Opinion ID: 2042539
Heading Depth: 1
Heading Rank: 3

Heading: Whether the Evidence Supports the Award of Damages.

Text: IDOT challenges the evidentiary support for the award of $75,000 as compensable damages. It also questions the sufficiency of the trial court's findings on damages, the measure of damages employed, and the award of interest on the judgment. A. Adequacy of the court's findings on damages. IDOT asserted in a posttrial motion under Iowa Rule of Civil Procedure 179(b) that the court's findings of fact were not sufficiently specific with respect to the theories employed in awarding damages. In ruling on that motion, the court declined to expand its findings. IDOT now reasserts its contention concerning the inadequacy of the damage findings. Although greater specificity would have aided this court in determining how the district court arrived at the amount of damages awarded, this failure is not critical given the nature of plaintiffs' proof. We have recognized that an absence of findings may be cured in some cases by reasoning backwards from the result to the issues and evidence. City of Des Moines v. Huff, 232 N.W.2d 574, 578-79 (Iowa 1975). Plaintiff attempted to establish damages through the testimony of Arthur Frahm, a real estate appraiser who was qualified as an expert witness. This witness testified as follows with respect to the measure of plaintiffs' loss: Q. And would you state to the Court how you approached this matter? A. Yes, sir. First of all, the property was sold by Mr. Jordan to Mr. Jones, I believe, on a contract. And this contract was one that was at a preferential interest rate to Mr. Jones, with no down payment, with initial payments at $3509.45 per month for the first 25 months and thenthat was at 11%, and then the interest rate increased to 13½ and the monthly payments increased to $4,070.20 for the remainder of the contract period. At that time interest rates were, for mortgages, were typically 13 to 15 percent, so this was an advantageous sale to Mr. Jones, and particularly from the standpoint of no down payment. So I calculated a cash equivalent value of that contract, to put it on the basis of cash, and then calculated the balance at the time theat the end of the payments, the default of the contract. And at that time he had a balance of $277,969. And he held this for 11 months without selling the property. Then eventually sold the property for $226,500. This was after the six-inch median had been installed. So what I did, I calculated interest at the rate of 10% nominal rate per annum, that would be over an 11-month period, and added that to the loss in value between the cash equivalent value of the contract, that balance, and the sale price, and that gave me a total figure that I calculated was due to Mr. Jordan as his loss. Q. And what was that figure, Mr. Frahm? A. It rounds to $77,000. In comparing the district court's damage award with the testimony of plaintiffs' expert witness, we can only conclude that, while the witness rounded plaintiffs' damages off to $77,000, the district court rounded this amount to $75,000. We are not left to speculate as to how the district court arrived at the amount of damages awarded. B. Sufficiency of the evidence to support the damage award. We next consider whether Mr. Frahm's expert testimony supports the district court's award under a proper measure of damages. In determining the measure of damages to be awarded, we are greatly influenced by the fact that a consideration for the agreement was the resolution of plaintiffs' potential taking claim based on loss of access to their business. For this reason it does not do violence to principles of contract remedies to measure damages by the effect of IDOT's breach on the value of the property. We conclude that Mr. Frahm's calculation of the $277,969 cash equivalent value of the contract was a shorthand way of fixing the cash market value of the property as evidenced by the sale to the Joneses. That sale took place when the parties contemplated a three-inch median strip. The $226,500 received by plaintiffs in the November 1985 sale was adopted by Mr. Frahm as the value of the property with a six-inch median strip. This difference of $51,469 was found by Mr. Frahm to be reflective of plaintiffs' damages. IDOT's expert witness testified to the difference in the value of the property with a six-inch median strip as opposed to a three-inch median strip and fixed that sum at $12,000. Obviously, the district court preferred the testimony of plaintiffs' expert to that of IDOT's expert. We do not disturb that portion of the damage award. [1] Frahm's conclusion as to plaintiffs' total damages also included the sum of $25,480 as interest on the higher of the two valuations for the eleven-month period between forfeiture of the Jones contract and resale of the property. Although the district court also approved that element of damages, we do not. Plaintiffs had the use and enjoyment of the property during this eleven-month period and therefore no basis exists for compensating them for any additional loss above its diminution in value. When a segregated item of damage which has been awarded is determined to have been improper on appeal, it may simply be eliminated and the balance of the judgment affirmed. Bossuyt v. Osage Farmers Nat'l Bank, 360 N.W.2d 769, 778 (Iowa 1985); Drake v. Block, 247 Iowa 517, 524, 74 N.W.2d 577, 582 (1956). C. The award of prejudgment interest. The district court awarded plaintiffs interest on the judgment from the date the petition was filed. IDOT, relying on Iowa Code section 25A.4 (1989), argues that any award of interest prior to the entry of judgment is improper. We believe this argument is misplaced. Section 25A.4 is applicable to tort claims brought under the auspices of chapter 25A. While the definition section of that chapter is broad, it is necessarily limited to those claims which, as a condition precedent to the bringing of the action, must be considered by the State Appeal Board. Plaintiffs' breach-of-contract claim does not fit within this category. An award of prejudgment interest in a contract claim against the state was upheld in Hallett Construction Co. v. Iowa State Highway Commission, 261 Iowa 290, 299, 154 N.W.2d 71, 76 (1967). Indeed, in the Hallett case, substantial precommencement interest was awarded. Plaintiffs have not challenged the district court's refusal to award precommencement interest in the present case, and consequently, we approve the award of interest from the date of filing the petition. Due to the item of nonrecoverable damage identified in division III.B. of this opinion, the award of damages must be reduced to $51,469. The judgment of the district court is so modified and otherwise affirmed. The clerk of the district court shall correct the judgment to reflect this modification. The judgment shall draw interest at the rate of ten percent per annum from the date of the filing of the petition. Costs on appeal are assessed seventy-five percent to appellant, twenty-five percent to appellee. AFFIRMED AS MODIFIED.