Utah Dep't of Transp. v. Target Corp.
Utah Dep't of Transp. v. Target Corp.
Opinion
¶1 One extremely small portion of a massive freeway interchange was built on land that the Utah Department of Transportation (UDOT) took from claimants Target Corporation (Target) and Weingarten/Miller/American Fork LLC (Miller) (collectively, Claimants). The vast majority of the interchange was constructed upon UDOT's own land or upon land taken from others. Claimants complain that the interchange prevents or impairs motorists from viewing their shopping center, and they claim the right to recover severance damages from UDOT related to this loss of visibility and related to the loss of a right-out exit 1 from the shopping center's parking lot. The trial court allowed that claim to proceed to a jury trial, and a jury awarded Claimants more than $2.3 million in severance damages.
¶2 UDOT now appeals, and asserts that the trial court erred in even allowing Claimants' suit for severance damages to reach the jury. UDOT asserts that Claimants' evidence was insufficient, regarding both causation and damages, to support their claims. For the reasons discussed below, we find UDOT's arguments unpersuasive, and therefore affirm.
BACKGROUND 2
¶3 In 2009, UDOT determined that two major highway construction projects (the Projects) needed to be built in fast-growing Utah County. One project involved widening and reconstructing Interstate 15 through essentially the entire length of Utah County, from Santaquin to the Salt Lake County line. This project, in total, was more than twenty-two miles long. The other project involved the construction of a new east-west arterial road from American Fork through Lehi to Saratoga Springs. This project, in total, was seven miles long. The two Projects intersect at a point in American Fork where Main Street crosses I-15. Before the Projects, there was already a freeway interchange at the site, allowing motorists to cross I-15 on Main Street via an overpass, or get on or off I-15 at that same location. The Projects called for the widening of both I-15 and American Fork Main Street, and therefore UDOT found it necessary to completely rebuild the existing freeway interchange (the Interchange).
¶4 In order to facilitate construction of the new Interchange at that location, UDOT condemned various properties, including three relatively small portions 3 of the Alpine Valley Shopping Center (the Shopping Center), a mall owned largely by Claimants that is located on the northeast corner of the Interchange. The Shopping Center is a large retail facility with many stores and shops. It has one major "anchor" tenant-Target-as well as other smaller retail stores, and includes a large outdoor parking lot. Claimants' witnesses testified at trial that the Shopping Center is designed to draw customers from a large regional area, and that customers are drawn there due to "ease of access and convenience, and knowing how to get there by visibility or good signage." Target owns the land on which its store is located, and Miller owns most of the Shopping Center's remaining land. Both Target and Miller share a parking lot, and also share a cross-easement across the entirety of the Shopping Center. The shared parking lot abuts Main Street, and prior to completion of the Projects a driver could easily access northbound I-15 by making a right-hand turn out of the south side of the parking lot, driving briefly westbound along Main Street, and then merging onto northbound I-15. The original northbound I-15 on-ramp was "at grade"-on the same level-with Main Street.
¶5 UDOT chose to rebuild the Interchange using an innovative "diverging diamond" design, which is "a very unique cross-over type interchange" that involves cars temporarily driving on the left side of the road. Significantly for present purposes, a diverging diamond design requires a lot of space, and in this case that design required that the bridge over the freeway be built higher than other design options, and also required much larger and higher on-and off-ramps. To take one specific example, the northbound I-15 on-ramp was raised from "at grade" (in the before condition) to a height of some twenty-three feet (in the after condition). The new Interchange's increase in height affected Claimants' property and the surrounding area in several ways.
