Case Name: STATE of Louisiana, Through the DEPARTMENT OF HIGHWAYS v. LULING INDUSTRIAL PARK, INC. and St. Charles Holding, Inc.
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1983-11-17
Citations: 443 So. 2d 672
Docket Number: Nos. 5-61, 5-180
Parties: STATE of Louisiana, Through the DEPARTMENT OF HIGHWAYS v. LULING INDUSTRIAL PARK, INC. and St. Charles Holding, Inc.
Judges: Before SAMUEL, BOWES, GAUDIN, GRISBAUM, JJ., and PEREZ, J. Ad Hoc.
Reporter: Southern Reporter, Second Series
Volume: 443
Pages: 672–690

Head Matter:
STATE of Louisiana, Through the DEPARTMENT OF HIGHWAYS v. LULING INDUSTRIAL PARK, INC. and St. Charles Holding, Inc.
Nos. 5-61, 5-180.
Court of Appeal of Louisiana, Fifth Circuit.
Nov. 17, 1983.
On Rehearing Dec. 8, 1983.
William W. Irwin, Jr., Robert L. Ledoux, Bryan Miller, Jessee S. Guillot, Baton Rouge, for plaintiff-appellee-appellant Louisiana Department of Transportation and Development.
Mack E. Barham, Ralph S. Hubbard III, Barham & Churchill, New Orleans, for defendant-appellant-appellee.
Ford T. Hardy, Jr., New Orleans, for appellant.
Before SAMUEL, BOWES, GAUDIN, GRISBAUM, JJ., and PEREZ, J. Ad Hoc.

Opinion:
GAUDIN, Judge.
On March 8,1974, the State of Louisiana, through the Department of Highways, filed an expropriation suit against Luling Industrial Park, Inc., in connection with construction of a bridge across the Mississippi River near Luling, Louisiana. Accordingly, the State took immediate possession of 217.566 acres from a 1,856.5-acre tract called Ashton Plantation and deposited $823,833.00 into the registry of the Court.
The sum deposited included $765,689.00 for the property taken and $58,144.00 as severance damages to the remainder of the tract.
The public necessity and purpose of the expropriation were not questioned, nor was the amount paid for the land actually taken. However, the amount deposited for severance damages was challenged and this litigation ensued.
Following trial in the 29th Judicial District Court, severance damages in the amount of $570,714.14 were awarded to St. Charles Holding, Inc., Luling Industrial Park's successor in title.
St. Charles Holding appealed, asking that the award for severance damages be increased. The State also appealed, contending (1) that St. Charles Holding is not the proper party defendant to receive severance damages and (2) that the award was excessive.
For reasons following, we hold that St. Charles Holding is the correct party defendant to receive severance damages; in fact, St. Charles Holding is now the only party defendant. We further find that the award was not legally sufficient, and we increase it to $3,954,582.00.
DEFENDANT'S TITLE CHAIN
In 1973, before the expropriation, Luling Industrial Park had mortgaged the subject property to the Great American Mortgage Investors, an out-of-state business trust.
Great American intervened in the expropriation proceeding because of its mortgage, which stated, in part:
"Mortgager hereby assigns to mortgagee any and all awards that may be given or made in any proceeding by any legally constituted authority to condemn the property herein mortgaged, or any part thereof, under power of eminent domain."
In a separate action, Great American filed for executory process, alleging default; and on July 30, 1975, the Sheriff of St. Charles Parish sold the property, along with all personal rights arising from the expropriation suit, to Great American.
The State then filed exceptions of no right or cause of action in the expropriation proceeding and also an objection to Great American's procedural capacity. The trial judge overruled these exceptions, noting that Great American:
"... did purchase the remainder of the mortgaged property at the foreclosure sale and is now certainly entitled to intervene and prosecute the action for adequate compensation for the property taken as well as for severance damage to the remainder of the properties."
On October 28, 1975, Great American Mortgage Investors changed its name to Great American Management and Investment. The company went into bankruptcy in 1979, and was judicially authorized to sell all of its assets, including the personal right to seek severance damages, to Great American Management and Investment, Inc., which in turn sold the property and accompanying rights to St. Charles Holding, n.y.
On May 26, 1980, by court order, St. Charles, N.V. was named sole defendant in place of Luling Industrial Park and Great American. St. Charles Holding, N.V. was later liquidated pursuant to Section 332 of the Internal Revenue Code, and all of its assets went to St. Charles Holding, Inc.
