State v. Evans , 26 Wash. App. 251 ( 1980 )

Munson, J.

—In this condemnation action, a jury awarded Donald M. Evans¹ $400,000 for the State's taking of 17.58 acres and severance damages to his feedlot because of the construction of Interstate Highway 82 east of Prosser. The State appeals from the judgment entered upon the verdict.

Evans owned 746.67 acres of land consisting of 645.43 acres of undeveloped dry land, 61.29 acres of land devoted to commercial or light industrial, 26.95 acres of irrigated pasture, 12 acres of plum and prune orchards and 1 acre of grapes. Approximately 57.5 acres of the 61.29 acres devoted to commercial or light industrial consisted of two cattle feedlots and improvements. The north feedlot abutting the area of the "take" is the lot in issue, as well as an adjacent feed mill which was located on land not owned by Evans. During the trial the jury had an opportunity to view the property.

Two issues central to this appeal involve (a) the status of the feed mill in conjunction with the feedlot, and (b) the value of the feedlot before and after the taking.

The State frames its first contention as follows:

The Court committed reversible error by allowing testimony which included the value of the feedmill in the overall value of the subject property absent proof that the respondents had an enforceable interest in the property upon which the feedmill was located.

Evans had leased land adjacent to his own property from Burlington Northern Railroad for about 10 years. On the leased land he built a feed mill where he mixed feed for the cattle in his feedlots. At trial, the State claimed that the land on which the feed mill was located did not belong to Burlington Northern Railroad, but was owned by the United States Bureau of Reclamation. The trial court did not allow the State to raise that issue because neither the Bureau of Reclamation nor the railroad was a party and any adjudication of title would not bind either party.

Before addressing the status and value of the feed mill, we set forth some basic principles on the taking of private property by the State. Private property may not be taken or damaged for public use without just compensation. Const, art. 1, § 16 (amendment 9). In Lange v. State, 86 Wn.2d 585, 589-90, 547 P.2d 282 (1976), the court made several significant statements regarding compensation:

[JJust compensation derives as much content from the basic equitable principles of fairness . . . as its does from technical concepts of property law." United States v. Fuller, 409 U.S. 488, 490, 35 L. Ed. 2d 16, 93 S. Ct. 801 (1973); . . .

. . . forced to sell, he is not to receive by reason of that fact a lesser amount than the property would fairly bring upon the market." Chelan Elec. Co. v. Perry, 148 Wash. 353, 358, 268 P. 1040 (1928). In carrying out our duty to achieve fairness in condemnation awards, we have recognized that just compensation must be calculated from the standpoint of what the property owner loses by having his property taken, not by the benefit which the property may be to the condemnor. . . .

. . . [J]ust compensation is to be determined by equitable principles and ... its measure varies with the facts." . . .

In the usual eminent domain proceeding, the property is valued as of the date of the trial.

(Citations omitted.)

The State is required to pay damages not only for that part of a tract taken but is also required to pay for that "diminution in value of the remainder area by reason of the severance therefrom of the parcel appropriated ..." 4A J. Sackman, Nichols' Law of Eminent Domain, § 14.1(3), at 14-33 and § 14.21 (rev. 3d ed. 1976); Idaho & W. Ry. v. Coey, 73 Wash. 291, 131 P. 810 (1913); cf. United States v. Miller, 317 U.S. 369, 87 L. Ed. 336, 63 S. Ct. 276, 147 A.L.R. 55 (1943).

For a property owner to be entitled to severance dam¿ges, the courts usually require three elements: ownership, use, and contiguity. Here, the State concedes that as to the entire 747 acres, there are severance damages. However, the State contends that as to the land upon which the feed mill is located, there is a lack of unity of ownership; thus, Evans could not claim damages to the feed mill. State v. Lacey, 8 Wn. App. 542, 507 P.2d 1206 (1973).

