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West Virginia Department of Transportation, Division of Highways v. Pifer

Supreme Court of Appeals of West Virginia

November 19, 2019

WEST VIRGINIA DEPARTMENT OF TRANSPORTATION, DIVISION OF HIGHWAYS, Petitioner Below, Petitioner,
v.
LAWRENCE W. PIFER and MICHAEL E. PIFER, Respondents Below, Respondents.

          Submitted: October 30, 2019

          Appeal from the Circuit Court of Wood County The Honorable Jason Wharton, Judge Civil Action No. 10-C-95

          Webster J. Arceneaux, III, Esq. James C. Stebbins, Esq. Joseph L. Jenkins, Esq. Lewis Glasser PLLC Charleston, West Virginia Counsel for Petitioner

          Robert L. Bays, Esq. Bowles Rice LLP Parkersburg, West Virginia and William Crichton, V William Crichton, VI Crichton & Crichton Parkersburg, West Virginia Counsel for Respondents

         SYLLABUS

         1. "'The ruling of a trial court in granting or denying a motion for a new trial is entitled to great respect and weight, [and] the trial court's ruling will be reversed on appeal [only] when it is clear that the trial court has acted under some misapprehension of the law or the evidence.' Syl. pt. 4, in part, Sanders v. Georgia- Pacific Corp., 159 W.Va. 621, 225 S.E.2d 218 (1976)." Syl. Pt. 2, Estep v. Mike Ferrell Ford Lincoln-Mercury, Inc., 223 W.Va. 209, 672 S.E.2d 345 (2008).

         2. "The measure of just compensation to be awarded to one whose interest in real estate is taken for a public use in a condemnation proceeding is the fair market value of the property at the time of the taking." Syl. Pt. 1, W.Va. Dep't of Transp., Div. of Highways v. W. Pocahontas Props., L.P., 236 W.Va. 50');">236 W.Va. 50, 777 S.E.2d 619 (2015).

         3. "The approved and general rule for the measure of damages in an eminent domain proceeding where parts of the land are taken is the fair market value for the land at the time it was taken, plus the difference in the fair market value of the residue immediately before and immediately after the taking less all benefits which may accrue to the residue from the construction of the improvement for which the land was taken." Syl. Pt. 3, W.Va. Dep't of Highways v. Bartlett, 156 W.Va. 431, 194 S.E.2d 383 (1973).

         4. "There must be proof which furnishes reasonable certainty of damages in eminent domain proceedings, and damages which are remote, conjectural or speculative cannot be recovered in such proceedings." Syl. Pt. 4, W.Va. Dep't of Highways v. Bartlett, 156 W.Va. 431, 194 S.E.2d 383 (1973).

         5. A landowner may seek damages for condemnation blight as an element of just compensation in a condemnation proceeding. W.Va. Const. art. III, § 9; W.Va. Code § 54-2-9a (2016).

         6. Because some delays relating to public projects are natural and unavoidable, before a landowner may recover damages for condemnation blight, he or she must establish that there has been an unreasonable delay in instituting the condemnation proceeding following its official announcement. Mere planning of the public project is insufficient to trigger a claim for damages. Additionally, a landowner must prove his or her damages were caused by the condemning authority's actions or inactions.

          WORKMAN, JUSTICE.

         In this appeal, we are asked to review a trial court's ruling that Respondents Lawrence W. Pifer and Michael E. Pifer were entitled to damages related to condemnation blight[1] for several years preceding the filing of the condemnation petition and the manner in which the court calculated interest on the award. Respondents are brothers who own property in Wood County, West Virginia, and operate a family business on their property. The fair market value of their land with improvements is $2.5 million.

         In 1998, Petitioner West Virginia Department of Transportation Division of Highways ("DOH") announced plans regarding a public improvement project that would severely impact Respondents' property. More than a decade later, however, DOH changed the project plans and condemned only a small portion of Respondents' property. Although relieved that their businesses were spared, Respondents introduced evidence at trial that DOH's protracted delay in commencing the project caused them to suffer condemnation blight for years prior to DOH filing the condemnation petition. The jury awarded a nominal sum for the "taking" of the property and $175, 165 in damages for condemnation blight. In its judgment order, the trial court calculated interest thereby increasing the total verdict to $466, 114.

