Merrill Trust Co. v. State

• Decision Date: 21 July 1980
• Citation: 417 A.2d 435
• Parties: MERRILL TRUST COMPANY, trustee under the will of Louis Oakes, Deceased, v. STATE of Maine.
• Court: Maine Supreme Court

Page 435

417 A.2d 435

MERRILL TRUST COMPANY, trustee under the will of Louis Oakes, Deceased, v. STATE of Maine.

Supreme Judicial Court of Maine.

Argued March 14, 1980.

Decided July 21, 1980.

Eaton, Peabody, Bradford & Veague, by Daniel G. McKay (orally), Arnold L. Veague, Bangor, for plaintiff.

Thomas G. Reeves (orally), Lester A. Olson, Legal Services Div., Dept. of Transp., Augusta, for defendant.

Before GODFREY, NICHOLS and GLASSMAN, JJ., and DUFRESNE, A. R. J.

DUFRESNE, Active Retired Justice.

On October 20, 1970, the Department of Transportation of the State of Maine (hereinafter referred to as MDOT) on behalf of the State of Maine, pursuant to 23 M.R.S.A. § 153, acquired through eminent domain 9.19 acres of land owned by the plaintiff Merrill Trust Company, trustee under the will of Louis Oakes, together with certain easements in the nature of sloping and drainage rights over portions of the remaining property of the plaintiff. The expropriated land was part of a tract approximately 5,500 acres in size located in the unorganized township of Big Squaw, Piscataquis County. The purpose of the taking was to eliminate a curve in the Greenville to Rockwood highway, otherwise known as routes 6 and 15 and hereinafter referred to as the highway. The new section of highway, running north to south through the tract, recast the plaintiff's holdings into three parts, instead of two previously existing segments: a westerly portion of approximately 4,576 acres, an easterly portion of about 902 acres, and a 3.5 acre parcel isolated between the old highway and the new right of way.

Big Squaw Mountain and Mountain View Pond are located in the westerly portion of the tract. At the time of the taking, seven hundred and fifty acres around Big Squaw Mountain had been leased by the plaintiff to the Moosehead Winter Development Corporation and the improvements in that area consisted of a motel, base facilities for ski-lifts, a sanitation system and trails. Otherwise, the plaintiff's property was uninhabited woodland.

A series of three studies, made by various consulting firms relative to the long term land use development of the Squaw Mountain tract in the years 1966, 1968 and 1971, culminated in a classification of the area of the land acquired by MDOT in 1970 as developable land for recreational purposes.

The area taken by the State is comprised of three separate parcels which run severally along the old right of way, except for that portion which abuts the reference 3.5 acre islanded piece between the old and the new road. The largest acquisition, located on the east side of the highway and denominated "parcel 2-2" by the parties, represents an area of 8.03 acres, while the other two small strips of land, "parcel 2-1" and "parcel 2-3," measure .16 acre and 1 acre respectively.

The State appealed from the 1973 award of the Land Damage Board (now the State Claims Board see P. L. 1975, c. 771, §§ 236, 236-A, effective January 4, 1977) to the Superior Court pursuant to 23 M.R.S.A. § 157, where the case was heard, jury waived, in December 1978.

Each party presented an expert witness to testify to the fair market value of the land taken. The plaintiff's appraiser stated that the highest and best use was "recreational development," and concluded that its per acre value was $2,250.00, supporting, so he claimed, an award of $20,677.50 for the 9.19 acres which the State had condemned. Adding $1,125.00 per acre for severance damages in respect to the 3.5 acre plot isolated by the taking, he testified that the plaintiff was entitled to the total amount of $24,450.00 as just compensation for the State's action. On the other hand, the State's appraiser, who was an employee of MDOT, estimated that in his opinion the total damage award should be $700.00. Specifically, he testified that the highest and best use of the subject property was "woodland with recreational potential," and concluded that its value was $65.00 per acre for a total amount of $600.00. He allocated an additional $100.00 for the other interests (easements) acquired. He also determined that no severance damages were allowable either on account of the isolated 3.5 acre piece as such or in relation to the remaining property of the plaintiff, because, as he maintained, the plaintiff's total acreage ownership was worth some $1,500,000.00, whether viewed before or after the taking.

The presiding Justice rejected the appraisal approaches of both experts, but expressly stated that, in his attempt to reach a fairer evaluation of just compensation, he did take into consideration their testimony and the opinions they voiced. He concluded the plaintiff was entitled to a total award of damages in the amount of $12,000.00.

