Pokorny v. Local No. 310, Intern. Hod Carriers Bldg. and Common Laborers Union of America

• Decision Date: 22 May 1974
• Docket Number: No. 73-718,73-718
• Citation: 38 Ohio St.2d 177,311 N.E.2d 866,67 O.O.2d 195
• Parties: , 67 O.O.2d 195 POKORNY et al., and Board of County Commissioners of Cuyahoga County v. LOCAL NO. 310, INTERNATIONAL HOD CARRIERS BUILDING AND COMMON LABORERS UNION OF AMERICA, Appellant, Lilbe Tavern, Inc., Appellee.
• Court: Ohio Supreme Court

Page 177

38 Ohio St.2d 177

311 N.E.2d 866, 67 O.O.2d 195

POKORNY et al., and Board of County Commissioners of Cuyahoga County v. LOCAL NO. 310, INTERNATIONAL HOD CARRIERS BUILDING AND COMMON LABORERS UNION OF AMERICA, Appellant Lilbe Tavern, Inc., Appellee.

No. 73-718.

Supreme Court of Ohio.

May 22, 1974.

Syllabus by the Court

1. Section 19, Article I of the Constitution of Ohio, and R.C. 163.18 do not conflict, since the jury trial mandated by Section 19, Article I, has as its purpose only the determination of the total worth of the property appropriated, while R.C. 163.18 applies only to the later distribution of that award by the court.

2. In a proceeding for distribution of an appropriation award, pursuant to R.C. 163.18, it is error for the court to exclude evidence of the capitalized present value of the amount by which the reasonable rental value of the premises exceeded the rent being paid under the lease.

Appellant, Local No. 310, was the owner of real property in Cleveland, Ohio, which housed its office and membership headquarters. Appellee, Lilbe Tavern, Inc., leased a portion of the premises on the ground floor. This lease expires August 31, 1975, with a five-year option to renew at an increased rental.

An action was filed by the County Commissioners to appropriate this property in connection with the construction of the Cuyahoga County Justice Center. A jury awarded compensation to the Union in the amount of $285,000 for its fee simple interest in the property. The Union then filed a motion, pursuant to R.C. 163.18, requesting an order of distribution.

Lilbe requested a trial by jury in the proceeding 'on the issue of the amount of compensation to be paid to it.' The Union's motion to strike the jury demand was denied.

At the trial, the Union's appraisers testified that the contract rental was equal to the fair market rental value of the lease so that there was no 'bonus' or leasehold value. Testimony concerning rental values for property also condemned for the same project was not permitted by the trial judge. The judge also excluded evidence of the present value of Lilbe's leasehold interest.

Lilbe's appraiser testified that the fair market value of the leasehold to the end to the second term was $47,250. The jury returned a verdict of $47,000 in favor of Lilbe Tavern, Inc.

The Court of Appeals affirmed.

The cause is now before this court pursuant to the allowance of appellant's motion to certify the record.

Riemer & Oberdank, Mortimer Riemer and Timothy J. Armstrong, Cleveland, for appellants.

Eli Manos and Michael T. Gavin, Cleveland, for appellee.

CELEBREZZE, Justice.

In this court, Local 310 argues three points for reversal:

(1) The trial court erred when, over appellant's objection, it allowed a jury trial on the issue of apportionment of the total award to holders of various property rights in an already appropriated property.

(2) The trial court erred in failing to admit evidence of the present, or capitalized value of a leasehold where evidence had been presented showing a 'bonus' value to the leasehold above the contract rental.

(3) The trial court erred by refusing to allow appellant's expert witnesses to give testimony on direct examination about the rental values of comparable property.

Section 19, Article I of the Constitution of Ohio mandates a jury in an appropriation action for the purpose of determining the amount of compensation due to the property owner. On this basis, appellee has argued, and both courts below agreed, that a jury trial was proper in the instant case.

This court has held that if there is more than one interest or estate in land sought to be appropriated, a bifurcated proceeding is required. In Sowers v. Schaeffer (1951), 155 Ohio St. 454, 99 N.E.2d 313, the court, in paragraph one of the syllabus, described that procedure:

'A land appropriation proceeding is essentially one in rem; it is not the taking of the rights of persons in the ordinary sense but an appropriation of physical property. In the event there are several interests or estates in the parcel of real estate appropriated, the proper method of fixing the value of each interest or estate is to determine the value of the property as a whole, with a later apportionment of the amount awarded among the several owners according to their respective interests, rather than to take each interest or estate as a unit and fix the value thereof separately. The separate interests of estates as between the condemner and the owners are regarded as one estate.'

This procedure is also made clear in R.C. Chapter 163. Pursuant to R.C. 163.10 and 163.14, a jury makes the initial award of compensation. Pursuant to R.C. 163.18, upon motion by any owner for distribution of the jury award, 'the court shall hear evidence as to the respective interests of the owners in the property and may make distribution of the deposit or award accordingly.' (Emphasis added.) Appellee argues, in effect, that insofar as R.C. 163.18 does not allow for a jury trial, it is unconstitutional because it conflicts with Section 19, Article I of the Constitution.

However, this court has made a distinction between the fixing of compensation due the owners as a group, and the apportionment of that compensation. (Sowers v. Schaeffer supra.) Section 19, Article I, does not require a jury trial to apportion the award between the property owners; it applies only to the action between the appropriating body and the property owners as a group.

While not mentioned by appellee, Section 5, Article I, must also be considered. It provides that: 'The right of trial by jury shall be inviolate * * *.' This constitutional guarantee applies only where trial by jury existed previous to its adoption. Belding v. State ex rel. Heifner (1929), 121 Ohio St. 393, 169 N.E. 301. In Willyard v. Hamilton (1836), 7 Ohio 398, 402, this court determined that there was no common-law right to a jury trial in land appropriations. Consequently, there are no common-law or constitutional bars to our reading of R.C. 163.18.

Appellee also contends that even if there is no right to a jury trial in an appropriation award distribution action, the trial court's action can be justified by applying Civ.R. 39(C), which, in pertinent part, provides:

'In all actions not triable of right by a jury (1) the court upon motion or on its own initiative may try any issue with an advisory jury * * *.'

Although it is clear that a court could apply that rule in an action of this nature, it also clear from the record that the court did not in fact empanel an advisory jury. Appellee exclusively based its jury demand on Section 19, Article I, and the court's entry granting a jury trial was based upon 'consideration of the briefs of the parties and arguments of cou...