State Ex Rel. Department of Transportation v. Montgomery Ward Development Corp.

719 P.2d 507, 79 Or. App. 457
CourtCourt of Appeals of Oregon
DecidedMay 21, 1986
DocketA8001-00003, A8001-00004, A8001-00005; CA A30941
StatusPublished
Cited by16 cases

This text of 719 P.2d 507 (State Ex Rel. Department of Transportation v. Montgomery Ward Development Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon 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 Transportation v. Montgomery Ward Development Corp., 719 P.2d 507, 79 Or. App. 457 (Or. Ct. App. 1986).

Opinion

*460 WARREN, J.

Defendants are owners of real property on which Mall 205, a shopping center in east Multnomah County, is located. The state commenced this eminent domain proceeding to acquire a portion of defendants’ land to construct an access road to Interstate 205 (1-205). The plans for the access road called for relocating S.E. 96th Avenue in a diagonal across defendants’ land, dividing the property in two. The new road severs a triangle of approximately 4.2 acres from the rest of the shopping center.

The state filed three complaints against various defendants involving different portions of the property. Many defendants were defaulted. The defendants that appeared in the action were the three First Union entities (First Union) and Cohen and Weissman, individually and as partners (Cohen and Weissman). The claims were consolidated for trial, because defendants’ interests coincided, at least to the extent of securing the maximum compensation. Defendants filed cross-claims against each other to establish their title to the land taken.

The issue of just compensation involved a consideration of various factors. First, defendants were entitled to compensation for the property taken: a fee simple title to the strip of land for the street and an adjacent easement. Second, defendants were entitled to damages, if any, caused by the severance of their remaining property into two parcels. Third, the damages could be reduced or offset by any increase in the value of the property attributable to the announcement, planning, construction and development of the 1-205 project.

The state’s complaints, filed January 2,1980, alleged the true value of the property taken and the resulting damages as $582,800. The state desired immediate possession of the property and deposited in court the sum of $600,800, pursuant to ORS 35.265.

On December 31, 1982, defendants entered into an agreement settling their cross-claims and agreeing to a single jury award for all defendants. The agreement allegedly was based on defendants’ understanding that the $600,800 the *461 state paid into court would be the minimum verdict. Defendants agreed that Cohen and Weissman would receive 75 percent of the deposit, less $8,000 they had paid to another party. First Union would receive 25 percent of the deposit. Any damages recovered in excess of $600,800 would be divided 85 percent to First Union and 15 percent to Cohen and Weissman. After they reached the agreement, defendants withdrew the money deposited in court.

The state filed amended complaints on September 23, 1983, alleging the true value of the property taken and damages as $213,500, instead of the original $582,800. Defendants opposed the state’s motion to amend its complaints. They assign error to the trial court’s allowing the state to amend the complaints, which permitted the jury to return a verdict of $213,500. Defendants also assign error to the court’s admitting evidence and giving and denying instructions relating to special benefits and enhancement of value due to the 1-205 project. In addition, Cohen and Weissman and First Union claim that they were denied a fair trial by the trial court’s ruling limiting participation by their separate counsel. They also claim that the trial court erred in permitting expert testimony because the witness did not possess an Oregon real estate license. Finally, they claim that the court erred in denying their motions for mistrial and a new trial based on alleged attorney misconduct and juror bias.

We first consider defendants’ claim that the trial court erred in permitting the state to amend its complaints to state a lower value as just compensation after defendants had withdrawn the money deposited in court. Defendants first contend that the allegations of value in the original complaints are binding admissions. An allegation of value in the complaint is an admission of liability for the taking in a certain amount and is the minimum verdict a jury can return. Highway Commission v. Kliks, 238 Or 281, 283, 393 P2d 763 (1964). However, once a pleading is amended, the original allegation of value is no longer a binding admission. Ralston v. Spoor, 39 Or App 883, 889, 593 P2d 1285, rev den 287 Or 149 (1979). Because the complaints were amended, the issue becomes whether the trial court abused its discretion in permitting the state to amend. We conclude that the trial court did not. The state recomputed its estimate of defendants’ damages by considering, for the first time after the *462 original complaints were filed, new theories which take into account the enhanced value of the property taken and special benefits to the remainder due to the I-205 project. The state was entitled to introduce evidence of those factors to help the jury determine just compensation. Although amending the complaints permitted the jury to return a lower verdict, defendants do not demonstrate that they were prejudiced thereby in their ability to present their case. The trial court did not abuse its discretion in permitting the amendments.

Defendants also urge this court to adopt a broad rule that all money deposited in court by the state, in order to acquire immediate possession of land to be condemned, and withdrawn by the property owners irrevocably becomes the landowners’ and is not subject to recoupment by the state in a case such as this, where the jury returns a verdict lower than the deposit. Defendants rely on O. R. & N. Co. v. Oregon Real Estate Co., 10 Or 444 (1882), as support for the proposition. That was an action by a private company to acquire an easement. The complaint alleged that just compensation for the land to be taken was $1,500, and the plaintiff deposited that sum in court. The Supreme Court held that the trial court’s instruction that the jury could find the damages to be between $250 and $11,000 was error, stating that

“the payment into court was a positive admission of damages to the amount of the tender. The money paid in became the money of the [landowner].” 10 Or at 445.

That case was tried on a complaint which alleged that the true value was $1,500. An instruction permitting the jury to return a lower verdict was error, because the complaint on which the case was tried admitted a value of $1,500.

The relevent statutes do not specifically provide for the state’s recovering the amount by which its deposit exceeds the verdict, nor do they preclude this result. Defendants are entitled to recover only “just compensation” for the property taken and resulting damages. Or Const, Art I, § 18. They should not receive a windfall simply because the state’s pretrial deposit was greater than the verdict that the jury returned. Because the state is required to pay amounts by which the verdict exceeds the deposit, ORS 35.325, common sense indicates that it should likewise be entitled to recover the amount by which its deposit exceeds the verdict. In *463

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Bluebook (online)
719 P.2d 507, 79 Or. App. 457, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-department-of-transportation-v-montgomery-ward-development-orctapp-1986.