State of Minnesota, by its Commissioner of Transportation,
Also decided on this docket: Minn. Ct. App., April 22, 2019
The holding in the court’s own words
Alternatively, if we conclude that Minnesota precedent does not now encompass this approach, the Landowners urge us to adopt this theory of damages. For the reasons set forth below, we conclude that our precedent does not support the approach urged upon us by the Landowners, and we discern no good reason to depart from our well- established precedent concerning access to an abutting highway. We therefore conclude that the Landowners are not entitled to $305,000 in damages for loss of access to their property.
Quoted verbatim from the opinion — no paraphrase, nothing generated. Not yet human-reviewed. How we find the holding.
Authorities cited
Identified automatically; this list may not be exhaustive.
- County of Anoka v. Blaine Building Corp. 566 N.W.2d 331
- Bjerke v. Johnson 742 N.W.2d 660
- O'MALLEY v. Ulland Bros. 549 N.W.2d 889
- Moorhead Economic Development Authority v. Anda 789 N.W.2d 860
- State Ex Rel. Humphrey v. Strom 493 N.W.2d 554
- State v. Pahl 95 N.W.2d 85
- State v. Casey 115 N.W.2d 749
- 36 N.W.2d 261 not in our corpus
- Larson v. State 790 N.W.2d 700
- Johnson v. City of Plymouth 263 N.W.2d 603
- Underwood v. Town Board of Empire 14 N.W.2d 459
- Hendrickson v. State 127 N.W.2d 165
- 101 N.W.2d 956 not in our corpus
- State Ex Rel. Powderly v. Erickson 285 N.W.2d 84
- State v. McAndrews 175 N.W.2d 492
- City of Mankato v. Hilgers 313 N.W.2d 610
- Alevizos v. Metropolitan Air. Com'n of Mpls. & St. P. 216 N.W.2d 651
- City of Crookston v. Erickson 69 N.W.2d 909
- City of St. Paul v. Rein Recreation, Inc. 298 N.W.2d 46
Opinion text
1
STATE OF MINNESOTA
IN SUPREME COURT
A18-1280
Court of Appeals Chutich, J.
State of Minnesota,
by its Commissioner of Transportation,
Respondent,
vs. Filed: April 22, 2020
Office of Appellate Courts
Rosemary R. Elbert, et al.,
Appellants.
________________________
Keith Ellison, Attorney General, Matthew Ferche, Assistant Attorney General, Saint Paul,
Minnesota, for respondent.
Harold A. Frederick, Eric S. Johnson, Fryberger, Buchanan, Smith & Frederick, P.A.,
Duluth, Minnesota, for appellants.
Jon W. Morphew, Morphew Law Office, PLLC, Minneapolis, Minnesota; Leland J.
Frankman, Frankman Law Offices, Minneapolis, Minnesota; James A. Yarosh, Siegel
Brill, P.A., Minneapolis, Minnesota; and Stuart T. Alger, Malkerson Gunn Martin, LLP,
Minneapolis, Minnesota, for amicus curiae Minnesota Eminent Domain Institute.
________________________
2
S Y L L A B U S
1. Appellants are not entitled to damages for loss of access under a theory that
assumes that the taking of a temporary easement for a highway improvement includes the
taking of the right of access to abutting property.
2. Appellants are not entitled to damages based on construction- related
interferences solely based on an assumed loss of access resulting from the construction
project as a whole.
Affirmed.
O P I N I O N
CHUTICH, Justice.
Appellants Rosemary Elbert and family (the Landowners) own valuable property
along Highway 61 between Silver Bay and Little Marais on the north shore of Lake
Superior. The State, acting through the Minnesota Department of Transportation (the
Department), condemned a small portion of the Landowners’ property for a construction
project intended to improve the safety and quality of Highway 61. After a hearing,
court-appointed commissioners awarded the Landowners $390,904.29 in damages,
$305,000 of which were severance damages attributable to the presumed loss of access to
the property from the abutting highway during construction. The Landowners never lost
access during the project. The parties stipulated to damages for the remaining claims, but
each appealed the damages awarded by the Commissioners to the district court.