The State finds fault with this chain of title, particularly with the sheriff's sale to Great American Mortgage Investors. However, it is apparent that Luling Industrial Park did encumber its expropriation suit rights, and equally evident that the sheriff explicitly conveyed these personal rights to Great American. Thereafter, these rights were legally transmitted until eventually obtained by St. Charles Holding, Inc.
Documents in evidence clearly show that the personal right, title and interest to and in the expropriation suit was specifically conveyed at every transfer, including (1) the sheriff's sale, (2) the transfer from Great American Mortgage Investors to Great American Management and Investment, (3) the transfer from Great American Management and Investment to Great American Management and Investment, Inc., (4) the sale from Great American Management and Investment, Inc., to St. Charles Holding, N.V. and (5) the distribution from St. Charles Holding, N.V. to St. Charles Holding, Inc.
The right to demand a fair market value and severance damages in an expropriation suit remains with the owner of the property at the time of the taking unless there is a specific transfer or assignment of this personal right. While this right is personal and does not follow the land, the right can be sold, assigned or otherwise encumbered. See Rogers v. La. Power & Light Co., 391 So.2d 30 (La.App. 3rd Cir. 1980), and cases cited therein.
On May 29, 1980, the trial judge signed an order allowing Luling Industrial Park's counsel to withdraw because, according to the Luling Industrial Park's motion, "... all of defendant's (Luling's) rights . were sold at a sheriff's sale . to Great American Mortgage Investors..."
Despite the May 29, 1980, motion and order, Luling Industrial Park filed a petition of intervention on March 23, 1981, a week before the trial was to start, alleging that it, not St. Charles Holding, Inc., was the proper party defendant. The trial judge dismissed the intervention, then proceeded to hear the case from March 31 to April 3, 1981. Judgment was rendered on July 24, 1981.
LULING'S APPEAL
Following the dismissal of its 11th hour intervention, Luling Industrial Park appealed to this Court. This appellant, however, voluntarily withdrew its appeal on March 17, 1983, stating in its motion that:
"(1) All of the right, title and interest of Luling in and to this suit was sold at a Sheriff's sale to Great American Mortgage Investors in proceedings styled 'Great American Mortgage Investors v. Luling Industrial Park, Inc.,' No. 15,618 on the docket of the 29th Judicial District Court for the Parish of St. Charles (the 'Foreclosure Suit'), said sale having taken place at public auction on July 30, 1975;
"(2) Luling received the notice required by law from the Sheriff for the Parish of St. Charles of the seizure of its personal right in and to this suit by the Sheriff for the Parish of St. Charles in the Foreclosure Suit;
"(3)- Said seizure and subsequent sale at public auction of all of the Luling's right, title and interest in and to this suit was done with the express knowledge and consent of Luling in an effort to be relieved of as much of its debt to Great American Mortgage Investors as possible pursuant to the Sheriff's sale;
"(4) The entire indebtedness of Luling to Great American Mortgage Investors was not satisfied by the sum paid by the purchaser at the Sheriff's sale;
"(5) Stacey Moak of the law firm of Cicero & Moak, formerly counsel for Luling in this suit, withdrew as counsel of record on May 29, 1980 and in his Motion of Withdrawal stated that all,of Luling's rights arising out of this suit were sold at a Sheriff's sale on July 30, 1975 to Great American Mortgage Investors, which admission was made with the express knowledge and consent of Luling and is a true and correct statement; and
"(6) Mover attempted to intervene in the court below, which intervention was denied by order of the trial judge, from which order mover appealed, and mover's dismissal shall not interfere with nor prejudice any other party to this suit, nor will it serve to delay the resolution of this suit."
This action was taken pursuant to a resolution of Luling Industrial Park's Board of Directors.
These assertions are not, of course, necessarily binding all or in part on the court, but they are final and conclusive with regard to Luling Industrial Park's right to proceed further in this litigation. Any party can abandon its appeal, and Luling Industrial Park has chosen to exercise this absolute procedural right.
St. Charles Holding's position is that if Luling Industrial Park had any claim for severance damages following the sheriff's sale and felt aggrieved, such alleged rights should have been enunciated in a suit to annul the sale. An action to nullify has to be instituted within two years if based on informalities or within five years if based on radical defects.
Further, defendant questions the State's standing to now collaterally or otherwise attack the sheriffs sale, considering the fact that Luling Industrial Park's opportunity to do so has prescribed and also the obvious procedural fact that Luling Industrial Park is no longer pursuing any course of action.
