State, Dept. of Transp. and Development v. Dietrich
| Decision Date | 05 February 1990 |
| Docket Number | No. 89-C-1534,89-C-1534 |
| Citation | 555 So.2d 1355 |
| Parties | STATE of Louisiana, DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT v. Roger DIETRICH, et al. |
| Court | Louisiana Supreme Court |
Donald Kelly, Natchitoches, Jeffrey Thomas, Shreveport, Kelly & Salim, Natchitoches, for applicants.
Ronald J. Bertrand, Bertrand & Soileau, Lake Charles, for respondent.
A writ was granted to consider whether the Louisiana constitutional requirement 1 that a landowner be fully compensated for an expropriation requires an award to these landowners for loss of profits from their cattle production/slaughterhouse business. 2
On December 31, 1980, the Dietrichs 3 purchased a 365.19 acre tract of land for $304,450 and invested an additional $30,000 in clearing the land. They intended to raise cattle on the property to supply the slaughterhouse business Leonard Melvin Dietrich had purchased in 1975. The Dietrichs bought $78,000 worth of cattle, approximately 150 head, and placed them on the land. The 150 "mama cows" 4 produced about 85 heifers and 50 steers per year, which provided heifers for the slaughterhouse and steers for auction. For two years, the combined operation was very successful, giving better meat at a saving of $.15 to $.20 per pound.
According to Dietrich, he would not have needed his cattle herd if it had not been for his slaughterhouse business. The cattle operation was intended to go along with the slaughterhouse business and it helped the slaughterhouse substantially because Dietrich could raise calves cheaper than he could buy them. Clarence Homer Jordan assisted Melvin Dietrich in planning his pasture and livestock program. According to Jordan, a county agent for 33 years, Dietrich put in drainage, bermuda grass, permanent pastures and a good fertilizer program. Jordan testified that "Dietrich had the best money making deal in the livestock business I know of." 5
In July of 1983, the Department of Transportation and Development (DOTD) expropriated 43.74 acres of the Dietrichs' tract for construction of Interstate Highway 49. Before the taking, the Dietrichs had a tract which was roughly square with unimpeded all-weather access from a paved parish road and a secondary gravel road along the east side of the property. The expropriated area cut across the property diagonally from the northwest to the southeast leaving a 140.6 acre triangular section of land to the east and a 180.85 acre triangular section to the west.
During the four-year construction of I-49, the Dietrichs were unable to reach the western section of their land. Because the eastern area could not sustain their entire herd, the Dietrichs sold 135 head of cattle for $38,300. The distress sale resulted in a $39,700 loss. After completion of I-49, the DOTD provided limited access to the western area through a paved drainage ditch which is frequently flooded and impassable approximately seven months of the year. According to E.J. Giering III, an expert in civil engineering and land surveying, the paved ditch provides the main drainage for the entire area and tends to hold water even during dry seasons. Since it is not profitable to raise cattle solely on the eastern section, the Dietrichs have been unable to maintain their cattle-raising operation.
The severance damages, which have not been paid, include monies to restore year-round access to the western parcel. Since the restored access will not permit the cattle to move freely from one side of the Dietrichs' land to the other, fewer cattle can be maintained. While 365 acres was a viable and profitable economic unit for the Dietrichs' cattle business, the smaller tracts are not. However, the Dietrichs will be able to have a 50 to 55 cow herd if facilities, including a holding pen and barn, are built on the western tract to duplicate those existing on the eastern tract.
Allen Joe Solomon, a dealer in livestock and an expert in raising cattle, testified that, in his opinion, the Dietrichs could notprofitably raise a production herd on the remaining property. According to Solomon, there is an old saying that less than 100 cows is a waste of time. To run 50 head, the Dietrichs will have to double their costs and duplicate everything that is on the east side at a cost of $30,000 to $50,000. During the month of trial, July, 1987, the cattle business was in its best year in the previous six and the best year in Solomon's memory. In Natchitoches Parish, the Dietrichs were the only cattle farmers with a slaughterhouse which enabled them to make more on their calves than anyone else because they had no traveling or commission costs and a built-in market.
Solomon's testimony was corroborated by that of Adolph Sklar, Jr., an expert in the buying and selling of cattle, who testified that the Dietrichs' cattle/slaughterhouse operation was a successful, integrated business. While the Dietrichs can still produce calves, the expense of doing so on the divided tracts will be approximately doubled. After the taking, Dietrich kept his cattle as long as he could and finally sold them to Sklar when he ran out of grass and had to liquidate.
According to David A. Waskom, the Dietrichs' accountant, their present inability to raise cattle on their remaining land has resulted in economic damage to both their cattle-raising operation and their slaughterhouse. The Dietrichs had to sell out because they did not have enough usable land to support their cattle. Waskom advised them to sell. The slaughterhouse must pay $.15 to $.20 more per pound to replace the beef formerly supplied by the Dietrichs' heifers. Waskom testified that by considering the average weight of the calves sold (600 lb.) and the number of heifers sold through the slaughterhouse annually (85), he determined that the slaughterhouse suffered a loss of $7,650 per year ( . The slaughterhouse also lost $23 per calf or $1,955 yearly from the sale of by-products. The total annual loss suffered by the slaughter house was $9,605. The DOTD did not produce any evidence contrary to Waskom's testimony.
