Northwest Arkansas Recovery, Inc., and Washington County v. Tom Lockhart and his wife, Elizabeth Lockhart

NOT DESIGNATED FOR PUBLICATION

ARKANSAS COURT OF APPEALS

OLLY NEAL, Judge

DIVISION I

CA00-394

November 29, 2000

NORTHWEST ARKANSAS AN APPEAL FROM WASHINGTON

RECOVERY, INC., and COUNTY CIRCUIT COURT

WASHINGTON COUNTY NO. CIV 99-382

APPELLANTS

V. HONORABLE MARY ANN GUNN,

CIRCUIT/CHANCERY JUDGE

TOM LOCKHART and his wife,

ELIZABETH LOCKHART AFFIRMED IN PART;

APPELLEES DISMISSED IN PART

This is an appeal from a jury trial in Washington County Circuit Court on the issues of whether the damages awarded appellees were excessive, whether appellees' testimony concerning their damages was proper, and whether the circuit court erred in denying appellants' post-trial motions, including a motion for judgment notwithstanding the verdict, a motion to intervene, and a motion for a new trial. We affirm in part and dismiss in part.

In 1994, Northwest Arkansas Recovery, Inc. (hereinafter "NWA"), a private corporation, bought 320 acres in Washington County for the purpose of building a composting facility for organic waste that includes dead turkeys and chickens, liquid and solid hen and hog manure, and other organic waste. It obtained a permit to receive municipal waste, sludge, septic tank pump-out, and restaurant waste grease. NWA and fiveother landowners in the area filed a petition with the Washington County Court to open a public road across lands owned by appellees, Tom and Elizabeth Lockhart, and Violet Jones.

An order authorizing the taking was entered on June 26, 1997, in which the court found that the parties were proper and that a public purpose would be achieved by the taking. The respondents therein appealed to the circuit court, which subsequently affirmed the taking. That order was not appealed and is not an issue herein. For purposes of this appeal, NWA is the only appellant because, at appellant's request after the jury verdict, the circuit court dismissed the other five landowners who petitioned to have the property condemned.

After the condemnation was granted, appellees filed a claim for damages in the county court on April 30, 1998. They claimed that NWA's operation would result in a loss of acreage to be used for the road and that it would cause offensive odors and increased traffic adjacent to their properties. They also challenged NWA's proof on just compensation and requested severance damages. Pre-hearing briefs were filed, and on March 16, 1999, the county court set damages at $1,452 for the Lockharts and at $2,448 for Ms. Jones. Appellees appealed to the circuit court, and a jury trial was held on September 1, 1999. The jury returned verdicts for $24,341 and $23,372, respectively, for Ms. Jones and the Lockharts. On September 16, 1999, after the jury verdicts were rendered but before the judgment was entered, Washington County moved to intervene, for a new trial, and for relief from the judgment. On November 29, 1999, judgment was entered on the jury verdicts; an order denying Washington County's motion to intervene was also entered on that date. NWA moved for a judgment notwithstanding the verdict on December 9, 1999, and on December 22, 1999, Washington County joined in its motion. All motions were denied in an order entered on January 6, 2000.

The issues on appeal are whether the trial court erred by allowing testimony by appellee Tim Lockhart as to NWA's possible use of the land, whether the damages awarded to appellees were excessive, and whether the denial of appellants' post-trial motions was proper. Before we reach the merits of these issues, we must address the deficiencies in this appeal. Appellant failed to include in the addendum to its brief the judgment on damages and it also failed to abstract the judgment. Rule 4-2(a)(8) of the Rules of the Supreme Court, provides: "Addendum. Following the signature and certificate of service, the brief shall contain an Addendum which shall include photocopies of the order, judgment, decree, ruling, or letter opinion, or administrative law judge's opinion, from which the appeal is taken...."

The rule further provides that briefs not in compliance with the required format shall not be accepted for filing by the Clerk. Ark. Sup. Ct. R. 4-2(c). However, Rule 4-2(b)(3) gives us the discretion to address the deficiencies when the case is submitted on its merits, and we will exercise that discretion in this case and will address the damage issue because there is sufficient information in the record to allow us to understand the issue. The supreme court has held that, as long as we can determine from a reading of the briefs and appendices material parts necessary for an understanding of the questions at issue, we will render a decision on the merits. Johnson v. State, 342 Ark. 357, ___ S.W.3d ___ (Oct. 12, 2000).