Notwithstanding the probable impropriety of such an attack by the State, we have no reason to pass on these matters as we find no legal imperfection in any of the transactions in the chain of title leading from Luling Industrial Park to St. Charles Holding, Inc.
We can understand the State's policy, as stated in its brief, of "... opposing execution of any judgment against it by a person not entitled to seek such judgment in the first place." In the instant case, however, the State did take 217.566 acres from a continuous estate, and St. Charles Holding, Inc. has emanated as the proper party defendant to receive severance damages.
We note that the voluminous record in this case contains numerous other motions, orders and judgments related to various procedural problems. None, however, relate significantly to the two primary issues:
(1) Is St. Charles Holding, Inc., the proper party defendant?
and
(2) Is the award for severance damages inadequate or excessive?
We have already addressed the first issue, and now move on to the second.
ASHTON PLANTATION
Prior to the expropriation, Ashton Plantation was a one-piece, 1856.5-acre tract with approximately 3,981 feet on the west descending bank of the Mississippi River. It was traversed by Louisiana Highway 18 and the T & P Railroad near the river and by Louisiana Highway 3127 on the opposite side.
After the State's taking, the property was split into eight distinct parcels. Various documents in evidence portray this division, as does the not-to-precise scale sketch annexed to this opinion. Actually, the attached drawing is a close facsimile of Exhibit "D" and shows the portion expropriated and remaining property carved into eight numbered sections. Exhibit "D" contains this numbering, and the various witnesses referred to the different parcels by these numerical designations.
There was considerable testimony relative to the highest and best use of Ashton Plantation both before and after the expropriation.
Among the State's witnesses was Captain Martin Gould, an experienced river pilot, who said that Ashton Plantation was not a favorable site for a boat dock because the deep water channel of the river was dangerously close to the bank and that docked vessels would be too near those passing by.
Pearl P. Burke, an engineering geologist and a long-time employee of the United States Army Corps of Engineers, disagreed with Captain Gould. She said that Ashton Plantation had been an excellent site for an industrial dock but added:
"... it is my opinion that the existence of the bridge reduces the use of this section as a dock site and I doubt that you would be able to get a permit for a deep draft vessel dock."
Douglas Burton, a consulting engineer and an expert in site selection, stated that before the expropriation the plantation was "... one of the prime sites along the Mississippi River for deep water heavy industrial development. It's greatest value by far would have been for refining in petrochemical. The length of the batture . would have allowed for at least three dock berths, perhaps four, which would have supported in the neighborhood of a 500,000 barrel per day refinery with associated petrochemical facilities ."
The bridge, Burton said, destroyed the site as a deep water port and for industrial use.
Regardless, we are not directly concerned with the before taking value. The parties agreed that the property remaining after the taking had a fair market value of $5,699,112.00 prior to the expropriation. A stipulation to this effect was entered into.
Severance damages are the difference between the remaining property immediately before and immediately after the expropriation. The before and after test may be applied to segmented areas of the remainder and the several sums added to make up the total award. See Town of Rayville v. Thomason, 404 So.2d 1290 (La.App. 2nd Cir. 1981), and authorities therein referred to.
Thus, in the instant case, the trial judge had but to determine the after taking fair market value of Ashton Plantation, i.e., the fair market value of its eight remaining parcels. Once this was decided, the court had only to subtract this sum from $5,699,-122.00 to arrive at a severance damages award.
The fair market value is the worth of property considered in the light of its highest and best use, this being the most favorable employment to which the land is adaptable and may reasonably be put to use in the not too distant future. Reference State v. Rapier, 246 La. 150, 164 So.2d 280 (1964).
DISTRICT COURT TRIAL
The State called seven witnesses, including Captain Gould; five Department of Transportation representatives; and Max J. Derbes Jr., a realtor and appraiser. The State attempted to show, primarily through the testimony of Mr. Derbes, that the property remaining after the taking was worth only slightly less than it was before the expropriation chiefly because the bridge and highway system made Moisant Airport and metropolitan New Orleans much more accessible. Mr. Derbes placed severance damages at just $55,117.00.
St. Charles Holding's four witnesses were Ms. Burke; Mr. Burton; Robert McSween, a real estate appraiser and consultant; and Roy M. Schwarz Jr., a realtor-appraiser and defendant's main expert.
Through these witnesses, St. Charles Holding tried to prove (1) that Ashton Plantation no longer had potential as a deep water port and had only a limited value with regard to the docking of barges, (2) that the highest and best use of the property varied from parcel to parcel and (3) that the remaining land was worth $1,500,000.00 after the expropriation, thereby setting severance damages at $4,199,122.00 ($5,699,122.00 minus $1,500,000.00).
