Installation of traffic light considered a general benefit in calculating condemnation award

by Victoria Heldt

City of Maryland Heights, Missouri v. Robert J. Heitz and Loretta Tucker
(Missouri Court of Appeals, November 1, 2011)

Heitz and Tucker have owned a 12-acre piece of property in Maryland Heights, Missouri since 1961, when it was surrounded by vacant land.  Heitz constructed a building to house Heitz Machine and Manufacturing and built a private drive down the center of the property that ran from Dorsett Road to the building.  Subsequently, Interstate 270 was constructed to the west of the property and developers showed an interest in purchasing it for commercial or retail use.  Heitz showed no interest in selling the entire parcel, but came to an agreement in the early 1980’s with Charles Drury, Sr. that provided Drury two and a half acres of land on which to build a Drury Hotel in exchange for Heitz becoming a limited partner in the venture.  The construction of the hotel still left a portion of Heitz’s property vacant along Dorsett Road.

Heitz continued to receive offers to purchase the remaining land including one from Mr. Drury who expressed interest in building another hotel on the remaining portion of the land.  It was his custom to convert older Drury hotels into Pear Tree Inns and then construct a new Drury Hotel nearby.  Another offer was received from the Edward D. Jones Company which had developed a North Campus in Maryland Heights.  The campus covered 50 acres of land to the southeast of the intersection of Dorsett Road and Interstate 270.  Edward D. Jones wanted to expand but was unable to do so due to the current configuration of the Dorsett-270 intersection.  The intersection next to the Jones campus (Dorsett Road and Progress Parkway) was very near to Interstate 270 and caused traffic congestion.  Jones sought to relocate Progress Parkway and formed a redevelopment plan with the City in 2002 which included building a public road over Heitz’s property.  Heitz claimed to have no knowledge of the City’s development plan.  Jones made yet another offer to Heitz to purchase the property since he would need an entrance to his campus from Dorsett Road.

Eventually, a portion of the Heitz property was condemned.  The private drive that the Heitz’s previously built that provided access to Heitz Machine would be made into a four-lane public road and two traffic signals would be constructed as outlined by the redevelopment plan.  The City valued the property at approximately $1.2 million.  Heitz disputed the valuation in the condemnation proceedings.  Heitz felt the compensation was not sufficient.  His property was less valuable from his perspective because Drury no longer had an interest in purchasing it for another hotel once the size of his remaining parcel was reduced.  The City felt the plan actually improved the property’s value, and that thus the damages were excessive.  Each party brought witnesses to testify to the value of the land.  The court awarded damages of approximately $1.8 million to Heitz.

The City brought seven claims on appeal, the first regarding the court’s finding that a traffic light is a general benefit.  They argued that it provided a special benefit and should be used to offset damages to Heitz.  They purported that the stoplight increased the property’s “accessibility, visibility, frontage, and connectivity” and that it lessened the cost of future commercial development.  Heitz argued that it did the opposite since it removed the property’s access to Dorsett Road.  The Court found that it was indeed a general benefit for three reasons.  First, a special benefit is derived from the specific location of the improvement.  Since the benefit would still exist of the stoplight was placed elsewhere in the area, it is not specific.  Second, the Court found that the traffic signal is a “secondary, necessary byproduct of the construction of the road,” so it is unable to confer an individual, specific benefit.  Third, the stoplight did not result in a vested right since the City could remove it whenever it saw fit.  For those reasons, the benefit could not be construed as special.

The City’s second argument challenged Mr. Drury’s testimony, inasmuch as Heitz failed to list him as an expert witness.  The Court found Drury did not need to be classified as an “expert witness” since he was merely discussing his prior dealings with Heitz and his knowledge of that specific piece of property.  The remainder of the City’s complaints challenged the admissibility of other expert witnesses and claimed errors in Heitz’s cross-examination and closing argument.  The Court denied all remaining points and affirmed the condemnation award.

