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Department of Transportation v. VanElslander

Citations: 594 N.W.2d 841; 460 Mich. 127Docket: 110386, Calendar No. 10

Court: Michigan Supreme Court; June 22, 1999; Michigan; State Supreme Court

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In a condemnation case involving the Department of Transportation and defendants Archie and Mary Ann VanElslander, the Supreme Court of Michigan reversed a trial court's decision that excluded evidence of an appraisal based on a potential zoning variance. The plaintiff sought to introduce this appraisal in the context of a road-widening project that resulted in zoning violations for the remaining property. The trial court initially granted the defendants' motion to exclude the appraisal and denied the plaintiff's request for reconsideration and cooperation in obtaining a zoning variance. The Supreme Court found that the trial court abused its discretion by excluding relevant evidence, as relevance is critical for admissibility. Just compensation, a constitutional requirement, mandates that property owners receive the full monetary equivalent for their property taken, ensuring neither party is unjustly enriched. The proper measure of damages includes the fair market value of the property taken and potential severance damages, with evidence of costs to cure being permissible.

In Sherburn, the Court of Appeals clarified the rationale for "cost to cure" evidence in cases of severance damages, indicating that property owners may undertake actions to rectify property injuries, thereby reducing severance damages and increasing market value. Such expenditures are considered the condemnee's cost to cure. Evidence relevant to determining market value at the time of condemnation can include potential rezoning impacts on property price. The distinction between rezoning and variance is acknowledged, but both possibilities are subject to uncertainty and should be evaluated by factfinders in assessing the property’s value before condemnation. Just compensation must balance the interests of property owners and the public, ensuring no party is unduly enriched. The Court referenced Eilender, stating that a reasonable possibility of zoning changes should be assigned a monetary value. The majority concluded that an expert's opinion on the likelihood of a variance was unsupported and speculative. However, the dissent argued that the expert's appraisal, based on consultations with city officials and evidence from similar projects, provided a credible basis for predicting the likelihood of obtaining a variance, making the expert's testimony admissible and more substantiated than the evidence in Eilender.

The Supreme Court concluded that evidence indicating the requested rezoning "would not be inconsistent with the use of certain surrounding areas" was adequate to establish that the possibility of a zoning change was valid and should be considered by factfinders in assessing property value. The Court of Appeals noted that variances granted elsewhere do not guarantee a similar outcome for the parcel in question, allowing defendants to argue and present evidence regarding this matter. However, excluding this issue from factfinding contradicts established precedent. Consequently, the trial court's order excluding the relevant appraisal was reversed, along with the judgments of the Court of Appeals. The case is remanded to the circuit court for further proceedings. The defendants no longer dispute the consideration of a zoning variance's possibility but contest the plaintiffs' evidence sufficiency. The appeal remains pertinent despite alterations made to the building in question, as the potential for a variance is still relevant in determining the property's value just before condemnation.