Specifically, the trial Justice found that the highest and best use of the property was "partially developed wooded land with potential for further recreational development." He first placed a fair market value of $275.00 per acre for parcels 2-1 and 2-3 on the west side of the highway, awarding $319.00 for the 1.16 acres of land taken and $181.00 for easements and severance damage in connection therewith, for a total value of $500.00. From a value range of $275.00 to $2,000.00 per acre, he then estimated the worth of the 8.03 acres taken on the east side of the highway at the rate of $1,000.00 per acre, for a total damage of $8,030.00, to which he added the sum of $1,000.00 for easement and severance damages in relation to that taking. Finally, he found that the isolated piece between the old highway and the new section of road had suffered severance damages in the amount of $2,459.00.

The State timely appealed from the appropriate judgment entered upon the foregoing findings, and presently challenges the valuation formula utilized, and the damages awarded, by the Court below.

We deny the appeal and sustain the Superior Court.

I. Fair Market Value Parcels 2-1, 2-2 and 2-3.

As its primary argument on appeal, the State earnestly contends that, in all instances of a partial taking, the exclusive method for valuing the portion condemned must be to estimate its worth as part of the whole. It is suggested that, under the holding of Timberlands, Inc. v. Maine State Highway Com'n, Me., 284 A.2d 894 (1971), the only valid valuation formula where severance damages are claimed is the difference between the value of the entire tract immediately before the taking and the value of the remainder immediately after the taking. This is contrary to the recognized traditional measure of damages for such partial takings which authorizes the use of an alternative concept, to wit, the value of the property actually taken together with the diminution in value of the part that remains (severance damage). See Housing Authority of Newark v. Norfolk Realty Company, 71 N.J. 314, 364 A.2d 1052, 1056 (1976). Nevertheless, pursuant to its stated argument, the State claims that the Superior Court erred in relying upon the suggested invalid appraisal of the plaintiff's expert witness, who grounded his professional opinion of market values upon a comparison to sales of one half acre lots. We reject this contention.

The defendant incorrectly interprets the holding of Timberlands, supra, wherein we wrote at 284 A.2d 898:

The "before and after" formula, in partial taking cases, is the ideal formula where severance damages are claimed, since the parcel taken is generally of limited size or unusual shape, or both, and may have no independent use and little or no economic value, unless considered in its relationship to the remainder of the tract. (Emphasis supplied).

* * * . Where the part taken has an independent economic use with a market value and may command a higher value as a separate entity, such value has been allowed. Territory of Hawaii v. Adelmeyer, 1961, 45 Hawaii 144, 363 P.2d 979; Lazenby v. Arkansas State Highway Commission, 1960, 231 Ark. 601, 331 S.W.2d 705.

The owner of the land taken by the process of eminent domain has the right to this higher fair market value or at least to the opportunity of proving it to the jury, as he is entitled to no less under the constitutional mandate than an exact equivalent for the injury. Curtis v. Maine State Highway Commission, 1964, 160 Me. 262, 203 A.2d 451.

The before and after test was devised for the benefit of the condemnee. The plaintiff is not restricted to the use of this formulation; rather, it is entitled to submit proof of its damages based upon the value of its holdings at their highest and best use. Had the condemnation not occurred, there is no showing that there would be any legal impediment to the plaintiff's subdivision of its 5500 acre tract. It logically follows that upon proper proof, (see, Curtis v. Maine State Highway Com'n, 160 Me. 262, 203 A.2d 451 (1964)), the plaintiff is entitled to recover the higher value of the land taken, whether or not it asserts a claim for severance damages.

The defendant also argues that the values assigned to the various parcels by the Superior Court Justice were arbitrary, and without evidentiary support. The record reveals that, contrary to this assertion, the presiding Justice carefully followed the guidelines enunciated in Timberlands, reaching a highly rational conclusion in the face of such disparate appraisal testimony.

In estimating the value of the land acquired by the State, Walter Foster, the plaintiff's expert witness, relied upon six comparable sales which he adjusted for time, location, and development and promotional costs. The parcels had been sold in 1972 by Skylark Incorporated, a subsidiary of Scott paper, to various grantees and are located approximately one quarter mile south of the plaintiff's property. Each parcel measured 22,000 square feet and sold for $2,500.00, for a unit value of $5,000.00 per acre. Based upon this data, Mr. Foster concluded that the 9.19 acres condemned had an indicated value of $2,250.00 per acre. On the other hand, the...