Meagher County Newlan Creek Water District, Inc. v. Walter

No. 12747 I N T E SUPREME C U T O THE STATE O M N A A H O R F F OTN M A H R COUNTY N W A CREEK EGE E LN W T R DISTRICT, I n c o r p o r a t e d AE under t h e Laws of t h e S t a t e o f Montana, and M A H R COUNTY, a EGE P o l i t i c a l S u b d i v i s i o n of t h e S t a t e of Montana, P l a i n t i f f s and Respondents, LESTER J. W L E AND L N MAE ATR EA WALTER, husband and w i f e , and t h e UNITED STATES O AMERICA, F Defendants and Appellants. Appeal from: D i s t r i c t Court of t h e F o u r t e e n t h J u d i c i a l D i s t r i c t , Honorable Nat A l l e n , Judge p r e s i d i n g . Counsel of Record: For A p p e l l a n t s : B o l i n g e r and Wellcome, Bozeman, Montana H. A. B o l i n g e r argued, Bozeman, Montana For Respondents: John V. P o t t e r , Jr. argued, White Sulphur S p r i n g s , Montana Submitted: November 4, 1975 Decided: 'Mkk - w 5 1376 ii Filed : M r . 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 C o u r t . T h i s i s a n a p p e a l from judgment e n t e r e d on a j u r y v e r - d i c t i n a condemnation a c t i o n t r i e d b e f o r e t h e d i s t r i c t c o u r t , Meagher County. Defendants L e s t e r J . W a l t e r and I n a Mae W a l t e r , were owners o f r a n c h l a n d s condemned by p l a i n t i f f s i n o r d e r t o c o n s t r u c t a multi-purpose r e s e r v o i r . Walters' l a n d was condemned f o r c o n s t r u c t i o n by t h e Meagher County Newlan Creek Water D i s t r i c t f o r a dam on Newlan Creek. I n c i d e n t t o c o n s t r u c t i o n of t h e dam, it w a s n e c e s s a r y t o a c q u i r e a d d i t i o n a l l a n d f o r t h e p o o l a r e a above t h e dam and t h e o u t f l o w s t r u c t u r e s below t h e dam. The dam i t s e l f , t h e o u t - f l o w area, and much o f t h e p o o l a r e a s a r e l o c a t e d on what w a s Walters' l a n d . The work p l a n f o r t h e dam c a l l e d f o r t h e u s e of t h r e e s e p a r a t e p a r c e l s o f l a n d i n S e c t i o n s Eleven (11) and F o u r t e e n ( 1 4 ) , Township Ten ( 1 0 ) North, Range S i x ( 6 ) E a s t , M.P.M. Tract One w a s s u b j e c t t o a f e e t a k i n g c o n s i s t i n g of 283.597 acres. T r a c t Two w a s s u b j e c t t o a temporary easement g i v i n g t h e Water D i s t r i c t t h e r i g h t t o e n t e r and remove f i l l materials f o r a p e r i o d o f f i v e y e a r s on 96.682 acres. T r a c t T h r e e was s u b j e c t t o a permanent easement on 1 5 . 1 a c r e s f o r c o n s t r u c t i o n , m a i n t e n a n c e , and u s e of a d i s c h a r g e c a n a l . The l a n d s u b j e c t t o t h e f e e t a k i n g and t h e permanent easement c o n s i s t s o f a p p r o x i m a t e l y 70 a c r e s of b o t t o m b n d a l o n g Newlan Creek and 230 a c r e s immediately a d j o i n - ing the bottombnd. I n a d d i t i o n , W a l t e r s ' home was t a k e n . P r i o r t o t r i a l , a commissioners' h e a r i n g w a s h e l d . The commissioners d e t e r m i n e d j u s t compensation t o be i n t h e amount of $160,079.65. T h i s award w a s a p p e a l e d by t h e Water D i s t r i c t t h r o u g h t h e f i l i n g o f a c o m p l a i n t i n condemnation on J a n u a r y 30, 1974. The Landowners a p p e a r e d by motion t o d i s m i s s and answer, o b j e c t i n g t o t h e Water D i s t r i c t ' s power o f condemnation. The m a t t e r proceeded t o h e a r i n g b e f o r e t h e d i s t r i c t c o u r t on F e b r u a r y 21, 1974. On March 29, 1974, t h e d i s t r i c t c o u r t e n t e r e d a "PRELIMINARY ORDER O CONDEMNATION" wherein it F o r d e r e d t h a t t h e l a n d and i n t e r e s t s i n l a n d be t a k e n by t h e Water D i s t r i c t upon making j u s c compensation a s p r o v i d e d by law. O A p r i l 1 6 , 1974, Landowners p e t i t i o n e d t h i s C o u r t e x n p a r t e f o r e x t r a o r d i n a r y r e l i e f i n t h e form of a w r i t o f pro- hibition. An o r d e r t o show c a u s e w a s i s s u e d , a n a d v e r s a r y h e a r i n g f o l l o w e d w i t h s u b s e q u e n t d e n i a l of t h e r e l i e f s o u g h t by t h i s C o u r t ' s o r d e r ( S t a t e e x r e l . Walter v . D i s t r i c t C o u r t , 164 Mont. 539, 521 P.2d 1 9 3 ) . P r i o r t o t r i a l , an o f f e r w a s made by t h e Water D i s t r i c t i n t h e amount o f $81,010. The o f f e r w a s n o t a c c e p t e d and t h e m a t t e r proceeded t o t r i a l . The j u r y awarded : (1) T o t a l f a i r market v a l u e of p r o p e r t y s o u g h t t o be a p p r o p r i a t e d ( i n c l u d i n g f e e t a k i n g , permanent and temporary easement) .....................