State of La, Thru the Dotd v. David Wade

• Court: Louisiana Court of Appeal
• Decided: May 28, 2008
• Docket: CA-0007-1385
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

07-1385

STATE OF LOUISIANA, THROUGH THE DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT

VERSUS

DAVID WADE, ET AL.

**********

APPEAL FROM THE SEVENTH JUDICIAL DISTRICT COURT PARISH OF CONCORDIA, NO. 40465 HONORABLE KATHY A. JOHNSON, DISTRICT JUDGE

BILLY HOWARD EZELL JUDGE

Court composed of Jimmie C. Peters, Elizabeth A. Pickett, and Billy Howard Ezell, Judges.

Pickett, J., dissents and assigns written reasons.

AFFIRMED IN PART AS AMENDED AND REVERSED IN PART.

Julie Mobley Lafargue Abrams & Lafargue, LLC 330 Marshall Street, Suite 1020 Shreveport, LA 71101 (318) 222-9100 Counsel for Plaintiff-Appellant: State of Louisiana, through the Department of Transportation and Development Ricky L. Babin Stephen P. Sheets John A. Harper Sheets, Babin & Associates P. O. Box 204 Gonzales, LA 70707 (225) 647-7900 Counsel for Defendants-Appellees: David Wade Sharon Richardson Wade James W. Wade Suzanne Campbell Wade EZELL, JUDGE.

In this matter, the State of Louisiana through the Department of Transportation

and Development (DOTD), appeals a jury verdict awarding David and James Wade

and their wives $621,584.75 as compensation for the expropriation of their land and

store. For the following reasons, we affirm the jury’s decision in part as amended and

reverse in part.

STATEMENT OF THE CASE

David and James Wade operated D & J Sales, a retail agricultural supply store,

on U.S. Highway 84 in Wildsville, Louisiana, from 1985 until 2005. A large part of

their business was the sale of seed and chemicals to row farmers in Catahoula and

Concordia Parishes. The brothers also sold and repaired trailers and other farm

equipment, sold and repaired all-terrain vehicles, and sold feed and supplies for

livestock, including hay that they produced. The Wades also operated a cattle

farming operation, which they conducted primarily on their family farm, though they

did occasionally use the D & J Sales location to meet customers to deliver cattle.

The property on which D & J Sales operated was an approximately eight-acre

tract of land bounded by U.S. Highway 84 on the North. Over the years, the Wades

had constructed improvements on the land that facilitated their business. They had

a large area between the highway and the retail showroom that allowed them to

display trailers and all-terrain vehicles. They had constructed driveways that enabled

tractor-trailers to deliver and pick up supplies. They had constructed two large

warehouses. One 7,200 square foot warehouse was immediately adjacent to the retail

area and had a concrete floor. It had a large passthrough that allowed large trucks to

drive through and load or unload in the warehouse. It also had a shop area for trailer

repair and ample storage space. Behind the first warehouse was a second 5,760

1 square foot warehouse. This second warehouse had more storage space, as well as

open storage spaces to the east and west of it for storage of hay and other equipment.

Beginning in 1993, DOTD began making public the plans to improve Highway

84. It was apparent from the beginning of the public discussions that DOTD would

build a new bridge over the Black River near Wildsville and that the property on

which D & J Sales operated would be expropriated. After years of discussion and

planning, DOTD filed a petition on June 8, 2005, with the district court expropriating

4.017 acres in the center of the Wades’ eight-acre tract of land. As all the buildings

on the property were within the area expropriated, all of the buildings on the property

had to be demolished. In conformity with the statutes regulating expropriation,

DOTD deposited $176,310.00 in the registry of the court as just compensation for the

expropriation of the Wades’ property. This amount included $159,249.00 for the

value of the land and improvements taken and $17,061.00 in damages. These figures

were based on the market value of the property. On June 20, 2005, an Order of

Expropriation was signed by the trial court.

The Wades filed a petition in reconvention on June 8, 2006, seeking an

increase in the amount of compensation. They argued that they were entitled to the

replacement value of the land and improvements taken by the State. The matter

proceeded to a jury trial to determine the amount of compensation due to the Wades.

