State Highway Comm N. v. Renfro

No, 12172

I N THE SUPREME C U T O THE STATE O MONTANA OR F F

THE STATE HIGHWAY COMMISSION e t a l , ,

P l a i n t i f f and Appellant, EDMOND W . RENFRO e t a l e ,

Defendants and Respondents,

Appeal from: District Court of t h e F i f t h J u d i c i a l D i s t r i c t , Honorable Frank E, B l a i r , Judge p r e s i d i n g ,

Counsel of Record:

For Appellant :

Daniel J, S u l l i v a n argued and Donald A. Douglas, appeared, Highway Legal Dept ,, Helena, Montana.

For Respondents:

C o r e t t e , Smith and Dean, B u t t e , Montana, Kendrick Smith argued, B u t t e , Montana.

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Submitted: September 21, 1972

Decided: JAN 1 9 1973 Filed : JAR ,t. 3 13/3

Mr. J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e Court.

This i s a n appeal from a judgment f o r t h e defendants on a j u r y v e r d i c t i n t h e d i s t r i c t c o u r t of Beaverhead County i n a condemnation proceeding brought by t h e s t a t e highway commission, The appeal q u e s t i o n s o n l y t h e award of $86,000 f o r d e p r e c i a t i o n i n market v a l u e of t h e remainder of defendants ' land by reason of t h e t a k i n g and c o n s t r u c t i o n of t h e highway. N question i s o r a i s e d by t h e highway commission i n t h i s a p p e a l t o t h e award of $29,000 a s t h e market v a l u e of d e f e n d a n t s ' land a c t u a l l y taken f o r t h e highway r i g h t of way. From t h e testimony a t t r i a l , i t appears t h e ranch p r o p e r t y l o c a t e d i n Reaverhead County n e a r Red Rock, Montana, c o n s i s t e d o f t h r e e s e p a r a t e t r a c t s of land which were n o t p h y s i c a l l y ad-

j o i n i n g , b u t which w e r e connected by t h e B e l l Canyon road. The t o t a l acreage of t h e r a n c h , i n c l u d i n g deeded and l e a s e d l a n d , w a s approximately 3,934 a c r e s . Two of t h e t r a c t s c o n s i s t of deeded l a n d , t o g e t h e r w i t h s t a t e l e a s e and f e d e r a l range land. The t h i r d t r a c t c o n t a i n s no deeded l a n d , b u t c o n s i s t s e n t i r e l y o f s t a t e l e a s e and f e d e r a l range land. The l a r g e s t t r a c t con- t a i n s about 3,294 a c r e s and could be considered t h e "home place". This i s t h e t r a c t through which t h e i n t e r s t a t e highway w i l l r u n , The d i s t a n c e from t h e home p l a c e t o t h e n e x t t r a c t i s about two m i l e s w e s t , and t h e t h i r d t r a c t i s about 1.5 miles w e s t of t h e second t r a c t , The two s m a l l e r noncontiguous t r a c t s w e r e used two months o u t of t h e y e a r a s summer range, For convenience i n t h i s opinion, we w i l l h e r e i n a f t e r r e f e r t o the p a r t i e s a s landowners and Commission, and t h e land p a r c e l s a s ?/I f o r t h e home p l a c e , !I2 f o r t h e f i r s t t r a c t west, and #3 f o r t h e second t r a c t w e s t , a s p o r t r a y e d on t h e map f u r n i s h e d t h e Court. The highway r i g h t o f way t r a n s v e r s e s p a r c e l #1 i n such a manner a s t o s e p a r a t e t h e u n i t i n t o two p a r c e l s w i t h no a c c e s s f o r s i x and one-half m i l e s and t h e only passage from one p a r c e l t o t h e o t h e r i s through a n e i g h t f o o t d r a i n pipe a t B e l l Canyon under t h e

