Land Clearance for Redevelopment Authority of Kansas City v. Massood
Land Clearance for Redevelopment Authority of Kansas City v. Massood
Opinion of the Court
Land Clearance For Redevelopment Authority Of Kansas City, Missouri, hereinafter referred to as “condemnor”, filed a condemnation action to acquire three parcels of land jointly owned by George Mas-sood and Donald E. Hutchison, hereinafter referred to as “condemnees”. The con-demnees, as well as the condemnor, filed exceptions to the Commissioners’ Report fixing and assessing $15,065.00 as con-demnees’ damages for the taking of the three parcels of land. The amount awarded by the Commissioners was paid into court on September 17, 1971.
A jury trial resulted in a verdict and judgment for $12,052.00 as damages for the taking of condemnees’ property. Con-demnees, dissatisfied with the jury’s assessment of damages, have appealed and their effort to achieve appellant relief centers on
Before addressing condemnees’ various contentions on appeal with any degree of particularity, some observation of certain general facts appears to be in order.
Condemnees’ property- was located in a portion of Kansas City, Missouri, described as the “East 23rd Street Urban Renewal Area”, which, on June 15, 1967, was declared to be “blighted and unsanitary” by the City Planning Commission of Kansas City, Missouri. On August 18, 1967, the City Council of Kansas City, Missouri, passed an ordinance declaring the proposed urban renewal area blighted. Condemnor’s plan for redevelopment of the area, as revised, was approved by the City Council on October 1, 1970, and the instant action to acquire condemnees’ property by condemnation was filed July 12, 1971.
Condemnees were real estate brokers specializing in commercial and industrial property. Among other things, they specialized in assembling tracts of land (taking title in their own names) for speculative commercial and industrial purposes. In 1963, they assembled and sold to Sears, Roebuck and Company 168,242 square feet of property. Sears put the acquired property to use as a parking lot in connection with their “retail store” and “catalogue order plant” located at Truman Road and Cleveland in Kansas City, Missouri. In 1964, condemnees started to assemble another tract of ground for speculative purposes in what was subsequently designated the East 23rd Street Urban Renewal Area, and in so doing acquired the three parcels of land which are the subject of this condemnation action. The three parcels of land mentioned are located on the east side of Myrtle Street across from the Sears parking lot.
The condemnees and their expert witnesses all testified that the highest and best use of the three parcels of land, although zoned “R 2B — residential duplexes” as of the date of taking, was for commercial and industrial purposes. They further testified that in their opinion there was a “reasonable probability” that the three parcels of land could be rezoned to “M 2A — heavy industrial”. Condemnor’s expert witnesses all testified that the highest and best use of the three parcels of land was for residential purposes.
One of the condemnees, without objection, testified that “it became public knowledge” in 1965 that the general area in which the three parcels of land were located was being studied and considered as a “blighted area” for purposes of “redevelopment” and when that occurred “everything just stopped”.
As is frequently the case, there was a wide divergence of opinion between con-demnees and their expert witnesses, and the opposing expert witnesses, as to the fair market value of the three parcels of land as of the date of their taking (September 17, 1971). The condemnees and their expert witnesses, as well as the opposing expert witnesses, all used the market data or comparable sales approach, as opposed to the cost approach or income approach, in arriv
Considerable difficulty has been encountered in perceiving the thrust of con-demnees’ first assignment of error, due in part to the difficulty of relating it to any particular question or questions posed by condemnees on cross-examination. The assignment, verbatim, reads as follows:, “The Court erred in refusing to permit appellants to inquire on cross-examination of respondent’s expert witness into the consideration given, if any, to the impact of the announcement and implementation of the Urban Renewal Plan on the validity of his comparable sales data.” Condemnees, in their brief, failed to point to any question or questions posed by them on cross-examination which they claim their first assignment of error purports to encompass. After carefully searching the record this court surmises that the gravamen of condemnees’ first assignment of error lies in the following two questions propounded on cross-examination to one of condemnor’s expert witnesses:
“And after Urban Redevelopment comes in you just can’t make it commercial any more, can you?”
and
“But there couldn’t be any parking lot over here where you have your comparable after Urban Renewal came in?”
