Polk v. State, through Dept. of Transp. and Development

Decision Date30 January 1989
Docket NumberNo. 88-C-0448,88-C-0448
Citation538 So.2d 239
PartiesBarbara Reeves POLK v. STATE of Louisiana, through the DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT. 538 So.2d 239
CourtLouisiana Supreme Court

Norman Sisson, William Irwin, Jr., Edward Michel, Baton Rouge, Robert Adams, Fournet & Adams, Lafayette, for applicant.

Guy Humphries, Jr., Humphries & Humphries, Donald Sharp, Gold, Little, Simon, Weems & Bruser, Alexandria, for respondent.

CALOGERO, Justice.

Plaintiff's home was located in the path of a new interstate highway which was being constructed by the Louisiana Department of Transportation and Development (DOTD). By virtue of a "voluntary acquisition agreement," she sold her house and adjacent structures to DOTD for $248,380 ($185,767 for the main residence and $62,613 for other improvements on the property). Her request for additional compensation for relocation costs and moving expenses was denied, and she filed this action against DOTD seeking recovery of those expenses.

Plaintiff's position is that it will cost much more than the $248,380 she received from DOTD for the sale of her existing home to construct a new home of comparable size and quality. She alleges that DOTD employees induced her to sell her home for $248,380 by promising her that she would be paid any additional amounts necessary to construct a new home of comparable quality.

The trial court agreed that DOTD's employees had made such a promise, and on that basis held that plaintiff is entitled to recover $170,742.85 in replacement housing costs. That amount represents the difference between the amount which the trial court found that the plaintiff would have to expend in order to construct a virtual replica of her existing home, $410,742.85, and the amount she received when DOTD purchased her former residence, $248,380. The trial court also held that DOTD is liable to plaintiff for moving expenses in the amount of $8,000.

The court of appeal affirmed, 517 So.2d 1178 (La.App. 3rd Cir.1987). We granted DOTD's application, 521 So.2d 1176 (La.1988), and now amend the judgments below to order a reduction of plaintiff's award for replacement housing benefits.

For reasons hereafter set forth, we hold that plaintiffs are not entitled to replacement housing benefits on the basis of any verbal contract with DOTD. While the holdings of the lower courts were premised on the existence of such a contract, we find no evidence in the record which establishes that such a binding oral agreement existed.

Instead, plaintiff's claim for replacement housing benefits should be evaluated under the provisions of La.R.S. 38:3101-3110 (the Uniform Relocation Assistance and Real Property Acquisitions Act, as adopted in Louisiana). The trial court's inquiry should have been whether DOTD's decision to deny plaintiff's claim for replacement housing benefits and moving expenses was an unreasonable, arbitrary or capricious exercise of its agency discretion.

Applying that standard of review to the facts of this case, we find that DOTD abused its agency discretion by totally denying plaintiff's claim for replacement housing benefits. However, our review of the record convinces us that the trial court's award of $162,362.85 for replacement housing benefits was excessive, and should be reduced to $63,904.

Additionally, we find that DOTD abused its discretion by denying plaintiff's request for moving expenses. We therefore affirm the $8,000 award allowed by the lower courts for those expenses.

(I) FACTS
(A) Developments Prior to DOTD's Purchase of the Polks' Home

Plaintiff Barbara Reaves Polk and her husband, Judge William Polk, own a large tract of property in Rapides Parish near Bayou Bouef. This is a rural area, not far from Alexandria. On a seven or eight acre portion of the Polks' property rest the house and the adjacent structures which are the subject of this suit. The Polks built the home about twelve years ago. Several years ago, Judge Polk transferred his ownership interest in the home to his wife. For that reason, Mrs. Polk is the sole named plaintiff in the lawsuit.

I-49 is an interstate highway which, when completed, will connect Shreveport and Lafayette. At some point in early 1983 (perhaps earlier; the exact date is unclear from the record), the Polks became aware that the proposed route of I-49 would pass through or near their home. Judge Polk testified that a DOTD employee met with him at his office and showed him a possible route for I-49. That proposed route (which was one of three alternative routes) placed the highway very near to his home, but did not require the taking of his home. Judge Polk told the DOTD employee that he would rather see the highway routed through the location of his present home, thereby causing him to relocate, than to live in a home that bordered on an interstate. After that meeting, DOTD selected a route which required the taking of the Polks' home, although that decision may not have been made in response to Judge Polk's request.

