CNL APF Partners, LP v. Department of Transportation
Docket: A10A1812, A10A1991
Court: Court of Appeals of Georgia; December 30, 2010; Georgia; State Appellate Court
In the case CNL APF Partners, LP et al. v. Department of Transportation and RCI Realty, LLC et al. v. Department of Transportation, the Georgia Court of Appeals addressed multiple appeals related to a condemnation action initiated by the Georgia Department of Transportation (DOT) for a property housing a restaurant. The condemnees, including CNL APF Partners, LP (CNL) and RCI Realty, LLC (RCI), contested the trial court's pre-trial rulings.
CNL appealed the denial of its motions for partial summary judgment, to strike the DOT's opposition brief, and to exclude certain evidence. The appellate court vacated the trial court's denial of partial summary judgment, remanding for further proceedings, affirmed the denial to strike the DOT's brief, and reversed the ruling on the motion in limine.
RCI and Restaurant Concepts challenged the trial court's denial of their motions in limine to exclude evidence, which included prior knowledge of condemnation, a 2003 letter from Restaurant Concepts's counsel, and rent charges. The court affirmed the denial regarding the first two pieces of evidence but reversed the denial concerning evidence of funds deposited by the DOT and the cause of a prior fire damaging the restaurant.
CNL had purchased the property in December 2004, leased it to RCI, which then subleased it to Restaurant Concepts. After a fire in January 2006, RCI continued to pay rent but did not restore the restaurant. When the DOT petitioned for condemnation in March 2006, RCI terminated its lease. CNL's motion for partial summary judgment sought to clarify RCI's obligations under the lease at the time of the taking, which the trial court deemed advisory and thus outside its jurisdiction—a determination the appellate court found erroneous, asserting that the trial court had jurisdiction over the condemnation-related issues.
The court ruled that addressing the issue in the motion for partial summary judgment would improperly encroach on the jury's role. Contract interpretation is generally a legal matter for the court unless the contract is ambiguous, which would necessitate jury involvement. In this case, the trial court did not analyze the contract, leading to the decision to vacate the denial of partial summary judgment and remand for further proceedings. CNL argued that the trial court erred by not striking the DOT's opposition brief, which was filed late, exceeding the 30-day limit set by Uniform Superior Court Rule 6.2. While the DOT’s late response did not present evidence but only legal arguments, the court did not abuse its discretion in choosing not to strike the brief. CNL also claimed the trial court erred in denying its motion in limine to exclude evidence regarding statutory pre-judgment interest. The court acknowledged that such interest should not factor into the jury's deliberations. Despite this, the court denied the motion to exclude, reasoning that clarifying the court's role in calculating pre-judgment interest to the jury would prevent the issue from influencing their decision.
The court determined that the jury should not consider pre-judgment interest and noted that allowing irrelevant evidence is inappropriate, leading to a reversal of CNL's motion to exclude such evidence. RCI and Restaurant Concepts contested the trial court's denial of their motions to exclude certain evidence related to just compensation in a condemnation case, which focuses on the fair market value of the property at the time of taking. As lessees, RCI and Restaurant Concepts are entitled to compensation for their leasehold's value, while the property owner loses the improved property's value.
RCI and Restaurant Concepts sought to exclude evidence of funds deposited by the Department of Transportation (DOT) for the property's estimated value, referencing the precedent set in Dept. of Transp. v. Gunnels, which indicated that such evidence should not be admitted as it could bias the jury's independent assessment of compensation. The trial court's denial of the motion was deemed erroneous.
Additionally, RCI and Restaurant Concepts moved to exclude evidence regarding the cause of a fire that damaged the restaurant, arguing it was irrelevant to their compensation and potentially prejudicial. The DOT contended that uncertainty about the fire's cause impacted insurance availability and thereby the property's market value. The court upheld the relevance of uncertainty about insurance coverage but agreed with RCI and Restaurant Concepts that the specific cause of the fire was not relevant to just compensation. Consequently, the court found that the trial court abused its discretion by denying the motion to exclude evidence of the fire's cause and reversed that ruling.
RCI and Restaurant Concepts sought to exclude evidence regarding their awareness of potential condemnation at the time RCI sold the property to CNL in 2004. The trial court denied this motion, deeming the knowledge relevant to the legitimacy of the sale as a bona fide, arm's length transaction, which could influence the assessment of the property's market value at the time of the taking. The court distinguished this case from the precedent set in City of Atlanta v. West, where knowledge of impending condemnation was deemed irrelevant to fair market value. Here, the Department of Transportation (DOT) aimed to use the knowledge to challenge the credibility of the property’s sale price as a valuation factor. The court concluded that considering this evidence was pertinent to determining just compensation for the condemnees, affirming its decision.
Additionally, RCI and Restaurant Concepts attempted to exclude a November 2003 letter sent by Restaurant Concepts's counsel to an appraisal firm, which contained a business valuation of the restaurant and comments on expected compensation. The trial court ruled that the letter did not constitute a pre-condemnation offer of compromise, thus allowing its admission as an admission against the condemnees' interest. Under OCGA. 24-3-37, offers made in the context of compromise negotiations are inadmissible, but the court clarified that the letter did not propose a compromise of a disputed claim, as no condemnation was active at the time it was sent. The court found that the letter aimed to either dissuade condemnation or secure full compensation, rather than to negotiate a compromise. RCI and Restaurant Concepts argued that the letter's statements were too remote to be relevant but the court maintained its admissibility.
Wright established that for a property owner's statement regarding its value to qualify as an admission against interest, it must be made close in time to the taking to be relevant for the jury. The trial court has discretion in assessing the admissibility based on the proximity of time and similarity of conditions. RCI and Restaurant Concepts argued that over two years between the value statements and the taking made them inadmissible, but the court highlighted that there is no strict rule regarding remoteness. They failed to demonstrate that market conditions significantly differed between 2003 and 2006, leading to the affirmation of the trial court's decision.
Additionally, RCI and Restaurant Concepts sought to exclude evidence of rent charged to Restaurant Concepts prior to the property sale. The Department of Transportation (DOT) argued this evidence was relevant to demonstrate that the rent charged by CNL did not represent the fair market rent at the time of taking. The court found no abuse of discretion in admitting this evidence, affirming the ruling. The judgment was affirmed in part, reversed in part, vacated in part, and the case was remanded with instructions, with concurrence from Chief Justice Miller and Justice Johnson.
Pre-judgment interest is not considered part of the just and adequate compensation owed to a condemnee under the Georgia Constitution, as established in City of Atlanta v. Landmark Environmental Industries. The relevance of pre-judgment interest evidence was deemed inadmissible for jury consideration, contradicting the general rule allowing admission of relevant evidence. Trial court practices of adopting counsel-prepared orders are discouraged. A jury instruction on pre-judgment interest was not under appeal since it had not been requested or provided. In Housing Authority v. Younis, it was determined that certain evidence was inadmissible in condemnation cases, which the trial court erred in allowing. The Department of Transportation's initial estimates and payments into court were irrelevant to the jury's issues. Comparisons are made regarding the nature of offers during negotiations, indicating that not all price announcements constitute offers to compromise. The value of property at the time of taking can include rental rates paid, as noted in Chouinard v. City of East Point.
