Smith v. Papio-Missouri River Natural Resources Dist.

• Decision Date: 10 April 1998
• Docket Number: No. S-95-376,PAPIO-MISSOURI,S-95-376
• Citation: 576 N.W.2d 797,254 Neb. 405
• Parties: Stephen R. SMITH and Doris Smith, Appellees, v.RIVER NATURAL RESOURCES DISTRICT, Appellant.
• Court: Nebraska Supreme Court

Page 797

576 N.W.2d 797

254 Neb. 405

Stephen R. SMITH and Doris Smith, Appellees, v. PAPIO-MISSOURI RIVER NATURAL RESOURCES DISTRICT, Appellant.

No. S-95-376.

Supreme Court of Nebraska.

April 10, 1998.

Syllabus by the Court.

1. Eminent Domain: Verdicts: Appeal and Error. A condemnation action is reviewed as an action at law, in connection with which a verdict will not be disturbed unless it is clearly wrong.

2. Rules of Evidence. In proceedings where the Nebraska Evidence Rules apply, the admissibility of evidence is controlled by said rules; judicial discretion is involved only when the rules make such discretion a factor in determining admissibility.

3. Trial: Expert Witnesses: Appeal and Error. A trial court's ruling in receiving or excluding an expert's opinion which is otherwise relevant will be reversed only when there has been an abuse of discretion.

4. Judges: Words and Phrases: Appeal and Error. A judicial abuse of discretion exists when a judge, within the effective limits of authorized judicial power, elects to act or refrain from action, but the selected option results in a decision which is untenable and unfairly deprives a litigant of a substantial right or a just result in matters submitted for disposition through the judicial system.

5. Eminent Domain: Valuation: Offers to Buy or Sell: Words and Phrases. Fair market value is the price which property will bring when offered for sale upon the open market as between a willing seller and buyer, neither being obligated to buy or sell.

6. Trial: Eminent Domain: Valuation: Evidence. In eminent domain proceedings where the sales prices of other tracts are offered as evidence of market value of the tract taken, a wide discretion must be granted the trial judge in determining the admissibility of the evidence of the other sales. The evidence should not be admitted where there is a marked difference in the situation of the properties.

7. Eminent Domain: Valuation: Evidence. Generally, evidence as to the sale of comparable property is admissible as evidence of market value, provided there is adequate foundation to show the evidence is material and relevant. The foundation evidence should show the time of the sale, the similarity or dissimilarity of market conditions, the circumstances surrounding the sale, and other relevant factors affecting the market conditions at the time.

8. Eminent Domain: Valuation. An appraisal must be made near enough in point of time to furnish a test of the market value as of the date in question and is a matter within the discretion of the trial court.

9. Eminent Domain: Valuation: Witnesses. An owner of real property shown to be familiar with the value of such land is a competent witness to testify as to its value for the use to which it is then being put, without additional foundation.

10. Trial: Eminent Domain: Valuation: Witnesses. In order for the testimony of either an expert or a lay witness to be admissible on the question of market value of real estate, the witness must be familiar not only with the property in question, but also with the state of the market.

11. Judgments: Appeal and Error. A proper result will not be reversed merely because it was reached for the wrong reasons.

12. Juror Misconduct: Proof. Allegations of misconduct by jurors must be substantiated by competent evidence.

13. Juror Misconduct: Verdicts. Juror misconduct complained of must relate to a disputed matter that is relevant to the issues in a case and must have influenced the jurors in arriving at the verdict.

14. Jury Misconduct: Appeal and Error. The trial court's ruling on a question involving jury misconduct will not be disturbed on appeal absent an abuse of discretion.

Paul F. Peters, of Schmid, Mooney & Frederick, Omaha, for appellant.

Michael J. Mooney and Francie C. Riedmann, of Gross & Welch, PC., Omaha, for appellees.

WHITE, C.J., CAPORALE, WRIGHT, CONNOLLY, and GERRARD, JJ., and SPETHMAN, District Judge, and GRANT, J., Retired.

GERRARD, Justice.

Stephen R. "Reed" Smith (Reed Smith) and Doris Smith sought and obtained further review in this court from the judgment of the Nebraska Court of Appeals in which it reversed a district court judgment based on a jury verdict in their favor and remanded the matter for a new trial. We conclude that the Court of Appeals erred in disturbing the jury verdict and, as such, reverse its judgment and remand the cause with the direction to reinstate the jury verdict and judgment entered in the district court.

