State ex rel. Missouri Highway and Transp. Com'n v. Jim Lynch Toyota, Inc.

• Decision Date: 14 April 1992
• Docket Number: No. 59975,59975
• Citation: 830 S.W.2d 481
• Parties: STATE of Missouri, ex rel. MISSOURI HIGHWAY AND TRANSPORTATION COMMISSION, Plaintiff/Appellant, v. JIM LYNCH TOYOTA, INC., et al. Exceptions of Kimco Development Corporation, Defendant/Respondent.
• Court: Missouri Court of Appeals

Page 481

830 S.W.2d 481

STATE of Missouri, ex rel. MISSOURI HIGHWAY AND TRANSPORTATION COMMISSION, Plaintiff/Appellant, v. JIM LYNCH TOYOTA, INC., et al. Exceptions of Kimco Development Corporation, Defendant/Respondent.

No. 59975.

Missouri Court of Appeals,

Eastern District,

Division Four.

April 14, 1992.

Motion for Rehearing and/or Transfer to

Supreme Court Denied

May 12, 1992.

Application to Transfer Denied June 30, 1992.

Rich Tiemeyer, Chief Counsel, Paul R. Sterrett, Government Counsel, Paul R. Ferber, St. Louis, Gregory Wayne Schroeder, Jefferson City, for plaintiff, appellant.

Bryan, Cave, McPheeters & McRoberts, Thomas C. Walsh, Thomas E. Wack and Gerald T. Carmody, Sheila O. Hunsicker, St. Louis, for defendant, respondent.

KAROHL, Judge.

The Missouri Highway and Transportation Commission (Commission) appeals from a judgment on a jury verdict which awarded Kimco Development Corporation (Kimco) approximately ten times the damages allowed by the condemnation Commissioners, approximately twenty times the damages found by the Commission's expert testimony, but just over half the damages proven by Kimco's evidence. This case involves a taking of approximately twenty thousand square feet of land along the southern and western borders of Kimco's 11.9 acre parcel. Both parties filed exceptions to the Commissioner's award.

The property is located in the northeast quadrant of the intersection of Taylor Road and Lindbergh Boulevard. In 1970, Kimco constructed a strip shopping center on the property. It rented to a number of tenants including K-Mart and Walgreens.

Prior to the taking, Kimco's property had four entrances. One entrance was accessible only to northbound Lindbergh traffic because of a median. There were three Taylor Road entrances. The taking involved 16,950 square feet along the Lindbergh border and 3,311 square feet along Taylor.

The condemnation was part of a highway project to eliminate traffic congestion at the intersection of Lindbergh and Taylor. The Commission constructed an overpass at the intersection so that traffic on Taylor will travel under Lindbergh. There is an entrance ramp on Taylor which allows traffic to go north on Lindbergh and an exit ramp which allows southbound Lindbergh traffic to drive down onto Taylor.

After the taking, Kimco's property had two entrances. Access to Lindbergh was totally eliminated. Of the two remaining Taylor entrances, the one closest to Lindbergh is now accessible only to westbound Taylor traffic because of a median.

Kimco offered evidence in support of its theory that the condemnation deprived customers of tenants access to Lindbergh and this destroyed the retail viability of the property so that the highest and best use of the property as a shopping center was lost. Kimco's expert testified that after the taking the highest and best use of the property would be light industrial. In his opinion, market value before the taking was by one approach five million dollars, and by another 4.8 million dollars. After the taking he opined the market value to be 1.1 million dollars. He concluded that the taking "dramatically" reduced the market value of the shopping center because the denial of direct access to Lindbergh made it impossible "to attract and commit major tenants to execute commitments to tenant the property." Kimco also offered two witnesses with considerable experience in purchasing, selling and developing shopping centers. They agreed the taking destroyed the use of the property as a retail center.

The testimony of these witnesses involved their consideration of the elements of access, visibility, the median, loss of traffic and circuity of travel in forming their conclusion. Much of this evidence was the product of cross-examination by the Commission. The court consistently overruled objections to evidence of these elements which the trial court said it believed were "non-compensable individually, ... [but admissible] only as they affect the total value of the property before and after...."

The Commission's expert testified the changes caused by the condemnation did not affect the highest and best use of the property as a strip shopping center. In his view the property value before taking, by a cost approach and a comparable sale approach, was $5,129,000. He considered the land to be worth four dollars per square foot before the taking and on that basis opined total damages of $109,000 for the land taken. He allowed no damages for loss of access because it was not relevant in the present case.

