Townsend v. Mid-America Pipeline Co.

• Decision Date: 06 May 1969
• Docket Number: MID-AMERICA,No. 53310,53310
• Citation: 168 N.W.2d 30
• Parties: Fred H. TOWNSEND and Ruth A. Townsend, husband and wife, Appellees, v.PIPELINE COMPANY, Appellant.
• Court: Iowa Supreme Court

Page 30

168 N.W.2d 30

Fred H. TOWNSEND and Ruth A. Townsend, husband and wife, Appellees, v. MID-AMERICA PIPELINE COMPANY, Appellant.

No. 53310.

Supreme Court of Iowa.

May 6, 1969.

Walter F. Rismiller, Tipton, and Herrick, Langdon, Belin & Harris, by Herschel G. Langdon, Des Moines, for appellant.

D. C. Nolan and John Nolan, Iowa City, for appellees.

RAWLINGS, Justice.

From assessment of damages by condemnation commission for taking of pipeline right-of-way across plaintiffs' land, they appealed to the district court. Trial to jury resulted in a $75,000 verdict based award. Defendant appeals. We affirm.

Plaintiffs own a 145 acre farm in Cedar County, containing substantial limestone deposits. Defendant company condemned a 50 by 1400 foot strip of that land.

On appeal to the district court plaintiffs first alleged damage for the partial taking amounted to $29,000. The morning trial commenced they, with trial court's permission, over timely resistance, amended their petition claiming $125,000.

Plaintiffs' evidence discloses they acquired the farm in 1952 for $14,900. Since 1961 an 'ag' quarry has been operating, under lease arrangements, on a part of the property not involved in these proceedings. The same operators also hold a lease right to conduct limestone quarry operations on that portion of the farm involved in the subject condemnation, but no such work has as yet been done in that area.

After commencement of this action, plaintiffs had a number of test holes or drillings made in the vicinity of the pipeline. Core samples were thus obtained and analyzed.

Mr. Fred Dorheim, an economic geologist testified, upon the basis of this analysis, the land contained hard LaClaire limestone of very high quality, and production of 75,000 to 100,000 tons of rock annually would reasonably be expected from a quarry the size and type of plaintiffs' farm. He also expressed an expert opinion relative to quantity of rock in the area affected by the pipeline easement. Additional testimony by this witness discloses limestone is quarried by blasting, the proximity of these operations to a pipeline being governed by amount of dynamite used, some done at least 250 feet away, others not nearer than 500 feet.

Plaintiffs called three other experts. They testified concerning value of the land before and after the taking.

One of these witnesses, Ralph West, for 21 years a manager of farm mortgages for an insurance company requiring him to appraise farm property stated, over objection, the farm was worth $157,000 before and $30,000 after the taking, resulting in damage of $127,000.

Another valuation witness for plaintiff was Lyle Grove, an experienced real estate broker. Defendant's objection being overruled, this witness said the before taking value was $150,000, the after value $30,000, net damage being $120,000.

Gene Schlaegel, a law graduate and knowledgeable real estate man with 22 years experience, also testified for plaintiffs. According to the record, neither Mr. Schlaegel's qualifications as an expert nor his testimony relative to value were challenged by defendant. This witness stated the Townsend property was reduced in value from $154,000 to $64,000 by the taking, the resultant damage being $90,000.

Defendant offered testimony of two experts. They testified plaintiffs' property was 'Shelby or poor, agricultural land' and the taking by defendant for pipeline purposes did not lower its farm market value.

As aforesaid the jury found for plaintiffs in the amount of $75,000. Defendant moved for a new trial.

After hearing, this motion was overruled. To the extent determinable from defendant's rather cumbersome assignments it contends on appeal, trial court erred in, (1) allowing plaintiffs to belatedly amend their petition; (2) overruling its objections to opinion testimony relative to value; (3) permitting use of an improper standard in determining damages; (4) finding no prejudicial jury misconduct; and (5) holding the verdict is not excessive.

Avoidance of duplication dictates these errors be not considered in the order assigned above.

I. Defendant argues trial court should have sustained its motion for a new trial because the award, resulting from passion and prejudice, is excessive.

Dealing with that subject in Shover v. Iowa Lutheran Hospital, 252 Iowa 706, 718, 107 N.W.2d 85, 92, this court said: 'In considering the contention the verdict is so excessive as to shock the conscience and show it is the result of passion and prejudice we must take the evidence in the aspect most favorable to plaintiff which it will reasonably bear. We must also give weight to the fact the trial court, with the benefit of seeing and hearing the witnesses, observing the jury and having before it all the incidents of the trial, did not see fit to interfere. Fredrickson v. Heline, 1960, 252 Iowa 92, 106 N.W.2d 74, and citations.

'The allowance of damages is primarily for the jury and we will not interfere therewith unless it clearly appears the verdict is unconscionable, the result of passion and prejudice, or not warranted by the evidence. Von Tersch v. Ahrendsen, 251 Iowa 115, 123, 99 N.W.2d 287, 292 (79 A.L.R.2d 267); Hamdorf v. Corrie, 251 Iowa 896, 907, 101 N.W.2d 836, 843; Mallinger v. Brussow, supra, 252 Iowa 54, 57, 105 N.W.2d 626, 628; Fredrickson v. Heline, supra.' See also Knudsen v. Merle Hay Plaza, Inc., Iowa, 160 N.W.2d 279, 286--287, and Beyer v. City of Dubuque, 258 Iowa 476, 489, 139 N.W.2d 428, 18 A.L.R.3d 416.

In this regard plaintiffs offered testimony to the effect there existed no comparable sales by which to determine fair market value, requiring resort to actual or intrinsic value of the land immediately before and after the taking. On that premise, as heretofore disclosed, plaintiffs' witnesses fixed the damage at a low of $90,000, a high of $127,000.

On the other hand, defendant sought determination of damage on a fair market value basis. And, as revealed supra, its witnesses accordingly found no damage resulted from the taking.

Trial court, in effect, instructed the jury the difference in fair market value immediately before and after taking is ordinarily the proper measure of damages, but if it be found no such standard exists, then the difference between actual or intrinsic value before and after taking would be the proper basis upon which to evaluate damages.

Understandably defendant did not challenge this instruction. As we said in Nedrow v. Michigan-Wisconsin Pipe Line Co., 245 Iowa 763, 768--769, 61 N.W.2d 687, 690: 'The foundation finding for the damage award in condemnation is the value of the property before condemnation. If it can be established that there is a market for the property, by evidence of a general buying and selling of that kind of property, the first finding will be the market value. But if the nature of the property be such that no market for that kind of property can be ascertained or established, the primary finding will be intrinsic or actual value of the property. Once the value is found before condemnation, either market or actual as the case may be, the next question is the value after condemnation. If the whole of the property is taken the first finding of value is the measure of recovery. If part of the property is taken the measure of recovery is the difference between the finding of value of the whole property before condemnation and the finding of value of the remaining property after condemnation. These general principles are all firmly established by all of the authorities. 29 C.J.S., Eminent Domain, §§ 136--139; 18 Am.Jur., Eminent Domain, Sec. 242.'

Having heard evidence ranging from no loss in market value, to an actual value loss from a low of $90,000 to a high of $127,000, the jury, as aforesaid, returned a $75,000 verdict.

It is to us evident, as trial court found in denying defendant's motion for new trial, the verdict is supported by ample and adequate evidence. Being within the testimonial range, we cannot say it is excessive.

II. But defendant asserts its objections to the opinion evidence of valuation experts called by plaintiffs should have been sustained, in that an erroneous standard for measurement of damages was used by them.

More specifically it is urged, these witnesses were permitted to multiply a royalty figure by amount of limestone in arriving at before and after taking values.

It is argued this violates the rule set forth in Nedrow v. Michigan-Wisconsin Pipe Line Co., 245 Iowa 763, 61 N.W.2d 687, prohibiting use of the unit rule. We there said, 245 Iowa loc. cit. 776, 61 N.W.2d loc. cit. 694: '* * * value cannot be established by finding the amount of rock in place and measuring the recovery by the amount rendered unquarriable by the taking, multiplied by the royalty figure.'

However, it is also well established, the presence of mineral deposits in land is a proper Element to consider in valuing property. That is clearly spelled out by this statement in Nedrow, supra, 245 Iowa at 770--771, 61 N.W.2d at 691: "With remarkable unanimity the courts hold that in determining the compensation in eminent domain proceedings for the land to be condemned, the existence of valuable mineral deposits in the land taken constitutes an element which may be taken into consideration if and in so far as it influences the market (or actual) value of the land. * * *

"Occasionally the rule has been expressed by the negative statement that the award may not be reached by separately evaluating the land and the deposits, since the latter, being only one element among many in determining the market (or actual) value of the land, cannot be considered as an independent factor the value of which is to be simply added to the value of the land."

Our question, briefly stated, is whether plaintiffs' value witnesses, and in turn the jury, used the so-called 'unit rule' alone in determining before and after taking values, or considered the limestone deposit...