Arkansas State Highway Comm'n v. Roberts

464 S.W.2d 57, 250 Ark. 80, 1971 Ark. LEXIS 1223

• Court: Supreme Court of Arkansas
• Decided: March 8, 1971
• Docket: 5-5443
• Status: Published

Opinions

Carleton Harris, Chief Justice.

This is the second appeal of an eminent domain proceeding instituted by the Arkansas State Highway Commission, appellant herein, against Judge Russell C. Roberts and Violet Lee Roberts, his wife, for the acquisition of a 9.63 acre tract of land in Conway needed for right-of-way purposes for the construction of Interstate Highway No. 40 and its facilities in Faulkner County, Arkansas. Judge Roberts and two expert witnesses testified on his behalf, the landowner testifying that just compensation for the taking of the the 9.65 acres was $129,750.00, Lloyd Pearce testifying that just compensation amounted to $105,750.00, and James Larrison, the second expert, testifying that just compensation was $114,500.00. According to these witnesses, the Roberts acreage was valuable for two purposes, the highest and best use for the front 200 feet (3.05 acres) being for commercial property, and the highest and best use of the remaining 6.37 acres being multifamily residential. The land said to be suitable for commercial use had a value, according to Pearce of $67,100, or $22,145 per acre. Pearce said that the property had 660 feet of frontage 200 feet deep on Highway 65 which was zoned for commercial use. He described a usable frontage of 610 feet, leaving a 50 foot right-of-way as access to the rear of the property, and he estimated that the frontage had a value of $110.00 per front foot. The land said to be suitable for multi-family residential, according to Pearce was .worth $37,650 or $5,910 per acre. This part of the property, the back 460 feet, was zoned for residential use, and Pearce said that it would support 135 units for multi-family residential purposes. The witness stated that in 1966, the traffic count along the highway was 5,000 vehicles per day, and that this constituted an increase of 600 per day over the year 1965. According to Larrison, the acreage commercially valued (the witnesses agree4 on the amount of land that was best suited for each purpose) was worth $75,900 or $25,050 per acre, and the multi-family residential was valued at $34,445, or $6,035 per acre. As to the commercial value, Larrison valued the front 200 foot depth at $115.00 a front foot, and, as to residential, he said there was a need in Conway for 360 additional family units.

Two experts on behalf of the state testified that, in their view, just compensation would amount to $24,000.00 and $27,500.00 respectively. On trial, the jury returned a verdict in the amount of $113,300.00, and from the judgment so entered, appellant brings this appeal. For reversal, five points are asserted by the department, but under1- the view that we take, it is not necessary that all of these points be discussed.

Background of the litigation is set out in the second and third paragraphs of the first opinion, Arkansas State Highway Commission v. Russell C. Roberts, et ux, 246 Ark. (June 9, 1969), 441 S. W. 2d 808, as follows:

“Some description of the property and its location is essential to an understanding of the case. On the date of the taking, June 6, 1966, the Roberts tract, approximately square, lay about a mile north of the Conway central business district. The tract was bounded on the south by U. S. Highway 65. At the back of the property, away from the highway, it sloped upward steeply to a ridge 60 feet higher than the front of the tract. The improvements consisted of a four-room house, a barn, and three stock ponds, but no witness attributed any value to the improvements in arriving at an estimate of just compensation for the land, [¹]

U. S. Highways 64 and 65 are of critical importance throughout all the testimony. The two routes run northward together from downtown Conway to a point about a quarter of a mile southwest of the Roberts tract. At that point there is a “Y” by which No. 65 diverges in an easterly direction and No. 64 diverges in a Westerly direction.”

