City of Ruston, Louisiana v. Family Investment Resources, LLC

Judgment rendered November 17, 2021.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 54,163-CA

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

*****

CITY OF RUSTON, LOUISIANA Plaintiff-Appellee

versus

FAMILY INVESTMENT Defendant-Appellant
RESOURCES, LLC

*****

Appealed from the
Third Judicial District Court for the
Parish of Lincoln, Louisiana
Trial Court No. 54812

Honorable Bruce Edward Hampton, Judge

*****

ROBERT E. SHADOIN Counsel for Appellant

WILLIAM S. CARTER, JR. Counsel for Appellee

*****

Before COX, STEPHENS, and HUNTER, JJ.

STEPHENS, J.

Defendant, Family Investment Resources, L.L.C., appeals judgments

from the Third Judicial District Court, Parish of Lincoln, State of Louisiana,

ordering the expropriation of its property on behalf of Plaintiff, City of

Ruston, and just compensation in the total amount of $144,000. Plaintiff

answered the appeal, contesting the amount of just compensation ordered by

the trial court. For the following reasons, the judgments of the trial court are

affirmed.

FACTS AND PROCEDURAL HISTORY

On January 18, 2011, the City of Ruston (the “City”) filed a petition

against Family Investment Resources, L.L.C. (“FIR”), seeking the

expropriation of property owned by FIR (the “Property” or the “Lot”). The

property, with an address of 507 North Trenton Street, Ruston, Louisiana,

consists entirely of a parking lot. It is located adjacent to the new Ruston

Police Department Headquarters Building (the “RPD building”) purchased

by the City in December 2008 and renovated by the City for the RPD in

2010. The City asserted the Property was necessary for additional parking

for employees of and visitors to the RPD building.

FIR, whose members are Ben and Joy Annison, filed a motion to

dismiss the City’s petition on February 2, 2011. A hearing was held on July

14, 2011, and in an oral ruling issued on October 27, 2011, the trial court

found the City had shown both a public and necessary purpose for the

expropriation, rejected FIR’s motion to dismiss, and ordered expropriation

of the Property. A judgment of expropriation was rendered on December 2,

2011, but the determination of just compensation due FIR was reserved and

deferred. Thereafter, the City deposited $119,000 into the registry of the

court, representing the amount of just compensation the City’s appraisers

determined was due FIR. This amount was subsequently withdrawn by FIR.

Trial on the issue of compensation began on December 12, 2016. FIR

argued that the expropriation of the Lot had caused it to suffer additional

loss or damage to adjacent properties that it owned or had ties to,

specifically, a residential property located across the street from the Lot (the

“Naylor House”), which is owned by the Annisons and frequently rented to

college students, and the Moffett Haus Gift Boutique, L.L.C. (“Moffett Haus

Boutique”), which operated periodically within property owned by FIR

located adjacent to the Lot (the “Moffett House”).1 The City objected to all

evidence on the grounds that neither the Annisons nor Moffett Haus

Boutique was a party to the suit. After a series of continued dates, trial

concluded on March 24, 2017, and the trial court issued written reasons for

ruling on April 1, 2020, stating in pertinent part:

[T]he Court finds the amount of just compensation owed by the
City to FIR for the Parking Lot is $144,000.00. The Court finds
no severance damage due to FIR. The Court further finds that
FIR has failed to prove a “unity of use” between Naylor House,
Moffett House, Moffett Haus Boutique, and the Parking Lot on
the date of the taking of the Parking Lot by the City or that any
special damages are due to FIR; therefore, any claims for
additional compensation are denied.

Judgment in accordance with the written reasons was signed on July 22,

2020.2 This appeal by FIR ensued, challenging both the expropriation and

the compensation awarded. The City answered the appeal, urging error in

1
The Naylor House is located at 509 North Trenton Street, and the Moffett House
is located at 506 North Trenton Street.
2
The judgment noted the parties’ rights as to an award of attorney fees and court
costs was not briefed by the parties and is reserved to them.

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the trial court’s award of compensation to FIR in excess of the amount

deposited into the registry of the court.

DISCUSSION

Expropriation

In its first assignment of error, FIR asserts the trial court erred in

finding that the expropriation served a public, necessary purpose and that the

City did not act arbitrarily in selecting FIR’s property for expropriation. FIR

argues the evidence presented by the City showed it acted arbitrarily, took

FIR’s property as a matter of convenience rather than necessity, and never

seriously considered alternatives to the expropriation of the Lot. We

disagree.