I. FACTS

On July 3, 1991, the Papio-Missouri River Natural Resources District (district) initiated an action to condemn a 21.22-acre tract of land owned by the Smiths located on the Boyer Chute of the Missouri River. The county board of appraisers awarded the Smiths $42,247.94 for the taking, and the Smiths appealed to the district court. Following a 4-day trial, a jury awarded the Smiths $127,500, and the trial court entered judgment in that amount.

The district appealed from the jury verdict, assigning several errors. In a decision not designated for permanent publication, the Court of Appeals held that the trial court abused its discretion when it allowed the Smiths to testify as to their opinions concerning the fair market value of their property and when it allowed the Smiths' real estate expert, Patrick Morrissey, to render his opinion concerning the value of the Smiths' property without proper and sufficient foundation. Smith v. Papio-Missouri River NRD, 96 NCA No. 34, case No. A-95-376, 1996 WL 471247 (not designated for permanent publication).

T he Court of Appeals concluded that such opinions were predicated on insufficient foundation for two reasons. First, the opinions were based on the mistaken premise that the Smith property was suitable for residential use, and second, the value of the Smith property was improperly compared to the so-called Novy trade. As the record in this matter is quite voluminous, additional facts will be supplied as required for proper analysis of the assigned errors.

II. STANDARD OF REVIEW

A condemnation action is reviewed as an action at law, in connection with which a verdict will not be disturbed unless it is clearly wrong. Walkenhorst v. State, 253 Neb. 986, 573 N.W.2d 474 (1998).

In proceedings where the Nebraska Evidence Rules apply, the admissibility of evidence is controlled by said rules; judicial discretion is involved only when the rules make such discretion a factor in determining admissibility. Id.

A trial court's ruling in receiving or excluding an expert's opinion which is otherwise relevant will be reversed only when there has been an abuse of discretion. Id.

A judicial abuse of discretion exists when a judge, within the effective limits of authorized judicial power, elects to act or refrain from action, but the selected option results in a decision which is untenable and unfairly deprives a litigant of a substantial right or a just result in matters submitted for disposition through the judicial system. Kaminski v. Bass, 252 Neb. 760, 567 N.W.2d 118 (1997); Malicky v. Heyen, 251 Neb. 891, 560 N.W.2d 773 (1997).

III. ASSIGNMENTS OF ERROR

The errors assigned by the Smiths in their petition for further review are that the Court of Appeals erred in concluding that (1) the property at issue could not be used for residential purposes, (2) the Novy trade could not be considered a comparable sale for valuation purposes, and (3) the Smiths' opinions concerning the fair market value of their property were inadmissible.

Because of the Court of Appeals' disposition of this matter, it did not reach two errors assigned by the district below: The trial court erred in (1) allowing the Smiths to cross-examine the district's real estate expert concerning real estate commission rates in Nebraska and (2) overruling the district's motion to vacate the verdict due to juror misconduct. For the purposes of our review, both assignments of error will be examined.

IV. ANALYSIS

1. ADMISSIBILITY OF OPINION TESTIMONY

(a) Evidence of Potential Residential Use

The Court of Appeals concluded that

there is no evidence to support Stephen Smith's assertions that a part of his property was outside of the floodway at the time of the taking and that there is no evidence to support a finding that there was any reasonable probability that the Smiths could have obtained the right to build a residence on the tract.

(Emphasis supplied.) Smith v. Papio-Missouri River NRD, 96 NCA No. 34 at 6. These conclusions are not supported by the record.

The land at issue, frontage property along a spring-fed portion of the Boyer Chute, had been in the Smith family for about 60 years. Through the 1930's, Reed Smith's grandparents lived in a house on the property. Other structures located on the property during the 1930's included a barn, a chicken coop, and a machine shed. Reed Smith's grandparents moved into town in the 1940's, and the buildings were lost when the banks of the chute eroded later that decade. Reed and Doris Smith purchased the property from Reed Smith's grandfather in the late 1970's and, along with family and friends, have enjoyed the use of a portion of the property as a recreational area for picnics, fishing, and hunting. The rest of the property was cropland. The Smiths testified that they intended to one day build their retirement home on this land and supplement their income by operating a fishing-guide service and duck-hunting area. At the time of the taking, Reed Smith was 46 years old and planned to retire when he was 55 years old.

The evidence at trial established that the owners of property within a floodway may build a residence or other structure on their property only if they can establish either that the site where the structure will be built is not actually within the floodway but instead within the floodway fringe or that construction in the floodway will not impede the flow of water within the floodway.

At the time of...