Tonnar v. Missouri State Highway and Transp. Com'n, 32809

• Decision Date: 28 September 1982
• Docket Number: No. 32809,32809
• Parties: W.E. TONNAR and Esther Tonnar, Appellants, v. MISSOURI STATE HIGHWAY AND TRANSPORTATION COMMISSION, Respondent.
• Court: Missouri Court of Appeals

Page 527

640 S.W.2d 527

W.E. TONNAR and Esther Tonnar, Appellants, v. MISSOURI STATE HIGHWAY AND TRANSPORTATION COMMISSION, Respondent.

No. 32809.

Missouri Court of Appeals,

Western District.

Sept. 28, 1982.

S. Preston Williams, Thomas E. Barzee, Jr., North Kansas City, for appellants.

James B. Jackson, Asst. Counsel, Kansas City, for respondent.

Before KENNEDY, P.J., and CLARK and MANFORD, JJ.

CLARK, Judge.

W.E. and Esther Tonnar were the owners of a dwelling house and acreage in Carroll County taken by the Missouri Highway and Transportation Commission for the improvement of Route 65. In addition to payment of compensation for the property taken, the Tonnars claimed relocation assistance funds for acquisition of a replacement dwelling. After declining the sum offered by the Commission as inadequate, the Tonnars appealed, first to a Commission hearing examiner and then to the Circuit Court. No relief was afforded and they now appeal to this court contending that use of an erroneous formula has denied them appropriate relocation compensation. Reversed and remanded.

In April, 1973, the Commission commenced an action to condemn and acquire appellants' residence and 7.99 acres of ground. That suit, no longer the subject of any dispute, was concluded by entry of a consent judgment in the amount of $38,100.00. Also available to appellants, and conceded by the Commission to be due, is a relocation assistance payment pursuant to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. §§ 4601-4655 (1976) applicable to state highway projects by reason of the contribution of federal funds. This relocation payment is defined by statute as that amount which, when added to the acquisition cost of the dwelling taken, equals the cost of a comparable replacement dwelling. 42 U.S.C. § 4623 (1976).

To compute the appropriate sum of relocation assistance, which is subject to a maximum of $15,000.00, it is necessary to determine how much was paid in the condemnation of the property owner's former dwelling and to deduct that amount from the ascertained cost of a replacement dwelling. In this case, both figures are disputed, the first because the condemnation award did not apportion the payment between the Tonnars' residence and the additional acreage taken, and the second, because no comparable replacement dwelling was available in the Carroll County locale. Facts bearing on these issues were presented in evidence before the hearing examiner and they must be recounted to compose a background for discussion of the points presented.

The total ground area taken from appellants for the highway project amounted to 7.99 acres of which it was agreed one acre should be considered as supporting and adjacent to the dwelling structure. At the onset of negotiations, the Commission secured an appraisal of the property by Joseph J. Steen. He valued the entire tract at $21,300.00 consisting of $15,200.00 for the house, $600.00 for the land on which it stood and $5,500.00 for the additional acreage. Mr. Steen did not participate in the eventual agreement upon a condemnation payment of $38,100.00, and he therefore had no opinion as to whether the increased amount over his appraisal was attributable to the land value or the residence structure or both. Unfortunately, no other witness testified as to how the compromise figure reflected in the consent judgment was reached.

One David E. Hopkins was an appraiser employed by the Tonnars. He did not enter the case, however, until well after the condemnation was commenced and he did not view the property while appellants' residence was still in place. His valuation of the dwelling structure was based on photographs and details related to him by the Tonnars. In the opinion of Hopkins, the property had a value of $39,000.00 consisting of $1850.00 per acre for the land and $20,500.00 for the house. Hopkins therefore valued the residence and the land on which it was located at $22,300.00.

While the Hopkins appraisal was in an amount very close to the sum which the Commission ultimately paid in the condemnation suit, this record contains no proof that the Hopkins appraisal was in fact the basis for the negotiated settlement. No direct evidence explains why the Commission increased its original offer of $21,300.00, based on the Steen appraisal, to $38,100.00 or how the increment of $16,800.00 was allocated as between land and improvements. Ready calculation of the amount received by the Tonnars for the taking of the residence alone can not, therefore, be made.

As to the cost for replacement housing the amount is also in dispute. The Tonnar home taken in the condemnation was 75 years old and contained high ceilings and large hallways and rooms. It did not have central air conditioning and it was characterized by both good and undesirable features typical of homes built at the turn of the century. No comparable home was available for the Tonnars to purchase. They did buy a replacement residence at a price of $43,000.00. While they contend the replacement home was comparable, it admittedly was very different in many respects. The home purchased was both newer and larger than the property condemned, it was located in town and it had central heating and air conditioning.

According to appraiser Steen, the only appropriate method to reach a price for a comparable replacement dwelling was to estimate the cost of a newly constructed home and apply adjustment factors taking into account modern materials and the functional obsolescence of appellants' former home. After checking with local building contractors and material suppliers Steen estimated that a replacement home could be built for $30,313.00. That home would contain 1750 square feet compared to 2304 square feet in the residence condemned and would have the same number of rooms. The reduced size was attributable to the elimination of the large hallways, a reduction in the size of bedrooms and other changes reflecting contemporary design. Appellants take exception to this estimate contending the changes deprive the hypothesized structure of comparability.

The Commission and the hearing examiner calculated the relocation assistance payment available to appellants based on certain rules which appear in a Commission publication known as the Right-of-Way Manual. This manual instructs in a situation as here where the condemnation award exceeds the original offer by the Commission in negotiation, the percentage ratio of land to improvements set out in the original Commission appraisal must be preserved. Under the manual formula, no account is taken of the factual basis for an increased award over the original offer.

The relocation assistance payment to the Tonnars in this case was computed at $2119.00 employing the manual formula as follows: The Steen appraisal is taken as a base and establishes the ratio of the value of the house and supporting land to the entire tract. This computation produces a factor of 74%, being the result when the Steen valuation of the house and lot, $15,800.00, is divided by the value of the whole tract, $21,300.00. That ratio of 74% is then applied to the award of $38,100.00 yielding an amount of $28,194.00 as the amount actually paid the Tonnars for the residence taken. This figure is then deducted from the Steen estimate of the cost to construct a replacement dwelling, $30,313.00 and the result is the amount payable as relocation assistance.

It is at once apparent that the valuation under the manual formula does not take into account the evidence of the appraisers, neither of whom testified to value range which would include the formula amount. In fact, appraiser Hopkins valued the house and lot at a much lower figure, $22,300.00, although his estimate of value of the total tract was somewhat higher than the award. Were appraiser Hopkins' figures taken as a basis for the manual formula, the ratio would be 57% and the relocation assistance payment would be...