State ex rel. Missouri Highway and Transp. Com'n v. Sturmfels Farm Ltd. Partnership

• Decision Date: 14 August 1990
• Docket Number: No. 56852,56852
• Citation: 795 S.W.2d 581
• Parties: STATE of Missouri ex rel. MISSOURI HIGHWAY AND TRANSPORTATION COMMISSION, Plaintiff-Respondent, v. STURMFELS FARM LIMITED PARTNERSHIP, et al., Defendants-Appellants.
• Court: Missouri Court of Appeals

Page 581

795 S.W.2d 581

STATE of Missouri ex rel. MISSOURI HIGHWAY AND TRANSPORTATION COMMISSION, Plaintiff-Respondent, v. STURMFELS FARM LIMITED PARTNERSHIP, et al., Defendants-Appellants.

No. 56852.

Missouri Court of Appeals,

Eastern District,

Division Three.

Aug. 14, 1990.

Motion for Rehearing and/or Transfer to Supreme Court

Denied Sept. 19, 1990.

Application to Transfer Denied Oct. 16, 1990.

William J. Travis, St. Louis, for defendants-appellants.

Paul R. Ferber, Paul R. Sterrett, St. Louis, and Richard L. Tiemeyer, Jefferson City, for plaintiff-respondent.

SATZ, Presiding Judge.

In this condemnation action, defendant landowners appeal from a jury verdict finding that defendants sustained no damages as a result of plaintiff Missouri Highway and Transportation Commission's (Commission) taking of defendants' property. We reverse and remand with directions.

Defendants owned approximately 65 acres of land, zoned non-urban, in an unincorporated area of West St. Louis County. The Commission condemned nearly 8 acres of this property for use in new highway construction. The condemnation divided the property into 2 separate tracts, one tract of roughly 2 acres to the west of the Commission's right-of-way and another tract of roughly 55 acres to the east of the right-of-way.

After the Commission filed its condemnation petition, the trial court appointed commissioners to determine the amount of compensation to which defendants were entitled. § 523.010 RSMo 1986; Art. 1, § 26, Mo. Const. (1945). The Commissioners' report recommended awarding defendants damages in the amount of $540,000. Both the Commission and defendants filed exceptions to the recommended amount, which the Commission paid into court. Approximately ten months thereafter, defendants entered into a contract to sell their remaining property, contingent upon rezoning. The property was eventually rezoned by ordinances which purported to require dedication of the right-of-way which the Commission had already taken. A jury trial followed to determine the amount of damages which the Commission's condemnation of the right-of-way had caused defendants.

Three appraisers testified at trial, two for defendants and one for the Commission. Their assessments of the damages sustained by defendants ranged from approximately $183,000 to over $1,200,000. However, the jury found the Commission owed defendants no compensation for the condemned property.

On appeal, defendants argue the trial court erred in admitting the only evidence supporting the finding of zero damages. The Commission based its theory of zero damages on evidence that there was a reasonable probability the condemned property would have had to be "dedicated" in order to obtain the rezoning which was crucial to defendants' claim of damages. Defendants argue that the prospect of dedication is irrelevant to calculation of the just compensation which the "takings clause", Art. 1, § 26, Mo. Const., guarantees owners of condemned property. We disagree.

"When part of a tract of land is condemned, the appropriate measure of damage is the difference between the fair market value of the entire property before the taking and the fair market value after the taking." Missouri Highway & Transportation Commission v. Horine, 776 S.W.2d 6, 12 (Mo. banc 1989). A taking occurs when the condemnor pays just compensation either directly to the owner of condemned property, or, prior to a trial on exceptions to the award made by appointed commissioners, when the condemnor pays into court the amount recommended by the commissioners. State ex rel. Highway Commission of Missouri v. Volk, 611 S.W.2d 255, 258 (Mo.App.1980). "The fair market value of the land taken is what a reasonable buyer would give who is willing but did not have to purchase, and what a seller would take who is willing but did not have to sell." Union Electric Co. v. Saale, 377 S.W.2d 427, 429 (Mo.1964).

