin & Leeney, Hammond, IN, Joseph Stalmack, Galvin, Stalmack and Kirschner, Hammond, IN, David W. Weigle, Hammond, IN, for plaintiff.

William J. Holloway, Daniel K. Ryan, Kevin W. Bruning, Hinshaw and Colbertson, Chicago, IL, Charles D. Brooks, Jr., Merrillville, IN, for defendants.

ORDER

LOZANO, Judge.

This matter is before the Court on Defendant's Motion in Limine No. 1 Concerning Parcels 7 and 47 to Bar Opinion Testimony, Witnesses, Documents, Comparable Sale and Argument in the Presence of the Jury that Assumes the Legally Permitted Use on I-2 District Zoning of "Motor Vehicle Services" at the Time of Valuation Did Not Permit a Gasoline Service Station ("Defendant's Motion in Limine No. 1") filed on March 5, 1996; Plaintiff's Motion in Limine No. 1 Concerning Parcels 7 and 47 filed on March 11, 1996 ("Plaintiff's Motion in Limine No. 1"); Defendant's Motion in Limine #2 filed on March 11, 1996; and Joint Motion for Ruling on Motions in Limine filed on March 28, 1996. For the reasons set forth below, Defendant's Motion in Limine No. 1 is GRANTED; Plaintiff's Motion in Limine No. 1 is DENIED; Defendant's Motion in Limine No. 2 is GRANTED IN PART AND DENIED IN PART; and the Joint Motion for Ruling on Motions in Limine is GRANTED by means of this order.

BACKGROUND

Plaintiff, City of Hammond ("the City"), condemned several parcels of land belonging to Defendant, Indiana's Last Real Estate Development Corporation ("ILRED"). The date of the taking was June 20, 1994. The remaining issue in this litigation is to determine the just compensation to which ILRED is entitled due to the taking.

Two of the parcels that belonged to ILRED, parcels 7 and 47, were located in an I-2 district zone, a manufacturing district. The main issue in the motions before the Court is what uses are permitted in this zone. In particular, the parties disagree on whether a gasoline service station is a permitted use in I-2 zones.

DISCUSSION

When awarding damages in a condemnation action, the trier of fact has to determine the fair market value of the property at the time of the taking. S. Ind. Gas & Elec. Co. v. Gerhardt, 241 Ind. 389, 172 N.E.2d 204, 205 (1961). The fair market value is what a willing buyer would pay to a willing seller under fair market conditions. U.S. v. 320 Acres of Land, 605 F.2d 762, 781 (5th Cir.1979). The factual finder may consider anything affecting the sale value of the land at the time of the taking. 320 Acres, 605 F.2d at 811; Gradison v. State, 260 Ind. 688, 300 N.E.2d 67, 72 (1973).

Just compensation is not limited to the value of the property as presently used. 320 Acres, 605 F.2d at 781, 811. The special value of the land due to its adaptability for use in a particular business is a element that can be considered. Gradison, 300 N.E.2d at 73. Accordingly, the landowner in a condemnation action can show not only the value of her land as presently used, but also can introduce evidence of the potential uses to which her property can be converted. 320 Acres, 605 F.2d at 771. Demand for potential uses affect market value because a reasonable person would purchase the property aware not only of its existing use, but also of other potential uses as well. A determination of fair market value takes into consideration the highest and most profitable use for which the property is adaptable and likely to be needed in the near future, since prospect demand for such use affects the market value of the property. Id. at 781.

At issue in this litigation is whether gasoline service stations were permitted uses in parcels 7 and 47 under the City of Hammond's zoning ordinance. If zoning laws do not permit a prospective use on a property, such use is speculative and should not be considered in determining the fair market value. Id. at 818. Just compensation must be determined in light of regulatory restrictions. Id. If a gasoline station was not a permitted use in those parcels under the Hammond zoning ordinances, then such use is not relevant to the determination of the fair market price of the properties in this case.

The construction of the legal significance of an ordinance is a question of law. 320 Acres, 605 F.2d at 818-19; Barnes v. City of Anderson, 642 N.E.2d 1004, 1006 (Ind.Ct. App.1994); City of Columbus Bd. of Zoning Appeals v. Big Blue, 605 N.E.2d 188, 191 (Ind.Ct.App.1992); Boone County Area Plan Comm'n v. Kennedy, 560 N.E.2d 692, 696 (Ind.Ct.App.1990). The court should interpret an ordinance as a whole, giving its words their plain and ordinary meaning. Barnes, 642 N.E.2d at 1006; City of Columbus Bd., 605 N.E.2d at 191. The presumption is that "the legislature intended that the language of the ordinance be applied in a logical manner consistent with its underlying goals and policy." Barnes, 642 N.E.2d at 1006.