¶6 First, the heightened overpass and raised northbound I-15 on-ramp required UDOT to gradually raise the elevation of Main Street as it approached the Interchange. Because Main Street itself was being raised, UDOT determined that, "for safety reasons," it could no longer permit right-out access from the south end of the Shopping Center onto the now-heightened Main Street, although UDOT was able to preserve right-in access from westbound Main Street into the parking lot. In connection with closing this right-out exit, UDOT took from Claimants one small rectangular parcel located on the south side of the shared parking lot, along Main Street. UDOT did not build any portion of the Interchange on this parcel. Prior to the taking, the right-out exit was the most heavily used exit in the parking lot, due to its proximity to the northbound I-15 on-ramp. After the taking, the closure of the right-out exit required all traffic exiting the parking lot to use an intersection located along the east side of the Shopping Center, along Kawakami Drive.
¶7 Next, to facilitate construction of the heightened northbound I-15 on-ramp, UDOT built a retaining wall along the northbound on-ramp. In order to support the retaining wall, UDOT found it necessary to construct an earthen slope alongside the retaining wall. UDOT did not, however, have enough space on its own property for the entire dirt support slope, so UDOT took a perpetual "slope easement" across a long, narrow parcel of Claimants' land that runs alongside the northbound I-15 on-ramp. UDOT then placed a large amount of dirt on the slope easement, creating a slope that supported the retaining wall that, in turn, supported the raised on-ramp onto northbound I-15. While the retaining wall itself is not located on the slope easement, the dirt slope supporting the retaining wall is at least partially located on the slope easement. 4
¶8 At trial, Target's representative testified that UDOT informed him that "it was not feasible to maintain the right-out [exit] due to the new construction, the design, specifically, of this diverging diamond." However, no other witness at trial testified that the condemnation of Claimants' specific parcels was "essential to the completion of the project as a whole."
See
Ivers v. Utah Dep't of Transp.
,
¶9 Claimants also presented evidence that completion of the Interchange affected the visibility-defined as the ability of others to view into the property,
see
¶10 In support of this contention, Claimants presented testimony from an expert appraiser (Appraiser). Appraiser valued Claimants' remaining property twice, once in the "before" condition, as though the Interchange had never been built, and once in the "after" condition, taking into account any effect that the Interchange had on the property's value. Appraiser explained that the difference in these values constituted the measure of Claimants' severance damages. Appraiser concluded that Claimants' remaining property was worth approximately 7.5% less in the "after" condition than in the "before" condition, and he calculated Claimants' severance damages, based on that conclusion, as more than $2.3 million. Appraiser testified that there were two main factors that contributed to the property's diminution in value: loss of visibility, largely because of the presence of the larger and taller Interchange, and loss of the right-out exit onto
Main Street. However, Appraiser did not attempt to provide any specific values for these individual components of loss-that is, Appraiser did not provide the jury with any specific amounts for damages related to loss of the right-out exit alone, or for damages related to loss of visibility alone, or for damages related to loss of visibility related to any specific component of the Interchange. At the close of Claimants' case, UDOT moved for a partial directed verdict on the issue of severance damages, arguing that Claimants should not be allowed to recover severance damages at all. Specifically, UDOT argued that Claimants failed to "elicit[ ] any testimony from any witness that this property was essential to the project as a whole," and therefore their claim for severance damages was infirm under the rubric set forth in
Ivers
,
¶11 After deliberation, the jury awarded Claimants a total of $87,910 for the value of the property interests that UDOT actually took (the two small parcels taken in fee simple plus the perpetual slope easement). In addition, the jury awarded Claimants a combined $2,381,294 in severance damages. UDOT takes issue with the severance damages portion of the jury's verdict, and first expressed its displeasure with this award by asking the trial court to enter a judgment notwithstanding the verdict, again asserting that Claimants "failed to establish through testimony of any fact or expert witness that the property taken by [UDOT] was 'essential to the completion of the project as a whole.' " The trial court denied that motion.
ISSUES AND STANDARD OF REVIEW
¶12 UDOT now appeals the award of severance damages to Claimants, and asserts that the trial court should have granted its motions for partial directed verdict and/or for judgment notwithstanding the verdict on that issue. We review a trial court's denial of a motion for directed verdict for correctness.
Proctor v. Costco Wholesale Corp.
