Opinion ID: 1102954
Heading Depth: 1
Heading Rank: 14

Heading: Method of Calculating Compensation Due

Text: We have heretofore strictly adhered to the unit rule. We set out the basis and application of the rule in Lennep v. Mississippi State Highway Commission, 347 So.2d 341 (Miss. 1977), quoted in Mississippi State Highway Commission v. Doughtrey-Hughes, Inc., 375 So.2d 413, 414 (Miss. 1979). It is clear that the legislature intended for the unit valuation method to be applied in determining compensation in eminent domain cases. Mississippi Code Annotated, Section 11-27-5 (1972). We have consistently followed the statutory mandate and use the unit valuation method for determining compensation where property sought to be condemned involves a leasehold interest. In Lee v. Indian Creek Drainage District, 246 Miss. 254, 148 So.2d 663, 666 (1963), we stated Where there are different interests or estates in the property acquired by condemnation, the proper course is to ascertain the entire compensation to be awarded as though the property belonged to one person and then apportion this sum among the different parties according to their respective rights. Accord, State Highway Comm. v. Rankin County Board of Ed., 531 So.2d 612 (Miss. 1988). Nichols' The Law of Eminent Domain, Sackman (3rd Ed. 1990) points out the difficulty of valuation of restrictive covenants by the traditional unit rule: There is no doubt a property may be restricted by means of a covenant running with the land to a use which is quite consistent with its highest and best use on the date of the condemnation. Thus, a servient tenement will have a value at least in theory equaling its value as unencumbered. Yet, the restriction imposed in favor of one or more other properties may be of substantial value to those properties. Thus, the unit rule has no application. Id. at § 12.05[4][h], p. 129. The proper method of valuation is the difference between the market value of the dominant estate before and after the taking. Standard Life urges the Court to adopt this view. However, that view is fundamentally incompatible with the reality that the covenant gives Standard Life an interest in the King Edward property. The unit rule requires that in this case, a value be assessed on the fee simple interest in the King Edward, then that amount be apportioned among the owners and Standard Life, according to their respective interests. JRA insists that any damages to Standard Life's covenant are purely speculative and thus should not be compensable. However, Standard Life's covenant is plainly being extinguished. We recently stated that: Because our constitution requires due compensation the presumption is that the construction will be of such character as to do the most injury to the remaining property of the landowner. 4 Nichols, The Law of Eminent Domain § 14.15, pp. 14-327 thru -329 (Rev. 3d Ed. 1990). This view is a function of the policy imperative that compensation and damages be payable once and for all and not piecemeal. One policy imperative of the before-and-after rule for more than half a century has been that the landowner's entire right and the Commission's entire liability will be resolved in a single action. That rule gives the landowner substantial incentive to discover and show all special damages. King v. Miss. State Highway Commission, 609 So.2d 1251, 1254 (Miss. 1992) (footnote omitted). Although we made these statements in an inverse condemnation case, the rationale applies equally to the facts in this case. The lower court was presented with ample evidence that the restrictive covenant had value. Therefore, it erred in granting summary judgment against Standard Life. AFFIRMED IN PART; REVERSED IN PART AND REMANDED TO THE SPECIAL COURT OF EMINENT DOMAIN OF HINDS COUNTY, MISSISSIPPI. HAWKINS, C.J., DAN M. LEE, P.J., PITTMAN, McRAE, JAMES L. ROBERTS, Jr. and SMITH, JJ., concur. PRATHER, P.J. and BANKS, J., not participating.