Ortego v. State, Dept. of Transp. and Development

• Decision Date: 25 February 1997
• Citation: 689 So.2d 1358
• Parties: 96-1322 La
• Court: Louisiana Supreme Court

Page 1358

689 So.2d 1358

96-1322 La. 2/25/97

Marius ORTEGO and Theresa Tate Ortego d/b/a Theresa's Dress Shop v. STATE of Louisiana, DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT, et al.

No. 96-C-1322.

Supreme Court of Louisiana.

Feb. 25, 1997.

Ronald Joseph Bertrand, Bertrand & Soileau, Rayne, for Applicant.

Gary J. Ortego, Ortego & Dupre, Ville Platte; Paulin J. Laborde, Jr., for Respondent [96-1322 La. 1] KIMBALL, Justice. ^*

We granted certiorari to determine the preclusive effect of a written compromise agreement, confected after commencement of an expropriation suit by the State, on a subsequent inverse condemnation suit brought by the property owner. The district court denied peremptory exceptions of no cause of action and res judicata filed by the State, through Department of Transportation and Development (DOTD), which sought the case's dismissal because the prior compromise, entered as a judgment on joint petition of both parties, contemplated just and adequate compensation for the property and rights taken and in consideration of all damages as a result of a highway widening project. Additionally, the district court granted the plaintiffs' motion in limine to exclude any documentary evidence or testimony relating to the previous expropriation suit and the settlement of that suit between the Ortegos and DOTD as it pertained to their property and the State highway project at issue. A jury trial in inverse condemnation ensued and the jury returned a verdict in plaintiffs' favor awarding $432,830.00 in total damages, consisting of $240,192.00 in costs for removal and/or relocation of the building and $192,638.00 in economic losses. The court of appeal affirmed. For the reasons explained more fully below, we reverse.

[96-1322 La. 2] FACTS

Marius and Theresa Ortego are owners of Theresa's Dress Shop, a going concern located at the intersection of U.S. Highway 167 and David Street in Ville Platte. In May 1989, DOTD filed an expropriation petition in the Thirteenth Judicial District Court for the Parish of Evangeline naming the Ortegos as defendants. The expropriation was necessary to facilitate construction of a highway widening project, designated "State Project No. 66-07-24, Junction La 10-East (Ville Platte), on State Route U.S. 167," Petition for State at 1, State, DOTD v. Ortego, No. 49,230-A (La. 13th J.D.C. May 30, 1989), which sought to expand the highway from two to four lanes. To accomplish this, DOTD expropriated 1,163 square feet of the Ortegos' property--a portion of the business' parking area--at the corner adjacent to the intersection and deposited $4,528.00 in the registry of the court as an estimate of just and adequate compensation for the property and property rights expropriated. The Ortegos retained the services of an attorney and objected to DOTD's proposed taking and compensation by Answer. Therein, the Ortegos made a general denial and further answered that the taking constituted a constructive taking of the whole, entitling them to, inter alia, the value of the entire business and relocation expenses.

Over the course of the next two years, the Ortegos retained experts in areas such as real estate appraisal and civil engineering to aid in their opposition and to more completely analyze the proper measure of damages to the business. The Pre-Trial Order filed before compromise in August 1991 represented an outline of this effort. Among other things, the Order reflects the Ortegos were prepared to call Mr. Byron Core, an expert real estate appraiser, for the purpose of testifying as to the value and effect of the taking. Moreover, the exhibit list contained therein included right of way maps, construction project maps, and a Certificate of Location and Design.

In February 1992, the parties filed a Joint Petition in the expropriation suit record which memorialized a settlement offer by the Ortegos in the matter. The compromise adduced from the Joint Petition contemplated a reduced partial taking from that initially proposed by DOTD--from 1,163 to 511.66 square feet--and increased remuneration from the amount on deposit from $4,528.00 to $47,288.00 as just compensation for the expropriation. The district court rendered and signed a judgment reflecting this agreement. In pertinent part, the judgment stated:

[96-1322 La. 3] Considering the joint petition filed herein by plaintiff and defendants showing that an agreement and settlement has been reached herein by said parties, in accordance with said joint petition, that the defendants desire to accept the total amount of [$47,288.00] as a final award of just and adequate compensation for the property and property rights expropriated and in full settlement of all damages, the said amount of [$47,288.00] being represented by the amount of [$4,528.00], heretofore deposited in the registry of the Thirteenth Judicial District Court for the Parish of Evangeline, and the additional amount of [$42,760.00], which said additional amount includes market value of land and improvements taken, as well as any claims for damages or other economic loses [sic], interest, attorney fees, expert fees or depositions or other trial preparation costs....

