STATE of Arizona ex rel. Robert MORRISON, Attorney General, Appellant,
JAY SIX CATTLE COMPANY, Inc., a corporation, P. C. Getzwiller and Marian T. Getzwiller, his wife, Appellees.
Rehearing Denied Aug. 15, 1960.
[88 Ariz. 99] Robert Morrison, Former Atty. Gen., Wade Church, Present Atty. Gen., and Charles L. Hardy, Sp. Asst. Atty. Gen., for appellant.
Dunseath, Stubbs, Morse & Burch, and J. Elliott Dunseath and Robert C. Stubbs, Tucson, for appellees.
This is an appeal by the State of Arizona from a judgment based upon a jury verdict awarding Jay Six Cattle Company, Inc. (hereinafter called 'Jay Six') the sum of $80,000, and P. C. Getzwiller and Marian T. Getzwiller (hereinafter called 'Getzwiller') the sum of $15,000. The action was commenced by the State to condemn land belonging to Jay Six and Getzwiller.
As of the date of the condemnation in October, 1957, Jay Six owned two sections, described as sections 17 and 18, which fronted on the south side of the Tucson-Benson Highway for a length of two miles, and was also owner or lessee of other adjoining sections. Jay Six had access to the highway through approximately six gates located in sections 17 and 18 along the highway.
The Getzwiller land consisted of approximately 350 acres which fronted on the north [88 Ariz. 100] side of the highway for one-half mile and abutted, for approximately one mile, the
east side of Mescal Road, which ran northsouth and led onto the highway. Getzwiller had direct access both to the highway and to Mescal Road.
The purpose of the condemnation was to convert the Tucson-Benson Highway from a two-lane highway into a four-lane controlled-access highway. Access to the highway along the area in question was to be permitted only via a single interchange to be constructed at the intersection of the highway by Mescal Road and the section line between sections 17 and 18. Mescal Road was to be elevated to cross above the highway with lanes leading therefrom to provide entrances to and exits from the east and west lanes of the highway. Mescal Road was graded to permit entrances thereto at points north and south of the highway. A frontage road running east-west was to be constructed north of the highway and was to be graded to provide access to the elevated Mescal Road. No frontage road was planned for the south side of the highway along the Jay Six land.
To accomplish the reconstruction of the highway, the State condemned 36.76 acres of Jay Six land along the two mile length of the abutting highway and for a distance along the section line between sections 17 and 18. The condemned Getzwiller land consisted of 3.12 acres which abutted the highway and Mescal Road.
After the reconstruction Jay Six will have access to the Tucson-Benson Highway via the interchange which can be reached only by entering Mescal Road, more than 1,000 feet south of the highway. Getzwiller will have access to the highway at the north entrance of Mescal Road and at the east entrance of the frontage road. Jay Six and Getzwiller claimed compensation for the value of the land taken and severance damages to their remaining property caused by the reconstruction of the highway and the condemnation of their rights of access thereto.
On this appeal, the State has assigned thirteen errors, some of which may be discussed together, and all of which are considered below.
The State claims first that the court erred in permitting four witnesses to testify, over objection, to their opinion of the value of the condemned land on front footage and other speculative bases not supported by the facts. The State relies in the main on the fact that there was no proof of prior sales of the Jay Six or Getzwiller property or, indeed, of any similar property in the area on a front footage basis.
The four witnesses were Kathryn Getzwiller, who owned other property in the area and had been in the real estate business as a saleswoman for approximately four years; J. R. Blake, who had devoted his time exclusively to buying and selling land [88 Ariz. 101] in the area on his own account for approximately eight years; William Fraesdorf, a real estate broker and land appraiser, who had been engaged in the real estate business in the area for approximately eleven years; and Dan C. McKinney, who had acted as broker in the sale and purchase of ranches in the area and had managed and owned ranches in Arizona and Nevada. These witnesses testified that they were familiar with the property in the area, and the Jay Six and Getzwiller land, in particular; that the Jay Six land was being used and operated as a cattle ranch; that the Getzwiller land was being used for a private residence and, in a limited way, for cattle grazing; that the highest and best use of the Jay Six and Getzwiller land in October 1957 was for commercial and residential development and for investment purposes; and that based on the location, topography and accessibility of the property, the development and availability of other property in the area, and other factors which were testified to, the Jay Six and Getzwiller land which fronted on the highway, and which was condemned by the State, had a market value in October 1957 on a front footage basis.
