Montana State Highway Commission v. Jacobs

• Decision Date: 14 December 1967
• Docket Number: No. 11286,11286
• Citation: 150 Mont. 322,435 P.2d 274
• Parties: MONTANA STATE HIGHWAY COMMISSION, Plaintiff and Appellant, v. Mabel JACOBS, Marjorie J. Noel, Randolph Jacobs and Theodore Jacobs, Defendants and Respondents.
• Court: Montana Supreme Court

Page 274

435 P.2d 274

150 Mont. 322

MONTANA STATE HIGHWAY COMMISSION, Plaintiff and Appellant, v. Mabel JACOBS, Marjorie J. Noel, Randolph Jacobs and Theodore

Jacobs, Defendants and Respondents.

No. 11286.

Supreme Court of Montana.

Submitted Sept. 14, 1967.

Decided Dec. 14, 1967.

Daniel J. Sullivan (argued), Helena, for appellant.

Boone & Karlberg, Dalton T. Pierson, William T. Boone (argued), Missoula, for respondents.

JOHN C. HARRISON, Justice.

This is an appeal by the State from a judgment entered in an eminent domain action brought by the Montana Highway Commission in which the jury awarded compensation in the amount of $90,000. The case was tried in the district court at Missoula, the Honorable Jack L. Green, judge presiding.

The property in question is a unit of some 850 acres located approximately 3 miles east of Missoula. The southern boundary of the property is at the base of Mount Sentinel. From this southern boundary the line extends in a semi-circle or ox bow north, east and south along the main channel of the Clark Fork River. The tract is sometimes called the Bandman Ranch or Bandman Flats.

Interstate Highway 90 now bisects the property east and west for a distance of 5,500 feet. Topographically, the property is a series of benches and terraces. The highway traverses the property through the highest terrace in a cut section with a width of 280 feet, then goes into a section at grade with a width of 240 feet. As a consequence of the construction of the highway there is a triangular area created south of the interstate which is cut off from the main part of the property. There is access to this portion of the property by means of a county road which traverses the property-it crossing the interstate by means of an underpass. A small part of the land taken results from the widening of the county road at the approaches to the underpass. The total taking for the highway is 32.31 acres and the widening of the county road takes 1.04 acres for a total take of 33.35 acres.

There is no access to this property from the interstate. From the interstate the first access point west of the property is at the East Missoula interchange and the first point of access east of the property is at the Milltown interchange. Access to the property is from U. S. Highway 10 located across the river. The county road takes off from U. S. 10 and crosses the river on a bridge that has a 3 ton load limit. After crossing the bridge the county road traverses the property, goes under Interstate 90, crosses a railroad right of way at the southern part of the property and then goes through an area called Deer Creek.

The compensation due to the defendants is the value of what was taken from them plus any depreciation in value of the property not actually taken but injuriously affected. This value is determined by the actual value of the land at the date of the service of the summons, in this case, May 7, 1965, R.C.M.1947, § 93-9913. The 'actual value' is the price that would in all probability result from fair negotiation, where the seller is willing to sell and the buyer desires to buy-the market value. State Highway Comm. v. Milanovich, 142 Mont. 410, 384 P.2d 752; State Highway Comm. v. Peterson, 134 Mont. 52, 328 P.2d 617; State v. Lee, 103 Mont. 482, 63 P.2d 135. In this case just compensation is the market value of what was taken plus the dollar amount the remainder depreciated in value on the market because of of the construction of the highway.

Compensation is based on the highest and best use to which the land is adaptable, whether so used at the time of the summons or not. State Highway Comm. v. Hoblitt, 87 Mont. 403, 288 P. 181. At the date of the service of summons the land in this case was used for agricultural purposes. However, all of the witnesses for both parties agreed that the highest and best use of the land at the pertinent date was for residential subdivision development. Thus, the compensation due to defendant is properly determined by considering the market value of the land in relation to prices paid in the Missoula area for land to be developed into residential subdivisions.

As is often the case when a condemnation suit is litigated, the values placed on the land were far apart. The witnesses for the State testified that just compensation would be between $13,340 and $18,675. The defendants' witnesses assessed compensation between $111,975 and $129,000. The jury, as is seen by the award of $90,000, attached greater weight to the testimony of the value witnesses for the defense than to that of those for the State. The State asserts in this appeal that the findings of the jury cannot be upheld as the amount awarded was far in excess of just compensation.

It is the defendants' value evidence that is first attacked. The State claims defendants' expert witnesses based their opinions on mere speculation. The word speculation may be used in two ways. In one sense, it is used to describe undeveloped property that may have a certain value due to mineral, timber, housing or other potential. A market value for such property may be shown. This value is speculative, but it is able to be objectively appraised. In the other sense 'speculation' is a synonym for conjecture or guess. It is value evidence based on this second type of speculation that cannot contain a jury verdict. State Highway Comm. v. Antonioli, 145 Mont. 411, 401 P.2d 563. Ascertaining the value of residential subdivision land requires some 'speculation'. However, such 'speculation' may be of the first sort set out above and if a proper foundation is laid an expert witness may give his opinion of the value of such land.

The first value witness for defendants was a Mr. Weidenfeller. He is a real estate man in the Missoula area and has been for more than 20 years. He specialized in the development of residential property. In his testimony he stated that he was familiar with the property here in question and also the market for such property in the area. Having shown that he knew more than the ordinary person on the street about the subject in question and that he testified to facts within his own knowledge and observation he was qualified to give his opinion as an expert. State Highway Comm. v. Peterson, supra; Yellowstone Park Ry. Co. v. Bridger Coal Co., 34 Mont. 545, 87 P. 963. His testimony was that just compensation to defendants would be $129,000. Of this $66,000 would be for what was taken and $63,000 depreciation to the remainder of the property.

Mr. Weidenfeller stated that his valuation was based upon three recent land transactions in the Missoula area in which he was involved. The prices paid and received in these transactions were not offered as substantive evidence of what the subject property was worth. When a price paid for another piece of property is offered as evidence of the value of property sought to be condemned a strong similarity between the two parcels must be shown to exist. State Highway Comm. v. Tubbs, 147 Mont. 296, 411 P.2d 739. However, when the value of another piece of property is testified to, as was the case here, for the purpose of showing the basis for an expert's knowledge of the market and his opinion of value, the requirement of similarity is not so strict and the question of the admissibility of the testimony is largely in the discretion of the trial judge. 5 Nichols on Eminent Domain, § 18.42(1), p. 253; 27 Am.Jur.2d, Eminent Domain, § 429, pp. 431-35; 29A C.J.S. Eminent Domain § 273(10), p. 1209. Here the pieces of land...