$ 60,268 (2) Depreciation accruing t o remainder ...............................$ 9,000 ( 3 ) Amount r e m a i n d e r w i l l be benefitted ..............................$ None. Judgment was e n t e r e d on t h e v e r d i c t . Walters f i l e d a motion f o r new t r i a l , which w a s d e n i e d . I t i s from t h e judgment and d e n i a l of a new t r i a l t h a t W a l t e r s a p p e a l . Appellants p r e s e n t s e v e r a l i s s u e s f o r review b u t w e d i s c u s s o n l y two. First: Was t h e i s s u e o f t h e Newland Creek Water D i s - t r i c t ' s power of condemnation res j u d i c a t a by v i r t u e o f t h i s C o u r t ' s o r d e r of A p r i l 29, 1974? ( S t a t e ex r e l . Walter v . D i s - t r i c t C o u r t , 164 Mont. 539, 521 P.2d 193.) Second: Did a p p e l l a n t s r e c e i v e j u s t compensation f o r t h e p u b l i c t a k i n g of t h e i r l a n d a s r e q u i r e d by A r t i c l e 11, Sec- t i o n 29, 1972 Montana C o n s t i t u t i o n ? First. The d o c t r i n e o f res j u d i c a t a s t a t e s t h a t a f i n a l judgment on t h e m e r i t s by a c o u r t o f competent j u r i s d i c t i o n i s c o n c l u s i v e a s t o c a u s e s of a c t i o n o r i s s u e s t h e r e b y l i t i g a t e d , a s t o t h e p a r t i e s and t h e i r p r i v i e s , i n a l l o t h e r a c t i o n s i n t h e same o r any o t h e r j u d i c i a l t r i b u n a l o f c o n c u r r e n t j u r i s - diction. 46 Am J u r 2d, Judgments, 5 394. Appellants argue t h a t t h i s C o u r t ' s o r d e r o f A p r i l 29, 1974, d e n y i n g t h e e x t r a o r d i n a r y r e l i e f s o u g h t was n o t on t h e m e r i t s and t h e r e f o r e was n o t res judicata. With t h i s c o n t e n t i o n , w e c a n n o t a g r e e . The o r d e r i n c a u s e #12742, S t a t e ex r e l . Walter v . D i s t r i c t C o u r t , 164 Mont. 539, 540, 521 P.2d 1 9 3 , s t a t e s : "On t h e r e t u r n day b r i e f s w e r e f i l e d , a motion t o quash by r e s p o n d e n t s , c o u n s e l w e r e h e a r d i n o r a l argument and t h e m a t t e r t a k e n under a d v i s e - ment. The C o u r t now b e i n g a d v i s e d , and g i v i n g consideration t o the petition, exhibits, briefs, and o r a l a r g u m e n t s , it i s o r d e r e d t h a t t h e r e l i e f s o u g h t be d e n i e d and t h e p r o c e e d i n g i s o r d e r e d dismissed. " I t w a s d u r i n g t h e show c a u s e h e a r i n g on a p p e l l a n t s ' p e t i t i o n f o r a w r i t o f p r o h i b i t i o n t h a t t h e Water D i s t r i c t ' s power t o con- demn w a s c h a l l e n g e d by a p p e l l a n t s . This Court denied t h e r e l i e f s o u g h t b e c a u s e b r i e f s and o r a l argument d e m o n s t r a t e d t h e r e w a s no m e r i t t o a p p e l l a n t s ' c o n t e n t i o n under Montana l a w . It is established t h a t a r i g h t , question, o r f a c t d i s t i n c t l y put i n i s s u e , a s was done h e r e , and d i r e c t l y d e t e r m i n e d by a c o u r t o f competent j u r i s d i c t i o n c a n n o t be d i s p u t e d i n s u b s e q u e n t a c t i o n s between t h e same p a r t i e s o r t h e i r p r i v i e s . Montana E a s t e r n P i p e L i n e Company v. S h e l l O i l Company, (D.C. Mont.) 216 F.Supp. 214. Where, a s h e r e , t h e r e w a s no w r i t t e n o p i n i o n e x p l a i n i n g t h e b a s i s f o r t h e C o u r t ' s o r d e r b u t t h e d e n i a l was i n t e n d e d t o be on t h e m e r i t s , t h e d e n i a l of r e l i e f s o u g h t i s r e s j u d i c a t a . McDonough v . G a r r i s o n , 68 Cal.App.2d 318, 156 P.2d 983. Finally, t h i s Court i n B u t l e r v. Brownlee and D i s t . C t . , 152 Mont. 453, 457, 451 P.2d 836, s t a t e d : "A judgment n o t a p p e a l e d from i s c o n c l u s i v e between the parties as to all issues raised by pleadings actually litigated and adjudged as shown