Property Owners Imp. Dist. No. 247 of Pulaski County v. Williford

• Decision Date: 23 December 1992
• Docket Number: No. CA,CA
• Citation: 843 S.W.2d 862,40 Ark.App. 172
• Parties: PROPERTY OWNERS IMPROVEMENT DISTRICT NO. 247 OF PULASKI COUNTY, Arkansas, Appellant. v. W. Douglas WILLIFORD, Willis E. and Juanita Starks, Thomas C. and Peggy Joyce Starks, Ronald Reed Hopper and Diana R. Griffin Hopper, Appellees. 91-369.
• Court: Arkansas Court of Appeals

Page 862

843 S.W.2d 862

40 Ark.App. 172

PROPERTY OWNERS IMPROVEMENT DISTRICT NO. 247 OF PULASKI COUNTY, Arkansas, Appellant. v.W. Douglas WILLIFORD, Willis E. and Juanita Starks, Thomas C. and Peggy Joyce Starks, Ronald Reed Hopper and Diana R. Griffin Hopper, Appellees.

No. CA 91-369.

Court of Appeals of Arkansas En Banc.

Dec. 23, 1992.

William H. Sutton, Walter A. Paulson, Andrew T. Turner, Little Rock, for appellant.

John T. Harmon, Little Rock, for appellees.

MAYFIELD, Judge.

The appellant is an improvement district which was formed for the purpose of building a sewer system to serve certain lands in Pulaski County.It filed suit against the appellees to condemn the permanent and temporary easements alleged to be necessary to construct and maintain the system.A total of .7558 acres was taken for the permanent easement and 1.8213 acres for the temporary construction easement.

There are five tracts of land owned separately by the appellees.The tracts vary in size from about 8 to slightly less than 2 acres.Appellees own a total of 17 acres, with more than one-half of it located within the Rock Creek "floodway" as designated by the Federal Emergency Management Agency.Other portions are located within the designated "floodplain."The property is effectively severed by the creek.The portion north of the creek fronts on Kanis Road.Access to the portion south of the creek is severely limited.

Appellant deposited $1050 as estimated just compensation for the property condemned.At trial the appellant's witnesses testified that the market value of the appellees' property before the taking would range from $1000 per acre to about $5300 per acre.The testimony of the appellees' witnesses placed that value in a range of $340,000 to $420,000 per acre.The jury returned a verdict for the appellees in a total amount of $82,768.30.For reversal, the appellant argues four points.We discuss each point separately but not necessarily in the same sequence argued by appellant.

I.

The first point we discuss is appellant's contention that "the trial court should have struck the landowners' value testimony."

The record shows that this case was tried two times.In the first trial the court granted the improvement district's motion for directed verdict in the amount of its deposit.This resulted from the court's granting the district's motion to exclude the testimony of the landowners' expert witnesses on the basis that their testimony was not admissible on the issue of the amount due for just compensation to the landowners.Afterwards, the court granted the landowners' motion for new trial.This appeal is from the judgment entered after the second trial.The point now under discussion was raised by appellant's motion to strike the testimony of the landowners' two "expert" witnesses who had also testified in the first trial.

One of the expert witnesses was John W. "Jay" DeHaven.The appellant argues the court should have struck Mr. DeHaven's testimony because he did not have a reasonable basis for his testimony.We do not think it would serve any purpose to discuss the testimony of this witness in detail.Suffice it to say that the motion to strike presented a matter largely within the sound discretion of the trial judge.Arkansas State Highway Commission v. Kennedy, 233 Ark. 844, 849, 349 S.W.2d 132(1961).See alsoArkansas Louisiana Gas Co. v. James, 15 Ark.App. 184, 692 S.W.2d 761(1985).We cannot say that the trial judge erred in refusing to strike Mr. DeHaven's testimony.

The landowners' other expert witness was Mary Kay Peyton.We discuss her testimony in some detail in order to explain our holding on this point and because her testimony is also involved in our consideration of appellant's third point for reversal.

Ms. Peyton was an employee of the Maumelle Company.Mr. DeHaven was president of that company.Both he and Ms. Peyton testified that the highest and best use of the appellees' property was for commercial development.Ms. Peyton was not an appraiser but was a licensed real estate broker and was general sales manager at the Maumelle Company, which was a land development and marketing company.This case was Ms. Peyton's first time to give an opinion on value to a jury in a condemnation case.

