State v. 45,621 Square Feet of Land, 1115

• Decision Date: 21 September 1970
• Docket Number: No. 1115,1115
• Citation: State v. 45,621 Square Feet of Land, 475 P.2d 553 (Alaska 1970)
• Parties: STATE of Alaska, Appellant, v. 45,621 SQUARE FEET OF LAND, Archie W. Stewart, et al., Appellees.
• Court: Alaska Supreme Court

Page 553

475 P.2d 553

STATE of Alaska, Appellant, v. 45,621 SQUARE FEET OF LAND, Archie W. Stewart, et al., Appellees.

No. 1115.

Supreme Court of Alaska.

Sept. 21, 1970.

G. Kent Edwards, Atty. Gen., Robert E. Price, Asst. Atty. Gen., Juneau, for appellant.

Michael M. Holmes, of Faulkner, Banfield, Boochever & Doogan, Juneau, Jeremiah M. Long, of Broz, Long, Mikkelborg, Wells & Fryer, Seattle, Wash., for appellees.

Before BONEY, C. J., DIMOND, RABINOWITZ, and CONNOR, JJ., and FITZGERALD, Superior Court Judge.

OPINION

RABINOWITZ, Justice.

The property in question was condemned by the State of Alaska for construction of the Juneau Outer Drive. In conjunction with the filing of its declaration of taking, the state deposited $37,250 which represented the state's estimate of just compensation. A hearing was then held before a master who concluded that appellee Stewart should receive $60,200 as just compensation. The state appealed the master's determination and after trial de novo, a superior court jury returned a verdict in the amount of $75,000. In addition, the jury, in answer to two interrogatories, placed the value of the land at $75,000 and found that the site improvements were of no value. Judgment was entered for the Stewarts in the amount of $75,000, plus interest from the date of taking and attorney's fees in the amount of $3,750. Thereafter, the state moved for a new trial on the grounds that the verdict was excessive, contrary to the weight of the evidence and a product of passion and prejudice on the jury's part. It was further alleged that a new trial should be granted due to the court's refusal to give the state's requested instructions pertaining to burden of proof and because of the trial court's refusal to allow into evidence a tax assessment of the subject property. The state's motion for a new trial was denied and this appeal followed.

Essentially, three questions are presented in this appeal. In its first specification of error, the state contends that the trial court acted incorrectly when it refused to

instruct the jury that in a condemnation case there is a burden on the defendant landowner to establish by a preponderance of the evidence in the case that the fair market value as of the date of taking of his estate of interest in the property which has been taken by the State of Alaska was as much as he alleges.

This presents us with a question of first impression as to the burden or proof in condemnation proceedings. ¹ It appears that American courts have employed three rules with respect to burden of proof in such cases. These differing approaches were summarized by the Supreme Court of Oregon in the following manner:

(1) The taking agency has the burden of proving just compensation. It is the moving party and seeks to change the status quo. The condemnor therefore must prove all parts of its case. * * *

(2) Neither party has a burden of proof. The measurement of just compensation involves a question of fact to be determined in rem and without adversary pleadings. This rule is based on the theory that the parties are not adversaries, therefore neither should have a greater burden of proof than the other. * * *

(3) When the taking agency is a governmental subdivision, it is presumed to have made a fair offer, and, accordingly, the landowner has the burden of proof that just compensation requires a sum greater than the amount conceded by the government. (So-called majority rule, followed by at least 24 states. * * *) ²

In the case at bar, the trial judge did not give the jury any instruction on burden of proof. We affirm the trial judge's refusal to instruct that the landowner has the burden of proving by a preponderance of evidence the just compensation to which he is entitled in a condemnation proceeding.

Section 18 of Article I of the Alaska Constitution establishes that '(p)rivate property shall not be taken or damaged for public use without just compensation.' In our view this constitutional guarantee, together with the peculiar in rem nonadversary pleadings characteristic of condemnation proceedings, distinguish these proceedings from ordinary civil actions. The differences have led us to the conclusion that instructions on burden of proof, in the sense of allocating the risk of failure to persuade the jury, are inappropriate in condemnation actions. ³ Regarding ordinary civil litigation, Professor McCormick states:

