Delta Regional Airport Authority v. Gunn

386 S.W.3d 693, 2011 Ark. App. 701, 2011 WL 5562737, 2011 Ark. App. LEXIS 752
CourtCourt of Appeals of Arkansas
DecidedNovember 16, 2011
DocketNo. CA 11-180
StatusPublished

This text of 386 S.W.3d 693 (Delta Regional Airport Authority v. Gunn) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Delta Regional Airport Authority v. Gunn, 386 S.W.3d 693, 2011 Ark. App. 701, 2011 WL 5562737, 2011 Ark. App. LEXIS 752 (Ark. Ct. App. 2011).

Opinion

JOHN B. ROBBINS, Judge.

Iiln this eminent-domain case, appellant Delta Regional Airport Authority appeals from the jury’s award of compensation of $150,000 to appellee J.T. Jarrett & Sons, a partnership that holds a leasehold interest in the property. Delta also appeals from the circuit court’s order granting attorney’s fees to the landowners, appellees Grover Gunn, III; Michael Scott Gunn; and Edgar Lindsey Gunn (collectively, the Gunns). We affirm in part and reverse in part.

Delta is a public corporation formed for the purpose of constructing and operating a regional airport for the general public in St. Francis and Cross Counties. Delta sought to acquire 209 acres in St. Francis County from the Gunns. When negotiations failed, Delta filed this eminent-domain action on January 21, 2009, to acquire the fee title from the Gunns and to acquire Jarrett’s leasehold interest. That lease had seven years remaining. Delta deposited | g$505,000 with the clerk of the circuit court, and an order was entered allowing Delta to take possession of the property.

The Gunns counterclaimed against Delta, alleging breach of the purchase contract. Jarrett filed a counterclaim against Delta seeking damages, or, in the alternative, the right to keep farming for the remainder of the lease term. Jarrett also filed a cross-claim against the Gunns, alleging that it had the right of first refusal to purchase the property in the event the Gunns sought to sell.1

Based on answers to discovery, Delta filed a motion in limine seeking to prohibit Jarrett from introducing evidence of its anticipated lost profits. The circuit court denied the motion to the extent that it sought to prohibit evidence as to what Jarrett paid in rent. In so ruling, the court said that it realized that proof of what Jarrett earned from the rental of the property was perilously close to being evidence of lost profits. The court also noted that the rent paid does not establish the fair market value.

The case was tried to a jury, which found for Delta on the Gunns’ contract claim and fixed the Gunns’ compensation for the taking at $580,000. The jury also fixed the compensation for the taking of the Jarrett leasehold interest at $150,000. Judgment was entered on the jury’s verdict on July 28, 2010.

The Gunns filed their motion seeking attorney’s fees on August 2, 2010. They argued that they were entitled to attorney’s fees under Ark.Code Ann. § 18-15-605(b) (Repl.2003) because the jury awarded total compensation that exceeded Delta’s initial deposit by more |sthan 20 percent. Delta responded to the motion by arguing that there was no statute that authorized an award of fees in this case and that section 18-15-605(b) applied only to municipal corporations and corporations that supply water. Jarrett filed a separate motion for attorney’s fees on September 20, 2010. The motion cited Ark.Code Ann. §§ 14-362-104, 18-15-605, and City of Fort Smith v. Carter, 364 Ark. 100, 216 S.W.3d 594 (2005) (Carter I), as authority for an award of fees.

By order entered on December 22, 2010, the circuit court awarded the Gunns attorney’s fees of $43,334.38 and costs of $2,322.15. This represented a 30 percent reduction of the amount sought for the unsuccessful prosecution of the Gunns’ counterclaim. The order did not cite any authority for the award, but stated that the court considered the motion and the parties’ briefs addressing the motion. The court denied Jarrett’s motion for attorney’s fees and costs, stating that there was no authority for such an award. Delta filed timely notices of appeal from both the judgment in favor of Jarrett and the judgment for attorney’s fees and costs in favor of the Gunns.

Compensation to Jarrett

Under this heading Delta argues two points: (1) that the circuit court erred in denying its motion for a directed verdict and (2) Jarrett’s proof was improper proof of anticipated lost profits. We address both points together.

