Opinion
No. 527I.
January 29, 1962. Rehearing Denied March 7, 1962. Certiorari Granted March 28, 1962.
Action to expropriate a home for highway purposes. From the award of the 19th Judicial District Court, Parish of East Baton Rouge, Fred S. LeBlanc, J., the State appealed. The Court of Appeal, Lottinger, J., held that the evidence established that land and improvements had value of $24,550, and that expenses of the landowner incurred for experts preparatory to trial were properly handled as an item of damages.
Affirmed.
Landry, J., dissented in part.
D. Ross Banister and Brunswig Sholars, Baton Rouge, for appellant.
Breazeale, Sachse Wilson by Maurice J. Wilson, Baton Rouge, for appellee.
Before LOTTINGER, LANDRY and REID, JJ.
This is an expropriation suit which involves the "total taking" of a home located in the 900 block of Convention Street in the City of Baton Rouge. At the time of the signing of the order of expropriation (September 27, 1957), the State deposited in the Registry of the Court the amount of $17,300.00, representing its estimate of just compensation. The defendant filed a timely answer wherein he prayed that the value of his property be fixed at $27,500.00 and that he be awarded $10,200.00 representing the difference between the State's deposit and his appraisal, together with the costs attendant to defending the action.
The lower court fixed the market value of the property at $24,500.00 and awarded the defendant $7,200.00 with legal interest from September 27, 1957, until paid. The trial court also awarded $450.00 and $325.00 as fees for appraisal work of L. Heidel Brown and Verdie Reece Perkins, respectively, together with legal interest on said amounts from date of judicial demand until paid. In addition, $50.00 was awarded these experts as expert witness fees for testifying, which sums were taxed as costs. The State has appealed. The defendant has neither appealed nor answered the appeal.
The trial judge rendered written reasons for judgment which read in part as follows:
"The first expert called by the defendant was Mr. L. Heidel Brown, a local realtor well known to the court. He stated that he had been engaged in the real estate business since 1932. Mr. Brown gave a rather comprehensive description of the house and expressed the opinion that it was 'a luxury type residence'. See Tr. p. 27). The property was being put to its highest and best use in his estimation. He characterized the locale of defendant's home as follows, to-wit: 'It was a well established, you might even say prestige, residential block.'
"This witness in applying the market data, or comparable approach, used two comparables, which he said he considered particularly applicable, both because of their proximity to the subject property and the nearness of the time element. The first, he explained, was the sale to Mrs. Lillie M.K. Hatcher of a full lot located at the southwest corner of Convention and North Ninth Streets, the sale price being the sum of $30,000.00. Immediately after this purchase the house located on the lot was demolished. (a full description of this property is set forth on page 74 of the transcript). This expert gave an adjusted front foot valuation of $434.00. He explained that this was only one comparable and for that reason he did not use a figure that high on the subject property. The other comparable he used was the sale from the Denny Heirs to Jimmy R. Major and George Paulat of a lot at the northwest corner of Convention and North Ninth Streets. (This property is described on page 73 of the transcript). In considering this property he made an adjustment to relate it to the subject property of $314.00 a front foot. This witness observed: 'Well, if you average the $434.00 front foot value and adjust it as established by the Hatcher sale with the $314.00 front foot evaluation, adjusted, as established by the Denny sale, you come up with an average front foot value of $374.00 a front foot.' However, he did not use this figure. He scaled it down to $300.00 a front foot for the subject property. Inasmuch as the subject property had a frontage of 40 feet, this made the value of the lot $12,000.00.
"In arriving at the cost of the improvements on the subject property he used a method calling for a figure less than replacement cost, as he did not think it was applicable. He explained his method in detail as set forth on pages 32 and 33 of the transcript. His adjusted valuation of the residence was $11,124.00. To this figure he added $500.00 for the garage, patio, and planting. These figures added to the sum of $12,000.00, the value he placed on the lot, gave him a total of $23,624.00, which he said he considered to be the fair market value of the subject property as of September 27, 1957, the date of the taking. (See Tr. p. 33). Mr. Brown testified he did not use the income approach. He gives his reasons for not doing so on page 45 of the transcript.
"The other expert placed on the stand by the defendant was Mr. Verdie Reece Perkins, a realtor, also well known to the Court. This gentleman had been engaged in the real estate business in Baton Rouge since 1936. It was stipulated by the parties to this suit (Tr. 67) 'That if questions were asked of Mr. Perkins which were asked of Mr. Brown regarding the Jones home, the type of construction, state of repair of the home, and the suitability for the purposes for which it was being used, that he would testify in response to such questions the same as did Mr. Brown'. Mr. Perkins appraised the land at $12,000.00, after using the Hatcher sale and the Denny sale (the Jimmie R. Major property) as comparables and making adjustments. In arriving at that value, he testified he used the same general approach or formula in concluding that the land had a value of $300.00 a front foot that Mr. Brown had used.