Property shall not be taken or damaged by any private entity

authorized by law to expropriate, except for a public and necessary purpose

and with just compensation paid to the owner. La. Const. art. 1, § 4(B)(4);

Exxon Mobil Pipeline Co. v. Union Pacific R. Co., 2009-1629 (La. 3/16/10),

35 So. 3d 192. Prior to filing an expropriation suit, an expropriating

authority shall attempt in good faith to reach an agreement as to

compensation with the owner of the property sought to be taken and comply

with all of the requirements of R.S. 19:2.2. La. R.S. 19:2. Where a price

cannot be agreed upon with the owner, any municipal corporation of

Louisiana may expropriate property whenever such a course is determined to

be necessary for the public interest by the governing authority of the

municipality. La. R.S. 19:102.

In Exxon Mobil Pipeline Co. v. Union Pacific R. Co., supra at 200, the

Louisiana Supreme Court set forth the standards for determining whether an

expropriation is proper:

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In challenges to the necessity of a taking, the landowner must
prove that the legislatively-authorized expropriator exercised
“its large discretion” arbitrarily, capriciously, or in bad faith.
Red River Waterway Com’n v. Fredericks, 566 So. 2d 79, 83
(La. 1990). Whether the expropriator’s purpose is public and
necessary is a judicial determination that will not be reversed on
appeal absent manifest error. Calcasieu-Cameron Hosp. Serv.
Dist. v. Fontenot, 628 So. 2d 75, 78 (La. App. 3d Cir. 1993),
writ denied, 1994-0168 (La. 3/18/94), 634 So. 2d 854. In the
context of expropriation, “necessary” refers to the necessity of
the purpose for the expropriation not the necessity for a specific
location. Calcasieu-Cameron Hosp. Serv. Dist., 628 So. 2d at
78. Once public necessity is established, the extent and the
location of property to be expropriated are within the sound
discretion of the expropriation authority and determination of
same will not be disturbed by the courts if made in good faith.
Id.

The criteria to be considered by the expropriator in determining
the location and extent of the property to be expropriated
include[s] factors such as costs, environmental impact, long
range area planning, and safety considerations. Red River
Waterway Com’n, 566 So. 2d at 83 (citing U.S. v. Carmack, 329 U.S. 230, 67 S. Ct. 252, 91 L. Ed. 209 (1946)). The
amount of land and the nature of the acreage taken must be
reasonably necessary for purpose of the expropriation, but it is
not necessary “to show actual, immediate, and impending
necessity for the expropriation.” City of New Orleans v.
Moeglich, 169 La. 1111, 126 So. 675, 677 (1930). The
suitability of the property for expropriation is primarily a
question of fact on which the judgment of the trial court will
not be disturbed unless manifestly erroneous. Board of Com’rs
of New Orleans Exhibition Hall v. Missouri Pacific R. Co., 625
So. 2d 1070, 1073 (La. App. 4th Cir. 1993), writ denied, 1993-
3088, 93-3100 (La. 1/28/94), 630 So. 2d 802.

Ruston Police Chief Steve Rogers testified that the police department

relocated to its current location in downtown Ruston primarily because the

department outgrew its previous building as the number of employees

increased, and there was inadequate parking available for both officers and

general staff. He testified the new RPD building has 30 parking spaces, two

of which are handicap accessible parking spots, but there was still a shortage

of parking for the current needs of the department. He noted that within the

department, there are currently 38 departmental vehicles that are

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continuously in use; six office personnel; six investigators; one parking

patrol officer; administrative staff; the chief and assistant chief of police; and

two captains, all of whom have either department or personal vehicles that

should be parked onsite. Chief Rogers further stated that there were ten

reserve officers, seven to eight reporting officers, and a minimum of three

dispatchers with personal vehicles. He estimated that at a maximum, 60

parking spaces or more were required to accommodate the department at this

time.

Chief Rogers also testified that because the department is also open to

the public, its facility and parking area are often utilized by the public on a

daily basis and for certain events. He stated there is a steady flow of

members of the public that come in and out of the department on a daily

basis, and onsite parking is required to accommodate those needs.

Additionally, the department often participates in citywide functions such as

the Peach Festival which, prior to the expropriation, required the department

to request permission from FIR to use the Lot to meet the needs of the

additional presence of members of the public. The department also often

hosts academy training and other department-related events which require an

increased number of parking spaces.

Chief Rogers further testified that the additional parking was

necessary for the safety of the officers and members of the public. He stated

that when the parking lot is full, officers and other people often park across

the street, which he noted was particularly dangerous because of the high

flow of traffic. Although Chief Rogers admitted he was not aware of any

pedestrian injuries that occurred from crossing this street, he stated that

because of the nature of the job, which often requires that officers carry

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certain equipment, it is never ideal to have them cross a busy street,

especially if there is an emergency.

Lewis Love, the city administrator, testified regarding several specific

alternate locations surrounding the new RPD building that were considered

as potential sites for additional parking but were ultimately dismissed either

because of cost (developmental or otherwise), availability, or inadequate

space.

