N. States Power Co. v. Mikkelson

• Decision Date: 03 March 2020
• Docket Number: No. 20190227,20190227
• Citation: 940 N.W.2d 308
• Parties: NORTHERN STATES POWER COMPANY, a Minnesota corporation, BY its BOARD OF DIRECTORS, Plaintiff and Appellee v. Laverne MIKKELSON a/k/a Laverne C. Mikkelson Sr.; Kandi Mikkelson a/k/a Kandi K. Mikkelson, Defendants and Appellants and SRT Communications, Inc., a North Dakota cooperative association; Verendrye Electric Cooperative, Inc., a North Dakota cooperative association; Brett Livingston; Lisa Livingston; Jarrod Livingston; New Prairie Township; and Ward County, Defendants
• Court: North Dakota Supreme Court

940 N.W.2d 308

NORTHERN STATES POWER COMPANY, a Minnesota corporation, BY its BOARD OF DIRECTORS, Plaintiff and Appellee

v.Laverne MIKKELSON a/k/a Laverne C. Mikkelson Sr.; Kandi Mikkelson a/k/a Kandi K. Mikkelson, Defendants and AppellantsandSRT Communications, Inc., a North Dakota cooperative association; Verendrye Electric Cooperative, Inc., a North Dakota cooperative association; Brett Livingston; Lisa Livingston; Jarrod Livingston; New Prairie Township; and Ward County, Defendants

No. 20190227

Supreme Court of North Dakota.

Filed March 3, 2020

Patrick D. J. Mahlberg, Minneapolis, MN, for plaintiff and appellee; submitted on brief.

Richard P. Olson, Jessica L. Merchant, and Ryan G. Quarne, Minot, ND, for defendants and appellants; submitted on brief.

Crothers, Justice.

[¶1] Laverne and Kandi Mikkelson appeal from a district court’s award of summary judgment in favor of Northern States Power Company ("NSP") and a denial of their motion to amend the court’s judgment. The Mikkelsons assert the court erred when it did not allow them the opportunity to be heard by a jury on their claim for damages in this eminent domain proceeding. We reverse and remand the case for further proceedings.

I

[¶2] NSP filed this eminent domain action in May of 2017 to obtain an electrical transmission line easement over the Mikkelson’s property. On November 20, 2017, the district court awarded NSP partial summary judgment on the issue of whether the taking was necessary for a public purpose. The only remaining issue was the amount of damages NSP owed the Mikkelsons for the taking.

[¶3] NSP moved for summary judgment asserting because there was only a partial taking, the proper measure of damages was diminution to the property’s fair market value. NSP claimed the Mikkelsons did not provide any competent, admissible evidence to present at trial. NSP supported its motion with transcripts from depositions of Laverne Mikkelson and Roger Cymbaluk, the Mikkelson’s expert appraiser.

[¶4] The following colloquy took place during the hearing on the motion:

"[NSP’s counsel]: Sure. So let’s think about it I guess slightly differently and what would be happening in front of the jury. You have the Mikkelsons will go first, they will attempt to carry their burden of proof. All right. They will have Mr. Mikkelson testify. His testimony is that the property has a before value of $3,000 per acre.

They will have Mr. Cymbaluk testify. Mr. Cymbaluk’s testimony is that the property will have a before value of $2,500 an acre. And at that point their case in chief is over.

....

[Mikkelson’s counsel]: Your Honor, obviously we would disagree with the idea that we are unable to provide admissible testimony regarding the value of the property and an after value. NSP has acknowledged that generally an owner can testify about the value of the property without qualification other than the fact of ownership. But they have selectively chosen portions of Mr. Mikkelson’s deposition to eliminate any of Laverne’s testimony regarding the value of his property...."

Mikkelson’s counsel then cited the following colloquy between Laverne Mikkelson and NSP’s counsel, which occurred during a deposition:

"Q. You would agree with me that the presence of the transmission line does not make the market value of the underlying property go to zero; right?

A. No.

Q. It’s not free; right?

A. No.

Q. There is some value that is retained even within the new easement area; right?

A. Well, kind of what we went through, I consider the added cost that it’s going to cost me every year to do this.

Q. Fine. But what you just told me is even with that in mind that area is not worth zero. It’s worth something.

A. Well, to me it’s worth zero as far as—because it’s going to cost me the same to use it. So for me it’s a zero value. I know I said earlier that, no, it wouldn't be zero, but I consider it a zero.

Q. Fine. Do you think the market would—if this property went up for sale, do you think the market would say that that easement acreage is worth zero?

