City of Santa Fe v. Komis
114 N.M. 659, 845 P.2d 753 (1992)
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Rule of Law:
In a partial condemnation action, a property owner is entitled to compensation for the diminution in market value of the remaining property caused by public perception or fear of the condemned property's use, regardless of whether that fear is objectively reasonable. Additionally, a trial court loses jurisdiction to modify a judgment's interest rate once a notice of appeal is filed, especially if the modification is not a collateral matter.
Facts:
- John and Lemonia Komis owned 673.77 acres of land in Santa Fe.
- The City of Santa Fe condemned 43.431 acres of the Komis's property on November 14, 1988.
- The taken land was designated for the construction of a bypass around the City of Santa Fe.
- The bypass was intended to transport hazardous nuclear waste from Los Alamos to the Waste Isolation Pilot Project (WIPP) site near Carlsbad, New Mexico.
- At the time of condemnation, the highest and best use of the Komis's property was for speculative investment for subdivision into rural homesites or for recreational purposes.
Procedural Posture:
- The City of Santa Fe initiated a partial condemnation proceeding to acquire 43.431 acres of land from John and Lemonia Komis.
- Following a jury trial, the Komises were awarded $884,192 in compensation, including $337,815 for severance damages for perceived loss due to public perception.
- The jury verdict was entered on August 1, 1991.
- The Komises filed a motion to modify judgment on August 20, 1991, asking the trial court to increase the interest rate from six to eight percent.
- The City filed a notice of appeal on August 29, 1991.
- By letter of judgment entered on August 30, 1991, the trial court granted the Komis’s motion to increase the interest rate.
- On December 17, 1991, the parties filed a joint motion to transfer jurisdiction of this appeal from the Court of Appeals.
- By order entered January 10, 1992, the Court of Appeals certified this matter to the New Mexico Supreme Court.
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Issue:
1. Does a property owner in a partial condemnation action deserve compensation for a decrease in the remaining property's market value caused by public fear of the condemned property's use, even if that fear is not objectively reasonable? 2. Does a trial court retain jurisdiction to modify a judgment's interest rate after a notice of appeal has been filed?
Opinions:
Majority - Franchini, J.
1. Yes, a property owner in a partial condemnation action is entitled to receive compensation for the diminution of value to the remainder of the property caused by public perception of the use to which the condemned property will be put, regardless of whether that fear is objectively well-founded or reasonable. The Court adopts the view that if loss of value can be proven, it should be compensable regardless of its source, emphasizing that the objective in condemnation cases is to compensate the landowner for damages actually suffered. If public fear, even if unfounded, causes potential buyers to avoid property or offer a reduced price, a loss of market value exists and is compensable if proven to a jury. The Court found no abuse of discretion in admitting a public-opinion survey (Zia poll) as it was relevant to showing public perception and market fear, and allowed an expert appraiser to rely on it. Similarly, a videotape depicting concerns about the WIPP route was admissible, not for its truth, but as foundational information for the expert's opinion, with proper limiting instructions to the jury. The trial court correctly excluded evidence on the objective safety of nuclear waste transport and other property value studies that did not account for public perception, as these were irrelevant to the issue of market value diminution caused by public fear. 2. No, the trial court did not have jurisdiction to modify the interest rate on the judgment after a notice of appeal was filed. The City filed its notice of appeal on August 29, 1991, prior to the trial court's August 30 ruling on the motion to modify. Furthermore, the Komises' motion to modify was served 19 days after judgment, exceeding the 10-day limit set by SCRA 1986, 1-059(E). The modification of the interest rate was not a 'collateral matter' that the trial court could address post-appeal, as it directly pertained to the constitutional validity of the interest rate within the condemnation procedure itself.
Concurring - Ransom, C.J.
1. Yes, I concur in the foregoing opinion, agreeing that fear which impacts on market value may be shown without proving the reasonableness of that fear, and such impact is compensable. However, Chief Justice Ransom expresses reservations regarding the reliance on evidence from polls showing lay opinion on specific percentage value decreases. He emphasizes that while polls can effectively demonstrate the nature and extent of public fear, the actual impact on market value requires expert opinion testimony and cannot solely rest on the speculation of individuals suffering from potentially irrational fear. He cites Ryan v. Kansas Power & Light Co. to support the principle that non-expert witnesses can provide corroborating and foundational testimony about marketplace fears but are not qualified to testify on the value of the property itself. Nonetheless, he ultimately concurs with the majority, finding that any errors in admitting certain evidence were harmless given the totality of evidence presented at trial and did not affect the substantial rights of the parties.
Analysis:
This case significantly expands the scope of compensable damages in eminent domain, particularly in partial taking scenarios. By allowing compensation for market value diminution based on public perception and fear, regardless of objective reasonableness, the New Mexico Supreme Court sets a precedent that mandates a broader consideration of intangible factors affecting property value. This ruling likely influences how appraisers assess 'fear damages' and broadens the types of evidence admissible in condemnation proceedings, particularly where public projects involve potentially hazardous or controversial uses. It also clarifies and reinforces the strict jurisdictional limits of trial courts concerning judgment modifications once an appeal has been filed, emphasizing procedural adherence and the finality of judgments.