Besides damage to the slaughterhouse operation, economic loss was sustained by the Dietrichs' cattle-raising operation. Dr. Earl G. Thames, an expert economist and professor of business at Northwestern State University, testified that the cattle-raising operation suffered an $11,700 annual loss from the taking. He arrived at the annual loss amount by multiplying a 150 lb. weight gain per year for each calf by 130 calves by 60 cents per pound ( . Thames obtained the figures for his calculations from statistics compiled from the Dietrichs' businesses. Thames calculated the past economic loss by multiplying the $11,700.00 annual loss by the four years from the expropriation until the date of trial. Thames calculated the future loss on the rather speculative basis of the remaining 39 years of Roger Dietrich's life expectancy.
The DOTD contends that the Dietrichs could have continued their cattle-raising operation by purchasing or renting additional land. However, the DOTD has not paid the severance damages which could have paid for relocation or replacement.
The DOTD deposited $48,700 in the registry of the court as compensation for the taking. The Dietrichs withdrew the funds with full reservation of their rights to any further compensation. They then alleged that the land taken had a greater value than the amount deposited, that severance damages were warranted, that damage to their cattle operation and slaughter house were sustained as a result of the taking, and that attorney's fees were due. The jury awarded damages as follows:
Taking of property: $53,305
Severance damage to remainder of the property: 132,569
Cost of cure: 54,954
Past economic loss from 1983 to 1987: 99,600
Future economic loss: 306,000
The court of appeal 6 affirmed the awards for the taking and the severance damages, but reversed the award for cost to cure which partially duplicated the severance award. 7 The court of appeal also reversed the past and future economic losses on the ground that they were not supported by law or fact.
In 1974, the Louisiana Constitution was re-worded to provide that an "owner shall be compensated to the full extent of his loss" when land is expropriated by the state. 8 Previously, a landowner could only receive the fair market value and any severance damages for property taken through expropriation. The change permits a landowner to remain in an equivalent financial position to that which he enjoyed before the taking. State Through Department of Highways v. Bitterwolf, 415 So.2d 196 (La.1982); State Through Department of Highways v. Constant, 369 So.2d 699 (La.1979).
Article I, Section 4, does not specify how to fully compensate a landowner whose property is taken. Delegates to the Constitutional Convention explained that full compensation should include moving costs, costs to relocate, inconvenience, and loss of profits from takings of business premises. 9 Where economic losses suffered by a business have been proven, damages for incidental and consequential loss must be awarded to fully compensate the owner. Article I, Section 4, provides that the landowner should be compensated for "his loss" not merely the loss of the land. 10
Constant decided that full compensation under Article I, Section 4, included restoration of a landowner's business facilities to the condition which existed before the taking. Replacement of property which was proven to be unique and indispensable was held to be an appropriate remedy in Constant.
Where the landowner challenges the amount the DOTD deposits for compensation, a greater value must be proven by a preponderance of the evidence. Dakin & Klein, Eminent Domain In Louisiana 371 (1970). Proof of economic loss may be...
To continue reading
Request your trial
-
U.S. v. Sid–mars Rest. & Lounge Inc.
...The Declaration of Rights of the Louisiana Constitution of 1974, 35 La. L.Rev. 1, 15 (1974); and citing as “ cf.” State v. Dietrich, 555 So.2d 1355, 1358–59 (La.1990); and State Through Dep't of Highways v. Constant, 369 So.2d 699, 702 (La.1979) as indicating that “the purpose of the additi......
-
West Jefferson Levee Dist. v. Coast Quality Const. Corp.
...of proving the reasonable probability of obtaining the permit necessary for development in the reasonably foreseeable future. Dietrich, supra, 555 So.2d at 1359; Nichols' The Law of Eminent Domain § 12B.14 and § 12C.03 at 12C-83 (1990) ("The burden proving the reasonable probability of a ch......
-
St. Bernard Port v. Violet Dock Port, Inc.
...the market value of the property taken is "not constitutionally significant");10 (3) State, Dep't of Transp. and Dev. Co. v. Dietrich, 555 So.2d 1355, 1358 (La. 1990) (where the Court held that La. Const. Art. I, § 4 (B)(5) permits compensation in excess of market value because "the landown......
-
Avenal v. State, Dept. of Natural Resources
...to the private property owner. See State, Through Dept. of Highways v. Constant, 369 So.2d 699 (La.1979); State, Dept. of Transp. and Development v. Dietrich, 555 So.2d 1355 (La.1990).3 We also note that the Louisiana Constitution, as quoted above, specifically guarantees the right to trial......