Manhattan Ice & Cold Storage, Inc. v. City of Manhattan

• Citation: 274 P.3d 609
• Decision Date: 23 March 2012
• Docket Number: No. 102,235.,102,235.
• Parties: MANHATTAN ICE AND COLD STORAGE, INC., Appellant, v. CITY OF MANHATTAN, Kansas, a Municipal Corporation, Appellee.
• Court: Kansas Supreme Court

274 P.3d 609

MANHATTAN ICE AND COLD STORAGE, INC., Appellant,

v.CITY OF MANHATTAN, Kansas, a Municipal Corporation, Appellee.

No. 102,235.

Supreme Court of Kansas.

March 23, 2012.

Syllabus by the Court

1. A point raised only incidentally in a brief but not argued there is deemed abandoned. Without specific argument on why an excluded witness should have been permitted to testify, an appellate court cannot review the merits of the exclusion.

2. When testimony of an excluded expert in an eminent domain trial was potentially relevant to the issue of special use or highest and best use as a meat processing plant, but the evidence was already presented to the jury through a representative of the landowner, the evidence could have been excluded as cumulative, and there is no prejudice.

3. The question of whether evidence concerns material too remote in time to be admissible in an eminent domain trial lies within the discretion of the district judge. Temporal remoteness is one of the factors the judge should consider. On the facts of this case, the trial judge did not abuse his discretion when excluding a temporally remote proposal on refrigeration equipment for a meat processing plant.

4. When a landowner in an eminent domain trial has failed to identify a representative from a company as an expert, any representative who testifies at trial must be treated as a lay witness and must be in compliance with the statutory requirements in K.S.A. 60–456(a) and K.S.A. 60–419.

5. Without a proffer of an excluded witness' testimony, an appellate court is not in a position to review the decision of the trial judge on relevance. A party bears the burden of making and preserving a record sufficient to support its claims on appeal.

6. A landowner is competent to testify on his or her nonexpert opinion of the value of the subject property in an eminent domain trial, but a landowner who is not an appraisal expert is not qualified to assemble the components of and calculate replacement cost. A jury, unguided by expert testimony or similarly established or recognized authority, also cannot assemble the components of and calculate replacement cost.

7. Although deposition testimony may be used at trial in certain circumstances, it is subject to the same limitations and objections as though the declarant were testifying in person. These limitations include relevance and the knowledge required of an expert required under K.S.A. 60–456(b)(1).

8. A landowner who chooses not to call an appraisal expert to the witness stand in an eminent domain trial—apparently because a pretrial motion in limine ruling restricted the appraisal expert's reliance on another expert not present at trial and whose deposition was properly excluded—cannot complain on appeal that the appraisal expert's testimony was too strictly circumscribed.

9. Under Supreme Court Rule 6.02 (2011 Kan. Ct. R. Annot. 39), an appellate court presumes a district judge did not rule on an issue when an appellant fails to provide a record citation to the ruling in its brief.

10. PIK Civ. 4th 131.08 and 131.09 concerning special use of property subject to eminent domain are outmoded. The current wording of K.S.A. 26–513(e) and instructions based upon it already provide adequately for jury consideration and valuation of a unique or highly unusual property.

John R. Hamilton, of Hamilton, Laughlin, Barker, Johnson & Watson, of Topeka, argued the cause, and Robert L. Pottroff, of Pottroff Law Office, P.A., of Manhattan, was with him on the briefs for appellant.

William L. Frost, of Morrison, Frost, Olsen, Irvine, Jackson & Schartz, LLP, of Manhattan, argued the cause, and Katharine J. Jackson, of the same firm, was with him on the brief for appellee.

The opinion of the court was delivered by BEIER, J.:

This appeal arises out of an eminent domain proceeding on three tracts. Landowner Manhattan Ice and Cold Storage, Inc. (Landowner) appeals the $3,515,043 judgment of the district court, challenging evidentiary rulings and one instruction. The condemning authority, the City of Manhattan (City), pursues a conditional cross-appeal. Because we affirm the district court's judgment, we need not reach the cross-appeal issues.

Factual and Procedural Background

Events Leading Up To Trial

Landowner initiated district court review of the $3.2 million appraisers' award for the June 29, 2007, taking of three tracts of land: one unimproved, one underlying a Rainbo Bread business, and one underlying a Manhattan Meats processing plant.