Following a trial held on January 18 and 19, 2007, the jury rendered a verdict. In

response to jury interrogatories, the jury found that the amount of compensation due

for the taking of the property was $161,694.00; $25,352.00 for the land and

$136,442.00 for improvements thereon. The jury found that the Wades were owed

severance damages to their remaining property in the amount of $14,516.00. Thus,

the total award of just compensation for the land taken was $176,310.00. Further, the

2 jury found that the Wades proved by a preponderance of the evidence that they were

entitled to the replacement costs for their improvements. The jury awarded

$556,223.75 to the Wades as the replacement cost of the buildings, less depreciation.

The jury also awarded $55,361.00 as the fair market value of land on which to build

the new buildings.

Following the trial, the court ordered counsel for the Wades to prepare a

judgment. DOTD objected to the judgment submitted, on the grounds that it was

required to pay the full amount of both the fair market value of the property taken and

the replacement cost of the property. DOTD argued that should the Wades receive

the higher amount of $621,584.75 for the replacement cost, a credit of $176,310.00

must be given for that which had previously been paid. Following a hearing, the

court found that the Wades should receive $621,584.75, in addition to the amount

previously paid by the State. The trial court issued a judgment on June 21, 2007,

awarding the Wades $621,584.75.

From that decision DOTD now appeals, asserting three assignments of error:

1. The jury erred in awarding the replacement cost of land and buildings, because the award placed the property owners in a better pecuniary position than before the taking, in violation of the constitutional mandate that the property owners be placed in the same pecuniary position as before the taking.

2. The jury erred in awarding the replacement cost of land and buildings because the property taken was not both unique in nature and location and also indispensable to the property owners’ business operations.

3. The trial judge erred in entering a judgment that failed to credit the $176,310.00 deposit that the State already paid to the property owners.

Because we find that a de novo review is required in this matter, we will not address

each assignment of error specifically, but rather generally in the course of our review.

3 DISCUSSION

Under the guidelines of Louisiana Code of Civil Procedure Article 1812, the

trial court is given wide discretion in determining and framing questions to be posed

as special jury interrogatories, and absent some abuse of that discretion, this court

will not set aside those determinations. Grayson v. R.B. Ammon and Assoc., Inc.,

99-2597 (La.App. 1 Cir. 11/3/00), 778 So.2d 1, writs denied, 00-3270, 00-3311 (La.

1/26/01), 782 So.2d 1026, 1027. Article 1812(A) provides, in relevant part:

[T]he court may submit to the jury written questions susceptible of categorical or other brief answer, or may submit written forms of the several special findings which might properly be made under the pleadings and evidence, or may use any other appropriate method of submitting the issues and requiring the written findings thereon. The court shall give to the jury such explanation and instruction concerning the matter submitted as may be necessary to enable the jury to make its findings upon each issue.

“If the trial court submits a verdict form to the jury with misleading or

confusing interrogatories, just as when it omits to instruct the jury on an applicable

essential legal principle, such interrogatories do not adequately set forth the issues to

be decided by the jury and may constitute reversible error.” Bradbury v. Thomas,

98-1678 (La.App. 1 Cir. 9/24/99), 757 So.2d 666, quoting Diez v. Schwegmann Giant

Supermarkets, Inc., 94-1089, p.5 (La.App. 1 Cir. 6/3/95), 657 So.2d 1066, 1069.

When an appellate court finds that legal error in the trial judge’s jury instructions

and/or interrogatories prejudiced one of the parties, the appellate court should set

aside the jury findings and perform a de novo review of the record. Fryson v. Dupre

Transp., Inc., 00-858, 00-859 (La.App. 4 Cir. 8/29/01), 798 So.2d 1012, writs denied,

01-2684, 01-2685 (La. 12/14/01), 804 So.2d 631, 638.

Our close review of the record in this case convinces us that the jury

interrogatories on fair market value and replacement costs were tainted with legal

error. The jury verdict form presented the jury with inherently incorrect and

4 inconsistent choices. Namely, the form was structured in such a way as to allow the

jury to award the Wades both the fair market value of their land and buildings as well

as replacement costs for the same, rather than forcing the jury to decide which was

the correct manner in which to reimburse the Wades. This is clearly reflected in the

fact that after awarding what it deemed to be fair market value for the expropriated

land and improvements thereon, the jury went on to award the Wades replacement

costs for both the land and the buildings, essentially allowing a double recovery.

