Judgment rendered November 17, 2021. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.
No. 54,163-CA
COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA
*****
CITY OF RUSTON, LOUISIANA Plaintiff-Appellee
versus
FAMILY INVESTMENT Defendant-Appellant RESOURCES, LLC
Appealed from the Third Judicial District Court for the Parish of Lincoln, Louisiana Trial Court No. 54812
Honorable Bruce Edward Hampton, Judge
ROBERT E. SHADOIN Counsel for Appellant
WILLIAM S. CARTER, JR. Counsel for Appellee
Before COX, STEPHENS, and HUNTER, JJ. STEPHENS, J.
Defendant, Family Investment Resources, L.L.C., appeals judgments
from the Third Judicial District Court, Parish of Lincoln, State of Louisiana,
ordering the expropriation of its property on behalf of Plaintiff, City of
Ruston, and just compensation in the total amount of $144,000. Plaintiff
answered the appeal, contesting the amount of just compensation ordered by
the trial court. For the following reasons, the judgments of the trial court are
affirmed.
FACTS AND PROCEDURAL HISTORY
On January 18, 2011, the City of Ruston (the “City”) filed a petition
against Family Investment Resources, L.L.C. (“FIR”), seeking the
expropriation of property owned by FIR (the “Property” or the “Lot”). The
property, with an address of 507 North Trenton Street, Ruston, Louisiana,
consists entirely of a parking lot. It is located adjacent to the new Ruston
Police Department Headquarters Building (the “RPD building”) purchased
by the City in December 2008 and renovated by the City for the RPD in
2010. The City asserted the Property was necessary for additional parking
for employees of and visitors to the RPD building.
FIR, whose members are Ben and Joy Annison, filed a motion to
dismiss the City’s petition on February 2, 2011. A hearing was held on July
14, 2011, and in an oral ruling issued on October 27, 2011, the trial court
found the City had shown both a public and necessary purpose for the
expropriation, rejected FIR’s motion to dismiss, and ordered expropriation
of the Property. A judgment of expropriation was rendered on December 2,
2011, but the determination of just compensation due FIR was reserved and
deferred. Thereafter, the City deposited $119,000 into the registry of the court, representing the amount of just compensation the City’s appraisers
determined was due FIR. This amount was subsequently withdrawn by FIR.
Trial on the issue of compensation began on December 12, 2016. FIR
argued that the expropriation of the Lot had caused it to suffer additional
loss or damage to adjacent properties that it owned or had ties to,
specifically, a residential property located across the street from the Lot (the
“Naylor House”), which is owned by the Annisons and frequently rented to
college students, and the Moffett Haus Gift Boutique, L.L.C. (“Moffett Haus
Boutique”), which operated periodically within property owned by FIR
located adjacent to the Lot (the “Moffett House”).1 The City objected to all
evidence on the grounds that neither the Annisons nor Moffett Haus
Boutique was a party to the suit. After a series of continued dates, trial
concluded on March 24, 2017, and the trial court issued written reasons for
ruling on April 1, 2020, stating in pertinent part:
[T]he Court finds the amount of just compensation owed by the City to FIR for the Parking Lot is $144,000.00. The Court finds no severance damage due to FIR. The Court further finds that FIR has failed to prove a “unity of use” between Naylor House, Moffett House, Moffett Haus Boutique, and the Parking Lot on the date of the taking of the Parking Lot by the City or that any special damages are due to FIR; therefore, any claims for additional compensation are denied.
Judgment in accordance with the written reasons was signed on July 22,
2020.2 This appeal by FIR ensued, challenging both the expropriation and
the compensation awarded. The City answered the appeal, urging error in
1 The Naylor House is located at 509 North Trenton Street, and the Moffett House is located at 506 North Trenton Street. 2 The judgment noted the parties’ rights as to an award of attorney fees and court costs was not briefed by the parties and is reserved to them.
2 the trial court’s award of compensation to FIR in excess of the amount
deposited into the registry of the court.
DISCUSSION
Expropriation
In its first assignment of error, FIR asserts the trial court erred in
finding that the expropriation served a public, necessary purpose and that the
City did not act arbitrarily in selecting FIR’s property for expropriation. FIR
argues the evidence presented by the City showed it acted arbitrarily, took
FIR’s property as a matter of convenience rather than necessity, and never
seriously considered alternatives to the expropriation of the Lot. We
disagree.
