Court Opinion

ID: 9593930
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:25:45.738228+00
Date Added: 2024-06-11T13:04:41.888522
License: Public Domain

ANDERSON, Justice
(dissenting).
I respectfully dissent from the majority’s conclusion that, when there is a partial taking in an eminent domain proceedings evidence of diminished access due to the construction of a road median is not admissible in determining the before and after fair market value of a landowner’s property. I believe the majority’s conclusion is incorrect for three reasons: (1) the majority’s reading of State v. Strom, 493 N.W.2d 554 (Minn.1992), is unduly narrow; (2) case law dictating that evidence of the loss of access in one direction is not compensable in an inverse condemnation context does not necessarily dictate the same result in a partial takings context; and (3) this court’s decision in City of Crookston v. Erickson, 244 Minn. 321, 69 N.W.2d 909, 915 (1955), supports submitting evidence of the loss of traffic to the finder of fact to determine whether the partial taking of the landowner’s property was an “integral and inseparable” part of the street improvement project.
The state’s ability to compel owners to relinquish property to the state for public purposes is a powerful intrusion upon the right to the quiet and peaceful ownership of property. The majority correctly recites well-settled law that the state must compensate a landowner whose land is taken for a public purpose. Both the United States Constitution and the Minnesota Constitution expressly limit the state’s exercise of the eminent domain power by requiring the payment of just compensation. See U.S. Const. amend. V; Minn. Const, art. I, § 13. These constitutional safeguards are rooted in the idea that no single individual should be forced to bear the entire burden for the good of all.
To insure that owners subject to the eminent domain power are made whole when their property is taken, legal safeguards have been established to ascertain the proper measure of damages. When there has been a partial taking of real property, the condemnation award breaks down into (1) damages for the part taken, and (2) severance damages to the part remaining. Strom, 493 N.W.2d at 562 (Simonett, J., dissenting in part and concurring in part). Severance damages
can occur because: (a) the part remaining is a smaller, less usable tract; and (b) the part remaining is adversely affected because of the way in which the land taken from the owner and others is put to use by the taker. This second type of revenue damages is also called “consequential” damages.
Id. (emphasis added). Severance damages are measured by the “before and after” rule: the difference in fair market value of the property before the taking and the fair market value of the remaining property after the taking. Minneapolis-St Paul Sanitary Dist. v. Fitzpatrick, 201 Minn. 442, 457, 277 N.W. 394, 402 (1937).
In Strom, we discussed at length a process to be followed in determining the appropriate measure of severance damages. We first affirmed the overarching principle that “[a]ny competent evidence may be considered if it legitimately bears upon the market value” of the property. Strom, 493 N.W.2d at 559 (quoting Ramsey County v. Miller, 316 N.W.2d 917, 919 (Minn.1982) quoting State by Lord v. Malecker, 265 Minn. 1, 5, 120 N.W.2d 36, 38 (1963) (alteration in original)). We went on to explain:
To determine the value of property taken in an eminent domain proceeding, the general rule is that “ ‘subject to the caveat that such proof must be competent, relevant and material, evidence of any matter with [sic] would influence a prospective purchaser and seller in fixing the price at which a sale of the property could be consummated may be considered.’ ”
In other words, evidence will be admitted concerning any factor which would affect the price a purchaser willing but not *338required to buy the property would pay an owner willing but not required to sell it, taking into consideration the highest and best use to which the property can be put. To not admit such evidence causes factors ordinarily considered when negotiating a price for a particular piece of property to be excluded and would result in the determination of a fair market value not of the property at issue, but of some nonexistent hypothetical piece of property.
Id. (citations omitted) (emphasis added).
I would adhere to our holding in Strom that “any competent evidence may be considered if it legitimately bears upon market value.” Id. Consequently, I disagree with the majority’s conclusion that Strom, Crook-ston, and our prior inverse condemnation rulings limit the introduction of evidence of diminished access as a factor relevant to the determination of the before and after fair market value of property when there has been a partial taking.
1. The majority’s reading of Strom is unduly narrow.
In Strom, this court held that evidence of construction-related interferences and loss of visibility to property following a partial taking was admissible not as a separate element of damages, but rather as evidence of the diminution in market value of the remainder. Id. at 560-62. In an attempt to harmonize its decision with Strom, the majority asserts that Strom is distinguishable because the damages “must arise from changes in the land actually taken, and not merely from the impact of the construction project as a whole.” However, Strom only supports this conclusion as it relates to the loss of visibility evidence.
The majority presumably relied on the following passage from Strom — concluding that the construction-related damages in that case were not general damages — in asserting that the Strom court tied the evidence admitted to physical changes in the property:
[I]n cases where there is a partial taking, the injured owner is not required to show that the injury is peculiar to his remaining property. It is sufficient that the damage is shown to have been caused by the taking of part of his property even though it is damage of a type suffered by the public as a whole.
