Land Clearance For Redevelopment Authority of Kansas City v. W.F. Coen & Co.

Decision Date25 April 1989
Docket NumberNo. WD39552,WD39552
Citation773 S.W.2d 465
PartiesLAND CLEARANCE FOR REDEVELOPMENT AUTHORITY OF KANSAS CITY, Missouri, Respondent, v. W.F. COEN & COMPANY, et al., Defendant. Appeal of ALLRIGHT AUTO PARKS, INC.
CourtMissouri Court of Appeals

Application to Transfer Denied Aug. 1, 1989.

Stephen Girard Mirakian, Kansas City, for appellant.

Robert J. Campbell and Leland H. Corley, Overland Park, for respondent.

Before SHANGLER, P.J., and CLARK and FENNER, JJ.

SHANGLER, Presiding Judge.

The defendants Allright Auto Park, Inc. and Allright Carpark, Inc. [Allright], condemnees, bring these consolidated appeals from a judgment entered on jury verdicts on a trial of exceptions to the commissioners' awards in a condemnation action brought by Land Clearance for Redevelopment Authority of Kansas City, Missouri [LCRA] and from the judgment of apportionment entered by the court.

The subject of the condemnation and apportionment trials were three parcels of land located in the central business district. This land was for the site of the AT & T Town Pavilion development. The three lots, parcels 13, 14 and 15, constitute a surface parking area known as the Kline lot. Allright Auto Park was the fee owner of Parcels 13 and 15. Allright Carpark, Inc., a wholly owned subsidiary of Allright Auto Park, was lessee of parcel 14. LCRA, the condemnor, purchased parcel 14 in fee, subject to the lease, shortly before commencement of the condemnation proceedings.

The commissioners determined the fair market value of the Kline lot, and on March 12, 1984, LCRA paid the sum into the court registry and so acquired title to parcels 13 and 15. LCRA had already purchased the fee in parcel 14, subject to the Allright lease, on February 24, 1984. The parties filed exceptions to the commissioner awards and the issue of the fair market value of the parcels taken was tried to a jury. Prior to the trial of the exceptions, each party moved in limine to exclude certain valuation evidence to be tendered by the other. LCRA sought to exclude the Allright evidence of business profits--actual or prospective--from the operation of the property as a surface parking lot. Allright sought to exclude the LCRA evidence of comparable land sales. The court denied both motions.

The valuation methodologies and determinations presented by the parties were markedly disparate. Allright undertook to prove value through two expert economists, Burns and Faurot. They gave opinion that the highest and best use of the Kline lot was for continued use as a surface parking lot. They gave opinion also that the value of each parcel on the date of taking was $98 per square foot. That calculation represented the present value of future profits lost as a result of the taking. LCRA undertook to prove value through two expert appraisers, Nunnink and Arnote. They gave opinion that the highest and best use of the Kline lot was redevelopment or assemblage, but included interim surface parking. They gave opinion also that the value of each parcel on the date of taking was between $45 and $50 per square foot. That estimate of value was based on sales of comparable properties in the central business district. The jury returned a verdict of $64.80 per square foot for each parcel. 1

The trial court then conducted a hearing under § 523.053, RSMo 1986, to apportion the jury award of $343,699.20 for parcel 14 between LCRA as fee owner and Allright as lessee. The value theories of apportionment, the bonus value method posited by LCRA and the summation method employed by Allright, were also markedly disparate. They will be fully explained in the course of opinion. The trial court entered detailed findings of fact and conclusions of law which expressly rejected the Allright theory of apportionment as inconsistent with Missouri law and generally accepted appraisal techniques. The court entered judgment of seven percent [7%], or $25,300, to Allright for its leasehold interest in parcel 14, and ninety-three percent [93%], or $318,399, to LCRA for its fee interest in parcel 14, the sum equal to the $343,699.20 fair market value at the time of taking as determined by the jury verdict.

Allright preserves four contentions of error for our review: 1) that Instruction 6 and Instruction 7 which submitted fair market value as the standard and measurement of damages did not properly apply to the taking because the Kline lot was not subject to the usual fair market value tests, 2) that the trial court improperly received Exhibit 41, a computer printout prepared by an expert for LCRA, 3) that the trial court on the trial of the exceptions improperly precluded Allright from cross-examination regarding the source of funds to pay the condemnation verdicts, and 4) the trial court at the apportionment hearing improperly found the facts and declared the law in the rendition of that phase of the judgment.