In addition to appellants' omission of an order from the addendum as discussed above, it also failed to amend its notice of appeal. On September 16, 1999, Washington County filed a motion to intervene, for a new trial, and for relief from judgment. The court entered two orders on November 29, 1999. The first order denied the motion to intervenebut did not address the motion for a new trial or motion for relief from judgment, and the second order entered the jury's verdict and awarded damages. On December 9, 1999, NWA filed a motion for judgment notwithstanding the verdict and Washington County joined in this motion. On December 28, 1999, NWA and Washington County filed a notice of appeal. The circuit court entered an order on January 6, 2000, denying the motion for judgment notwithstanding the verdict and the motion for a new trial. Because they filed their notice of appeal before the January 6, 2000, order was entered, both NWA and Washington County were required by Rule 4(b)(2) of the Rules of Appellate Procedure Civil to amend their notice of appeal to include those motions denied by this latest order. Neither party amended their notice of appeal, and their failure to do so has precluded us from considering issues of denial of the motion for judgment notwithstanding the verdict and denial of the motion for a new trial.

Based on the above facts, the only remaining issues preserved in this appeal are whether the trial court erred by allowing appellee Tom Lockhart to testify as to NWA's possible use of the land, whether the damages awarded appellees were excessive, and whether the denial of Washington County's motion to intervene was proper. We dismiss those portions of the appeal challenging the denial of the motions for judgment notwithstanding the verdict and for a new trial.

Washington County argues that the circuit court erred by denying its motion to intervene. When NWA filed a petition in the Washington County Court for the opening of a public road across lands owned by appellees, the county attorney was not named as a party. The petition was granted by the county court and was affirmed on appeal by the circuit courtin 1997, and that order was never appealed. Appellees then filed a claim for damages in the county court, and once again, the county was not a party in that action. The county court awarded damages in the amounts of $1,452 and $2,448 for the Lockharts and for Ms. Jones, respectively. Appellees appealed to the circuit court and requested a jury trial. The county still was not made a party to the proceedings and did not file a motion to intervene. The jury returned verdicts for $24,341 and $23,372, respectively, for Ms. Jones and the Lockharts. On September 16, 1999, Washington County moved to intervene. In an order entered on November 29, 1999, the trial court denied the county's motion and held that it was a party by operation of law. The specific issue that the county raises on appeal is the appropriateness of the trial court's denial of its motion to intervene pursuant to Rule 24.

Rule 24 of the Arkansas Rules of Civil Procedure provides for two types of intervention:

(a) Intervention of Right. Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of this state confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

(b) Permissive Intervention. Upon timely application anyone may be permitted to intervene in an action: (1) when a statute of this state confers a conditional right to intervene; or (2) when an applicant's claim or defense and the main action have a question of law or fact in common. When a party to an action relies for ground of claim or defense upon any statute or executive order administered by a federal or state governmental officer or agency or upon any regulation, order, requirement or agreement issued or made pursuant to the statute or executive order, the officer or agency upon timely application may be permitted to intervene in the action. In exercising its discretion, the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

Both sections of Rule 24 require that the timeliness issue be satisfied before reaching the other requirements in either of those sections. The supreme court recently addressed this issue and stated that a threshold question in determining whether intervention should be allowed is whether application was made in a timely manner. Milberg v. State, 342 Ark. 303, ___ S.W.3d ___ (2000). The issue of timeliness is a matter well within the sound discretion of the trial court and is subject to reversal only when that discretion has been abused. Id. The supreme court said that, in determining timeliness, there are three factors to consider: (1) how far the proceedings have progressed; (2) any prejudice to other parties caused by the delay; and (3) the reason for the delay. Id. Post-judgment intervention is generally allowed only upon a strong showing of entitlement by the applicant or a demonstration of unusual and compelling circumstances. Id.

In the instant case, the petition to condemn was filed, a hearing was held, the petition was granted, and appellees filed a complaint for damages in county court and were awarded total damages of $3,900. Appellees appealed the amount of damages to the circuit court, and a jury awarded damages totaling $47,713. A bond was then posted by NWA to cover the full amount of the damages. The county did not seek to intervene until five years of litigation had ended and the jury had awarded damages of almost $50,000. The county waited until the case was at the final judgment stage before it sought intervention.

The second prong of the timeliness analysis requires the trial court to determine whether any prejudice to other parties would be caused by the delay. These parties have been litigating this case for over five years, and if the motion to intervene were granted, the parties would be forced to go through yet another jury trial. As stated earlier, a bond hasbeen posted to cover the amount of the damages; therefore, the county is protected whether the damages are $3,000 or $50,000. To require these parties to go through a new trial on the issue of damages would be pointless because the county does not stand to lose anything, and the additional time and effort appellees would expend in another trial would be prejudicial to them.