The district court rejected the Landowners’ theory of damages supporting their
claim for severance damages, and the court of appeals affirmed. Because we do not assume
3
that the taking of a temporary easement includes the taking of access and decline to adopt
a new rule of law that so holds, and because the damages based on construction-related
interferences the Landowners seek are not compensable as a matter of law, we affirm.
FACTS
The Landowners own about 115 acres of property on the north shore of Lake
Superior. Divided by Highway 61, one part of the Landowners’ property is above the
highway, and the other borders Lake Superior. In February 2013, the Department
successfully petitioned the district court through eminent domain for temporary and
permanent easements to reconstruct and widen a 5.3- mile segment of Highway 61. The
1½ year project included plans to resurface the pavement, regrade the slopes of the ditches,
and adjust culverts.
Relevant here, the Department sought and acquired by court order land designated
as Parcel 41. Parcel 41 contained 0.71 acres of permanent easements, varying in “depth
from 20 to 90 feet,” and providing “permanent workspace around drainage culverts.” The
areas encumbered by the permanent easements were “existing drainage areas consisting of
gullies, watercourses, or other lower areas not generally usable for building zones.” The
permanent easement included the following rights: “to acquire all trees, shrubs, grass and
herbage within the right of way therein to be taken, and to keep and have the exclusive
control of the same.”
The Department sought and the district court granted 3.29 acres of temporary
easements within Parcel 41, including a “20 - to 30-foot deep, temporary construction
easement across the length of frontage on the upper side of the roadway,” and a “20-foot,
4
temporary workspace . . . encumber[ing] most of the frontage of the lower side.” The
temporary easements also included a “50-foot deep workspace . . . at the [Landowners’]
driveway for reconstruction of the apron.”
In its May 2013 order concluding that the taking was necessary , the district court
appointed three commissioners to determine the amount of damages sustained by the
Landowners because of the taking. A hearing was held on December 6 and 7, 2016.
John Hinzmann, an engineer who oversaw the highway project for the Department,
testified that the petition for temporary easements did not seek to acquire the right of access
to the Landowners’ property. Had it wanted to acquire that right, t he Department would
have had to “buy that access” and “delineate it” on its condemnation maps as “access
control.” He also testified that the construction contract specified that the contractors must
maintain reasonable access to the Landowners’ remaining property to the maximum extent
possible; if they failed to do so, the contract provided for a $500 fine “for each incident at
each location for each day or portion thereof.”
Sanford Hoff, the Landowners’ real estate appraiser, opined that the Landowners
incurred severance damages of $305,000 for an assumed loss of access to the
unencumbered property. He testified that the highest and best use for the Landowners’
property was development of residential property and resort-style operations. According
to Hoff, because the temporary easement extended most of the length of the property,
potential developers would just “assume that during the construction period, they weren’t
going to have access” to the property. He maintained that a diff erence existed between
losing legal access and losing practical access to the property and that losing access in a
5
practical sense would make it hard for potential buyers to do advance planning for
development, thereby affecting the value of the property.
Hoff further testified that losing access to the unencumbered property was a
“construction interference.” He admitted that his estimation of damages based on
construction-related interferences came from the Department’s construction project itself
and was based solely on the assumed lack of access, and not any other construction
activities or alleged damages. Hoff was unaware that the contractor was required to
maintain reasonable and adequate access throughout the project.
James Zapolski, an inspector for the Department in charge of overseeing the project,
testified that he was never notified of “any interruption in rights to access the property at
any time during the project or during the pendency of the temporary easement.” He was
not aware of any clos ures of the Landowners’ single gravel driveway, and stated that,
whatever construction work was done on the driveway was done one side at a time to
preserve access. He also noted that the temporary easements for construction workspace
along the highway were largely unused and that construction occurred on only one side of
the highway at a time.
The commissioners determined that damages amounted to $390,904.29. Notably,
they attributed $305,000 worth of the total damages to the temporary loss of access to the
property.
Each party appealed the award to the district court, filing cross motions for partial
summary judgment. The district court granted the Department’s motion, finding that the
Department did not acquire the right to acce ss by its condemnation petition. The court
6
specifically found that “[a]t all times, the [ Landowners] retained their property right to
reasonably convenient and suitable access to Highway 61 throughout the project and the
term of the temporary easements.” The court also noted that, if the Landowners believed
that a taking of the right of access had occurred, “the takings claim must either be
determined in a separate mandamus action or by a motion to the district court to have that
question of law determined and, if necessary, added to the case prior to presentation of the
case to the court-appointed Commissioners.”
