Title: STATE HIGHWAY COMM N v RENFRO

State: montana

Issuer: Montana Supreme Court

Document:

No, 12172 I N THE SUPREME C O U R T O F THE STATE O F MONTANA T H E STATE HIGHWAY COMMISSION et al,, P l a i n t i f f and Appellant, EDMOND W . R E N F R O et a l e , Defendants and Respondents, Appeal from: District Court of t h e F i f t h J u d i c i a l District, Honorable Frank E, Blair, Judge presiding, Counsel of Record: For Appellant : Daniel J, Sullivan argued and Donald A. Douglas, appeared, Highway Legal Dept , , Helena, Montana. For Respondents: Corette, Smith and Dean, Butte, Montana, Kendrick Smith argued, Butte, Montana. - Submitted: September 21, 1972 Decided: JAN 1 9 1973 Filed : JAR ,t. 3 13/3 M r . J u s t i c e Gene B. Daly delivered the Opinion of the Court. This is an appeal from a judgment f o r the defendants on a jury verdict i n the d i s t r i c t court of Beaverhead County i n a condemnation proceeding brought by the s t a t e highway commission, The appeal questions only the award of $86,000 f o r depreciation i n market value of the remainder of defendants ' land by reason of the taking and construction of the highway. N o question i s raised by the highway commission i n t h i s appeal t o the award of $29,000 a s the market value of defendants' land actually taken f o r the highway r i g h t of way. From the testimony a t t r i a l , it appears the ranch property located i n Reaverhead County near Red Rock, Montana, consisted of three separate t r a c t s of land which were n o t physically ad- joining, but which w e r e connected by the B e l l Canyon road. The t o t a l acreage of the ranch, including deeded and leased land, w a s approximately 3,934 acres. Two of the t r a c t s c o n s i s t of deeded land, together with s t a t e lease and federal range land. The t h i r d t r a c t contains no deeded land, but consists e n t i r e l y of s t a t e lease and federal range land. The l a r g e s t t r a c t con- t a i n s about 3,294 acres and could be considered the "home place". This i s the t r a c t through which the i n t e r s t a t e highway w i l l run, The distance from the home place t o the next t r a c t is about two m i l e s w e s t , and the t h i r d t r a c t i s about 1.5 miles w e s t of the second t r a c t , The two smaller noncontiguous t r a c t s w e r e used two months out of the year a s summer range, For convenience i n t h i s opinion, we w i l l hereinafter r e f e r t o the p a r t i e s a s landowners and Commission, and the land parcels a s ?/I f o r the home place, !I2 f o r the f i r s t t r a c t west, and #3 f o r t h e second t r a c t w e s t , a s portrayed on the map furnished the Court. The highway r i g h t of way transverses parcel #1 i n such a manner a s t o separate the u n i t i n t o two parcels with no access f o r six and one-half m i l e s and the only passage from one parcel t o the other i s through an eight foot drain pipe a t B e l l Canyon under the highway right of way, Three witnesses and the landowners testified that cattle would not go through this drain pipe. This testimony was rebutted and is in conflict, The highway construction also buried an irrigation ditch and there is no provision for bringing water from the source east of the highway to the lands on the west. The landowners claimed the construction of the highway right of way through the ranch would depreciate the value of the ranch by an amount between $90,000 and $116,000, This reduction in value would be due to a claimed decrease of between 87 and 117 "animal units" to the ranch, which could originally support about 4 0 0 animal units. This reduction would be due in part to the impracticability of irrigation and general inaccessability of that portion of tract #l lying to the east of the highway right of way, There was addi- tional loss claimed due to a change in the character of some land from hay to grazing, resulting from construction. The landowners produced several witnesses who testified to damage to the remainder in parcel #1 in excess of the jury's award. The landowners further produced evidence that tract 82 and tract #3 which are noncontiguous to each other and to tract #I, are so inseparably connected in use that taking from #I must necessarily injure #2 and #3, as they operate as one integral unit, The court permitted testimony concerning damage to tracts ! I 2 and #3, The Commission's appraiser did not consider these tracts in his appraisal. The Commission presents five issues for review. The first four issues are consolidated into one for discussion and the basic question is ---what comprises the remainder of the land, subject to depreciation, by reason of its severance from the part taken? 1 I Or, what constitutes the term a larger parcel" within the meaning of section 93-9912(2), R.C,M. 1947? The question raised in issue five is---may a jury consider testimony for damage awards for 11 inconveniencetf, and was there sufficient competent evidence to support the jury award? Section 93-9912(2), R.C.M. 1947, a s it applies here reads: I I I f the property sought t o be appropriated constitutes only a part of a larger parcel, the depreciation i n value which w i l l accrue t o the portion not sought t o be condemned. by reason of its severance from the portion sought t o be-con- demned, and the construction of the improvements i n the manner proposed by the plaintiff," (Emphasis supplied), The Commission contends t h i s s t a t u t e does not provide for the inclusion of any noncontiguous remainder land. It c i t e s four Montana cases i n support of i t s position which the t r i a l court used i n