For the third prong of the timeliness analysis, we consider the reason for the delay. Though the county was never made a party to any of the proceedings at the county court level or at the circuit court level, it is undisputed that the county attorney was aware of the proceedings, was in fact served with some of the pleadings, and admitted that he was present for most of the hearings. Around April 30, 1998, the county attorney was served with a copy of the appellees' claims for damages that had been filed in the county court. The appellees served the county attorney, George Butler, with their notice of appeal from the county court to the circuit court, which had been filed around April 5, 1999. Additionally, the circuit court judge held a hearing on September 16, 1999, after the jury trial to deal with the issues of the intervention motion and against whom the judgment should actually be entered. Mr. Butler was present at this hearing and admitted that he was not only aware of the case being litigated at the county and circuit court levels but that he was in fact present at most, if not all, of the hearings. When asked by the circuit court why he waited to intervene, Mr. Butler did not give a reason other than to say that "the appellees were only asking for damages in the amount of $22,000.00 and then lo and behold, there's a judgment for $46,000.00." Mr. Butler asked the court to grant a new trial and, in the alternative, to require an adequate bond be posted to cover the damages that were awarded. The county never gavethe court a reason for the delay. During a hearing held on September 16, 1999, the judge did order that the bond be increased to $50,000, and the November 29, 1999, order provided that NWA shall provide a bond sufficient to cover any damages the county might sustain.

Although the trial court did not reach the timeliness issue of the county's motion, it could have found that its motion was not timely made.

The next issue we address is whether appellee Tom Lockhart's testimony concerning damages was proper. During his direct examination, appellee Mr. Lockhart testified that NWA has the ability to haul both animal waste and municipal waste. NWA's counsel objected to this testimony and argued that what Mr. Fredericks (president of NWA) might do some day in the future, but does not now have the capacity to do or the capability to do, is irrelevant for purposes of what the jury is to consider. The court overruled the objection and stated that the road has already been established as a public road and that case law allows wide latitude in him [Tom Lockhart] to testify regarding the highest and best use of his land and things of that nature. NWA's counsel argued that, as a consequence of the court's ruling, the jury was allowed to hear continuing speculative testimony about the number of trucks that would use the roadway and the nuisance conditions anticipated by this usage, which had no rational basis.

It is well settled that opinion testimony by either the landowner or his value witness may be stricken on motion if there is no fair or logical basis for its support. Ozark Gas Transmission Sys. v. McCormick, 10 Ark. App. 210, 662 S.W.2d 210 (1984). Once the witness expresses an opinion as to fair market values, the burden shifts to the condemnor toestablish by cross-examination that there is no logical basis to support the opinion before such testimony is subject to being stricken from the record on motion. Id.

Tom Lockhart testified that he heard Mr. Fredericks testify in the past about his desire to use municipal waste and that, based on this usage, twenty-five trucks a day would be used. Lockhart said that he believes that NWA has the ability to handle both animal waste and municipal waste. That testimony goes directly to the issue of how appellees' land will be affected by NWA's operation. Before this testimony could be stricken, the burden shifted to NWA to show that there is no logical basis to support this testimony. On cross-examination, Lockhart admitted that he heard Mr. Fredericks testify that presently there is no municipal trash service available in Northwest Arkansas. When asked whether he believed Mr. Fredericks's testimony, Lockhart said he did not know. There were no questions asked of Lockhart on cross-examination regarding testimony that Mr. Fredericks had given during previous hearings. If the condemnor is unable on cross-examination to draw more than a weak or questionable basis for the opinion, that fact has a bearing on the weight to be given the testimony by the jury and the testimony should not be stricken on motion. Ozark Gas Transmission Sys., supra. In the case at bar, NWA failed to address the basis for Mr. Lockhart's opinion. Lockhart testified that his opinion was based on Mr. Fredericks's prior testimony, yet NWA did not question him about Mr. Fredericks's prior testimony. The trial court was correct in allowing the testimony.

The final issue is whether damages were excessive. Appellants argue that the damages awarded are excessive and appear clearly to have been given under the influence of passion and prejudice.

The jury awarded appellees, Tom and Elizabeth Lockhart and Violet Jones, $23,372 and $24,341, respectively. There were handwritten notes after the amounts on each verdict form that read "and more if we could have." Appellants argue that the written notes are indicative that the jury panel did not have a particular limit and that the jurors must have strayed from the instructions due to inflamed passions and prejudice. They argue that the jurors ignored the instruction on damages that stated that they were to fix the fair market value at the difference in value of the tract before and after the taking and that this instruction is harmonious with the law in Property Owners Improvement District #247 of Pulaski County v. Williford, 40 Ark. App. 172, 843 S.W.2d 862 (1992).

