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Utah Department of Transportation v. LEJ Investments LLC

Court of Appeals of Utah

November 8, 2018

Utah Department of Transportation, Appellant,
v.
LEJ Investments LLC, Robert Bowman Consulting LLC, Craig Jensen, Richard Jensen, Carol Bowman, and Robert Bowman, Appellees.

          Third District Court, Salt Lake Department The Honorable Todd M. Shaughnessy No. 110902201

          Sean D. Reyes, Barbara E. Ochoa, William H. Christensen, David M. Quealy, and Brent A. Burnett, Attorneys for Appellant

          Jonathan O. Hafen, Justin P. Matkin, and Jeffery A. Balls, Attorneys for Appellees

          Judge David N. Mortensen authored this Opinion, in which Judges Gregory K. Orme and Michele M. Christiansen Forster concurred.

          MORTENSEN, JUDGE

         ¶1 In this condemnation action, the Utah Department of Transportation (UDOT) attempted to convince the trial court that a piece of property was nearly worthless dirt. The trial court thought more of the property, and UDOT appeals. We affirm.

         BACKGROUND

         ¶2 UDOT filed a condemnation action to acquire a strip of land that crossed property owned by LEJ Investments LLC, Robert Bowman Consulting LLC, Craig Jensen, Richard Jensen, Carol Bowman, and Robert Bowman (collectively, LEJ). UDOT sought to obtain the land to construct a new freeway, the Mountain View Corridor (the MVC), on the west side of Salt Lake County. When the parties could not agree on the fair market value of the property, UDOT served LEJ with a complaint, establishing the date on which the trial court was to base its determinations of fair market value and severance damages.

         ¶3 At trial, UDOT and LEJ presented differing appraisal values for the property. UDOT depicted the property as "a 353-acre vacant dry farm" with "no streets accessing the interior of the property" and with "antelope still roam[ing] the area." LEJ depicted the property as a budding real-estate investment with immediate potential for mixed-use development. During trial, the mayor of West Jordan City (the City) testified that the mixed-use development plans were consistent with the City's plans for the area, even without the MVC. A real estate developer also testified that there was sufficient demand as of the valuation date to develop the LEJ property for mixed use, even in the absence of the MVC.

         ¶4 The trial court reviewed appraisals from each party and ultimately rejected both valuations. The court concluded, "Neither side offered a backup or alternative valuation for the court to look to for guidance, opting instead to go for broke with the value conclusions each had in hand. Under these circumstances, the court has no choice but to construct its own before-condition valuation, as best it can under the circumstances, and with all the limitations presented." The court ultimately awarded LEJ approximately $13 million in just compensation for the property.

         ¶5 After the trial court entered a final judgment, UDOT learned that LEJ had not supplemented its discovery responses prior to trial with information regarding actual development proposals for portions of the LEJ property. UDOT moved for a new trial, asking the court to compel production of documents and reopen discovery. The trial court granted the motion in part, requiring LEJ to supplement its discovery responses with unproduced documents and scheduling an additional day of trial. The trial court denied UDOT's request to conduct additional discovery and quashed the subpoenas UDOT's counsel had issued to consultants whom LEJ engaged in an effort to gain municipal development approvals during the time leading up to trial. After receiving additional evidence during the added day of trial, the trial court declined to amend its prior ruling.

         ¶6 UDOT appeals.

         ISSUES AND STANDARDS OF REVIEW

         ¶7 UDOT raises various challenges to the trial court's final order. Where UDOT challenges the court's application of the law, we review such conclusions for correctness. See AmericanWest Bank v. Kellin, 2015 UT App 300, ¶ 11, 364 P.3d 1055. Where UDOT's arguments challenge the court's factual findings, we review for clear error. Id. Finally, we review the court's decision to partially reopen trial and discovery for an abuse of discretion. See Sunridge Dev. Corp. v. RB & G Eng'g, Inc., 2013 UT App 146, ¶ 3, 305 P.3d 171; Clissold v. Clissold, 519 P.2d 241, 242 (Utah 1974), overruled on other grounds by St. Pierre v. Edmonds, 645 P.2d 615 (Utah 1982).

         ANALYSIS

         ¶8 UDOT contends that the trial court erred in four ways. First, UDOT argues that the trial court misapplied the project-influence rule by relying on developments and comparable properties that existed after the MVC project began. Second, UDOT argues that the trial court's conclusions regarding the after-condemnation value of the property and severance damages were clearly erroneous, legally incorrect, and internally inconsistent. Third, UDOT argues that the trial court did not hold LEJ to the appropriate burden of proof when it rejected LEJ's expert's appraisal but proceeded to complete a fair market evaluation. Fourth, UDOT argues that ...


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