State v. Chang

436 P.2d 3, 50 Haw. 195, 1967 Haw. LEXIS 86
CourtHawaii Supreme Court
DecidedDecember 29, 1967
Docket4586
StatusPublished
Cited by17 cases

This text of 436 P.2d 3 (State v. Chang) is published on Counsel Stack Legal Research, covering Hawaii Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Chang, 436 P.2d 3, 50 Haw. 195, 1967 Haw. LEXIS 86 (haw 1967).

Opinion

OPINION OF THE COURT BY

RICHARDSON, C.J.

The State of Hawaii, plaintiff-appellant, cross-appellee, condemned a vacant 31,683 square foot parcel of land owned by the defendants-appellees, cross-appellants on July 17, 1961. The parcel is located at the mauka-Waikiki (northeast) comer of Hotel and Punchbowl Streets. This court upheld a lower court determination that the condemnation was for a public purpose, State v. Chang, 46 Haw. 279, 378 P.2d 882.

Subsequently, the first trial to determine the fair market value of defendants’ land began on August 1, 1965. The jury returned a verdict of $866,400. After entry of judgment on November 1, 1965, the trial court granted the State’s motion for a new trial. The trial court denied the defendants’ motion for an interlocutory appeal. The second trial began on February 14, 1966. The *196 jury returned a verdict of $772,000 and the judgment thereon was filed March 2, 1966. The State again moved for a new trial, but the trial court denied the motion. The State appealed from the judgment in the second trial, and the defendants cross-appealed from the granting of the State’s motion for a new trial following the first trial.

The trial court erred in granting the State’s motion for a new trial following the first trial. We remand the case for entry of judgment pursuant to the jury verdict in the first trial. It is unnecessary to consider the State’s appeal from the judgment in the second trial. The following discussion refers only to the first trial.

The State called two expert witnesses, real estate appraisers Yoshio Hanao and John Hulten, to testify as to the fair market value of defendants’ property. Both witnesses used the comparative method in determining the fair market value. They selected several properties which in their opinion were comparable and could be related to the defendants’ land. These comparable properties had been leased or sold in the years preceding or following the condemnation or valuation date, July 17, 1961.

Mr. Hanao first subtracted from the actual prices of the lease of sale the estimated value of any buildings existing on the properties. Where property was leased rather than sold, the annual net income was capitalized at a certain percentage to find the value of the land. The State’s witnesses made allowances for the differences between the defendants’ land and the comparable properties in time, location, shape and size. Mr. Hanao arrived at the round figure of $17 per square foot. After deducting a certain amount in depreciation in value due to a utility easement, Mr. Hanao concluded that the fair market value was $536,300. Using the same method, Mr. Hulten concluded that the fair market value was $550,000.

Dr. Richard Chang, one of the owners of the condemned land, placed its value at $33.50 per square foot or $1,060,000 for the entire parcel. Mr. Y. T. Lum, defendants’ expert witness and real estate appraiser, also used the comparative method starting with the prices of actual sales and leases of comparable properties. *197 He considered environmental and economic influences on the land market and specifically updated the value of his comparable properties to the valuation date.

Mr. Lum obtained a range of values from a low of $16 to $18 to a high of $40 to $50 per square foot for the comparable properties and then related the values to the defendants’ land. His opinion of the fair market value of the defendants’ land, taking into account the costs to prepare the land for its highest and best use as a multi-story medical or professional office building was $866,400. Mr. Lum testified that the defendants’ expenditures for architect’s, engineer’s and attorney’s fees and mortgage finance negotiations in preparing the land for use as a professional office building increased the value of the land by $66,400.

During its deliberations, the jury submitted to the trial court the following question in writing:

“The jury would like to clarify one point regarding the figures used by the State as comparison. Were the figures used prices paid at time of sale, or were they updated to July 17, 1961?”

After argument by counsel, the court answered:

“The figures on the State’s map in evidence were prices paid at the time of the sale or lease and were not up-dated to July 17, 1961.”

The jury returned a verdict of $866,400. The trial court granted the State’s motion for a new trial on the grounds that the jury erred when it separately added the expenses for architect’s, engineer’s and attorney’s fees and mortgage finance negotiations to the market value of the land; that its answer to the jury’s question concerning the figures on the State’s maps misled the jury and had a prejudicial effect on the State’s case; that the verdict was excessive and not supported by the evidence; and that a new trial was necessary to prevent a miscarriage of justice. Defendants’ specifications of error deny the validity of the order to grant a new trial based on the above grounds.

*198 1. The Addition of Fees and Costs to the Market Value of the Defendants’ Land.

The State relies on Hawaii Housing Authority v. Rodrigues, 43 Haw. 195, in support of its argument that the trial court erred in allowing evidence of the defendants’ expenditures of costs and fees to prepare the land for a multi-story building. In Rodrigues the parties had stipulated the fair market value of the condemned land. To that value the trial court added the expenses incurred by the landowner in connection with a proposed residential subdivision of the land and the anticipated profits in the event the subdivision was completed. On appeal, we reversed on the ground that such items were too uncertain and conjectural to be considered.

The State contends in this case that the costs were itemized separately and then added to the fair market value. The State’s reliance on Rodrigues is misplaced. In this case the expenditures were presented to show that there was an enhancement of the value of the land. Mr. Lum stated that the fees and costs were contributory to the fair market value. Because of such expenditures, the feasibility of constructing a multi-story building on the land was established and a buyer would no longer have had to wait for such a study to be made.

We find no support in the record for the State’s contention that the jury separately determined the fair market value of the land and then added to it the feasibility study costs. Furthermore, we note that the trend of authority is to permit consideration of such costs in determining fair market value. See Cade v. United States, 213 F.2d 138 (4th Cir. 1954); United States v. 25.406 Acres of Land, 172 F.2d 990 (2d Cir. 1949), Cert. denied, 337 U.S. 931; and United States v. Wise,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State v. Namauu
Hawaii Intermediate Court of Appeals, 2025
Stratis v. Pacific Ins. Co., Ltd.
739 P.2d 251 (Hawaii Intermediate Court of Appeals, 1987)
Mahoney v. Mitchell
668 P.2d 35 (Hawaii Intermediate Court of Appeals, 1983)
County of Hawaii v. Leeb
618 P.2d 1154 (Hawaii Intermediate Court of Appeals, 1980)
Ott v. Samaritan Health Service
622 P.2d 44 (Court of Appeals of Arizona, 1980)
Cafarella v. Char
615 P.2d 763 (Hawaii Intermediate Court of Appeals, 1980)
Midkiff v. Tom
471 F. Supp. 871 (D. Hawaii, 1979)
J.W.A. Realty, Inc. v. City of Cranston
399 A.2d 479 (Supreme Court of Rhode Island, 1979)
Harkins v. Ikeda
557 P.2d 788 (Hawaii Supreme Court, 1976)
Dawson v. Olson
543 P.2d 499 (Idaho Supreme Court, 1975)
City and County of Honolulu v. Market Place, Ltd.
517 P.2d 7 (Hawaii Supreme Court, 1973)
City & County of Honolulu v. BONDED INVEST. CO., LTD.
507 P.2d 1084 (Hawaii Supreme Court, 1973)
State v. WILLETT HOLDING COMPANY
298 A.2d 69 (Supreme Court of New Jersey, 1972)
State v. Davis
499 P.2d 663 (Hawaii Supreme Court, 1972)

Cite This Page — Counsel Stack

Bluebook (online)
436 P.2d 3, 50 Haw. 195, 1967 Haw. LEXIS 86, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-chang-haw-1967.