on the face of the judgment and reasonably determined in order to reach the conclusion announced." (Emphasis supplied.) Second. Appellants contend they were denied just com- pensation for the public condemnation of their land. We agree. Just compensation for a public taking of private land is to be computed as: fair market value of land taken plus (value of remainder before taking - value of remainder after taking?),Section 93-9912, R.C.M. 1947; State Highway Commission v. Emery, 156 Mont. 507, 481 P.2d 686; Montana State Highway Comm'n v. Jacobs, 150 Mont. 322, 435 P.2d 274. Upon review of the entire record in this case, this Court finds that neither the award of severance damages to the remainder nor the compen- sation for property taken were supported by substantial evidence. Considering first the severance damages to that part of appellants' land not taken, it is obvious that the condemnation resulted in excising the very heart out of their ranch. A re- view of the trial transcript demonstrates this to be the case. The fee taking will result in the permanent loss of 70 acres of appellants' bottomhnd leaving only 8 acres for immediate use and 15 acres in the temporary easement area which are not usable until after reclamation five years hence. Because this bottom Bnd provides hay, pasture, and wintering grounds for appellants' cattle, it is important to the operation of the ranch. In addition, appellant Lester Walter testified that two of his best stodcwater springs were within the fee taking area. Other springs are still available to appellants, but several of these either dry up, have poor access, or are situated on land owned by someone else. This uncontradicted testimony becomes extremely important when the highest and best use of appellants' land is considered. By the Water District appraiser's own admission, such highest and best use of the land is as a small stock ranch. That the condemnation action would be detrimental to such an operation is easily perceived. Before the taking, appellants ran 40 or more head of cattle without purchasing hay and rented out pasture for approximately 200 additional head. Norman Wheeler, a farm and ranch consultant, testified appellants' land prior to the taking could carry 125 head. However, after the taking an entirely different situation exists. With the disappearance of two good stock water springs and most of the bottomland used for pasture and hay, much of what the cattle ranch depended upon for sustenance is gone, with the resulting substantial deprecia- That tion in the remainder. /damages to remaining land have been allowed in such situations becomes apparent upon a survey of authority. 27 Am Jur 2d, Eminent Domain, S 311, provides: "Damages to remaining land that have been allowed or considered in determining compensation include * * * permanent interference with farming, as dis- tinguished from temporary interference or incon- venience. * * * " (Emphasis supplied.) See also Trunkline Gas Company v. O'Bryan, 21 I11.2d 95, 171 In the instant case, the interference with the operation of appellants' property as a stock ranch by the condemnation is permanent and so substantial that the $9,000 awarded by the jury as damages to the remainder can hardly be considered adequate. As to compensation for that part of appellants' land taken, this Court finds the jury award to be inadequate as it was not based on substantial evidence. The method of valuation for the land taken used by the Water District's appraiser Howard Sparhawk was comparable sales. Such a basis for expert opinion has been ruled an acceptable means of valuation for a taking of this nature, with the extent of comparability going to the weight of the evidence rather than to its admissibility. Montana Power Co. v. Wolfe, Mont . -P.2d , 33 St.Rep. 172; U.S. v. 45,131.44 Acres of Land, 483 F.2d 569; U.S. ex rel. T.V.A. v. Easement and Right of Way, 405 F.2d 305. We find the problem in the instant case is that the weight given to such appraisal by the jury is simply not support- ed by the evidence. At trial, Sparhawk testified that since he believed there were ample comparable sales in Meagher County from which an evaluation could be made, he did not feel the need to investigate the possibility of comparable sales in surround- ing counties. However, upon review of the evidence presented, it becomes apparent that Sparhawk's