Heye Farms, Inc. v. State, Dept. of Roads, S-95-054
| Decision Date | 31 January 1997 |
| Docket Number | No. S-95-054,S-95-054 |
| Citation | 558 N.W.2d 306,251 Neb. 639 |
| Parties | HEYE FARMS, INC., a Nebraska corporation, Appellee and Cross-Appellant, v. STATE of Nebraska, DEPARTMENT OF ROADS, Appellant and Cross-Appellee. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Motions for New Trial: Appeal and Error. A motion for new trial is to be granted only when error prejudicial to the rights of the unsuccessful party has occurred; such a motion is addressed to the discretion of the trial court, whose decision will be upheld on appeal in the absence of an abuse of that discretion.
2. Jury Instructions: Appeal and Error. It is the duty of the trial court to instruct on the proper law of the case, and failure to do so constitutes prejudicial error; in determining whether such has been done, all the jury instructions must be read together, and if, taken as a whole, they correctly state the law, are not misleading, and adequately cover the issues supported by the pleadings and the evidence, there is no prejudicial error necessitating a reversal.
3. Eminent Domain: Damages. The measure of damages for partial takings of land is the market value of the land taken and the difference in the value of the remainder before and after the taking.
4. Eminent Domain: Damages. In considering the effect of the severance on the market value of the remainder, account must be taken of all of the inconveniences caused by the severance as they might affect a prospective purchaser and the effect of the severance upon every available, reasonable, and probable future use of the property, as it relates to the market value of the remainder of the property considered as a unitary whole.
5. Motions to Strike. The consideration of a belated motion to strike testimony, no objection having been previously made, is discretionary with the trial court.
6. Eminent Domain: Evidence. Generally, evidence as to the sale of comparable property is admissible as evidence of market value, provided there is adequate foundation to show the evidence is material and relevant; the foundation evidence should show the time of the sale, the similarity or dissimilarity of market conditions, the circumstances surrounding the sale, and other relevant factors affecting the market conditions at the time.
Don Stenberg, Attorney General, and Robert G. Avey, Lincoln, for appellant.
Otto H. Wellensiek, of Wellensiek Law Offices, Syracuse, for appellee.
In this eminent domain action, the district court granted a new trial to the plaintiff-appellee condemnee, Heye Farms, Inc., which had obtained a verdict and judgment in its favor against the defendant-appellant condemner, State of Nebraska, Department of Roads, in the amount of $56,635. The State appealed to the Nebraska Court of Appeals, asserting that the district court abused its discretion in ordering a new trial in that, in summary, the district court erroneously concluded that it had (1) improperly instructed the jury concerning the matter of severance damages and (2) wrongly struck certain of Heye Farms' evidence. Heye Farms then cross-appealed, asserting that the district court erred in (1) refusing to instruct the jury on severance damages in accordance with the instruction Heye Farms tendered and (2) failing to strike certain of the State's evidence. Under our authority to regulate the caseloads of the Court of Appeals and this court, we, on our own motion, removed the matter to our docket. We now reverse, and remand with the direction that the verdict and judgment thereon be reinstated.
A motion for new trial is to be granted only when error prejudicial to the rights of the unsuccessful party has occurred, Farmers & Merchants Bank v. Grams, 250 Neb. 191, 548 N.W.2d 764 (1996); such a motion is addressed to the discretion of the trial court, whose decision will be upheld on appeal in the absence of an abuse of that discretion, Menkens v. Finley, 251 Neb. 84, 555 N.W.2d 47 (1996).
Heye Farms raises corn, soybeans, wheat, and cattle. The State condemned 30.15 acres of Heye Farms' Otoe County land for the construction of a highway, leaving Heye Farms with 414.79 acres. The new highway cuts off the northwest quarter of the farm from the south half, blocking Heye Farms' access to the 98.4-acre northwest area. There is evidence that as a result, Heye Farms will have to haul cattle from the south portion of its land to the north portion by truck and, approximately 15 or 16 times per year, will have to drive an extra 3 miles each way to farm part of its land.