highway right of way, Three witnesses and the landowners testified that cattle would not go through this drain pipe. This testimony was rebutted and is in conflict, The highway construction also buried an irrigation ditch and there is no provision for bringing water from the source east of the highway to the lands on the west. The landowners claimed the construction of the highway right of way through the ranch would depreciate the value of the ranch by an amount between $90,000 and $116,000, This reduction in value would be due to a claimed decrease of between 87 and 117 "animal units" to the ranch, which could originally support about 400 animal units. This reduction would be due in part to the impracticability of irrigation and general inaccessability of that portion of tract #l lying to the east of the highway right of way, There was addi- tional loss claimed due to a change in the character of some land from hay to grazing, resulting from construction. The landowners produced several witnesses who testified to damage to the remainder in parcel #1 in excess of the jury's award. The landowners further produced evidence that tract 82 and tract #3 which are noncontiguous to each other and to tract #I, are so inseparably connected in use that taking from #I must necessarily injure #2 and #3, as they operate as one integral unit, The court permitted testimony concerning damage to tracts ! and I 2 #3, The Commission's appraiser did not consider these tracts in his appraisal. The Commission presents five issues for review. The first four issues are consolidated into one for discussion and the basic question is ---what comprises the remainder of the land, subject to depreciation, by reason of its severance from the part taken? Or, what constitutes the term 1 Ia larger parcel" within the meaning of section 93-9912(2), R.C,M. 1947? The question raised in issue five is---may a jury consider testimony for damage awards for 11 inconveniencetf, and was there sufficient competent evidence to support the jury award?

Section 93-9912(2), R.C.M. 1947, a s i t a p p l i e s h e r e reads: II I f t h e property sought t o be appropriated c o n s t i t u t e s only a p a r t of a l a r g e r p a r c e l , t h e d e p r e c i a t i o n i n value which w i l l accrue t o t h e p o r t i o n not sought t o be condemned. by reason of i t s severance from t h e p o r t i o n sought t o be-con- demned, and t h e c o n s t r u c t i o n of t h e improvements i n t h e manner proposed by t h e p l a i n t i f f , " (Emphasis s u p p l i e d ) , The Commission contends t h i s s t a t u t e does n o t provide f o r t h e i n c l u s i o n of any noncontiguous remainder land. I t c i t e s four Montana c a s e s i n support of i t s p o s i t i o n which t h e t r i a l c o u r t used i n allowing t h e j u r y t o consider d e p r e c i a t i o n of t h e two noncontiguous p a r c e l s /,2 and /,3, i n a d d i t i o n t o #1, i n a r r i v i n g a t an award f o r d e p r e c i a t i o n , The f o u r c a s e s a r e : Alexander v. S t a t e Highway ~omm'n, 142 Mont. 93, 381 P.2d 780; S t a t e Highway Comm'n v. Robertson & Blossom, 151 Mont. 205, 219, 441 P,2d 181; L e w i s & Clark County v. N e t t , 8 1 Mont. 261, 266, 263 P. 418; and S t a t e , e t . a l . v, Bradshaw Land & Livestock Co., 99 Mont, 95, 106,-42 P.2d 674. A b r i e f examination of t h e s e c a s e s i s i n order. I n Alexander. t h e i s s u e concerned an award f o r cement batching p l a n t equipment purchased by t h e s t a t e i n an eminent domain pro- ceeding. Qn appeal i t was h e l d t h e award was excessive because i t

was based on testimony of t h e owner a s t o v a l u e of equipment n o t a c t u a l l y found i n t h e p l a n t , Here, t h e i s s u e concerns an award f o r deprecia.tion t o a ranch operation, due t o a reduction i n t h e number of animal u n i t s t h e ranch i s capable of supporting. I n Robertson & Blossom, t h e Court s t a t e d : "To determine what i s ' t h e remainder' s o a s t o determine what c o n s t i t u t e s t h e u n i t cf property a f f e c t e d , t h e r e a r e g e n e r a l l y t h r e e tests: ( I ) same ownership, (2) contiguous, (3) u n i t y of use. Here t h e property was contiguous and no i s s u e i s made, The a p p e l l a n t urges t h a t s i n c e Robertson and t h e Corporation were two d i s t i n c t owners, t h e i n s t r u c t i o n given was improper. T h i s i s c o r r e c t . I' The i s s u e i n Robertson & Blossom was u n i t y of ownership. The i s s u e i n t h e i n s t a n t c a s e i s what c o n s t i t u t e s "the remainder1'--- only t h e t r a c t of land from which t h e r i g h t of way was a c t u a l l y taken, o r a l l af t h e noncontiguous land which was a c t u a l l y put t o t h e same use by t h e same landowner? It should be noted t h a t

r e f e r e n c e t o a "general" t e s t o r requirement of c o n t i g u i t y i n Robertson & Blossom was d i c t a , s i n c e i t was o u t s i d e t h e i s s u e of t h e case. Consequently, t h e f a c t t h a t t h i s general requirement was mentioned and no exceptions were mentioned does not mean t h e Court e s t a b l i s h e d c o n t i g u i t y a s an a b s o l u t e requirement and recognized no exceptions.