In contrast, FIR offered only the testimony of Ben Annison, who

simply expressed his opinion that RPD’s expropriation of the Lot was not

for a public and necessary purpose based solely on his personal observations

of the frequent vacancies in RPD’s current parking lot and familiarity with

alternative parking options in the area.

The trial court’s factual determination that the expropriation of the Lot

was both necessary and for a public purpose is clearly supported by Chief

Rogers’ testimony as well as by the record as a whole. The evidence

demonstrates the property will be used for parking of public and private

vehicles in conjunction with publicly funded law enforcement activities,

which clearly establishes a public purpose. Likewise, the evidence

establishes both a current and future need for additional parking at the new

RPD building. Adequate parking is necessary not only for police vehicles

but also for other staff members employed by RPD and, importantly, for

members of the public. There should never be a scenario where a citizen

seeks the services of a police department but is deterred by lack of available

parking. Furthermore, FIR failed to establish the Lot was expropriated

arbitrarily, capriciously, or in bad faith. Accordingly, we find no error in the

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trial court’s judgment of expropriation. This assignment of error is without

merit.

Just Compensation

In its second and third assignments of error, FIR asserts the trial court

erred by finding FIR was not entitled to additional compensation.

Specifically, FIR argues the trial court erred by ruling that (1) the absence of

the Annisons as a named party barred its entitlement to additional

compensation, and (2) it was not entitled to additional compensation

pursuant to the doctrine of unity of use. We disagree.

In every expropriation action to take property, the owner shall be

compensated to the full extent of his loss. La. Const. art. I, § 4(B)(5).

However, there is no specific formula set forth by the legislature to aid

courts in determining the “full extent of loss.” St. Bernard Port, Harbor &

Terminal Dist. v. Violet Dock Port, Inc., LLC, 2017-0434 (La. 1/30/18), 239

So. 3d 243. The Louisiana Constitution states only, “Except as otherwise

provided in this Constitution, the full extent of loss shall include, but not be

limited to, the appraised value of the property and all costs of relocation,

inconvenience, and any other damages actually incurred by the owner

because of the expropriation.” La. Const. art. I, § 4(B)(5). Likewise, La.

R.S. 19:9 provides limited guidance as to how to determine the “full extent

of the loss.” Louisiana R.S. 19:9(A) states:

In determining the value of the property to be expropriated, and
any damages caused to the defendant by the expropriation, the
basis of compensation shall be the value which the property
possessed before the contemplated improvement was proposed,
without deducting therefrom any general or specific benefits
derived by the owner from the contemplated improvement or
work.

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Seeking additional compensation beyond the appraised value of the

Lot, FIR offered testimony describing the Annisons’ real estate puzzle, the

pieces consisting of the Lot, the Naylor House, the Moffett House, and the

Moffett Haus Boutique; how the Lot, particularly, was a key asset to all of

the Annisons’ future plans for the adjacent properties; and, the damages the

Naylor House and Moffett House Boutique suffered due to the expropriation

of the Lot. However, it is not necessary to consider such evidence because

any claims for damage sustained by the Annisons or the Moffett Haus

Boutique were not properly before the trial court, as they are not parties to

the instant expropriation suit.

A juridical person is an entity to which the law attributes personality,

such as a corporation. The personality of a juridical person is distinct from

that of its members. La. C.C. art. 24. The general rule is that a corporation

is a distinct legal entity separate from the individuals who own interests in

the corporation. A corporation has the power to buy and sell property, make

contracts, incur debt, sue and be sued. Olson v. Olson, 48,968 (La. App. 2

Cir. 4/23/14), 139 So. 3d 539, writ granted, 2014-1063 (La. 10/3/14), 149

So. 3d 275, and writ denied as improvidently granted, 2014-1063 (La.

1/28/15), 159 So. 3d 448.

FIR, the owner of the Lot and the only defendant in this suit, is a

distinct legal entity from its members, the Annisons, and also from Moffett

Haus Boutique, whose members are also the Annisons. If the Moffett Haus

Boutique or the Annisons (with respect to the Naylor House) had wished to

assert damages caused by the expropriation of the Lot, they could have

intervened in the suit or filed a separate action against the City, but they

cannot pursue their claims vicariously through FIR—a distinct legal entity.

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FIR further asserts the unity of use doctrine entitles them to additional

compensation based on damages suffered by the Naylor House and Moffett

Haus Boutique as a result of the expropriation of the Lot. According to FIR,

the lack of unity of ownership among the properties should not prohibit the

application of the unity of use doctrine because strictly adhering to the above

principles regarding the distinct personality of juridical persons fails to fairly

recognize the realities underlying corporate ownership of land as applied to

the concept of eminent domain. However, even if issues of unity of

ownership were set aside, FIR’s argument for the applicability of the unity

of use doctrine nevertheless fails because there is in fact no unity of use

among the three properties.

