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City of Quincy v. Diamond Construction Company

January 16, 2002


Appeal from Circuit Court of Adams County No. 00ED1 Honorable Mark A. Schuering, Judge Presiding.

The opinion of the court was delivered by: Justice Knecht


The plaintiff, City of Quincy (City), initiated an eminent domain action to acquire a portion of defendant, Diamond Construction Company's (Diamond), property to complete a street- extension project. The City, during a five-month period, procured two strikingly different appraisals of Diamond's property. The first appraisal was obtained before Diamond, in reliance on the City's definite plan to acquire its property, began to relocate its asphalt plant to ensure it would be operational for the next year's construction season. The City's second appraisal was obtained on the date the condemnation complaint was filed and after Diamond had traded in and moved certain components of its plant. The first appraisal listed the property's highest best use as an asphalt plant and the second appraisal listed it as vacant industrial. Prior to the jury trial to determine just compensation for the taking, the trial court granted Diamond's motion in limine to exclude evidence of the City's second appraisal and limit the evidence of highest and best use to an asphalt plant. The jury awarded Diamond $1,558,640 as compensation for the taking. The City appeals, contending the trial court abused its discretion in granting Diamond's motion in limine. We affirm.


In September 1997, Charles Scholz, Quincy's mayor, contacted Charles Miller, Diamond's president, to discuss the City's plan to extend 18th Street through Diamond's asphalt plant. Over the next two years, Miller communicated with various City officials concerning the City's acquisition of his property and his concerns with the timing of the taking. Miller was concerned because he would be required to move the asphalt plant during the winter months in order for Diamond to honor its contractual obligations during the regular construction season, which usually begins in early spring.

On October 21, 1999, Miller wrote to the City's special assistant corporation counsel, Hubert Staff, with the following concerns and requests: (1) Miller had not heard from the City in several months concerning the acquisition of his property; (2) if the City planned to go forward with the taking, Diamond would be unable to continue operations at that location; (3) Diamond was financially committed to making capital improvements in its business in order for it to honor its contractual obligations for the next spring's construction season; (4) Miller requested the City's official position regarding the acquisition of his property; and (5) time was of the essence and Diamond would begin capital improvements at the existing plant if the City did not respond by November 20, 1999.

In an October 25, 1999, response, Staff told Miller the City intended to go forward with the acquisition of his property sometime prior to the 2000 construction season. Further, Staff told Miller he expected the city council to adopt a resolution within two weeks authorizing him to enter into negotiations with Diamond for the acquisition of its property.

On November 5, 1999, Staff again wrote to Miller, advising him the City expected to adopt a resolution on Monday, November 8, 1999, authorizing him to make an offer on the Diamond property. The city council passed the resolution and on November 9, Scholz forwarded a letter to Miller acknowledging the City planned to acquire a portion of the Diamond property through eminent domain.

On December 13, 1999, Miller received a letter from Staff offering Diamond $462,000 for fee title to 1.88 acres of the 10-acre tract, damages to the remainder of the property, and compensation for construction easements. Miller was advised the amount was based on an appraisal prepared by Wayne Briggs on November 9, 1999. The appraisal concluded the value of the entire tract of property before the taking was $1,300,000. Briggs' appraisal described the property as special use improved with an asphalt plant, which was a fixture and, thus, part of the realty and could not be moved. Briggs stated the property's current use as an asphalt operation was consistent with the highest and best use of the property. Finally, Briggs stated due to the nature of the taking, which would divide the Diamond property into two separate parcels, the remainder of the property after the taking would be unsuitable for use as an asphalt plant.

Prior to and immediately after receiving this letter, Miller took initial steps to relocate Diamond in an effort to ensure Diamond would be able to honor its future contractual obligations. Part of Miller's relocation plans included trading in and selling some of the components from the old asphalt plant for a new asphalt plant to be constructed at a new location. Miller talked to asphalt plant manufacturers and learned it would take approximately one year for the delivery and set up of a new plant. Accordingly, Miller began the process of ordering the component parts of a new plant in May 1999.

After the City's December 13, 1999, offer, Miller communicated for several months with City officials concerning whether the City could reimburse Diamond for various costs, such as moving expenses, and whether the City could provide a low- interest loan to Diamond. The City offered virtually no assistance to Diamond, other than the compensation in its original offer, so Miller officially informed the City on April 5, 2000, Diamond would not accept the offer of $462,000.

On April 6, 2000, the City filed a condemnation action to acquire 1.886 acres and a construction easement on 1.04 acres of Diamond's 10-acre tract. On August 1, 2000, the City filed a motion for immediate vesting of title and for temporary easements. The dispute resulting in this appeal began when the City's appraiser, Wayne Briggs, sent Diamond a second appraisal report, in which he opined the highest and best use of Diamond's property was not as an asphalt plant, as Briggs stated in his first appraisal. Rather, Briggs' second appraisal listed the highest and best value as vacant industrial, which greatly reduced the property's value. Briggs' estimated value of the entire tract as of April 6, 2000, the date the City filed its petition for condemnation, was $220,000, and the value of the taking was $111,000.

The record shows as of the date of Briggs' second appraisal, the following parts of Diamond's asphalt plant remained on the property: oil tanks, large scales, buildings, heating systems, a bag house, shuttle buggy, concrete footings for the plant, specialized electric and gas utility services, a masonry building, a crushed stone base, laboratory trailers, concrete ramps, loading docks, and various stockpiles of aggregate and stone used in the production of asphalt. Briggs admitted for the second appraisal he merely drove by the property and did not physically inspect the premises. He further stated he did not talk to Miller to ascertain whether Diamond was using the plant for any aspects of its asphalt production. Finally, Briggs admitted he was not an expert on asphalt plants, he had never appraised an asphalt plant before his November 9, 1999, appraisal of the Diamond plant, and he did not consult with any leaders in the industry to aid in his appraisal and determination that an asphalt plant no longer existed on the property.

After Diamond received Briggs' second appraisal, it filed a traverse and motion to dismiss, citing the strikingly different appraisal values and alleging, in pertinent part, the City was prohibited from acquiring the property by eminent domain as it had acted in bad faith. The trial court stopped short of finding the City acted in bad faith, but it did state its disapproval of the City's use of the second appraisal in the condemnation proceedings. The trial court did not make a final ruling on the issue at that time, but it stated fundamental fairness dictated the highest and best use of ...

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