The district court was also unpersuaded by the Landowners’ arguments concerning
their claim for takings damages based on construction -related interferences. Quoting
County of Anoka v. Blaine Building Corp., 566 N.W.2d 331, 334 (Minn. 1997), the court
found that an expert opinion on market valuation could not claim “severance damages from
‘the impact of the construction project as a whole.’ ” The court found that a valuation
opinion could not be based on a hypothetical developer not want ing to compete with a
highway right-of -way project; rather, the district court found that expert opinions must
include certain assumptions about buyers and sellers. Specificall y, the court concluded
that buyers and sellers would “perform enough due diligence to understand the property
rights acquired (the easement) and to understand what was not acquired (the right of
access), and would . . . understand the obligations of the project contractor to not interfere
with the owners’ right of reasonably convenient and suitable access.”
The parties stipulated that $80,904.29 in damages—attributable to the permanent
and temporary easements and loss of trees and the vegetative buffer in these areas—was
7
unaffected by the district court order, and preserved the right to appeal “all damages and
claims excluded by” the district court order.
The court of appeals affirmed. State v. Elbert , No. A18-1280, 2019 WL 1757934,
at *2 (Minn. App. Apr. 22, 2019). The court rejected the Landowners’ argument that
easement damages are “based on the government’s fullest possible use of the easement” as
“inconsistent with Minnesota law.” Id. at *2–3. The court of appeals also concluded that
the Landowners did not allege damages based on construction- related interferences
because they did not “identify any alleged damages actually suffered” on their property.
Id. at *3.
The Landowners sought review, which we granted.
ANALYSIS
On appeal from summary judgment, we inquire whether a genuine issue of material
fact exists and whether the district court erred in its application of the law. Bjerke v.
Johnson, 742 N.W.2d 660, 664 (Minn. 2007). We view the evidence in the record “in the
light most favorable to the party against whom summary judgment was granted.” Id.
(quoting O’Malley v. Ulland Bros., 549 N.W.2d 889, 892 (Minn. 1996)). When the
relevant material facts are not in dispute, we review the district court’s interpretation of the
law de novo. Id.
“A state’s ability to use eminent domain to take an individual’s property is an
awesome power.” Moorhead Econ. Dev. Auth. v. Anda, 789 N.W.2d 860, 875 (Minn.
2010). Eminent domain is the power of the sovereign to take a person’s land without
consent, id., and “[p]rivate property shall not be taken, destroyed or damaged for public
8
use without just compensation therefor first paid or secured.” Minn. Const. art. I, § 13.
The constitutional provision for just compensation is liberally construed. Anda,
789 N.W.2d at 876. In addition, “ ‘[ t]aking’ and all words and phrases of like import
include every interference, under the power of eminent domain, with the possession,
enjoyment, or value of private property.” Minn. Stat. § 117.025, subd. 2 (2018).
At issue here is the amount of just compensation owed to the Landowners. To
determine just compensation for a taking, court-appointed commissioners ascertain and
report the amount of damages sustained by the property owner resulting from the taking.
Anda, 789 N.W.2d at 876. In partial taking cases, including those involving temporary
easements, damages are calculated using the “before and after” rule. State by Humphrey
v. Strom, 493 N.W.2d 554, 558 (Minn. 1992). That is, the damages are measured by “the
difference between the market value of the entire tract immediately before the taking and
the market value of what is left after the taking.” State by Lord v. Pahl, 95 N.W.2d 85, 90
(Minn. 1959).
When determining value, the commissioners consider suitable uses, including the
“ ‘highest and most profitable use for which property is adaptable and needed[.]’ ” Anda,
789 N.W.2d at 876 ( quoting Olson v. United States, 292 U.S. 246, 255 (1934)).
“ ‘Whatever the circumstances . . . the dominant consideration always remains the same:
What compensation is “just” both to an owner whose property is taken and to the public
that must pay the bill?’ ” Id. at 880 (quoting United States v. Commodities Trading Corp., 339 U.S. 121, 123 (1950)).
