State Ex Rel. Department of Highways v. Vermilion Development Co.

249 So. 2d 167, 258 La. 1159, 1971 La. LEXIS 4387
CourtSupreme Court of Louisiana
DecidedMay 4, 1971
Docket50615, 50617
StatusPublished
Cited by18 cases

This text of 249 So. 2d 167 (State Ex Rel. Department of Highways v. Vermilion Development Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana 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. Vermilion Development Co., 249 So. 2d 167, 258 La. 1159, 1971 La. LEXIS 4387 (La. 1971).

Opinions

DIXON, Justice.

The State Department of Highways expropriated various tracts of land belonging to defendants. The defendants are a corporation and the three individuals who owned the stock in the corporation. Two of these individuals operated as a partnership in developing real estate. The third managed the development corporation for the other two. The land involved in the expropriation all lies within newly developed residential subdivision property, or within tracts adjacent to the developed residential subdivision, which adjacent tracts were in various stages of development.

Three suits were filed to expropriate land lying within a proposed extension of Interstate 10 at Lafayette. One was compromised. The other two were consolidated for trial.

■,The substance of the litigation before us is the compensation to be paid by the State to landowners who acquire land and develop it in an area reasonably believed to lie within the extension of an existing highway right of way which ends nearby. It is the State’s contention that the defendants in these cases bought and developed land in “bad faith,” knowing that the land was soon to be expropriated and hoping thereby to profit at the expense of the State. The State contends that the defendants are entitled to something less than market value of such property at the time of the expropriation.

The defendants deny any “bad faith” and insist that they are entitled to market value of the property on the date of the expropriation.

The case was tried for ten days. The trial judge stated in his written opinion that the State “has set forth a statement of facts which counsel for defendant has concurred in;” the trial judge then incorporated the agreed statement of facts in his opinion; this portion of the trial judge’s opinion was accepted by the Court of Appeal and incorporated in its opinion, 236 So.2d 53. Since these facts are not contradicted before us, we will attach them as as appendix to this opinion.

Vermilion Development Company, Inc. is the defendant in suit numbered 33,209 in the district court. The tracts taken were referred to in the petition as two tracts on which five houses were built. The property was actually five lots in Richter Park [1165]*1165Subdivision, Extension No. 2. $115,350.00 was deposited when the suit was filed on November 18, 1964. On December 15, 1964 the answer was filed; on December 28, 1964 a joint motion of the State and the defendant was presented and signed on the same day by the judge, allowing the defendant to withdraw the deposit.

On April 14, 1965 the State filed an amended petition, in which it alleged:

“4. That after the filing of the original petition herein, plaintiff obtained the information that at the time defendant acquired the land expropriated herein, its officers, Charles A. Patout, Lawrence C. Richard and Eugene W. Patout had full knowledge of the location of the proposed highway right of way and that with full knowledge that the land would be required for the construction of the proposed highway improvement, they constructed within the required right of way five brick veneer one and one-half story houses.
“5. That therefore the just compensation to which the said defendant is entitled is the reimbursement for the land which it purchased within the required right of way and the salvage value of the houses constructed by the defendant upon the land.
“6. That the Department of Highways gave public notice of its plan to construct the highway, for the construction of which defendant’s property was expropriated herein, by public hearing on October 9, 1959 and continuously thereafter.
“7. That under the provisions of Louisiana Civil Code, Article 2633, defendant is not entitled to receive more for the property expropriated than its value at the time public notice of the construction of the highway was given, and to pay more would constitute unjust enrichment to defendant at public expense.
"8. That the defendant acquired the land expropriated herein, through its officers, from Albert A. Richter under act of sale dated January 29, 1963, recorded in book Z-38, p. 437, and by act of sale dated February 1, 1963, recorded in book G-39, p. 101, of the conveyance records of the Parish of Lafayette, State of Louisiana.
“9. That the consideration paid to Albert A. Richter by defendant and its officers was at the rate of $2,000.00 per acre, and the amount of land was 1.012 acres, and the total paid for the land was $2,024.00.
“10. That the plaintiff sold the aforesaid five houses at public sale to the highest bidder and received for them the amount of $16,050.00.
“11. That therefore the just compensation to which the defendant is entitled, being the amount paid by the defendant, through its officers, for the expropriated [1167]*1167land, and the amount the houses brought as salvage, is $18,074.00, as is shown by the amended Certificate of Estimate of Just Compensation marked ‘Exhibit P-5A,’ annexed hereto and made a part hereof.”

The State then prayed for judgment ordering the defendant to refund $97,276.00.

The trial judge concluded that the evidence failed to show that the defendants in the suits knew the exact location of the extension of 1-10. He found that the developers had not acted in “bad faith.” The district judge said:

“From the communications that have been referred to, it seems that these people did what they could to ascertain its whereabouts so as to protect themselves. Immediately upon being told or warned about the construction, they ceased operations in that respect and moved on into other areas of the subdivision. I do not believe their overall conduct depicts a scheme with the ultimate purpose of enriching themselves at the public expense. Therefore, the first issue presented to the Court in this litigation, i. e. the denial of compensation on the basis of unjust enrichment will be denied. The evidence is not clear and convincing and to a legal certainty that these persons were guilty of bad faith as alleged.”

The Court of Appeal was impressed with evidence which indicated that the developers were able to accurately predict in 1961 where 1-10 would pass after the expropriation in 1964, and had bought on June 29, 1963 (under a development contract with one Richter which gave the developers the right to acquire additional land adjacent to the development for the price of $2,-000.00 an acre) sixty-one lots which either lay within the new right of way or were partially affected by the right of way. The Court of Appeal also pointed out that construction was begun on the new houses lying within the expropriated property in March or April of 1964, and that some work was done on the houses at night and in rainy weather. These houses were two-story houses and more expensive than others in the subdivision.

We are convinced that the interpretation of the testimony by the trial court is more nearly correct than the conclusions drawn by the Court of Appeal. There was no evidence adduced from which we could say that the developers had actual knowledge that I — 10 would be extended through their subdivision.

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State Ex Rel. Department of Highways v. Vermilion Development Co.
249 So. 2d 167 (Supreme Court of Louisiana, 1971)

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Bluebook (online)
249 So. 2d 167, 258 La. 1159, 1971 La. LEXIS 4387, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-department-of-highways-v-vermilion-development-co-la-1971.