         DOH argues that the Circuit Court of Wood County's order denying its motion for a new trial and to amend or alter the judgment is a marked departure from well-established rules for determining just compensation due a landowner in a condemnation proceeding. Specifically, DOH argues the trial court erred: (1) by holding the date of take was an issue of fact for the jury; (2) by failing to incorporate condemnation blight within the context of its impact upon the fair market value of the property as of the date of the take, and improperly instructing the jury on the issue; and (3) by calculating interest in its judgment contrary to statute.[2]

         As set forth below, we affirm the trial court's judgment on the jury's award of damages for condemnation blight. However, we reverse and remand with directions for the trial court to recalculate interest on the award in accordance with West Virginia Code § 54-2-14a.

         I. FACTUAL AND PROCEDURAL HISTORY

         Respondents are independent operators of a gasoline service station, convenience store, and towing service in Mineral Wells, West Virginia. Respondents have operated their family business for more than twenty years on their 2.45 acre parcel that fronts County Route 14.

         In April, 1996, and October, 1998, DOH held public informational meetings regarding a planned public project involving the South Mineral Wells Interchange of Interstate 77 and County Route 14 (the "project"). DOH considered several plans for completion of the project. Under the plan chosen in December, 1998, Alternate Plan C, DOH would take Respondents' parcel of land almost in its entirety. Respondent Michael E. Pifer testified that DOH's announcement was devastating news to him and his family.[3]

That was shortly after we went to that meeting over at the Mineral Wells school, and had the bomb set on us that we were the cheapest and it looked like they was going to take us. And that was in '98. That was my anniversary message to my wife that night.

         By letter dated December 18, 1998, DOH confirmed that it chose Alternate Plan C for the portion of the project west of the interstate. Mr. Pifer testified about the significance of DOH's selection: "That's going through my convenience store. That's going through my gas pumps, and that's going through my tank field."

         By letter dated March 21, 2001, DOH informed Respondents that construction plan development would begin in July, 2003, and construction would begin in "Spring 2005." DOH kept in touch with Respondents, however, and delayed moving forward on the project; construction did not begin as planned.

         In April, 2008, a DOH employee met with Michael E. Pifer at his service station to announce DOH changed the project plans, preliminarily, and Respondents' property would largely be spared. Mr. Pifer testified,

this was one of the happiest days that I had, because this showed that we wasn't being taken. The convenience store was not being taken. The gas pumps was not being taken. The tank field was not being taken. And this paper . . . shows that they're going to take one leg of my big sign out there. And then the temporary construction easement across almost all the way, and then that one in that right-of-way. And then they were going to take that five-foot by the sign where it had the two stakes out there. . . . But it pretty well told me we were going to survive.

         Subsequent to this modification, DOH again changed the project plan to avoiding taking Respondents' sign. Ultimately, DOH sought to condemn a 116-square-foot piece of land for a noncontrolled access right of way, a 424-square-foot area for a temporary construction easement ("TCE"), and a second 53-square-foot area for another TCE (the "condemned property").

         On March 9, 2010, DOH filed its petition to condemn Respondents' land for a public use and, per West Virginia Code § 54-2-14a, deposited $3, 550 with the trial court, which DOH estimated to be just compensation. As the condemned property represented only a small portion of what Respondents owned, it was considered a partial taking. Commissioners appointed to ascertain "just compensation" determined that Respondents should be awarded $17, 500. Both parties objected to the commissioners' report and the matter went to jury trial. See id. § 54-2-10 (providing either party may "demand that the question of the compensation, and any damages to be paid, be ascertained by a jury, in which case a jury of twelve freeholders shall be selected and impaneled").

