State Ex Rel. Burk v. Oklahoma City

SIMMS, Justice

(dissenting).

The majority holds that the trial court complied with our directions in State ex rel. Burk v. Oklahoma City, Okl., 522 P.2d 612 (1974), by instructing the appraisers to determine the value of 20th Street according to conventional “fair market value” standards, and by fixing the value of 20th Street at half the square footage cost that appellees paid to acquire nearby land. I disagree and respectfully dissent.

This was not a conventional real estate transaction and conventional “fair market value” instructions were not applicable.

Appellees were not purchasers or lessees who were “willing, but not obligated” to buy or lease 20th Street. They were wrongdoers. They had attempted to vacate this public street through fraud. The vacation was void ab initio. “[Appellees’] private use of the public street was a trespass from its inception. The construction of a permanent structure thereon constituted a public nuisance per se and was unlawful each day it continued.” Burk, supra at 619. Our decision in Burk, supra, gave appellees two options. They could remove the building and restore 20th Street as a public street; or, pursuant to our creation and imposition of a trust, they could make annual lease payments to the City Council of Oklahoma City as trustees for as long as the building encroaches on 20th Street.

The City of Oklahoma City was not an owner or lessor “willing but not obligated” to sell or lease 20th Street. The City Council held the property in trust for the public and was unable to “sell, barter or transfer it for a private use.” Burk, supra, at 620. The Two Thousand Classen Building occupies a public street only by virtue of our decision in Burk, supra. It is only through that opinion that the City Council is required and authorized to accept lease payments as trustees for the public as compensation for the appellees’ private taking of their street.

I agree with appellants that the instructions to the appraisers should have required them to consider the increased market value of the two blocks owned by ap-pellees contiguous to and now joined together by the acquisition of the street. While the trial court did allow testimony regarding this matter, that testimony shows that in their determination of the tracts value, the appraisers did not consider this property’s unique value to appellees and the special benefit its acquisition gave them.

The intent of the Court in Burk, supra, was to place the rights of the parties to the subject property in status quo, not to place the parties themselves in status quo. At page 620 we first discussed the availability of precedent for requiring appellees to remove their building from the City’s street. We then considered quieting title to the building in the City.

We rejected these alternatives, stating that “equity will not insist on an absolute and literal restoration of the parties to status quo where it would be purposeless, useless and foolish.” at 621. I understand this rejection of the destruction of the building and rejection of quieting title to the property in the City of Oklahoma City, to have resulted from a desire to prevent economic waste. We concluded this discussion of “restoration of status quo”, at 621 with the following:

“[Although the parties themselves cannot be restored to the situation existing *596before, their rights in respect to the property which forms the subject matter in controversy shall be placed in status quo.”

The Court then proceeded to place the “portion of the street which appellees fraudulently sought to vacate ... in trust” and to establish provisions for paying an annual rental payment to the City Council of Oklahoma City as trustees for the public.

We rejected one extreme, the destruction of the building, and instead created pos-sessory rights to the building in appellees contingent upon payment of annual rental to the City. I do not agree that we intended the other extreme — that appellees should pay less for the use and enjoyment of this property through this arrangement than they would have paid if the property had been available for acquisition through private negotiation and sale.

Testimony showed that seven comparable transactions resulted in a sale price in excess of $5.00 per square foot.1 In one of these transactions, appellee Cameron paid $10.83 per square foot to acquire property for his complex. The majority dismisses this figure as an unrepresentative and “disaproportionate” value since it was paid to a “hold-out” seller, and concludes that to place such a price tag on 20th Street would amount to an award of punitive damages against appellees.

I do not agree. Appellee Cameron willingly paid a private seller $10.83, per square foot to acquire property which the seller was willing to sell at that price. How can the assessment of at least that value to property which appellees sought to take through fraud and deceit, without benefit of law, be punitive in nature ?

Appellees should pay the citizens of Oklahoma City for their property at least the amount per square foot that they paid to private individuals. The citizens of the City are the ultimate of “hold-out” sellers for 20th Street is not subject to barter, sale or transfer. It is “leased” to appellees only through judicial direction and the citizens must rely on the courts to negotiate in their behalf.

In view of this evidence, I agree with appellants that the trial court abused its discretion in fixing the value of 20th Street at approximately $5.00 per square foot.

While Burk, supra, does not require the trial court to award punitive damages against appellees, it also certainly does not direct the trial court to make the appellees’ attempted fraudulent vacation of a public street, and their unlawful construction of a building thereon, a commercially profitable venture.

I am authorized to state that Justice IRWIN joins me in this dissent.

. Two sales at $5.33 per sq. ft., one sale at $5.67 per sq. ft., one sale at $7.14 per sq. ft., two sales at $5.71 per sq. ft., and one sale at $10.83 per sq. ft.