State ex rel. Missouri Highway and Transp. Com'n v. Delmar Gardens of Chesterfield, Inc.

• Citation: 872 S.W.2d 178
• Decision Date: 22 March 1994
• Docket Number: No. 63815,63815
• Parties: STATE of Missouri, ex rel., MISSOURI HIGHWAY AND TRANSPORTATION COMMISSION, Plaintiff-Appellant, v. DELMAR GARDENS OF CHESTERFIELD, INC., et al., Exceptions of Chesterfield Builders, Inc., et al., Defendants-Respondents.
• Court: Court of Appeal of Missouri (US)

Page 178

872 S.W.2d 178

STATE of Missouri, ex rel., MISSOURI HIGHWAY AND TRANSPORTATION COMMISSION, Plaintiff-Appellant, v. DELMAR GARDENS OF CHESTERFIELD, INC., et al., Exceptions of

Chesterfield Builders, Inc., et al., Defendants-Respondents.

No. 63815.

Missouri Court of Appeals,

Eastern District,

Division Two.

March 22, 1994.

Rich Tiemeyer, Chief Counsel, R.B. Regan, Asst. Counsel, and Paul R. Ferber, Dist. Counsel, Chesterfield, for plaintiff-appellant.

Rosenblum, Goldenhersh, Silverstein & Zafft, P.C., Mark E. Goodman and Jell A. Silverstein, Clayton, for defendants-respondents.

KAROHL, Judge.

The Missouri Highway and Transportation Commission (Commission) appeals an award of $413,852 in damages to landowners in a partial taking condemnation case. The Commission argues the trial court erred in ruling, as a matter of law, that special benefits could not accrue to the property; in excluding portions of the Commission's expert's testimony because his opinion was based on hearsay; in sustaining landowner's motion in limine and objection to the Commission's offer of proof concerning the zoning history of the property; and in sustaining landowner's motion in limine and objection to the Commission's offers of proof of the elements which affect the market value.

The Commission filed a Petition in Condemnation on April 16, 1990, in the Circuit Court of St. Louis County to acquire a piece of property located on the south side of Highway Forty between Woods Mill Road and Clarkson Road. The Commission planned to erect a highway interchange on the condemned property. The court entered its order of condemnation and court appointed Commissioners subsequently awarded $250,000 in condemnation damages to landowners. Both the Commission and landowners filed exceptions to the award and both requested a jury trial.

A jury waived trial was held on November 18 and 19, 1992. The trial court entered judgment in favor of landowners, awarding owners $413,852 in damages. The Commission appeals. We reverse and remand for a new trial.

Our review of a court tried case is governed by Rule 73.01(c) and Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.banc 1976). The judgment of the trial court will be sustained unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. Id.

In the Commission's first point on appeal, it contends the trial court erred in determining the Commission was not entitled to prove special benefits to offset the damages because, as a matter of law, its evidence proved only general benefits.

Prior to trial, the landowners motioned to exclude any evidence that special benefits had accrued to the condemned property as a result of construction of a highway interchange on the condemned land. After hearing the parties arguments, but without the benefit of any offers of proof, the court ruled in favor of landowners to exclude "testimony or reference of special benefits resulting from the taking of [landowners'] property." As a result of this ruling, the Commission asked for a continuance because its experts had based their appraisals on special benefits accruing to the condemned property. The trial court refused the request. The Commission then agreed to waive a jury trial "to expedite matters under the unusual circumstances of this case wherein it is anticipated that [the Commission's] evidence will be mostly presented through an offer of proof."

It is well-settled in Missouri that special benefits to the residue of a landowner's property may be set off against the award of compensation for a taking in a condemnation suit, but general benefits may not be set off. State ex rel. State Hwy. Com'n, Etc. v. Tate, 592 S.W.2d 777, 778 (Mo.banc 1980). State ex rel. State Highway Commission v. Jones, 15 S.W.2d 338, 340 (Mo.1929), drew the distinction between special benefits and general benefits:

"General benefits," those accruing to the owners of property in a neighborhood or vicinity generally, are not deductible from the damages; to make such a deduction would be to require the landowner whose property is taken in part to liquidate his damages by contributing his share of the benefits which inure to the public as a whole. "Special benefits" stand on a different footing; they are such as accrue directly and proximately to the particular land remaining by reason of the construction of the public work on the part taken. Such benefits must, of course, be reflected in an increase in the market value of the land.