In evaluating loss of value to a leasehold interest, the correct measure of damages is the amount by which the fair market value of the lease exceeds the agreed-upon rent. Lamar Advantage Holding Co. v. Arkansas State Hwy. Comm’n, 369 Ark. 295, 253 S.W.3d 914 (2007); Pearson v. Henrickson, 336 Ark. 12, 983 S.W.2d 419 (1999); Arkansas State Hwy. Comm’n v. Humble, 248 Ark. 685, 453 S.W.2d 408 (1970); Arkansas State Hwy. Comm’n v. McHaney, 234 Ark. 817, 354 S.W.2d 738 (1962). Further, the supreme court in McHaney defined rental value:

By rental value is meant not the probable profits that might accrue to the tenant, but the value, as ascertained by proof of what the premises would rent for or by evidence of other facts from which the fair rental value may be determined.

234 Ark. at 819, 354 S.W.2d at 740 (quoting Reeves v. Romines, 132 Ark. 599, 602, 201 S.W. 822, 822 (1918)). There is no difference in principle where the rent agreed upon was part of the crop instead of money. Reeves, 132 Ark. at 602, 201 S.W. at 822. However, in later cases, the supreme court has held that there is an exception to the rule against evidence of lost profits in cases of agricultural property. See Arkansas State Hwy. Comm’n v. Ormond, 247 Ark. 867, 448 S.W.2d 354 (1969); Arkansas State Hwy. Comm’n v. Weir, 237 Ark. 692, 376 S.W.2d 257 (1964); Arkansas State Hwy. Comm’n v. Addy, 229 Ark. 768, 318 S.W.2d 595 (1958); Hot Spring County v. Crawford, 229 Ark. 518, 316 S.W.2d 834 (1958). The reason for the distinction is that, in the case of agricultural land, the income in question was derived from the use of the property itself. See Lamar Advantage Holding, supra; Ozark Gas Transmission Sys. v. Barclay, 10 Ark.App. 152, 662 S.W.2d 188 (1983). It was not error for the circuit court to admit evidence of the value of Jarrett’s crops that include profit because those profits were derived from the use of the land itself and not merely a business conducted on the land.

Our standard of review of the denial of a motion for directed verdict is whether the jury’s verdict is supported by substantial evidence. Advanced Envtl. Recycling Techs. v. Advanced Control Solutions, Inc., 372 Ark. 286, 275 S.W.3d 162 (2008). Substantial evidence is that which goes beyond suspicion or conjecture and is sufficient to compel a conclusion one way or the other. Id.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Flowers v. Norman Oaks Construction Co.
17 S.W.3d 472 (Supreme Court of Arkansas, 2000)
Harris v. City of Fort Smith
234 S.W.3d 875 (Supreme Court of Arkansas, 2006)
Hot Spring County v. Crawford
316 S.W.2d 834 (Supreme Court of Arkansas, 1958)
Pearson v. Henrickson
983 S.W.2d 419 (Supreme Court of Arkansas, 1999)
Lamar Advantage Holding Co. v. Arkansas State Highway Commission
253 S.W.3d 914 (Supreme Court of Arkansas, 2007)
Arkansas State Highway Commission v. Ormond
448 S.W.2d 354 (Supreme Court of Arkansas, 1969)
City of Fort Smith v. Carter
216 S.W.3d 594 (Supreme Court of Arkansas, 2005)
Arkansas State Highway Commission v. Addy
318 S.W.2d 595 (Supreme Court of Arkansas, 1958)
Burcham v. City of Van Buren
954 S.W.2d 266 (Supreme Court of Arkansas, 1997)
Vanderpool v. Fidelity & Casualty Insurance
939 S.W.2d 280 (Supreme Court of Arkansas, 1997)
Ozark Gas Transmission Systems ex rel. Ozark Gas Pipeline v. Barclay
662 S.W.2d 188 (Court of Appeals of Arkansas, 1983)
Reeves v. Romines
201 S.W. 822 (Supreme Court of Arkansas, 1918)
Ark. State Highway Comm. v. McHaney
354 S.W.2d 738 (Supreme Court of Arkansas, 1962)
Ark. State Highway Comm. v. Weir
376 S.W.2d 257 (Supreme Court of Arkansas, 1964)
Arkansas State Highway Comm'n v. Humble Oil Co.
453 S.W.2d 408 (Supreme Court of Arkansas, 1970)

Cite This Page — Counsel Stack

Bluebook (online)
386 S.W.3d 693, 2011 Ark. App. 701, 2011 WL 5562737, 2011 Ark. App. LEXIS 752, Counsel Stack Legal Research, https://law.counselstack.com/opinion/delta-regional-airport-authority-v-gunn-arkctapp-2011.