Arkansas Power & Light Co. v. Melkovitz

Citations: 11 Ark. App. 90; 668 S.W.2d 37; 1984 Ark. App. LEXIS 1516Docket: CA 83-145

Court: Court of Appeals of Arkansas; April 4, 1984; Arkansas; State Appellate Court

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In January 1979, Cleo Melkovitz and Martha, along with Herbert C. Rule and Elizabeth, purchased a 439-acre tract in Lonoke County. In August 1979, Arkansas Power and Light Company initiated condemnation proceedings for 12.77 acres of this land for a power transmission line, making the necessary deposit and entering the property on August 29, 1979. A jury awarded $75,000 as just compensation in December 1982. The appellant contested several trial court decisions, including the admissibility of the appellees’ expert testimony, the jury's verdict as excessive, the inclusion of evidence regarding the deposit made at entry, the exclusion of the appellant's expert witnesses from the courtroom, and the refusal to instruct the jury on the appellees' duty to mitigate damages. The court found no errors.

Walter C. Estes, the appellees' expert, testified about his extensive experience in farming and real estate since 1970. He evaluated the property’s fair market value, initially listing it at $1,250 per acre in 1978, which he adjusted for current value using a government-published percentage factor. After the taking, he valued the 80 acres surrounding the transmission lines at $807.50 per acre (a 50% reduction) and the remaining land at $1,615.00 per acre before the taking and $1,534.25 per acre after. The appellant argued that Estes lacked a reasonable basis for his valuation, but the court disagreed, citing that expert testimony is only stricken if cross-examination shows a lack of foundation. The expert's methodology included property inspection, criteria for determining fair market value, and comparable sales, all of which were substantiated, leading the court to uphold the expert's valuation without objection to the adjustment method used.

The testimony evaluated the impact of a power line on a specific 80-acre tract of farmland, considering factors such as location, size, construction, and disruption of farming activities. The expert witness acknowledged that potential buyers would factor these elements into their valuation but admitted he had no specific examples of property sales where a transmission line had depreciated market value, relying instead on his "educated opinion." The appellant referenced the case Ark. State Hwy Comm’n v. Jensen, arguing that the expert's testimony lacked sufficient foundation, as the court previously required experts to demonstrate factual familiarity with the property rather than speculation. Unlike the expert in Jensen, who had not inspected the property, the witness, Estes, testified that he had personally inspected the land before and after the power line's construction. He described how the power line reduced operational efficiency, increased costs for aerial applications, and decreased crop yield, opinions supported by other experienced farmers and crop dusters. Estes stated the power line's presence would reduce the land's value by 5% and negatively affect its desirability. He posited that a buyer would prefer an identical tract without a power line and that these issues would persist annually, impacting property value. The appellant also cited Ark.-Mo. Power Co. v. Sain, where an expert's opinion on market value lacked a reasonable basis; however, in this case, the witness provided specific effects of the transmission line on property sale and supported his opinion with rationale.

Testimony regarding the fair market value of real property can derive from the opinions of knowledgeable witnesses, not solely from sales of comparable properties. A witness with relevant experience, such as a realtor and farmer, can opine on the impact of the erection of a transmission line on property salability. Any perceived weaknesses in such testimony pertain to its weight rather than admissibility. The court will uphold the jury's verdict unless it is overwhelmingly excessive, indicating passion, prejudice, or misapplication of law. A landowner is qualified to express opinions on their property's value without needing to demonstrate expertise in market values. Despite the appellant's challenge to the credibility of the appellees' valuation, evidence showed that their initial purchase price was low due to conditions favoring a quick sale. Improvements made by the appellees before the condemnation proceedings significantly enhanced the property’s desirability and value. Testimony indicated that the taking of the land reduced its value by $250 per acre.

Testimony revealed that the presence of power lines and towers significantly complicated and increased costs associated with farming operations, particularly rice cultivation, which necessitates aerial applications of seed, fertilizer, and herbicides. Agricultural pilots expressed that flying in fields with power lines was perilous, leading to delays in chemical applications beyond critical deadlines, resulting in ineffective treatments. Both the primary witness and a corroborating pilot indicated that optimal chemical application requires flying 20 to 40 feet above ground in straight lines, which was hindered by the power lines. This led to uneven applications, diminishing crop yields, and escalating weed issues, necessitating costly reapplications. The power lines also restricted access to some farm areas, thereby increasing operational costs and reducing productivity.

Additionally, it was noted that the declining water table made conventional irrigation less viable, pushing reliance towards pivot sprinkler systems, which the power lines obstructed on a 130-acre field. Testimony emphasized that prospective buyers usually consider such hindrances when purchasing farmland, with one witness asserting that no prudent buyer would choose a property with a transmission line over an equivalent one without it. The jury was entitled to weigh the credibility of landowners' opinions regarding these impacts, and the testimonies were deemed sufficiently reasoned to justify the jury's verdict, which was not found to be grossly excessive.

The appellant argued that the trial court improperly allowed the jury to hear evidence about the $13,000 deposit made at the beginning of the proceedings. An expert witness testified that the fair market value difference of the property before and after the taking was $14,000. The appellant's objection regarding inquiries into the witness's prior appraisal efforts was addressed by the court, which permitted questions for impeachment purposes, barring any inquiries into privileged communications.

The witness confirmed he conducted the appraisal of the appellees' farm before the condemnation and assumed the company used his report to determine the deposit amount, which was $13,791.60 at the time the complaint was filed. He expressed that, in his opinion, just compensation is $16,000, but clarified he does not make deposit decisions. Evidence of the deposit amount is generally inadmissible in eminent domain cases to avoid contradicting lower valuations from other witnesses; however, it can be used for impeachment purposes, as established in Ark. State Hwy. Comm’n v. Blakeley. In this case, the witness's assumption about the deposit allowed for further questioning for impeachment, especially since it was indicated that his appraisal may differ from others, which he acknowledged. The trial court's failure to provide a cautionary instruction about this evidence was not grounds for appeal since the appellant did not request it.

Additionally, the appellant claimed the trial court erred by excluding its expert witnesses from the courtroom. The court denied the appellant's request for their presence, stating they were not essential to the case, which the appellant contested, arguing it created a conflict between Unif. R. Evid. 615 (exclusion of witnesses) and Unif. R. Evid. 703 (basis for expert opinion). The appellant contended that without hearing the testimonies of other witnesses, the expert could not form an informed opinion based on the presented evidence.

Witnesses in the case provided their opinions based on independent investigations of the property, rather than relying on the testimony of other witnesses. The court emphasized that expert witnesses, while benefiting from hearing testimony, are not automatically exempt from sequestration under Rule 615(3). The trial judge's discretion in such matters is respected unless there’s evidence of abuse. The record showed these witnesses did not intend to base their opinions on courtroom testimony and were not hindered by their exclusion. The court found that their presence was not essential for the case's presentation as outlined in Rule 615(3). 

In the dispute over damages related to a taken easement, the appellee testified about the costs incurred from moving a ditch, while the appellant's expert argued that such action was unnecessary. The appellant claimed the appellee had a duty to mitigate damages, referencing a past case. However, the current case differed as it involved determining whether the power lines necessitated moving the ditch, a matter for the jury. The court affirmed the lower ruling, finding no error in the trial judge's decisions, with concurrence from Justices Mayfield and Cooper.