State, Department of Highways v. McPherson

BARHAM, Justice

(dissenting).

We granted this writ primarily to review the Court of Appeal’s determination that the landowner’s sale of dirt to a contractor for the construction of the highway for which a part of his land had been expropriated was a special benefit which would offset severance damages. I agree with the majority’s conclusion that an expropriatee is not to be charged with a special benefit for the sale of dirt from the remainder of his property for use in the project construction.

However, two serious errors have been committed by the majority. While it has correctly permitted the landowner to retain the $60,000.00 received for the sale of dirt, it has also, according to my review of the record, allowed him to recover severance damages from the State to the north remainder of his property for the depreciation in value caused by the excavations made by him for the removal of dirt. Moreover, the majority has awarded full severance damages to the south remainder on the basis of appraisers’ awards arrived at by ascertaining the difference in market *146 value of the whole before the taking (less the value of the part taken) and the market value of the remainder at the time of the trial; and it has actually, after making this full award, also given severance damages to the same area on a cost-to-cure basis when the defect to be cured had been included in the market value appraisals.

The majority has found that the qualifications of the landowner’s appraisers, Williams and Sevier, were “indeed impressive” and accepted them as the appraisers whose opinions are controlling of the case; however, it has rejected portions of the testimony of these witnesses. In fact, it has accepted the calculations of value of one of these qualified experts on two issues, but not upon another important issue. No mention is made of the contradiction in the testimony of these witnesses. For the purposes of this dissent I will also accept these two witnesses to be well qualified, but I will review all of their testimony.

First, I consider the question of severance damages to the north remainder of the property. Although- the majority and the trial court accepted both of the landowner’s appraisers, Williams and Sevier, over all other expert witnesses in the case to establish market value of the part taken and, as I will show later, to establish the severance damages to the south remainder, for some reason in the determination of severance damages to the north remainder they failed even to mention Williams’ testimony. I cannot understand why the testimony of such a qualified and eminent expert, accepted for all other purposes, has not been given any consideration on this issue.

Sevier testified that the north tract had been heavily affected by the taking and suffered severance damages because a new road and drainage ditch would have to be built in order to afford field access and proper drainage of rain water from the north remainder onto the south remainder. Sevier opined that there was need for a large drainage ditch running parallel to the highway in order to collect all the water from the north remainder and carry it onto the south remainder. An engineer was called to buttress this proposition.

The natural flow of rain water is from north to south, the land has been cultivated so as to lend itself to a north-south water flow, and no change in the north remainder’s topography has been made by the taking. The highway has been simply interposed between it and the south remainder. On the north side of the highway is the usual road ditch for collecting rain water flow, and according to all of the testimony numerous culverts and drainage facilities have been placed under the highway to remove the water collected in the north ditch of the highway by its natural flow to the south. It is admitted by all that even larger culverts were installed in the vicinity of the interchange in place of the small cul *148 verts which once carried water under Louisiana Highway 577 into a ditch on the south remainder, which I will discuss later. The engineer sets forth an expensive plan for constructing roads and major drainage facilities- on the north remainder, yet he admits: that the natural flow of the water is to the south and that culverts will carry the water under the road, and finally seems to conclude that perhaps his expert opinion would contradict that of the highway engineers only to the'extent of requiring two additional culverts under the highway.

The State’s witnesses assigned a special benefit to the remainder because in reclassifying the remainder as commercial property rather than as farmland on account of its location at a major interchange after the taking, the market value was enhanced. They also testified that at least the north remainder would have suffered no damage. But conceding that we are faced with contradictions in regard to severance damage to the north, we have the answer by the landowner himself through the clear, unequivocal testimony of his expert Williams. Williams negates absolutely, positively, and categorically the testimony of the landowner’s other appraiser, Sevier, and the engineer'. According to Williams, the only damage to the north remainder is that caused by the landowner himself when he allowed 12 acres of the north remainder to be’éxcávated'to fulfill his contract for the sale of dirt. Williams’ expert conclusion is that the partial taking in no manner adversely affected the north remainder, and that the north remainder suffered no severance damage. This is the most obvious instance where the majority has used only that evidence which would support the highest award to the landowner and has rejected all other.

I am of the opinion that the north remainder suffered no severance damages.

I move next to a consideration of severance damages to the south remainder, which consists of approximately 112 acres. The trial judge stated: “The defendant has clearly established with the appraisers, the engineer and the contractor, James Gregory, that to use, cultivate, or pasture the south remainder, much money must be spent for bridges, dirt work, and culverts, but I am of the opinion that these losses are adequately included in the awards for severance hereinabove provided.” (Emphasis supplied.) The expression “awards for severance hereinabove provided” refers to the trial court’s award of $22,348.20 as severance damages to the south remainder under the estimate of diminished market value made by Williams and Sevier. It is apparent from the above-quoted holding that the trial court rejected the cost-to-cure method of assigning severance damages in favor of the before-and-after market value approach. Both Williams and Sevier determined the severance damages to the *150 south remainder by arriving at the difference between the market value of the entirety before the taking (less compensation for the part taken) and the market value of the remainder after the taking as that market value was affected by reason of the partial taking.