In June, 1983, the Polks met with DOTD District Relocation Officer Joseph Walker at the DOTD's Alexandria office. It appears from the record that at the time of this meeting, DOTD had made the decision to route the interstate across the Polks' property in a manner which would require the taking of their home. However, no specific arrangements had been made in that regard, as the DOTD's proposed route was yet to be surveyed and was subject to approval by the Federal Highway Administration.

The Polks went to Walker's office to inquire about the mechanics which would be involved when DOTD acquired their property. They were primarily concerned over the amount of time that they would have, to move from their home and relocate once DOTD purchased their property. It is quite clear from the record that the Polks never intended to move to an existing residence. Instead, they intended to use the money they would receive from DOTD to build an identical home nearby, on another portion of their property. The Polks sought assurances from Walker that they would have enough time, between the date that DOTD purchased the property and the date it actually took possession, to build and move into a new home.

Walker told the Polks that when DOTD purchased their property, it would, as required by law, give them 90 days to vacate the premises. The Polks expressed concern over the 90 day period, because they did not think that their new home could be built within such a short time period. Walker told the Polks that exceptions could be made to the 90 day rule if construction on the new home were underway and the Polks were making a good faith effort to vacate. He also stated that DOTD could provide the Polks with temporary housing while their new home was being built.

At this meeting, Walker also gave the Polks a general explanation of DOTD's policy with regard to relocation benefits. He explained that in addition to the money which the Polks would receive for the sale of their home, they could be eligible for replacement housing benefit payments if the cost of obtaining a comparable home exceeded the purchase price which they were paid for their existing home. He told the Polks that it was DOTD's policy to provide the Polks with the compensation necessary to obtain a replacement home which is "as good or better than what they were in." However, no specific estimates of possible relocation payments to which the Polks might be entitled were discussed at the meeting. At this point in time, Walker had not even seen the Polks' home. Walker told the Polks that relocation benefits could be as low as zero or as high as $15,000, and possibly more than $15,000 if they were to qualify for "last resort" housing benefits (see Section II(B)(1) of this opinion, infra for discussion of last resort housing benefits).

Finally, Walker told the Polks that when it was time for them to move, they could use a private moving company and that DOTD would pay the moving expenses. The Polks left the meeting with the understanding that DOTD would contact them further regarding the acquisition of their property.

Over the next few months, the Polks waited for an offer on their home from DOTD, but received none. After writing letters complaining about the delay, Judge Polk was told by DOTD officials that a sale would take place in late 1983 or January, 1984, but no offer was made by the DOTD during that time.

In February, 1984, DOTD real estate agent Terry Brown visited the Polks' property on what he described at trial as a "fact finding mission." Brown gathered factual information on the Polks' home and family, and submitted that information to Robert David, DOTD's statewide relocation officer. David in turn submitted the information to the Federal Highway Authority, which requires DOTD to submit a "relocation plan" for persons who will be displaced by highway construction.

Brown testified that the federal agency approved the relocation plan submitted by David with respect to the acquisition of the Polks' property. It appears that the "plan" was simply a general outline of the proposed acquisition process and an estimate of the relocation needs which might be created when the highway was built. David testified that such plans are routinely prepared by DOTD whenever private property is to be acquired in a highway project (The DOTD Relocation Assistance Manual provides for the preparation of a "Conceptual Stage Relocation Plan," Rule 5.4.2.1, and a "Right of Way Stage Relocation Program," Rule 5.4.2.2.) Brown testified that the federal government's approval of the relocation plan did not mean that the Polks would necessarily qualify for relocation benefits, as that determination, which would depend upon the value of the Polks' existing residence and the amount that it cost them to obtain comparable housing, was yet to be made.

Brown testified that after his inspection of the property, he called...

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