Property shall not be taken or damaged by any private entity
authorized by law to expropriate, except for a public and necessary purpose
and with just compensation paid to the owner. La. Const. art. 1, § 4(B)(4);
Exxon Mobil Pipeline Co. v. Union Pacific R. Co., 2009-1629 (La. 3/16/10),
35 So. 3d 192. Prior to filing an expropriation suit, an expropriating
authority shall attempt in good faith to reach an agreement as to
compensation with the owner of the property sought to be taken and comply
with all of the requirements of R.S. 19:2.2. La. R.S. 19:2. Where a price
cannot be agreed upon with the owner, any municipal corporation of
Louisiana may expropriate property whenever such a course is determined to
be necessary for the public interest by the governing authority of the
municipality. La. R.S. 19:102.
In Exxon Mobil Pipeline Co. v. Union Pacific R. Co., supra at 200, the
Louisiana Supreme Court set forth the standards for determining whether an
expropriation is proper:
3 In challenges to the necessity of a taking, the landowner must prove that the legislatively-authorized expropriator exercised “its large discretion” arbitrarily, capriciously, or in bad faith. Red River Waterway Com’n v. Fredericks, 566 So. 2d 79, 83 (La. 1990). Whether the expropriator’s purpose is public and necessary is a judicial determination that will not be reversed on appeal absent manifest error. Calcasieu-Cameron Hosp. Serv. Dist. v. Fontenot, 628 So. 2d 75, 78 (La. App. 3d Cir. 1993), writ denied, 1994-0168 (La. 3/18/94), 634 So. 2d 854. In the context of expropriation, “necessary” refers to the necessity of the purpose for the expropriation not the necessity for a specific location. Calcasieu-Cameron Hosp. Serv. Dist., 628 So. 2d at 78. Once public necessity is established, the extent and the location of property to be expropriated are within the sound discretion of the expropriation authority and determination of same will not be disturbed by the courts if made in good faith. Id.
The criteria to be considered by the expropriator in determining the location and extent of the property to be expropriated include[s] factors such as costs, environmental impact, long range area planning, and safety considerations. Red River Waterway Com’n, 566 So. 2d at 83 (citing U.S. v. Carmack, 329 U.S. 230, 67 S. Ct. 252, 91 L. Ed. 209 (1946)). The amount of land and the nature of the acreage taken must be reasonably necessary for purpose of the expropriation, but it is not necessary “to show actual, immediate, and impending necessity for the expropriation.” City of New Orleans v. Moeglich, 169 La. 1111, 126 So. 675, 677 (1930). The suitability of the property for expropriation is primarily a question of fact on which the judgment of the trial court will not be disturbed unless manifestly erroneous. Board of Com’rs of New Orleans Exhibition Hall v. Missouri Pacific R. Co., 625 So. 2d 1070, 1073 (La. App. 4th Cir. 1993), writ denied, 1993- 3088, 93-3100 (La. 1/28/94), 630 So. 2d 802.
Ruston Police Chief Steve Rogers testified that the police department
relocated to its current location in downtown Ruston primarily because the
department outgrew its previous building as the number of employees
increased, and there was inadequate parking available for both officers and
general staff. He testified the new RPD building has 30 parking spaces, two
of which are handicap accessible parking spots, but there was still a shortage
of parking for the current needs of the department. He noted that within the
department, there are currently 38 departmental vehicles that are
4 continuously in use; six office personnel; six investigators; one parking
patrol officer; administrative staff; the chief and assistant chief of police; and
two captains, all of whom have either department or personal vehicles that
should be parked onsite. Chief Rogers further stated that there were ten
reserve officers, seven to eight reporting officers, and a minimum of three
dispatchers with personal vehicles. He estimated that at a maximum, 60
parking spaces or more were required to accommodate the department at this
time.
Chief Rogers also testified that because the department is also open to
the public, its facility and parking area are often utilized by the public on a
daily basis and for certain events. He stated there is a steady flow of
members of the public that come in and out of the department on a daily
basis, and onsite parking is required to accommodate those needs.
Additionally, the department often participates in citywide functions such as
the Peach Festival which, prior to the expropriation, required the department
to request permission from FIR to use the Lot to meet the needs of the
additional presence of members of the public. The department also often
hosts academy training and other department-related events which require an
increased number of parking spaces.
Chief Rogers further testified that the additional parking was
necessary for the safety of the officers and members of the public. He stated
that when the parking lot is full, officers and other people often park across
the street, which he noted was particularly dangerous because of the high
flow of traffic. Although Chief Rogers admitted he was not aware of any
pedestrian injuries that occurred from crossing this street, he stated that
because of the nature of the job, which often requires that officers carry
5 certain equipment, it is never ideal to have them cross a busy street,
especially if there is an emergency.
Lewis Love, the city administrator, testified regarding several specific
alternate locations surrounding the new RPD building that were considered
as potential sites for additional parking but were ultimately dismissed either
because of cost (developmental or otherwise), availability, or inadequate
space.