....

IT IS ORDERED, ADJUDGED AND DECREED that there be judgment in favor of the plaintiff, the State of Louisiana, Department of Transportation & Development, and in favor of defendants, Marius Ortego and Theresa Tate Ortego, confirming the amount of [$47,288.00], as a final award to defendants of just and adequate compensation for the property and property rights heretofore expropriated in these proceedings and in full settlement of all damages, subject to the specific terms and conditions in the joint petition of plaintiff and defendants.

Judgment at 1-2, State, DOTD v. Ortego, No. 49,230-A (La. 13th J.D.C. Feb. 10, 1992). Consequently, the Ortegos withdrew the $47,288.00 that DOTD deposited in the court's registry.

On August 19, 1994, the Ortegos, represented by different counsel, filed the instant suit against DOTD, CLECO, and Gilcrhrist Construction, Inc. ¹ Ostensibly, the plaintiffs complained that DOTD damaged them in a constitutional sense by using its prior existing right of way to its fullest extent, which resulted in a constructive taking of their entire property, building, and business causing additional damages not contemplated in the compromise. In their Petition, the plaintiffs conceded they compromised a prior expropriation suit with the State, involving their land and building located at U.S. 167 and David Street and Project 66-07-24. However, they alleged this partial taking was a "specific and limited" expropriation of Parcel 5-12-R-1, formerly Parcel 5-12, and for related damages only as to Parcel 5-12-R-1. ² Moreover, the plaintiffs contended neither they nor their representatives knew or had any way of knowing where the actual highway would finally be situated in proximity to their property and business. (R.p. 11).

In that vein, the Ortegos claimed the present suit embodied a cause different from that [96-1322 La. 4] compromised in the State's prior suit. They prayed for various damages in connection with the design and planning of the highway project, including building relocation costs and economic losses. In response, DOTD filed a peremptory exception of no cause of action, the substance of which addressed the preclusive effect of the prior compromised suit between the parties as covering the "taking of Parcel 5-12-R-1 and ... the construction of the improvements as built as planned," which DOTD pleaded as res judicata. After hearing argument of counsel on the exception, the district court denied the exception. Later, in answering plaintiffs' petition, DOTD asserted generally a denial of plaintiffs' allegations; however, DOTD reurged that plaintiffs' claim was res judicata due to the judgment terminating the prior litigation between the parties. The case then proceeded to trial by jury.

On the first day of trial, counsel for the plaintiffs made a motion in limine, requesting the court to exclude any documentary evidence or testimony relating to the previous suit and compromise between DOTD and the Ortegos "as it pertain[ed] to their property and the State's highway project at issue...." (R.p. 198). The court granted the motion over DOTD's objection, which constrained DOTD from any reference to the prior compromise throughout the course of trial. The parties also entered into a stipulation that the damages sought by the Ortegos in the case was based on the "design, planning or specification of the entire project and highway and not the construction itself."

At the conclusion of the plaintiffs' case DOTD's counsel moved for a directed verdict, arguing the plaintiffs failed to introduce any evidence as to changes or design factors which would not have been contemplated in the prior litigation. Referring to its earlier rulings with regard to the prior suit, the court denied DOTD's motion. DOTD thereafter commenced its case-in-chief, proffering, in addition to earlier proffers necessitated in examining the plaintiffs' witnesses with regard to the prior litigation, Proffers 7 and 8. Proffer 7 contained a stipulation as to the testimony of Mr. Byron Core, the Ortegos' expert real estate appraiser from the prior expropriation case. Proffer 8 exhibited the compromise offer from the Ortegos to the State in the prior suit, which relied in large measure on the findings of experts in arriving at the offer.

The jury returned a verdict for the Ortegos. The State was found negligent in its "design, planning and/or construction" of the project as it pertained to and affected the Ortegos' property. [96-1322 La. 5] The jury awarded the Ortegos cost to cure damages totaling $432,830.00, comprised of $240,192.00 in costs for removal and/or relocation of the building and $192,638.00 in economic losses. DOTD suspensively appealed.

The court of appeal affirmed the judgment. Finding the...