allowing the jury t o consider depreciation of the two noncontiguous parcels /,2 and /,3, i n addition t o #1, i n arriving a t an award for depreciation, The four cases are: Alexander v. State Highway ~omm'n, 142 Mont. 93, 381 P.2d 780; State Highway Comm'n v. Robertson & Blossom, 151 Mont. 205, 219, 441 P,2d 181; Lewis & Clark County v. N e t t , 81 Mont. 261, 266, 263 P. 418; and State, et.al. v, Bradshaw Land & Livestock Co., 99 Mont, 95, 106,-42 P.2d 674. A brief examination of these cases i s i n order. In Alexander. the issue concerned an award for cement batching plant equipment purchased by the s t a t e i n an eminent domain pro- ceeding. Qn appeal it was held the award was excessive because it was based on testimony of the owner a s t o value of equipment not actually found i n the plant, Here, the issue concerns an award for deprecia.tion t o a ranch operation, due t o a reduction i n the number of animal units the ranch i s capable of supporting. I n Robertson & Blossom, the Court stated: "To determine what i s 'the remainder' so a s t o determine what constitutes the unit cf property affected, there a r e generally three tests: ( I ) same ownership, (2) contiguous, (3) unity of use. Here the property was contiguous and no issue i s made, The appellant urges that since Robertson and the Corporation were two d i s t i n c t owners, the instruction given was improper. T h i s i s correct. I' The issue i n Robertson & Blossom was unity of ownership. The issue i n the instant case i s what constitutes "the remainder1'--- only the t r a c t of land from which the right of way was actually taken, or a l l af the noncontiguous land which was actually put t o the same use by the same landowner? It should be noted that reference t o a "general" t e s t or requirement of contiguity i n Robertson & Blossom was dicta, since i t was outside the issue of the case. Consequently, the fact that t h i s general requirement was mentioned and no exceptions were mentioned does not mean the Court established contiguity a s an absolute requirement and recognized no exceptions. I n Nett, the Court stated: - "The measure of damages i n a proceeding for the condemnation of land for a public highway, under our statute and similar enactments, i s the f a i r market value of the land sought t o be condemned with the depreciation of such value of the land from which the s t r i p is t o be taken, less allowable deductions f o r benefits proven * * * which values are t o be determined a s of the date of the commencement of the proceeding," The issue i n Nett was whether damages could be awarded t o compensate the future cost of maintaining fences. The issue i n the instant case is---what constitutes "the land from which the s t r i p i s t o be taken"? Finally, we quote from Bradshaw Land & Livestock Co.: "The theory of defendant cannot be upheld, unless it may be said that a l l of the lands owned by defendant were a part of the larger parcel from which the right of way was taken. "In the case of State v. Hoblitt, 87 Mont, 403, 288 Pac. 181, 183, it was said: 'Ordinarily damages may be awarded only for injury done t o the particular l o t or t r a c t of land from which the right of way s t r i p i s taken, and the above r u l e i s applied i n ascertaining the award t o be made by a determination of the value of the acreage taken, and the depreciation i n value of the remainder of the particular t r a c t , regardless of what other lands the owner may possess * * * but, even where two t r a c t s are separated by a highway o r watercourse, or, a s here, by a railway, i f they a r e used jointly by the owner i n a single enter- prise and the whole plant i s depreciated i n value by the proposed improvement, the direct damages suffered may be I compensated (30 C.J, 736), When, however, parts of the same establishment are separated by intervening private lands, they are generally considered a s independent parcels. [Citing Cases] "In the case of Oakland v, Pacific Coast L.Co., supra, the California court said: '1t is insisted, however, that a l i b e r a l definition should be given t o "parcel, 11 and that unity of use should be regarded a s the controlling and determinative factor i n the solution of t h i s question whenever i t arises. But i f unity of use i s the controlling consideration, it can matter not how f a r i n fact the pieces of land are separated. A factory may be i n one county, i t s warehouse i n another, i t s principal sales agency i n a third; any interference with any of the three properties would of necessity be an interference with the unity of .use of them a l l , and, i f appellant's position i s sound, damages t o the other two may be recovered for a taking of o r an injury t o the third. Indeed, t h i s i s but another way of phrasing the r e a l contention of appellant, as quoted above from i t s b r i e f , that business i s property and when the taking by the s t a t e o r i t s agencies interferes with, impairs, damages, o r destroys a business, compensa- tion may be recovered therefor, W e a r e not t o be under- stood as saying that t h i s should not be the law when we do say t h i s i s not our law. 1 "~ome of the lands for which it was sought t o claim damages by the construction of t h i s highway are located more than nine miles from the right of way. The evidence showed that a l l of the noncontiguous lands were grazing i n character and of no greater value than approximately $5 per acre. W e appreciate that it is sometimes recognized as an exception t o the general rule herein announced that where lands a r e so inseparably connected i n