"This witness used the replacement approach in determining the value of the house. Like Mr. Brown he found 2224 square feet in the house, which he figured at $7.75 per square foot, less 30% depreciation, which gave him a net figure of $12,065.00 for the house. He valued the garage at $250.00, the patio at $100.00, the landscaping and beautification of the yard at $250.00. His total appraisal for land and improvements on the subject property was $24,665.00. (Tr. p. 68-69).
"Mr. Perkins was asked whether he considered, in making his appraisal, any other purpose for which the subject property might be used, other than that of a home, and he answered in the negative. 'No, sir', he replied, 'I think it was used as a sale, it was saleable in my opinion as a home, and I used that approach in arriving at my opinion'.
"The plaintiff placed only one expert witness on the stand to testify as to the fair market value of the subject property. This witness was Mr. Lowell Roseman, a local realtor well known to the court. It was stipulated, however, that the other appraiser employed by the Highway Department, namely, Mr. Bradley C. Mittendorf was ill and unable to be present in court and that if he were present his testimony would be the same as that of Mr. Lowell Roseman. The stipulation included an acknowledgment by counsel for the defendant that because of the qualifications, training and background of Mr. Mittendorf he would meet the requirements of this court to testify as an expert witness. (Tr. 3).
"Mr. Roseman stated that he 'was reared in the real estate and lumber business, and have been an active realtor for twelve years.'
"This witness testified that he used the market data approach and the replacement, less depreciation, approach, in determining the fair market value of the subject property. He expressed the opinion that the income approach was not applicable to this property and that it would not be fair to treat it from the income approach.
"In arriving at the replacement cost Mr. Roseman used 1063 square feet for the first floor of the dwelling at $10.00 a square foot; 1063 square feet for the second floor at $6.00 a square foot, 208 square feet for the porch at $3.00 a square foot, making a total valuation of $17,623.00. This amount was discounted by him at the rate of 50% for depreciation, which gave a net figure of $8816.00. To this amount he added $300.00 for the garage and $150.00 for the concrete patio, making a total of $9,266.00. He rounded his out at $9300.00 as the value he fixed for the improvements. (Tr. 88).
"Mr. Roseman placed a value of $8,000.00 on the lot, based on $200.00 a front foot. This figure added to the value arrived at by him for the improvements, made a total of $17,300.00 which was his appraisal value of the subject property. (Tr. 88). He used the Jimmie Major (or Denny sale) as one of his comparables. (This sale was one of the two sales used by the experts of the defendant). He said he wished to call the Hatcher (the other comparable used by defendant's experts) to the attention of the court, but that he attached very little weight to the sale price of $30,000.00 because Mr. Hatcher told him that he had paid just about twice what the property was worth, that Mrs. Hatcher wanted to move to town from the country, and that she wanted that particular lot. (The Hatchers were not produced as witnesses, although to the knowledge of the court they both resided in the parish and were well and able to come to court had they been so ordered by court process at the instance of the plaintiff). Mr. Roseman testified that he placed a value of $10,900.00 on the house located on the Major property. He admitted he inspected only the first floor of this house, that he did not know how many square feet the house contained. He placed this valuation on the dwelling on the Major property as contrasted to the value of $9300.00 which he fixed for the improvements on the subject property. (Tr. 102). On cross-examination he admitted that the Denny (Major) property 'did not compare in appearance to the Jones property. The Jones property has been a well-kept piece of property and had a lived in appearance like a home, whereas the other was a rooming house type'.
"Mr. Roseman used as his second comparable a two-story house located at No. 2174 Wisteria Street, admittedly twenty-two blocks from the subject property. The house rests on a corner lot, as Mr. Roseman stated, but he did not mention the fact that the street which runs along the east side of the house is a narrow one without sidewalks and the side of the house is right on the street. This circumstance, in the opinion of the court, detracts from its desirability as a home and affects its value adversely to a considerable degree.
"The third comparable selected by this expert was located at No. 637 St. Ferdinand Street, a distance of twelve blocks from the subject property. It was a two-story house used as three apartments. This property was in an area inferior to that of the plaintiff's property, as the witness admitted. When asked why he chose to use this property, which was so far removed from that of the subject property, Mr. Roseman's reply was: 'I felt that the house was somewhat comparable, being a two story house in good condition'. This property is located next door to a filling station.