reliance on Meagher County sales was misplaced. Of the approximately forty-seven Meagher County ranch sales pointed out on a map by Sparhawk, he readily admitted, through nine pages of testimony, that all but four or five such sales were low and not comparable. Then upon cross-examination, Sparhawk's testimony re- vealed serious deficiencies in the basis for his opinion that these few sales were in fact comparable to the appellants' prop- erty and thus could be used in determining the fair market value of appellants' property. When questioned about the allegedly comparable Holiday to Jorgenson sale, Sparhawk admitted he had not computed the carrying capacity of the ranch land involved in that sale. As to sale #29, the Weingartner property, Sparhawk admitted the water facilities on such property were poor in contrast to appellants' property. Concerning sales #5 and #47 relied upon by Sparhawk, it was revealed the property was situated at an altitude of 6,500 feet and no mention was made of bottom land. Appellants' property was situated at a considerably lower altitude, 5,500 feet, and contained good bottom land. Sale #30, the Cook to Ward sale, was an estate sale but there was some question as to whether any competitive bidding had taken place before that sale. Finally, Sparhawk's testimony as to his evaluation of the Manger property (#39, #40, #41), the sale which he placed the most credence on in appraising appellants' land revealed serious shortcomings. Under the persistent ques- tioning of appellants' attorney, Sparhawk admitted he had no knowledge of the carrying capacity of the Manger property nor had he made an appraisal of that property or even investigated its range land in detail. As the final blow to the basis of Sparhawk's appraisal, he admitted that actual comparable sales did not exist in Meagher County! On the basis of the testimony of the Water District's own appraiser, this Court finds it impossible to accept the weight given by the jury to his valuation of appellants' property in its compensation award for land taken. This is so especially in view of the fact Sparhawk did not go outside Meagher County in his search for comparable sales whereas Wheeler, one of appellants' expert appraisers, testified as to sales in other counties which he believed to be comparable, sales which indi- cated a considerably higher price per acre. It is an established principle of law in condemnation proceedings, as well as other types of actions, that a jury find- ing will not be disturbed unless obviously and palpably out of proportion to the injury done. State Highway Commission v. Bennett, 162 Mont. 386, 513 P.2d 5; State Highway Commission v. Jacobs, 150 Mont. 322, 435 P.2d 274; State Highway Commission v. Manry, 143 Mont. 382, 390 P.2d 97. Such a situation exists in the instant case. With the heart taken out of appellants' land, substantial evidence does not exist to support the inadequate award of $9,000 damage to the remainder. Weighing the weak attempts by respondent to establish comparable sales in Meagher County as a basis for Sparhawk's appraisal against evidence presented by one of appellants' appraisers of much higher comparable sales in surrounding counties, the compen- sation given for land was also inadequate. Jury Instruction No. 9 states that the proper amount to be paid by the Water District for the use of Tract Two consists of consideration for the removal of the fill material " * * * added to the damages that would accrue by loss of use of such parcel for a period of five years." (Emphasis supplied.) However, the testimony of the Water District's appraiser indi- cates that he calculated the compensation for use of Tract Two as mere rental value in the amount of $4,285, over a period of five years with no consideration given for the taking of 800,000 cubic yards of fill material. An examination of the jury award for the right to enter and remove fill material indicates com- pensation in the amount of $4,544. Thus it would seem the jury awarded very little for the removal of 800,000 cubic yards of fill material, with most of the award on Tract Two going to rent, as calculated by the Water ~istrict'sappraiser. To that extent the compensation for Tract Two is inadequate. Accordingly, the judgment of the district court is reversed and the cause is remanded with orders to grant a new trial. .We concur: * Chief Justice