Court Opinion

ID: 9847753
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:06:57.880029+00
Date Added: 2024-06-11T09:17:31.446405
License: Public Domain

Roe, J.
(dissenting)—Defendants were the owners of 746.67 acres of land upon which they had one feedlot. They also operated an adjacent feedlot, at least in part, on rented land. Somewhat removed from defendants' property was a feed mill which was defendants' personal property. Defendants were not the owners of the land upon which the feed mill was located; who did own the land was in doubt, but it was not the condemnees.
The State, in this condemnation action, did not seek to take any of the feedlot pens or the feed mill but merely to move the highway closer to the feedlot improvements by condemning 17.58 acres.
The jury awarded $400,000, or approximately $22,700 per acre. The expert witnesses as to values for the State would have supported a judgment of somewhat under $140,000, testifying as to the before and after valuation of the land as a result of the take. This is the correct and only method to determine valuation of the land and improvements condemned. No evidence was given by the witnesses for the owners as to the value of the total acreage before and after the take. Rather, they sought to itemize certain elements of damages and were permitted to state that after the take the feedlot would be worth nothing because of the nearness of the proposed highway.
Defendants admit that the value of the feed mill is not a compensable item in this action, and yet, purposely and erroneously, the value of the feed mill itself, which was owned by the defendants on adjacent land of another, was *265permitted to be introduced in evidence. Such evidence was error and clearly infected the verdict. Not only was the evidence as to the value of the feed mill itself inadmissible, confusing and misleading, but it should have been stricken at the request of counsel and the jury should have been instructed to disregard such evidence. Hence, for such error this case should be reversed.
In order to explain this conclusion, I must quote from the record at some length.
Although the objections to this evidence were not well articulated by the State, and its position was confused by reference to the ownership of the land on which the feed mill was located, nevertheless, a sufficient statement of its position is in the record.
The attorney for the condemnees, aggressively poised as to this evidence question, ingeniously was able to inject in the record at various times the value of the feed mill, approximately $250,000, and to suggest it would be a total loss after the take. There is absolutely no reason why any testimony as to the intrinsic value of the feed mill was admissible under the guise of enhancement of the feedlot.
The juxtaposition of the feed mill to the pens is properly admissible to enhance the value of the feedlot, as would nearness to any supporting utility, whether it be a road, railroad, a gas or water main, or other conveniences, but the intrinsic value of such road, railroad, gas or water main, etc., would not be admissible.
The appraisers agreed that a feedlot with a feed mill on the premises is more valuable than a lot without one. But there should not be incorporated into the award an amount to the owners of the conveniently supportive utility merely because the adjacent feedlot is being taken. Evidence of such loss is clearly inadmissible whether the condemnee or some third person owns such utility.
This problem was anticipated, though not well examined, by counsel for the condemnor seeking in a motion in limine to instruct the owners, their attorneys and witnesses not to *266directly or indirectly mention, refer to, interrogate concerning, or attempt to convey to the jury in any manner "any evidence or opinion which includes any lands not owned by the respondents in defining the single larger parcel for the purpose of determining just compensation in this action." (Italics mine.)
Argument to the court was confusing, with the State insisting that because the defendants did not have a valid lease on the land because ownership was in another, that therefore all reference to the feed mill should have been eliminated. The court properly refused to try title in this condemnation action, but the result is not that the evidence of the value of the feed mill was admissible.
Mr. Secrest (counsel for the State), states in reference to the feed mill:
Now, that's a rather expensive item in this case and based upon our discovery, part of their theory is that we're going to put him out of the feed lot business, and obviously you have a $250,000 feed mill floating somewhere around here. It can make a difference in how one goes about appraising the property, ....
The attorney for the State supports his position that only the property condemned would be the subject of the award, citing State ex rel. Wirt v. Superior Court, 10 Wn.2d 362, 371, 116 P.2d 752 (1941), that condemnees are not entitled to recover damages from any tract except the one over which a private way of necessity was condemned.
"Tracts held by different titles vested in different persons cannot be considered as a whole where it is claimed that one is incidentally injured by the taking of the other for a public use. This is the rule although the owner of the tract taken holds an interest in the property claimed to be damaged, and although the two tracts are used as one." 18 Am. Jur. 912, § 271.
The damages for taking a right of way are based on ownership of land actually taken and are limited to lands held under the same title.