In contrast, FIR offered only the testimony of Ben Annison, who
simply expressed his opinion that RPD’s expropriation of the Lot was not
for a public and necessary purpose based solely on his personal observations
of the frequent vacancies in RPD’s current parking lot and familiarity with
alternative parking options in the area.
The trial court’s factual determination that the expropriation of the Lot
was both necessary and for a public purpose is clearly supported by Chief
Rogers’ testimony as well as by the record as a whole. The evidence
demonstrates the property will be used for parking of public and private
vehicles in conjunction with publicly funded law enforcement activities,
which clearly establishes a public purpose. Likewise, the evidence
establishes both a current and future need for additional parking at the new
RPD building. Adequate parking is necessary not only for police vehicles
but also for other staff members employed by RPD and, importantly, for
members of the public. There should never be a scenario where a citizen
seeks the services of a police department but is deterred by lack of available
parking. Furthermore, FIR failed to establish the Lot was expropriated
arbitrarily, capriciously, or in bad faith. Accordingly, we find no error in the
6 trial court’s judgment of expropriation. This assignment of error is without
merit.
Just Compensation
In its second and third assignments of error, FIR asserts the trial court
erred by finding FIR was not entitled to additional compensation.
Specifically, FIR argues the trial court erred by ruling that (1) the absence of
the Annisons as a named party barred its entitlement to additional
compensation, and (2) it was not entitled to additional compensation
pursuant to the doctrine of unity of use. We disagree.
In every expropriation action to take property, the owner shall be
compensated to the full extent of his loss. La. Const. art. I, § 4(B)(5).
However, there is no specific formula set forth by the legislature to aid
courts in determining the “full extent of loss.” St. Bernard Port, Harbor &
Terminal Dist. v. Violet Dock Port, Inc., LLC, 2017-0434 (La. 1/30/18), 239
So. 3d 243. The Louisiana Constitution states only, “Except as otherwise
provided in this Constitution, the full extent of loss shall include, but not be
limited to, the appraised value of the property and all costs of relocation,
inconvenience, and any other damages actually incurred by the owner
because of the expropriation.” La. Const. art. I, § 4(B)(5). Likewise, La.
R.S. 19:9 provides limited guidance as to how to determine the “full extent
of the loss.” Louisiana R.S. 19:9(A) states:
In determining the value of the property to be expropriated, and any damages caused to the defendant by the expropriation, the basis of compensation shall be the value which the property possessed before the contemplated improvement was proposed, without deducting therefrom any general or specific benefits derived by the owner from the contemplated improvement or work.
7 Seeking additional compensation beyond the appraised value of the
Lot, FIR offered testimony describing the Annisons’ real estate puzzle, the
pieces consisting of the Lot, the Naylor House, the Moffett House, and the
Moffett Haus Boutique; how the Lot, particularly, was a key asset to all of
the Annisons’ future plans for the adjacent properties; and, the damages the
Naylor House and Moffett House Boutique suffered due to the expropriation
of the Lot. However, it is not necessary to consider such evidence because
any claims for damage sustained by the Annisons or the Moffett Haus
Boutique were not properly before the trial court, as they are not parties to
the instant expropriation suit.
A juridical person is an entity to which the law attributes personality,
such as a corporation. The personality of a juridical person is distinct from
that of its members. La. C.C. art. 24. The general rule is that a corporation
is a distinct legal entity separate from the individuals who own interests in
the corporation. A corporation has the power to buy and sell property, make
contracts, incur debt, sue and be sued. Olson v. Olson, 48,968 (La. App. 2
Cir. 4/23/14), 139 So. 3d 539, writ granted, 2014-1063 (La. 10/3/14), 149
So. 3d 275, and writ denied as improvidently granted, 2014-1063 (La.
1/28/15), 159 So. 3d 448.
FIR, the owner of the Lot and the only defendant in this suit, is a
distinct legal entity from its members, the Annisons, and also from Moffett
Haus Boutique, whose members are also the Annisons. If the Moffett Haus
Boutique or the Annisons (with respect to the Naylor House) had wished to
assert damages caused by the expropriation of the Lot, they could have
intervened in the suit or filed a separate action against the City, but they
cannot pursue their claims vicariously through FIR—a distinct legal entity.
8 FIR further asserts the unity of use doctrine entitles them to additional
compensation based on damages suffered by the Naylor House and Moffett
Haus Boutique as a result of the expropriation of the Lot. According to FIR,
the lack of unity of ownership among the properties should not prohibit the
application of the unity of use doctrine because strictly adhering to the above
principles regarding the distinct personality of juridical persons fails to fairly
recognize the realities underlying corporate ownership of land as applied to
the concept of eminent domain. However, even if issues of unity of
ownership were set aside, FIR’s argument for the applicability of the unity
of use doctrine nevertheless fails because there is in fact no unity of use
among the three properties.