This court's standard of review in deciding whether a jury award is excessive is whether the verdict is so great as to shock the conscience of this court or demonstrate passion or prejudice on the part of the trier of fact. Smith v. Galaz, 330 Ark. 222, 953 S.W.2d 576 (1997). In doing so, this court reviews the proof and all reasonable inferences most favorably to the appellee. Id.

Appellee Tom Lockhart testified that he calculated what he believes to be the fair market value of his acreage before the taking and after the taking. Lockhart testified that, as a result of his ownership and his investigations of values over the past four or five years, he believes that his property was worth approximately $162,000 and that, after the taking, he valued it at $138,000, a difference of $23,372. He also testified that Ms. Jones's property was worth the same as his, per acre, prior to the taking and that, after the taking, he valued her property at $137,690, a difference of $24,341. Lockhart said he took into consideration the use of the road by appellants in arriving at his figures.

It is well settled that a landowner can testify as to the value of his property for purposes of damages in a condemnation proceeding. The following excerpt is an example of this:

A landowner's opinion as to the value of his land is admissible in evidence whether he knows anything about land market values in the area or not. His value opinion is admissible in evidence simply because he owns the land and is qualified to state an opinion as the value of what he owns. Of course, such opinion testimony, either by the landowner or his value witnesses, may be stricken on motion if there is no fair or logical basis for its support. Once the landowner or his qualified expert witness has expressed into evidence his opinion as to fair market values, the burden then shifts to the condemner to show by cross-examination that the landowner or the witness has no logical basis to support his opinion before such testimony is subject to being stricken from the record on motion. If on cross-examination the condemner is unable to draw from the landowner or his expert witness more than a weak or questionable basis for his opinion, that fact has a bearing on the weight to be given the testimony by the jury, and the testimony should not be stricken on motion.

Arkansas State Hwy. Comm'n v. Jones, 256 Ark. 40, 41-42, 505 S.W.2d 210, 211-12 (1974) (citations omitted).

It has long been the law in Arkansas that the measure of damages is the value of the land taken, plus the damage to the land not taken, less any accruing benefits, and it is proper to take into consideration the difference in the market value of the property before and after the taking. Clark County v. Mitchell, 223 Ark. 404, 266 S.W.2d 831 (1954).

Appellants rely on Property Owners Improvement District #247 of Pulaski County v. Williford, supra, in stating that the jury is to award damages based on the differencebetween the fair market value of the property prior to the taking and the fair market value of the property after the taking. Property Owners involved how damages should be awarded based on whether or not the condemnor is a sovereign entity or a nonsovereign entity. However, the case does not examine the issue of severance damages. That case states that a sovereign condemnor would be entitled to an offset against the damages sustained by the landowner if there were special benefits reaped by the landowner due to the condemnation. That is not the situation in the case at bar.

In the instant case, the jury's awards were in the exact amounts that appellant Tom Lockhart testified that he believed he and Ms. Jones were damaged. Based on the amounts of the verdicts, it is evident that the jury gave greater weight to Lockhart's testimony as to value than that of the other witnesses. Lockhart testified that, in reaching his values, he took into consideration the way NWA was using and planned to use the road. Appellants argue that, according to the parties' testimony at trial, the actual value of the land taken is between $1,000 per acre and $1,500 per acre and that the actual land taken was only about three acres. That testimony merely goes to the actual land taken and not to severance damages. The jury instruction directed the jury to award damages based on the difference between the fair market value of the land before the taking less the fair market value of the land after the taking. While appellants are correct that the testimony placed the value of the land between $1,000 and $1,500 per acre, Mr. Lockhart testified that his property was further damaged due to the use of the road by NWA. Lockhart testified that he estimated the damages to be $23,372 for his property and $24,341 for Ms. Jones's property. Appellees' value appraiser, Keith Schultz, testified that he placed damages at $17,700 to $18,700 for the Lockhartproperty and the Jones property, respectively. The jury obviously awarded damages based on Tom Lockhart's testimony, and their written statement on the verdict forms "and more if we could" merely evidences the fact that the jury gave greater weight to Mr. Lockhart's testimony than that of the other witnesses who testified as to the amount of damages.

Appellants have failed to prove that the jury verdicts are so excessive that they shock the conscience of the court or that they were given under the influence of passion and prejudice.

Affirmed in part and dismissed in part.

Robbins, C.J., and Hart, J., agree.