L.U. Sheep Co. v. Board of County Com'rs of County of Hot Springs, 89-148

Decision Date11 April 1990
Docket NumberNo. 89-148,89-148
Citation790 P.2d 663
PartiesL.U. SHEEP COMPANY, a Wyoming Corporation; Gary Kellogg and Brenda Kellogg, husband and wife; and Maxine Kellogg, Appellants (Defendants), v. BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF HOT SPRINGS, Wyoming, Appellee (Plaintiff).
CourtWyoming Supreme Court

John W. Davis of Davis, Donnell, Worrall & Bancroft, P.C., Worland, and James L. Applegate, Hirst & Applegate, Cheyenne, for appellants.

J. John Sampson, Sheridan, for appellee.

Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY and GOLDEN, JJ.

THOMAS, Justice.

The question of what is the proper instruction to be given to the jury with respect to the measure of damages to the landowner for a partial taking of a privately owned road under the Wyoming Eminent Domain Act, §§ 1-26-101 to -817, W.S.1977 (the Act), is the central issue to be resolved in this case. Collateral issues are asserted relating to the propriety of the cooperation of the United States Forest Service (USFS) in the road project; whether that cooperation resulted in the USFS being an indispensable party to the proceedings; whether Hot Springs County brought the action under the proper statutes; whether the trial court erred in excluding from evidence the report of court-appointed appraisers; and whether the trial court erred in granting motions submitted by Hot Springs County to suppress testimony concerning the involvement of the USFS in the project; certain testimony from the landowners whose property was taken; evidence about the rental value of the land; and evidence relating to road construction costs.

The trial court failed to instruct the jury about the proper measure of damages in this instance, and we must reverse and remand the case for further proceedings consistent with this opinion. Because the same issues are likely to arise upon retrial, we address the rulings of the trial court on the motions to suppress evidence. Those rulings appear to be incorrect in some instances in light of the proper measure of damages. We affirm the rulings of the trial court that established the posture of the USFS in connection with this case and excluded evidence concerning the involvement of the USFS. We also agree with the trial court that Hot Springs County could bring this case under the Act rather than under the statutes relating to the establishment of a county road. Sections 24-3-101 to -127, W.S.1977.

In their brief on appeal, styled "Brief for Appellants/Defendants," L.U. Sheep Company, and Gary Kellogg, Brenda Kellogg, and Maxine Kellogg (Kelloggs), set forth the following issues to be addressed by the Court:

"I. Whether or not the district court erred when it refused to instruct in accordance with existing statutory law.

"II. Whether or not the district court erred when it ruled that the joint enterprise of Hot Springs County and the Forest Service regarding the Grass Creek road project did not violate either Wyoming statutes or the Wyoming Constitution.

"III. Whether or not the district court erred when it held that it was proper for Hot Springs County to proceed under §§ 1-26-105 et seq., 1 rather than the county road statute, §§ 24-3-101, et seq.

"IV. Whether or not the district court erred when it refused to allow any evidence from the three appraisers who had been previously appointed by the court.

"V. Whether or not the district court erred by granting any of several motions in limine.

"VI. Whether or not the district court erred when it refused to hold that the Forest Service was an indispensable party to these proceedings."

The Board of County Commissioners of the County of Hot Springs, Wyoming (Hot Springs County), in its Brief for Appellee/Plaintiff, recites the same six issues as the appellants, and it adds the following statement of an additional issue:

"VII. Whether or not the jury verdict was supported by competent evidence presented at trial and should, therefore, be affirmed."

Hot Springs County filed its complaint seeking condemnation of a private road that had been constructed across the lands of L.U. Sheep Company and the Kelloggs. The action was commenced on March 3, 1988, well after the effective date of the Act, and the County did invoke its power of eminent domain pursuant to § 1-26-801. The purpose of the condemnation was to provide access to the Shoshone National Forest for recreation, the harvesting of timber, and the development and operation of oil and gas leases. The USFS had agreed to finance the acquisition of this road by Hot Springs County, and the record justifies the conclusion that the acquisition of the road was accomplished at the behest of the USFS.

