Northern States Power v. Mikkelson ( 2020 )

Filed 03/03/20 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2020 ND 54
Northern States Power Company, a Minnesota
corporation, by its Board of Directors, Plaintiff and Appellee
v.
Laverne Mikkelson a/k/a Laverne C. Mikkelson Sr.;
Kandi Mikkelson a/k/a Kandi K. Mikkelson, Defendants and Appellants
and
SRT Communications, Inc., a North Dakota cooperative
association; Verendrye Electric Cooperative, Inc.,
a North Dakota cooperative association; Brett
Livingston; Lisa Livingston; Jarrod Livingston;
New Prairie Township; and Ward County, Defendants
No. 20190227
Appeal from the District Court of Ward County, North Central Judicial
District, the Honorable Douglas L. Mattson, Judge.
REVERSED AND REMANDED.
Opinion of the Court by Crothers, Justice, in which Justice VandeWalle and
Surrogate Judge Schmalenberger joined. Justice Tufte filed a dissenting
opinion in which Chief Justice Jensen joined.
Patrick D. J. Mahlberg, Minneapolis, MN, for plaintiff and appellee; submitted
on brief.
Richard P. Olson, Jessica L. Merchant, and Ryan G. Quarne, Minot, ND, for
defendants and appellants; submitted on brief.
Northern States Power v. Mikkelson, et al.
No. 20190227
Crothers, Justice.
[¶1] Laverne and Kandi Mikkelson appeal from a district court’s award of
summary judgment in favor of Northern States Power Company (“NSP”) and
a denial of their motion to amend the court’s judgment. The Mikkelsons assert
the court erred when it did not allow them the opportunity to be heard by a
jury on their claim for damages in this eminent domain proceeding. We reverse
and remand the case for further proceedings.
I
[¶2] NSP filed this eminent domain action in May of 2017 to obtain an
electrical transmission line easement over the Mikkelson’s property. On
November 20, 2017, the district court awarded NSP partial summary judgment
on the issue of whether the taking was necessary for a public purpose. The
only remaining issue was the amount of damages NSP owed the Mikkelsons
for the taking.
[¶3] NSP moved for summary judgment asserting because there was only a
partial taking, the proper measure of damages was diminution to the
property’s fair market value. NSP claimed the Mikkelsons did not provide any
competent, admissible evidence to present at trial. NSP supported its motion
with transcripts from depositions of Laverne Mikkelson and Roger Cymbaluk,
the Mikkelson’s expert appraiser.
[¶4] The following colloquy took place during the hearing on the motion:
“[NSP’s counsel]: Sure. So let’s think about it I guess
slightly differently and what would be happening in front of the
jury. You have the Mikkelsons will go first, they will attempt to
carry their burden of proof. All right. They will have Mr.
Mikkelson testify. His testimony is that the property has a before
value of $3,000 per acre.
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They will have Mr. Cymbaluk testify. Mr. Cymbaluk’s
testimony is that the property will have a before value of $2,500
an acre. And at that point their case in chief is over.
...
[Mikkelson’s counsel]: Your Honor, obviously we would
disagree with the idea that we are unable to provide admissible
testimony regarding the value of the property and an after value.
NSP has acknowledged that generally an owner can testify about
the value of the property without qualification other than the fact
of ownership. But they have selectively chosen portions of Mr.
Mikkelson’s deposition to eliminate any of Laverne’s testimony
regarding the value of his property. . . .”
Mikkelson’s counsel then cited the following colloquy between Laverne
Mikkelson and NSP’s counsel, which occurred during a deposition:
“Q. You would agree with me that the presence of the
transmission line does not make the market value of the
underlying property go to zero; right?
A. No.
Q. It’s not free; right?
A. No.
Q. There is some value that is retained even within the new
easement area; right?
A. Well, kind of what we went through, I consider the added
cost that it’s going to cost me every year to do this.
