Opinion ID: 848629
Heading Depth: 1
Heading Rank: 17

Heading: analysis

Text: Art. 10, § 2 of Michigan's 1963 Constitution provides that [p]rivate property shall not be taken for public use without just compensation therefor being first made or secured in a manner prescribed by law. `The purpose of just compensation is to put property owners in as good a position as they would have been had their property not been taken from them.' Dep't of Transportation v. VanElslander, 460 Mich. 127, 129, 594 N.W.2d 841 (1999) (citations omitted). Therefore, the proper amount of compensation for property takes into account all factors relevant to market value. Silver Creek Drain Dist. v. Extrusions Div., Inc., 468 Mich. 367, 379, 663 N.W.2d 436 (2003). In order to determine just compensation, we must determine the market value of the condemned land at the time of the taking.... State Hwy. Comm'r v. Eilender, 362 Mich. 697, 699, 108 N.W.2d 755 (1961). The fair market value of condemned property shall be determined with respect to the condition of the property and the state of the market on the date of valuation. M.C.L. § 213.70(3). `[A]ny evidence that would tend to affect the market value of the property as of the date of condemnation is relevant.' VanElslander, supra at 130, 594 N.W.2d 841 (citation omitted). A. RELEVANCE OF EVIDENCE OF POSTTAKING REZONING It is well established and uncontested that one of the factors relevant to market value is the `reasonable possibility that the zoning classification will be changed.' Eilender, supra at 699, 108 N.W.2d 755 (citation omitted). As this Court held in Eilender, supra at 699, 108 N.W.2d 755, `if there is a reasonable possibility that the zoning classification will be changed, this possibility should be considered in arriving at the proper value.' (Citation omitted.) [4] In other words, if, at the time of the taking, there existed a reasonable possibility that the property would be rezoned to allow more lucrative uses, this reasonable possibility should be considered. [5] Id. This factor `must be considered in terms of the extent to which the possibility would have affected the price which a willing buyer would have offered for the property just prior to the taking.' Id. (citation omitted). Property that is zoned to allow more lucrative uses is worth more money than property that is not so zoned. Therefore, property that has a reasonable possibility of being rezoned to allow more lucrative uses is worth more money than property that does not have a reasonable possibility of being rezoned to allow more lucrative uses. [6] A person whose property has been taken by the government is entitled to the full market value of the taken property, taking into consideration the totality of factors that a willing buyer would consider, including the reasonable possibility of rezoning. The majority does not disagree that the reasonable possibility of rezoning is a factor that must be considered when determining just compensation. However, the majority concludes that the fact itself that the property was rezoned after the taking cannot be considered in determining whether there was, at the time of the taking, a reasonable possibility of rezoning. I disagree. Instead, I believe that such evidence may afford compelling evidence that a reasonable possibility of rezoning existed at the time of the taking. In this case, one of the primary issues for the jury to resolve was whether, at the time of the taking, there was a reasonable possibility that the subject property would be rezoned from residential to commercial. MDOT argues that the trial court abused its discretion when it allowed defendants to introduce evidence that, although the property was zoned residential at the time of the taking, 2½ years later the property was rezoned commercial. The Court of Appeals majority agreed with MDOT, concluding that evidence of the actual zoning change was irrelevant to the value of the property on the date of taking and should not have been disclosed to the jury. 2003 WL 21699884 at . The Court of Appeals dissent, on the other hand, concluded that the trial court did not abuse its discretion in admitting evidence of the posttaking rezoning. I agree with this dissent. MRE 402 provides that [a]ll relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, the Constitution of the State of Michigan, these rules, or other rules adopted by the Supreme Court. [7] MRE 401 defines relevant evidence as that having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. As already discussed, whether a reasonable possibility of rezoning existed at the time of the taking is of consequence to the determination of just compensation. [8] That the property was, in fact, rezoned makes it more probable that a reasonable possibility of rezoning existed at the time of the taking. As the Court of Appeals dissent explained, evidence of the actual rezoning had the tendency to make the existence of the possibility of rezoning more probable than it would be without the evidence. 