"Any factor that has a present, quantifiable effect on the market value of the property is proper as an element of damages." Horine, 776 S.W.2d at 12. Thus, when determining just compensation for condemned property, it is proper to take into account rezoning which was reasonably probable just before or after the taking and which affected the fair market value of the property at either of those times. See State ex rel. State Highway Commission v. Carlson, 463 S.W.2d 74, 80 (Mo.App.1970). The property "must be evaluated under the restrictions of the existing zoning and consideration given to the impact upon market value of the likelihood of a change in zoning." Saale, 377 S.W.2d at 429. This may be done either by determining the subject property's value as rezoned, minus a discount factor to allow for the uncertainty that rezoning would actually take place, or by determining the property's value with its existing zoning, plus an incremental factor because of the probability of rezoning. Carlson, 463 S.W.2d 81-82; See generally Nichols, Eminent Domain, § 12C.03.2 (1989).

The Commission presented evidence that rezoning of defendants' property was reasonably probable before the date of taking, February 20, 1987, when the Commission paid the recommended award of $540,000 into court. All three appraisers who appeared at trial testified that the non-urban zoning of the subject property had become obsolete prior to the condemnation. In fact, defendants had submitted a rezoning application to St. Louis County in October, 1986, approximately three months before the Commission took the right-of-way. Defendants offered no evidence of their property's value without rezoning.

However, the Commission contends that defendants could have achieved rezoning of their property only by agreeing to "dedicate" the right-of-way which the Commission sought. Thus, according to the Commission, defendants suffered no damages as a result of the condemnation.

Dedication of some property to the local government in exchange for rezoning of other property is a form of contract, or conditional, rezoning. Rathkopf, The Law of Zoning And Planning, § 27.05, pp. 27-45 (1989). Contract rezoning occurs when "a county or municipality exercises its power to rezone in exchange for considerations given by or exacted from ... [a] developer." Treme v. St. Louis County, 609 S.W.2d 706, 716 (Mo.App.1980). Since rezoning which is reasonably probable may be considered when determining just compensation for taken property, we believe that a reasonable probability of dedication, as a prerequisite to rezoning, may likewise be a proper element of damages in a condemnation case. A reasonable probability that taken property would have had to be dedicated in exchange for reasonably probable rezoning may be relevant to determination of the value of property never actually taken, if the probability of dedication had a quantifiable impact on the property's worth.

Contract rezoning is constitutional only "where the offer made or the exaction demanded for the rezoning bears [a] ... reasonable relationship to the activities of the developer...." Treme, supra, 609 S.W.2d at 716. See also, State ex rel. Noland v. St. Louis County, 478 S.W.2d 363, 367 (Mo.1972). If no reasonable relationship exists between the exaction demanded and the development, the "contract" between the rezoning authority and the developer is an unconstitutional contracting away of the police power in violation of Art. 11, § 3, Mo. Const. See Treme. Arguably, this unconstitutional contract is also a "taking" without just compensation in violation of Art. 1, § 26, Mo. Const.

Defendants first raised the issue of whether there was a sufficient nexus between dedication of the right-of-way for the new highway and the development of their surrounding property in a pre-trial motion in limine. Citing Noland, supra, defendants renewed their objection to the Commission's dedication evidence on these grounds repeatedly throughout trial, at times claiming that dedication which is not reasonably related to the activity for which rezoning is sought violates the takings clause, Art. 1, § 26, Mo. Const., rather than Article 11, § 3, Mo. Const. In the argument portion of their appellate brief, defendants again maintain there was not a constitutionally sufficient relationship between dedication of the right-of-way and the development of their remaining property. Under these circumstances, we conclude that the Point in defendants' brief which alleges that the Commission's dedication evidence violated the takings clause is also sufficient to preserve for review the issue of whether dedication would have constituted a reasonable exercise of state police power under Article 11, § 3, Mo. Const. The Commission does not contend otherwise.

The Commission does argue that consideration of the constitutionality of dedication is barred as a collateral attack on the rezoning ordinances, enacted subsequent to the condemnation of defendants' property and prior to trial. These ordinances purported to require dedication of the right-of-way which the Commission had previously taken.

Landowners are normally not permitted to challenge the constitutionality of zoning in condemnation proceedings. Marvin E. Nieberg Real Estate Co., v. St. Louis County, 488 S.W.2d 626, 630, 631 (Mo.1973); Nichols, supra, Section 12C.03. However, defendants' claim that a dedication requirement would have been unconstitutional in this case is not a collateral attack on the zoning ordinances enacted after the condemnation of their property. As indicated, just compensation for taken property is calculated as of the time when the condemnor pays damages. When the Commission paid into court the amount of damages recommended for condemnation of the right-of-way, no ordinance rezoning defendants' property or requiring dedication of the right-of-way existed. Therefore, the constitutionality of the ordinances ultimately enacted is not an issue in this case.

More important, the rationale for barring...