Q. Fine. But what you just told me is even with that in mind
that area is not worth zero. It’s worth something.
A. Well, to me it’s worth zero as far as—because it’s going to
cost me the same to use it. So for me it’s a zero value. I know I
said earlier that, no, it wouldn’t be zero, but I consider it a zero.
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Q. Fine. Do you think the market would—if this property
went up for sale, do you think the market would say that that
easement acreage is worth zero?
A. Yeah. Do you think I can take that strip and sell it to
anybody?
Q. You’re not selling the easement strip to anybody. The
property goes up for sale as a whole unit. Do you think that the
market would respond to that by saying, I know this is a 278-acre
piece of land; that said, there’s a 13.39 acre easement that is in
place, and so I’m not paying a dime for that 13.39 acres, so I will
take the market value, [$]3,000 per acre, and I will multiply it by
264—264 acres. That’s not the way it works, is it?
A. I think they’ll do it the other way. I think they’ll just put
a lesser value on the whole property.
Q. You think that the entire property is less valuable?
A. Exactly.
Q. By how much?
A. Well, that would have to be determined.
Q. By an appraiser?
A. By an appraiser—
Q. Not by you.
A. —or on a sale.
Q. Right.
A. Yeah.
Q. You can’t do it.
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A. No. Because they definitely wouldn’t come in, like you
said, [t]his land we aren’t going to pay anything for. No, we’re
going to make the rest of the land worth less.
Q. Right. And that’s a fair way of looking at an easement
taking is you compare the before value of the entire property with
the after value of the entire property; right?
A. Mm-hmm.
Q. And that’s what you’re saying would be the way that the
market would look at your property; right?
A. I believe so, yes.”
[¶5] On January 16, 2019, the district court granted NSP summary judgment
on the issue of just compensation. Based on the transcripts from depositions,
the court concluded the Mikkelsons had not, and could not, provide competent
and admissible evidence to meet their burden to prove an amount of damages
at trial. The court awarded damages to the Mikkelsons based on NSP’s
expert’s opinion, which was an amount of $10,620.
II
[¶6] The Mikkelsons assert the district court erred when it granted summary
judgment. The Mikkelsons argue the court should have allowed them to
present evidence at a trial.
“Summary judgment is a procedural device for promptly
resolving a controversy on the merits without a trial if there are
no genuine issues of material fact or inferences that can
reasonably be drawn from undisputed facts, or if resolving factual
disputes will not alter the result. A party seeking summary
judgment bears the initial burden of showing there is no genuine
dispute regarding the existence of a material fact. When a motion
for summary judgment is properly made and supported, an
opposing party may not rely merely on allegations or denials in its
own pleading[.] Rather, the party resisting the motion must set
forth specific facts by presenting competent, admissible evidence,
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whether by affidavit or by directing the court to relevant evidence
in the record, demonstrating a genuine issue of material fact.
“Whether the district court properly granted summary
judgment is a question of law which we review de novo on the
entire record. On appeal, we decide whether the information
available to the district court precluded the existence of a genuine
issue of material fact and entitled the moving party to judgment
as a matter of law. We view the evidence in the light most favorable
to the opposing party and give the opposing party the benefit of all
favorable inferences which can be reasonably drawn from the
record.”
Jordet v. Jordet, 2015 ND 76, ¶ 11, 861 N.W.2d 147 (quoting Hale v. Ward
Cnty., 2014 ND 126, ¶ 7, 848 N.W.2d 245).
[¶7] “Private property shall not be taken or damaged for public use without
just compensation . . . .” N.D. Const. art. I, § 16. When a taking occurs, the
property owner is entitled to be paid the fair market value for property that
has been taken. City of Devils Lake v. Davis, 480 N.W.2d 720, 725 (N.D. 1992).