Id. See also Tate, 592 S.W.2d at 779. The burden of proving special benefits remains on the condemnor. Tate, at 782. Only that part of the increase resulting from special benefits--those, if any, arising from the land's position directly on the highway improvements, such as availability for a new or better use, facilities for ingress and egress, improved drainage, sanitation, flood protection, and the like--would be chargeable. Tate, at 779, citing State ex rel. State Highway Commission v. Young, 23 S.W.2d 130, 135 (Mo.1929). Cases involving the condemnation of a right of way for highway construction often cite changes in available uses or in the facilities for direct access that enhance the value of the residual land as paradigm examples of special benefits. Tate, at 779.

State ex rel. State Highway Commission, Etc. v. Tate, 592 S.W.2d 777 (Mo.banc 1980) is controlling on this issue. In Tate, the court was presented with this same issue we now consider. Land was ordered condemned for the purpose of relocation and reconstruction of two highway routes. The landowners filed a motion in limine to prevent the Commission from presenting any evidence the landowners' property remaining after the taking was increased in value because of the location of a new interchange and an access road nearby, or from making any other reference to special benefits. Id. at 778. The trial court sustained landowners' motion and restrained the Commission from presenting evidence on, or mentioning, the issue of special benefits. Thereafter the parties waived a jury trial. The trial court entered a damage award in favor of the landowners. The Commission appealed alleging it was error for the court to exclude evidence of special benefits. Id.

In Tate, the Commission sought to show that the landowners' property benefitted from the direct access onto the improved highway route by way of a ramp; direct access onto an improved highway route by way of two newly constructed commercial entrances; direct access to a new street; and a change in the highest and best use of the property. Id. at 781. The court stated "[The Commission] has a right to present evidence with respect to these benefits, and their value should be set off against the landowners' damages." Id. "Whether the change in access constitutes a special benefit or another source of special damage to the landowner is a question of fact for the trier of facts." Id. The court continued "where a limited-access highway is substituted for a land-use highway, there does not appear to be any basis for a presumption of special benefit to the adjoining land; but the condemnor is entitled to prove, if it can, that the limitations imposed on the adjoining landowner's right of access are in fact a special benefit." Id. at 782, citing State ex rel. State Highway Commission v. Vorhof-Duenke Co., 366 S.W.2d 329, 339 (Mo.banc 1963). The court found that the trial court's sustaining the landowners' motion to exclude all evidence of special benefits constituted prejudicial error. It reversed and remanded for a new trial. Tate, at 782.

Here, the Commission's position was that the landowners' property was suitable for residential development before the highway improvement and then commercial development after the improvement. During pre-trial motions the trial court sustained landowners' motion excluding all evidence of special benefits. It ruled before hearing any evidence of special benefits.

During trial the Commission sought to introduce evidence of special benefits. The landowners' objection to this evidence was sustained. However, the Commission preserved this error with an offer of proof. The Commission's appraiser testified that the highest and best use of the property before the highway improvements was for residential purposes and the fair market value of the property prior to the improvement was $617,105. He then testified that the fair market value of the property after the improvements was $1,859,907, taking into consideration that the highest and best use of the property would be commercial after the improvement. Rezoning was required but the prospects were a question of fact.

The Commission was entitled to present this evidence of special benefits to the trier of fact. It was error for the trial court to rule as a matter of law that all evidence of special benefits would not be admissible. The prejudice is inherent in the ruling. We reverse and remand for a new trial on this point.

We will also address the Commission's second point in that this may be at issue upon remand. In its second point, it alleges the trial court erred in declaring the Commission's expert witness could not rely on hearsay in formulating expert opinions.

The expert formulated his opinion, among other things, on discussions with "city officials, planning consultants, engineers, people active in the real estate development field." The trial court sustained the landowners' pre-trial motion to exclude the testimony of the Commission's expert testimony because that testimony was based on hearsay. The Commission preserved the error with an offer of proof.

During the offer of proof the Commission's expert was asked what his assignment was concerning the condemned property. He stated the assignment was to look at the property both before and after the highway taking, to formulate an opinion as to...