Id. at 560 (emphasis added).
Although this passage undoubtedly ties the admissibility of the evidence to the partial taking, it is less clear that the court limited admissibility to evidence of damages arising from the state’s use of the condemned property. This passage must be read in harmony with the text of the opinion as a whole. First, although the court explicitly stated in Strom that evidence of loss of visibility is admissible only when “the diminished visibility results from changes on the property taken from the landowner,” id. at 561, the court did not expressly place such a limitation on evidence of construction-related damages. Moreover, other passages in Strom appear to conflict with such a limitation, including the court’s statement that “[t]he construction-related problems visited upon the Wood-bridge property are typical of the problems being experienced by other commercial properties located along the length of the reconstruction.” Id. at 557.
When we summarized our answer to the first certified question in Strom, we did not limit our holding to instances in which the damages arose from the state’s use of the condemned portion of the plaintiffs property:
We answer the first certified question in the affirmative: In a partial-taking condemnation action, evidence of construction-related interferences is admissible, not as a separate item of damages, but as a factor to be considered by the finder of fact in determining the diminution in market value of the remaining property.
Strom, 493 N.W.2d at 560-61. This distinction is made clear when we compare this answer to the answer to the second certified question:
In a partial-taking condemnation action, to the extent that loss of visibility to the public traveling on a redesigned highway results from changes in the property taken from the owner, evidence of the loss is admissible, not as a separate item of damages, but as a factor to be considered by the finder of fact in determining the dimi*339nution in market value of the remaining property.
Id. at 561-62 (emphasis added).
Notably, Strom cites with approval the decision of the Missouri Supreme Court in State ex rel. State Highway Comm’n v. Nickerson, 578 S.W.2d 916, 918 (Mo.1979). In Nickerson, the Missouri Supreme Court reversed and remanded when the lower court had refused to admit, under the state’s “before and after” rule, evidence of the impact of the loss of traffic on the market value of property due to the relocation of a highway. Id. at 919. The Missouri court held that by limiting the evidence in this manner, the lower court had asked the jury to “value a hypothetical 2.11 acre tract” and not the actual remaining property. Id. at 918. Nowhere did the Nickerson court tie the admissibility of the evidence of loss of access to the state’s use of the condemned portion of the landowner’s property. Consequently, I conclude that Strom stands for a broader proposition than that evidence of severance damages is never admissible unless the damages arise directly from the state’s use of the condemned portion of a landowner’s property.
2. Inverse condemnation cases are not controlling in a partial takings context.
The majority erroneously relies on this court’s prior rulings that a landowner generally has no vested right to two-way access to traffic on an abutting street. See, e.g., State by Mondale v. Gannons, Inc., 275 Minn. 14, 19, 145 N.W.2d 321, 326 (1966) (holding that property owner has vested right to access to street in one direction); Hendrickson v. State, 267 Minn. 436, 441, 127 N.W.2d 165, 170 (1964) (stating that property owners have no vested right to continued flow of traffic past property). These eases were treated as inverse condemnation cases by the court and are not dispositive in a partial takings case.
Unfortunately, the majority’s misplaced reliance on inverse condemnation precedent confuses the threshold issue of whether a property owner is entitled to compensation with the true issue in this case: whether evidence of diminished access is admissible to establish the proper measure of damages when there has been a partial taking. The Texas Court of Appeals recently criticized the state’s indiscriminate combination of these distinctly different elements of a condemnation action, noting that such an approach
mixes indiscriminately the rules which govern two distinctly different elements of a condemnation action: (1) the substantive rules applicable to a determination of whether the owner has a legal right to compensation; and (2) the substantive and evidentiary rules applicable to a calculation of the owner’s compensation once he has established a legal right to it.
State v. Schmidt, 805 S.W.2d 25, 29 (Tex.Ct.App.1991) (emphasis added), rev’d on other grounds, 867 S.W.2d 769 (Tex.1993). In other words, as appellant landowners argue in this case, the inverse condemnation cases are not helpful in that they address only the issue of whether a compensable taking has occurred and shed little light on the proper measure of damages when, as here, the right to some compensation is indisputable.
There is a distinct and crucial difference in the admissibility of evidence of damages when governmental liability is not at issue— as in this case — as opposed to the admissibility of evidence when liability is at issue. Cynthia M. Filipovich, Inadmissibility of Governmental Highest Possible Use Evidence in a Partial Takings Case: A Departure From Constitutional Just Compensation, 70 U. Det. Mercy L.Rev. 873, 879 (1993). Under the general rule articulated in Strom, once government liability has been established, “[a]ny competent evidence [of the diminution in fair market value] may be considered if it legitimately bears upon the market value.” Strom, 493 N.W.2d at 559 (citation omitted). In my view, that this court has previously held that the loss of traffic in one direction does not give rise to-governmental liability in inverse condemnation is insufficient justification to disregard the directive of Strom when governmental liability is conceded, as in this partial takings case.