         In addition to seeking the usual compensation associated with a taking, Respondents sought damages for DOH's allegedly unreasonable actions during the pre-condemnation period based on the length of time between the 1998 public announcement and the filing of the petition in 2010. Respondents claimed that they suffered damages for rental loss due to condemnation blight. Prior to trial, DOH moved in limine to preclude the introduction of evidence or testimony of condemnation blight, asserting that Respondents' method for calculating those damages had not been recognized in West Virginia. DOH further moved the trial court to preclude introduction of evidence that the date of take should be earlier than the date the petition was filed. By letter to the parties, the trial court denied DOH's motion.

         The five-day trial in this matter commenced on August 8, 2017, and the jury viewed Respondents' property after the parties' opening remarks. Respondent's expert appraiser, Russell Rice, testified at length regarding his investigation to determine the public project's impact to Respondents' property. His evaluation began with the usual two-step process: (1) he determined the fair market value of the property taken as $2, 000; and (2) he determined the damage to the residue was zero. Mr. Rice explained that the threat of condemnation did not affect the value of the residue at all, but the primary influence of the condemnation blight was the loss of Respondents' ability to negotiate a lease on the property with a major distributor from 2001 to 2010. Mr. Rice opined that Respondents suffered $35, 000 in damages each year based on reasonable market rental values.

         Michael E. Pifer testified that the best use of his property at the time was to lease to a major dealer/distributor of gasoline rather than to compete with one. The announcement of the project put Respondents' property under threat of condemnation and they were unable to go forward with negotiations for a favorable lease with a larger commercial operation. Mr. Pifer stated that he was one of the last independents at any major intersection off Interstate 77 in Wood County and he simply could not compete with the larger distributors. When asked if he made any efforts following 2000 to lease the gasoline service station, Mr. Pifer explained: "Well, I didn't have to make efforts, they come to us. But every one of them said 'When the road's done. When the Road's done we want to talk to you. When the road's done we will be interested in leasing your facility.'" Mr. Pifer stated further that "no one wanted to lease off of us if the place was going to be torn up and the road construction was going to be three years long. I mean, it really hurts your business when they're doing stuff out there." Mr. Pifer claimed $812, 000 in damages attributable to condemnation blight.

         DOH's expert arraiser, Roscoe Shiplett, testified that he did not see any evidence of condemnation blight when valuing Respondents' property. He noted Respondents continued to operate their business during all relevant times.

The trial court instructed the jury as follows:
When a condemnor unreasonably delays between the announcement of an intent to condemn a parcel of property and the initiation of the condemnation action causing an owner to suffer damages, the owner is entitled to compensation for that loss. Where the real property has been blighted because of the delay between the announcement of a public project and the acquisition of the lands necessary to construct the project the owner is entitled to recover any decrease in value attributable either to the project, to the pendency of the condemnation project proceedings or to the conduct of the agency relating to the taking of the property and to any loss of earnings from the subject property during the period of the blight.
Accordingly if you find by a preponderance of the evidence that the subject property has suffered blight by virtue of a delay between the announcement of the subject project and the acquisition and the date of this condemnation, then you may award damages for any loss of earnings (both personally and business) and any diminution of market value, proven by a preponderance of the evidence.

         Following deliberations, the jury awarded Respondents $2, 000 for the take and $1, 800 for the TCEs. The jury further found that Respondents suffered damages related to condemnation blight prior to March 9, 2010, and awarded $35, 033 for five years (2003 - 2007) for a total of $175, 165. The trial court entered its judgment order on November 16, 2017, and calculated pre-petition interest at 10% and then 10% interest was calculated to the total award from the date of petition to arrive at the $466, 114 verdict.

         DOH moved for a new trial and to alter or amend the judgment and asserted that the evidence presented regarding condemnation blight was in contravention of the law as was the admission of evidence regarding the date of take. DOH further argued that the trial court improperly calculated interest in its judgment order. By order entered May 11, 2018, the trial court denied the motion and this appeal followed.

         II. ...


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