,
ANALYSIS
¶13 It is a bedrock principle of both the federal and state constitutions that the government cannot take a citizen's property for public use without paying that citizen "just compensation" for the value of the property taken.
See
U.S. Const. amend. V ;
see also
Utah Const. art. I, § 22. "The policy behind Utah's constitutional provision is to ensure that the burden for damage done to private property is 'distributed among all the taxpayers' rather than 'upon those only who sustained the injury.' "
See
Utah Dep't of Transp. v. Admiral Beverage Corp.
,
¶14 A physical taking is the most obvious kind of taking, and occurs when the government physically appropriates a citizen's property.
See
View Condo. Owners Ass'n v. MSICO, L.L.C.
,
¶15 When the land that is condemned constitutes only a portion of a larger parcel, a landowner may be entitled to more than merely the market value of the portion of the land that is actually taken. Specifically, the landowner may be entitled to "severance damages" for any diminution in the value of the remaining portion of the landowner's property, as long as the landowner can demonstrate that the diminution in value was caused by the taking.
See
¶16 The "cardinal and well-recognized rule" regarding the measure of severance damages is that a landowner is entitled to recover "the difference in market value of the property before and after the taking."
See
Admiral Beverage
,
¶17 An entitlement to severance damages exists, however, only if landowners can show a causal link between the taking of a portion of their land and the diminution in the value of the remainder.
See
Ivers
,
¶18 In this case, Claimants assert entitlement to two types of severance damages. First, Claimants maintain that their remaining property has diminished in value due to loss of visibility that they claim has resulted from the construction of the new Interchange. Second, Claimants assert that their remaining property has diminished in value because of the loss of the right-out exit onto American Fork Main Street. For its part, UDOT asserts that Claimants have not presented sufficient evidence to support their claim to either type of severance damages, but for different reasons.
A. Severance Damages for Loss of Visibility
¶19 With regard to Claimants' assertion that they are entitled to severance damages for loss of visibility, UDOT maintains that Claimants have not presented sufficient evidence of the necessary causal link between the taking of their property and their claimed severance damages.
¶20 There are two methods by which a landowner can demonstrate the requisite causal link. First, if the visibility issues stem from a "structure" that is built upon the part of the property that was taken, causation is presumed.
See
Ivers
,
¶21 The main thrust of UDOT's arguments, both before the trial court and on appeal, is that Claimants have not established, through competent evidence, that their parcels were "essential" to the Projects as a whole, and therefore cannot avail themselves of the second method of proving severance damages. As noted above, none of Claimants' witnesses directly testified that the taken parcels were "essential" to the Projects as a whole.
¶22 Claimants, however, maintain that they can demonstrate causation through the first method, and that they therefore need not prove that the taken parcels were "essential to the Projects as a whole." Specifically, Claimants assert that the view-impairing structure is the entire Interchange, and they argue from that premise that, because part of the Interchange (the dirt slope supporting the retaining wall on the northbound I-15 on-ramp) was built on their property, causation for severance damages should be presumed. UDOT disagrees, and posits that the view-impairing "structure" is not the entire Interchange but, instead, the specific component parts of the Interchange (such as the raised freeway overpass, or new retaining walls on the southern end of the Interchange), only one of which (the northbound I-15 on-ramp) was even partially built on Claimants' taken property. In order to address these arguments, we must confront three questions.
1.
¶23 First, we must determine whether, as a legal matter, a view-impairing structure that is only partially constructed upon the taken parcel is presumed to have caused severance damages to the remaining parcel or, instead, whether the view-impairing structure must be constructed entirely upon the taken parcel to qualify for a presumption of causation. We conclude that, in order to be presumed to have caused severance damages to the remaining parcel, a view-impairing structure need not be entirely constructed within the taken parcel.
¶24 We draw support for this conclusion from
Utah State Road Commission v. Miya
,
¶25 Indeed, we cited this portion of
Miya
when we considered the
Ivers
case.