Accordingly, we find that a de novo review is appropriate in this matter.

Louisiana Constitution Article 1, Section 4, provides that the State may only

take property from a private citizen for a public purpose with just compensation.

Subsection (B)(5) states:

In every expropriation or action to take property pursuant to the provisions of this Section, a party has the right to trial by jury to determine whether the compensation is just, and the owner shall be compensated to the full extent of his loss. Except as otherwise provided in this Constitution, the full extent of loss shall include, but not be limited to, the appraised value of the property and all costs of relocation, inconvenience, and any other damages actually incurred by the owner because of the expropriation.

The primary issue raised in this case is whether just compensation to the Wades

includes replacement cost of the land and improvements expropriated by the State.

The supreme court first recognized replacement cost as an acceptable measure of just

compensation in State, through the Dep’t of Highways v. Constant, 369 So.2d 699

(La.1979). There, the supreme court noted that the measure of damages required in

expropriation cases is “that an owner not only be paid the market value of property

taken and severance damages to his remainder, but also that such an owner be put in

as good a position pecuniarily as he would have been had his property not been

taken.” Id. at 701.

5 In Constant, the supreme court found that the owners of a marina whose

loading area was taken were entitled to the replacement cost of the loading area. The

court determined that the waterfront property had been fortified with bulkheads and

fill to allow heavy equipment to unload and enter the adjacent bayou. The evidence

showed that because of a nearby bridge with a low clearance, this particular location

was unique for allowing heavy equipment to gain access to the bayou and reach

pipeline facilities. The court also found that this was an indispensable part of the

landowners’ marina business. The supreme court announced the following rule for

determining if replacement cost is the appropriate measure of just compensation:

We do not, by these rulings, announce any general principle that replacement cost is always the most appropriate measure of awarding a landowner compensation for the taking of a physical asset used in his business, nor that the depreciation of the former asset should never be considered.

Generally, we assume, the landowners may be compensated fully by other approaches than by awarding them the replacement cost of the improvement taken, especially where (unlike the present instance) the property is not shown to be both unique in nature and location and also indispensable to the conduct of the landowners’ business operations on the site from which a part is taken. Likewise, in the usual situation the depreciated value of the asset taken will have some lessening effect on the award to the landowner, since he may be fully compensated by the actual pecuniary value of the asset taken. For instance, the full compensation constitutionally provided does not require that the owner receive a new building to replace a dilapidated one which is expropriated.

Id. at 706-07.

The Wades argue that they are entitled to recover the replacement cost of their

property because the property taken was “both unique in nature and location and also

indispensable to the conduct of the landowners’ business operations on the site from

which a part is taken.”

We agree with DOTD that the land in and of itself was not unique in nature or

location. The evidence shows that most of the customers of D & J Sales testified that

6 they would continue to patronize the business as long as the new location was

reasonably close to the prior location. Therefore, the jury’s award of $55,361.00 to

purchase new land for a replacement building was incorrect. The record does,

however, support the jury’s awards of $25,352.00 as the fair market value of the land

seized by DOTD and $14,516.00 for severance damages. Those awards are,

accordingly, affirmed.

However, the land alone did not constitute the extent of the seizure by DOTD.

The expropriation included the buildings constructed by the Wades to suit their

particular business needs. Our review of the record indicates that the buildings and

improvements taken were not only unique in nature and location, but also

indispensable to the conduct of the landowners’ business operations.

The property at issue was tailored to meet the needs of D & J Sales. They had

a large area between the highway and the retail showroom that allowed them to

display trailers and all-terrain vehicles. They had constructed two large warehouses

crafted to accommodate the wide range of services and transactions they performed.

