No. 14517
IN THE SUPREME COURT OF THE STATE OF MONTANA
1979
THE STATE OF MONTANA, ACTING BY AND
THROUGH STATE HIGHWAY COMMISSION OF THE
STATE OF MONTANA,
Plaintiff and Respondent,
-vs-
ADELINE DONNES ,
Defendant and Appellant.
Appeal from: District Court of the Thirteenth Judcial District,
Honorable L. C. Gulbrandson, Judge presiding.
Counsel of Record:
For Appellant:
M. Gene McLatchy, Highway Legal Dept., Helena, Montana
For Respondent:
Petersor, ardHunt, Billings, Montana
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Submitted on briefs: July 12, 1979
Decided : Am 1 :.
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Filed: 9;
Mr. Justice Daniel J. Shea delivered the Opinion of the Court.
Adeline Donnes, the owner of ranch land in Yellowstone
County, appeals from a judgment of the Yellowstone County
District Court, entered on the basis of a jury verdict
awarding her $10,653.38 for land condemned by the State of
Montana.
The landowner asks for a new trial on three grounds.
She contends first, that the trial court erred in refusing
her testimony as to the depreciation in value to the land
remaining after the take; second, that the trial court erred
in refusing her testimony as to an alleged comparable sale;
and third, that the jury failed to award her damages for
what she contends is a permanent impairment of the ranching
operation. She argues alternatively for a remand, contending
that she is entitled to recover attorney fees and expenses
of litigation. We affirm the judgment of the trial court.
The ranch land involved was condemned to obtain property
for a four-lane interstate highway. The highway project
bisected the landowner's property from the west to the east,
leaving the property connected by a livestock tube or tunnel.
The landowner's property consists of approximately 1,435
acres and is used for a cow-calf ranching operation. The
amount of land actually taken by the State was 80.3 acres.
All previously existing stocktrails and other points of
access to the portion of land lying to the north of the
interstate were cut off by the highway project. In order
to provide access from the property north of the interstate
to the property south of the interstate, the State constructed
a tunnel or livestock tube in one of the coulees. The
interstate split the winter range into two parts, the north
portion and the south portion. All of the water wells for
the winter range were located on the south portion. All
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of the land immediately to the north of the interstate
was sealed off without any water for the livestock,
necessitating the construction of a well on the north
portion.
The landowner concedes that she was permitted to
testify to the value of her land for the purposes it was
then being used, but contends that the trial court should
have permitted her to go an additional step and testify
to the depreciated value of the ranch land after the con-
demnation. The landowner can, of course, testify as to the
reasonable value of the land according to the uses it is
then being put, but ownership alone does not qualify one
to testify as to its value for other purposes. In such
event the landowner must have some peculiar means of forming
an intelligent and correct judgment as to the value of the
property in question beyond what is presumed to be possessed
by men generally. State Highway Commission v. Marsh (1974),
165 Mont. 198, 203, 527 P.2d 573, 575. The landowner contends
that the trial court erred in not permitting her to testify
to the resulting depreciation in value of the ranch caused
by the taking of the 80.3 acres. We determine however, that
in light of the landowner's own testimony, the ruling of
the trial court was correct.
The landowner made an offer of proof to the effect that
the depreciation of the property in total, based on the total
cow-calf operation, was $40,000. In not permitting the
landowner to testify as to this, the trial court ruled that
she had failed to lay a proper foundation, but that if she
could do so at any time during the trial, such testimony
would be permitted. She offered no additional foundation.
It is clear that the landowner possessed no peculiar
means of forming an intelligent and correct judgment as to
the value of the property beyond what is presumed to be
possessed by men generally. She did not testify to the
value of the remaining land after the take. She testified
that she did not personally operate the ranch, but rather
her lessee operated the ranch. Although she testified at
length concerning solutions or cures to the problem created
by the interstate dividing the ranch land, she was unable to
estimate the necessary costs to make the corrections. Nor
could she assign a monetary value to the effect of the
change in operations, as it related to the total value of
the ranch. Indeed, when asked her opinion as to the value
of the remaining land after the take, she testified it was
too difficult to give such an opinion and declined to do so.
Under these circumstances, the ruling of the trial court was
correct.
