Williams Natural Gas Co. v. Perkins, 83981

• Court: Oklahoma Supreme Court
• Writing for the Court: HODGES
• Citation: Williams Natural Gas Co. v. Perkins, 952 P.2d 483, 1997 OK 72 (Okla. 1997)
• Decision Date: 10 June 1997
• Docket Number: No. 83981,83981
• Parties: WILLIAMS NATURAL GAS COMPANY, a Delaware Corporation, Appellee, v. William Jerry PERKINS, Appellant.

Page 483

952 P.2d 483

1997 OK 72

WILLIAMS NATURAL GAS COMPANY, a Delaware Corporation, Appellee, v. William Jerry PERKINS, Appellant.

No. 83981.

Supreme Court of Oklahoma.

June 10, 1997 As Corrected Sept. 10, 1997 As Corrected on Grant of Appellant's Rehearing Petition and Denial of Appellee's Rehearing Petition Feb. 23 1998. ^*

George D. Sherrill, Michael M. Reynolds, DeBois, Sherrill & Reynolds, Duncan, for Appellant

Mary Johnson Tidholm, Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Oklahoma City, for Appellee.

HODGES, Justice.

¶1 The issue in this proceeding is what is the proper measure of damages in a condemnation suit following the 1990 amendment to Article 2, Oklahoma Constitution, § 24.

I. HISTORICAL PERSPECTIVE OF JUST COMPENSATION

¶2 Article 2, section 24 of the Oklahoma Constitution provides for the taking of private property for public use for just compensation. Until section 24 was amended in 1990, it provided for just compensation "in such manner as may be prescribed by law."

¶3 Before 1991, the Oklahoma Statutes did not address the method for determining just compensation. ¹ However, in State ex rel. State Highway Comm'n v. Anderson, ² this Court adopted the before-and-after method as the proper means of determining just compensation. Under the before-and-after method, just compensation is the difference in the fair market value of the property immediately before the taking and the fair market value of the property remaining immediately after the taking. ³

¶4 In 1990, section 24 of article 2 of the Oklahoma Constitution was amended, to read:

Private property shall not be taken or damaged for public use without just compensation. Just compensation shall mean the value of the property taken, and in addition, any injury to any part of the property not taken. Any special and direct benefits to the part of the property not taken may be offset only against injury to the property not taken. ⁴

Section 24, article 2 now requires just compensation to be determined by taking the value of the property taken and adding the injury to the remaining property. Because the phrase "any injury to any part of the property not taken" is meaningless if applied only to takings of an entire parcel, section 24 must be read to apply to partial takings as well as taking of entire parcels of property.

¶5 In response to the constitutional amendment to section 24, the Oklahoma Legislature in 1991 amended section 53(D) of title 66 of the Oklahoma Statutes. The amendment to section 53(D) attempted to override the mandate of the people of Oklahoma in amending the Constitution. Section 53(D) as amended provides:

Just compensation ... shall mean the value of the property taken, and in addition, any injury to any part of the property not taken. Any special and direct benefits to the part of the property not taken may be offset only against any injury to the property not taken. If only a part of a tract is taken, just compensation shall be ascertained by determining the difference between the fair market value of the whole tract immediately before the taking and the fair market value of that portion left remaining immediately after the taking. ⁵

In amending section 53(D), the Legislature attempted by statute to rejuvenate the old before-and-after method of determining just compensation in partial takings. This portion of section 53(D) dealing with the before-and-after method for determining just compensation is in conflict with the Constitutional directive. Because of this conflict, the provision of section 53(D) which attempts to reinstate the before-and-after method for partial takings is unconstitutional.

II. FACTS

¶6 Williams Natural Gas (Williams) filed a petition for condemnation in June of 1992. Williams sought an easement 66 feet wide and 4,289 feet long, with rights of ingress and egress, and the right to use a 25-foot temporary work space adjacent to the easement, a partial taking. Prior to trial Williams served on Perkins, the landowner, an offer to allow judgment to be taken against it in the amount of $10,400. Perkins rejected the offer.

¶7 The trial court appointed three commissioners to inspect Perkins' property. The commissioners filed a report assessing damages at approximately $1625. Perkins demanded a jury trial.