As stated in the earlier case, the principal issue is the substantiality of the testimony offered on behalf of appellees; there are many similarities in the testimony in both cases, and a great deal of what we have said in Arkansas State Highway Commission v. Russell C. Roberts, et ux, Supra, is likewise applicable here. As in the first case, all of the appellees’ witnesses used only one method of reaching their conclusions—that of comparable sales, and the first requirement in .using this method is that the sales must be comparable before they are even admissible in evidence. City of Little Rock v. Sawyer, 228 Ark. 516, 309 S. W. 2d 30. In Arkansas State Hwv. Comm. v. Witkowski, 236 Ark. 66, 364 S. W. 2d 309, it was pointed out that important factors in determining whether a sale is comparable are location, size, sale price, conditions surrounding the sale of the property,, business and residential advantages or disadvantages, and whether the land is unimproved, improved, or developed land. At the first trial, appellees’ experts only mentioned one sale involving land on Highway 65 said to be comparable to the Roberts property, and we quickly disagreed that this sale was indeed comparable. We disagreed also that four other sales offered by appellee as to commercial value, were comparable, and the language used in rejecting those sales is applicable to some of the sales used in the present case. For instance, in addition to pointing out that all parcels were on Highway 64 rather than Highway 65, we pointed out that the sales “were in a small area that had already been developed to commercial use.” That is true of three of the sales offered by appellee in the present litigation. Draught to Kerr McGee, about Vz acre, Rogers to Farmer’s Fire Insurance Company, about .14 of an acre, and Threshing to Central Arkansas Production Credit Assn., about an acre, were all sales in a small area, within the city limits, that had already been developed for commercial use. Three other sales, all outside the city limits, in an undeveloped area, were also used. The largest tract involved was a sale from Carter to Burford, and it only contained approximately an acre. The other two only contained approximately Vz acre and 1/3 acre respectively. All three were vacant at the time they were sold, except that one contained a small residence, which was considered of no value. Pearce and Larrison testified that they made adjustments in the differences between the lands covered in the sales mentioned, and the land owned by Judge and Mrs. Roberts, in finding the properties to be comparable. These adjustments included such factors as topography, utilities, size and shape, access, surrounding area, etc. It is at once evident that comparing all of these factors, finding the Roberts property better in some respects, and not as good in others, is rather a complicated process, particularly when some of the comparable sales used differ substantially from some of the other sales used, i. e., some were in the city limits, (3) in highly developed commercial districts, while others were out of town, (3) with no zoning, sewer, police, or fire protection. Apparently the witnesses then averaged the sales to reach their figures. This seems to us to be a matter, on the one hand, of using sales that were dissimilar to the Roberts property, because the lands (used for comparison) sold were more valuable, and on the other hand, using sales which were dissimilar because the lands were not as valuable, bringing the one group down, and the other group up, in order to reach a comparable figure.² That this was done is evident from the testimony. Mr. Larrison testified “By taking the six sales which we have considered and striking an average, we come up with $125 a front foot. Now in applying this to the subject property, I considered we already had 610 feet of effective property, 200 feet deep, so in placing my value on this property I said 660 feet at $115 which is the same thing as saying 610 feet at $120.” This explained the figure that he had reached on the property valued for commercial use, $75,900. Of course, it is entirely proper for an expert to reconcile differences in the sales used and the principal property, particularly if there is no property in the vicinity actually comparable in nearly all respects, but one noticeable, and somewhat confusing fact here, is that some of the properties used as comparable were not at all comparable with each other, and the points of dissimilarity, between these separate tracts and the Roberts lands greatly varied from one extreme to another. As an example, let us say that the principal property is C. The expert compares C with A, which is in a highly developed area, finding some points of similarity and some dissimilar points. He then uses B, lands in an undeveloped area, which also bear some similarities to C, but of an entirely different nature from A, the dissimilarities also being of a different nature. Using these properties for comparison, he reaches the conclusion that A is worth so much more per land measure than C; likewise he reaches the conclusion that B is worth so much per land measure less than C. He then takes this analysis, hits an average, and uses the average to arrive at a value for C. Bear in mind that the comparison made by appellees’ experts involved going through a similar process in six sales rather than two.

Mr. Pearce added a rather unusual basis in support of the value of the front portion of the lands for commercial purposes. He testified that the back portion of the property would support 110 units of multi-family residential use, and then stated:

"When we are speaking in terms of 110 units of multi-family residential use which could very easily be located on the land we create a need by the erection or construction of those 110 units for commercial facilities such as a barber shop, beauty shop, small sundry shop. [Our emphasis]”

This is what is known as “begging the question”, which is simply basing a conclusion upon a fact not yet proved.

2a Of course, the 110 units are not already there, and filled to capacity, a fact which will be subsequently discussed.

As previously stated, all sales used were on Highway 64.,. Mr. Larrison was questioned about this on cross-examination as follows:

"Q. Are you telling the jury that there were no sales of commercial properties comparable to the Roberts property on Highway 65 and that you had to go clear down to Highway 64 east of Conway to get comparable sales?