We agree with the authority cited by the State that before one may maintain a claim for compensation in an eminent domain proceeding, one must have an enforceable interest, State v. J.R. Leasing Co., 1 Wn. App. 944, 466 P.2d 185 (1970), and the proper procedure is to determine as a preliminary question whether a condemnee has any legal rights or claim in the property for which he seeks damages. Tacoma v. Mason County Power Co., 121 Wash. 281, 209 P. 528 (1922). The State need not admit or prove the nature or extent of title until trial. Chelan Elec. Co. v. Perry, 148 Wash. 353, 356, 268 P. 1040 (1928); Walla Walla v. Dement Bros. Co., 67 Wash. 186, 190, 121 P. 63 (1912). However, implicit in the State's contention here is that if the feed mill were located on the railroad property, evidence as to the use of the mill would be admissible on the issue of severance damages as an adjunct to the feedlots. Its contention here and at trial rested solely on the lack of any enforceable interest on behalf of Evans in the feed mill land. Assuming arguendo the State's contention was correct, Evans' interest in the realty, if any, was of no consequence because the State was not condemning the property upon which the feed mill was located.² The issue was whether a feedlot with an accessible feed mill was of greater value than one without an accessible feed mill. Both the State's and Evans' expert testified that access to a feed mill enhanced the value of the feedlot. This was a proper matter for the jury to consider in determining just compensation of severance damages. State ex rel. State Highway Comm'n v. Gray, 81 N.M. 399, 467 P.2d 725 (1970).

The State's motion in limine and its objection during trial to evidence regarding the feed mill was based solely on Evans' lack of title to the land on which the mill was located. The State did not contend at trial, and does not directly contend here, that the value of the mill was irrelevant to the issue of damages. Testimony was admitted, without objection, that the value of the feedmill was $250,000 and it would cost $10,000 to move it. Neither the cost of moving, which is not an element of damages in this proceeding,³ nor the market value of the feed mill as a separate entity was relevant. Notwithstanding, the State never objected to the valuation on the ground of relevancy. In Marr v. Cook, 51 Wn.2d 338, 341-42, 318 P.2d 613 (1957), the court stated:

We have insisted that unless the specific ground of objection to the admission of evidence is a proper ground, the trial court commits no error in overruling it. White v. Fenner, (1943), 16 Wn.(2d) 226, 133 P.(2d) 270.

Without proper objection, there is no basis for appellate review. State v. Boast, 87 Wn.2d 447, 451, 553 P.2d 1322 (1976). After the owner testified to the value of the feed mill, the State's expert, in rebuttal, testified to his valuation less depreciation. Had the State properly objected to the owner's testimony of the value on the basis of relevancy, the rebuttal testimony would not constitute a waiver of the right to assign error at the appellate level. However, in the absence of such an objection, the State will not be permitted to raise obliquely the objection for the first time here. Therefore, the State's first contention must be rejected. We find no error.

The State frames its second contention as follows:

The Court committed reversible error by allowing respondents' valuation witnesses to limit their damage testimony to only the small portion of the subject property which had been developed into a feedlot.

Evans conceded the State's appraisal value of the remaining acreage was accurate; he believed the only issue was the value of the feedlot. Evans' valuation witnesses, other than himself, were owners and operators of feedlots; so far as the record reflects, they would have no expert knowledge of the value of orchards, pasture, commercial, industrial, or undeveloped land. As to the State's contention that there was no after-value testimony of the entire property, we quote the following testimony of Evans on direct examination:

Q . . . I have to ask you in the before situation what do you think that your place is worth?

A Are you talking about the feed lot or the whole?

Q No, the whole thing. . . .

A Well, I believe the whole Evans' Brothers holdings in this particular mapping arrangement here is probably worth a million to a million, two.^[4]

Q . . . [W]hat do you think your property, again, all of it, will be worth afterwards, after the highway is built?

A Well, I think it will be diminished by the worth of the feed lot, and it is anything connected directly with the feed lot.

Q All right, and how much in dollars? . . .

A ... I think that feed lot is worth $450,000 right now.

Q And what will it be worth after this freeway goes through in your opinion, Don?

A I don't believe we'll have a feed lot.