2003 WL 21699884 at . This is true because a jury confronted with the reality of a subsequent rezoning would be acting in an altogether logical fashion by comparing this reality to an alternative reality in which no subsequent rezoning had occurred, and concluding that the former reality gives rise to a greater inference than the latter that the impetus for rezoning preceded the taking. Whether this inference is strong or weak would depend on the totality of the circumstances. The majority, however, would, in every case, deny the property owner the ability to introduce evidence of an actual rezoning, regardless of the strength of the inference raised by the rezoning either by itself or in conjunction with other evidence. Because I believe that evidence of actual rezoning gives rise to the wholly logical inference that the genesis of that rezoning may have preceded the taking, I would not bar the introduction of such evidence. [9] Indeed, the leading treatise on eminent domain observes that evidence of a posttaking rezoning has been held to be weighty evidence of the existence (at the time of the taking) of the fact that there was a reasonable probability of an imminent change. 4 Nichols, Eminent Domain (3d ed.), § 12C.03[3]. As the New Jersey Supreme Court has explained, such evidence support[s] the reasonableness of the factual claim that on the date of taking the parties to a voluntary sale would have recognized and been influenced by the probability of an amendment in the near future in fixing the selling price. New Jersey v. Gorga, 26 N.J. 113, 118, 138 A.2d 833 (1958). [10] B. MARKETPLACE TRANSACTIONS VERSUS CONDEMNATION PROCESS As the majority explains, the jury is charged in cases of this sort with determining what a mythical, hypothetical, theoretical, fictional, willing buyer, would have paid a mythical, hypothetical, theoretical, fictional, willing seller for the property in a voluntary, transaction at the time of the taking. Ante at 387, 388, 390, 391 n. 38, and 392, 393; ante at 387. However, in truth, the condemnation process does not involve a typical willing buyer, [11] a willing seller, or a voluntary transaction. [12] Instead, it involves a transaction in which the government takes property without the permission or consent of the property owner, in what is essentially a forced sale. The property owner is not a willing seller, and the government is not a typical willing buyer. The condemnation process bears little in common with a voluntary sale of property in the market between a willing seller and a willing buyer. It is a source of its confusion that the majority fails to give significance to these differences. Yet, they are determinative of the very issue before this Court. The majority provides that the jury is to suppose that the property owner is indistinguishable from a willing seller, that the government is indistinguishable from a typical willing buyer, and that both have entered into a market transaction. Next, the jury is asked to imagine the value that a reasonable buyer and seller would have placed on the property in the market. Finally, although the jury can be apprised by the governmental buyer that at the time of sale, the property was zoned residential and there was no reasonable possibility of it being rezoned, the jury cannot be apprised by the private seller that such rezoning, in fact, has already occurred. The upshot of this procedure is that the jury must imagine a typical willing buyer, a willing seller, and a voluntary transaction-none of which, of course, exist in reality-while at the same time the jury must not consider a reality that does exist, namely, that the government has taken property that has been rezoned. Moreover, not only is the jury to imagine a market transaction where in reality there is none, but in calculating the fair market value of the property being sold the jury must imagine a particular moment in time at which the taking, or forced sale, occurred, placing itself in the shoes not of any real parties involved in the taking, but of a nonexistent reasonable buyer and seller. This is in further contrast to a genuine market transaction in which the buyer and the seller stand in their own shoes, and there is no need for a jury, or any other third party, to imagine anything concerning the value of property. What is the significance of the fact that the condemnation process is not truly equivalent to a market transaction? Its significance lies in its demonstration that the majority operates on a faulty premise when it insists that the jury, in making its fair market value determination, can have access only to such information as would have been possessed by a real buyer and seller at the time of the real transaction. In the instant case, this means, according to the majority, that the jury must be deprived of the information that the property was rezoned after it was taken. Apart from the fact that all of the majority's realities are merely fictive, there is simply no basis for the proposition that parties to a genuine transaction and parties to a constructive transaction can, or should, be placed on an equal footing concerning the range of access to information. This is a false equivalency because the underlying transactions are not equivalent. In the market transaction, the buyer and the seller will typically possess considerable information that is distinctive or unique to themselves-sentimental considerations concerning property, subjective assessments of value, and estimations of worth that are a function of their personal experiences, their varied speculations of the future, and their diverse financial circumstances and ambitions. Such subjective factors are inaccessible to the jury, which can only make a fair market value determination on the basis of objective factors. [13] Just as the participants in the subjective transaction may then possess information that is unavailable to the participants in the objective transaction, the corollary is also true. For the participants in the subjective transaction are involved in the