The crossing now used is subject to periodic flooding in wet years. Evidence suggests that correcting the field crossing problem would cost about $650. However, the parties stipulated that the State will construct a drainage ditch on both sides of the new highway for the purpose of carrying water from existing terraces and will make necessary corrections if the ditch overflows. The highway also boxed in a small area of farmland lying between the highway and the existing waterway. Evidence suggests that this will cause a problem, with terraces being too close to the highway, leaving too little room for harvesting vehicles to turn around. Moving the existing waterway and correcting the terrace would cost $1,020.
Craig Harris testified as an expert on behalf of Heye Farms. He determined the value of the farm before the taking by considering the sales of comparable land in the surrounding area. He initially testified that the value of the farm prior to the taking was $713,000 and that the value of the area taken was $45,000. He also testified that the value of the remainder before the taking was $668,000 and after the taking was $613,350, taking into account $1,950 for conservation work, making the total damages $99,650 ($45,000 for the land taken and $54,650 for damages to the remainder).
When asked how he determined the difference in value of the remainder before and after the taking, Harris stated, "I used a--an income approach, the valuation process that would either be a loss of income to the farm or an increase in expense and determined the value of the remainder." He explained further that the right-of-way cut off the water supply to the northwest quarter, thus diminishing the grazing land value. Establishing a new water source would cost $2,190 annually. Harris "capitalized" this expense at 6 percent because it is a recurring expense, and thus concluded that the total expense for establishing a new water source at the northwest quarter is $36,500. Harris also considered the additional labor and equipment required to haul grain to the bin site and valued it at $505. Again, Harris capitalized this expense at 6 percent, arriving at a total expense of $8,420.
The State moved to strike from Harris' opinion of the damages to the remainder the $36,500 and $8,420 amounts, arguing that these two figures are improperly based on an income approach. The district court sustained the State's motion to strike and advised the jury to disregard that testimony.
Harris then testified that based on his experience in the sale of severance property versus nonseverance property, every remaining acre was damaged in the amount of $125 by the severance, making the total value of the remainder of the subject property after the taking $611,500. Thus, in Harris' opinion, the revised damages to the remainder are $56,500 ($668,000 less $611,500). That, together with the value of the property taken ($45,000), makes the total revised damages $101,500.
Darrell Smith testified as an expert for the State. Using a comparable sales approach, he testified that the value of Heye Farms' land prior to the taking was $571,900. He further testified that the value of the property taken by the State is $32,953 and that the value of the remaining property before the taking was $538,947 and $529,364 after the taking, a difference of $9,583, making the total damages $42,536. In arriving at the amount of damages to the remainder, Smith considered the newly restricted access to a particular 98.4-acre area, increased difficulties in farming a particular 3.3-acre area (costing $2,723), easements on .27 acres, the need to erect a fence, the need for a new waterway (costing $1,275), and the need to level four terraces. Smith also testified that due to the parties' stipulation about the waterways, there will no longer be a problem with farming the 3.3-acre area; thus, $2,723 and $1,275 should be subtracted from his damages estimate. Therefore, Heye Farms' total damages, according to Smith's final estimate, are $38,538.
On cross-examination, Smith admitted that he was not familiar with Neb.Rev.Stat. § 39-1331 (Reissue 1993), which provides:
Whenever the location, relocation, establishment, construction, or reconstruction of a highway causes the severance of real property, which is being used for farm or other agricultural purposes and title thereto is held under one owner, the department [of Roads] shall make provision for crossing the highway from one tract to the other, or compensation for the severance of the tract shall be paid....
Heye Farms then unsuccessfully moved to strike Smith's testimony because he made his appraisal without knowledge of § 39-1331. On redirect examination, Smith stated that in making his appraisal, he considered the fact that there was no access between the northwest quarter and the south quarters.
After the jury viewed the property, the district court instructed, in relevant part, as follows:
[Heye Farms] is entitled to recover:
1. The fair market value of the property taken....
2. Any decrease in the fair market value of the remaining property, to the extent that the decrease was proximately caused by the taking....
....
The "fair market value" of a piece of property is the price that someone ready to sell, but not required...
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