The majority has allowed double recovery — that is, recovery under both approaches. As the trial court found, the value assigned as the cost to cure had already been considered and included in both appraisers’ after-taking evaluations. In order for an appraiser to make a before- and-after determination of value for severance damages, he must of necessity account for all of the defects in the property caused by the partial taking which have effect upon the market value of the remainder.

The majority has increased the landowner’s own appraisers’ evaluation of total severance damages to the south remainder by 50 per cent. According to the appraisers’ evaluation, the total severance damage to the south remainder, which was adopted by both the trial court and the majority here, was $22,348.20. The majority now adds $12,380.00 for the cost of constructing an expensive highway bridge over a farm ditch in order to give access between two portions of farmland for farm vehicles. Williams stated repeatedly that his appraisal of the after value of the south remainder had included an estimate for the cost of using culverts to bridge the ditch. This realtor-appraiser is qualified to determine for the purpose of market value both the extent to which denial of accessibility devalued the property and the adequacy of culverts as a remedy of the defect for a prospective purchaser.

Sevier on several occasions definitely stated that he had included within'his estimate of a $200.00 per acre loss in válue to the south remainder the need for and the cost of giving access to both portions of that remainder by way of a bridge. I will admit that on redirect examination after a recess the attorney for the landowner tried to rehabilitate Sevier in this regard by seeking a categorical response that the appraiser had not in fact considered the bridge in arriving at his remainder value. This attempt at rehabilitation does not refute that testimony repeated on cross-examination to specific questions relating to the elements which constituted the appraiser’s $200.00 per acre depreciation of the south remainder.

On cross-examination, knowing that he had to give facts to justify his expert .opinion of the $200.00 per acre depreciation, Sevier in careful repetitive response to precise questions began to account for the defects which he considered depreciated the south remainder. He first testified: “Well, Seventy-five Dollars ($75.00) for the loss of cultivatable land, and the problems in farming, Seventy-five Dollars *152 ($75.0,0) for his drainage problems, for his bridge and his access.” (Emphasis supplied.) Realizing that the $75.00 values would not total $200.00 per acre depreciation, Sevier immediately thereafter stated these values should have been $100.00, and then in answer to the question “How about the bridge?”, he answered: “Well, I really am not qualified to say what a bridge would cost, but in my estimation, that would be included in the hundred dollars for the overpass et cetera.”

Appraisers who fix market value do not have to estimate cost to cure. In fact, they should not, except as a check upon their kppraisal of market value. They should, as Sevier has just indicated, estimate the depreciation factor of the non-access upon the market value. Appraisers do not have to defer to experts on cost to cure. The market-value approach used by Williams and Sevier should not be supplemented by any estimates of cost to cure.

It is very clear, as the trial court concluded, that Sevier included in his appraisal of the after value of the south remainder the lack of access between the two portions of that remainder, and that this lack of access was in fact a considerable devaluating factor in his computation of that value. As previously noted, Williams’ appraisal estimate included the depreciating factor of non-access. The trial court was perfectly correct in deciding to disregard the testimony of the engineer and the bridge-builder of the cost to make the particular improvements they testified were necessary for the restoration of the south remainder to its before-taking condition.

The appraisers had already determined the market value difference between the before-taking condition and the after-taking condition caused by the partial taking. The estimates by the engineer and the contractor of cost of restoration, of cure, were merely repetitive of the absence of access, the need for drainage, and the other devaluating factors which had already been considered and awarded by the two appraisers. The trial court accepted, and we should accept, the best approach for determining severance damages — that is, the difference in the market value before the taking and the market value of the remainder after the taking, as reflected by the damage caused by the partial taking. That approach fixes the severance damages at $22,348.20. Certainly we cannot cumulate the value under that approach with the value under a cost-to-cure approach.

I conclude that the north remainder suffered no severance damages, only damage which the landowner visited upon himself advisedly jn exchange for the price he received for the dirt which was removed from his property. Just as he carinot have the dirt sale charged against him as a special benefit, neither can he charge the damage suffered by the dirt removal to the State as an item of severance damages.

*154 I agree that the south remainder suffered severance damages because of the excess water which will collect and pond in certain places, the unusual shape which will make impossible ordinary farming methods, difficulty of access between it and the main farm to the north, and lack of access between the two portions of the south remainder. However, like the trial court, I accept the landowner’s appraisers’ evaluation of severance damages of $22,348.20. I must reject the special cost to cure, the bridge construction on the south remainder, as having already been included in the award of Sevier and Williams under their before-and-after market value approach. The majority’s award should be reduced by $7511.25 and $12,380.00, or a total of $19,891.25v

For these reasons I respectfully dissent.