Both of said questions were objected to by condemnor and its objections were sustained by the trial court. A literal construction of the questions indicates that they were directed toward the use con-demnor intended to make of the property once acquisition was completed. Nevertheless, it is apparently condemnees’ contention, after reconciling the questions with their first assignment of error and the argument portion of their brief, that said questions were an attempt on their part to show that “public knowledge” in 1965 that the general area was being studied and considered as a “blighted area for purposes of redevelopment” had a depressing effect on the market value of all property in the area, including the comparable sales relied on by condemnor’s expert witnesses.
The prevailing law of this state fails to support the condemnees insofar as their first assignment of error is concerned. In St. Louis Housing Authority v. Barnes, 375 S.W.2d 144 (Mo. 1964), the Supreme Court affirmed a lower court’s refusal to give an instruction proffered by a property owner that the jury, in assessing damages in a condemnation action, could take into consideration “. . . any damages caused to defendant’s property as a result of the institution of the condemnation proceedings, either by the actual filing of the condemnation petition or by the announcement of plans for condemnation and the effect of such announcement on the value of such property if you find that such announcement, if any, caused the property to change in value.” Thus, the issue of whether the adverse effect of a premature announcement of condemnation is a proper element for a jury to consider in assessing damages in a condemnation action was squarely presented to the court in Barnes. In holding that it was not, the court relied on and quoted as follows from its en banc opinion in State ex rel. City of St. Louis v. Beck, 333 Mo. 1118, 63 S.W.2d 814, 817 (banc 1933): “We do not undertake to decide if the realty company is entitled to any damages on account of the pendency or delay of the condemnation proceeding itself, and if there is any damage on account of such proceedings, it is of a personal character, as distinguished from any damage to the property itself, and is not an element to be considered by the commissioners in assessing benefits and damages in this proceeding.” In State ex rel. State Highway Commission v. Samborski, 463 S.W.2d 896, 902-903 (Mo. 1971), a case involving a lessee’s interest in a condemnation award, the Supreme Court demonstrated the continuing viability of the principle for which Barnes
Before leaving condemnees’ first assignment of error, this court senses a growing awareness that the debilitating effect of threatened- condemnation is a recurring problem that may well require a revisitation of the obtaining law in this state. In a given situation a premature announcement of condemnation may well cast a devastating pall over property in a given area with the end result that by the time a de jure taking occurs the fair market value of the property has become noticeably depressed. The present status of the law in this state, as exemplified by State ex rel. City of St. Louis v. Beck, supra; St. Louis Housing Authority v. Barnes, supra; State ex rel. State Highway Commission v. Samborski, supra, and State ex rel. Highway Commission v. Anderson, supra, undoubtedly springs from an unyielding commitment to the proposition that the fair market value of property subject to condemnation is to be ascertained as of the date of appropriation, i. e., the date the commissioners’ award is paid into court. St. Louis Housing Authority v. Barnes, supra, and State ex rel. Highway Commission v. Anderson, supra. This latter rule apparently became clearly fixed in the law of this state as early as 1875. Hosher v. K. C., St. J. & C. B. R. Co., 60 Mo. 303. The rule had its inception at a time when the power of eminent domain was exercised in most instances to acquire raw, undeveloped land for public purposes and announcements of its impending exercise had a minimal impact, if any at all, on the value of the property subject to acquisition. Moreover, the rapid and widespread dissemination of news, which the multiple, sophisticated news media of today are capable of, was not then a factor to be reckoned with. A metamorphosis occurred between then and now. It now seems to be. the rule rather than the exception for the power of eminent domain to be exercised in highly developed areas and when it is in the offing it becomes the news of the day and saturates broad areas. For these reasons, this state’s present commitment to the de jure date of taking as controlling for determining the fair market value of property subject to condemnation may well be an anachronism. Although inadequately presented by the record in this case both by way of evidence and offers of proof, a grossly premature announcement of condemnation, however well motivated and regardless of how or by whom initiated, may, as a practical matter, penalize property owners if the fair market value of their property is determined solely as of the date of the de jure taking. This is particularly true in situations involving the twentieth century innovation of urban redevelopment. In Land Clearance for Redevelopment Authority v. Morrison, 457 S.W.2d 185 (Mo. banc 1970), the Supreme Court of this state suggested, at least inferentially, in a case involving condemnation for urban redevelopment purposes, that a property owner’s only re