task of calculating personal value, while the participants in the objective transaction are involved in the very different task of calculating fair market value. In calculating the former amount as accurately as possible  personal value  it is necessary merely that the buyer and the seller be permitted to take into consideration as much information as is of importance to each. In calculating the latter amount as accurately as possible-fair market value-it is necessary in contrast that as much relevant information as available concerning value be taken into consideration. For the reasons set forth earlier, I believe that evidence of posttaking rezoning is relevant to fair market value. Such relevance is not diminished by the fact that this information might not have been available to participants in a subjective transaction. Although the objective transaction of the condemnation process can never truly replicate the subjective transaction of the marketplace, it can nonetheless be made as perfect as possible on its own terms. This can be achieved only by making available as much relevant information as possible to the fact-finder. C. PROBATIVE VALUE VERSUS DANGER OF UNFAIR PREJUDICE MDOT argues that, even if evidence of the posttaking rezoning is relevant evidence, it should be excluded pursuant to MRE 403. MRE 403 provides, [a]lthough relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence. However, [e]vidence is not inadmissible simply because it is prejudicial. Waknin v. Chamberlain, 467 Mich. 329, 334, 653 N.W.2d 176 (2002). `Relevant evidence is inherently prejudicial; but it is only unfair prejudice, substantially outweighing probative value, which permits exclusion of relevant matter under Rule 403 ....' Id. at 334, 653 N.W.2d 176 (citations omitted). Evidence is unfairly prejudicial when there exists a danger that marginally probative evidence will be given undue or preemptive weight by the jury. Id. at 334 n. 3, 653 N.W.2d 176, quoting People v. Crawford, 458 Mich. 376, 398, 582 N.W.2d 785 (1998). The fact that, subsequent to the taking, the zoning ordinance was actually amended to permit the previously proscribed use has been held to be weighty evidence of the existence (at the time of the taking) of the fact that there was a reasonable probability of an imminent change. 4 Nichols, Eminent Domain (3d ed.), § 12C.03[3] (emphasis added). Evidence of a posttaking rezoning is not merely marginally probative evidence, and thus there is no danger that marginally probative evidence will be given undue weight by the jury. Waknin, supra at 335, 653 N.W.2d 176 (emphasis added). Further, the trial court repeatedly instructed the jury that it was to value the property as of the date of the taking, [14] and we must presume that the jurors understood and followed these instructions. [15] People v. Dennis, 464 Mich. 567, 581, 628 N.W.2d 502 (2001). D. PRACTICAL VALUE OF EVIDENCE OF POSTTAKING REZONING At trial, MDOT argued that there was no reasonable possibility that the property would be rezoned. Not permitting defendants to respond to this argument with the fact that the property has, in fact, been rezoned undermines the integrity of the judicial process by requiring a jury to ignore reality. That is, the majority would require the jury to ignore the skyscraper that looms over a property, or the crowds milling about the new sports stadium. Such a determined obliviousness to reality brings no honor to a justice system when there are customary and traditional means-a trial court that precisely instructs on the law and a jury that faithfully abides by the instructions-by which to ensure that the skyscraper or the sports stadium is evaluated only for proper purposes. The majority is correct that evidence of a posttaking rezoning is not dispositive concerning whether there existed at the time of the taking a reasonable possibility of a rezoning. However, it is incorrect that such rezoning can never be of any relevance in this regard. Rather, just as with all other aspects of the just compensation determination, the relevance of a particular posttaking rezoning must be assessed on a case-by-case basis. The premise of our justice system is that providing more, rather than less, information will generally assist the jury in discovering the truth. Relevant evidence sustains the truth-seeking process. In the American judicial system, a jury is called upon to assume the important role of fact-finder and the massive responsibility that the role entails: searching for the truth. `The purpose of trial is to find the truth and exact justice through the transmission of information to the jury.' Comment, Speaking out: Is Texas inhibiting the search for truth by prohibiting juror questioning of witnesses in criminal cases?, 32 Tex Tech L R 1013, 1014 (2001) (citation omitted). The costs to our justice system are almost always much greater, in my judgment, when the jury is deprived of relevant evidence than when the consideration of such evidence is enabled and a risk incurred that it will be considered for improper purposes. For we can reasonably protect against the latter risk through careful instructions and thoughtful deliberations. By contrast, lost evidence will forever taint a decision that could have been enhanced by the consideration of such evidence. While recognizing that posttaking rezoning evidence can be abused, such evidence also carries the potential to ensure a truer and better-informed calculation of fair market value. To deprive the jury in this case of the ability to consider