WAYMOND M. BROWN, Judge.
This appeal is from a judgment awarding compensation for the condemnation of a utility easement. On appeal, the landowner contends the circuit court erred by (1) entering an order of possession, ex parte, without any notice to it and thereby denying it the opportunity to respond or request a hearing; (2) excluding the testimony of certain witnesses who could not directly relate their testimony to the fair market value of the properly. We find merit in the landowner's second point. Accordingly, we reverse and remand for a new trial.
The condemned property is part of a 460-acre tract where a wildlife sanctuary for exotic animals and a visitor park are operated. On August 14, 2012, appellee Southwest Arkansas Utilities Corporation (SWEPCO) filed a complaint against appellant Safari Real Estate, LLC, and its manager, Leon Wilmoth, to obtain a utility easement across Safari's property for
In advance of trial, SWEPCO filed a motion in limine seeking to prevent Safari from presenting evidence on topics other than the fair market value of the property. SWEPCO also sought to preclude litigation over the route of the transmission line as decided by the Public Service Commission (PSC). The circuit court held a hearing on the motions in limine just prior to the start of the trial. The court excluded certain of Safari's witnesses, ruling that the only proper evidence was that related to the fair market value of the property taken.
At trial, Safari's appraiser, Thomas Rife, testified that Safari owned approximately 462 acres, divided into four quadrants, to keep the various animals separated. In his calculations, he valued the raw land at $2,000 per acre, with another $1,500 per acre for improvements such as roads, fencing, ponds, and maintaining the grounds. He did not consider any barns or other buildings in his calculations. He said that SWEPCO was taking 9.17 acres for its transmission line through the middle of Quadrant Four. He opined that the remaining 104.83 acres in Quadrant Four could no longer be used as a wildlife park because of U.S. Department of Agriculture regulations concerning wild and exotic animals. He calculated the damages from the taking at $399,000. This included $32,000 for the 9.17 acres in the easement and $367,000 for the damages to Quadrant Four.
Tom Reed, SWEPCO's appraiser, testified that Safari owned approximately 350 acres while the entire Wilmoth family holdings totaled over 600 acres. He valued the property at $2,500 per acre before, and $2,395 after, the taking, for a total of $37,000 in damage to the property's market value. According to Reed, a study of a semi-rural area near Fayetteville indicated that the maximum extent of any harm to remaining properly was no farther than 225 feet on either side of a power-line easement. He used this figure in calculating the value of Safari's remaining property after the taking. He disagreed with Rife that Quadrant Four was rendered useless by the taking of the easement, asserting that it could still be used for agricultural purposes.
The jury, in a verdict signed by nine jurors, awarded Safari $87,539 for the taking of its property. After giving SWEPCO credit for the compensation deposited into the registry at the commencement of the case, the judgment amount was $50,939, together with prejudgment interest of $3,402.45. This appeal followed.
Safari's first point is that the circuit court erred in issuing the order of possession on an ex parte basis, thereby violating Safari's due-process right to contest the seizure of its property, the amount of the deposit, and the manner, timing, and necessity of the taking. There is no merit to this point.
Both the United States Supreme Court and the Arkansas Supreme Court have held that the Fifth Amendment to the United States Constitution does not require payment prior to the taking nor does it necessarily require a pre-taking hearing.
This brings us to Safari's arguments concerning the circuit court's rulings that prevented it from submitting evidence that was not directly related to the fair market value of the easement taken by SWEPCO. On appeal, we will not reverse a circuit court's ruling on the admission of evidence absent an abuse of discretion.
At the hearing on the motion in limine, Safari sought to have its witnesses testify as to elements of severance damages to the remaining tract and whether it could continue to be used as a wild-animal safari park. The circuit court excluded the testimony, ruling that the only proper testimony was that concerning the before-and-after value of the property. In doing so, the court inadvertently took an unduly narrow view of what proper damages are in a condemnation case. It did so by not considering how certain testimony, although not directed specifically at the property's fair market value, may nevertheless be relevant in determining the fair market value. As discussed below, there is no requirement that each witness be able to directly relate his or her testimony to the fair market value of the property.
After the court's ruling excluding the witnesses, Safari proffered the testimony of Leon Wilmoth, Todd Hawkins, and Michael Cordeiro as to the costs of various improvements that Safari considered necessary as a result of the taking. Wilmoth testified that, as a result of the loss of the use of Quadrant Four for the park, it would be necessary to acquire a replacement for Quadrant Four and then build replacement barns and holding pens, fence some 2.5 miles of substitute acreage, and build replacement reservoirs. Hawkins gave an estimate of approximately $298,000 for construction of two standard iron buildings, measuring 40' x 300'. On cross-examination, he could not say whether the buildings were required.
Likewise, Cordeiro, a dirt contractor, gave an estimate of approximately $332,000 to rebuild the roads, to build a new pond and dam, and to clear for the fence and barn. He estimated the cost to clear the fences at $2,200 an acre. On cross-examination, he also could not say whether such improvements were necessary for Safari to operate as a drive-through safari.
Wilmoth's testimony should have been admitted because it laid the foundation for the contractors' testimony. It was also the evidentiary foundation for Thomas Rife's conclusion that Quadrant Four was not economically viable as a park. While the cost of such improvements is
However, such prospective expenditures are not the measure of damages but are only an aid in determining the difference in the before-and-after value of the property.
Our supreme court has long held that testimony concerning the danger of transmission lines and the frightening of animals on the property is a proper element of damages in condemnation cases.
For such consequential damage, Safari is entitled to "just compensation," with the extent of the damage to be established by the opinions of witnesses who show themselves to be acquainted with the property and with the effect of the construction and operation of the transmission upon it. Such testimony must, of course, be within the general rule that the damages claimed must be direct and certain, and such as may be reasonably expected to follow from the invasion of the premises by SWEPCO.
This does not mean that all of Safari's proffered testimony was admissible. For example, the rebuttal testimony of Leon Wilmoth concerning one gate being left open for nine days was not admissible because any severance damages for the diminution in value of the remaining property caused by leaving gates open is conjectural at best in that they are not reasonably expected to follow from the appropriation of the Safari property.
Because of the truncated nature of the other proffered testimony, we express no opinion as to its admissibility. We reverse and remand for a new trial.
Reversed and remanded.
Gladwin, C.J., and Kinard, J., agree.