One of the warehouses was immediately adjacent to the retail area and had a large

passthrough and a concrete floor to allow large trucks to drive through and load or

unload in the warehouse. It also had a shop area for trailer repair and ample storage

space. The other warehouse not only provided more storage space for feed, seeds,

and chemicals that had been purchased but were not yet needed by the customers, but

also contained special open storage spaces to the east and west of it for storage of

hay. This was necessary for ease of access for both D & J Sales, who baled as well

as sold hay, and their customers for easy loading. These buildings were clearly

unique, as they were singular in nature, and were designed to fit the specific business

plan of D & J Sales. They were indispensable to the conduct of the D & J Sales’

7 business operations and the expropriation by the State made it impossible for the

Wades to continue their business.

Moreover, the record indicated that the only available commercial property in

the area was an old grocery store that was valued at $800,000.00 prior to the

modifications the Wades would need to make in order to have a viable store. This

amount is well beyond the amount the Wades seek to build a new store to their

required specifications. To put it simply, we must choose between awarding the

Wades the replacement costs of these improvements or putting them out of business.

We choose the former. Accordingly, we find that the Wades are entitled to

replacement costs for the loss of these buildings and hereby affirm the finding of the

jury that the replacement costs for the building are $566,223.75, less depreciation.

However, we reverse the jury’s award of $136,442 for the fair market value of the

improvements, in order to prevent the Wades for receiving a double recovery for the

loss.

For the above reasons, we reverse the award of $55,361.00 for replacement

costs of the land and $136,442.00 for the market value of the improvements. We

affirm the jury’s decision awarding the Wades $25,352.00 for the taking of their land,

$14,516.00 for severance damages, and $566,223.75 for the replacement costs of the

improvements, for a total award of $606,091.75. This amount is reduced to

$429,781.75 after allowing a credit for $176,310.00 already paid to the Wades by

DOTD. Costs of this appeal, $2,280.00, are to be split between the parties.

8 STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

STATE OF LOUISIANA, THRU THE DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT

PICKETT, J., dissenting.

I respectfully dissent. The majority falls into error by finding the jury

instructions inadequate. It also errs in its de novo review of the verdict of the jury.

I would reverse the award of replacement costs for the property taken, and limit the

Wades’ recovery to the fair market value of the land and improvements expropriated

by the state.

The supreme court has explicitly told this court that it is not the role of an

appeals court to consider the effect of jury instructions if they are not contested by the

parties on appeal. Guidry v. Dwight Manuel, Inc., 04-2031 (La. 11/17/04), 887 So.2d

456. Furthermore, the record does not show that either party objected to the jury

instructions in the trial court, as required by La.Code Civ.P. art. 1793(C). The

majority cites cases for the proposition that a de novo review is required if a court

finds the jury instructions legally incorrect. But in each of those cases the issue was

squarely presented to the court for review by the appellants. The majority exceeds

the authority of this court by conducting a de novo based on an alleged error that was

neither preserved for review nor assigned as error. I find that the proper review of the

judgment below is under the manifest standard of review.

1 Applying the proper standard, I would reverse the judgment of the trial court.

There is nothing in the record to support a finding that the property was “both unique

in nature and location” as required under State, through the Department of Highways

v. Constant, 369 So.2d 699 (La.1979) (emphasis added). The evidence shows that the

property and the improvements situated thereon suited the business plan of D&J

Sales, and the expropriation by the state made it impossible for the Wades to continue

the business at that location. The Wades failed to prove, however, that the location

of the D&J Sales was so unique as to make continuing the business at another

location impossible. I disagree with the majority’s interpretation of the application

of the rule set forth in Constant.

The facts in Constant are clearly distinguishable from the facts in this case. In

Constant, the location of the loading area for which replacement costs were ordered

was so unique that it was indispensable to the operation of the marina at issue. The

court was, however, careful to limit the applicability of a replacement cost rule to

those situations where the property is “shown to be both unique in nature and location

and also indispensable to the conduct of the landowners’ business operations on the

site from which a part is taken.” Id. at 706 (emphasis added). I do not find evidence

in this record to support a finding that the plaintiffs’ property is so uniquely situated

that it meets the requirements set forth in Constant.

I would find that the Wades were fully compensated under law for the

expropriation of their land when DOTD paid them for the fair market value of the

land and improvements and severance damages as awarded by the jury in response

to interrogatories. I would, therefore, reverse the judgment of the trial court awarding

the Wades the replacement costs of land and improvements.