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Utah Department of Transportation v. Target Corp. and Weingarten

Court of Appeals of Utah

February 8, 2018

Utah Department of Transportation, Appellant,
Target Corporation and Weingarten/Miller/American Fork LLC, Appellees.

         Fourth District Court, American Fork Department The Honorable Thomas Low No. 090102037

          Sean D. Reyes, Barbara E. Ochoa, William H. Christensen, and Stanford E. Purser, Attorneys for Appellant

          Kevin E. Anderson and Jason E. Wilkinson, Attorneys for Appellee

          Target Corporation Jeffrey W. Appel, Matthew N. Evans, and Robert P. Harrington, Attorneys for Appellee Weingarten/Miller/American Fork LLC

          Judge Ryan M. Harris authored this Opinion, in which Judges Kate A. Toomey and Jill M. Pohlman concurred.


          HARRIS, JUDGE

         ¶1 One extremely small portion of a massive freeway interchange was built on land that the Utah Department of Transportation (UDOT) took from claimants Target Corporation (Target) and Weingarten/Miller/American Fork LLC (Miller) (collectively, Claimants). The vast majority of the interchange was constructed upon UDOT's own land or upon land taken from others. Claimants complain that the interchange prevents or impairs motorists from viewing their shopping center, and they claim the right to recover severance damages from UDOT related to this loss of visibility and related to the loss of a right-out exit[1] from the shopping center's parking lot. The trial court allowed that claim to proceed to a jury trial, and a jury awarded Claimants more than $2.3 million in severance damages.

         ¶2 UDOT now appeals, and asserts that the trial court erred in even allowing Claimants' suit for severance damages to reach the jury. UDOT asserts that Claimants' evidence was insufficient, regarding both causation and damages, to support their claims. For the reasons discussed below, we find UDOT's arguments unpersuasive, and therefore affirm.


         ¶3 In 2009, UDOT determined that two major highway construction projects (the Projects) needed to be built in fast-growing Utah County. One project involved widening and reconstructing Interstate 15 through essentially the entire length of Utah County, from Santaquin to the Salt Lake County line. This project, in total, was more than twenty-two miles long. The other project involved the construction of a new east-west arterial road from American Fork through Lehi to Saratoga Springs. This project, in total, was seven miles long. The two Projects intersect at a point in American Fork where Main Street crosses I-15. Before the Projects, there was already a freeway interchange at the site, allowing motorists to cross I-15 on Main Street via an overpass, or get on or off I-15 at that same location. The Projects called for the widening of both I-15 and American Fork Main Street, and therefore UDOT found it necessary to completely rebuild the existing freeway interchange (the Interchange).

         ¶4 In order to facilitate construction of the new Interchange at that location, UDOT condemned various properties, including three relatively small portions[3] of the Alpine Valley Shopping Center (the Shopping Center), a mall owned largely by Claimants that is located on the northeast corner of the Interchange. The Shopping Center is a large retail facility with many stores and shops. It has one major "anchor" tenant- Target-as well as other smaller retail stores, and includes a large outdoor parking lot. Claimants' witnesses testified at trial that the Shopping Center is designed to draw customers from a large regional area, and that customers are drawn there due to "ease of access and convenience, and knowing how to get there by visibility or good signage." Target owns the land on which its store is located, and Miller owns most of the Shopping Center's remaining land. Both Target and Miller share a parking lot, and also share a cross-easement across the entirety of the Shopping Center. The shared parking lot abuts Main Street, and prior to completion of the Projects a driver could easily access northbound I-15 by making a right-hand turn out of the south side of the parking lot, driving briefly westbound along Main Street, and then merging onto northbound I-15. The original northbound I-15 on-ramp was "at grade"-on the same level- with Main Street.

         ¶5 UDOT chose to rebuild the Interchange using an innovative "diverging diamond" design, which is "a very unique cross-over type interchange" that involves cars temporarily driving on the left side of the road. Significantly for present purposes, a diverging diamond design requires a lot of space, and in this case that design required that the bridge over the freeway be built higher than other design options, and also required much larger and higher on- and off-ramps. To take one specific example, the northbound I-15 on-ramp was raised from "at grade" (in the before condition) to a height of some twenty-three feet (in the after condition). The new Interchange's increase in height affected Claimants' property and the surrounding area in several ways.

         ¶6 First, the heightened overpass and raised northbound I-15 on-ramp required UDOT to gradually raise the elevation of Main Street as it approached the Interchange. Because Main Street itself was being raised, UDOT determined that, "for safety reasons, " it could no longer permit right-out access from the south end of the Shopping Center onto the now-heightened Main Street, although UDOT was able to preserve right-in access from westbound Main Street into the parking lot. In connection with closing this right-out exit, UDOT took from Claimants one small rectangular parcel located on the south side of the shared parking lot, along Main Street. UDOT did not build any portion of the Interchange on this parcel. Prior to the taking, the right-out exit was the most heavily used exit in the parking lot, due to its proximity to the northbound I-15 on-ramp. After the taking, the closure of the right-out exit required all traffic exiting the parking lot to use an intersection located along the east side of the Shopping Center, along Kawakami Drive.