See
Utah Dep't of Transp. v. Ivers
,
¶26 Further support for our conclusion can be found in case law from other jurisdictions that, like ours, allow recovery of severance damages for loss of visibility.
6
At least some of those courts have held that such damages are recoverable even where the view-impairing structure is built only partially on the taken property.
See
,
e.g.
,
State v. Strom
,
¶27 We also note that UDOT appeared to concede this point at oral argument. In response to questioning from the court, UDOT conceded that Claimants would, at least theoretically, be entitled to severance damages for loss of visibility caused solely by the northbound I-15 on-ramp, because UDOT conceded that the on-ramp (although not necessarily the Interchange) was at least partially constructed on property taken from Claimants. 7 As noted elsewhere herein, the only part of the northbound on-ramp (for that matter, the only part of the entire Interchange) that was constructed on Claimants' property is part of the slope supporting the on-ramp's retaining wall. By conceding a theoretical entitlement to severance damages for loss of visibility caused by the northbound on-ramp, UDOT was necessarily conceding the point that a structure, in order to be considered to have presumptively caused severance damages, does not have to be entirely constructed on land taken from the claimant.
2.
¶28 Second, we must determine what the "structure" is for purposes of the causation analysis. There are three possibilities. First, "structure" could be defined extremely broadly, to mean the entirety of the freeway Projects in question. Neither party advocates for this position, and we conclude that this position is foreclosed by applicable case law. Second, the "structure" in question could be the Interchange, in its entirety. Claimants advocate for this position. Third, the "structure" in question could be the individual component parts of the Interchange that are alleged to have affected Claimants' visibility. UDOT advocates for this position. We find Claimants' position most persuasive.
¶29 The "structure" in question cannot be the entirety of the Projects. This possibility has already been rejected by our supreme court. In
State v. Harvey Real Estate
,
¶30 While reference to the entirety of the two multi-mile Projects is far too broad, we perceive UDOT's position as too narrow. UDOT asserts that the "structure" in question is not the Interchange in its entirety but, rather, its specific individual components-for instance, the raised overpass, the raised northbound on-ramp, new retaining walls and sound walls-that Claimants assert impair the Shopping Center's visibility. UDOT concedes that at least a portion of the northbound on-ramp was built on Claimants' property, and therefore makes at least a theoretical concession that Claimants would be entitled to severance damages resulting from loss of visibility caused directly by the presence of the new northbound on-ramp. But UDOT maintains that it should not have to pay severance damages for loss of visibility caused by any other component part of the Interchange, because none of the other parts of the Interchange were even partially constructed on Claimants' land.
¶31 We disagree, because we view the Interchange as one interconnected structure. Each part of the Interchange has some effect on the others, all stemming from UDOT's choice of a "diverging diamond" design. That design choice required a raised and widened freeway overpass, as well as raised on- and off-ramps. The raised on- and off-ramps, in turn, required new and higher retaining walls and slope supports. It seems to us unduly artificial to require a condemnation claimant to break a freeway interchange into component parts for the purpose of proving a claim to severance damages. 8 We also wonder whether we could, on any principled basis, halt the sub-dividing process once it begins. 9
¶32 We are also guided by our supreme court's language in
Ivers
and
Admiral Beverage
. In those cases, it appears that the court thought of the "structure" in broader terms than UDOT now advocates. For instance, in
Ivers
and
Admiral Beverage
, the court referred to the structure in question as simply "the raised highway" or "the I-15 freeway," rather than to individual on-ramps or retaining walls.
See
Ivers
,
¶33 Moreover, in
Admiral Beverage
, the supreme court overruled its own previous holding, outlined in
Ivers
, that loss of visibility damages were not recoverable as part of severance damages.
See
Admiral Beverage
,
¶34 Accordingly, we view the "structure" in question as the Interchange, rather than as the Projects or as the Interchange's individual component parts.
3.
¶35 Finally, after answering the first two questions, we must determine whether, as a factual matter, the structure (as we have defined it) was at least partially constructed upon the taken parcel. It should be evident by now that it was.
