Opinion
NO. 2016-CA-0096 C/W: NO. 2016-CA-0262 C/W: NO. 2016-CA-0331
09-12-2018
ST. BERNARD PORT, HARBOR & TERMINAL DISTRICT v. VIOLET DOCK PORT, INC., LLC CONSOLIDATED WITH: ST. BERNARD PORT, HARBOR & TERMINAL DISTRICT v. VIOLET DOCK PORT INC., LLC
JENKINS, J., DISSENTS
For the reasons that follow, I disagree with the foundation of the majority's conclusion that the "highest and best use" of the Property is for layberthing, rather than use as a multimodal bulk cargo facility. This decision, obviously, greatly impacts the valuation of the Property. My concern is not necessarily about the result reached on that issue, but about the shortfalls in reaching that result.
On writ of certiorari, the Supreme Court found that the trial court legally erred by using the incorrect standard for evaluation of the experts' valuation testimony, where it decided that it did not have the discretion to arrive at a valuation somewhere "in between" the two expert opinions, i.e., "split the baby." St. Bernard Port, Harbor & Terminal Dist. v. Violet Dock Port, Inc., 17-0434, p. 15 (La. 1/30/18), 239 So.3d 243, 254. According to the Supreme Court, a trier of fact is not required to make a binary choice and accept one side's testimony in its entirety, but is instead empowered to weigh strengths and weaknesses of expert testimony. Id. The Court also found that the trial court compounded this error by failing to identify the error and conduct a de novo review. Id.
The Supreme Court reversed and remanded the matter to this court solely for the purpose of fixing the amount of just compensation based on the evidence in the entire record and in accordance with the principles set forth in its opinion. In its remand, the Court stated "we prefer that the Court of Appeal perform the first appellate review of the entire record under the correct rule of law." Id., 17-0434. p. 16, 239 So.3d at 255. For the reasons outlined below, I find the majority does not accomplish this directive.
In State v. Bitterwolf, 415 So.2d 196 (La. 1982), the Supreme Court explained that the legislature and the courts have developed rules which accept the fair market value of the property as a relevant consideration in determining just compensation for purposes of expropriation. Fair market value has consistently been defined as the price a buyer is willing to pay after considering all of the uses that the property may be put to where such uses are not speculative, remote or contrary to law. West Jefferson Levee Dist. v. Coast Quality, 93-1718 (La.5/23/94), 640 So.2d 1258. In determining fair market value of the land taken in an expropriation case, consideration is to be given to the most profitable use to which the land can be put by reason of its location, topography, and adaptability. City of Shreveport v. Abe Meyer Corp., 219 La. 128, 52 So.2d 445, 447 (1951), affirmed as amended, 223 La. 1079, 67 So.2d 732 (1953); State, Dep't of Highways v. Rapier, 246 La. 150, 164 So.2d 280 (1964). This theory, of taking the latter factors into consideration, is commonly known as the "highest and best use" doctrine. The highest and best use of land in expropriation cases involves several factors. Factors which may be considered include:
• market demand;State, through the Dept. of Highways v. Constant, 369 So.2d 699, 702 (La. 1979).
• proximity to areas already developed in a compatible manner with the intended use;
• economic development in the area;
• specific plans of business and individuals, including action already taken to develop the land for that use;
• scarcity of the land available for that use; negotiations with buyers interested in the property taken for a particular use; absence of offers to buy the property made by the buyers who put it to the use urged; and
• the use to which the property was being put at the time of the taking.
It is "well established" that the current use of the property is presumed to be the highest and best use and the burden of overcoming that presumption by proving the existence of a different highest and best use based on a potential, future use is on the landowner. Exxon Pipeline, 00-2535, 00-2559, p.8, (La. 5/15/01), 788 So.2d 1154, 1160. Where a landowner overcomes the presumption, the landowner is entitled to compensation based on a potential use of the property, even though the property is not being so utilized at the time of the taking, provided he can show it is reasonably probable the property could be put to this use in the "not too distant future." West Jefferson Levee Dist., 640 So.2d at 1273.
In this case, the use to which Violet was putting the Property at the time of the expropriation — layberthing with a limited cargo operation — is presumed to be the Property's highest and best use. Violet, however, may overcome this presumption by demonstrating, by a preponderance of the evidence, that the property could be used in a different, more valuable way, that the potential use is not speculative, and that it could be undertaken in the "not too distant future." Exxon Pipeline, 00-2535, 00-2559, pp. 8-9, 788 So.2d at 1160-61; West Jefferson Levee Dist., 640 So.2d at 1273.
The majority's failure to provide a complete analysis of the "highest and best use" gives me pause. As stated above, the current value of the Property is presumed to be the highest and best use, and the burden of overcoming that presumption by proving the existence of a different highest and best use based on a potential, future use is on Violet, the landowner. The majority fails to provide any substantive discussion of Violet's expert's analysis of the factors supporting the "highest and best use" of the Property as a multimodal bulk cargo facility, so as to satisfy Violet's burden. Instead, the majority addresses only the conclusions of the Port's expert that the attributes of the Property were "problematic," and that Violet's experts used "extraordinary assumptions" and a "flawed" rationale. There is no express finding that Violet failed to overcome the presumption, and why.
Although I do not, at this time, challenge the majority's conclusion with respect to the "highest and best use" of the Property, I cannot support it, as I find the majority's analysis of this issue provides an incomplete roadmap for reaching its decision.
I respectfully dissent.