In 1962, the landowner purchased grazing land from the
State, and she wanted to testify as to the price she paid
for this land. However, the trial court refused her testimony,
ruling that the 1962 purchase was not a comparable sale in
relation to the land involved here that was being condemned
by the State. The landowner offers no reasonable rationale
as to why she should have been permitted to so testify, and
we find none.
The third contention of the landowner is that she was
entitled as an element of depreciation damages, to damages
for permanent impairment of the ranching operation, but that
the jury only allowed her the cost of a well on the north
portion of the remaining land. Although permanent inter-
ference with farming or ranching, as opposed to temporary
interference or inconvenience to farming or ranching operations,
is recognized as an element of compensation, Meagher Cty.
Newland Creek Water Dist. v. Walter (1976), 169 Mont. 358,
364, 547 P.2d 850, 854, the facts here fully support the
jury verdict.
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The heart of the landowner's case consisted of the
measures or methods needed to cure the problems created by
splitting the land into a north and south portion, joined
only by a tunnel. Witnesses for both sides testified at
lepgth concerning the effect of the construction of the
interstate on the cow-calf operation, but little evidence
exists as to the permanent impairment of the ranching operation.
It cannot be doubted that the livestock tube constructed
to provide access from the north portion to the south portion
of the property created some inconvenience, but it did not,
however, constitute a permanent impairment of the ranching
operation. The land on the north side of the interstate was
separated from the water wells on the south side, except for
the access provided by the livestock tube. An expert witness
for the landowner testified that after the construction of
an electric water well on the north portion of the property,
the value of the land on which it was constructed would be
just as high as it was before the condemnation. Although
an element of inconvenience surely exists, we cannot say
that an element of permanent impairment exists. The facts
of this case did not compel the jury to award damages for
permanent impairment.
The final issue raised by the landowner is that she
is entitled, under section 70-30-305, MCA, to an award of
reasonable attorney fees and the costs of litigation in
addition to the amount of the jury's verdict. By this
statute, attorney fees and the expenses of litigation go to
the landowner in addition to the amount of the jury verdict,
if the landowner receives an award in excess of the State's
final offer. The contention here is that the State's offer
of $6,000, made prior to the date of the commissioner's value
hearing, must be the one used in comparing it to the
jury's verdict of $10,653.38. This analysis, however
ignores the statute and the case law governing the situation.
The right to recover necessary costs of litigation, as
provided for by section 70-30-305, MCA, does not vest when
the suit is filed, but vests only when the private property
owner prevails, securing a higher verdict than the State's
final offer. State, Department of Highways v. Olsen (1975),
166 Mont. 139, 146, 531 P.2d 1330, 1334. Under subsection 2
of this statute, to prevail means that the property owner
must receive an award in excess of the final offer of the
State. State By And Through Dept. of Highways v. Burlingame
(1979), Mont . , 597 P.2d 51, 55, 36 St.Rep. 603, 606.
The State is not confined, as the landowner contends,
to the offer of $6,000 made before the commissioner's value
hearing. Rather, the State may make an offer at any time
before the trial starts. State, Department of Highways v.
Olsen, supra, 166 Mont. at 146, 531 P.2d at 1334. The
landowner rejected the offer of $6,000, but before the trial
started, the State made its final offer of $20,100 which the
landowner rejected. It is this final offer which must be
measured against the jury verdict. Clearly, therefore, the
landowner is not entitled to attorney fees and expenses of
litigation. The State's offer exceeded the jury verdict.
The judgment of the District
We Concur:
Chief Justice
u Justices
Mr. Justice John C. Sheehy dissenting:
This landowner was very much ill-used by the Yellow-
stone County jury. On its face, the award for the actual
taking is unconscionable. She was awarded $4,815 for an
actual taking of 80.3 acres. This averages approximately
$60 per acre. If at anytime in 1971, the presumed year of
taking, an 80 acre tract in the beautiful lands along the
Yellowstone River east of Pompeii's Pillar were to be sold
for $60 per acre, a line of eager purchasers a mile long
would have formed to get in on the buy.
This unfair result is because of error that occurred in
the course of the trial. The first error was the refusal of
the District Court to allow a landowner to testify as to her
estimate of the value of the property following the taking.