¶36 As described above, one extremely small part (the slope supporting a retaining wall that is part of the northbound I-15 on-ramp) of the Interchange was built on land taken from Claimants. Under these circumstances, Claimants are entitled to recover severance damages caused by loss of visibility resulting from construction of the entire Interchange.
10
The structure in question-
the Interchange-was at least partially built on land taken from Claimants, and these facts entitle Claimants to take advantage of the presumption that the severance damages they suffered as a result of the construction of the Interchange were incurred "by reason of the severance."
See
Utah Code Ann. § 78B-6-511(2) (providing that recoverable severance damages consist of those damages incurred "by reason of [the remaining parcel's] severance from the portion sought to be condemned");
see also
Ivers
,
¶37 Thus, with regard to their claims for severance damages for loss of visibility, Claimants are able to demonstrate the requisite causal link through the first method-by showing that the view-impairing structure (the Interchange) was at least partially constructed on their former land. With regard to those damages claims, it is not necessary for Claimants to prove that the taken parcels were "essential" to the Projects as a whole. The trial court therefore did not err by allowing Claimants' suit for severance damages for loss of visibility to proceed to a jury trial.
B. Severance Damages for Loss of the Right-Out Exit
¶38 This does not end our analysis, however, because there is another component of severance damages to which Claimants assert entitlement: severance damages associated with loss of the right-out exit onto Main Street. At oral argument, UDOT conceded that Claimants were theoretically entitled to recovery of this component of severance damages, but maintained that Claimants had not presented sufficient evidence of damages with regard to that claim. We find UDOT's arguments unpersuasive, and agree with Claimants that they presented sufficient evidence of their claimed severance damages.
¶39 "[T]he proper measurement of severance damages is determined by comparing the market value of the portion of property not taken with its market value before the taking."
See
Admiral Beverage
,
¶40 Thus, there is no requirement, in Admiral Beverage or in any other case of which we are aware, that Claimants must present their severance damages on a line-item basis, including a discrete value for, specifically, damages suffered by virtue of the loss of the right-out exit. 11 Claimants are free to present their severance damages evidence in a more general way, by presenting to the factfinder evidence of what the property was worth prior to the taking, and what it is worth after the taking. 12
¶41 In this case, Claimants did just that, and we find no legal infirmity in their efforts. Appraiser concluded that Claimants' remaining property was worth approximately $2.3 million less after the Interchange was built than it was before construction began. Appraiser testified that there were two main factors that contributed to the property's diminution in value-loss of visibility and loss of the right-out exit. Appraiser's failure to provide specific values for these individual components of loss, in particular for loss in value caused by the loss of the right-out exit alone, does not render his testimony infirm or inadmissible, at least not in this case.
CONCLUSION
¶42 Even though only a small portion of the enormous Interchange was actually built on the land UDOT took from Claimants, that small portion enables Claimants to take advantage of a much easier pathway to prove a causal link between the taking and their claimed damages. Because the Interchange was at least partially built on the taken property, a causal link between the taking and Claimants' severance damages for loss of visibility is presumed. Claimants do not need to prove that the taking of their parcels was "essential" to the Projects as a whole.
¶43 Claimants are likewise entitled to recover severance damages for loss of the right-out exit onto Main Street. UDOT concedes that Claimants are theoretically entitled to these damages. Because we conclude that Claimants are entitled to recover each of the categories of severance damages at issue in this appeal, it necessarily follows that their damages evidence, presented merely in a before-and-after manner, was sufficient on the facts of this case.
¶44 Affirmed.
A "right-out exit" allows traffic to exit (but not necessarily enter) a facility, but only by turning right.
Our recitation of the facts is presented in the light most favorable to the jury's verdict, and comes from the testimony and evidence developed at trial.
See
Smith v. Fairfax Realty, Inc.
,
Two of these three parcels were taken in fee simple, and the third was taken in the form of a perpetual slope easement. The two parcels taken in fee simple were very small (756 and 928 square feet, respectively). The slope easement is larger, comprising 8,825 square feet.