Zoning regulations that constrain the free use of real property should be construed strictly. Barnes, 642 N.E.2d at 1006; Town of Merrillville Bd. of Zoning Appeals v. Public Storage, Inc., 568 N.E.2d 1092, 1097 (Ind. Ct.App.1991); Ayers v. Porter County Plan Comm'n, 544 N.E.2d 213, 219 (Ind.Ct.App. 1989). The court cannot extend zoning restrictions by implications. Barnes, 642 N.E.2d at 1006 (refusing to apply an ordinance prohibiting the keeping of livestock to a Vietnamese pot belly pig kept as a pet). Town of Merrillville Bd., 568 N.E.2d at 1097 (refusing to interpret "public necessity" as absolute necessity, in a case evaluating the need for a public storage facility); Ayers, 544 N.E.2d at 219 (refusing to extend a restriction on student dormitories, nursing homes, and orphanages to a group home for autistic people because such group homes were not listed specifically in the ordinance).

The parcels in question are located in an area zoned I-2, a manufacturing district. Gasoline service stations are not listed specifically as permitted uses in that zone. See Hammond, Ind. Zoning Ordinance ("Ordinance") Tit. XI, sec. 2(A). However, it is not sufficient to look at the uses listed for I-2 zones, because the permitted uses for that zone include "any use permitted in the I-1 light industrial district." Id. at sec. 2(A)(10). Title X, section 2(A) lists the permitted uses for I-1 zones. Hammond, Ind. Zoning Ordinance.

The I-1 zone permitted uses include in section 2(A)(8), "Motor Vehicle Services." Ordinance Tit. X. Although the ordinance defines "automotive service station" and "garage, vehicle repair," it does not define "motor vehicle services." The definitions included in the ordinance read as follows:

Automotive Service Station — An "automotive service station" is a building or other structure or a tract of land used exclusively for the storage and sale of gasoline or other motor fuels and for any uses accessory thereto. The sale of lubricants, accessories, or supplies, the lubrication of motor vehicles, the minor adjustment or repair of motor vehicles, or the washing of motor vehicles are permitted accessory uses. A public parking lot or public parking garage is not a permitted accessory use.

Uses permissible at a filling station do not include motor vehicle sales, major mechanical and/or body work, straightening of body parts, painting, welding, storage of automobiles not in operating condition, or other work involving noise, glare, fumes, smoke or other characteristics to an extent greater than normally found in automotive service stations. An automotive service station is not a repair garage nor a body shop.

* * * * * *

Garage, Vehicle, Repair — A structure, or portion thereof designed or used for the repair, equipment, or servicing of motor vehicles, including, but not limited to, upholstery work, glass work, painting, welding, body and fender work, and major engine overhaul and transmission work, but not including motor vehicle sales. Ordinance Tit. I, sec. 13. Despite being defined, it does not seem that these terms appear anywhere else in the ordinance.

Because the ordinance does not define the term "motor vehicle services," the Court should look at the plain and obvious meanings of these words. Courts in several states have found that "motor vehicle service station" is an unambiguous term that includes the sale of gasoline to automobiles. See Value Oil Company v. Town of Irvington, 152 N.J.Super. 354, 377 A.2d 1225, 1227 (S.C.Law Div.1977), aff'd, 164 N.J.Super. 419, 396 A.2d 1149 (S.C.App.Div.1978) (citing an ordinance that used the term "gasoline service station" interchangeably with "motor vehicle service station"); V.S.H. Realty v. Zoning Hrg. Bd., 27 Pa.Cmwlth. 32, 365 A.2d 670, 672 (1976) (holding that the plain meaning of the term as listed in Webster's Dictionary includes the retail sale of gasoline); Melody v. Zoning Bd. of App., 158 Conn. 516, 264 A.2d 572, 573 (1969) (using the term "motor vehicle service station" to include gasoline sales); Town of Wheatland v. Esso Standard Oil, 2 Misc.2d 784, 150 N.Y.S.2d 130, 131 (N.Y.Sup.Ct.1956) (stating that "motor vehicle service stations" are more commonly known as "gas stations"); Bauer v. Bd. of Paterson, 102 N.J.L. 235, 132 A. 515, 516 (1926) (holding that stations that provide motor vehicle services include those supplying only oil and gas). The Court finds these opinions persuasive. Although they are not authoritative in this Circuit and do not mandate that the Court follow their interpretation, they do present the common meaning of the term as interpreted by a variety of courts from a variety of locations.

Plaintiff tries to distinguish the cases cited above from the case at hand by noting that in this case the ordinance lists "motor vehicle service" alone, not followed by "station." The Court finds such argument disingenuous. What Pl...