Q ... Do you feel that it will have any market value? Do you think any willing buyer informed who is not compelled to buy would be interested in buying that feed lot?

A No, sir.

We do not believe the jury should have had any difficulty in computing the before and after value of the feedlot. in relation to the entire property. The jury had before it all of the essential figures. It would have been a simple matter for them to compute the amount after acquisition: $450,000 reduced to zero equals $450,000 damages. If the State had reason to believe that the after value would be different from the before value less damages, it should have examined Evans on that fact. Instead, the State chose to stand on what it perceived to be its legal right to the introduction of after-value testimony. Better practice dictates that counsel examine their witnesses in order to elicit the before value, the after value and the alleged damages of the entire property. Nevertheless, to fail to ask the critical question of the computation of the after value of the entire property was not fatal to this jury's verdict. The error, if any, was not prejudicial. The trial court properly instructed the jury that the measure of damages in a condemnation action is the difference between the fair market value of the entire property before the acquisition and the fair market value of the remainder after acquisition. State v. Sherrill, 13 Wn. App. 250, 534 P.2d 598 (1975).

Additionally, the State contends the trial court's acceptance of the testimony restricting damages to the feedlot amounts to an abandonment of the before-and-after test and erroneously permits use of the "unit rule,"⁵ i.e., the whole is equal to the sum of its parts. We disagree. Here, the farm was a diversified operation. In recognition of this fact, even the State's appraiser valued each area of land separately: orchard, cattle pasture, unimproved land, commercial and light industrial land. The owner did not challenge the appraisals except as to the feedlot, which became the only item in issue. The unit rule was not applied. It is recognized there are instances where an expert will not be able to evaluate or appraise the whole property. In Berry v. State, 103 N.H. 141, 144, 167 A.2d 437, 439-40 (1961), the court commenting on the possibility that fractional appraisals will result in false values noted:

It is true that it may be difficult for an appraiser to segregate and ascribe to a part of an entire property a value entirely divorced from the value of the rest of it. However even though in this case the State presented the testimony of an expert concerning the before and after value of the whole property, he admitted that he went over the property "with a man who I consider eminently qualified to evaluate the standing timber." He also agreed "that at least since the taking the only way you can approach the fair value of the land lying west of the Interstate is to treat it as a single unit... a timber lot."

Furthermore from a practical viewpoint also it may be more difficult for a jury to deal with fractional appraisals in such a way as to prevent duplication in the amount of damages awarded. However in this case the parts which were separately appraised had such distinct characteristics that the danger of duplication could be found to be at a minimum.

These are all matters to be weighed by the Trial Court in deciding whether the testimony offered will aid the jury in arriving at its decision. ... We cannot say it was error for the Trial Court to admit such testimony in this case, or that it could not constitute the basis of a fair and just verdict.

(Citations omitted.)

We agree with the observation in In re Mercer St., Seattle, 55 Wash. 116, 119, 104 P. 133 (1909):

This being a condemnation proceeding in which the jury not only heard the evidence, but also viewed the property, and their verdict having been sustained by the trial judge, an utter absence of evidence to support it would be our only justification for granting a new trial.

... An appellate court should hesitate before setting aside the verdict of a jury in a condemnation case, and it will only make such order when it clearly appears that the verdict is unjust and unsupported by any competent evidence.

See also State v. Wenatchee Valley Holding Co., 169 Wash. 535, 546, 14 P.2d 51 (1932); Tacoma v. Hansen, 59 Wash. 594, 110 P. 426 (1910); State ex rel. State Highway Comm'n v. Northeast Bldg. Co., 421 S.W.2d 297, 302 (Mo. 1967). We find no error.

We address the other assignments of error summarily. The State contends the trial court erred when it admitted written leases executed by Evans on adjacent property after this action was filed. The State argues the acquisition is governed only by the state of Evans' record title at the time the condemnation was commenced. It is undisputed that Evans had oral leases with adjacent property owners which preceded the execution of the written leases. While the State is correct that oral leases may not evidence a sufficient interest upon which a claim for severance damages may be based, State ex rel. Wirt v. Superior Court, 10 Wn.2d 362, 116 P.2d 752 (1941), here, at the time of trial, there was an enforceable interest—the written leases. The State was not prejudiced; we find no error.