After hearing the case, the trial judge totally rejected Mr. Derbes' contention that severance damages were minimal noting in the assigned reasons for judgment that Mr. Derbes' comparables were "faulty" and that Mr. Derbes "... refused to accept the fact that one whole tract of land divided into non-contiguous parcels is damaged."
The comparable sales referred to by Mr. Derbes were from a residential development on the other side of the river.
The trial judge was not too impressed by Mr. Schwarz's comparables, either, but he (the trial judge) did conclude:
"The record and exhibits and the evidence strongly support the fact of severance damages: Limited access from parcel to parcel; limited access from parcels to public roads; the non-contiguous nature and conformation of the remaining parcels; proximity of the bridge and right-of-way as a source of disturbance and annoyance; the non-access nature of the right-of-way creating a barrier between the remaining parcels; the limited use of the batture."
The record amply supports these factual conclusions and the ascertainment that more than just minimal severance damages are due, and we will not disturb these findings. See Canter v. Koehring Co., 283 So.2d 716 (La.1973), and Arceneaux v. Domingue, et at, 365 So.2d 1330 (La.1978).
We do, however, take exception with both the manner in which the trial judge computed severance damages and the figure he came up with. The trial judge said, candidly, that he "... is hard pressed to determine the severance damage, realizing that the court should not substitute its opinion of severance for that of the experts."
Following his in toto rejection of the State's contentions and his determination that significant severance damages were rightfully owed, the trial judge applied this formula for arriving at the amount:
"... the expert Schwarz dwelled often on the figure of 10%, applying a 10% plus adjustment here and a 10% adjustment there. This court will apply a 10% severance damage to the remaining parcels of land; hence, 10% of the before taking figure of $3,482.26 per acre applied to the remaining 163819 acres gives a severance damage of $570,714.14."
Even if Mr. Schwarz repeatedly referred to "... a 10% adjustment here and a 10% adjustment there . ", he clearly did not mean this percentage figure to apply to severance damages. There is nothing in the record justifying an across-the-board 10 percent assessment regarding the eight incongruous parcels, nor is there any testimony suggesting that any percentage figure should be uniformly applied to the various segments.
While there is no exclusive or artificial formula for determining severance damages, the district judge's severance damages award must be related to the adduced testimony and documentary evidence; and he must not substitute his opinion for that of experts. Neither should he conjure up a percentage figure and apply it unalterably to dissimilar fragments, as was done here.
Every expropriation case is unique in some respects and must be judged on its own particular facts, and the ultimate test of value is what men of wisdom and prudence and having adequate means would devote to the parcels if owned by them. This canon is set forth in Parish of Iberia v. Cook, 238 La. 697, 116 So.2d 491 (1959), and in various subsequent cases, including Consolidated Sewerage District of the City of Kenner v. OKC Dredging, Inc., 380 So.2d 657 (La.App. 4th Cir.1980).
The most accurate and equitable method of establishing severance damages in the instant case is by examining each of the eight sections. The parcels are geographically different and obviously have varying after-taking values.
Before starting this inquiry, we note that the expropriation occurred in 1974 and the merits of this case were not heard until March and April, 1981. The record is devoid of any testimony concerning meaningful residential, industrial or commercial development on or immediately adjacent to the plantation from the time of the taking to the trial.
PARCELS 1 AND 2
These parcels, together, include 23.84 acres and form the riverfront. Mr. Schwarz testified that while these parcels "... lost most of their usage because of the loss of the deep water site . ", they nonetheless could be used "... for some kind of service on the river that utilized the river for dispatching..." And, he added, the site had limited value as a barge-docking site.
Mr. Schwarz placed an after-taking value of $36,000.00 on parcel 1 and a $73,000.00 value on parcel 2. We conclude that the highest and best use of parcels 1 and 2 and the after-taking values are in accord with Mr. Schwarz's testimony, noting, again, that the trial judge did not accept Mr. Derbes' conflicting overview.
PARCELS 3 AND 4
These parcels, too, are considered jointly due to their similarity. Parcel 3 has 14.37 acres while parcel 4 has 12.072 acres, and both are bounded by Highway 18 on the north side and by the railroad on the south.
The highest and best use for these parcels is light industrial or commercial, according to the testimony. The record sup ports an after-taking value of $10,000.00 per acre or $143,700.00 for parcel 3 and $120,720.00 for parcel 4. We accept these figures.