Proposal sufficient to pass muster at preliminary plat stage despite water pressure and sewage disposal concerns

NOTE:  With the start of fall classes the BLUZ welcomes its newest student contributor, Victoria Heldt.  Tori’s bio appears under “contributors.”  Melanie Thwing is continuing to report on all things land use in her homeland of Wisconsin before she starts law school next fall (Packers news will be filtered out.  Sorry Melanie).

by Victoria Heldt

State of Missouri, Ex Rel., Alexander & Lindsey, LLC v. Planning and Zoning Commission of Platte County, Missouri
(Missouri Court of Appeals, Western District, August 16, 2011)

Alexander & Lindsey, LLC (Alexander) owns approximately 16 acres of property north of Missouri Highway 92 and east of Highway 45 in Platte County, Missouri.  In July of 2007, Alexander filed an application with Platte County for a preliminary plat to subdivide the property into five lots for commercial development with the name “Beverly Plaza.”  In order to subdivide land in Platte County, a property owner must comply with the Platte County Subdivision Regulations of 1992.  The Director of Planning and Zoning, Daniel Erickson, determined that Alexander’s preliminary plat application met all of the requirements of the Subdivision Regulations and recommended approval of the application.

Pursuant to Subdivision Regulations, a public hearing was held in March of 2008, at which Erickson testified that the preliminary plat application complied with regulations.  In addition, a traffic study was completed that was approved by the Missouri Department of Transportation and the Platte County Engineer.  A drainage study was also reviewed and approved by the County Engineer.  Several concerns were raised at the hearing, however, regarding the water and soil testing.  The spokesman for Water District No. 3 stated that the District could provide water service to the property but that it could not guarantee fire suppression adequacy.  The Health Department, which performed soil testing, stated that 2 of the lots did not have adequate soil testing results suitable for septic systems and that those lots may require waste treatment systems using a lagoon or another method.

Erickson stated that some revisions would be made to the plat in response to the opposition to the development from the City of Weston.  These include 75-foot setback along both Highways 45 and 92 would be provided that would require a detailed landscape plan at the time of final plat approval and an area containing a stand of trees would be permanently protected by a stream buffer setback easement.  Greg Hoffman, an alderman with the Weston Board of Alderman, testified that the City of Weston opposes the proposed development of the property because it violates Weston’s scenic overlay ordinance for properties within Weston, which requires a 100 foot setback and other provisions regarding landscaping, massing of buildings, and scenic views.  He noted that the Weston Planning and Zoning Commission had voted down this same request several years prior.

At the end of the hearing, the Planning and Zoning Commission denied the preliminary plat 7 to 1, finding that the application would be detrimental to the public good and would impair the intent, purpose and necessity of the Subdivision Regulations for the following reasons:  1) lack of specification as to the proposed uses 2) infrastructure limitations, such as water for fire suppression, lack of central sewage disposal facilities and inability of the proposed subdivision to support wastewater stabilization ponds 3) the potential impact of wastewater stabilization ponds on neighboring properties and the public 4) potential for traffic hazards created by two access points on Highway 45 adjacent to the proposed subdivision.  Alexander appealed to the County Commission and then to the circuit court, both of which confirmed the Planning and Zoning Commission’s denial of the request. Alexander then appealed to the Missouri Court of Appeals

Alexander asserted that the decision to deny its preliminary plat was arbitrary and unlawful since the plat was in compliance with the requirements of Platte County’s Subdivision Regulations.  The Court of Appeals agreed.  The Court stated that the County Commission is acting in an administrative capacity, not a legislative capacity, when reviewing subdivision plats. As such it has no authority to make subjective judgments regarding the granting or denying of  plats.  It simply has the authority to determine if a proposal complies with regulations.  The Court noted that the County Commission’s four reasons it provided for denial (listed above) were outside the scope of the requirements of the Subdivision Regulations for preliminary plats.  As to lack of specification of proposed uses, nothing in the Subdivision Regulations requires specification of uses at the preliminary plat phase.  Similarly, the regulations do not require an applicant seeking approval of a preliminary plat to resolve infrastructure issues involving fire suppression, central sewage disposal facilities, or wastewater stabilization ponds. The Court emphasized the fact that this was a preliminary plat, which only gives the subdivider permission to proceed with the planning and development phases of the project.  The Subdivision Regulations will still require the final plat to comply with all Subdivision Regulations.  The Court further noted that the general purpose clause of a subdivision ordinance cannot be used as an independent basis for plat denial since it contains “no standards for approval.” Since Alexander’s plat complied, the County Commission had a ministerial duty to approve it and no authority to deny it.The Court concluded that the County Commission’s denial of Alexander’s preliminary plat was arbitrary, unlawful, and not based upon substantial and competent evidence.  It reversed the decision and remanded it to the lower court.