Evans' expert witnesses testified that a reasonable buyer would not purchase a feedlot located 88 to 100 feet from a freeway because of its effect on the cattle and the effect of dust and odor of the feedlot on drivers on the highway. The State contends that because the experts' information was based upon matters discussed at cattle feeders' conventions, it was speculation and conjecture and therefore erroneously admitted. The psychological effect of an adverse condition, real or imagined, on a potential buyer may have a material influence on the market value of property. These effects and their impact on the market value have been recognized in cases involving the inherent fear of electricity and gas transmission lines. See Kentucky Hydro-Elec. Co. v. Woodard, 216 Ky. 618, 287 S.W. 985 (1926); Gulledge v. Texas Gas Transmission Corp., 256 S.W.2d 349 (Ky. App. 1952); Collins Pipeline Co. v. New Orleans E., Inc., 250 So. 2d 29, 37 (La. App. 1971); Appalachian Power Co. v. Johnson, 137 Va. 12, 119 S.E. 253 (1923). Evans' experts, one of whom had been in the feedlot business for over 40 years, the other for over 20 years, testified that the conditions they described definitely diminished the market value. It is not the landowner's fault the adverse conditions exist; he has been damaged in the value of his property by the mere existence of a mental attitude which had a material influence on the market value of his feedlot. See 4A J. Sackman, Nichols' Law of Eminent Domain § 14.241[1], at 14-158 (rev. 3d ed. 1979). The weight and credibility of the testimony was for the jury. We find no error in allowing these witnesses to testify to such attitudes and their effects.

The State contends the trial court erred in refusing to give the State's proposed instruction identical to WPI 150.11⁶ on remote and speculative testimony. The court rejected this instruction on the basis that it was a comment on the evidence. The State argues the instruction was proper because Evans' witnesses testified to dust, odor and other environmental problems which, in the opinion of the State, was speculative testimony. We disagree with the trial court that the instruction was a comment on the evidence, but do not adopt the position of the State that merely because it is a pattern jury instruction it must be correct. Here, the jury was instructed to reach a result based upon the evidence. The State's proposed instruction was a correct statement of the law and could have been properly given. Nevertheless, considering the instructions as a whole, we find no error in the court's failure to give the instruction. See Renton v. Scott Pac. Terminal, Inc., 9 Wn. App. 364, 512 P.2d 1137 (1973).

The State also contends the court erred in failing to give its instruction identical to WPI 151.05.⁷ There was no evidence of business profits or losses. The closest the evidence came to the subject was testimony introduced by the State that fewer than 5,000 head of cattle were consistently fed on both feedlots. All the experts testified the value of feedlots is based upon the number of cattle that could be fed in a given feedlot; the values ranged from $65 to over $100 a head. There was no testimony relating to the cost of cattle, feed, or other business costs; likewise, there was no testimony relating to the price of cattle purchased or sold. We find no prejudicial error in not giving the instruction.

Finally, the State objects to the court's allowing Evans a peremptory challenge to a member of the original jury panel after Evans had waived his first peremptory challenge. This was error. RCW 4.44.210, relating to peremptory challenges, states in pertinent part:

[S]uch refusal on the part of the plaintiff to exercise his challenge in proper turn, shall conclude him as to the jurors once accepted by him, and if his right be not exhausted, his further challenges shall be confined, in his proper turn, to talesmen only.

The same procedure applies to defendants. It is somewhat surprising, considering the experience of counsel and the trial judge, that this issue arose. However, the error is not fatal. Parties are not entitled to have any particular juror serve. The State does not allege that any of the jurors subsequently selected were not qualified; unless prejudice results from allowing an excessive number of peremptory challenges, reversible error has not been committed. No such prejudice is cited; none is found. Creech v. Aberdeen, 44 Wash. 72, 87 P. 44 (1906); see also Annot., Effect of allowing excessive number of peremptory challenges, 95 A.L.R.2d 957 (1964).⁸

Judgment affirmed.

