City of Westminster v. R. Dean Hawn Interests.
2024 COA 80. No. 23CA0351. Eminent Domain—Condemnation—Fair Market Value—Comparable Sales—Executory Contracts for the Purchase and Sale of Land.
August 1, 2024
The City of Westminster (Westminster) filed a petition in condemnation seeking to condemn 37.65 acres (the taken property) of R. Dean Hawn Interests’ (RDHI) 105.66-acre land (the subject property) for the purpose of constructing a drinking water treatment facility. The subject property consists of two parcels. The first is 60.75 acres, and the second, made up of five subdivided lots, is 44.91 acres. Westminster did not seek to condemn approximately 68.35 acres of the subject property (the remainder). The parties agreed that the taken property’s highest and best use was for large-scale mixed-use development, including retail, office, and multifamily housing. RDHI sought compensation for the taking and damages to the remainder because of the condemnation. Westminster’s valuation expert, Rothweiler, valued the taken property at $9,429,000 and concluded that there was no damage to the remainder. RDHI’s valuation expert, Clayton, valued the taken property at $31,091,344 and concluded that there was a diminution of $5,947,046 in value to the remainder. The parties argued numerous motions in limine before the district court and then proceeded to a valuation trial before an appointed board of three commissioners. The commissioners awarded RDHI $25,469,728 for the taken property and $1,631,362 in damages to the remainder.
On appeal, Westminster argued that the district court erroneously allowed RDHI to introduce into evidence three comparable sales because the underlying properties were dissimilar from the taken property. Here, both experts opined that there was a scarcity of comparable sales to use in their valuations; while the taken property is vacant land, it is not undeveloped land, as Westminster contended; Clayton’s comparable sales involved properties that resemble the taken property; and the record shows that Clayton adjusted the valuation for each comparable sale to reflect the entitlement differences between it and the taken property. Accordingly, the district court did not err in admitting evidence of Clayton’s comparable sales.
Westminster also contended that the district court abused its discretion by deciding that the “Erickson agreement”—an agreement between RDHI and Erickson for the purchase and sale of a parcel of real property adjacent to the condemned land—could be admitted at the valuation trial. The court of appeals held that an executory contract for the purchase and sale of land is relevant and admissible, at the district court’s discretion, as evidence of the value of the condemned property. Here, the Erickson agreement was relevant to the question of fair market value and just compensation because (1) it documented a binding contract for sale of the property executed between two sophisticated parties; (2) its admission was consistent with general standards for admissibility of evidence in eminent domain cases, which favor the admissibility of evidence, and what a willing buyer would pay a willing seller is relevant to the taken property’s value; and (3) Clayton did not misuse the Erickson agreement in his valuation. Thus, the district court did not abuse its discretion in finding the Erickson agreement relevant to the just compensation issue and, therefore, admissible.
The order was affirmed, and the case was remanded for the district court to determine the amount of and award RDHI its reasonable appellate attorney fees and costs.