- I n Nett, t h e Court s t a t e d : "The measure of damages i n a proceeding f o r t h e condemnation of land f o r a public highway, under our s t a t u t e and s i m i l a r enactments, i s t h e f a i r market v a l u e of t h e land sought t o be condemned w i t h t h e d e p r e c i a t i o n of such v a l u e of t h e land from which t h e s t r i p i s t o be taken, less allowable deductions f o r b e n e f i t s proven *** which values a r e t o be determined a s of t h e d a t e of t h e commencement of t h e proceeding," The i s s u e i n Nett was whether damages could be awarded t o compensate t h e f u t u r e c o s t of maintaining fences. The i s s u e i n t h e i n s t a n t case is---what c o n s t i t u t e s "the land from which t h e s t r i p i s t o be taken"? F i n a l l y , we quote from Bradshaw Land & Livestock Co.: "The theory of defendant cannot be upheld, unless i t may be s a i d t h a t a l l of t h e lands owned by defendant were a p a r t of t h e l a r g e r p a r c e l from which t h e r i g h t of way was taken. "In t h e case of S t a t e v. H o b l i t t , 87 Mont, 403, 288 Pac. 181, 183, i t was s a i d : 'Ordinarily damages may be awarded only f o r i n j u r y done t o t h e p a r t i c u l a r l o t o r t r a c t of land from which t h e r i g h t of way s t r i p i s taken, and t h e above r u l e i s applied i n a s c e r t a i n i n g t h e award t o be made by a determination of t h e v a l u e of t h e acreage taken, and t h e d e p r e c i a t i o n i n v a l u e of t h e remainder of t h e p a r t i c u l a r t r a c t , r e g a r d l e s s of what o t h e r lands t h e owner may possess *** b u t , even where two t r a c t s a r e separated by a highway o r watercourse, o r , a s h e r e , by a railway, i f they a r e used j o i n t l y by t h e owner i n a s i n g l e e n t e r - p r i s e and t h e whole p l a n t i s depreciated i n value by t h e proposed improvement, t h e d i r e c t damages s u f f e r e d may be compensated (30 C.J, 736), I When, however, p a r t s of t h e same establishment a r e separated by i n t e r v e n i n g p r i v a t e lands, they a r e g e n e r a l l y considered a s independent p a r c e l s . [ C i t i n g Cases] "In t h e case of Oakland v, P a c i f i c Coast L.Co., supra, t h e C a l i f o r n i a c o u r t s a i d : '1t i s i n s i s t e d , however, t h a t a l i b e r a l d e f i n i t i o n should be given t o "parcel, 11 and t h a t u n i t y of use should be regarded a s t h e c o n t r o l l i n g and determinative f a c t o r i n t h e s o l u t i o n of t h i s question whenever i t a r i s e s . But i f u n i t y of use i s t h e c o n t r o l l i n g c o n s i d e r a t i o n , i t can matter n o t how f a r i n f a c t t h e p i e c e s of land a r e separated. A f a c t o r y may be i n one county, i t s warehouse i n a n o t h e r , i t s p r i n c i p a l s a l e s agency i n a t h i r d ; any i n t e r f e r e n c e with any of t h e t h r e e p r o p e r t i e s would of n e c e s s i t y be an i n t e r f e r e n c e with t h e u n i t y of .use