Green, C.J., concurs.

1 Although the additional respondents named above are parties to this action, we refer only to respondent Donald M. Evans.

2 Thus, we need not decide whether unity of ownership requires that a person with an interest in two tracts have a fee simple interest in each. See United States v. Fuller, 409 U.S. 488, 35 L. Ed. 2d 16, 93 S. Ct. 801, 805 (1973) (dissenting opinion); State ex rel. Symms v. Nelson Sand & Gravel, Inc., 93 Idaho 574, 468 P.2d 306, 313 (1970); cf. United States v. Honolulu Plantation Co., 182 F.2d 172 (9th Cir. 1950), cert. denied, 340 U.S. 820, 95 L. Ed. 602, 71 S. Ct. 51 (1950). We note in all of the authority cited by the State, the condemnee was attempting to claim damages for real property in which he had no enforceable interest. United States v. 62.61 Acres of Land, More or Less, 547 F.2d 818 (4th Cir. 1977) (condemnee had no enforceable interest in a stone jetty); United States v. 87.30 Acres of Land, More or Less, 430 F.2d 1130 (9th Cir. 1970) (owner did not have a vested property right in revocable permits issued by the Army Corps of Engineers). See also United States v. Fuller, supra.

3 RCW 8.26 governs relocation assistance in eminent domain proceedings.

[4] 4Evans was never asked if this included the value of the feed mill; likewise, he was never asked if his valuation of the feedlot included the value of the feed mill.

5 See 4 J. Sackman, Nichols' Law of Eminent Domain § 12.3142[1][a], at 12-337 to 338 (rev. 3d ed. 1979), which notes: "The measure of compensation is not the aggregate of the prices of the lots into which the tract could be best divided, . . .” Department of Highways v. Schulhoff, 167 Colo. 72, 77, 445 P.2d 402, 405 (1968); 29A C.J.S. Eminent Domain § 136(8), at 562 et seq. (1965).

6 "In arriving at the amount of compensation to be paid the respondents, you should not consider anything which is remote, imaginary, or speculative, even though mentioned or testified to by witnesses. The only elements which you should take into consideration are those which will actually affect the fair market value of the property and which are established by the evidence."

7 "Although evidence has been introduced with reference to the business conducted upon the property being condemned, such evidence was admitted solely for the purpose of showing the use to which this property was adapted, and should be considered by you for such purpose only. You are not to consider the volume or extent of such business, if any appears, or the profits, if any, as a measure of the market value of the property. Neither should you take into consideration in determining the amount of damages to be awarded for the taking of the property condemned, any injury to such business or any loss of profits of such business, even if such injury or loss appear from the evidence. It is the real property of the respondents, not their business, which is condemned by the petitioner, and it is for this real property only that you are to award compensation."

8 We believe it necessary to note that at trial there were issues which took an equal amount of time and attention, if not more, than the value of the feedlots, with or without the feed mill, and the issues involving title. For example, another major issue presented for the jury's consideration was the cost of a drainage sys.tem for Evans' feedlot required by the Department of Ecology. Both parties put forth substantial conflicting testimony as to various plans, their costs and effect on the value of the feedlot. Amounts ranged from $35,000 to $400,000. It .was the State's theory that the "cost of cure" of putting in a drainage system had a direct effect upon the market value of the feedlot. The jury was presented with a dazzling array of figures and issues. We inject this observation as a reminder that the issues before the jury tend to differ in perspective and focus from those presented to an appellate court.

While our review of the record reflects some conceivable tactical errors, the failure to object being only one example, we believe the State was accorded a fair trial. Nevertheless, both sides were represented by experienced trial lawyers. What might appear to us to be tactical errors may have had reasons not readily apparent. It is not for this court to speculate on what those reasons might have been.