Annexation/taxation agreement held to be valid by Missouri court

by Melanie Thwing and Gary Taylor

Western Taney County Fire Protection District v. City of Branson, Missouri
(Missouri Court of Appeals, February 10, 2011)

The Western Tansey County Fire Protection District (District) and the City of Branson, MO (City) both hold taxation authority within their boundaries for fire protection. Annexations of property within the District’s boundaries by the City in 1994 resulted in an overlap in taxation.   To avoid this, both entered into an “Agreement Concerning Provision of Fire Protection Services” (Agreement). In paragraph 2 it is stated that if the City’s corporate limits are extended by annexations in the future the City will provide the fire services to the annexed property. Paragraph 7 provided that the District would stop taxing any area within the corporate limits of the City after December 31, 1994. Further, if property is annexed District will maintain the right to tax until the end of that year. Finally paragraph 8 agrees that the City will pay $416,666.66 to District for three years starting in 1995 and ending in 1997. All contractual obligations were met.

Then, after the City annexed further property [the case does not specify when this annexation occured] the District sought more money under § 321.322 RSMo. This statute basically holds that a city will assume fire protection duties for annexed property and pay the district either “an amount mutually agreed upon,” or fees under the statutory formula.  The City refused payment claiming that the requested payments fell within the terms of the Agreement and were satisfied by the payments to District. In trial court it was found that § 321.322 was a consideration when crafting the Agreement and therefore the District was entitled to no further compensation.

The District argued to the Court of Appeals that § 321.322 provides a “sixty days’ statutory mandate” that does not allow agreements to extend to annexations outside of sixty days post-contract. The court disagreed.  Under the statute a compensation scheme would be enacted unless a city would contractually assume responsibility to pay a mutually-agreed consideration.  The statute provides that “nothing contained in this section shall prohibit the ability of a city to negotiate contracts with a fire protection district for mutually agreeable services.” The statute does not forbid agreements. Future obligations can be addressed by contract; parties are permitted by statute to craft terms that address foreseeable future annexations. The District argued that the Agreement does not discuss if it extends to future annexations; it only confirms that double taxation and coverage will not occur. However, paragraph 7 specifically states, “future annexations,” thus clarifying that future annexations were forseeable and meant to fall under the agreement’s terms.

Lastly the District argued that § 321.322 violates Article 10, §§ 1 & 2 of the Missouri Constitution and the common law rule against perpetual contracts. If the sections are read together they prohibit District from “contracting away” taxing power without legislative authority. The court, however, pointed out that the District did not lose their right to tax in the Agreement. It simply stopped duplication of services and wrongful double taxing.  The court also found that a contract for indefinite terms does not make it perpetual. Further the Missouri courts often reject the idea that contracts automatically create perpetual obligations or rights. The judgment of the trial court was affirmed.

Expert’s testimony in takings case lacked foundation and should have been excluded

by Melanie Thwing

Glaize Creek Sewer District v. Gorham
(Missouri Court of Appeals, March 22, 2011)

Gary and Sheila Gorham live in Jefferson County, Missouri. In 2008 Glaize Creek Sewer District filed a petition in condemnation to acquire a permanent sewer easement and a temporary construction easement that would run through the Gorham’s back yard. This easement would be fifteen feet wide and 161 feet long.

During construction Glaize Creek utilized a thirty foot wide temporary easement to store equipment. Glaize Creek also cut down trees in the back yard as well as cutting the roots of at least nine trees, altered the grade of the back yard and left a permanent manhole.

The Gorham’s filed for damages with the trial court. Mrs. Gorham is a certified state appraiser and testified about the property. She found, according to Uniform Standards of Professional Appraisal Practices (USPAP) that the property diminished $29,000 after the project was complete.

It was noted in her testimony that the loss of trees allowed commercial properties to be seen at night, there was now an inability to build a pool or any other improvements over the sewer line, there was a loss of marketability of property during the actual construction, and the back yard was now in a “torn-up condition.” All of these resulted in a permanent diminution in the value of the property.

Glaize Creek also called a certified real estate appraiser to testify. However, this expert did not see the property prior to construction and did not inspect the entire property. He stated his purpose was to find if there was an impact on the property from the easement, not the value of the entire property. He testified that there was no adverse affect to the property.

The Gorham’s then asked that the expert testimony from Glaize Creek be stricken because the opinion did not measure damages and the difference in value before and after the taking. This objection was overruled and the jury returned the verdict of $0.00.