of them a l l , and, i f a p p e l l a n t ' s p o s i t i o n i s sound, damages t o t h e o t h e r two may be recovered f o r a t a k i n g of o r an i n j u r y t o t h e t h i r d . Indeed, t h i s i s but another way of phrasing t h e r e a l contention of a p p e l l a n t , a s quoted above from i t s b r i e f , t h a t business i s property and when t h e t a k i n g by t h e s t a t e o r i t s agencies i n t e r f e r e s w i t h , impairs, damages, o r destroys a business, compensa- t i o n may be recovered t h e r e f o r , W a r e n o t t o be under- e stood a s saying t h a t t h i s should not be t h e law when we do say t h i s i s n o t our law. 1 "~omeof t h e lands f o r which i t was sought t o claim damages by t h e c o n s t r u c t i o n of t h i s highway a r e l o c a t e d more than n i n e miles from t h e r i g h t of way. The evidence showed t h a t a l l of t h e noncontiguous lands were grazing i n c h a r a c t e r and of no g r e a t e r v a l u e than approximately $5 per a c r e . W a p p r e c i a t e t h a t it i s sometimes recognized e a s an exception t o t h e general r u l e h e r e i n announced t h a t where lands a r e so inseparably connected i n t h e use t o which they a r e a p p l i e d t h a t i n j u r y t o o r d e s t r u c t i o n of one must n e c e s s a r i l y and permanently i n j u r e t h e o t h e r . (10 R.C.L. 157). This exception i s without a p p l i c a t i o n h e r e , a s t h e r e was no preliminary foundation l a i d showing t h a t t h e s e o u t l y i n g grazing lands were permanently i n j u r e d o r destroyed. Accordingly, t h e t r i a l c o u r t was i n e r r o r i n admitting testimony a s t o t h e damage t o t h e lands which were n o t contiguous t o t h e t r a c t from which t h e r i g h t of way was taken. (Emphasis supplied). This c a s e i s c l o s e i n p o i n t t o t h e i n s t a n t case. It c o n t a i n s a d e f i n i t i v e statement a s t o t h e a p p l i c a t i o n of what i s now s e c t i o n 93-9912, R.C,M. 1947, i n an eminent domain proceeding where d e p r e c i a t i o n damages a r e claimed t o property which i s n o t p h y s i c a l l y connected o r contiguous t o t h e t r a c t from which t h e r i g h t of way I1 i s severed, b u t t h e landowner claims t h e lands a r e s o inseparably connected i n t h e use t o which they a r e a p p l i e d t h a t i n j u r y t o o r d e s t r u c t i o n of one must n e c e s s a r i l y and permanently i n j u r e t h e I1 other. W w i l l simply r e i t e r a t e t h a t r u l e a s i t a p p l i e s t o t h e i n s t a n t e case, Landowners i n eminent domain a c t i o n s a r e e n t i t l e d t o f a i r compensation f o r d e p r e c i a t i o n t o t h e remainder of t h e p a r c e l which r e s u l t s from t h e severance, The general r u l e r e q u i r e s t h a t t h e land f o r which d e p r e c i a t i o n damages a r e sought be contiguous t o t h a t from which t h e severance i s made. However, t h e landowner may claim a s an exception t o t h e g e n e r a l r u l e t h a t t h e u n i t y of use w i t h i n an i n t e g r a t e d operation t o which he a p p l i e s noncontiguous lands owned i s of such a c h a r a c t e r t h a t a f t e r severance they cannot be f u l l y u t i l i z e d t o t h e i r b e s t and most valuable use. This claim becomes

