Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
Eugene O. Finch, et al.,
Filed May 19, 1998
File No. C6958245
Robert B. Bauer, James F. Sheldon, Michael G. Dougherty, Severson, Sheldon, Dougherty & Molenda, P.A., 7300 West 147th St., Suite 600, Apple Valley, MN 55124 (for respondent)
John Hugh Gilmore, 64 West Delos St., St. Paul, MN 55107-1107 (for appellant)
Considered and decided by Crippen, Presiding Judge, Davies, Judge, and Harten, Judge.
U N P U B L I S H E D O P I N I O N
Appellants challenge a condemnation judgment. We affirm.
In 1994, respondent City of Eagan initiated condemnation proceedings to acquire 2.03 acres of property owned by appellants Eugene and Deborah Finch. The property was needed for a new road known as Red Pine Lane. Following trial, the jury returned a special verdict granting appellants $72,840 in damages. Of that amount, $56,840 was for land actually taken and $16,000 was for damages to property not taken. The Finches appeal.
D E C I S I O N
The decision to exclude evidence lies within the trial court's broad discretion and "will not be disturbed unless it is based on an erroneous view of the law or constitutes an abuse of discretion." Uselman v. Uselman, 464 N.W.2d 130, 138 (Minn. 1990).
A. Development Cost Approach
The development cost approach can be used to determine the fair market value of real property in condemnation proceedings. Hanson v. County of Hennepin, 527 N.W.2d 89, 93-94 (Minn. 1995). It is designed to reflect
the current price a developer-purchaser would be warranted in paying for the land, given the cost of developing it and the probable proceeds from the sale of developed sites.
County of Ramsey v. Miller, 316 N.W.2d 917, 920 (Minn. 1982). Appellants argue that the trial court erred by granting a motion in limine that prohibited them from introducing evidence necessary to support this approach to valuation of their property.
In making their argument, appellants overlook the fundamental threshold requirement that, before the development cost approach may be used, traditional methods of valuation must be inadequate. See Hansen, 527 N.W.2d at 94 (because development cost approach is complicated and manipulable, "it should be employed judiciously, when the other traditional methods for valuing property are not wholly reliable"). Other evidence of pre- and post-takings market value, such as comparable sales, must be inadequate or unavailable before development cost evidence will be admitted. See Buzick v. City of Blaine, 491 N.W.2d 923, 926 (Minn. App. 1992) (when comparable sales evidence is "so different that comparison [is] meaningless," evidence of development cost approach "may be admissible"), aff'd 505 N.W.2d 51 (Minn. 1993).
Here, appellants made no showing that other evidence of market value was unavailable, inadequate, or significantly dissimilar from the subject property. In fact, one of appellants' expert witnesses, a professional real estate appraiser, derived his valuation of appellants' property from the recent sales of three comparable neighboring properties; thus, comparable sales evidence was clearly available. None of those properties was so dissimilar from appellants' property that comparison was meaningless.
Because appellants did not demonstrate a need for development cost evidence, the trial court did not err by granting the motion in limine to exclude that evidence.
B. "After" Analysis of Damages
In a partial takings case,
the measure of damages is the difference between the fair market value of the entire piece of property immediately before the taking and the fair market value of the remainder of the property after the taking.
State by Humphrey v. Strom, 493 N.W.2d 554, 558 (Minn. 1992).
Appellants argue that the trial court erred by granting the motion in limine that prohibited them from including evidence of damages from Red Pine Lane in their "after" analysis of market value. But at trial they were not prevented from presenting evidence that Red Pine Lane decreased the post-takings market value of their property.
"If the jury's special verdict finding can be reconciled on any theory, the verdict will not be disturbed." Hanks v. Hubbard Broadcasting, Inc., 493 N.W.2d 302, 309 (Minn. App. 1992), review denied (Minn. Feb. 12, 1993). Reconciling the special verdict to the evidence in this case is simple: the jury did not believe appellants' expert witness, who testified that construction of Red Pine Lane reduced the market value of the remainder of appellants' property by $90,000. The jury awarded $16,000, an amount it believed to be appropriate. There was no error.
Appellants argue that the trial court erred by denying their new trial motion. The decision to grant or deny a new trial lies "within the sound discretion of the trial court and will not be disturbed absent a clear abuse of that discretion." Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990). No new trial is necessary where, as here, there has been no error.
[ ]1 Appellants' argument focuses exclusively on the development cost approach's secondary foundation requirements that
(a) the land is ripe for development; (b) the owner can reasonably expect to secure the necessary zoning and other permits required for the development to take place; and (c) the development will not take place at too remote a time.
Miller, 316 N.W.2d at 922. These secondary requirements are intended to prevent property owners from submitting speculative development cost evidence "in an attempt to artificially inflate the value of condemnation awards." Hansen, 527 N.W.2d at 94.
In granting the motion in limine, the trial court properly found that development cost evidence was inadmissible because appellants' property was not "ripe for development." Although we decide this case on other grounds, we note that before the November 1994 takings date appellants had not signed a contract to develop their property, applied for the permits required to develop their property, or submitted their development plan for city approval. Appellants' property also lacked adequate primary and secondary access, and was burdened by a road easement that appellants could not independently terminate.