The owner also is entitled to severance damages, which are measured by the
depreciation in value to the property not taken. City of Hazelton v. Daugherty,
275 N.W.2d 624, 628 (N.D. 1979). The determination of damages caused by a
taking is a fact question that “shall be ascertained by a jury, unless a jury be
waived.” N.D. Const. art. I, § 16; see also N.D.C.C. § 32-15-01(1) (“A
determination of the compensation must be made by a jury, unless a jury is
waived.”). The party claiming damages in a condemnation proceeding
generally has the burden of proof to establish the amount. Lenertz v. City of
Minot, 2019 ND 53, ¶ 22, 923 N.W.2d 479; Cass Cnty. Joint Water Res. Dist. v.
Erickson, 2018 ND 228, ¶ 12, 918 N.W.2d 371.
[¶8] The Mikkelsons argue they provided competent, admissible evidence to
survive summary judgment on the issue of just compensation. NSP claims the
Mikkelsons have not proffered admissible evidence, as established by their
answers to deposition questions, to raise a factual dispute as to the property’s
fair market value after the easement. The parties disagree as to how various
portions of deposition testimony should be interpreted. The Mikkelsons claim
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their theory of damages, as stated in their deposition testimony, is that the
easement decreased the value of the acres it burdens to zero and that
diminution should be spread across the rest of their property to yield the
market value after the taking
[¶9] NSP likens this case to Lenertz v. City of Minot, 2019 ND 53, 923 N.W.2d
479. Lenertz brought an inverse condemnation proceeding against the City of
Minot alleging street and storm water improvements caused flooding of his
property that constituted a taking. Id. at ¶ 2. The district court held a jury
trial to decide the issue of damages. Id. at ¶ 3. After hearing testimony, the
court found Lenertz was only entitled to damages for a partial taking of his
property, and therefore the proper measure of damages would be diminution
in value. Id. at ¶ 4. The City of Minot moved for a directed verdict, and the
court allowed Lenertz to make an offer of proof outside the presence of the jury.
Id. Lenertz called an expert witness who testified the property had no value.
Id. The expert testified his opinion was based on the costs it would take to
repair the property, although the expert admitted: “I am not an engineer, I am
only guessing that it would cost this much to repair the property.” Id.
[¶10] The district court decided to not allow the expert’s proffered testimony
into evidence. Lenertz, 2019 ND 53, ¶ 4, 923 N.W.2d 479. The court concluded
the expert’s testimony would be unhelpful to the jury because it was based on
an improper measure of damages—i.e. cost of repairs rather than diminution
in value—and the expert admitted he had no basis for his testimony. Id.
Because Lenertz’s proffered testimony could not support a finding of damages
by the jury, the court entered judgment as a matter of law and dismissed the
case. Id. at ¶ 5. On appeal, this Court affirmed the district court’s grant of
judgment as a matter of law. Id. at ¶ 28.
[¶11] Lenertz is different from the present case. Unlike the testimony in
Lenertz, the Mikkelsons do not claim their entire property is worthless. Nor
do they base their measure of damages on repair costs. Rather, the
Mikkelson’s theory for damages is that the acreage burdened by the easement
has no value and that amount of diminution “taken across the whole of the
Subject Property” yields the fair market value after the taking. This is
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consistent with the proper measure of damages for a partial taking, “which is
the difference in the market value of the property not taken before and after
the severance from the part taken.” Daugherty, 275 N.W.2d at 628.
[¶12] The parties do not agree on the amount of damages NSP owes the
Mikkelsons. The Mikkelsons claim the easement totally devalues the acreage
it burdens. NSP claims the easement devalues the acreage by a lesser amount.
The parties’ dispute creates a factual issue as to the amount the easement
devalued the Mikkelson’s property. “The determination of damages in an
eminent domain action is a question of fact to be decided by the trier of fact.”
Davis, 480 N.W.2d at 725. “Deciding an issue by summary judgment is not
appropriate if the court must draw inferences and make findings on disputed
facts.” Desert Partners IV, L.P. v. Benson, 2016 ND 37, ¶ 10, 875 N.W.2d 510.