At the first trial Ms. Peyton's testimony was struck because she"figured" the value of the entire property owned by the appellees at $2.50 per square foot.She then used that figure to determine the value of the portion taken for easement purposes by the appellant.She testified: "But I did not determine separately the fair market value of the actual easement itself, independent of the rest of the property."In sustaining the objection to Ms. Peyton's testimony in the first case, the judge said, "Under Ms. Peyton's method of valuation, one could pick any spot of land out of the entire tract and Ms. Peyton would value it at $2.50 per square foot.And yet, it is obvious that some portions of the tract are worth more than that, some less."

At the second trial, Ms. Peyton evaluated the appellees' land separately.Two tracts were still given the value of $2.50 per square foot, but "to be conservative," Ms. Peyton testified, the other tracts "were adjusted" to $2.00 per square foot.She testified that she had changed her "approach" for the second trial, but admitted "I have gone back and recalculated to come up with a different method for establishing basically the same thing."Ms. Peyton did testify that she started with a square-foot valuation based on the market value of comparable property.She said she adjusted the value of the appellees' property based on the information she gathered on the cost of filling appellees' land to where it would be suitable for commercial development.She admitted there was a problem with access to that portion of appellees' property south of the creek, that she had "no idea" what it would cost to build a bridge over the creek, but she thought there were "all kinds of possibilities in dealing with that creek besides building a two million dollar bridge across it."She also testified, using the Williford property as an example, that after his property was filled, brought to grade, and was ready to be built on, it would be worth $2.50 per square foot; that this would be the average price, the portion north of the creek and fronting on Kanis Road being worth $6.00 per square foot and the portion south of the creek being worth $.50 per square foot.

Because the motion to strike is largely a matter of discretion, we cannot hold that the trial court erred in refusing to strike Ms. Peyton's value testimony, but her testimony impacts on the next point that we discuss.

II.

The second point we discuss is appellant's argument that the trial court applied the wrong measure of damages.

Appellant offered two instructions, which were refused, on the measure of just compensation.Requested InstructionNo. 3 was as follows:

The measure of damages allowed for the taking of land for a right-of-way or easement is the market value of the land so taken and, separately, the damage, if any, resulting from the taking to the owner's remaining lands.

The other instruction offered by appellant on the measure of just compensation was requested InstructionNo. 4, which stated:

You are instructed that the measure of compensation to be paid for the temporary easement is the fair rental value of the property within the temporary easement for the period of construction which, in this case, was one year.

The court refused each of the above requested instructions, and over appellant's objection that it was the wrong measure of damage, the court gave the jury the following instruction:

You are to assess the damages to the property of Doug Williford, Juanita Starks, Ron and Diana Hopper and Tom Starks and you must then fix the amount of money which will reasonably and fairly compensate each of them for the difference in the fair market value of the lands of each immediately before and immediately after the taking.

The appellant contends that the correct measure of damages in a condemnation case involving a partial taking by a nonsovereign condemnor is the value of the land taken plus any damage to the remainder, but if the taking is by the sovereign, the correct measure is the difference in the fair market of the entire tract immediately before and immediately after the taking.Our decision in Arkansas Louisiana Gas Co. v. James, 15 Ark.App. 184, 692 S.W.2d 761(1985), is cited in support of appellant's contention.In that casewe acknowledged that the rule in the two situations is different.We explained that this results from the right of the sovereign to have any special benefits offset against the damages sustained by the landowner, while no such right exists where the condemnor is a private corporation.Cited in support of our explanation were the cases of Arkansas Louisiana Gas Co. v. Howell, 244 Ark. 86, 423 S.W.2d 867(1968), andOzark Gas Transmission System v. Hill, 10 Ark.App. 415, 664 S.W.2d 892(1984).

As we stated in James, the Arkansas Constitution permits the state to authorize private corporations to condemn property but Article 12, § 9 provides that full compensation must be paid by the corporation "irrespective of any benefit from any improvement proposed by such corporation."What this means was summed up by the Arkansas Supreme Court in Howell:

Consequently, we hold that, when a private corporation takes property through the process of eminent domain, damages are properly awarded on the basis of the full fair market value for the easement taken, plus any damage occurring to the remainder of the property.

244 Ark. at 90, 423 S.W.2d 867.

Although the appellees contend that the appellant improvement district should be accorded the status of sovereign for the purposes of determining the proper measure of damages when the district exercises its power of eminent domain, we do...