Opinion ID: 1786496
Heading Depth: 1
Heading Rank: 2

Heading: evaluations

Text: Article I, Section 2 of the Louisiana Constitution provides: No person shall be deprived of life, liberty or property, except by due process of law. Except as otherwise provided in this Constitution, private property shall not be taken or damaged except for public purposes and after just and adequate compensation is paid. In compliance with the constitutional mandate, this Court has long held that a landowner is entitled to the monetary equivalent of the property taken, or the market value. Housing Authority of New Orleans v. Brinkmann, 224 La. 262, 69 So. 2d 37 (1953); Housing Authority of Shreveport v. Green, 200 La. 463, 8 So.2d 295 (1942); Dakin and Klein, Eminent Domain in Louisiana, Chapter IV, Section 1, p. 154 (1970). All of the tools of evaluation, including the determination of highest and best use, the study of comparables, cost of structure and depreciation studies, and income analysis, are only means to fixing just and adequate compensation. No one of these tools is an end in itself. It is true that, in the usual case, the study of comparables is the primary tool of analysis. This Court recognized that principle in State v. Tolmas, 238 La. 1, 113 So.2d 288 (1959). In that decision, however, we further noted: Plaintiff's evidence of comparable sales is not conclusive; neither is defendants' testimony as to one comparable sale. The determination of the market value of the instant property cannot, therefore, be limited to only a consideration of comparable sales. What this means seems clear. If there is a priority attached to the study of comparables, it exists only because, in most cases, that approach is most likely to produce accurate results, insuring just and adequate compensation. When, however, the study of comparables does not, as a matter of fact, serve to best insure an accurate evaluation, the prime consideration of just and adequate compensation requires that courts be free to use any other method better suited to a correct assessment of value. Our recent holdings on front-rear evaluations are only another application of this principle. See State of Louisiana, through the Dept. of Highways v. Hoyt, La., 284 So.2d 763 (1973). Here, the trial court used income analysis for reasons rooted in the facts of the case. These included the dissimilarities of the existing comparables, the inadequacy of the cost figures presented by the state, the use-division of parcel 1-3 which had been made by the landowners, and similar considerations. The Court of Appeal repudiated none of these factors. The reduction in the award was ordered only because of this holding: The adoption of the income approach in establishing value may be material in certain cases, but where there have been sales of comparable property, and improvements can be evaluated accurately by cost of reproduction new less depreciation, valuations arrived at by capitalization of rental value should be disregarded. The holding is incompatible with the principle of just compensation and must be rejected. We hold, therefore, that, even when comparable sales are available, courts are free to consider income studies if, on the facts of the case, these studies provide a substantial aid in evaluation. Our holding approves a similar decision of the First Circuit Court of Appeal in State v. Lewis, La.App., 142 So.2d 652 (1962). There, the Court of Appeal stated: The jurisprudence of this State recognizes that the best measure of compensation or market value is obtained through the use of comparable sales. However, in the absence of such comparable sales, a valuation based upon rental income from the property may be resorted to, and further, even where there are comparable sales, utilization of the rental income may be resorted to for the purpose of supplementing the appraisal. ... (Italics ours)