A. If there were any sales of comparable size on Highway 65 they were not comparable in location. I couldn’t see them.[³]

Q. You have any explanation to the jury as to why you had all these sales out on 64 for all these high prices and not one single sale on Highway 65 for four years?

A. There were some sales on Highway 65 right at the “Y” but I have been instructed by our attorney not to consider them.

Q. Why were you instructed not to consider them?

MR. JONES: I think that is a question of law, purely of law. We will object to that question. We think it is an improper question.

THE COURT: Overruled.

A. Because of the Supreme Court ruling in the prior trial of this case. They instructed me in their opinion that the Supreme Court has said these sales were not admissible in evidence.

Q. All right. The sales of the property or these properties were exactly like the property you have used on Highway 64 are they not, in size, in development and in what they are being used for?

A. Well, I won’t split hairs.”

Of course, one cannot help but wonder, if property on 65 was so valuable for commercial purposes, why there were no sales.

Four sales were used by witnesses in reaching the values testified about for the 6.37 acres considered for multi-family residential. Three of these sales were in a developed residential area, one being located on Clifton Street, one on Cleveland Street, and the other on Independence Avenue. All were on paved streets, all had utilities, and were zoned multi-family use. Two of these were within 500 feet of Hendrix College, one being right across the street. Two of the three are less than Vz an acre, and the other is less than an acre. The fourth sale referred to was that of Western Bell Motel, located at the intersection of Highway 64 West and Washington Street, a well developed area. Less than Vz an acre was involved, and the property had sixteen units when it was sold. In stating that these properties were comparable, the same procedure was used as with the commercial property, already outlined. Appellees did make a better case in this phase of the litigation than in Arkansas State Highway Commission v. Russell C. Roberts, et ux, Supra, in that testimony was offered relative to a need for rental housing units. Dr. Harold Love, Chairman of Special Vocations at State College of Arkansas, testified that in 1966 there was a very strong demand for rental housing units near the college, not only for graduate students, but for faculty members as well. He stated that although there had been many apartments built in the last few years, the rental charge was too high for graduate students. He said that since 1966, there had been one large multi-housing unit built by the college, and that a small one had also been constructed; however, he said that the large unit was not always full and, as a matter of fact, probably was about only 60% full, the reason being that the unit was too expensive. He added that he thought $1,000.00 per acre was a rather high price for land upon which multi-housing units would be built, and that he was not testifying that rental housing could be built on the Roberts land, only that there was a need in 1966 that was not met. Mr. Wilburn Smith, business manager for Hendrix College, testified that since 1963, he had not found it easy to find proper rental quarters for new faculty members, and he agreed that in early 1966, there was a strong demand for rental housing units in the city of Conway. He said that the student enrollment increased by approximately 100 to 150 from 1963 to 1966, and had increased from 1966 to the present by approximately 250 students; that during the three year period between 1963 and 1966, there would have been an increase of 18 faculty members. As to the last group, Mr. Smith admitted that no one had failed to find a place to live, and he also said that Hendrix student housing was not full; that he was not saying that there was a demand for student housing. The witness said he knew nothing about the Roberts property.

Judge Roberts used the same sales as his two experts. His evaluation of $129,750.00 was the same as that in the first case. The. Roberts property is already zoned for multi-family units, and has a 660 foot frontage on the highway; however, 50 feet will have to be used for a private service drive into the proposed complex. Judge Roberts said that the property was purchased in 1945 for the sum of $1,750 or $175.00 per acre. The three ponds on the Roberts property occupy about an acre, the largest of these being about six feet deep. All of the ponds are located in the “commercial area” of the property.⁴ As previously stated, the witness did not go into detail in explaining the valuations he had reached, but he did say that he was not familiar with any piece of property in the area that was zoned commercial on the front and residential on the back that could be used for multi-family structures; subsequently he stated that the property was the only piece of property in the city limits of the city of Conway, relative to size, topography, location and utilities, that could be developed on June 6, 1966 (date of the taking) in the manner testified about. Judge Roberts, strictly speaking, was correct, in this statement, but the evidence reflects that there are two other pieces of property on Highway 65 which are almost in the same category. One of these is a ten acre tract adjoining the Roberts property on the west, the distinctive difference being that this latter tract is,not rigfit on the highway.⁵ The other is a sale from Berry to McCracken and Wilson which took place on November 30, 1961; this tract is composed of 16 acres, fronts along the same highway, and has the same zoning as the Roberts property, with commercial on the highway frontage and residential on the back part.⁶