the rezoning is to undermine its ability to determine the truth in this matter, and thereby to produce the most accurate possible determination of just compensation to which defendants are constitutionally entitled. [16] Finally, knowing that a jury will be apprised of all relevant information also may serve felicitously to encourage those who testify and who argue before the jury to do so in a more accurate and precise fashion. For example, a government witness may be more hesitant to tell the jury that there was no reasonable possibility of a rezoning if the witness knows that the jury will eventually be informed that the property has, in fact, been rezoned. In other words, a government witness may well be less cocksure in his or her assertion that there was no reasonable possibility of a rezoning if there is a real-world check upon the witness's testimony. Under the majority's approach, the government will remain free to tell the jury that absolutely no possibility of a rezoning existed, and the property owner will be unable to rebut this assertion by being allowed to inform the jury that the property has, in fact, been rezoned. [17] To allow such a distorted picture of the reality surrounding the exercise of a constitutional power, to the benefit of the government and to the detriment of the property owner, is to undermine the integrity of the constitutional process. [18] For these reasons, I conclude that the trial court did not abuse its discretion in admitting evidence of the posttaking rezoning. [19] E. EVIDENCE THAT POSTTAKING REZONING WAS CAUSED BY TAKING A posttaking rezoning is admissible only as evidence that a reasonable possibility of a rezoning existed at the time of the taking. [20] A rezoning that was caused by the taking obviously does not constitute evidence that a reasonable possibility of a rezoning existed at the time of the taking. In other words, a posttaking rezoning that was caused by the taking is simply not relevant evidence in support of fair market value at the time of the taking. Therefore, [t]he effect on market value of the condemnation proceeding itself may not be considered as an element of value. Silver Creek, supra at 379, n. 13, 663 N.W.2d 436, citing M.C.L. § 213.70(1), [21] and In re Urban Renewal, Elmwood Park Project, 376 Mich. 311, 318, 136 N.W.2d 896 (1965). [A]n actual change in zoning cannot be taken into account if it `results from the fact that the project which is the basis for the taking was impending.' Roach v. Newton Redevelopment Auth., 381 Mass. 135, 137, 407 N.E.2d 1251 (1980), quoting 4 Nichols, Eminent Domain (rev. 3d ed.), § 12.322[1], n. 7.1. See also State v. Kruger, 77 Wash.2d 105, 108, 459 P.2d 648 (1969); People ex rel Dep't of Pub. Works v. Arthofer, 245 Cal.App.2d 454, 465, 54 Cal.Rptr. 878 (1966); Williams v. City & Co. of Denver, 147 Colo. 195, 202, 363 P.2d 171 (1961). The trial court itself recognized that, if the posttaking rezoning was caused by the taking, the jury should not consider the posttaking rezoning when considering whether a reasonable possibility of a rezoning existed at the time of the taking, as it instructed the jury: if there was a reasonable possibility, absent the threat of this condemnation case, that the zoning classification would have been changed, you should consider this possibility in arriving at the value of the property on the date of taking. (Emphasis added.) However, the trial court, for reasons that are unclear, refused to allow MDOT to present evidence that the posttaking rezoning may have been a result of the taking. [22] The Court of Appeals dissent relied on M.C.L. § 213.73 to conclude that the trial court did not abuse its discretion in excluding evidence that the posttaking rezoning was caused by the taking. [23] M.C.L. § 213.73 provides, in pertinent part: (1) Enhancement in value of the remainder of a parcel ... shall be considered in determining compensation for the taking. (2) When enhancement in value is to be considered in determining compensation, the agency shall set forth in the complaint the fact that enhancement benefits are claimed and describe the construction proposed to be made which will create the enhancement. The dissent concluded that because MDOT did not plead in its complaint any benefit to defendants' remaining property as a result of its construction project, the trial court did not abuse its discretion when it prevented [MDOT] from presenting evidence that the rezoning occurred as a result of its construction project.... 2003 WL 21699884 at . I respectfully disagree. M.C.L. § 213.73 is applicable where the condemning agency attempts to reduce the amount of just compensation on the basis that the condemnation actually increased the value of the remaining property that was not condemned. MDOT attempted to introduce evidence here that the rezoning was the result of the condemnation, not to show that defendants' remaining property was enhanced by the condemnation, but to show that when the taking occurred there was not a reasonable possibility of a rezoning. In other words, MDOT did not contend that it should pay less for the fifty-one acres taken because the remaining 284 acres will be worth more than before the taking. MDOT does not contend that enhancement in value is to be considered in determining compensation. M.C.L. § 213.73. To the contrary, MDOT is arguing that enhancement in value, i.e., the subsequent rezoning, is not to be considered in determining compensation. Therefore, in my judgment, M.C.L. § 213.73 simply does not apply here.