INSTRUCTIONS 6 & 7 & FAIR MARKET VALUE

Allright contends first that fair market value does not measure the damages in the condemnation of a surface parking lot, but rather that in such a taking, the present value of lost future profits from the use of the land is the best evidence of value. Allright argues, accordingly, that Instruction 6 [MAI 9.01] and Instruction 7 [MAI 16.02] which submitted fair market value, misdirected the jury, and that the refusal of the court to submit Instruction A tendered by Allright was prejudicial error. 2 The expounded argument is that our law recognizes that in the case of a surface parking lot, it is the character of the property itself and not the labor of the owner that makes the land valuable. The profits are derived directly, almost altogether, from the use of the land and so are the land's chief source of value. It was the Allright expert testimony, moreover, that the value of the parking lot was almost entirely dependent upon its location in the central business district, rather than upon improvements or operational and marketing efforts. The taking of the land is, therefore, tantamount to the taking of the business. Allright presented economist experts to project the future profits until February, 2008, [when the lease on parcel 14 expired] and then calculated the present value of the lost future profits by the application of a 10.5% interest rate--the formula prescribed by another Allright expert. This evidence, Allright argues, justified the submission of Instruction A under our decisions.

To sustain argument that the capitalization of profits was a valid method to prove the fair value of the surface parking lot taken in condemnation [and hence a valid basis for the submission of tendered Instruction A], Allright cites Private Property for Municipal Courts Fac. v. Kordes, 431 S.W.2d 124 (Mo.1968); City of St. Louis v. Union Quarry & Constr. Co., 394 S.W.2d 300 (Mo.1965); State ex rel. Highway Comm'n v. Mount Moriah Cemetery Ass'n, 434 S.W.2d 470 (Mo.1968); and Reorganized School Dist. No. 2 v. Missouri Pac. R.R. Co., 503 S.W.2d 153 (Mo.App.1973). The rule of decision in those cases, however, is not as casual as Allright makes out. Those cases reaffirm that business profits do not usually bear as admissible evidence to prove the value of the land on which the business is located. That exclusion rests on the theory that such evidence is "too speculative, uncertain, and remote to be considered as a basis for computing or ascertaining the market value." Union Quarry at 306.

The just compensation our constitution mandates for private property taken for public use means, usually, fair market value of the property at the time taken. That is to say, what a reasonable buyer, who was willing but did not have to purchase, would give and what a seller, who was willing but did not have to sell, would take. Id. at 305[6-10]. The fair market value of property imports proof of sales of similar property in the community as the method to fix the value of the property taken. Mount Moriah at 472. When the property is such that evidence of fair market value does not obtain, necessity requires a different formula to fix fair value. Thus, in the taking of such singular properties, as school yards, church yards, college campuses, buildings under construction, and cemeteries--properties without fair market value, the capitalization or even other method of valuation may be approved. Id., Kordes at 126; Union Quarry at 305; Reorganized School Dist. # 2 at 158. In any such case, where a business is conducted on the land taken in such a manner as to be inextricably interrelated, "so that an appropriation of the land means an appropriation of the business," evidence of net profits of the business may be allowed to prove the value of the land taken. The evidence of net profits, nevertheless, must be "clear, certain and easily calculable," so that conjecture "is minimized as far as possible...." Union Quarry at 306.

Allright argues that a surface parking lot comes within this allowable proof of land value by evidence of net profits of the business related to the land--and cites Kordes. The tracts taken in Kordes were operated as a parking lot. The court expressly found that its use "was related to and connected with the land so that appropriation of the entire tract appropriated the business." Moreover, the evidence of profits was clear. The witnesses also all testified that "the market data approach of comparable sales could not be used because the only sales were 'in the urban renewal development' and were not arm's length transactions." Kordes at 125. It was only because there was no other way to arrive "at a fair market on it" that the evidence of the business profits was allowed. Id. at 126. In these singular circumstances, Kordes validated the capitalization of business profits method to determine the value of the land taken. Kordes does not treat a surface parking lot as a species of...