A. Yeah. Do you think I can take that strip and sell it to anybody?

Q. You're not selling the easement strip to anybody. The property goes up for sale as a whole unit. Do you think that the market would respond to that by saying, I know this is a 278-acre piece of land; that said, there’s a 13.39 acre easement that is in place, and so I'm not paying a dime for that 13.39 acres, so I will take the market value, [$]3,000 per acre, and I will multiply it by 264—264 acres. That’s not the way it works, is it?

A. I think they'll do it the other way. I think they'll just put a lesser value on the whole property.

Q. You think that the entire property is less valuable?

A. Exactly.

Q. By how much?

A. Well, that would have to be determined.

Q. By an appraiser?

A. By an appraiser—

Q. Not by you.

A. —or on a sale.

Q. Right.

A. Yeah.

Q. You can't do it.

A. No. Because they definitely wouldn't come in, like you said, [t]his land we aren't going to pay anything for. No, we're going to make the rest of the land worth less.

Q. Right. And that’s a fair way of looking at an easement taking is you compare the before value of the entire property with the after value of the entire property; right?

A. Mm-hmm.

Q. And that’s what you're saying would be the way that the market would look at your property; right?

A. I believe so, yes."

[¶5] On January 16, 2019, the district court granted NSP summary judgment on the issue of just compensation. Based on the transcripts from depositions, the court concluded the Mikkelsons had not, and could not, provide competent and admissible evidence to meet their burden to prove an amount of damages at trial. The court awarded damages to the Mikkelsons based on NSP’s expert’s opinion, which was an amount of $10,620.

II

[¶6] The Mikkelsons assert the district court erred when it granted summary judgment. The Mikkelsons argue the court should have allowed them to present evidence at a trial.

"Summary judgment is a procedural device for promptly resolving a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if resolving factual disputes will not alter the result. A party seeking summary judgment bears the initial burden of showing there is no genuine dispute regarding the existence of a material fact. When a motion for summary judgment is properly made and supported, an opposing party may not rely merely on allegations or denials in its own pleading[.] Rather, the party resisting the motion must set forth specific facts by presenting competent, admissible evidence, whether by affidavit or by directing the court to relevant evidence in the record, demonstrating a genuine issue of material fact.

"Whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record. On appeal, we decide whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. We view the evidence in the light most favorable to the opposing party and give the opposing party the benefit of all favorable inferences which can be reasonably drawn from the record."

Jordet v. Jordet , 2015 ND 76, ¶ 11, 861 N.W.2d 147 (quoting Hale v. Ward Cnty. , 2014 ND 126, ¶ 7, 848 N.W.2d 245 ).

[¶7] "Private property shall not be taken or damaged for public use without just compensation ...." N.D. Const. art. I, § 16. When a taking occurs, the property owner is entitled to be paid the fair market value for property that has been taken. City of Devils Lake v. Davis , 480 N.W.2d 720, 725 (N.D. 1992). The owner also is entitled to severance damages, which are measured by the depreciation in value to the property not taken. City of Hazelton v. Daugherty , 275 N.W.2d 624, 628 (N.D. 1979). The determination of damages caused by a taking is a fact question that "shall be ascertained by a jury, unless a jury be waived." N.D. Const. art. I, § 16 ; see also N.D.C.C. § 32-15-01(1) ("A determination of the compensation must be made by a jury, unless a jury is waived."). The party claiming damages in a condemnation proceeding generally has the burden of proof to establish the amount. Lenertz v. City of Minot , 2019 ND 53, ¶ 22, 923 N.W.2d 479 ; Cass Cnty. Joint Water Res. Dist. v. Erickson , 2018 ND 228, ¶ 12, 918 N.W.2d 371.

[¶8] The Mikkelsons argue they provided competent, admissible evidence to survive summary judgment on the issue of just compensation. NSP claims the Mikkelsons have not proffered admissible evidence, as established by their answers to deposition questions, to raise a factual dispute as to the property’s fair market value after the easement. The parties disagree as to how various portions of deposition testimony should be interpreted. The Mikkelsons claim their theory of damages, as stated in their deposition testimony, is that the easement decreased the value of the acres it burdens to zero and that diminution should be spread across the rest of their property to yield the market value after the taking

[¶9] NSP likens this case to Lenertz v. City of Minot , 2019 ND 53, 923 N.W.2d 479. Lenertz brought an inverse condemnation proceeding against the City of Minot alleging street and storm water improvements caused flooding of his property that constituted a taking. Id. at ¶ 2. The district court held a jury trial to decide the issue of damages. Id. at ¶ 3. After hearing testimony, the court found Lenertz was only entitled to damages for a partial taking of his property, and therefore the proper measure of damages would be diminution in value. Id. at ¶ 4. The City of Minot moved for a directed verdict, and the court allowed Lenertz to make an offer of proof outside the presence of the jury. Id. Lenertz called an expert witness who testified the property had no value. Id. The expert testified his opinion was based on the costs it would take to repair the...