Duke Power Co. v. Mom 'N' Pops Ham House, Inc.

258 S.E.2d 815 (1979)

DUKE POWER COMPANY
v.
MOM `N' POPS HAM HOUSE, INC.; John W. Ervin, Jr., Trustee for Northwestern Bank; and Northwestern Bank.

No. 7825SC1146.

Court of Appeals of North Carolina.

October 16, 1979.

Patrick, Harper & Dixon by Stephen M. Thomas, Hickory, and William I. Ward, Jr., Charlotte, for petitioner-appellant.

Simpson, Baker & Aycock by Samuel E. Aycock, and Daniel R. Simpson, Morganton, for respondents-appellees.

HILL, Judge.

Three questions are presented for review by this Court as follows:

1. Did the trial court's rulings on the petitioner's motion in limine and the respondents' offer of evidence allow the jury improperly to consider possible specific further uses of the respondents' property in reaching its verdict?

In condemnation proceedings, the determinative question is: In its condition on the day of taking, what was the value of the land for the highest and best use to which it would be put by owners possessed of prudence, wisdom and adequate means? The owner's actual plans or hopes for the future are completely irrelevant. Such aspirations are regarded as too remote and speculative to merit consideration. State v. Johnson, 282 N.C. 1, 191 S.E.2d 641 (1972); State Highway Commission v. Conrad, 263 N.C. 394, 139 S.E.2d 553 (1965); Wadsworth Land Co. v. Piedmont Traction Co., 162 N.C. 503, 78 S.E. 299 (1913). The respondents in this cause wanted to introduce testimony that they had future plans for the expansion of their office and warehouse building to the north and that northward was the only direction in which they could expand the building, and further, that the imposition of the petitioner's easement had precluded that expansion. Petitioner had filed its motion in limine in an effort to keep this evidence from being put before the jury directly or indirectly. The trial judge was not in error in denying petitioner's motion in limine. Granting of the motion is discretionary with the trial judge. The judge did not abuse his discretion, and as is apparent from the record, no impermissible evidence of future plans was heard by the jury.

2. Did the trial court improperly exclude the value testimony of the petitioner's expert witnesses?

Where only a part of a tract is taken, the measure of damages for said taking shall be the difference between the fair market value of the entire tract immediately prior to said taking and the fair market value of the remainder immediately after said taking . . . . G.S. 136-112(1).

The judge is required to instruct the jury to use the above standard—and that standard only—in computing damages. Board of Transportation v. Jones, 297 N.C. 436, 255 S.E.2d 185 (1979).

However, the real issue is whether expert real estate appraisers must use the before and after formula in determining damages. They do not. Duke Power's easement is situated so that the damage to respondents' land will result from two things. Respondents will suffer loss to the extent of the value of land actually taken. In addition, the easement will isolate the warehouse in the southwest corner of the lot between Southern Railway and Duke Power easements. The northeast corner upon which the smokehouse sits will not be affected.

Petitioner's experts should have been permitted to testify from first-hand knowledge as to their opinion of the damage to the lower part of the tract. Such testimony was allowed in Clancy v. State, 104 N.H. 314, 185 A.2d 261 (1962).

In Clancy, several utility company easements had been taken on the rear part of plaintiff's property. The easements covered three of the total nine acres and came within 35 feet of plaintiff's buildings which were located on the front part of plaintiff's lot. Plaintiff's expert stated that the value of the existing buildings was not affected by the easement. The expert came to his figure by estimating the value of the remainder of the tract of land before the taking and after the taking.

The New Hampshire Court instructed the jury to arrive at a figure for damages by determining the difference,

`between the fair value of [the plaintiff's] whole property' before the taking, and `the fair value, of what was left' after the taking. Clancy, 185 A.2d at p. 263.

It should be noted that this is the same measure used by juries in North Carolina.

The judge in Clancy continued to say, The value of the buildings remaining constant, the difference between the value of the whole property before and after the taking would necessarily be the same, whether the value of the buildings was omitted from both figures used in computing the difference, or was included in both.

Here, there is no dispute that the value of the smokehouse in the northeast corner is not affected by the easement. Just as in Clancy, the value of that building remains constant. The value of the smokehouse could be one dollar or one million dollars. What is important is the loss to the "before taking" value of the land. This can be determined by adding the value of the land actually taken to the loss in value of the warehouse because of its isolation. This sum can be subtracted from any "before taking" value that may be pulled out of the air to arrive at respondents' damage.

It is clear that a judge must instruct the jury to base its verdict on the difference between the value of land before the taking and afterwards. However, expert real estate appraisers should be given latitude in determining the value of property.

It is important to note that the statute (G.S. 136-112) speaks only to the exclusive measure of damages to be employed by the `commissioners, jury or judge." It in no way attempts to restrict expert real estate appraisers to any particular method of determining the fair market value of property either before or after condemnation. Board of Transportation v. Jones, 297 N.C. 436, 438, 255 S.E.2d 185, 187 (1979).

In situations where elements of the property, such as the smokehouse here, will remain constant in value despite the taking, expert appraisers will not have to include that value in their computations in order for their testimony to be competent.

3. Did the trial court err in failing to properly instruct the jury as to the meaning of the term "easement" and the rights of the respondents in the areas covered by the Duke Power easement?

The court correctly charged the jury that the landowner had the right "to make use of the land condemned in any manner which does not conflict with the rights of Duke Power Company."

The court then limited its definition of an easement by saying, "In this case, the landowner is limited in the use of the property to parking, crossing, raising of crops and the land cannot be used for building."

The court should not have elaborated on its definition of an easement. By limiting the definition, the court may have confused the jury and given them an improper view of the landowner's rights to the encumbered land. The jury should have been told simply that the landowner retained the right to use the land for all lawful purposes not inconsistent with the rights acquired by the petitioner. North Asheboro Sanitary District v. Canoy, 252 N.C. 749, 114 S.E.2d 577 (1960); Carolina Power & Light Co. v. Bowman, 229 N.C. 682, 51 S.E.2d 191 (1949). An almost infinite number of uses other than those mentioned by the presiding judge can be established.

Hence, for the reasons set out above, the petitioner is awarded a new trial.

New trial.

VAUGHN and ERWIN, JJ., concur.