the use t o which they are applied that injury t o o r destruction of one must necessarily and permanently injure the other. (10 R.C.L. 157). This exception i s without application here, a s there was no preliminary foundation laid showing that these outlying grazing lands were permanently injured or destroyed. Accordingly, the t r i a l court was i n error i n admitting testimony a s t o the damage t o the lands which were not contiguous t o the t r a c t from which the right of way was taken. (Emphasis supplied). This case i s close i n point t o the instant case. It contains a definitive statement a s t o the application of what i s now section 93-9912, R.C,M. 1947, i n an eminent domain proceeding where depreciation damages a r e claimed t o property which is not physically connected or contiguous t o the t r a c t from which the right of way I1 i s severed, but the landowner claims the lands are so inseparably connected i n the use t o which they are applied that injury t o or destruction of one must necessarily and permanently injure the other. I 1 W e w i l l simply r e i t e r a t e that rule a s it applies t o the instant case, Landowners i n eminent domain actions are entitled t o f a i r compensation for depreciation t o the remainder of the parcel which results from the severance, The general r u l e requires that the land for which depreciation damages are sought be contiguous t o that from which the severance i s made. However, the landowner may claim a s an exception t o the general rule that the unity of use within an integrated operation t o which he applies noncontiguous lands owned i s of such a character that a f t e r severance they cannot be f u l l y utilized t o their best and most valuable use. This claim becomes a question of f a c t for jury determination. Favorable considera- tion must be given the jury determination provided it i s based on, and not contradictory t o , competent and credible evidence supporting i t s holding, This exception t o the general requirement of contiguity which was discussed i n the foregoing quotation from Bradshaw Land & Livestock Co. has been recognized by various a u t h o r i t i e s and i n decisions by courts i n federal and s t a t e jurisdictions. 27 Am J u r 2d Eminent Domain 5317; 29A C.J.S, Eminent Domain 5140; Anno. 6 ALR2d 1197, 1226; 4 A Nichols on Eminent Domain, 3rd Ed. $14.31(1) ; 2 Lewis Eminent Domain, 3rd Ed. 5 698. Issue f i v e does not bear a t r a n s c r i p t reference i n the b r i e f as t o alleged testimony on damages based on inconvenience. However, M r . R.enfro, the landowner, under cross-examination by the Commission's attorney, t e s t i f i e d a t length concerning depreciation based on water problems, hay, and animal u n i t s . This exchange occurred: "Q. N o w then did you depreciate any of the grazing Land lying e a s t of the new highway? A. No, only f o r inconvenience, moving our---- . Did you have a figure f o r inconvenience? A. Y e s , w e have a figure f o r inconvenience on the whole operation. Q . What was t h a t figure, s i r ? A. $75,000.00". Then followed more depreciation testimony concerning the water, the eight foot tube under the r i g h t of way and the impracticali- t i e s presented i n watering stock a f t e r the taking, Then, t h i s appears : "A. You have the main l i n e which runs up the middle of your f i e l d and when you s t a r t your haying operation, you have t o shut your pump off i n order t o put up your hay, and you couldn't run a hundred horse e l e c t r i c motor f o r two weeks t o water, t o pump a couple of tanks f u l l of water t o water your c a t t l e . It j u s t wouldn't be practical. "Q, W e l l , what monetary damage did you assign because of t h a t ? A. W e figured $75,000.00 on the inconvenience and the damage t o the place. "Q. Well, how many tons of feed did you lose? A. H o w many what ? Q H o w many tons of feed did you lose, yes, on the e a s t side of the take? "MR. SMITH: East o r west? "Q. Pardon me, west of the I n t e r s t a t e highway, the 3rea we have j u s t been describing? A. Well, w e would lose 400 head f o r approximately 3 months, "Q. 400 head, 1200, divide t h a t by 12, t h a t ' s 100 animal u n i t months o r animal u n i t s ? A. Yes, "Q. And i s t h a t how you computed the $75,000.00? A. No, i t would have been more than $/5,000,00, t h i s i s j u s t a conservative figure." (Emphasis supplied). It would be d i f f i c u l t t o determine t h a t the reference t o I I inconvenience" a s used here and when viewed i n the l i g h t of the testimony preceding and following concerning depreciation damage, could mean the kind of speculation o r inconvenience generally understood t o be noncompensalbe. The testimony following the second reference would seem t o indicate t h a t the witness had i n mind more than mere inconvenience i n answering the question and a r r i v i n g a t a damage figure. Perhaps one can say t h a t the festimony of the owner i s not a r t f u l l y given, but i t does appear c l e a r l y t h a t the animal u n i t basis f o r depreciation was considered also. Other witnesses, including qualified appraisers, t e s t i f i e d tu the unity of use of the parcels and the l o s s of animal u n i t s resulting from the take, W e find the f a c t determination made by the jury and the award based upon i t a r e supported by competent and credible evidence. The judgment of the d i s t r i c t court i s affirmed, , " * / Associate J u s t i c e Y ! \ ' We CO A cur: i ! g. ?hie£ J u s t i c e - - * - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Associate Justices.