Department of Transportation v. Haggerty Corridor Partners Ltd. Partnership

700 N.W.2d 380, 473 Mich. 124
CourtMichigan Supreme Court
DecidedJuly 15, 2005
DocketDocket 124765
StatusPublished
Cited by25 cases

This text of 700 N.W.2d 380 (Department of Transportation v. Haggerty Corridor Partners Ltd. Partnership) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Department of Transportation v. Haggerty Corridor Partners Ltd. Partnership, 700 N.W.2d 380, 473 Mich. 124 (Mich. 2005).

Opinions

YOUNG, J.

Defendants own land that was partially taken in condemnation proceedings initiated by plaintiff. At issue is whether the trial court properly allowed defendants to present, in support of their proffered calculation of just compensation, evidence that their [127]*127property had been rezoned from residential to commercial after the taking.

We conclude that the evidence of the posttaking rezoning was irrelevant to the issue of the condemned property’s fair market value at the time of the taking. Because the trial court abused its discretion in admitting this evidence, and because the error was not harmless, we affirm the judgment of the Court of Appeals, which reversed the jury’s verdict and remanded the case for further proceedings.

I. FACTS AND PROCEDURAL HISTORY

Defendant Haggerty Corridor Partners Limited Partnership owned approximately 335 acres of an undeveloped tract of land in Novi, Michigan, which it had assembled for the future purpose of building a high-tech office park. Plaintiff, the Michigan Department of Transportation (MDOT), sought to condemn approximately fifty-one acres of this property for construction of a portion of the M-5 Haggerty Road Connector in the city of Novi. As required under MCL 213.55,1 MDOT provided defendants with a good-faith offer of $2,758,000 for the property, based on its then-applicable single-family and agricultural zoning classification.2 Defendants, believing that the property’s “highest and best use”3 was commercial rather than residential, [128]*128refused MDOT’s offer.

In December 1995, MDOT initiated an eminent domain proceeding under the Michigan Uniform Condemnation Procedures Act (UCPA)4 to condemn the property. At trial, as might be expected, the parties presented widely divergent evidence with respect to just compensation.

Consistent with its theory that the highest and best use of the property was residential, MDOT presented evidence that, at the time of the taking, the property was not likely to be rezoned to permit the commercial use proposed by defendants.5 MDOT’s appraiser testified that it was economically feasible to develop the parcel, both before and after the taking, as a residential subdivision, and that, in 1995, it was not reasonably possible that the land would be rezoned for commercial use. On the basis of an estimation that defendants’ land would support development of fifty-four residential lots, MDOT’s appraiser testified that the difference in the value of defendants’ property before and after the taking amounted to $1,415,000.

Defendants, on the other hand, sought to establish that they, along with other knowledgeable participants in the commercial real estate market, knew at the time of the December 1995 taking that the property was likely to be rezoned to allow for its planned use as an [129]*129office park.6 Defendants’ appraiser testified that the land could not have been profitably developed as residential property, and that rezoning was imminent at the time of the taking. Against this backdrop, defendants’ appraiser arrived at a just compensation figure of $18.6 million.

Consistent with their theory that the fair market value of the residential property on the date of the taking was increased because of the realistic prospect that it would soon be rezoned commercial, defendants sought to introduce evidence of the fact that the property had, in fact, been later rezoned. Defendants wished to show that in May 1998, approximately two and one-half years after the taking occurred, defendants’ property was rezoned for office/ service/technology (OST) uses. MDOT filed a motion in limine to bar this evidence, arguing that it was irrelevant to the fair market value of the property as of the date of the taking. The trial court denied MDOT’s motion. Additionally, the trial court refused to grant MDOT’s alternative request to present evidence that the rezoning took place solely as a result of the taking.7

[130]*130At MDOT’s request, the jury was taken on a bus tour of defendants’ property. The parties vigorously dispute what the jurors saw on this tour. MDOT contends that the jurors saw mainly an undeveloped tract with some commercial buildings under construction on a portion of the property. Defendants contend, on the other hand, that the jurors saw many completed office buildings on the developed portion of the property and that only a small portion of the property remained undeveloped. There is no record to support either party’s contention.

The jury was instructed that fair market value must be assessed as of the date of the condemnation, and not as of some future date. The jury was further instructed, with respect to the zoning reclassification, that

if there was a reasonable possibility, absent the threat of this condemnation case, that the zoning classification would have been changed, you should consider this possibility in arriving at the value of the property on the date of the taking.

The jury determined that just compensation was owed to defendants in the amount of $14,877,000.

On appeal to the Court of Appeals, MDOT contended that the trial court erred in denying its motion to exclude evidence of the posttaking rezoning decision and in further prohibiting MDOT from introducing evidence establishing that the zoning change was caused by the condemnation itself. The Court of Appeals majority agreed that the trial court abused its discretion in allowing the jury to consider evidence of the posttaking zoning change and that the error was not harmless:

The subject property was to be valued “as though the acquisition had not been contemplated.” MCL 213.70(1). Plaintiff attempted to introduce evidence establishing that the subject property was rezoned because of the condem[131]*131nation. If so, the actual rezoning was irrelevant. Indeed, the value of condemned property should have been determined without regard to any enhancement or reduction of the value attributable to condemnation or the threat of condemnation. State Highway Comm v L & L Concession, 31 Mich App 222, 226-227; 187 NW2d 465 (1971). Defendants were not entitled to the enhanced value that resulted from the condemnation project, only the value of the property at the time of taking. In re Urban Renewal, Elmwood Park Project, 376 Mich 311, 318; 136 NW2d 896 (1965). Although the potential for rezoning on the date of taking was properly considered, evidence of the actual zoning change was irrelevant to the value of the property on the date of taking and should not have been disclosed to the jury. Moreover, we agree with plaintiffs contention that the evidence improperly contributed to the jury’s finding that the rezoning was reasonably possible. At the very least, the improperly admitted evidence tainted the jury’s resolution of the “reasonable possibility” question of fact. Therefore, we conclude that the trial court abused its discretion in admitting the evidence.
We reject defendants’ contention that the evidentiary error was harmless. Had the evidence not been admitted, it is unlikely that the jury would have been exposed to the evidence that defendants now claim renders the improperly admitted evidence harmless.[8

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Bluebook (online)
700 N.W.2d 380, 473 Mich. 124, Counsel Stack Legal Research, https://law.counselstack.com/opinion/department-of-transportation-v-haggerty-corridor-partners-ltd-partnership-mich-2005.