The court focuses attention on con-demnees’ third assignment of error before addressing their second assignment, since condemnees’ first and third assignments of error are, in theory, closely related. The essence of condemnees’ third assignment of error is that the trial court should have excluded all comparable sales relied on by condemnor’s expert witnesses that occurred after 1965, the date condemnees claim that it became “public knowledge” that the area was being considered for urban redevelopment purposes. The gist of their argument is that the aforesaid had a deleterious effect on the fair market value of all property in the area from 1965 on and therefore all sales subsequent to that time were so tainted that they should have been per se ex-
The pivotal issue in the remaining assignment of error, condemnees’ second assignment in numerical order of assertion, is whether their acquisition of certain parcels of land subsequently condemned resulted from forced sales thereby rendering evidence of their purchase price inadmissible. The parcels of land in question are two in number and events leading up to their sale to and purchase by the condemnees, germane to the issue raised, are as follows: The first of the two parcels of land involved a renter of condemnees by the name of Sam Withers. Withers “outgrew” a house he had been renting from condemnees and moved to another residence which he was purchasing from a different owner under a “contract for a deed”. Withers got behind on the scheduled payments in the “contract for a deed”, and desired to move to and buy another home which was offered for sale by the Veterans Administration for $450.00. Condemnees suggested to Withers that he should obtain a deed to the property which he was purchasing under the “contract for a deed” and, in return, give the owner a note and deed of trust to secure any unpaid balance on the original purchase price. Withers acceded to condemnees’ suggestion and the owner of the property was apparently amenable to completing the sale of the property to Withers as suggested by the condemnees. Prior to securing a deed from the owner of the property, condemnees had loaned Withers approximately $500.00 for various purposes. After Withers acquired title to the property he had been purchasing under the “contract for a deed”, he then transferred title to the property to con-demnees by warranty deed. As considera
The general rule in this state bearing on the issue at hand is stated in the oft-cited case of State ex rel. State Highway Commission v. Rauscher Chevrolet Company, supra, 1. c. 92: “It is the established rule in this state, and generally, that the price an owner paid for property being condemned is admissible as some evidence of its value at the time of appropriation. That rule applies unless circumstances appear which destroy the relevancy or probative value of that otherwise relevant and highly important evidence.” The court properly cautioned that in order for the purchase price to be admissible, the underlying sale “must have been voluntary in the sense that the seller and buyer were each capable and desirous of protecting his interest” rather than a “forced sale”. Concomitantly, admissibility of the price paid by an owner for property being condemned is relegated to the discretion of the trial court and, unless the purchase price is totally lacking in probative value, the weight to be given to it, insofar as being indicative of the condemned property’s fair market value, is a recognized jury prerogative. State ex rel. State Highway Commission v. Crain, 496 S.W.2d 867 (Mo.App. 1973), and cases therein cited. The trial court’s decision to admit or refuse such evidence, since it falls within the realm of discretion, should not be disturbed on appeal absent a clear showing that the trial court manifestly abused its discretion. Epperson v. Nolan, 452 S.W.2d 263[9] (Mo.App. 1970); and Union Electric Company v. Turner, 446 S.W.2d 430[7] (Mo.App. 1969).
It is now appropriate to juxtapose the purchases from Withers and Smith with the principles immediately heretofore iterated. After doing so, it is the opinion of this court that the price paid by con-demnees for the Smith property ($500.00 cash for her equity in the property and cancellation of approximately $1,000.00 indebtedness owed by her against the property) was clearly admissible. Condemnees sought Mrs. Smith out and she agreed to sell and the condemnees agreed to buy the property on the terms mentioned. Con-demnees’ initial contact with Mrs. Smith
Judgment affirmed.
All concur.
Reference
- Full Case Name
- LAND CLEARANCE FOR REDEVELOPMENT AUTHORITY OF KANSAS CITY, Missouri, Plaintiff-Respondent v. George MASSOOD and Donald E. Hutchison
- Cited By
- 5 cases
- Status
- Published