PARCEL 5
This section is inappropriate for agriculture because the bridge blocks the sun and because its elongated shape makes it difficult to operate heavy equipment necessary for sugar cane.
Mr. Schwarz valued this tract at $600.00 an acre, and recommended selling it to the bordering landowner for $45,540.00. This appears to be the highest and best use.
PARCEL 6
This is the largest section, 1,214 acres, stretching from the railroad south to Highway 3127. At the time of the expropriation, approximately 612 acres were planted with sugar cane while the balance (602 acres) was wooded.
Mr. Schwarz said that highest and best use of the cultivated 612 acres was agricultural. He also stated:
"The highest and best use of the remaining acres was for hunting or some kind of recreation. It was low and got wet as you went progressively south."
After testifying at considerable length about the pros and cons of parcel 6 and quoting facts and figures from various comparable sales, Mr. Schwarz put the after-taking value at $913,000.00 ($612,000.00 for the planted portion and $301,000.00 for the wooded area).
In Mr. Derbes' opinion, the highest and best use of all of the plantation's remaining property, except parcel 8, was for industrial purposes if proper permits could be obtained. If permits could not be secured, Mr. Derbes added, then the highest and best use would be "... for future potential development on a speculative basis ."
However, there was no compelling testimony relating to parcel 6 usage other than for agriculture or hunting, and seven years had passed since the expropriation. If any industrial or commercial development was even planned, it was not brought to the trial judge's attention.
Mr. Derbes did not give an exact after-taking value for parcel 6 or any other individual section except parcel 7. His testimony, which the trial judge disregarded, was that parcel 7 was worth less after the taking but that all other segments, including parcel 6, were worth more.
• Mr. Schwarz valued the cultivated portion of parcel 6 at $1,000.00 per acre and the remainder of this parcel at $500.00 per acre. Two comparable sales of wooded land similar to the rear portion of parcel 6, however, were for $750.00 and $1,250.00 per acre, respectively, the average being $1,000.00 per acre.
Taking into consideration all of the testimony and evidence regarding parcel 6, we conclude it has a value of $1,000.00 per acre, or $1,214,000.00.
PARCEL 7
All experts agree that these isolated 84.3 acres have lessened in value. The record supports an after-taking worth of $50,-580.00 ($600.00 per acre).
PARCEL 8
This 203-acre tract is low and designated as wetlands but it does have limited access to Highway 3127. Mr. Schwarz, assigning a value of $61,000.00, said these acres are presently unusable; while Mr. Derbes testified that the highest and best use "... was potential future residential."
There was no testimony that this property was, in the foreseeable future, to be used for residential purposes. The evidence was to the contrary. There was little demand for residential property, and a governmental permit would be needed to drain the land.
There was nothing substantial to offset Mr. Schwarz's statements, and we accept them and his evaluation.
SUMMARY AND CONCLUSION
Recapitulating, the eight remaining sections of Ashton Plantation have a total after-taking value of $1,744,540.00, itemized as follows:
Parcel After-taking V alue
$ 36,000.00
73,000.00
143,700.00
120,720.00
45,540.00
1,214,000.00
50,580.00
61,000.00
Subtracting $1,744,540.00 from $5,699,-122.00, the agreed-to before-taking value of the eight parcels, the severance damages are $3,954,582.00.
The amount of severance damages may seem inordinate because the agreed-on before taking value was $5,669,122.00, and the State was saddled with this figure. However, we do not find fault with the before-taking price as it reflects the plantation's potential as a deep water industrial site, a potential ruined by the expropriation.
Likewise, we do not criticize Mr. Derbes' opinions. From the State's viewpoint and in an effort to minimize severance damages, he testified as best he could, considering pertinent facts and the lack of compa-rables favorable to the State's position.
Accordingly, the July 24, 1981, judgment of the 29th Judicial District Court is amended to increase severance damages to $3,954,582.00. In all other respects, the judgment is affirmed. Appellate costs are to be borne by the State of Louisiana, through the Department of Highways.
AMENDED AND AFFIRMED.
SAMUEL, J., dissents and assigns reasons.
. Reference LSA-C.C. art. 3543 and LSA-R.S. 9:5642.
. As stated in Louisiana Power & Light Co. v. Churchill Farms, Inc., 292 So.2d 183 (La.1974).
. See State Dept. of Highways v. Eubanks, 345 So.2d 533 (La.App. 3rd Cir.1977).