"In my opinion the court is justified in accepting the value of $12,000.00 placed on the land by the landowner's two expert witnesses, Messrs. Brown and Perkins. This sum was based on $300.00 per front foot. The two experts for the Highway Department, Messrs. Mittendorf and Roseman place a valuation of $8000.00 on the land, based on $200.00 per front foot. This lower value was undoubtedly due to the fact that they both failed and refused to use the Hatcher sale as a comparable. The price that the Hatcher's paid ($30,000.00) was for the land alone, as the improvements thereon were salvaged without profit to them. It is the decision of this court that that sale represented the market value, or the price which would be agreed upon at the voluntary sale between a willing seller and a willing purchaser, taking into consideration all available uses to which the land might be put. 'State through Department of Highways v. Ragusa, 234 La. 51, 99 So.2d 20, 21 and cases cited therein. See also comprehensive Comment, 'Expropriation — a Survey of Louisiana Law, 18 La.Law Rev. 509 (1958) at 538 et seq.' This Hatcher sale was from a willing seller to a willing purchaser.
"With regard to the improvements on the subject property the court feels that the valuation placed thereon by the experts for the Highway Department is too low. Mr. Roseman in figuring the replacement cost less depreciation of the house used a depreciation of 50%, although he admitted the house was in very good condition. By way of stipulation, Mr. Mittendorf used the same percentage of depreciation. On the other hand, the two experts for the landowner used a depreciation of only 30% in figuring the replacement cost less depreciation. In view of the testimony on this point and the personal knowledge of the court as to the condition of the house on the subject property and after personally viewing the comparables, the court is of the opinion that the value of the house at the time of the taking was $12,000.00. To this sum must be added the sum of $500.00 to cover the cost of the garage, patio and landscaping. These figures for the land, the house, garage and patio total the sum of $24,500.00, which amount in the opinion of the court was the true market value of the entire property at the time of the expropriation." (Tr. pages 44-50).
[1, 2] We agree with the Trial Judge's findings that the comparables used by defendant's experts, covering properties very close to the subject property, are better guides in determining value than those relied on by the State and find, therefore, that his conclusions concerning value are correct.
There remains the question of whether the expenses of the landowner incurred for experts preparatory to trial should be handled as an item of costs or as damages, as held by the trial judge. In State, Through Department of Highways v. Barineau, 225 La. 341, 72 So.2d 869, the Supreme Court commented as follows:
"To hold that the owner must pay his own costs in resisting attempts to take his land without his consent would nullify to a certain extent the constitutional guarantee of just and adequate compensation, Art. 1, Sec. 2, La.Const. of 1921, which 'clearly contemplates that the class of expenses usually taxed as costs should be included as an element of the owner's damage * * *.' Westwego Canal Term. Co. v. Louisiana Highway Comm., 200 La. 990, 9 So.2d 389, 392; see, also, Harrison v. Louisiana Highway Commission, 202 La. 345, 11 So.2d 612; Gulf Shipside Storage Corp. v. Thames, 217 La. 128, 46 So.2d 62." (Emphasis supplied).
From the above and foregoing it would appear that the holding of the trial judge in this respect was correct.
There is no manifest error in the judgment appealed from and the same is therefore affirmed.
Judgment affirmed.
Although I heartily concur in that portion of the majority opinion rendered herein fixing the compensation due defendant landowner in the sum of $24,500, and establishing the fees of the expert witnesses Brown and Perkins (for testifying before the Court) in the sum of $50.00 each and taxing said fees as costs herein, for the reasons hereinafter set forth I most respectfully dissent from that portion of the judgment assessing the expenses of defendant's appraisers Brown and Perkins (in the amounts of $450.00 and $325.00, respectively), against plaintiff as "damages" and allowing defendant interest thereon from date of judicial demand, until paid.
In awarding defendant landowner recovery of the expenses incurred by his appraisers in preparation of giving their testimony in Court as elements or items of damages, the majority opinion is obviously and unquestionably predicated solely upon the language contained in State, Through Department of Highways v. Barineau, 225 La. 341, 72 So.2d 869, which my esteemed colleagues deem decisive of the issue.
I most respectfully contend, however, that in so doing my learned brothers have been led into error by what I consider to be the inadvertent use of the word "damages" in State v. Barineau, supra.
For purposes of the present discussion, I see no need to set forth the cited language appearing in the majority opinion. It suffices to say, however, that the views stated on the subject by the Supreme Court in the Barineau case, were expressly predicated upon Westwego Canal Terminal Co. v. Louisiana Highway Commission, 200 La. 990, 9 So.2d 389; Harrison v. Louisiana Highway Commission, 202 La. 345, 11 So.2d 612, and Gulf Shipside Storage Corp. v. Thames, 217 La. 128, 46 So.2d 62.
