State ex rel. Department of Transportation & the Board of Transportation for the Division of Highways v. Baken Park Enterprises, Inc.

257 N.W.2d 448, 1977 S.D. LEXIS 174

• Court: South Dakota Supreme Court
• Decided: August 30, 1977
• Docket: No. 11816
• Status: Published

Opinions

WOLLMAN, Justice (on reassignment).

The state appeals from a judgment entered in this condemnation action that took some 9,235 square feet of defendant Baken Park Enterprises, Inc.’s, shopping center property for a street improvement project in Rapid City.

* Because we agree that the trial court should have granted the state’s motion to strike certain testimony and should have given the state’s proposed instruction that the jury should not consider loss of business or loss of profits during the period of construction in fixing the amount of defendant’s damages, we reverse and remand for new trial.

One of defendant’s expert witnesses testified on direct that in arriving at the after-taking value of the property he had taken into account the fact that accessibility to the property would be more difficult during the period of construction as well as after-wards. The state then interrupted the direct testimony with a query whether the witness had allowed for the improper access during the period of construction in arriving at his opinion on the question of damages, to which the witness replied that although he had not specifically done so he had recognized that there was going to be a period of construction and that as a result defendant’s property was “more speculative.” He acknowledged that he had increased his rate of capitalization and that some part of that increase would be allocated to the difficulty that created rent loss. The state thereupon objected to the witness’ testimony and moved that it be stricken. The objection was overruled.

At the close of the case the state proposed the following instruction:

“You are instructed that you may not consider loss of business or loss of profits based on interruption of business during time of construction of the highway improvement in arriving at damages to be awarded to the landowners.”

Upon defendant’s objection, the trial court refused to give the proposed instruction, even though a few moments earlier the court had acknowledged that the law was in accord with the state’s position on the matter.

Defendant contends that the state injected the element of loss of profits into the case by its cross-examination of the witness and therefore will not be heard to complain of any alleged error resulting from the witness’ testimony regarding loss of profits as an element of damages. This argument will not wash, however, because the state was entitled to probe the basis of the witness’ before and after values, otherwise it would have no way of knowing whether the elements that went into determining those values were properly compen-sable. Cf. State Highway Comm. v. Anderson, S.D., 242 N.W.2d 674.

We conclude that the losses incurred by a property owner in the way of loss of income and profits because of temporary interference with normal routes of ingress and egress, together with other inconveniences attendant upon the work in progress, are not compensable items of damage resulting from a construction project such as that involved in the instant case. See Dept. of Public Works v. Ayon, 54 Cal.2d 217, 5 Cal.Rptr. 151, 352 P.2d 519; Blank v. Iowa State Highway Comm., 252 Iowa 1128, 109 N.W.2d 713; Dept. of Highways v. Ray, Ky., 392 S.W.2d 665; Lybarger v. Dept. of Roads, 177 Neb. 35, 128 N.W.2d 132; State ex rel. Highway Dept. v. Kistler-Collister Co., Inc., 88 N.M. 221, 539 P.2d 611; 27 Am.Jur.2d Eminent Domain § 285; 2A Nichols on Eminent Domain (3d Ed.) § 6.4442(2). Although it is true that in some of the cases that have adopted this rule there was no actual taking of property, one who loses a portion of his property to the condemning authority does not, ipso facto, suffer any greater inconvenience or loss of income and profits than one who does not.

There remains the question whether the trial court’s failure to strike the expert’s testimony or to give the requested instruction was sufficiently prejudicial to warrant the reversal of the judgment. Defendant’s expert witness testified to a difference in before and after taking value of $115,000. Two of defendant’s three stockholders gave testimony to the effect that the difference between the before and after value amounted to $150,000. The state’s expert witness testified to a difference of $37,000. The jury returned a verdict in the amount of $125,150.

Although we do not set aside judgments because of every error that occurs at trial, Dwyer v. Christensen, 77 S.D. 381, 92 N.W.2d 199, Limmer v. Westegaard, S.D., 251 N.W.2d 676, we cannot say with any degree of confidence that the result here would have been the same had the objected-to testimony been stricken or the proposed instruction been given. The testimony was of special significance because of the fact that twenty-two of defendant’s thirty-one tenants were occupying space in the shopping center under percentage leases.

We conclude, then, that once the opinion of defendant’s expert was infected with the noncompensable elements of damages flowing from the loss of access during construction, the state’s motion to strike his testimony should have been granted, or at the very least the corrective instruction given.

Other errors alleged by the state are either mooted by our decision or are without merit.

The judgment is reversed and the case is remanded for new trial.

DUNN, C. J., and MORGAN, J., concur. ZASTROW and PORTER, JJ., dissent.

The other defendants did not participate in the trial and are not involved in this appeal.