In re Chittenden Solid Waste Dist.

• Decision Date: 20 April 2007
• Docket Number: No. 2005-217.,2005-217.
• Citation: 2007 VT 28,928 A.2d 1183
• Parties: In re CHITTENDEN SOLID WASTE DISTRICT.
• Court: Vermont Supreme Court

928 A.2d 1183

2007 VT 28

In re CHITTENDEN SOLID WASTE DISTRICT.

No. 2005-217.

Supreme Court of Vermont.

April 20, 2007.

Motion for Reargument Denied June 22, 2007.

Michael L. Burak and W. Scott Fewell of Burak Anderson & Melloni, PLC, and Joseph E. Frank of Paul Frank & Collins, P.C., Burlington, for Plaintiff-Appellee.

Robert F. O'Neill, Norman Williams and Megan J. Shafritz of Gravel and Shea, Burlington, for Defendant-Appellant.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

DOOLEY, J.

¶ 1. Hinesburg Sand & Gravel Company, Inc. (HS & G) appeals from an amended judgment of $4 million in damages for the condemnation of its sand pit by Chittenden Solid Waste District (the District) to create a solid waste landfill. Following a jury verdict, the Chittenden Superior Court granted the District's motion for judgment as a matter of law pursuant to V.R.C.P. 50(b). The court ruled that HS & G suffered no compensable business loss, and it set aside that part of the verdict that awarded HS & G an additional $4.8 million for business loss. HS & G argues that the court erred in granting the motion and that the court should have awarded it interest to make the valuation current. We hold that the superior court properly determined that HS & G was not entitled to compensation for business loss or to prejudgment interest. We affirm.

¶ 2. Condemnation proceedings began in 1992 when the District filed a petition pursuant to 24 V.S.A. § 2299a to condemn a sand pit located in Williston, Vermont that is owned and operated by HS & G. As its name suggests, HS & G's manufacturing and processing plant, as well as its main gravel pit, are located in Hinesburg, some miles from the sand pit.

¶ 3. The District intends to create a regional solid waste landfill at the sand pit site. The landfill condemnation statute, 24 V.S.A. §§ 2299a-2299k, sets forth two separate steps for the District to condemn property for a landfill. First, the District must show, and the superior court must find, that the condemnation is necessary. Id. § 2299e. Second, unless the District and any person "with an interest in the property" can agree on damages, the court must assess the damages caused by the taking. Id. § 2299f.

¶ 4. In this case, HS & G contested both the necessity for the taking and, after necessity was determined, the compensation offered by the District. In the necessity phase, the superior court found that the District had satisfied the criteria for necessity set forth in 24 V.S.A. § 2299b(1), subject to the condition that the District stockpile and make sand from the pit available to HS & G for up to thirty years. The condition was included pursuant to a plan presented by the District to excavate and stockpile sand, at its expense, for HS & G to transport to its Hinesburg plant to process. To the extent the District excavated and stockpiled sand for HS & G, the plan required it to (1) excavate the sand "in a reasonable way" consistent with "preserving or enhancing the value of the available sand to HS & G," (2) cover it with a "vegetative cover," and (3) handle it so as to "prevent any significant contamination by litter or landfill leachate." HS & G appealed the finding of necessity and the court's authority to order the stockpiling condition to this Court, and we affirmed. Chittenden Solid Waste District v. Hinesburg Sand & Gravel Co., 169 Vt. 153, 154, 730 A.2d 614, 616 (1999).

¶ 5. In affirming, we explained that the superior court had simply adopted the proposal of the District, and had not modified or altered the proposal. Thus, we stressed that the condition did not bind HS & G:

The condition objected to by HS & G was imposed on [the District] not HS & G. HS & G could take it or leave it. The condition commits [the District] to adhere to a plan, at [its] cost and expense, to make the Redmond sand available to HS & G . . . if it chose to take it. We conclude that in so determining the court did not bind HS & G to any conditions subsequent to the condemnation, but instead was merely adhering to the legislative mandate under § 2299b(1) that the court consider and give effect to the policy of protecting earth resources as required by 10 V.S.A. § 6086. . . .

The court did take into account "inconvenience and expense" by offering HS & G the choice whether to accept the sand. Depending on HS & G's choice, the issue of expense may be relevant in the damages portion of the proceedings yet to come.