9
The Landowners base their claim for damages on two grounds. 1 First, they argue
that our precedent, specifically State by Lord v. Casey, 115 N.W.2d 749 (Minn. 1962), sets
out a rule equivalent to the “most-injurious- use” and “fullest-extent” theory of damages
that assumes a taking of access based on the Department’s fullest possible use of the
easements. Alternatively, if we conclude that Minnesota precedent does not now
encompass this approach, the Landowners urge us to adopt this theory of damages. Second,
the Landowners maintain that they are entitled to severance damages based on
construction-related interferences because work activity along the highway effectively
prevented access to the unencumbered property, therefore causing market uncertainty and
a reduction in value. We address each argument in turn.
I.
We first consider whether we must presume that access is destroyed when the
Department is granted a temporary easement either under our precedent or, as the
Landowners urge, under the “most-injurious- use” rule or “fullest extent” rule. For the
reasons set forth below, we conclude that our precedent does not support the approach
urged upon us by the Landowners, and we discern no good reason to depart from our well-
established precedent concerning access to an abutting highway.
The Landowners argue that our decision in Casey assumes that the Department will
use the temporary easement granted to the fullest extent possible and further assumes that
1 At oral argument, the Landowners contended that the issue of the amount of
damages should be resolved by a jury. But the Landowners appear to have waived a jury
trial in their notice of appeal to the district court. And questions of law about the applicable
legal standard are determined by the court. See Blaine Bldg. Corp., 566 N.W.2d at 334.
10
the most injurious method of construction will be used, thereby effectively destroying
access to the Landowners’ property and entitling them to damages.
The Landowners alternatively urge us to adopt the most-injurious-use and fullest-
extent rules and make the same assumptions, citing to treatises and foreign cases in support
of this assertion. 2 In particular, the Landowners rely on Kentucky Fried Chicken of
Warren, Inc. v. Flanders, a Rhode Island case in which the court held that, under state law,
in the absence of a “written assurance” from the state that the property owner would
maintain its right of access, the state presumably denied access for the entire two- year
temporary easement. 461 A.2d 927, 928–29 (R.I. 1983).
The Landowners also point to Hudson v. City of Shawnee, which relied on Kentucky
Fried Chicken for the same proposition. 777 P.2d 800, 805–06 (Kan. 1989). Under Kansas
law, the court held that the condemnor must draft the petition in a way that makes clear
that property owners retain access. Id. at 805. There, because the city took land for “all
other purposes incidental to the construction of a street or sidewalk,” the court concluded
that this taking included the taking of the right of access. Id. at 806.
The Department, by contrast, asserts that Minnesota recognizes the right of access
as a distinct property right that “necessarily remains with the abutting owner until and
unless it has been explicitly acquired.” The Department also maintains that the rights
2 In addition to the cases discussed, the Landowners cite to several other cases. See,
e.g., Idaho-Western Ry. Co. v. Columbia Conference of Evangelical Lutheran Augustana
Synod, 119 P. 60, 67 (Idaho 1911); Cleveland, Cincinnati, C hi. & St. Louis Ry. Co. v.
Hadley, 101 N.E. 473, 476 (Ind. 1913); Little v. Loup River Pub. Power Dist., 36 N.W.2d
261, 264–65 (Neb. 1949); Coos Bay Logging Co. v. Barclay, 79 P.2d 672, 677 (Or. 1938).
Of course, these cases from foreign jurisdictions are not binding on the courts of our state.
11
acquired are those described in the condemnation petition and authorized by order, and
here, the Department did not acquire the right of access. According to the Department ,
other procedures exist if a landowner believes rights other than those in the order have been
taken, namely, moving the district court to expand the order before the commissioners’
hearing or asserting a “mandamus action to compel condemnation of the allegedly taken
property rights.” We agree with the Department.
In Minnesota, an “easement” is an “interest in land owned by another person,
consisting in the right to use or control the land for a specific limited purpose.” Larson v.
State, 790 N.W.2d 700, 703 (Minn. 2010) (quoting Easement, Black’s Law Dictionary (9th
ed. 2009)). “The written instrument creating the easement . . . defines the scope and extent
of the interest in land.” Id. at 704.
Relevant to the parties’ dispute about the scope of the Department’s temporary
construction easements is the right of access property owners have to abutting highways.
Minnesota law treats the right of access—ingress and egress—as a distinct property right.