         ¶7 Next, to facilitate construction of the heightened northbound I-15 on-ramp, UDOT built a retaining wall along the northbound on-ramp. In order to support the retaining wall, UDOT found it necessary to construct an earthen slope alongside the retaining wall. UDOT did not, however, have enough space on its own property for the entire dirt support slope, so UDOT took a perpetual "slope easement" across a long, narrow parcel of Claimants' land that runs alongside the northbound I-15 on-ramp. UDOT then placed a large amount of dirt on the slope easement, creating a slope that supported the retaining wall that, in turn, supported the raised on-ramp onto northbound I-15. While the retaining wall itself is not located on the slope easement, the dirt slope supporting the retaining wall is at least partially located on the slope easement.[4]

         ¶8 At trial, Target's representative testified that UDOT informed him that "it was not feasible to maintain the right-out [exit] due to the new construction, the design, specifically, of this diverging diamond." However, no other witness at trial testified that the condemnation of Claimants' specific parcels was "essential to the completion of the project as a whole." See Ivers v. Utah Dep't of Transp., 2007 UT 19, ¶ 21, 154 P.3d 802, overruled in part on other grounds by Utah Dep't of Transp. v. Admiral Beverage Corp., 2011 UT 62, 275 P.3d 208 (holding that a claimant is entitled to severance damages related to a view-impairing structure "built on property other than that which was condemned" only "if the use of the condemned property is essential to the completion of the project as a whole").

         ¶9 Claimants also presented evidence that completion of the Interchange affected the visibility-defined as the ability of others to view into the property, see id. ¶ 12-of the Shopping Center. Prior to the Projects, motorists moving in any direction on I-15 or Main Street could easily see the Shopping Center as they were driving. After the Projects, by contrast, visibility into the Shopping Center decreased, chiefly because of the larger and taller Interchange. Parts of the Interchange, including the taller and wider bridge over the freeway, as well as new or taller retaining walls and raised on- and off-ramps, now impair motorists' view of the Shopping Center. Claimants argued that they were entitled to be compensated not just for the value of the parcels that were taken, but also for "severance damages" representing the full loss of the market value of the Shopping Center caused by the taking, including diminution in value caused by reduced visibility and access.

         ¶10 In support of this contention, Claimants presented testimony from an expert appraiser (Appraiser). Appraiser valued Claimants' remaining property twice, once in the "before" condition, as though the Interchange had never been built, and once in the "after" condition, taking into account any effect that the Interchange had on the property's value. Appraiser explained that the difference in these values constituted the measure of Claimants' severance damages. Appraiser concluded that Claimants' remaining property was worth approximately 7.5% less in the "after" condition than in the "before" condition, and he calculated Claimants' severance damages, based on that conclusion, as more than $2.3 million. Appraiser testified that there were two main factors that contributed to the property's diminution in value: loss of visibility, largely because of the presence of the larger and taller Interchange, and loss of the right-out exit onto Main Street. However, Appraiser did not attempt to provide any specific values for these individual components of loss-that is, Appraiser did not provide the jury with any specific amounts for damages related to loss of the right-out exit alone, or for damages related to loss of visibility alone, or for damages related to loss of visibility related to any specific component of the Interchange. At the close of Claimants' case, UDOT moved for a partial directed verdict on the issue of severance damages, arguing that Claimants should not be allowed to recover severance damages at all. Specifically, UDOT argued that Claimants failed to "elicit[] any testimony from any witness that this property was essential to the project as a whole, " and therefore their claim for severance damages was infirm under the rubric set forth in Ivers, 2007 UT 19, ¶ 21. The trial court denied UDOT's motion, reasoning that although no witness explicitly testified that UDOT's takings were "essential to the project as a whole, " the evidence was nonetheless sufficient to potentially support a finding that the takings were "essential."

         ¶11 After deliberation, the jury awarded Claimants a total of $87, 910 for the value of the property interests that UDOT actually took (the two small parcels taken in fee simple plus the perpetual slope easement). In addition, the jury awarded Claimants a combined $2, 381, 294 in severance damages. UDOT takes issue with the severance damages portion of the jury's verdict, and first expressed its displeasure with this award by asking the trial court to enter a judgment notwithstanding the verdict, again asserting that Claimants "failed to establish through testimony of any fact or expert witness that the property taken by [UDOT] was 'essential to the completion of the project as a whole.'" The trial court denied that motion.


         ¶12 UDOT now appeals the award of severance damages to Claimants, and asserts that the trial court should have granted its motions for partial directed verdict and/or for judgment notwithstanding the verdict on that issue. We review a trial court's denial of a motion for directed verdict for correctness. Proctor v. Costco Wholesale Corp., 2013 UT App 226, ¶ 6, 311 P.3d 564. Likewise, we review for correctness a trial court's denial of a motion for judgment notwithstanding the verdict. Neff v. Neff, 2011 UT 6, ¶ 49, 247 P.3d 380. On either a motion for directed verdict or a motion for judgment notwithstanding the verdict, we will reverse the trial court's ruling "only if, viewing the evidence in the light most favorable to the prevailing party, we conclude that the evidence is insufficient to support the verdict." Lawrence v. MountainStar Healthcare, 2014 UT App 40, ¶ 18, 320 P.3d 1037 (citation and internal quotation marks omitted).


         ¶13 It is a bedrock principle of both the federal and state constitutions that the government cannot take a citizen's property for public use without paying that citizen "just compensation" for the value of the property taken. See U.S. Const. amend. V; see also Utah Const. art. I, § 22. "The policy behind Utah's constitutional provision is to ensure that the burden for damage done to private property is 'distributed among all the taxpayers' rather than 'upon those only who sustained the injury.'" See Utah Dep't of Transp. v. Admiral Beverage Corp., 2011 UT 62');">2011 UT 62, ¶ 21, 275 P.3d 208 (quoting Kimball v. Salt Lake City, 90 P. 395, 397 (Utah 1907)). The constitutional guarantee of "just compensation" "is triggered when there is any substantial interference with private property which destroys or materially lessens its value, or by which the owner's right to its use and enjoyment is in any substantial degree abridged or destroyed." Id. ΒΆ 22 (citation and ...

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