Red River Waterway Com'n v. Fry

628 So. 2d 38, 1993 La. App. LEXIS 3482, 1993 WL 366853
CourtLouisiana Court of Appeal
DecidedNovember 16, 1993
Docket25,051-CA
StatusPublished
Cited by7 cases

This text of 628 So. 2d 38 (Red River Waterway Com'n v. Fry) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Red River Waterway Com'n v. Fry, 628 So. 2d 38, 1993 La. App. LEXIS 3482, 1993 WL 366853 (La. Ct. App. 1993).

Opinion

628 So.2d 38 (1993)

RED RIVER WATERWAY COMMISSION, Plaintiff-Appellant,
v.
Elizabeth Robinson FRY, et al., Defendants-Appellants.

No. 25,051-CA.

Court of Appeal of Louisiana, Second Circuit.

September 22, 1993.
Opinion Correcting Decision on Rehearing November 16, 1993.

*40 Donald G. Horton, Coushatta, for Red River Waterway Com'n.

Bethard & Davis by James G. Bethard, Coushatta, for Rex and Sandra Young.

William M. Comegys, III, Shreveport, for Elizabeth Robinson Fry.

Before MARVIN, C.J., and NORRIS and BROWN, JJ.

MARVIN, Chief Judge.

In this action to expropriate leased farmland by the Red River Waterway Commission, the commission and the lessees appeal a judgment awarding the lessees $125,066 for the taking of the lease and the lessee's business loss, plus $23,125 attorney fees.

The commission complains the award is too high and the lessees should recover only the value of the leasehold. The lessees complain they were not compensated for the value of a 1995 option to renew their lease of the expropriated property for five years, which they intended to exercise had not the property been taken. Lessees also complain of an inadequate attorney fee award and additionally seek attorney fees for work done on the appeal.

We amend the judgment to award the lessees damages for the unexercised 1995 option period, to reduce the amount awarded by the rent the lessees would have had to pay to rent this property from 1990 through 1999, and to increase the attorney fees for work on appeal.

We otherwise affirm the judgment as amended.

FACTS

Rex and Sandra Young first entered into a five-year lease on September 21, 1979, with Elizabeth Fry of about 2700 acres of Caddo Parish farmland bordering Red River. Mr. Young's business was clearing land and subleasing it to farmers. Young spent approximately $100,000 clearing and improving the leased land to increase the acreage suitable for row crop farming.

The lease stated that a reduction in rent would occur if any of the leased property was taken by eminent domain. The initial lease, which terminated December 31, 1984, gave the lessees an option to lease the property for an additional five-year period, ending December 31, 1989. The Youngs exercised this option.

*41 On September 30, 1985, the lease agreement was amended, granting the lessee the option to lease the property for two additional five-year terms, from January 1, 1990, to December 31, 1994, and from January 1, 1995, to December 31, 1999. The amendment stated,

In order to exercise the options, the Lessee need do nothing more than remain on the property and comply with the terms and conditions herein stated.

The amendment provided that the Youngs would pay rentals of $50,000 per year beginning in 1990, and $60,000 per year beginning in 1995.

On February 21, 1991, the commission filed the expropriation action, joining the landowner-lessor and her lessees, the Youngs, as defendants under L.R.S. 34:2301 et seq. The commission took 643.8 acres of the leased land, which included approximately 170 acres of cropland, from the area known as Cross Keys between La. Hwy. 1 and Red River.

Young had spent between $50,000 and $70,000 clearing and developing this area to increase the acres available for row crop production from 128 to 501. The Youngs subleased the Cross Keys farmland to Jessie and Danny Davis and received as rentals or income, $39,085 in 1987, $38,000 in 1988, and $38,000 in 1989. Upon learning that the property would be expropriated, the Davis brothers ceased leasing the property. In 1990, Louis Honc subleased the unexpropriated Cross Keys land and unsuccessfully attempted to farm it. The Youngs received $17,500 from Honc.

The commission deposited $25,300 into the registry of the court for the taking from the Youngs. The Youngs contend that they are entitled to $218,343 as full compensation, less the $25,300 already paid. Ms. Fry did not reduce Youngs' rent in accord with the eminent domain provision in the lease, notwithstanding the Youngs' request for reduction.

The trial court's judgment awarded the Youngs $125,066 for losses from 1990 to 1994, plus $23,125 for attorney fees, $9,845 for the Youngs' expert witness, and interest and costs. No award of damages was made for the loss of the 1995 option to renew because the trial court found such an award would be too speculative.

EMINENT DOMAIN

The commission contends the Youngs' claim for damages should be prohibited by C.C. Art. 2697 which states:

If, during the lease, the thing be totally destroyed by an unforseen [unforeseen] event, or it be taken for a purpose of public utility, the lease is at an end. If it be only destroyed in part, the lessee may either demand a diminution of the price, or a revocation of the lease. In neither case has he any claim of damages.

As mentioned, the eminent domain provision of the lease restates the substance of C.C. Art. 2697, but the provision provides as well that all damages awarded for the taking of the leased property shall belong to and be the property of the lessor and the lessee as his interest may appear. The commission argues this provision makes the matter of damages one between the lessor and lessee and not between the lessee and expropriating authority.

C.C. Art. 2697, in appropriate circumstances, may bar a lessee's damage claim against the lessor, but does not bar the lessee's claim against the condemnor for the constitutionally mandated "just compensation" for the taking. Holland v. State, Dept. of Transp., 554 So.2d 727 (La.App. 2d Cir. 1989), writ denied.

Moreover, the Fry-Young lease specifically contemplates that lessee, as well as the lessor, is entitled to "damages," as his interest may appear, from the expropriator. A lessee does not give up his right to claim constitutional compensation for the taking by agreeing to a self-destruct lease provision that merely restates the law governing the relationship between himself and his lessor. Holland, supra. We find the commission's contention to the contrary without merit.

CALCULATION OF LESSEES' DAMAGES

La. Const. Art. 1, § 4, requires that just compensation shall be paid to the property *42 owner when property is taken for a public purpose, and "the owner shall be compensated to the full extent of his loss."

A lessee is an "owner" of a property right and is entitled to recover his or her losses. State Dept. of Transp. & Development v. Jacob, 483 So.2d 592 (La.1986); Holland, supra; Packard's Western Store v. State, D.O.T., 618 So.2d 1166 (La.App. 2d Cir.1993). See also State, Dept. of Transp. & Dev. v. Exxon Corp., 430 So.2d 1191 (La.App. 1st Cir.1983), writ denied.

Contending the $25,300 it paid to the Youngs was in excess of that to which they were entitled, the commission submits the trial court did not employ the proper methodology of evaluating the leasehold interest, and the Youngs should receive compensation only for the leasehold advantage, which is the difference between the fair market value and the actual rental value of the property. The commission argues that the expropriated property was not unique and could be readily replaced.

Where economic losses suffered by a business have been proven, damages for incidental and consequential loss must be awarded to fully compensate the owner. The owner should be compensated for "his loss," not merely the loss of the land. State, DOTD v. Dietrich, 555 So.2d 1355 (La.1990).

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Bluebook (online)
628 So. 2d 38, 1993 La. App. LEXIS 3482, 1993 WL 366853, Counsel Stack Legal Research, https://law.counselstack.com/opinion/red-river-waterway-comn-v-fry-lactapp-1993.