She would have testified that the property she owned had
been depreciated by virtue of the taking to the extent of
$40,000. The District Court refused her testimony on the
grounds that she needed "more specific foundation". In
this, the District Court erred. The only foundation necessary
for her testimony had been laid: she was the landowner, and
under State Hwy. Comrn'n. v. Marsh (1974), 165 Mont. 198,
203, 527 P.2d 573, the landowner's right to give an opinion
as to reasonable value of his or her property, when the use
before and after is the same, it is unqualified:
"(1) The landowner on prima facie showing of
ownership, may testify as to value, so long
as:
"a. His testimony is 'reasonable', and
"b. The value testified to is for the uses
to which he is putting the land .
. ."
The basis of the court's refusal to allow this land-
owner to testify as to her opinion on value was not based
on lack of "reasonable" testimony but rather that she had not ~
laid a specific foundation. This was an insufficient ground on
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which to deny her testimony.
The objections to her testimony on which the State
relied are not sufficient to overcome her right as landowner
to testify to the value of her property. The State's objection
consisted of the fact that she was leasing the land instead
of operating it herself, that she is a schoolteacher and
mother living in Red Lodge, Montana, a substantial distance
away from her property; that her testimony indicated because
of the taking that some of her land would have to be overgrazed
in order to continue as a cow-calf ranch operation; that
the depreciation in value would be predicated upon impliedly
negligent maintenance of the highway relative to erosion off
of the tube underpassing the highway; that it would "ignore
the landowner's duty to mitigate damage"; and that her
estimate of value included cost-of-cure items. Those objections
go merely to the weight of the testimony, and have no
effect on her unqualified right under State Hwy. Comm'n. v.
Marsh, supra, as a landowner to testify as to the value of
her property. The fact that she would testify as to the
value after the taking has no bearing. The eminent domain
proceedings were commenced in 1971 when the complaint was
filed. The highway itself was not constructed until 1974-
1975. The cause was tried in May 1978, so she had at the time
of trial at least three years of experience with her cow-
calf operation and how the taking affected the value of her
property.
In 1962, the defendant and her husband purchased a
parcel of land from the State of Montana which was characterized
as grazing land, and which was offered on competitive bids.
She offered to testify as to the price they paid for that grazing
land. On objection, the court refused to allow such testimony.
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Even though the purchase was nine years prior to the taking
in this case, the value placed upon the grazing land in
a purchase by this landowner would have a direct bearing
on the value to be considered by the jury of the land taken.
When the State expert testified as to values, he used what
he termed as comparable sales occurring early in the 1960's in
the same area. Of course there was no objection on the part
of the landowners counsel to this testimony. Obviously, refusal
to allow this landowner to testify as to the value of land
actually purchased by her in connection with this land as an
indication of the value of this land in 1971 was again
error.
This court attempted to straighten out the law with
respect to the landowner's testimony of value in State Hwy.
Comm'n. v. Marsh, supra. As a result of the majority opinion
in this case, that problem is again beclouded with no guidance
to courts or lawyers for future eminent domain proceedings.
In State Hwy. Comm'n. v. Marsh, supra, this Court
reversed because the landowner was not allowed to testify as
to the value of the property involved. The same result
should have been obtained here. Were that so, it would not
be necessary to consider the issue of attorney fees at this
juncture. But since the majority here is sustaining what
was done in the District Court with respect to the landowners
testimony, the question of attorney fees becomes pertinent.
In my opinion, the jury did enough damage to this landowner
in awarding an insufficient amount for the taking. We do
her further damage in not applying 1972 Mont. Const., Art.
11, S29. In my dissent in State By and Through Dept. of
Highways v. Burlingame (1979), - Mont . , 597 P.2d 51,
56, 36 St-Rep. 603, I pointed out that the only statutory
definition of a "final offer" was that contained in section
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70-30-305, MCA, which provided that the "final offer" had to
be made within 30 days after the appeal had been perfected
from the commissioner's award or report. In this case, the
majority, relying on a subsequent offer, not a "final offer"
as defined by the statute, made several months after the
appeal had been perfected, denies attorney fees and deprives
this landowner of just compensation. The result here is a
gross inequity. In addition to having received an inadequate
award, which is now approved, this landowner must in addition
bear the burden of her attorney fees and costs. If this
Court continues to refuse to apply properly a specific
statute, where can a landowner turn?
I would reverse for a new trial.
I agree with this dissent.
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Justice