See Johnson v. City of Plymouth, 263 N.W.2d 603, 605–06 (Minn. 1978); Underwood v.
Town Bd. of Empire, 14 N.W.2d 459, 461 (Minn. 1944). Specifically, property owners
have a right of “reasonably convenient and suitable access” to a highway that abuts their
property. Johnson, 263 N.W.2d at 605. What is reasonable access is typically a fact
question.3 Hendrickson v. State, 127 N.W.2d 165, 172 (Minn. 1964).
3 Here, the relevant material facts about access are not in dispute; the uncontroverted
facts show that no actual loss of access occurred.
12
The Landowners rely on State by Lord v. Casey to argue that we should presume
that the Department took the right of access when it took a temporary easement along the
length of most of the Landowners’ property. 115 N.W.2d 749 (Minn. 1962). Casey
involved a property owner’s subsurface rights. In Casey, the state’s taking of land for
highway purposes impeded the use of a gravel company’s tunnel conveyor system. Id. at
751. In discussing the rights of the property owners—there, the gravel company —we
stated that “when the state purchases or acquires an easement for highway purposes, the
owner of the fee ‘retains a right to use the land for any lawful purpose compatible with the
full enjoyment of the public easement. ’ ” Casey, 115 N.W.2d at 753 (quoting Town of
Glencoe v. Reed, 101 N.W.2d 956, 957 (Minn. 1904)). In other words, even after the state
took an easement to build a highway, the gravel company could continue to use its tunnel
under the road, as long as it did not impede travel on the highway. Id. at 753−54. We
ultimately held, however, that because use of the tunnel became practically impossible, the
landowner was entitled to just compensation. Id. at 754.
The single statement in Casey on which the Landowners base their argument—“any
lawful purpose compatible with the full enjoyment of the public easement”— actually
discusses the protection of rights that property owners have; it does not support construing
the scope of the Department’s easement in the most injurious manner. The Landowners’
right to access their property —which they retained and continued to enjoy during this
construction project— was a “lawful purpose” that was “compatible with the full
enjoyment” of the Department’s easement. Id. at 753. Casey is therefore consistent with
13
our understanding of the rights acquired by the Department and the rights retained by the
Landowners. The Landowners offer no persuasive reasons to depart from this precedent.4
Moreover, the Landowners have failed to assert any compelling reason why we
should adopt the most-injurious-use or fullest-extent rules used in a small number of other
states. Nothi ng in Minnesota law suggests that we presume that, simply because the
Department took a temporary easement across the Landowners’ property, the Department
also took the right of access. Cf. Blaine Bldg. Corp., 566 N.W.2d at 334 (noting that “a
property owner suffers compensable damage” for loss of access only when the property
“owner is denied reasonably and suitable access to the main thoroughfare in at least one
direction”); Johnson, 263 N.W.2d at 607 (considering whether, but not presuming that,
reasonable access was taken as a result of a public improvement project).
In fact, Minnesota law requires reasonable access when a highway is being
reconstructed. When a new highway is constructed or an old one improved, property
owners maintain their right to access the highway unless an “easement of access has been
acquired.” Minn. Stat. § 160.18, subd. 2 (2018) (“Except when the easement of access has
been acquired,” the government in constructing, reconstructing, or relocating a highway
“shall construct suitable approaches thereto within the limits of the right-of-way where the
approaches are reasonably necessary and practicable, so as to provide abutting owners a
reasonable means of access to such highway.”).
4 In fact, we have never cited the portion of Casey on which the Landowners rely in
any of our eminent domain case law.
14
We also have never required that the Department expressly preserve an owner’s
right of access in its condemnation petition.5 And we do not require it here. Our approach
is unlike Rhode Island, Kansas, and the other states that require otherwise.
Finally, as the Department points out, if we agreed with the Landowners that the
Department takes access along with a temporary easement, the burden would shift to the
Department to show that a taking had not occurred. This burden shifting runs contrary to
Minnesota law, which places the burden “on the person challenging the government’s
action to establish that there is an unconstitutional taking.” State by Powderly v. Erickson,
285 N.W.2d 84, 90 (Minn. 1979) (internal citations omitted). For these reasons, we do not
accept the Landowners’ invitation to adopt a new rule of law in Minnesota.
