Matthews v. Division of Administration, State, Dept. of Transp., 73--599

• Decision Date: 26 December 1975
• Docket Number: No. 73--599,73--599
• Parties: Catherine MATTHEWS, Appellant, v. DIVISION OF ADMINISTRATION, STATE of Florida, DEPARTMENT OF TRANSPORTATION, et al., Appellees.
• Court: Florida District Court of Appeals

Page 664

324 So.2d 664

Catherine MATTHEWS, Appellant, v. DIVISION OF ADMINISTRATION, STATE of Florida, DEPARTMENT OF TRANSPORTATION, et al., Appellees.

No. 73--599.

District Court of Appeal of Florida, Fourth District.

Dec. 26, 1975.

Rehearing Denied Jan. 28, 1976.

Patrick L. Bailey, Sullivan, Cochran, Ranaghan & Bailey, Pompano Beach, for appellant.

Geoffrey B. Dobson, Gen. Counsel, and Barbara Ann Dell McPherson and Winifred S. Smallwood, Tallahassee, for appellee-Dept. of Transp.

OWEN, Judge.

The principal issue in this eminent domain case is whether the measure of damages recoverable when an established business is totally destroyed by the taking is limited to the owner's loss of profits from the business.

Appellant, defendant below, owned a laundromat business which, she alleged, had been totally destroyed as a result of the taking of her adjacent property for right of way purposes. At trial she produced an expert who so testified, expressing the opinion that the value of the business was 'within the area of $28,000 to $32,000.' In explaining this, the witness stated that he had assigned a $15,000 value to the equipment in defendant's shop and a $13,000 value to the goodwill of the business, this latter figure being selected because it equalled the annual volume of business. Upon cross-examination the witness conceded that he was not familiar with the profit structure of the business after which the following testimony was elicited from him:

'Q Then it would be most difficult, wouldn't it, as a matter of logic, for you to place a value on a business when you haven't determined what that business has, in effect, done for the past five years?

'A No, not really. Because the equipment is worth something, and so is the volume that has been raised. Now, it takes a certain amount of time and effort and money to bring up a volume. And when an operation starts, it might be two or three or four or five or six months, depending on the address of the person, before anything is established.

'Q What if I were to tell you, just hypothetically, since you are an expert in this field, that that business did not make a profit for the five years immediately preceding your analysis, what would you say to that?

'A I would say there are so many other ones that have the same structure as that and they are selling for about the same price that I have mentioned.

'Q I am not discrediting what you are saying. I am merely saying this business is a different matter. This is a specific business owned by Mrs. Catherine Matthews, not the businesses out in the field, the comparable businesses about which you have told us. But this is a specific business, and she must qualify under this business.

'All right. Then you did not consider the profit taking or loss of the particular business owned by Catherine Matthews for the five years immediately preceding January of 1971?

'A No, I did not.'

The State moved to strike the testimony of this witness on the grounds that there was no evidence of a loss of profits to defendant's business and thus the testimony was speculative and conjectural. The motion was denied, but after the jury had subsequently returned a verdict for the defendant which included the amount of $20,000 for business damages, the court granted the plaintiff's motion for a new trial on the grounds that the admission of such testimony was error '. . . in that the same was speculative and failed to consider the loss of profit(s) to the defendant's business. . . .' The is the order appealed.

In granting the motion for new trial, it is apparent that the trial court felt (in line with appellee's contention on appeal) that loss of profits is the sole measure of the business damages recoverable under Fla.Stat. § 73.071(3)(b) (1973) ¹ when an established business has been totally destroyed by the taking. It is our view that such position is not correct and that it was error to vacate and set aside the verdict and grant appellee a new trial.

Compensation for business damages is entirely a creature of statute, State Road Department v. Abel Investment Company, 165 So.2d 832 (2nd DCA Fla.1964), and is a form of relief which most jurisdictions do not provide. The Legislature did not define or otherwise elaborate upon what constitutes 'business damages,' but there is absolutely no indication that it intended this statute to be construed as allowing business damages for lost profits only. The statutory language, which authorizes compensation for 'the probable damages to such business which the denial of the use of the property so taken may reasonably cause', simply does not warrant this restrictive interpretation.

The Florida courts have apparently had no occasion to expressly define the proper measure of business damages as contemplated by the statute. The State relies on two Florida cases in support of its position, but neither of these cases purports to Definitively define business damages.

The first of these cases, City of Tampa v. Texas Co., 107 So.2d 216 (2nd DCA Fla.1958), to the extent that it does relate to business damages, instead of supporting the State's position, in fact undermines it. In that case, the court was concerned primarily with issues not relevant here, but in the course of a discussion of who may recover for business damages, the court, at 225, noted:

'The general rule (which disallows business damages) . . . is not applicable where there exists a statutory right to compensation For loss of profits and other business losses such as exists in Florida by virtue of . . . (the predecessor statute to § 73.071(3)(b)).' (e.s.)

Thus, the emphasized language would at least imply that the 2nd DCA has interpreted Florida's business damage statute as providing recovery for more than simply loss of profits.

The other case relied upon by the State is LeSuer v. State Road Department, 231 So.2d 265 (1st DCA Fla.1970). In determining the sufficiency of a jury verdict in that case, the court distinguished between severance damages and business damages, as follows (at 267--8):

'In appellants' argument in support of the first ground for reversal it is contended that the minimum of $65,000 that it would cost to relocate the facilities in his business on that portion of his property not taken are business damages and therefore the jury's verdict has to be at least in that amount in accordance with the rule that the jury cannot ignore evidence of business damages. We cannot agree with this thesis. The cost of effecting physical changes or modifications in the premises necessitated by a taking are in the nature of...