It is clear, and, indeed, it is not disputed that each of the four witnesses was qualified generally to testify to the value of the land in issue. See 18 Am.Jur.,
Eminent Domain, §§ 355, 356. As qualified experts, they could appraise the land on any reasonable basis, subject to limits properly imposed by the trial judge.
As stated in the Board of Regents etc. v. Cannon, 86 Ariz. 176, 178, 342 P.2d 207, 209:
'The question of whether any witness, whether or not designated 'expert' is competent to testify on a given subject rests in the sound discretion of the trial court, and its exercise will not be reviewed but for abuse.'
The fact that there were few prior relevant sales in the area and that these sales had been made on an acreage basis does not necessarily preclude expert testimony that the land in question had a market value on a front foot basis. Prior sales are only one element in determining market value as of a particular date and so long as the qualified witnesses testify to the factors within their special knowledge and competence upon which they base their opinion, even though they give little or no weight to the prior sales, their opinions of market value may, within the sound discretion of the trial court, be admitted.
In Board of Regents, etc. v. Cannon, supra, the expert witnesses appraised the market value of the land in question primarily on the basis of the rental income derived from the property. In affirming the trial court's admission of such testimony, this Court stated:
[88 Ariz. 102] 'It is true that there are other elements which may be used to determine market value, including a knowledge of the sales prices of other property similar in character and locality, but we know of no rule which requires the use of this element exclusively. If the witness testifying as to market value bases his opinion upon a recognized method of determining it which is of such a nature that it is not a matter of common knowledge, but results from special experience or training of the witness, his opinion in that matter may be regarded as expert. Upon cross-examination he may be questioned as to the extent of his knowledge of other elements, and lack of such knowledge would be a matter for the jury to consider in weighing the value of the testimony.' (86 Ariz. at page 179, 342 P.2d at page 209)
Here, the essential point is that there was testimony from these witnesses and others that the use to which the Jay Six and Getzwiller land was being put in October 1957 was not its then highest and best use. Such evidence was clearly competent. As was stated in County of Maricopa v. Paysnoe, 83 Ariz. 236, 239, 319 P.2d 995, 997:
'A valuation which does not take into consideration the highest use would not be the fair market value and therefore would not be just compensation. * * * An owner who is making only a minor use of premises cannot be deprived of its value for a major use if that major use goes to a higher market value.'
The testimony that the highest and best use of the Jay Six and Getzwiller lands was for commercial purposes and that the land had value on a front footage basis, was given not as a forecast of future events but in response to questions posed in terms of the fair market value of the land as of October 1957. The witnesses testified not only to the availability, adaptability and reasonable foreseeability of the land for commercial purposes but also to its 'present demand'; that is, its demand as of the date of the condemnation.
Thus, Kathryn Getzwiller testified that she had refused $10 a front foot for her own property in the area, that a number of people had questioned her about buying property in the area for commercial and business purposes and that developers and builders had confirmed her opinion as to front footage value. Dan C. McKinney testified that he had tried to obtain for his customers property which fronted on the highway. William Fraesdorf testified to
contacts he had with, and inquiries he received from, people, locally and outside the state, who wanted to buy land in the area, as well as to the terms on which they were willing to make a purchase. Another witness,[88 Ariz. 103] Theodore E. Leonard, who a few months prior to the condemnation had commenced operating a gasoline service station about one and one-half miles from the main Jay Six entrance gate, testified that he had acquired his property for motel, restaurant and other commercial purposes, which had been frustrated by the State's condemnation actions. These and other witnesses testified that the demand for highway frontage property for commercial purposes implied front footage values.