Predicated upon the applicable constitutional provision which guarantees payment of just and adequate compensation for property taken for public purposes, the cases in our jurisprudence are legion to the effect that in expropriation proceedings the landowner is entitled to the fair market value of property expropriated (compensation for land actually taken) and "damages" consisting of "severance damages" the measure of which is the diminution in value of remaining property occasioned by the taking. I believe that a reading of the innumerable decisions on the subject matter will support the position that in expropriation proceedings the amount paid the landowner for property condemned is customarily referred to as "just and adequate compensation" whereas the term "damages" is applied exclusively to awards made to property owners for diminution in value of property remaining but nevertheless reduced in value as a result of the expropriation.
Although the Barineau case, supra, does apparently classify the expenses of the landowner's appraisers in preparing for trial as in the nature of "damages" the authorities therein relied upon do not, in my humble judgment, support the conclusion.
In Westwego Canal and Terminal Co. v. Louisiana Highway Commission, 200 La. 990, 9 So.2d 389, the landowner filed a rule to tax as costs certain fees and expenses paid or incurred to expert witnesses in defense of an expropriation action. In dealing with the subject matter, the Supreme Court stated:
"The costs of the clerk, sheriff and witnesses' fees are taxable. Rev.Stat. 1870, § 750. Expenses incurred for surveys, maps and plats necessary to enable the party to make out his case are taxable as costs. Rev.Stat.1870, § 750; Boagni v. Police Jury, La. App., 145 So. 781, citing Bentley v. Fischer Lumber [ Mfg.] Co., 51 La. Ann. 451, 25 So. 262. The fees and expenses of experts summoned and used by the successful litigant may be taxed as costs. Act No. 19 of 1884; Levy v. McWilliams, 13 La. App. 444, 127 So. 761, 13 La. App. 444, 129 So. 170, citing Suthon v. Laws, 132 La. 207, 61 So. 204. Therefore, the Highway Commission is liable for all the costs herein claimed by the Westwego Canal Terminal Company.
* * * * * *
"For the reasons assigned, the judgment appealed from is annulled so far as it denied the Westwego Canal Terminal Company recovery for $33.67, court costs; $191.80 paid Frank H. Waddill for expert fees and expenses; $3.36 for the costs of blue prints; and condemning the Highway Commission to pay legal interest to be calculated 'from the date of signing of the judgment.'
"It is further ordered that the judgment be amended so as to decree that the Louisiana Highway Commission be condemned to pay the following additional expenses as costs, to-wit: court costs, $33.67; expert fees and expenses of Frank H. Waddill, $191.80; costs of blueprints, $3.36." (Emphasis supplied)
Gulf Shipside Storage Corporation v. Thames, 217 La. 128, 46 So.2d 62, also cited in support of the language employed in the Barineau case did not involve an expropriation proceeding but concerned only the effective date of Act 291 of 1948 which made certain changes in Act 97 of 1936, known as the Louisiana Unemployment Compensation Law. The decision simply holds that since the case was not an expropriation proceeding, plaintiff therein was not entitled to judgment against defendant (a state agency) for costs.
The last case cited by the Supreme Court in State v. Barineau, supra, is that of Harrison v. Louisiana Highway Commission, 202 La. 345, 11 So.2d 612. The Harrison case does not hold that costs incurred by a landowner in defense of an expropriation proceeding are recoverable as "damages". It merely holds (upon authority of Westwego Canal Terminal Co. v. Louisiana Highway Commission) that in an expropriation proceeding the condemning authority is responsible to the successful property owner for all costs incurred by the owner in proving his case. I find nothing which would indicate an intention to classify the owner's expenses as "damages" instead of "costs".
In view of the express classification of such items of owner expense as "costs" in the Westwego Canal and Terminal case, the Supreme Court could not, in my judgment, categorize such items as "damages" in the Barineau case without expressly overruling the former authority. I find no language in the Barineau case which even remotely suggests an intention to overrule the Westwego Canal and Terminal Company case.
As I view the several decisions, the import of the language used in the Barineau case is to the effect that whereas the expenses of the property owner's appraisers are recoverable as costs, they are nevertheless in the "nature of damages" as the latter term is customarily and ordinarily used considering that denial of their recovery would, to the extent thereof, deprive the landowner of the just and adequate compensation to which he is entitled for land taken or severance damages due for land not actually taken but diminished in value by virtue of the erection or construction of the facility which gave rise to the expropriation proceeding. The net effect of the Barineau case (insofar as concerns the issue presently under consideration) is simply that in an expropriation proceeding the property owner is entitled to recover THE NET MARKET VALUE OF PROPERTY TAKEN AND THE NET WORTH OF SEVERANCE DAMAGES PROVEN. The Barineau case further points out (and I believe correctly so) that if the landowner is denied recovery of such items he does not receive the full measure of recovery guaranteed by our state constitution.
If such expenses are recoverable as "damages" it necessarily follows that the expropriating agency is liable for interest thereon. I do not detect in the Barineau case or any other decision language indicative of intent to hold that the landowner is due interest on items of cost.