Opinion ID: 1796351
Heading Depth: 1
Heading Rank: 3

Heading: Temporary Damages

Text: The State next claims that a fact issue that was never resolved existed in this matter. It contends that the testimony presented demonstrated that residual contamination would continue on the Gees' property after remediation and that because the property could never be completely restored, the injury to the land was permanentnot temporary. In addition, the State claims that the fair market value of the Gees' property was $31,500 and the property's diminution in value caused by the leak was $20,500. Because of this evidence, the State urges that the jury should have resolved whether the damage to the Gees' property occasioned by the fuel migration was temporary or permanent. It further asserts that the circuit court misinterpreted this court's decision in State v. Diamond Lakes Oil Co., 347 Ark. 618, 66 S.W.3d 613 (2002). In sum, the State maintains that the Gees suffered a total destruction of the value of their property and that their property damages should have been limited to the diminution in fair market value occasioned by the migrating fuel. It further points out that the Gees are under no legal requirement to spend any of their $180,000 damage award on the actual restoration of their land. Thus, it claims that the potential for the Gees receiving a windfall looms large. In Kutait v. O'Roark, 305 Ark. 538, 809 S.W.2d 371 (1991), this court observed that where the damaged property is capable of repair, restoration costs are a recoverable element of damages for the temporary damage done to property. This court has further said that when injury to land is temporary, the measure of damages is the cost of restoring the property to the same condition that it was in prior to the injury. See State v. Diamond Lakes Oil Co., supra . In Diamond Lakes , the State contended that the circuit court erred in granting Diamond Lakes' motion in limine to exclude any evidence of the property's market value. The circuit court had reasoned that because Diamond Lakes was not seeking permanent damages, the market value was irrelevant. In affirming the circuit court's decision, we held that by virtue of the fact that the Arkansas Department of Environmental Quality (ADEQ) ordered the cleanup of the property at issue, the damages by their very nature were temporary, as they would cease to exist once the environmental remediation was completed. 347 Ark. at 626, 66 S.W.3d at 617. See also Highland Indus. Park, Inc. v. BEI Defense Sys. Co., 192 F.Supp.2d 942, 945 (W.D.Ark.2002) (observing that Arkansas decisions are much more clear in their development of the concept that designation of damage as temporary hinges upon the potential for repair or restoration), rev'd on other grounds, 357 F.3d 794 (8th Cir.2003) (reversing the award of summary judgment and damages, because claims on which they were based were barred as untimely). We disagree that an unresolved fact question exists in this case. Just as in Diamond Lakes , ADEQ in the case before us ordered a cleanup of the Gees' property. While it did not order the Gees to restore the property to its former state, that is of no great moment. In Diamond Lakes , the State's own agency, ADEQ, believed that the property could be remediated. Thus, we concluded that the damages at issue were temporary in nature. The federal district court observed in the Highland Indus. Park case that this court in Bush v. Taylor, 130 Ark. 522, 197 S.W. 1172 (1917), suggested that the definition of temporary hinges on the possibility of restoration so that `the property destroyed could be replaced in substantially the condition in which it existed before.' Highland Indus. Park, Inc., 192 F.Supp.2d at 946 (quoting 130 Ark. at 531, 197 S.W. at 1174). That appears to be precisely the position of ADEQ in the instant case, as it ordered corrective action to be taken. We conclude that the circuit court did not err in instructing the jury on restoration costs for temporary damages for the purpose of putting the Gees' property back in substantially the same state it was in before the accident. With respect to whether the temporary damages should have been limited to the diminution in the fair market value of the property, which was $20,500, we hold that the damages should not have been so circumscribed by the court. In Diamond Lakes , the State asserted a similar argument, which was that the temporary damage award of $200,000 was grossly disproportionate to the fair market value of the property. However, we concluded that because ADEQ had ordered the remediation and Diamond Lakes had no discretion in the remediation work, the amount of damages was not unreasonable, since Diamond Lakes had no choice but to make the repairs even if they did exceed the diminution in fair market value. See also Nischke v. Farmers & Merchants Bank & Trust, 187 Wis.2d 96, 522 N.W.2d 542 (1994) (holding that because Nischke has a legal duty to restore the environment, she could recover the cost of repair even though such costs exceeded the diminishment in her property's value). Here, the additional remediation work which was at issue in the Gees' litigation was not mandated by the State and appears to have dealt mainly with the Gees' groundwater. Indeed, the State contested the necessity for it. Nevertheless, the Gees proved their case to the jury that additional restoration work was necessary. We see no real distinction between ADEQ directing remediation, as was the case in Diamond Lakes , and a jury's verdict that additional restoration was needed, as happened in the instant case. In both situations, the conclusion was that the property could be remediated, and under our holding in Diamond Lakes , this means the property damage was temporary. This court has previously observed that if either of two measures will fully compensate the injured party for his loss, that measure which is least expensive to the wrongdoer must be adopted[.] Benton Gravel Co. v. Wright, 206 Ark. 930, 934, 175 S.W.2d 208, 210 (1943). This court made that statement in the context of determining that the question of whether the injuries sustained to the property were permanent or temporary in that case was better left to the jury. [2] And yet it is clear that the landowner's personal use of the property has also been a factor in awarding temporary damages. Section 929 of the Restatement (Second) of Torts has this comment on restoration: ... If, however, the cost of replacing the land in its original condition is disproportionate to the diminution in the value of the land caused by the trespass, unless there is a reason personal to the owner for restoring the original condition, damages are measured only by the difference between the value of the land before and after the harm.... On the other hand, if a building such as a homestead is used for a purpose personal to the owner, the damages ordinarily include an amount for repairs, even though this might be greater than the entire value of the building. Restatement (Second) of Torts § 929 (1979). Howard Brill, in his treatise, commented on personal use in the same vein: ... If either of the measures will fully compensate the owner, some case law suggests that the measure that is more definite and certain and less expensive to the wrongdoer must be adopted. However recent authority indicates that the appropriate measure of damages requires consideration of the use to which the owner put or intended to put the land. To the extent that the owner had a personal use for the land and a bona fide desire to repair or restore the land to its pre-injury condition, the court is more likely to view the injury as temporary in nature and award replacement or restoration costs.... However, an award of restoration costs that would exceed the pre-injury value of the land might be viewed as economic waste and therefore inappropriate. Howard W. Brill, Arkansas Law of Damages § 30-1, at 560 (4th ed.2002) (endnotes omitted). The Gees' land, which contained their home, clearly had a personal use for them. They lived there and sometimes had family members visit. Moreover, the type of injury involved here, which was a fuel leakage and migration of that fuel, requires remediation under our State's public policy. To be sure, ADEQ had a corrective plan of action, which it was implementing, but when a jury determines that more can be done to offset the damage to the Gees' property, that action should not be discouraged. It appears that the value of the Gees' property prior to the fuel leak was $31,500, while afterward, it was worth $11,000. Under the State's theory, the Gees would be limited to receiving $20,500 in damages, whereas the jury awarded restoration costs of $180,000. [3] We cannot say these damages, which were approximately nine times the diminished fair market value, were grossly disproportionate. See First Elec. Coop. Corp. v. Charette, 306 Ark. 105, 810 S.W.2d 500 (1991). Because of the property's personal nature and this State's firm policy in favor of remediation and restoration, we cannot say that the circuit court abused its discretion in instructing the jury on restoration costs.