a q u e s t i o n of f a c t f o r j u r y d e t e r m i n a t i o n . Favorable c o n s i d e r a - t i o n must be given t h e j u r y d e t e r m i n a t i o n provided i t i s based on, and n o t c o n t r a d i c t o r y t o , competent and c r e d i b l e evidence s u p p o r t i n g i t s holding, This e x c e p t i o n t o t h e g e n e r a l requirement of c o n t i g u i t y which was d i s c u s s e d i n t h e foregoing q u o t a t i o n from Bradshaw Land & Livestock Co. has been recognized by v a r i o u s a u t h o r i t i e s and i n d e c i s i o n s by c o u r t s i n f e d e r a l and s t a t e j u r i s d i c t i o n s . 27 Am J u r 2d Eminent Domain 5317; 29A C . J . S , Eminent Domain 5140; Anno. 6 ALR2d 1197, 1226; 4A Nichols on Eminent Domain, 3rd Ed. $14.31(1) ; 2 Lewis Eminent Domain, 3rd Ed. 5 698. I s s u e f i v e does n o t b e a r a t r a n s c r i p t r e f e r e n c e i n t h e b r i e f a s t o a l l e g e d testimony on damages based on inconvenience. However, Mr. R.enfro, t h e landowner, under cross-examination by t h e Commission's a t t o r n e y , t e s t i f i e d a t l e n g t h concerning d e p r e c i a t i o n based on w a t e r problems, hay, and animal u n i t s . This exchange occurred: "Q. N w then d i d you d e p r e c i a t e any of t h e g r a z i n g o Land l y i n g e a s t of t h e new highway? A . No, o n l y f o r inconvenience, moving our---- . Did you have a f i g u r e f o r inconvenience? A. Y e s , w e have a f i g u r e f o r inconvenience on t h e whole o p e r a t i o n . Q . What was t h a t f i g u r e , s i r ? A. $75,000.00". Then followed more d e p r e c i a t i o n testimony concerning t h e w a t e r , t h e e i g h t f o o t tube under t h e r i g h t of way and t h e i m p r a c t i c a l i - t i e s presented i n w a t e r i n g s t o c k a f t e r t h e t a k i n g , Then, t h i s appears : "A. You have t h e main l i n e which r u n s up t h e middle of your f i e l d and when you s t a r t your haying o p e r a t i o n , you have t o s h u t your pump o f f i n o r d e r t o put up your hay, and you c o u l d n ' t r u n a hundred h o r s e e l e c t r i c motor f o r two weeks t o w a t e r , t o pump a couple of t a n k s f u l l of w a t e r t o w a t e r your c a t t l e . It j u s t wouldn't be practical. "Q, W e l l , what monetary damage d i d you a s s i g n because of t h a t ? A . W f i g u r e d $75,000.00 on t h e inconvenience e and t h e damage t o t h e p l a c e . "Q. Well, how many t o n s of feed d i d you l o s e ? A. How many what ? Q How many t o n s of f e e d d i d you l o s e , y e s , on t h e e a s t s i d e of t h e t a k e ?

"MR. SMITH: East o r west? "Q. Pardon me, west of t h e I n t e r s t a t e highway, the 3rea we have j u s t been d e s c r i b i n g ? A. Well, w e would l o s e 400 head f o r approximately 3 months, "Q. 400 head, 1200, d i v i d e t h a t by 12, t h a t ' s 100 animal u n i t months o r animal u n i t s ? A. Yes, "Q. And i s t h a t how you computed t h e $75,000.00? A. No, i t would have been more than $/5,000,00, t h i s i s j u s t a conservative figure." (Emphasis s u p p l i e d ) . I t would be d i f f i c u l t t o determine t h a t t h e r e f e r e n c e t o II inconvenience" a s used h e r e and when viewed i n t h e l i g h t of t h e testimony preceding and following concerning d e p r e c i a t i o n damage, could mean t h e kind of s p e c u l a t i o n o r inconvenience g e n e r a l l y understood t o be noncompensalbe. The testimony following t h e second r e f e r e n c e would seem t o i n d i c a t e t h a t t h e w i t n e s s had i n mind more than mere inconvenience i n answering t h e q u e s t i o n and a r r i v i n g a t a damage f i g u r e . Perhaps one can say t h a t t h e festimony of t h e owner i s n o t a r t f u l l y given, b u t i t does appear c l e a r l y t h a t t h e animal u n i t b a s i s f o r d e p r e c i a t i o n was considered also. Other w i t n e s s e s , i n c l u d i n g q u a l i f i e d a p p r a i s e r s , t e s t i f i e d tu t h e u n i t y of use of t h e p a r c e l s and t h e l o s s of animal u n i t s

r e s u l t i n g from t h e t a k e , W f i n d t h e f a c t d e t e r m i n a t i o n made by t h e j u r y and t h e award e based upon i t a r e supported by competent and c r e d i b l e evidence.

The judgment of t h e d i s t r i c t c o u r t i s a f f i r m e d , , "

*/ Associate J u s t i c e Y A ! \ '

We CO c u r : i !g. ?hie£ Justice

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Associate J u s t i c e s .