The road involved in this case runs from Grass Creek in northern Hot Springs County to the border of the Shoshone National Forest. The road, which follows Grass Creek, had existed as a private road for many years. The length of the road where it crossed the Kelloggs' property was .94 of a mile and 6.84 miles where it crossed the property of L.U. Sheep Company. Significant improvements had been made to the road in the 1950s including, at the time of trial, about eighteen cattle guards and thirty-five culverts. Over the years, the landowners had permitted the road to be used for access to a youth camp and to the sites of timber and oil and gas operations. The owners, however, had denied access to other users of the road. Most of the surrounding land is used as pasture and hay meadows.

At the time their answer was filed, the Kelloggs and L.U. Sheep Company also filed a motion to join the USFS as an indispensable party, invoking the provisions of Rule 19, W.R.C.P. That was met by a subsequent motion on the part of Hot Springs County to suppress any mention of the USFS in the condemnation proceedings. The trial court found that the agreement between Hot Springs County and the USFS did not make the USFS an indispensable party in that a determination without the involvement of the USFS would not affect its substantial rights. For that reason, it denied the motion of the Kelloggs and L.U. Sheep Company, but it granted the motion of Hot Springs County, ruling that any reference to the USFS would be immaterial and irrelevant.

The procedural effort of Hot Springs County to confine the proceedings continued, and it filed motions to suppress evidence relating to the rental value of the private road; evidence demonstrating road construction costs; and testimony from the landowners about the collateral effects of making the road a public road. All of these motions were granted by the trial court. The judge stated that testimony from landowners concerning livestock losses and increased dust attributable to making the road public would be entirely speculative. No definite reasons were articulated for granting the other two motions. The argument of Hot Springs County was that the rental value of the road and the costs of construction were not relevant in determining the "before and after values" of the ranch properties that the partial taking affected. Hot Springs County maintained that the only proper measure of compensation in the case was to compare, in each instance, the value of the entire property before the partial taking with the value of the entire property after the partial taking.

In August of 1988, the parties stipulated to certain facts and issues in the case. The effect of that stipulation was to establish the right of Hot Springs County to condemn the road under the Act, and the only issue left to be resolved was the question of just compensation for the condemnation of the private road. The trial court entered an order that reflected the stipulation of the parties and, pursuant to Rule 71.1(e), W.R.C.P., also provided for the appointment of three independent appraisers.

The appraisers were instructed by the court with respect to making a determination of the amount of just compensation, and they were told to be guided by §§ 1-26-701 through -713, W.S.1977, which is the compensation section of the Act. 2 Prior to arriving at their determination of the values of the respective takings, the appraisers viewed the road, received and examined evidence, and held a hearing. The report of the appraisers was filed with the court on March 8, 1989.

The appraisers determined that the just compensation for the taking of the Kellogg lands was $33,350 and, for the taking of the lands of L.U. Sheep Company, just compensation was determined to be $128,000. In arriving at the just compensation for the value of the Kellogg lands taken, the appraisers included the loss of revenues for use of the road and damages to the remaining property caused by the general public. The appraisers relied upon these same factors in arriving at the value of the lands taken from L.U. Sheep Company, and they allowed additional compensation to that landowner for the diminution in value of its remaining lands. Hot Springs County labeled the appraisers' determinations improper and unacceptable.

Pursuant to the provisions of Rule 71.1(j), W.R.C.P., the County requested a jury trial, and one was conducted on April 18 and 19, 1989. The appraisers' report was offered in evidence by the Kelloggs and L.U. Sheep Company, but the trial court refused to receive it into evidence stating that it was hearsay and that it would not assist the jury. At the trial, both sides presented experts who testified with respect to the appropriate compensation for the lands taken. The expert presented by the Kelloggs and L.U. Sheep Company testified that the value of the Kellogg land that was taken was $25,225 and that the value of the lands taken from L.U. Sheep Company was $201,012. Those amounts included compensation for the effect that the public road would have on the remaining lands. One of the experts called by Hot Springs County determined the value of the Kellogg taking to be $1,200 and the value of the L.U. Sheep Company taking to be $8,700. A second expert called by Hot Springs County...

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