To continue reading

Request your trial
10 cases
  • State ex rel. Missouri Highway and Transp. Com'n v. Quiko
    • United States
    • Missouri Court of Appeals
    • 29 d3 Maio d3 1996
    ... ... , Rich Tiemeyer, Chief Counsel, Jefferson City, Barry S. Zirulnik, Price & Zirulnik, Jackson, ... (MHTC) filed a petition to condemn tracts of land adjacent to existing U.S. 65 north of Branson, ... point relied on but refers to no case authority in the argument portion of the brief under that ... the leasehold, the court said, in Land Clearance for Redevelopment Corp. v. Doernhoefer, 389 ... v. W.F. Coen & Co., 773 S.W.2d 465, 471 (Mo.App. W.D.1989) ... Wulfing v. Kansas City S. Indus., Inc., 842 S.W.2d 133, 159 ... ...
  • City of Riverside v. Progressive Inv. Club
    • United States
    • Missouri Court of Appeals
    • 29 d2 Maio d2 2001
    ... ... Progressive Investment Club of Kansas City, Inc., et al., Respondent, Ilios, Inc., ...         Where the owner of condemned land withdraws an award paid into the court for the ... App. E.D. 1996); Land Clearance For Redevelopment Authority v. W.F. Coen & Co., ... ...
  • Spencer Diesel Injection & Turbo, Inc. v. City of Sioux City, Iowa, No. 7-069/06-0494 (Iowa App. 4/25/2007)
    • United States
    • Iowa Court of Appeals
    • 25 d3 Abril d3 2007
    ... ... as relevant in determining the value of the land because it is too uncertain and depends upon too ... Land Clearance for Redevelopment Auth. of Kansas City v. Coen, ... ...
  • Santa Fe Trail Neighborhood v. W.F. Coehn
    • United States
    • Missouri Court of Appeals
    • 25 d2 Janeiro d2 2005
    ... ... SANTA FE TRAIL NEIGHBORHOOD REDEVELOPMENT CORP., Plaintiff, ... Dr. Joan Walker, t, ... W.F. COEN & COMPANY, et al., Defendant, ... Dr. Henrik A ... the owner, and a mere permission to use land, dominion over it remaining in the owner and no ... grantor to freely revoke it any time." Kansas City Area Transp. Auth. v. Ashley, 485 S.W.2d ... or encumbrance on the property." Land Clearance for Redevelopment Corp. v. Doernhoefer, 389 ... be condemned by any legally constituted authority for any purpose, then the term of this lease ... ...
  • Request a trial to view additional results
6 books & journal articles
  • Section 21 Other Evidence Issues
    • United States
    • The Missouri Bar Condemnation Practice Deskbook Chapter 8 Litigating the Exceptions Case: Pretrial Discovery and Trial
    • Invalid date
    ...the damages on behalf of the condemnor will not be admitted. Land Clearance for Redevelopment Auth. of Kansas City v. W.F. Coen & Co., 773 S.W.2d 465, 470 (Mo. App. W.D. 1989). But if the condemnor’s attorney opens the door, the courts will allow further inquiry by the landowner’s counsel i......
  • Section 67 Leasehold Valuation
    • United States
    • The Missouri Bar Condemnation Practice Deskbook Chapter 9 Valuation
    • Invalid date
    ...of any bonus value the lessee has under the lease. Land Clearance for Redevelopment Auth. of Kansas City v. W.F. Coen & Co., 773 S.W.2d 465, 471 (Mo. App. W.D. 1989). The “bonus value” is the difference between the fair market value of the unexpired lease and actual rent to be paid under th......
  • Section 23 Leasehold for a Term of Years
    • United States
    • The Missouri Bar Condemnation Practice Deskbook Chapter 6 Distribution of Commissioners' Award
    • Invalid date
    ...County v. State Tax Comm’n, 406 S.W.2d 644 (Mo. banc 1966) Land Clearance for Redevelopment Auth. of Kansas City v. W.F. Coen & Co., 773 S.W.2d 465 (Mo. App. W.D. The lessee carries the burden of proving existence of bonus value. St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453 (Mo. ......
  • Section 24 What Is Compensable: Measure of Damages, Interest, and Attorney Fees
    • United States
    • The Missouri Bar Condemnation Practice Deskbook Chapter 11 Inverse Condemnation
    • Invalid date
    ...interests are included in the one case than in the other case. Land Clearance for Redevelopment Auth. of Kansas City v. W.F. Coen & Co., 773 S.W.2d 465 (Mo. App. W.D. 1989). Because the Constitution requires payment before the acquisition of the property, the property owner is technically e......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT