Utah Dept. of Transp. v. Rayco Corp.
| Decision Date | 26 July 1979 |
| Docket Number | No. 15265,15265 |
| Citation | 599 P.2d 481 |
| Parties | UTAH DEPARTMENT OF TRANSPORTATION, Plaintiff and Respondent, v. RAYCO CORPORATION, Fashion Fabrics of Utah Incorporated, Baskin-Robbins 31Flavors Stores Realty Incorporated, Johney Katich and Inza Katich, Jerald V.Priest, Fred M. Stettler, and Commercial Security Bank, Defendants andAppellants. |
| Court | Utah Supreme Court |
Robert S. Campbell, Jr. and Duane R. Smith, of Watkiss & Campbell, Salt Lake City, for defendants and appellants.
Robert B. Hansen, Atty. Gen., Stephen C. Ward, Asst. Atty. Gen., Salt Lake City, for plaintiff and respondent.
Defendant Rayco, the owner of a shopping center and supermarket situated thereon, appeals from a judgment rendered in an eminent domain proceeding. Defendant seeks a new trial.
We reverse and remand for a new trial, in accordance with this opinion. Costs to Rayco. All statutory references are to U.C.A. 1953.
The matter was tried before a jury, which returned a verdict of $99,963.65 for damages; of this, $38,028.00 was for the fair market value for the land taken, and $61,935.65 was for severance damages. Defendant made motions for an additur, or in the alternative, for a new trial. The trial court granted an additur of $37,714.35; of this sum, $10,800 was for improvements situated on the land taken, for which the jury failed to award any compensation. The remaining amount was to cover the minimum amount, as indicated in the evidence, to compensate for the cost of cure; a standard of recovery advocated by the state and adopted by the jury in lieu of severance damages. The plaintiff accepted the additur, and an amended judgment was entered. Defendant appeals and plaintiff cross appeals. The following diagram will be helpful in visualizing the facts and issues here involved.
Defendant's commercial property was situated in the downtown section of Ogden, Utah. It had 414 feet of frontage and access to 12th Street, and 180 feet of frontage and access to Washington Boulevard; both of which are major traffic arteries. As of June 7, 1976, the date of acquisition, the entire property was being utilized as a shopping center and supermarket. The improvements were situated on the northern boundary of the property; the parking area was immediately in front of it and extended to the southern boundary on 12th Street. The supermarket was located on the northeast part of the tract with unloading docks and employee parking situated next to the east property line. To the west of the supermarket, extending to the western boundary on Washington Boulevard, were three commercial rental units which were leased by a fabric store, a restaurant, and an ice cream store. The building occupied approximately 42,460 square feet of the property; most of the remainder of the 140,000 square feet of the property was utilized for parking.
The prime parking area in the shopping center was directly in front of the supermarket, and extended to the entrances on 12th Street. It was uncontested that the highest and best use of the property was being made as of the date of service of summons. This use was directly dependent on adequate prime parking, which was extant prior to the taking. Without adequate parking, the supermarket could not compete with others in the vicinity. The supermarket was constructed in 1973; it was specially designed to facilitate the quick and easy movement of customers. The loading ramps were constructed parallel to the east wall of the building so the merchandise could flow to the storage areas on the north of the building and then to the retail sections in the central portions of the structure. The loading ramps had been so situated as to be away from the prime parking area so as to create a minimum of interference with the supermarket traffic.
The evidence established the economic patterns of the supermarket business, e. g., ordinary or daily sales and traffic do not yield more than a break-even result. It is only during "peak" hours that the property yields an acceptable return on the capital investment. The first five days of each month, and Thursday through Saturday, are "peak" shopping days for supermarkets generally in the Ogden area. To stimulate these "peak" periods, heavy reliance is placed on local advertising. To accommodate "peak" hour shoppers, it is imperative that adequate prime parking be available. The capacity of a supermarket to compete is directly tied to prime parking, the situs of which is directly in front of a supermarket. Parking on the sides or to the rear of the building is considered inadequate to meet "peak" demand hours. The evidence further indicated the chief competitors of defendant maintained ample prime parking to meet "peaking" requirements.
The customer parking area of the supermarket was designed to facilitate the entry and exit of traffic traveling in a north-south direction on 12th Street. The parking stalls for this traffic were aligned in an east-west direction directly in front of the supermarket. The parking area for the shopping center extended across the entire southern half of the property. Prior to condemnation, there were 228 parking spaces in the shopping center, of these approximately 30 to 40 spaces were situated along the east boundary and northeast corner of the property; these latter spaces were utilized for employee parking. There were six points of access to the parking area along 12th Street, and two points of access from Washington Boulevard. The parking spaces in the southwestern quarter of the property were situated in front of the other commercial enterprises.
The condemnation action was for the purpose of widening 12th Street. It included that taking of a strip 50 feet wide along the southern boundary of the property. In addition, the state acquired an additional 10 feet in depth for a drainage easement. The number of parking spaces was reduced from 228 to 158. The parking spaces condemned were primarily situated in the prime parking area. Furthermore, the number of access openings from 12th Street was reduced from six to three.
The evidence indicated the condemnation reduced the supermarket parking below the acceptable minimum. Thirty percent of the supermarket parking was taken. This resulted in the loss of more than 50 percent of the prime parking, directly in front of the supermarket. The minimum number of parking places required to accommodate a major shopping center, such as defendant's, is 212. There is no method by which the remaining parking area could be redesigned to compensate for the parking stalls lost. The remaining parking area can no longer accommodate "peak" customer traffic; thus defendant can no longer compete with the prime parking of its competitors. The narrow band of parking remaining could reasonably cause traffic congestion and inconvenience. The remaining parking spaces are 54 less than allowed by the zoning laws of Ogden, thus constituting the shopping center a non-conforming use.
The effect of the condemnation, as explained by one of the expert witnesses, was to make the three-year-old supermarket a misplaced improvement, for no one would intentionally design and construct such a building on a parcel with such limited parking. The knowledgeable buyer would not purchase the remaining property for a primary supermarket location.
The expert witnesses of both parties were in essential agreement as to the value of the land condemned; there was further agreement that the defendant had suffered substantial damage to its remaining property. Defendant's expert testified there was $470,070.00 in severance damages. Plaintiff's expert assessed such damages to be $226,251.00. The point of contention between the parties was whether the severance damage could be mitigated by the acquisition and improvement of replacement property.
The State urged a tract of land owned by the Weber County School Board could replace the land expropriated. This land was contiguous to the northeast corner of defendant's property. It had an approximate width of 151.75 feet and it fit into the right-angled jog of defendant's property in that area, where the loading dock and waste disposal areas are located.
The replacement tract was accessible from a side street, Adams Avenue. Defendant had had an option on this land, which it had permitted to expire prior to the service of summons in this action for the reason that experts had advised it the school land was not the equivalent of the condemned property, and would not ameliorate the problems caused by the State acquisition.
Defense counsel objected to any testimony regarding the replacement land until an adequate foundation had been laid establishing its equivalency to the land condemned, and that it was for sale on the market at a specific price on June 7, 1976. The objection was overruled and extensive testimony was presented by plaintiff's witness, Bergeson.
On appeal, defendant contends the trial court committed prejudicial error in submitting to the jury the issue of the replacement land, in mitigation of severance damages.
Under § 78-34-10, a condemnee is entitled to the value of the property condemned, including all the improvements thereon (subsection (1)); and further if only a part of the larger parcel is condemned, the damages which will accrue to the portion not condemned by reason of its severance from the portion condemned. Subdivision (5) requires each source of damages be separately assessed.
There has been an element of confusion interjected into the case law in this jurisdiction concerning the availability of replacement land and the right to severance damages. In Provo River Water Users Associated v. Carlson, 1 this Court ruled there was no adequate foundation of fact to support the condemnee's claim for severance damages. The condemned property was a parcel of 18.75 acres...
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