The above testimony of the expert witnesses, which appears to be hearsay and not admissible to prove value, was not received for that purpose. Sich testimony was introduced to qualify these expert witnesses and to establish their competence to base their opinions of value on their knowledge of and experience with the present demand for property in the area on a front footage basis. See Board of Regents etc. v. Cannon, supra. Indeed, the State itself inquired into many of these matters upon its voir dire examination of these witnesses.
The limited nature of the demand for the property, whether on an acreage or front footage basis, was explained by the witnesses as being the result of the predominantly State or Federal ownership of the property in the area and of the refusal of the few private owners to sell their land or offer it for sale. The point is, as noted above, that prior sales are not the sole test of market value and are, accordingly, not the sole test of present demand.
It follows that prior sales made on an acreage basis which reflected the use of property for cattle grazing purposes would not necessarily be determinative of the basis upon which the property, which fronted on a highway and had direct access thereto, would be valued for its best use as commercial and investment property. Testimony of values on an acreage basis may thus be subject to the same kind of attack as has been made on this appeal to the front-footage testimony.
After reviewing the record herein, we hold that the trial court did not abuse its discretion in permitting the witnesses to appraise the market value of the Jay Six and Getzwiller property on a front footage basis.
The State's second group of assignments is that the amount of damages testified to by the witness Fraesdorf and set forth in Exhibits 16A and 16B was improper for the reason that it twice included the value of the land taken. The State claims that the witness and the exhibits computed the difference between the value of all the Jay Six and Getzwiller land before the condemnation and the value of the remaining land after the condemnation, and added to the resulting figure the value [88 Ariz. 104] of the land taken. It is clear that such method of computation is improper because it duplicates, in effect, the value of the land taken.
A.R.S. § 12-1122 prescribes the proper measure as the value of the condemned land plus severance damages or difference in value of the remaining land. A review of the record makes it clear that the testimony and exhibits did not, as claimed, include the value of the condemned land twice.
The witness Fraesdorf did testify to the value of all the land before the condemnation and the value of the remaining land after the condemnation, and computed the difference, plus the cost of necessary restorative improvements, as total damages. The witness then testified separately to the value of the land taken, but this figure was not added to the total damages. Rather it was subtracted therefrom to arrive at separate figures for the value of the condemned land and for the severance damages to the remaining land. Such method of computation was not improper and was indeed utilized by the State's expert witness. Further,
exhibits reflecting the values testified to by Fraesdorf were received in evidence either without objection or where objection was made, it was subsequently withdrawn.
Exhibits 16A and 16B were based on the testimony of witness Sanders K. Solot, a professional appraiser and licensed real estate salesman, who computed damages on a different basis from that adopted by witness Fraesdorf. Solot testified to the value of all of the land (including the condemned land) both before and after the taking. To the difference between these values, Solot added the value of the land taken and the cost of the necessary improvements. These computations were reflected in Exhibits 16A and 16B for the Jay Six property and in Exhibit 17 for the Getzwiller property. Objection was made by the State to Exhibits 16A and 16B, but not to Exhibit 17.
It is clear that the figure representing the difference between the value of all the land before and after the taking does not take into account the total loss of the condemned land; it takes into account only the decline in value of the condemned land as if that land had not been taken. To remedy this omission, however, Solot added to the computed damages the full value of the condemned land before the taking. This is erroneous because part of this value is already reflected in the damages; all that should be added is the value of the condemned land after the taking.
The State recognized this discrepancy and upon cross-examination obtained from Solot the concession that his estimate of the total damages to the Jay Six property, as reflected in Exhibits 16A and 16B, was overstated by the sum of $1,600. It was also stipulated that the damages to the Getzwiller property, which were reflected [88 Ariz. 105] in Exhibit 17 (which had been received in evidence without objection and was not assigned as error on this appeal), were similarly overstated by the sum of $100. Thus, the mistake in Exhibits 16A and 16B, to which the State now assigns error, was corrected in the presence of the jury, and cannot be said to have been prejudicial to the State.
Further, the instructions of the trial judge on the applicable measure of damages permitted the jury to take the value of the condemned land into ...