While it appears that in the instant case appellees’ experts have gone into more detail in endeavoring to show comparability of the subject property with the properties used in comparison, we cannot agree that this effort was entirely successful.⁷ The reason can be stated in one simple sentence, viz, there are too many differences to support the award given. In Vol. 5, Nichols on Eminent Domain, 3rd Edition, Sec. 21.31 (1), it is said:

“The location of the property sold must be considered, and evidence of the price paid at sales of other land, to be admissible in a land damage case, must be confined to land similarly situated and of the same character as that taken; and, as a general proposition, to land in the same neighborhood. It cannot be said, however, as a matter of law how large an area, in feet or blocks, constitutes a neighborhood, and no hard and fast rule can be laid down on the subject. In large cities ‘neighborhood’ is a relative term, and the field which a witness may take into consideration in forming an opinion of the selling price of land in the vicinity of a particular property, should not only be reasonably adjacent thereto, but it should be of the same general character as the immediate locality in which such property is situated. In sections of a city devoted to residences, or to retail trade, proximity to some desirable or undesirable point may affect values so greatly that one piece of land may be worth twice as much as another a hundred feet away. In determining the value of land in such sections the court should be very strict in its requirements of proximity as well as of similarity.”

It is obvious from what has been said, that we consider the proof offered as to both commercial value and value as a multi-family apartment to be completély inadequate to support the amount of the judgment.

It is asserted that the trial court erred in overruling the motions of appellant to quash the special jury panel selected to try this cause. It was first contended by the department that two jury commissioners did not have the qualifications prescribed by law since they were county officers, and accordingly, could not possess the same qualifications as petit jurors, a necessary requirement for jury commissioners under Ark. Stat. Ann. § 39-201 (1969 Supp.). Appellant’s complaint is based on the fact that the two were Democratic Central Committeemen for Faulkner County. Appellant is in error. We have held that County Central Committeemen are not officers in any sense except to be answerable to mandamus proceedings. Park v. Kincannon, Judge, 214 Ark. 398, 216 S. W. 2d 376.

It is also contended that Act 568 of 1969 was applicable to this cause and that the jury should have been selected under the provisions of that act. Since any further trial would unquestionably come under the provisions of the act, there is no need to discuss the point further.

As pointed out at the outset, this is the second appeal of this case. This type of litigation is expensive, as well as time consuming, and we recognize that it may be difficult to locate many tracts of land that are really comparable. As earlier mentioned, the evidence offered relative to the multi-family unit use is stronger than at the first trial. Accordingly we have carefully examined the evidence and are of the view that it properly supports approximately 50% of the judgment entered. Hence, we think that an award of $57,000.00 is proper under the evidence, and that the judgment should be reduced from $113,300 to $57,000. See Arkansas State Highway Comm. v. Dupree, 228 Ark. 1032, 311 S. W. 2d 791; Arkansas State Highway Comm. v. Watkins, 229 Ark. 27, 313 S. W. 2d 86.

The judgment is affirmed on the condition that remittitur is entered as indicated within seventeen calendar days; otherwise, the judgment will be reversed and the case remanded for a new trial.

Fogleman, J., concurs.

1 Likewise, in the instant litigation, no witness on- behalf of appellees attributed any value to these improvements.

2 The Roberts ■ property was found to be more valuable than four tracts and less valuable than two.

Also defined as “founding a conclusion on a basis that needs to be proved as much as the conclusion itself.” Johnson v. Hall, Secy. of State, 229 Ark. 400, 316 S. W. 2d 194.

3 There is an incongruity in this testimony for Mr. Larrison stated that if there were any sales of comparable size on Highway 65, they were not comparable in location. Yet, along with Mr. Pearce, the sales actually used were neither comparable in size or location.

4 These would of course, have to be filled in.

5 This property was sold in 1963, in a sale of DuVall to Meadow-wood Builders for a consideration of $15,500, reflected by cash, and the trade of a house. Mr. Larrison stated that he did not consider this sale because it was not "an arm’s length market transaction”, although testimony on the part of the state indicated to the contrary.

6 This property sold for |875.00 per acre, but Mr. Larrison testified that he did not consider this sale, because he considered no sales before 1962, as they were too remote.

7 It is interesting to note that, though entirely different sales were used in this case for comparison with the Roberts property, Pearce reached the same identical value figures reached in the first trial.