In sum , the Department did not take a right of access in its petition and the
Landowners retained “reasonably convenient and suitable access” to their propert y at all
times during construction. See Johnson, 263 N.W.2d at 605. We therefore conclude that
the Landowners are not entitled to $305,000 in damages for loss of access to their property.
Our decision does not leave property owners without a remedy when government
action affects access. First, a party can object to the property rights taken when the state
petitions for condemnation. State by Mondale v. McAndrews, 175 N.W.2d 492, 493 (Minn.
1970). If a property owner believes the right of access is impeded, the owner must object
5 Further evidence of this fact is found in the testimony of Hinzmann, the
Department’s engineer, who testified that the Department has separate procedures that it
must follow if it wishes to acquire access, including actually purchasing access and
delineating it on its condemnation maps. Here, by contrast, the Department required the
contractor to maintain reasonable access to the Landowners’ property.
15
to the petition before the trial court “submit[s] the damage question to the commissioners.”
City of Mankato v. Hilgers, 313 N.W.2d 610, 612–13 (Minn. 1981). But o nce parties
appeal a commissioners’ award of damages to the district court, the court’s jurisdiction is
limited to determining just compensation damages. Id. at 612. Second , property owners
who believe that a right of access was taken without a formal exercise of eminent domain
can assert an inverse-condemnation claim in a mandamus action. See Alevizos v. Metro.
Airports Comm’n, 216 N.W.2d 651, 657 (Minn. 1974).
II.
We next must determine whether the Landowners are entitled to severance damages
based on construction-related interferences as an alternative means of compensation. The
Landowners urge us to look to the highest and best use of their property—development—
and the construction interferences—the temporary and permanent easements along the
entire length of the property—to conclude that a diminution in market value has occurred
for which they should be compensated. They assert that the Department’s construction
interferences stemming from the loss of access must have affected the market value for
development at the time of the taking.
The Department agrees that development is the highest and best use for the property,
but asserts that the supposed loss of access is the entire basis for the construction-related
interferences that the Landowners claim. And because no loss of access occurred here, the
Department maintains that the record lacks sufficient evidence to create a genuine dispute
of material fact regarding any damages stemming from the construction interferences. The
16
Department argues that the Landowners’ allegations are merely hypothetical and that the
Landowners’ evidence does not go beyond “speculative general assertions.”
In a partial taking, just compensation includes (1) damages for the value of land
actually taken, and (2) the severance damages to the remaining property resulting from the
land actually taken. Blaine Bldg. Corp., 566 N.W.2d at 334; Strom, 493 N.W.2d at 558
n.3. Severance damages measure the diminution in market value to the remaining property.
Blaine Bldg. Corp., 566 N.W.2d at 334. Considered in determining these severance
damages are so-called construction-related interferences. Strom, 493 N.W.2d at 560–61.
Construction-related interferences sometimes arise because of inconveniences
affecting the use and enjoyment of the remainder property during construction. Id. at 560.
They are “temporary and any impairment to value is also temporary.” Id. The property
owner seeking damages for a partial taking “is not required to show that the injury is
peculiar to [the owner’s] remaining property,” but the law limits recovery to only “the
damage caused by the taker’s use of the land acquired from the owner of the remainder
area.” City of Crookston v. Erickson, 69 N.W.2d 909, 912–13 (Minn. 1955).
Although we use a broad standard of relevancy in determining wh at evidence is
admissible to prove construction-related interferences, evidence of “ ‘diminution in value
of only the real estate is relevant.’ ” Strom , 493 N.W.2d at 559 (quoting Hendrickson,
127 N.W.2d at 173). Evidence “concerning any factor which would affect the price a
purchaser willing but not required to buy the property would pay an owner willing but not
required to sell it” is admissible. Id. But evidence must be “competent, relevant[,] and
17
material.” Id. (quoting City of St. Paul v. Rein Recreation, Inc., 298 N.W.2d 46, 50 (Minn.
1980)).
In Strom, a construction-related interference case, we noted the details of the
construction project. There, a state highway was converted into Interstate Highway 394;
construction lasted 3¼ years; access to the office tower at issue “changed many times” and
“[t]he route was often circuitous and inconvenient although it was never completely
eliminated.” Id. at 557–58. In fact, the parties stipulated that “as a result of the changes in
access during construction and other factors attributable to construction, such as vibration,
noise, and dust, the owner of the property suffered damages during the construction period
in the nature of a temporary reduction of rental income which reduction was attributable to
construction activities.” Id. at 559–60.