There is, then, it seems, no key-principle which governs the apportionment of the burden of persuasion. In ascertaining the party who is to carry this burden, we can only look to the practice which the courts in the light of tradition and of their notions of convenience, fairness and policy, have worked out in the particular type of case, for burden of pleading and thus for the companionate burden of persuasion. ⁴

In a condemnation proceeding such as the case at bar where the sole issue is determination of just compensation, procedural rules involving the concept of risk of failure to persuade are inapposite. Here the focal point of the trier of fact's inquiry is the ascertainment of just compensation. Thus, regardless of whether the condemning agency or the property owner meets a given burden of persuasion, Alaska's constitutional mandate requires that the owner be awarded just compensation for the property he has lost. In the usual condemnation case, the jury is confronted with conflicting opinions as to value. The jury is not faced with the necessity of finding a particular value or no value at all. As to the issue of fair market value, both the condemning agency and the property owners may produce competent evidence of the fair market value of the condemned property. Absent the production of such evidence by either party, the triers of fact will determine fair market value solely from the other party's evidence. The burden of production facet of burden of proof, rather than the risk of non-persuasion aspect, is the more meaningful concept in the trial of a condemnation proceeding.

Other courts have reached similar conclusions regarding the inappropriateness of burden of proof instructions, in the risk of non-persuasion sense for condemnation purposes. Since 1920 the courts of Ohio have held that the doctrine of burden of proof has no application to condemnation proceedings. Martin v. City of Columbus, 101 Ohio St. 1, 127 N.E. 411 (1920); Ellis v. Ohio Turnpike Commission, 70 Ohio Law Abst. 417, 124 N.E.2d 424, 432 (Ct.App.1955); In re Appropriation by Director of Highways, 120 Ohio App. 273, 201 N.E.2d 889, 894 (Ct.App.1963). In reaching this conclusion, the Ohio courts have placed emphasis on the absence of adversary pleadings, ⁵ and the jury's paramount function of ascertaining just compensation for the property taken. ⁶

Oregon provides by statute that:

Plaintiff and defendant may offer evidence of just compensation, but neither party shall have the burden of proof of just compensation. ⁷

We hold that the trial court did not err in refusing to instruct the jury on the subject of burden of proof. In the case at bar, the jury was informed that the exercise of the power of eminent domain is subject to the constitutional requirement of payment of just compensation. The jury was further instructed that their only concern was the determination of the just compensation to be awarded. In this regard, the jury was given detailed instructions as to the applicable criteria for determination of just compensation and was specifically charged that:

The compensation to be paid by the State of Alaska for an estate or interest in property must be just. In order to be just, the amount of such compensation must be fair, not only to the owner whose property is taken, but also to the public which is to pay for it. If the amount of your verdict is less than the amount you believe to be the defendant's loss, based upon the fair market value of the property taken at the time of the taking, then the compensation is not just to the owner. If it is more than that amount, then the compensation is not just to the State.

Study of the court's entire charge to the jury leads to the conclusion that the trial court's instructions were not erroneous. ⁸

Appellant's next two specifications of error pertain to a 1966 tax assessment which was made by the Greater Juneau Borough. Appellant asserts that the court erred in failing to admit into evidence the 1966 assessment ⁹ and in failing to instruct the jury that (t)his assessment of property by the assessor is prima facie evidence of the full and true value in money of the property for all legal purposes and proceedings.

The majority rule excludes property tax assessments from evidence in condemnation cases on the rationale that such an assessment is res inter alios acta, notoriously unreliable as a criterion of true value ¹⁰ or the opinion of persons not called as witnesses and subject to cross-examination.

On the other hand, appellant argues that in Alaska, AS 29.10.396 requires '(p) roperty shall be assessed at its full and true value.' Appellant further relies upon AS 29.10.390 which provides that:

The assessor is not bound to accept a return as correct, but if he thinks it necessary or expedient, he may make an independent investigation of property returned. If he suspects that a person who had not made a return has property subject to taxation, the assessor shall make an independent investigation as to the property of that person. In either case, the assessor may make his own valuation and assessment of the taxable amount of the property, which shall be prima facie evidence for all legal purposes and proceedings.

Appellant contends that this latter statute authorizes the admission into evidence of tax assessments in condemnation proceedings. Against this interpretation, appellees point out that AS 29.10.390 was enacted into law by Section 9, Chapter 174, SLA 1957. The purpose of this 1957 enactment was 'to provide a uniform...