During pretrial discovery, the City took depositions of landowner's president, Steve Saroff; landowner's designated appraisal expert, Christopher J. Heavey, whose resume identifies him as a property management professional; and landowner's designated rebuilding expert, James Larva, a construction project manager. During his deposition, Saroff opined that the three tracts had a total fair market value of $10 million. Heavey's written report included a total fair market value for the three tracts of $12,241,367.86, $7,907,205 of which was attributable to the “replacement cost” of the Manhattan Meats processing plant. This cost was calculated in the written report of Larva.

At the time of the pretrial conference, the trial judge permitted landowner to add Dr. James Marsden as an expert witness. Landowner intended to use Marsden to testify on United States Department of Agriculture regulations for meat processing plants.

The City filed an initial and supplemental motion in limine before trial, seeking exclusion of:

(1) Testimony of Heavey on any opinion about the Rainbo Bread or Manhattan Meats tract or any proposed use, on fair market value of the subject property, on the replacement cost method of appraising, and on depreciation of the subject property;

(2) Testimony of Larva or of Mark Redmond on any opinion of the cost to build or replace any improvements;

(3) Testimony of Bob Bramhall on any opinion of the cost to install heating or air conditioning units or refrigeration equipment;

(4) Testimony of Saroff on any opinion of value related to this case;

(5) Testimony of Saroff and/or Debbie Saroff on the uniqueness of the property, just compensation, conversations with the City regarding the property, special use of the property, historical value of the property, compatible uses of the property, or planned improvements;

(6) Testimony of Marsden on any “special value” or any other value of the subject property;

(7) Testimony of Jean Wherrel; Brett Ballou, Roger Schultz, Tim Schultz, or any representative of Schultz Construction Company; testimony of Jim Gleason, Mark Warner, Don Ince, Joe Mills, Bruce McCallum or any representative of Dial Realty; testimony of Ron Fehr, Jason Hilgers or Brian Williams; or Don Crubel on any issue;

(8) The contract for purchase of Ince's stock, other evidence of Ince's buyout, or photos from the national registry of Saroff's historical home; and

(9) Any evidence related to the Kansas Department of Transportation's acquisition of property for a bridge over the Kansas River.

In the trial judge's order ruling on the motions, he stated:

“1. Replacement cost less depreciation is a valid and recognized method of valuing land in a condemnation proceeding.

“2. The opinions of Chris Heavey and a representative of Herndon & Redmond, Inc.[,] are admissible as to the cost of the replacement of the existing buildings and land within the subject tract.

“3. Steve Saroff, as a landowner, is entitled to testify as to the value of his land, notwithstanding his opinion may be based on what he has heard from others.

“4. The testimony of Bob Bramhall as to the cost of refrigeration equipment is too remote in time and will not be allowed.

“5. With regard to defendant's supplemental motion in limine the [testimony of Saroff or Debbie Saroff regarding the uniqueness of the property, just compensation, conversations with the City regarding the property, historical value of the property, compatible uses of property, planned but not yet accomplished improvements or design changes to the property; testimony of Don Crubel regarding the subject properties; testimony of Jean Wherrel; testimony of Brett Ballou, Roger Schultz, Tim Schultz, or any other representative of Schultz Construction Company; testimony of Jim Gleason, Mark Warner, Don Ince, Joe Mills, Bruce McCallum or any representative of Dial Realty; testimony of Ron Fehr, Jason Hilgers, or Brian Williams regarding any issue in this matter; introduction of the contract for purchase of Don Ince's stock, other evidence of Ince's buyout, or photos of national registry of Steve Saroff's historical home; and introduction of any evidence related to the DOT's acquisition of property related to bridge over the Kansas River] will not be allowed as irrelevant....

“6. The DVD recording of the view of plaintiff's premises is relevant and admissible on the issue of depreciation in the replacement cost approach to valuation.

“7. The testimony of James Marsden is inadmissible as irrelevant to the only issue in this case, that is the fair market value of the land in question.”

Landowner sought reconsideration of the trial judge's decision regarding Saroff's testimony on the uniqueness of the property and possible design changes. The City responded, arguing that evidence of “uniqueness” was appropriate only when there was no ascertainable market or comparable sales for the property. The district judge ruled that Saroff could testify in detail about the description of the subject property, its prior uses, and its use on the day of the taking; but he could not testify about what “could have been done” with the property.

Trial

Landowner's first witness was the City's designated expert, Fletcher Simmons. During Simmons' direct examination, landowner elicited information about the different methods of valuation allowable under the Kansas statute—comparable sales, replacement cost, and income capitalization—and about...