Fulton County v. Funk , 266 Ga. 64 ( 1995 )

Hunstein, Justice,

dissenting.

The majority, for all its protestations to the contrary, has made the undivided fee rule the law of this State and has overruled White v. Fulton County, 264 Ga. 393 (444 SE2d 734) (1994). Because the Georgia Constitution mandates rejection of the undivided fee rule, I dissent.¹

When the State exercises its right to take away the property of one of its residents, that party is entitled to recover in full the amount that justly and adequately compensates him for the taking. Art. I, Sec. III, Par. I (a), Ga. Const. (1983). Because the Georgia Constitution “ ‘deals with persons, not with tracts of land,’ ” White, supra at 394 (1), our appellate courts have long recognized that the amount of just and adequate compensation involves what the condemnee lost, not what the condemnor gained.² The undivided fee rule, on the other hand, limits the amount a condemnee can recover by making the amount of recovery contingent upon what the condemnor gained. The undivided fee rule involves situations where individuals own different interests in the same piece of property (usually, landlord-tenant arrangements) and requires the factfinder, to determine what the condemnor gained (the whole property or “undivided fee”) and limits the condemnees’ award to their share of that whole amount, without regard to the amount the condemnees lost. In other words, the aggregate amount of the several interests are not allowed to exceed the value of the whole. The undivided fee rule thus violates the Georgia Constitution because it does not allow a condemnee to recover just and adequate compensation for the full value of its separate property interest whenever that interest, valued together with other condemnees’ interests, exceeds the value of the “whole” property.

The undivided fee rule does not prevent the condemnees of separate, non-unique property interests from recovering “more” than just and adequate compensation: it only prevents such condemnees as a group from recovering “more” than what the condemnor received, even though that amount may be “less” than what each individual condemnee lost. The undivided fee rule presents the superficially attractive idea that what the condemnees lost should equal precisely what the condemnor gained, with neither party gaining more or losing less than they were constitutionally entitled to receive. That idea, however, is a chimera. Only in an ideal world could the undivided fee rule operate constitutionally, an ideal world where the appraisal of property interests could be so precisely calculated that condemnees’ loss would indeed equal precisely condemnor’s gain. But the reed world produces opinions, instead of absolutes, and as long as valuation testimony conflicts and a jury is entitled to believe or disregard all or any part of any witnesses’ testimony, the reality is that there will be jury verdicts in which the total monetary amount awarded to justly and adequately compensate the individual interests in a condemned property may exceed the monetary amount attributed by witnesses at tried as representing the value of the unencumbered fee as a whole.

The majority attempts to distinguish between “unique” properties and properties that are subject to fair market valuation. The undivided fee rule is not about unique vs. non-unique property; it is not about how leasehold interests are valued. It is about the manner in which the factfinder goes about calculating the amount due each condemnee, a process that applies regardless of the uniqueness or non-uniqueness of the property involved. By focusing the factfinder’s attention onto the “whole” gained by the condemnor, the undivided fee rule shifts the factfinder’s attention away from the constitutionally-mandated calculation of what the condemnee lost, what was the value of that part of the property taken. Contrary to the majority’s claim, this Court in White made no mistake when it rejected the undivided fee rule without drawing any artificial distinction between unique and non-unique properties. It is the majority that misconstrues former law and violates the Georgia Constitution by foisting an artificial distinction between types of property that deprives owners of non-unique property interests of just and adequate compensation for their property. As a final practical matter it should be noted that because the jury generally decides whether condemned property is unique, Raiford v. Dept. of Transp., 206 Ga. App. 114 (3) (424 SE2d 789) (1992), the distinction the majority attempts to draw between unique and non-unique property will fail in application and its opinion will result in the giving of the undivided fee rule charge in all condemnation cases.

Decided December 4, 1995 — Reconsideration denied December 14, 1995. Pursley, Howell, Lowery & Meeks, Charles N. Pursley, Jr., Jo L. Meeks, Susan B. Forsling, for appellants. Peek & Whaley, J. Corbett Peek, Jr., James G. Peek, for appellees.

White holds

“[T]he rule in Georgia is that where there are separate estates to be condemned, each owner is entitled to the full value of his respective interest, even though the aggregate amount thus attained may exceed the value of the property appraised as a unit.” [Cits.]

Under the majority opinion that rule no longer exists in Georgia as to owners of non-unique properties. I dissent to the majority opinion abolishing that rule and making the undivided fee rule the law of this State.

I am authorized to state that Justice Sears and Justice Thompson join in this dissent.

1 There is no question, even by the parties to this appeal, that the charge given the jury in this case included the undivided fee rule. On two separate occasions the trial court instructed the jury to look to the whole or total value of the property when considering the amount of just and adequate compensation due to the landlord and the tenant. The first charge provided:

Now this verdict that you all will render here will require you to separate the interest of the two entities here, each one of the parties, and the verdict will point out to you, will indicate which defendant it’s for. And in considering them separately, however, it’s important for you to determine what is just and adequate compensation for the property, the total property. . . .

(Emphasis supplied.)

The second charge provided:

The landlord and the tenant own the entire property there. The land [lord] had an interest in the ownership, and the lessee had an interest, and their interest in the property should equal the whole — the value of the whole property, just and adequate compensation for the whole property.

(Emphasis supplied.)

2 See, e.g., White, supra; Dept. of Transp. v. McLaughlin, 163 Ga. App. 1 (1) and (2) (292 SE2d 435) (1982); Dept. of Transp. v. Kendricks, 148 Ga. App. 242 (1) (250 SE2d 854) (1978); State Hwy. Dept. v. Thomas, 115 Ga. App. 372 (1) (154 SE2d 812) (1967).