Where expropriation involves only one of a number of tracts of land,

if a claimant can prove unity of use, i.e., that all of the tracts were used for

the same purpose as a single unit, then severance damages for all of the

property will be recoverable. The determinative factors underlying the

Louisiana unity of use doctrine are a unified use in fact, coupled with a legal

right to effect that unified use, i.e., ownership. State Through Dept. of

Highways v. Cefalu, 288 So. 2d 332 (La. 1974); City of Shreveport v. Noel

Estate, Inc., 41,148 (La. App. 2 Cir. 9/27/06), 941 So. 2d 66, writ denied,

2006-2774 (La. 1/26/07), 948 So. 2d 171.

The evidence at trial showed that as of the date of the taking, the Lot

was a vacant, unimproved lot sporadically rented to the public for parking

during the annual Peach Festival. The Naylor House is a residential property

the Annisons rent to college students. Notably, it includes on-site parking.

The Moffett Haus Boutique is a limited liability company which owned and

operated a gift shop/boutique/cafe seasonally from 2005 through 2008, from

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within the Moffett House. The Moffett House is an improved residential

property, with on-site parking, intermittently used as a residence.

The record clearly establishes these three properties/entities—the Lot,

the Naylor House, and The Moffett Haus Boutique—were not used for the

same purpose. Moreover, while their ownership might be intertwined for the

single goal of benefiting the Annisons, these properties/entities by no means

operate as a single unit. The factors necessary for application of the unity of

use doctrine simply are not met in this case. Accordingly, as the unity of use

doctrine is inapplicable, an award of severance damages is not appropriate

since the Lot was expropriated in its entirety; the trial court did not err in

finding FIR was not entitled to additional compensation. FIR’s second and

third assignments of error are without merit.

The City’s Answer

The city asserts in its answer that the trial court erred by finding FIR

was entitled to just compensation in excess of the amount deposited into the

registry. We disagree.

When there is conflicting testimony between witnesses and experts, it

is the duty of the trial court to make credibility determinations.

Determinations of credibility are within the purview of the trial court, and

such determinations are not to be disturbed unless manifestly erroneous or

clearly wrong. Wells v. Town of Delhi, 53,607 (La. App. 2 Cir. 3/3/21), 316

So. 3d 1257. A trier of fact is not required to make a binary choice and

accept one side’s testimony in its entirety, but is instead empowered to

weigh strengths and weaknesses of expert testimony. St. Bernard Port,

supra. In deciding to accept the opinion of one expert and reject the opinion

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of another, a trial court can virtually never be manifestly erroneous. City of

Shreveport, supra.

At trial, three expert appraisers testified regarding the fair market

value of the Lot. FIR’s expert, Keats Everett, opined the Lot was valued

between $147,000 and $213,000, which amount included, in addition to the

fair market value of the Lot, consideration that any replacement property

would also require additional costs to pave the replacement lot. Mike

Graham, an expert for the City, opined that just compensation for the Lot

was $118,147. The City’s second expert, David Volentine, testified just

compensation for the Lot was $119,000. He further opined that if a new lot

were to be purchased by FIR, it would cost an additional $31,500 to pour a

parking lot to replace the expropriated Lot.

The trial court’s thorough written reasons for ruling clearly show it

considered the testimony of each expert and had an accurate understanding

of the law regarding just compensation in expropriation cases. The trial

court noted that although it accepted Volentine’s fair market valuation of the

Lot, it was likewise compelled by Everett’s opinion that FIR would have

additional costs for relocation. The trial court set the amount for those

additional expenses at $25,000, bringing the total just compensation due FIR

to $144,000.

In accordance with La. Const. art. I, § 4(B)(5), FIR is entitled to

compensation to the full extent of its losses, including but not limited to the

appraised value of the property and all costs of relocation, inconvenience,

and any other damages incurred as a result of the expropriation of the Lot.

The trial court appropriately exercised its discretion in weighing the

testimony of the expert appraisers and setting an amount for relocation costs

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in addition to fair market value. Accordingly, this assignment of error is

without merit.

CONCLUSION

For the foregoing reasons, the trial court’s December 2, 2011,

judgment of expropriation in favor of plaintiff, the City of Ruston,

Louisiana, and July 22, 2020, judgment setting just compensation due to

defendant, Family Investment Resources, L.L.C., are affirmed. Costs of

appeal are assessed one-half to plaintiff. The other half of costs is not

assessed. See La. R.S. 13:4521.

AFFIRMED.

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