Id. at 160, 730 A.2d at 619-20.

¶ 6. This appeal arises from the damages phase of the condemnation. Before trial, the parties skirmished over what issues could be litigated in the damages phase. The District, through a motion for partial summary judgment, argued that HS & G was precluded by collateral estoppel from relitigating issues related to the viability of the District's plan to excavate and provide sand to HS & G. The superior court agreed, deciding that HS & G could not relitigate the claim that sand would not be available, because that issue had been decided in the necessity phase when the court found that the District's plan would provide sand to HS & G in a useful and valuable form. The court did, however, deny the District's motions in limine to prevent HS & G's experts from testifying to the costs involved in using the excavated sand as it related to business losses. A similar ruling was made just before trial commenced.

¶ 7. During the jury trial on damages, HS & G introduced evidence to prove that in addition to compensation for the value of the sand pit property, it was entitled to recover for business losses consisting of the additional costs of sorting the commingled coarse and fine sand and cleaning the sand because of contamination by bird droppings on the stockpile. HS & G's expert testified that this additional processing would cost the company over $5.7 million. As to the value of the property itself, appraisal experts for both parties agreed that the highest and best use of the property was as a landfill, and not as a sand pit. They agreed that the property's fair market value, when valued as a landfill, was about $1.8 million.¹ In addition, HS & G president Paul Casey testified that he thought the property was worth $7.5 million, without including the value of the sand.

¶ 8. The court instructed the jury that it could award HS & G compensation for both the fair market value of the property and the business loss. For the property value determination, the court instructed the jury to determine fair market value "based on the highest and best use of the property," defined as the one "which is the most profitable." The court went on to instruct that fair market value "includes the value of the sand." The court also instructed that in determining fair market value it must consider the effect on that value of any restrictions on the District's use: the right of HS & G to excavate and remove sand through October 31, 2007, the obligation of the District to make sand available to HS & G under its sand plan, and the right of HS & G to take the stockpiled sand without charge. The court instructed that the jury should set fair market value as of January 1, 2000. Since the valuation date was already nearly four years old, the court further instructed: "Do not add interest, that will be handled by the Court after the verdict is received."

¶ 9. The court also instructed on business loss as follows:

Damages to the sand and gravel operation at the Hinesburg plant are measured by any increase in the costs of operating the plant caused by the District's taking of the Redmond Road sand pit. Hinesburg Sand and Gravel asserts that the District's co-mingling of coarse and fine sands and the defecation of sea gulls on the sand piles will increase processing costs back at its plant. . . . [A]ny damages for increased costs at the Hinesburg plant must be reduced to present value as of January . . . of 2004. . . . I must inform you that Hinesburg Sand and Gravel will have sufficient quantity and quality of Redmond sand to continue its plant operations for the foreseeable future. . . . And although there will be sufficient quantity and quality, that does not answer the question of whether there may be increased processing costs which is what a good deal of this trial was about.

¶ 10. The jury returned a verdict of $4 million for the property and $4.8 million for the value of business loss. After the jury rendered its verdict, the District moved for judgment as a matter of law pursuant to V.R.C.P. 50(a), arguing that HS & G failed to carry its burden of proof on business loss damages. In this motion, and in its renewed motion in March 2004 the District argued that HS & G was collaterally estopped from arguing that it would have to bear increased processing costs because the court had found in the necessity phase that the "inconvenience and expense to HS & G [because of the sand plan] would be negligible." The District also argued that the evidence supporting business loss was speculative, that business loss was unrecoverable for business on another property — that is, the site of the Hinesburg plant — and that HS & G could not recover for business loss based on its use of the property as a sand pit when the amount of damages was based on the use of the property as a landfill. The court granted the District's motion for judgment as a matter of law on March 23, 2005, striking the award for business loss. The court agreed that HS & G was collaterally estopped from arguing about the quality and quantity of sand, that the business loss incurred was not to "business on the property" as required by statute, and that valuing the property as a landfill and then obtaining compensation for business loss associated with its use as a sand pit would constitute double recovery. On May 6, 2005, the court entered an amended judgment of $4 million for the fair market value of the property. HS & G here appeals this amended...