Where expropriation involves only one of a number of tracts of land,
if a claimant can prove unity of use, i.e., that all of the tracts were used for
the same purpose as a single unit, then severance damages for all of the
property will be recoverable. The determinative factors underlying the
Louisiana unity of use doctrine are a unified use in fact, coupled with a legal
right to effect that unified use, i.e., ownership. State Through Dept. of
Highways v. Cefalu, 288 So. 2d 332 (La. 1974); City of Shreveport v. Noel
Estate, Inc., 41,148 (La. App. 2 Cir. 9/27/06), 941 So. 2d 66, writ denied,
2006-2774 (La. 1/26/07), 948 So. 2d 171.
The evidence at trial showed that as of the date of the taking, the Lot
was a vacant, unimproved lot sporadically rented to the public for parking
during the annual Peach Festival. The Naylor House is a residential property
the Annisons rent to college students. Notably, it includes on-site parking.
The Moffett Haus Boutique is a limited liability company which owned and
operated a gift shop/boutique/cafe seasonally from 2005 through 2008, from
9 within the Moffett House. The Moffett House is an improved residential
property, with on-site parking, intermittently used as a residence.
The record clearly establishes these three properties/entities—the Lot,
the Naylor House, and The Moffett Haus Boutique—were not used for the
same purpose. Moreover, while their ownership might be intertwined for the
single goal of benefiting the Annisons, these properties/entities by no means
operate as a single unit. The factors necessary for application of the unity of
use doctrine simply are not met in this case. Accordingly, as the unity of use
doctrine is inapplicable, an award of severance damages is not appropriate
since the Lot was expropriated in its entirety; the trial court did not err in
finding FIR was not entitled to additional compensation. FIR’s second and
third assignments of error are without merit.
The City’s Answer
The city asserts in its answer that the trial court erred by finding FIR
was entitled to just compensation in excess of the amount deposited into the
registry. We disagree.
When there is conflicting testimony between witnesses and experts, it
is the duty of the trial court to make credibility determinations.
Determinations of credibility are within the purview of the trial court, and
such determinations are not to be disturbed unless manifestly erroneous or
clearly wrong. Wells v. Town of Delhi, 53,607 (La. App. 2 Cir. 3/3/21), 316
So. 3d 1257. A trier of fact is not required to make a binary choice and
accept one side’s testimony in its entirety, but is instead empowered to
weigh strengths and weaknesses of expert testimony. St. Bernard Port,
supra. In deciding to accept the opinion of one expert and reject the opinion
10 of another, a trial court can virtually never be manifestly erroneous. City of
Shreveport, supra.
At trial, three expert appraisers testified regarding the fair market
value of the Lot. FIR’s expert, Keats Everett, opined the Lot was valued
between $147,000 and $213,000, which amount included, in addition to the
fair market value of the Lot, consideration that any replacement property
would also require additional costs to pave the replacement lot. Mike
Graham, an expert for the City, opined that just compensation for the Lot
was $118,147. The City’s second expert, David Volentine, testified just
compensation for the Lot was $119,000. He further opined that if a new lot
were to be purchased by FIR, it would cost an additional $31,500 to pour a
parking lot to replace the expropriated Lot.
The trial court’s thorough written reasons for ruling clearly show it
considered the testimony of each expert and had an accurate understanding
of the law regarding just compensation in expropriation cases. The trial
court noted that although it accepted Volentine’s fair market valuation of the
Lot, it was likewise compelled by Everett’s opinion that FIR would have
additional costs for relocation. The trial court set the amount for those
additional expenses at $25,000, bringing the total just compensation due FIR
to $144,000.
In accordance with La. Const. art. I, § 4(B)(5), FIR is entitled to
compensation to the full extent of its losses, including but not limited to the
appraised value of the property and all costs of relocation, inconvenience,
and any other damages incurred as a result of the expropriation of the Lot.
The trial court appropriately exercised its discretion in weighing the
testimony of the expert appraisers and setting an amount for relocation costs
11 in addition to fair market value. Accordingly, this assignment of error is
without merit.
CONCLUSION
For the foregoing reasons, the trial court’s December 2, 2011,
judgment of expropriation in favor of plaintiff, the City of Ruston,
Louisiana, and July 22, 2020, judgment setting just compensation due to
defendant, Family Investment Resources, L.L.C., are affirmed. Costs of
appeal are assessed one-half to plaintiff. The other half of costs is not
assessed. See La. R.S. 13:4521.