[¶13] We conclude the district court erred when it granted summary judgment
on the issue of damages.
III
[¶14] The parties’ remaining arguments are either without merit or not
necessary to our decision. We reverse the district court’s order for summary
judgment and remand for further proceedings consistent with this opinion.
[¶15] Daniel J. Crothers
Allan Schmalenberger, S.J.
Gerald W. VandeWalle
Tufte, Justice, dissenting.
[¶16] I respectfully dissent.
[¶17] Under authority provided in statute, Northern States Power (NSP)
sought to condemn an easement for an electric transmission line across a
278-acre parcel of agricultural land owned by the Mikkelsons. In response to
NSP’s motion for summary judgment on the issue of just compensation for the
easement, the Mikkelsons argued they had offered sufficient competent
admissible evidence on the diminished fair market value resulting from the
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taking to overcome summary judgment and present the issue of just
compensation to a jury. The Mikkelsons also state but fail to develop the
argument that they are “entitled under the North Dakota Constitution, and
under N.D.C.C. § 32-15-22 to provide this evidence to a jury for a determination
on damages.” I reserve for another day when the argument is fully briefed the
question of whether the state constitution curtails the application of our
summary judgment rule to eminent domain cases. N.D. Const. art I, § 16
(“Compensation shall be ascertained by a jury, unless a jury be waived.”);
Guerard v. State, 220 N.W.2d 525, 529 (N.D. 1974) (Knudson, J., concurring)
(“I concur in the syllabus and in the reversal of the summary judgment only as
I am of the opinion that summary judgment is not appropriate in eminent
domain proceedings.”); see Gomez v. Kanawha Cty. Comm’n, 787 S.E.2d 904,
923-24 (W.Va. 2016) (reversing grant of summary judgment because state
constitution required just compensation “shall be ascertained by an impartial
jury” and landowner has right under that provision to present her opinion
about value); but see Montgomery Cty. v. Soleimanzadeh, 82 A.3d 187 (Md.
2013) (reversing by 3-2 vote the intermediate appellate court’s determination
that constitutional mandate for jury determination of just compensation
provided exception to summary judgment rule).
[¶18] The owner of land made the subject of a condemnation proceeding may
claim damages in the form of just compensation for the value of the land taken,
and may also claim severance damages for a reduction in value for the
remainder of a parcel not taken. City of Grand Forks v. Hendon/DDRC/BP,
2006 ND 116, ¶ 9, 715 N.W.2d 145 (citing N.D.C.C. § 32-15-22(2)). “Damage to
the property not taken is not presumed, and the owner has the burden of proof
to show that the condemnation has reduced the value of the property not
taken.” Id. at ¶ 10.
[¶19] The Mikkelsons’ brief responding to NSP’s summary judgment motion
referred the district court to the deposition testimony of Laverne Mikkelson,
Kandi Mikkelson, and their appraiser Roger Cymbaluk. As the majority
recounts in ¶ 4, Laverne Mikkelson repeatedly testified that the value of the
area burdened by the easement was “zero.” When asked if he could offer an
opinion of the diminished market value of the land after being burdened by the
8
easement, he said “Couldn’t do it.” As to the diminished value of the entire
parcel, when asked if he had an opinion about how much less the entire
property was worth with the easement in place, Laverne Mikkelson responded
“No.” Kandi Mikkelson stated she had no opinion as to the diminished value
independent from that expressed by Laverne Mikkelson.
[¶20] The property interest taken by NSP is an easement for an electric
transmission line. The easement burdens 13.39 acres of a larger 278-acre
parcel of agricultural land. The only evidence offered by the Mikkelsons as to
the amount of damages due for the taking was the entire market value of the
13.39-acre easement corridor. This despite the undisputed fact that the
Mikkelsons retain title to the land and the right to continue to use the land for
any uses not inconsistent with the easement.