The Commission appeals claiming it is entitled to a new trial based on trial court error: (1) in the admission of evidence; (2) by refusing withdrawal instructions of the evidence improperly admitted; (3) in admitting hearsay evidence over objection; (4) in refusing to submit a mandatory MAI instruction; and (5) by permitting cross-examination of its appraiser on an incompetent matter. We affirm.

Two of the Commission's claims of trial court error involve arguments that the court erred in admitting evidence. First, it argues error in the admission of evidence due to loss of traffic, circuity, inconvenience of travel, placement of a median barrier, and loss of visibility. It argues these items are not compensable in a partial taking condemnation case. Second, it claims error in the allowance of evidence of lost business, lost profits and lost rentals. The Commission asserts these matters are speculative and conjectural in a case where fair market value is otherwise ascertainable and Kimco's business, with its potential profits, has not been taken.

The Commission relies on State ex rel. State Highway Commission v. Meier, 388 S.W.2d 855 (Mo. banc 1965) and State ex rel. State Highway Commission v. Brockfeld, 388 S.W.2d 862 (Mo. banc 1965). Meier holds the various elements are not separately compensable. To the extent any of these elements of loss are common to other members of the public, and not items of damage special to a property owner, they are not compensable. Meier, at 858-859. Kimco did not dispute this rule in the trial court. Kimco responds the rule is inapplicable. It argues the Commission misperceived the nature and purpose of the evidence because Kimco never claimed a right to compensation for the taking of these elements. Kimco offered no value evidence for any of these elements.

We review a claim of error in admitting or excluding evidence on the basis of an abuse of discretion resulting in substantial and obvious injustice. Del-Mar Redevelopment Corporation v. Associated Garages, Inc., 726 S.W.2d 866, 869 (Mo.App.1987). In condemnation cases the better practice is to allow the jury to hear and weigh as much relevant and material evidence relating to value as possible. Land Clearance Redevelopment Authority v. Kansas University & Endowment Ass'n, 797 S.W.2d 495, 497 (Mo.App.1990).

Certainly, evidence as to the highest and best use of a piece of property subject to condemnation is relevant in determining the value of the property before taking. State ex rel. Kolb v. County Court of St. Charles, 683 S.W.2d 318, 322 (Mo.App.1984). In the present case the challenged evidence, including the elements considered in determining highest and best use by Kimco's witnesses, was probative on the issue. Mention of elements not separately compensable was approved in State ex rel. State Highway Commission v. Galeener, 402 S.W.2d 336, 340 (Mo.1966). The court there acknowledged "that noise and speed, increased traffic and their resulting inconveniences are neither elements of damages nor of benefits and they are not proper matters of proof or for the jury's consideration.... But, even though inconvenience ... is not an element for which the landowner may be compensated, it may with other factors affect future use and therefore market value...." Id.

We found in State of Missouri ex rel. Missouri Highway & Transportation Commission v. Mosley, 697 S.W.2d 247, 248 (Mo.App.1985) that there is a "distinction between consideration of such elements [loss of privacy and circuity of traffic] as separate individual elements of damage and as mere factors combining to cause a diminution of market value." In Mosley, the trial court allowed such evidence as support for "consequential damage" but not for any specific damages. The trial court in the present case held the same view and ruled the Commission's objections on the same basis. We find no error in the limited admission of evidence of the various elements which Kimco's witnesses testified they considered in arriving at their opinions of consequential damages stated in terms of fair market value.

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. Kamo Elec. Co-op. v. Baker, 287 S.W.2d 858, 861, 365 Mo. 814 (1956). Any factor that has a present, quantifiable effect on the market value of the property is proper as an element of damages (citations omitted). Moreover, the depreciation in market value due to a risk of harm [a possibility of future flooding] is recoverable in a condemnation proceeding.

State ex rel. Missouri Highway & Transportation Commission v. Horine, 776 S.W.2d 6, 12 (Mo. banc 1989). Horine recognizes the propriety of the recovery of consequential damages where a landowner is entitled to direct damages as a result of a loss of his property. Id. at 10.

The court properly admitted evidence of the various elements of loss considered by Kimco's witnesses in their determination of consequential damage which resulted from the destruction of the property's highest and best use. These witnesses never assigned a value to any of these elements and Kimco never claimed separate damages for them. The witnesses "lumped" these elements and concluded that the highest and best use of the property as a strip shopping center was no longer...