Given the burden of the large project and the parties’ stipulations, we concluded that
evidence of construction-related interferences was admissible, but only as “a factor to be
considered by the finder of fact in determining the diminution in market value of the
remaining property,” and, notably, not as a separate item of damages. Id. at 560–61. In
addition, construction-related interferences are compensable only to the extent that they
result from “changes in the land actually taken, and not merely from the impact of the
construction project as a whole.” Blaine Bldg. Corp., 566 N.W.2d at 334 (emphasis added)
(citing Strom, 493 N.W.2d at 560; City of Crookston, 69 N.W.2d at 912–13).
With this precedent in mind, we turn to the merits of the parties’ arguments.
The parties agree that development is the highest and best use for this land. The
Landowners assert that the temporary easements would cause hypothetical developers of
18
their property—those seeking to use the property for its highest and best use —to assume
access to the property was unavailable, therefore affecting the price a developer would pay
and reducing the land’s market value. The Landowners’ argument for damages based on
construction-related interferences is without merit.
Careful review of Hoff’s appraisal, which forms the sole basis for the Landowners’
alleged severance damages based on construction-related interferences,6 reveals that the
damages here are not compensable. The focus of the appraisal pertaining to severance
damages was entirely based on the assumed restriction or loss of access to the Landowners’
property. Hoff specifically agreed that the “project itself ” caused the market uncertainty
that led to his damages calculations regarding construction interferences. The appraisal
report contained no alleged construction-related interferences other than those based on an
assumed loss of access.
These damages assertions are at odds with our precedent. As we explained above,
we do not assume that the Department takes access to abutting property when it takes a
temporary easement for road improvement. The parties dispute whether damage
determinations may only be based on evidence available at the time of the taking or whether
evidence of what actually occurred beyond the date of the taking can be used. We need
not decide that issue because the Landowners are not entitled to compensation either way.
At the time of the taking, the Department did not take access to the Landowners’ property,
6 At oral argument, the Landowners pointed out that they may present a different
expert should the case go to a jury. But the summary-judgment record contains only Hoff’s
appraisal as support for the Landowners’ damages assertions. Whatever other evidence the
Landowners may have is therefore not part of the record on appeal.
19
and we cannot presume that it did so, under any theory. After the taking, uncontroverted
evidence in the record shows that the Landowners never lost access to their property. As
the Department correctly states, “no changes in access occurred or are alleged from the
before condition to the after—access, both legally and practically, was the same before the
taking, during the Project, and after the taking.”
Moreover, in Strom, the parties stipulated to damages that not only included severe
changes in access, but also “vibration, noise, and dust” that led to a measurable “temporary
reduction of rental income.” 493 N.W.2d at 559–60. But here, the parties have stipulated
to certain damages and not for the loss of access or any other construction-related
interferences.
And in Blaine Building, we made clear that damages must not arise from the
construction project as a whole. 566 N.W.2d at 334. Again, the Landowners’ expert
testified that his calculations for construction- related interferences came from the project
as a whole based on the presumed loss of access stemming from general construction on
the highway.
As the district court pointed out, an expert’s foundation must rely on certain
assumptions about buyers and sellers, including that they would “perform enough due
diligence to understand the property rights acquired . . . and not acquired.” Here, a
temporary easement was acquired by the Department, but the right of access was not. To
the extent the Landowners’ expert report was based on speculative predictions about what
hypothetical buyers and sellers would incorrectly assume about rights that were not
actually acquired, the report lacked foundation.
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Accordingly, because the entirety of Hoff’s severance damages analysis is based on
a perceived loss of access from the construction project as a whole, Blaine Bldg. Corp.,
566 N.W.2d at 334, a nd because this report is the only evidence that the Landowners
submit in support of their claim, they failed to establish a genuine issue of material fact for
a jury on compensable damages. On the record before us, we therefore conclude that, as a
matter of law, the Landowners are entitled to no damages based on construction-related
interferences.
CONCLUSION
For the foregoing reasons, we affirm the decision of the court of appeals.
Affirmed.