Reference was also made to State v. Corvallis Sand & Gravel Co., 69 Wn.2d 24, 30, 416 P.2d 675 (1966), involving *267a gravel pit, quoting from Grays Harbor Boom Co. v. Lownsdale, 54 Wash. 83, 97-98, 104 P. 267 (1909):
Compensation is given for taking or injuriously affecting the property of the landowner. Damages must be predicated upon the property itself, or an incident of the property. When a possible use is dependent upon the acquisition of an interest in property of another, no right of compensation accrues. . . .
It follows that respondents cannot be compensated for the loss of a boom site, for they had no boom site to lose. To possess it they must have obtained title to, or permission to use, the property of the state.
The trial court did not err in refusing to instruct the jury regarding the proximity of the state-owned portion of the gravel bar.
Later Mr. Secrest stated:
[Wje're asking that the Court exclude any evidence which contemplates the use of another's property in conjunction with Mr. Evans' property.
That clearly includes the feed mill located on another's property.
In response to the court's question, Mr. Secrest said:
Well, we're moving to exclude anything on destruction of the business and on separate portion of this motion
referring to the feed mill, and further:
I think at best what happens is if that feed mill is sitting on land that he doesn't own and doesn't have a lease on or anything else, at best we're talking about personalty. We're talking about a cost of moving that thing off in a situation anyway that's the best they can do. . . . In other words, the feed mill might be worth, you know, 250,000 bucks in place, but if you have to pick it up and move it and relocate it, obviously, any purchaser of property is going to deduct that in his mind, . . .
Again, the objection is inartfully stated. Nevertheless, it is clear that it was the position of the State that the value of the feed mill was not admissible because it was not compensable.
*268With reference to the court's inquiry about relocation expenses of the feed mill, Mr. Secrest stated:
If that happens, you see, under the relocation assistance laws that isn't part of this condemnation case. It is a matter of relocation.
(Italics mine.)
Mr. McDonald (counsel for the condemnee) said:
The people that we'll call are the people that are knowledgeable in the cattle business, and they'll put a value on this feed mill as it existed in the before situation.
(Italics mine.) This may have been a slip of the tongue in the use of the words "feed mill." Further, he said:
[0]ne of the things that they will assume in connection with placing that value on it [the feedlot] is that there exists in conjunction with it a feed mill, which is functional.
In reference to the feedlot and the feed mill, he stated: .
It is the utility of use to the subject property that permits them to say that, "So equipped I think the property in the before situation is worth a half a million dollars."
(Italics mine.) Later he claimed:
And that's the utility of use which the Courts have recognized . . .
Evidently his whole approach was to get into evidence the value of the feed mill which he admitted was not part of the take.
In reference to the feed mill, he also stated, "It is a utility. It doesn't need to be the target of your take and obviously isn't, ..."
As to the proper measure of damages, Mr. McDonald maintained:
Now, obviously, we agree for heavens sakes, that you are going to be talking about the before and after market value. That's the rule, and it is a perfectly wise and legitimate rule and we don't have any quarrel with it.
*269He admitted:
The danger in the unit rule is one of duplication that at the sums [sic] of the separate items can exceed the whole, and that's just a matter of instruction.
Yet, in Mr. McDonald's opening statement to the jurors with reference to the value of the feedlot, if one is going out today and reproduce the number of cattle pens (even though the cattle pens themselves were not condemned), he declared:
[A]nd this now, understand, this isn't talking about the mill. You see, there is a mill sitting down here (indicating) that would cost you a couple hundred thousand more dollars to replace, but talking about their reproduction of the layout that you are talking probably about 110, $120 per unit.
(Italics mine.) He multiplied that by 5,000 head which would amount to $500,000 to $600,000.
Mr. Mellor, expert for the State, arrived at a a value of $65 a head for the Evans' feedlot, multiplied by 5,000 head capacity and came to $325,000, from which would have to be deducted the cost of curing a sewage problem. This was comparable to feedlots sold when there was a feed mill on the lot itself.
He also set the total value of the entire property at $492,250. Of course, only a fraction of it was taken. The net value of the take with improvements was $129,000.
He thus reached a total just compensation of $138,750. It is not necessary for our purposes to itemize all his computations.
In his cross-examination of Mr. Mellor, Mr. McDonald deliberately insinuates the amount of the feed mill by stating:
Q All right, so if we are talking about X plus a $250,000 mill before under your notion or Y plus the $250,000 mill after the construction, why, X is going to equal Y in any event, isn't it?
The availability of the feed mill was relevant. Its $250,000 value was not.
