State ex rel. Department of Highways v. Jacobsen

306 So. 2d 886, 1974 La. App. LEXIS 3362
CourtLouisiana Court of Appeal
DecidedDecember 31, 1974
DocketNo. 6029
StatusPublished
Cited by1 cases

This text of 306 So. 2d 886 (State ex rel. Department of Highways v. Jacobsen) 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
State ex rel. Department of Highways v. Jacobsen, 306 So. 2d 886, 1974 La. App. LEXIS 3362 (La. Ct. App. 1974).

Opinions

LEMMON, Judge.

This expropriation suit involves the taking by the State of Louisiana, Department of Highways, of a strip of highway frontage from Mr. and Mrs. John S. Jacobsen’s corner property for the purpose of widening State Route La. 23 in Jefferson Parish from two to four lanes. After a trial on the merits, the district court rendered judgment fixing just compensation for the property taken and for severance damages to the remaining property.

The Department appealed, principally questioning the correctness of the trial judge’s method of determining severance damages. By answer to the appeal, the Ja-cobsens raised the issue of the adequacy of the awards for the property taken and for severance damages, and incidental issues as to interest and expert fees.

VALUE OF PROPERTY EXPROPRIATED

The corner tract, measuring 175 x 150 feet, was leased to a major oil company as a service station site. Three appraisers opined that the property’s highest and best use was as a serivce station; the fourth stated the highest and best use was for retail commercial purposes.

The expropriated strip, varying in width between 25 and 29 feet, extended across the entire existing highway frontage and contained 4,970 square feet. The only improvements located on the strip were concrete and shell surfacing, a pump island, and exterior lighting.

In determining the value of the land, all four expert appraisers used the market [889]*889data approach by studying recent sales of similar parcels in the area. The trial court accepted the estimate by one of the Department’s appraisers of $2.10 per square foot as being "consistent with comparable sales in the neighborhood and more reasonable than the amounts (values) placed on the property by the other appraisers,” particularly noting the “strained adjustments” applied by the Jacobsens’ two appraisers in reaching values of $2.65 and $2.70. The Department’s other appraiser valued the land at $2.30.

The determination of property value by a trial court is a finding of fact, to which great weight must be accorded on appellate review. State, Department of Highways v. Ragusa, 234 La. 51, 99 So.2d 20 (1958). However, to compare the value of properties in the area sold at points in time relatively near the date of expropriation with the value of the subject property, appraisers must adjust the effect on value of the time differential and of dissimilarities between the properties. This technique, largely based on informed judgment, was utilized by all four appraisers.

In our opinion the record does not support the valuation reached by the appraiser whom the trial judge accepted. One of his comparables near the subject property, sold over a year earlier at $2.03, had substantially less highway frontage and was thus not suitable for use as a service station. Two others, sold at $2.41 and $1.50 (the latter more than three years before the expropriation), were located north of the West Bank Expressway in “old Gretna,” a location favored by the appraiser because less land was available. Scarcity, however, is significant only if accompanied by demand. All other evidence indicated that most residential and commercial developments were taking place south of the Expressway and that southbound Highway 23 was a much better service station location, because of greater amounts of traffic generated by the new subdivisions and shopping areas and because this was the only through highway for traffic into Plaquemines Parish. Another of this appraiser’s comparables, located far south of the subject property and ultimately used for a service station, was sold for $2.08 more than four years before the expropriation. The only comparable property sold at a substantially lower price ($1.77, 18 months before the expropriation) required a considerable expenditure for fill and was admittedly a poorer location.

On the other hand, the Jacobsens’ appraisers relied principally upon the narrow frontage comparable, adjusted for time and for highway frontage, and upon a two-year old sale for $3.17 at the intersection of Gretna Boulevard, admittedly a better location. These appraisers supported their opinions with sales of service station locations in the general area, although not on Highway 23.

We believe the trial judge erred in accepting the Department’s appraiser’s valuation and rejecting that based on more reliable comparables and more reasonable adjustments. The evidence supports a valuation of at least $2.50 per square foot, and we set the award for the land taken at $12,425.00 (4,970 square feet at $2.50) ,1 We further award the sum of $1,489.00 as compensation for the improvements on the land taken, as estimated by the Department’s appraiser. The total award for the property taken is $13,914.00.

SEVERANCE DAMAGES

All four expert appraisers estimated severance damages by valuing the entire property before and after the expropriation.

Value Before

The before value of the land forming the entire parcel (26,250 square feet at $2.-50) was $65,625.00.

[890]*890In determining the before value of the improvements, each appraiser used the cost approach, considering that approach best in this case where the land was properly used and the building was not depreciated beyond economic restoration. Each utilized a construction expert’s estimate of the replacement cost of the identical improvements and then applied an adjustment factor for value inferiority (or depreciation) of the older improvements. The adjusted relacement cost thus derived represented the estimated fair market value of the improvements at the time of the taking.2

As to replacement cost new, the trial judge rejected the testimony of the Department’s experts, a construction estimator and a contractor who built numerous service stations, and accepted that of the Ja-cobsens’ expert, the vice-president of a general contracting firm. We find no manifest error in this resolution of conflicting testimony.3 The Jacobsens’ estimator, employing the same procedure as if he were submitting a construction bid, itemized and priced the complete labor and materials required and estimated the replacement cost at $71,600.00. Included in this sum, however, was $11,266.00 of service station equipment, which was owned by the lessee. Furthermore, the estimator included the sum of $3,000.00 as the cost of demolishing the old building. While this item is appropriately considered later in the appraisal process, demolition is not properly considered in determining replacement cost new. Thus, the total of these sums ($14,266.00), as well as the 12% overhead and profit applied thereto ($1,711.92), must be deducted, and we determine the proper replacement cost new to be $55,622.08.

The Department’s primary complaint on appeal is that the trial judge failed to allow for the present deficiency in the value of the old building as compared to the value of the hypothetical new building. All appraisers recommended that same amount, representing depreciation or value inferiority, be deducted from the replacement cost new.

The concrete block building, approximately fifteen years old at the time of taking, had been maintained in good condition. The appraisers estimated depreciation applicable to the improvements as follows:

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Related

STATE, DEPT. OF HIGHWAYS v. Browning
315 So. 2d 784 (Louisiana Court of Appeal, 1975)

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306 So. 2d 886, 1974 La. App. LEXIS 3362, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-department-of-highways-v-jacobsen-lactapp-1974.