¶8 Before the trial, Perkins filed a motion in limine asking the court to prohibit Williams from referring at trial to the before-and-after method for determining just compensation. The trial court denied the motion ⁶ finding title 66, section 53(D) of the 1991 Oklahoma Statutes established the before-and-after method as the exclusive method of determining just compensation and only evidence relating to the exclusive method would be admitted. In accordance with its ruling, the trial court disallowed expert witness testimony of the injury to the property not taken.

¶9 The trial court gave two instructions on the method for determining the amount of just compensation. In instruction number two, the court instructed the jury: "In this case [just compensation] is the fair market value of the easement plus any injury to the property left remaining after the taking." In instruction number 5, the trial court instructed the jury:

This is a case in which the plaintiff has taken only a part of the defendant's property, and it is sometimes referred to as a "partial taking" case. In a partial taking case, the term "just compensation" means the payment to the owner for the taking of a part of his property by the plaintiff of an amount of money that will make the owner whole. In this case this is the fair market value of the part of the property that was taken, plus any injury to the property left remaining after the taking. The fair market value of the property taken is determined in the following manner:

1. Determine the fair market value of the whole tract immediately before construction of the pipeline began.

2. Determine the fair market value of that portion of the tract not taken by the pipeline right-of-way immediately after the pipeline construction was completed.

3. Subtract the second amount from the first amount....

Injury to the remaining property is the damage, if any, caused by:

1. The separation of part of the tract from the remaining property;

2. The construction of the pipeline on the property taken.

Instruction number five was a modification of Oklahoma Uniform Jury Instruction (OUJI) number 25.3. ⁷

¶10 The jury verdict fixed Perkins' compensation at $3,800. The trial court denied Perkins' post-trial motion for court costs, prejudgment interest, post-judgment interest, attorney's fees, expert witness fees, and appraiser fees. Perkins appealed. The Court of Civil Appeals reversed and remanded. This Court granted certiorari.

III. ANALYSIS

A. Constitutional Attack on § 53(D)

¶11 Perkins argues that title 66, section 53(D) of the Oklahoma Statutes is constitutionally infirm because it is inconsistent with article 2, section 24 of the Oklahoma Constitution. Perkins reasons that the trial court's instruction number 5 whose modification of OUJI number 25.3 was based on § 53(D) must be equally infirm.

¶12 As noted in Part I of this opinion, article 2, section 24 of the Oklahoma Constitution provides that just compensation is the value of the property taken plus any injury to the property not taken. This definition includes just compensation in partial takings. Because title 66, section 53(D) provides a method for determining just compensation which is inconsistent with article 2, section 24 in proceedings involving partial takings, it is constitutionally infirm to the extent of the inconsistency. ⁸

¶13 OUJI number 25.3 is a correct statement of the law. ⁹ However, the trial court modified the uniform instruction to incorporate the constitutionally infirm statutory provisions of title 66, section 53(D). Thus, the trial court committed fundamental error in giving instruction number five. ¹⁰

¶14 Williams posits that the before-and-after method stated in section 53(D) is just one means of determining the value of the property taken. We cannot agree. First, if the intent was to retain the before- and-after method, there would have been no need for the constitutional provision to define just compensation as "the value of the property taken, and in addition, any injury to any part of the property not taken." The adoption of this language evidences an intent to change the method of determining just compensation. ¹¹

¶15 Second, section 24 of article 2 states: "Just compensation shall mean the value of the property taken, and in addition, any injury to any part of the property not taken." ¹² Section 53(D) of title 66 provides: "[J]ust compensation shall be ascertained by determining the difference between the fair market value of the whole tract immediately before the taking and the fair market value of that portion left remaining immediately after the taking." ¹³ If the purpose of 53(D) had been to establish the method of determining the value of the property taken, then it would have stated "the value of the property taken shall be ascertained by...." By amending section 53(D), the Legislature attempted to substitute its will for that of the people of Oklahoma when they approved the constitutional method of determining just compensation as taking the value of the property taken plus any injury to the property not taken.

¶16 Third, if section 53(D) were merely a means of determining the value of the property taken, then the landowner would be compensated twice for the injury to the property not taken. When using the before-and-after method, a jury will consider the value of the total property immediately before the taking and the value of the property not taken immediately after the taking. The value of the remaining property immediately after the taking includes injury because of the taking. ¹⁴ Under Williams' theory, the injury to the property not taken would be considered...