*270Mr. McDonald again put in the amount in his question:
If the mill added a couple of hundred thousand dollars to the value of this operation and in the market for the cattle yard and the after situation was zilch because of the freeway, then, in addition to what he was losing because of that result presently he'd be also losing the utility of the mill, wouldn't he, unless he wanted to junk it for salvage?
(Italics mine.) Clearly such evidence was inadmissible. There was no objection at this point as there should have been. Nevertheless, the State preserved this error which the court refused to rule on in the motion in limine.
The court asked counsel for the State, assuming that the condemnees in fact have a valid lease with the Burlington Northern:
[I]s it your position that the respondent would be precluded from claiming damages to this feed mill as a part of the feed lot operation because it is on leased property?
Mr. Secrest: Let me think about that one for a minute, your Honor. I am inclined to say, yes.
The court stated with reference to the feed mill:
Isn't it also realty and also damage to personalty, and can't the jury consider the feed mill, if nothing else, as personalty like they do the whole feed lot perhaps?
Mr. Secrest: I think not.
The Court: They might consider it as personalty.
Mr. Secrest: I can't agree with the fact that a jury in a condemnation proceeding have an eminent domain proceeding can consider personalty.
The Court: Of course, they can. They are going to pay him for a building that's obviously a piece of personalty.
Mr. Secrest: A building is a fixture,. . .
Not only is the feed mill personalty, it was not condemned, and it was not on land condemned.
The court recognized the position of the State and the intent of the defendants, stating with reference to the feed mill:
I'm sure, is going to be, and based upon the opening statements that the feed mill is used in conjunction with the feedyard and is an asset of the feedyard and clearly, *271according to Mr. Mellor, a valuable asset which has something to do with the value of the feedyard itself, are you saying that even though the jury might decide that the feedyard is going to be destroyed, that the cost of cure exceeds its value, that they can't recover any damage for a feed mill that's sitting there with no feedyard to service? Is that what you are really saying?
Mr. Secrest: Yep. [sic]
(Italics mine.) Later the court said, referring to the feed mill:
I don't know what it is worth, but it is obviously worth a substantial amount of money, but it is not worth much without a feedyard by it I would guess.
And later:
And, if it is, certainly an element of damage is the fact that he has an asset sitting over here which is no longer useful; [This obviously refers to the feed mill.]
Direct examination by Mr. McDonald of his client, Mr. Evans:
Q What else goes into setting up a cattle yard? We've heard testimony about a mill. What would it cost—realizing that cost isn't the sole guide—but what would it cost to replace that mill that the jury saw?
A Approximately 250,000.
Mr. McDonald, in direct examination of his client, Mr. Evans, in discussing the value of the feedlot operation, mentioned a shop building which was going to be taken:
A Yes, sir.
Q All right, so that would be included in that figure? [previously given]
A Yes.
Q Alone would your mill have any utility after this occurs?
A No, sir. It is salvage.
The judge recognized this persistent, troublesome problem of the feed mill when he stated:
The damages to the feed lot are basically what are called not to the take but to the—or allocable to severance damages. . . . That is, it has an effect on the value after the freeway is in that is on the real property.
*272The question, of course, is whether or not the feed mill which is used in conjunction with the feedyard which is at best located upon leased property and not a great distance but some distance away. . . . And the question presented is whether or not evidence is admissible and whether the jury can take into consideration the value of the feed miU as a part of the value or enhancing the value of the feed lot.
The court stated:
I cannot allow the State to raise this issue that the feed mill is located upon property which is not owned by Burlington Northern but rather is owned by a third entity, that is, the United States Government.
That ruling was error. The natural result was then to put in the value of the feed mill which was not condemned.
Again Mr. McDonald in a leading question which was objectionable, but unfortunately not objected to, introduced the value of the feed mill. The question was to his client, Mr. Evans:
Q And obviously, you didn't. You are willing to lease property on which you build a mill? You've got you've told us personal property worth a quarter of a million dollars on that lease site, isn't that what you told us?
A Yes, sir.
Mr. Secrest, in direct examination of a Mr. McMinimee by the defendants, stated:
I'm going to object to that assumption in the question, and I don't mean to interrupt the counsel but I'd like a continuing objection on anything on leased land.
The Court: I understand.
On cross-examination of Mr. McMinimee, witness for the defendants:
Q O.K. Now, did you mean to express an opinion of value of the entire Evans' property . . .