The Gorham’s appealed to the Missouri Court of Appeals, first arguing that the trial court abused its discretion when the expert testimony was allowed. They claim the testimony failed to address the proper measures of damages, was irrelevant, lacked foundation, and served only to confuse the jury. The Court of Appeals noted that it will not generally second-guess the conclusion of the trial court on the admissiblity of expert testimony, but in cases where the sources relied on by the expert are “so slight as to be fundamentally unsupported,” the testimony should be excluded from consideration.  Missouri law, § 523.001(1) states that in partial takings the measure of compensation is “the difference between the fair market value of the entire property immediately prior to the taking and the fair market value of the remaining or burdened property immediately after the taking.”  The expert from Glaize Creek testified that he did not assess the fair market value of the entire property before and after the easement. Instead he visited the property after the project was completed. In his testimony no data was presented as to how he reached the conclusion that no value was lost. On the other hand, Mrs. Gorham testified that she used comparable sales methods and presented reasons for the diminution in property value.  The Court of Appeals found that Glaize Creek’s expert testimony must be excluded because it is not founded on any rational basis and without substantial information and is mainly speculative.

By failing to take into account the value of the property prior to the easement the testimony lacked foundation and should have been excluded. The judgment of the trial court was reversed and the case was remanded for a new trial.

Sign company had no vested right to have permit processed under old ordinance

by Melanie Thwing

Lamar v. City of Kansas City
(Missouri Court of Appeals, November 9, 2010)

In September 2007, the City Council of Kansas City, Missouri passed an amendment to its code of ordinances.  The amendment prohibited outdoor signs with “revolving, moving, flashing, blinking, or animated characteristics.”  The amendment also provided that until the amendment went into effect no permits for altering outdoor signs were to be approved.  

Lamar had filed a permit application with the city two days before the enactment of the ordinance.  Because of the pending ordinance city staff refused to process Lamar’s application until after the ordinance was passed. In district court Lamar argued that the permits should have been processed immediately based on the ordinances that were in effect at the time of application.  The district court disagreed and summary judgment was granted to the City. Lamar appealed to the Court of Appeals.

The court looked to previous rulings which held that “the mere filing of an application gave the applicant no vested right under the old ordinance.” From these the court holds that just filing an application is not enough to provide a vested right. Rather, the owner “must have reasonably relied upon a belief that the existing law would continue to be in force.” This requires not only a reliance on the continuation of the ordinance, but also a reasonable belief.

The Missouri Court of Appeals ultimately held that Lamar had no vested right to have its permit processed under the old ordinancem and dismissed the case.

Contempt order contingent on future action was not final, and therefore unappealable

by Melanie Thwing

City of Portage Des Sioux v.  Lambert
(Missouri Court of Appeals, October 26, 2010)

Klaus Lambert and Constance Alt own real property in the City of Portage des Sioux, Missouri. Early in 2004, the city filed a petition for an injunction against them for violations of several ordinances about the safety and sanitation of buildings on their properties. An order was entered on April 27, 2004 that within 60 days of the judgment a red building and a boat be removed from the premises.  The remaining structures on the property also were found to be in such a state of disrepair that they constituted a danger.  The April 27 order included a directive that those buildings be restored, elevated or demolished within 180 days of the judgment.

By October 2006 the Lamberts and Alts had not complied, and on October 19, 2006 a second judgment was entered extending the deadline another 60 days for the red building, and another 180 days for the other buildings.

On August 4, 2009, the city filed a motion for contempt against each defendant. After a hearing, the court entered an order adjudging defendants guilty of contempt of court because of their failure to comply with the April 27, 2004 and October 19, 2006 orders. The court ordered defendants to pay a fine of $100.00 per day “until such time as they have purged themselves of this contempt by demolishing and removing the first building and the remaining buildings on the property.” It further ordered that “to ensure defendants[‘] compliance with the judgment of April 27, 2004, as extended by the order of October 19, 2006, and this judgment/order, if [defendants] fail to demolish and remove the red/rust colored building and remaining buildings on the property by November 30, 2009, the [city] is hereby authorized to demolish and remove the structures.” 

The defendants appealed this August 2009 order; however, the Missouri Court of Appeals determined that the August 2009 order could not be enforced without an additional evidentiary hearing or external proof regarding defendants’ compliance (or noncompliance) with that part of the order requiring them to demolish their buildings by November 30, 2009.  This rendered the enforcement conditional upon the occurrence or nonoccurrence of a future act, the performance of which was outside the record, making the judgment “not final,” and unappealable at the present time.  “Generally, where the enforcement of a judgment is conditional upon the occurrence or nonoccurrence of future acts, the performance or non performance of which is outside the record, the judgment is deemed indefinite and unenforceable.”  The Court of Appeals could not rule on a future act, which may or may not occur. The defendants’ appeal was dismissed.

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