[¶21] This taking is a partial taking because NSP is condemning an easement
and not fee simple title to the 13.39 acres. See Exxon Pipeline Co. v. Zwahr, 88
S.W.3d 623, 627 (Tex. 2002) (“When, as here, only part of the land is taken for
an easement, a partial taking occurs.”); United States ex rel. TVA v. 1.72 Acres
of Land, 821 F.3d 742, 756 (6th Cir. 2016) (“It is well established that in a
partial takings case such as this, ‘[t]he correct measure of compensation for an
easement, as for any partial taking, is the difference in fair market value of
the whole tract before and after the taking.’”). The easement is but one stick in
the bundle of sticks to which property rights are often analogized. Interest of
D.D., 2018 ND 201, ¶ 10, 916 N.W.2d 765 (quoting Henderson v. United States,
575 U.S. 622 (2015)); Noss v. Hagen, 274 N.W.2d 228, 234-35 (N.D. 1979)
(Pederson, J., concurring specially). Many sticks remain after the easement is
taken. The Complaint emphasizes the Mikkelsons “shall have the full use and
enjoyment of the easement areas and rights-of-way, so long as said use and
enjoyment is consistent with [the easement].” The Mikkelsons did not raise a
triable issue of fact by asserting their desire to be paid for all the sticks when
only one stick is condemned.
[¶22] The Majority refers twice to severance damages, in ¶ 7 and ¶ 11. The
Mikkelsons did not argue either below or on appeal that they are entitled to
severance damages for the part not taken. There is no claim for a per-acre loss
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in value to the part not taken. The Mikkelsons argue that the 278-acre parcel
has a reduced value as a result of the taking. The only evidence they offer to
avoid summary judgment, however, is that the value of the larger 278-acre
parcel burdened by the 13.39-acre easement corridor is reduced because 13.39
acres are now worth “zero.” That is not evidence of severance damages. It
merely repackages the Mikkelson’s unsupported claim that the easement
reduces the value of the burdened strip of land to zero. This cannot be
reconciled with Lenertz v. City of Minot, 2019 ND 53, 923 N.W.2d 479.
[¶23] In Lenertz, we rejected the argument that a landowner may offer only
testimony supporting a 100% loss in value as sufficient to raise a fact question
for the jury:
Lenertz argues the district court erred in deciding there was
no evidence regarding damages and relies on his own testimony at
trial as to his land’s value. He asserts there was no adequate
remediation, he testified on value and his loss, and he placed a
value on the tract. See Schultz v. Schultz, 2018 ND 259, ¶ 19, 920
N.W.2d 483 (“An owner of property may testify as to the property’s
value.”). He contends the City’s attorney’s argument is not
evidence or proof and the only evidence of damages was from him
as the landowner. He contends that because some damage
evidence was presented, the jury had a range of values and the
court’s judgment as a matter of law was inappropriate.
Here, the district court held judgment as a matter of law was
appropriate because no total taking of the property occurred, and
because Lenertz did not proffer evidence of damage less than a
total devaluation. The evidence established the property had been
at most partially taken or damaged by the City’s actions. The
evidence did not establish a total devaluation of the property.
While Lenertz testified he suffered damages, he did not provide
more than a general statement about his damages.
Because Lenertz only proffered evidence of total devaluation
rather than specific damages, the district court properly granted
judgment as a matter of law under N.D.R.Civ.P. 50. The district
court did not err in holding the evidence was insufficient to have
the jury decide damages.
Lenertz, 2019 ND 53, ¶¶ 26-28, 923 N.W.2d 479.
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[¶24] Because this case falls squarely within the holding of Lenertz, I would
affirm.
[¶25] Jerod E. Tufte
Jon J. Jensen, C.J.
[¶26] The Honorable Allan Schmalenberger, S.J., sitting in place of McEvers,
J., disqualified.
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