UDOT correctly points out that Claimants introduced no exhibit or testimony demonstrating exactly where the boundaries for the slope easement were located, or demonstrating exactly how much of the dirt slope ended up being located on the slope easement. But it is clear from the trial testimony that at least some of the dirt slope supporting the northbound I-15 on-ramp is located on the slope easement, and therefore is located on property owned by Claimants. In addition, during oral argument, UDOT's counsel acknowledged that UDOT placed the dirt slope at least partially on Claimants' property. Moreover, one of the jury instructions proposed by UDOT and submitted to the jury stated that UDOT acquired the slope easement "for the purpose of constructing and maintaining slopes on the property as part of the Project[s]."
This court has read
Miya
in this manner once before. In this court's decision in
Utah Department of Transportation v. Ivers
,
Some jurisdictions (including our own from 2007 to 2011,
see
Ivers
,
UDOT's concession here was limited because, as discussed below, UDOT points out that Claimants presented to the jury only a total composite figure comprising all of its claimed severance damages, and did not endeavor to itemize or individually value each part of their claimed severance damages (such as, for instance, loss of visibility solely due to the presence of the northbound on-ramp). UDOT therefore takes the position that, even though Claimants would be theoretically entitled to recover severance damages for loss of visibility caused by the northbound I-15 on-ramp, Claimants' specific evidence for this item of severance damages was insufficient.
If the structure in question were a building instead of a freeway interchange, the analysis would be clearer. It would make little sense to say that a claimant could recover severance damages for loss of visibility occasioned by a single part or feature of a building (say, a wing of the building, or an awning, column, or steeple) but could not recover severance damages for loss of visibility occasioned by other parts of that same building. While we concede that a building is perhaps more clearly one contiguous "thing" than a freeway interchange is, we cannot conceive of any principled basis upon which to distinguish the two scenarios.
As noted, UDOT conceded that Claimants have at least a theoretical entitlement to severance damages caused by loss of visibility related to the northbound on-ramp. But absent that concession, UDOT could potentially have argued that only the dirt slope support was actually constructed on Claimants' property, while the actual retaining wall and the rest of the on-ramp were not. If we permit UDOT to subdivide the Interchange down into its component parts (e.g., bridges and on-ramps), we are aware of no principle that would prevent condemnors from subdividing each component part into its own respective sub-parts (e.g., retaining walls, slope supports).
We are aware that, in some cases, it may be difficult to determine where an "interchange" begins and ends. In this case, however, as far as we are aware, all of the items that were described as part of the cause of Claimants' severance damages for loss of visibility (e.g., the raised freeway overpass, the northbound I-15 on-ramp, the new retaining walls) are unquestionably part of the Interchange. However, we note that, at oral argument and at one point in its reply brief, UDOT made some mention of "sound walls" that it claimed were quite a distance away from the Shopping Center. This argument was not well-developed in UDOT's briefing, and as a result we are not certain exactly which "sound walls" UDOT is referring to or where they are located, or whether UDOT is even attempting to argue that the sound walls in question are not part of the Interchange. We note simply that we consider any such claim on UDOT's part-that some of the items included as causes of Claimants' loss of visibility damages may not be part of the Interchange-to be inadequately briefed and developed.
There is a statutory mandate that, in condemnation cases, "as far as practicable compensation shall be assessed for each source of damages separately." See Utah Code Ann. § 78B-6-511 (LexisNexis 2012). UDOT makes passing mention of this statute in its brief, but makes no argument that this statute should be read in a manner that would put it at odds with our supreme court's analysis in Admiral Beverage .
Despite the difficulty of the endeavor, as described in
Admiral Beverage
,
Reference
- Full Case Name
- UTAH DEPARTMENT OF TRANSPORTATION, Appellant, v. TARGET CORPORATION and Weingarten/Miller/American Fork LLC, Appellees.
- Cited By
- 7 cases
- Status
- Published