A Well, the feed mill and his cattle feed pens is what I—not the rolling stock. Just the—I don't know. The land, the farm, the farmland, or anything like that. I'm talking about the pens that are boarded up and the feed mill.
*273(Italics mine.) Thus, it is clear that the value of the feed mill was included in this amount by the witness for the defendants and it was clearly the intent of defendants' counsel.
On direct examination of Mr. Golob, expert witness for the defendants, as to the basis for the testimony regarding the value, Mr. McDonald stated:
You understand what we want you to understand particularly is that in addition to its present existence (indicating) with the north pens and the south pens and the feed mill. . .
The enhancing value of the feed mill was reflected when counsel for the defendants asked on direct examination:
Q I see. All right. Now, let me ask you: In connection with this have you assumed for purposes of my question that this operation has a mill back here (indicating)?
A Yes, I know that.
But this related to the method of appraising the cattle at so much per head, that is, $90 to $150, to determine the value of the feedlot.
Mr. Golob, expert witness, stated whether the feed mill was on leased land or not would make no difference, as long as "you have access to using a facility."
Cross-examination of Mr. Golob:
Q Well, in other words, did you value the whole? You didn't intend to express an opinion of value of the entire Evans' ownership, did you?
A I was looking at the feed lot corrals and the mill facility.
After the court ruled that the feed mill evidence was admissible, on redirect Mr. Mellor (the State's appraiser) testified as to its value. The reproduction cost new was determined to be $246,000. There was not a waiver by the State. There was a continuing objection. This was an attempted defense measure. It was done only in rebuttal.
The court further erred in refusing to give WPI 151.05, which refers to the fact that evidence has been introduced with reference to business conducted; that such evidence *274should be admitted solely for the purpose of showing the use to which the property was adapted; and that the jury was not to consider the volume or extent of the business.
Mr. McDonald in his closing argument again told the jury:
What you should do, what he should be doing, is he should be compensated for ruining his business and the property that they're actually taking, . . .
(Italics mine.) Actually, this was consistent with the ruling of the trial court that the defendants proceeded upon the assumption that the feedlot had a 5,000-head capacity, but the evidence indicated that at only one short period of time had it approached that capacity. It was being used for about 2,000 to 3,000 head. The court stated, in refusing to give the instruction:
My only comment is I don't think there's any evidence in the case about business or volume of business of profits.
I think the evidence was replete with references to business and profits and how profits are computed.
In his closing argument Mr. McDonald clearly included the feed mill in the amount that the jury was to award. He stated:
Of course it has a feed mill. The fact that it is on leased land—it was clear from the rulings of the Court— had nothing to do with the value of its utility,. . .
Then he correctly stated that the value of the feedlot is related to the accessibility to a feed mill, but he stated:
They jumped depending on whether or not they had a mill, and they don't figure out too badly on the depreciated value from Mr. Evans' own estimate of it.
But he also stated, "The feed mill and highway are going to meet." For all purposes this mill was included in the take despite the fact that there was evidence that it could be moved for $10,000. The trial court should have ruled that all evidence and reference to the intrinsic value of the uncondemned feed mill was inadmissible. The jury should have been instructed that its value, its reproduction cost, *275and depreciated present worth were not admissible, and the jury should have been instructed to disregard all that testimony.
After having carefully read the entire record, I come to an inescapable and abiding conclusion that it was the original purpose of the defendants and their very capable lawyer to include both the value of the feed mill and its enhancing operation in the award and that actually it was included. This is reversible error.
In effect, this is double recovery for the feed mill. Its nearness to the feedlot enhances the value of the feedlot. Its use for that purpose was permissible, but it was again used and reckoned into the loss because of the evidence as to its intrinsic value and its utility before the take at about $250,000, even though it was personal property on property of another, is still owned by the condemnees since it was not condemned, and it can be relocated for $10,000.
Significant is the opening colloquy where counsel with the court were discussing the cost of a waste disposal system which the defendants were confronted with prior to condemnation and which would have to be accommodated after condemnation. The defendants wished to show that the cost of a new disposal system would be considerably enhanced. Mr. McDonald, attorney for the owners, stated in reference to a disposal system:
[T]he first plan that he comes up with . . . was over $400,000 for the first system that they came up with to solve this problem . . .
. . . They didn't like it because quite frankly, your Honor, that cost is worth more than the property is worth and what's involved in the take,. . .
But the jury awarded $400,000.
The judgment should be reversed.
Reconsideration denied July 18, 1980.
Review granted by Supreme Court September 19, 1980.