Kansas City Power & Light Co. v. Strong

359 P.3d 33, 302 Kan. 712, 2015 Kan. LEXIS 720
CourtSupreme Court of Kansas
DecidedAugust 28, 2015
DocketNo. 110,573
StatusPublished
Cited by9 cases

This text of 359 P.3d 33 (Kansas City Power & Light Co. v. Strong) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kansas City Power & Light Co. v. Strong, 359 P.3d 33, 302 Kan. 712, 2015 Kan. LEXIS 720 (kan 2015).

Opinion

The opinion of the court was delivered by

Stegall J.:

In January 2012, Kansas City Power & Light Company (KCPL) condemned a power line easement bisecting two tracts of undeveloped agricultural land in southern Johnson County. The land was owned by the trusts for Daniel and Evelyn [713]*713Strong (the Strongs). The easement occupied approximately 12 out of a combined 460 acres. Court-appointed appraisers awarded the Strongs $96,465 in damages. The Strongs appealed. At trial, the jury awarded the Strongs $1,922,559 as compensation for the taking. KCPL then appealed directly to this court pursuant to K.S.A. 2014 Supp. 26-504.

■ KCPL asserts three claims of error below. First, KCPL claims die district court erred in denying its repeated motions to exclude or strike the expert testimony evidence offered by the Strongs. KCPL argued below, and reprises the argument on appeal, that the evidence was inadmissible pursuant to K.S.A. 26-513(e). Next, KCPL alleges the district court improperly permitted the Strongs’ experts to testify pursuant to an alternative, nonstatutory “development approach” without first laying a foundation that development of the property was imminent. Finally, KCPL claims the district court erred in admitting evidence regarding a 2004 option contract the Strongs entered into with a developer.

The Strongs cross-appealed from certain unfavorable evidentiary rulings, but because we find the lower court did not err in admitting any of the evidence KCPL objects to, we do not reach the issues raised by the Strongs’ cross-appeal. As such, we affirm the jury award and the judgment of the district court below.

Factual and Procedural Background

KCPUs Motion in Limine

Prior to trial, KCPL filed a motion in limine asserting numerous evidentiary challenges. Relevant to this appeal, the motion sought to exclude the opinion testimony of the Strongs’ expert witnesses and any exhibits showing hypothetical subdivision plans. KCPL also sought to exclude from evidence a purchase option contract for the sale of the Strongs’ property to R.H. Sailors, a developer. The district court granted the motion as to the option contract but denied KCPL’s motion with respect to the Strongs’ experts’ opinions and exhibits.

[714]*714 KCPL’s Expert Testimony

At trial, KCPL presented expert testimony from two appraisers—Laird Goldsborough and Kenneth Jaggers. Goldsborough testified that the property had a best and highest use of agricultural land with a speculative investment premium. He noted that “[speculative holding is the consideration that at some point in tire future [the land] will likely be developed into something else.” Goldsborough believed the property would eventually be developed. He testified that the speculative investment premium was worth more than tire pure agricultural value of the land. Considering this, Goldsborough arrived at a precondemnation fair market value of $3,501,866.

In Goldsborough’s opinion, the easement did not cause any damage to tire property because it would not affect farming operations. Therefore, to arrive at his appraisal of the land after the taking, he simply subtracted the value of the taken acreage. In Goldsboro-ugh’s opinion, the easement reduced tire value of the Strongs’ land by $94,678.

KCPL’s second expert, Kenneth Jaggers, produced similar testimony. Like Goldsborough, Jaggers valued tire land as agricultural property with an investment premium due to the likelihood of development at some point in the future. Jaggers used comparable sales of similarly situated properties—agriculture property with speculative value—to determine the fair market value of the land prior to tire taking. Jaggers testified he did not compare sales of farmland with no speculative value, explaining, “I’m sure no farmer would buy [the Strongs’ land] solely to farm” and that any buyer would do so on a speculative basis. Based on these comparable sales, adjusted for size, location, and other factors, Jaggers testified the pre-taking value of the land was a combined $4,744,300 for both tracts.

Again like Goldsborough, Jaggers opined drat “there was no diminution in value to the subject property after acquisition of the easement” and the easement caused no damage to the remainder of the property. Deducting the acreage affected by the easement from his calculations, Jaggers testified that the post-taking value of [715]*715the property was $4,615,900—amounting to a $128,400 loss suffered by the Strongs.

The Strongs’ Expert Testimony

The Strongs built their case around the testimony of two experts—James Lambie and Troy Smith—and three exhibits (numbered 260-A, 260-B, and 260-C) showing a hypothetical concept development that could be built on the property. Exhibit 260-A demonstrated what a subdivision might look like without the KCPL easement while exhibits 260-B and 260-C depicted two alternative arrangements of lots accommodating the KCPL easement. Both exhibits 260-B and 260-C incorporated setbacks between the developed lots and the power lines. Daniel Strong testified that exhibits 260-A through C were prepared for trial and the subdivision was entirely hypothetical. He admitted the land had not been presented to any municipality for annexation.

Lambie is a homebuilder and developer in Johnson County. He testified that his opinions were formed as a developer, taking into consideration the factors a developer looking to purchase and build on the Strongs’ land would consider. Lambie agreed that farm income alone would not be sufficient to economically justify paying fair market value for the Strongs’ property. He said drat in working up an offer to purchase land with an investment premium, a developer such as himself would utilize a concept plan tailored to the property such as contained in exhibits 260-A through C. According to Lambie, a developer wants to know, first and foremost, the available acreage for lot placement within any tract. He testified that utility easements always reduce such available acreage and that lots adjacent to power lines are always the last to sell. In fact, according to Lambie, such lots required a price discount of between 50 and 55 percent to sell. Lambie testified that if faced with 110-feet tall power line poles on a 70-foot wide easement, such as KCPL’s, he would not develop lots all the way to the edge of the easement but would build in a sizable setback.

Lambie opined that from a developer’s perspective, the value of the land prior to the taking was $15,000 per acre for a total fictional purchase price of $6.9 million. However, Lambie believed the [716]*716KCPL easement would reduce the amount a developer would be willing to pay for the land by $3,680,972 due both to the raw reduction in tire aggregate number of lots and to the required discount factor that would be applied to some of the developed lots.

On cross-examination Lambie admitted tíiat he was not an appraiser and that he was unfamiliar with appraisal techniques. In forming his opinions, he stated that he relied on the concept plans presented in exhibits 260-A through C.

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Cite This Page — Counsel Stack

Bluebook (online)
359 P.3d 33, 302 Kan. 712, 2015 Kan. LEXIS 720, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kansas-city-power-light-co-v-strong-kan-2015.