Other jurisdictions have held that evidence of damages that are not compensable in an inverse condemnation context may be admit*340ted to establish the post-condemnation value of remaining property following a partial taking under the “before and after” rule. See, e.g., State v. Moore, 382 So.2d 543, 545 (Ala.1980) (holding that jury should be informed of loss of traffic to fast food restaurant not as separate element of damages but as inquiry into market value); State ex rel. Morrison v. Thelberg, 87 Ariz. 318, 325, 350 P.2d 988, 992 (1960) (holding that measure of damages for partial taking includes the difference in value before and after access limitations); Nickerson, 578 S.W.2d at 918 (admitting evidence of loss of traffic as bearing upon market value). This approach is in accord with this court’s determination in Strom that evidence of construction-related damage, though not admissible on inverse condemnation, is admissible in a partial taking as bearing upon the question of market value following condemnation. Moreover, this approach furthers the “clear intent” of Minnesota condemnation law to “fully compensate its citizens for losses related to property rights incurred because of state actions.” Strom, 493 N.W.2d at 558.
3. City of Crookston v. Erickson supports admissibility.
In Crookston, this court recognized an exception to the general rule that a property owner may only be compensated for damages incurred by the state’s use of the owner’s condemned property:
[Wjhere a part of an owner’s land is taken for a public improvement such as [a sewage treatment plant], and the part taken “constitutes an integral and inseparable part of a single use to which the land taken and other adjoining land is put,” the owner is entitled to recover the full damage to his remaining property due to such public improvement even though portions of the public improvement are located on land taken from surrounding owners.
244 Minn. at 327, 69 N.W.2d at 914 (quoting Andrews v. Cox, 129 Conn. 475, 482, 29 A.2d 587, 590 (1942)) (emphasis added). In so holding, the Crookston court allowed the land owner to offer evidence of the full diminution in value of his property after a partial taking even though no part of the sewage plant developed by the city was actually located on his remaining property. Id. at 327-28, 69 N.W.2d at 911, 914.
The appellant landowners argue that under the rule of Crookston, they are “entitled to recover their full damages to their remaining property caused by the University Avenue project even though portions of that project were located upon lands other than those strips actually taken from these owners.” They argue that because all of the components of the University Avenue projects were integral and inseparable to the entire project, Crookston precludes summary judgment in this case.
At least one court has applied the same rationale as this court applied in Crookston in allowing evidence of severance damages in a street improvement project condemnation. The California Court of Appeals allowed evidence of severance damages in People By and Through Dept. of Public Works v. Volunteers of America, accepting, the plaintiffs argument that the freeway “must be considered as a whole * * * as one integral part” of a single project, including the portion which was on the land of the plaintiffs. 21 Cal.App.3d 111, 115, 98 Cal.Rptr. 423, 426 (1971).
The majority characterizes the appellant landowners’ loss of access due to the median installation as occurring “coincidentally” with an “unrelated partial taking.” I disagree. The record supports that the installation of the median restricting the flow of traffic to appellants’ property was part of an integrated attempt to ease congestion on University Avenue: the project necessarily — not coincidentally — required the widening of the street and condemnation of the appellants’ property. For these reasons, I believe the appellants should be allowed to introduce evidence at trial of the effect of the loss of access on the before and after market value of their property.
The majority also concludes that allowing the appellants this opportunity would produce future inequitable results in that a landowner equally affected by the loss of access, but who faces no contemporaneous loss of property, would not be entitled to compensation under our inverse condemnation precedent. I am mindful of this apparent inequi*341ty, but am guided by the words of Justice Simonett in Strom, who concluded that there is an important difference justifying the admissibility of evidence of a broader array of damages when the state physically takes property. Justice Simonett wrote:
If there has been a partial taking, that is important. The significance of a partial taking is that it may establish, in a way that a non-taking cannot, the kind of close proximity between the remainder tract and the operation of the public improvement which is necessary to establish that any injury is indeed, direct, substantial and peculiar.
Strom, 493 N.W.2d at 563 (Simonett, J., dissenting in part, concurring in part).
I agree and would allow the appellants to offer evidence of the diminution of market value in this case.1 When the state marshals its awesome condemnation powers to take property from its citizens, more than mere property may be lost: successful businesses may become unprofitable; previously desirable parcels of property may be rendered difficult to sell; even cherished family traditions may be lost when residential property is affected. It is only just, then, to level the playing field by allowing affected citizens to introduce “[a]ny competent evidence” that “bears upon the market value” of the property. Id. at 559 (citations omitted).

. That the appellants are entitled only to the diminution in market value of the subject property and not to lost profits due to the lost traffic may be emphasized by the district court in a limiting instruction to the jury. See Riddle v. State Highway Comm’n, 184 Kan. 603, 613, 339 P.2d 301, 310 (1959).