Appeal from the District Court of Campbell County The Honorable Keith G. Kautz, Judge
The opinion of the court was delivered by: Kite, Chief Justice.
Before KITE, C.J., and GOLDEN,*fn1 HILL, VOIGT, and BURKE, JJ.
[¶1] Greencore Pipeline Company, LLC (Greencore) filed an action seeking to condemn easements across property owned by Barlow Ranch, Limited Partnership (Barlow) for a pipeline to transport carbon dioxide (CO2). The parties reached an agreement on the terms of possession and scope of the easements but asked the district court to determine the amount that would justly compensate Barlow for the partial taking of its property.
[¶2] During a two day bench trial, Barlow presented evidence of prices paid for other comparable pipeline easements to show the fair market value of Greencore's easement and the compensation due for the partial taking. Greencore argued that Barlow was only entitled to a percentage of fee value and comparable easement sales should not be considered in determining the appropriate amount of compensation for the condemned easement. The district court concluded Wyoming statutes allowed consideration of comparable sales in determining just compensation, but the easements Barlow presented were not sufficiently comparable to be reliable evidence of the fair market value of Greencore's easement. Instead, it awarded compensation based upon the average of the amounts Greencore had paid other landowners for easements for its CO2 pipeline. Barlow appealed the district court's order and Greencore cross appealed.
[¶3] In its appeal, Barlow claims the district court erred in concluding the easements it relied upon were not valid comparables. Barlow also asserts the district court erred in concluding annual payments for a condemned easement are not permissible under Wyoming law. In its cross appeal, Greencore asserts the district court erred in considering evidence of comparable easements in arriving at a damages award far in excess of the fair market value of the land on which the easement is located. Greencore further asserts the district court erred in not granting it the right to abandon the pipeline in place.
[¶4] Addressing the issues in a different order than the parties present them, we conclude the district court properly ruled that it could consider evidence of comparable easements in determining just compensation. The court, however, erred in concluding Barlow's proffered easements were not the result of arms' length transactions or sufficiently comparable, while the other Greencore easements were. The district court also erred by concluding annual payments are not allowed under Wyoming law, but correctly ruled that the issue of whether Greencore may abandon the pipeline in place is not properly before the court at this time. Affirmed in part and reversed and remanded in part.
[¶5] The issues presented in these consolidated cases are:
A. Did the district court err by concluding comparable easements were proper evidence to establish the value of a partial taking of real property for a pipeline easement?
B. Did the district court err when it ruled the easements offered by Barlow as comparables were not the result of arms' length transactions?
C. Did the district court err in concluding the pipeline easements offered by Barlow were not comparable to the Greencore easement pursuant to Wyo. Stat. § 1-26-704(a)(iii)(B) and (C) (LexisNexis 2011)?
D. Did the district court err in concluding annual payments for a condemned easement are not permissible under Wyoming law?
E. Did the district court err when it refused to rule that Greencore was entitled to abandon its pipeline in place when its need for it terminates?
[¶6] Greencore is a Delaware limited liability company with its principal place of business in Texas. It planned to build a twenty inch pipeline to transport CO2 from the Lost Cabin Gas Plant in Fremont County, Wyoming to the Bell Creek Oil Field in southeastern Montana. To construct and maintain the pipeline, Greencore needed a 100 foot construction and fifty foot permanent easement across property located in Campbell County belonging to Barlow and others.
[¶7] Greencore was able to reach agreements with sixty-three other landowners to purchase easements on their property, but could not agree with Barlow, Mitchel M. Maycock and Dixie Lea Maycock, Trustees of the Mitchel M. Maycock Revocable Trust, Mitchel M. Maycock and Dixie Lea Maycock, Trustees of the Dixie Lea Maycock Revocable Trust, Joseph C. Maycock (collectively "Maycocks") or Brown-Kennedy Ranch Co. (B-K). Therefore, Greencore filed a complaint against those parties seeking to have the portion of their properties across which the pipeline would run condemned pursuant to Wyo. Stat. Ann. § 1-26-814 (LexisNexis 2011).*fn2
[¶8] In its complaint, Greencore asked the district court to set a hearing to determine its right to condemn the easements, enter an order permitting it to have possession and use of the property during the condemnation proceedings and determine an amount to be paid to Barlow, Maycocks and B-K for the condemned property. In accordance with Wyo. Stat. Ann. § 1-26-513(a) (LexisNexis 2011),*fn3 Greencore also deposited with the district court $136,323.83, which amount reflected the combined total of its final purchase offers to Barlow, Maycocks and B-K.
[¶9] After Greencore filed its complaint, the parties entered into stipulations agreeing that Greencore could properly obtain the easements by condemnation and granting easements for the construction, operation and maintenance of the pipeline. The district court entered orders pursuant to the parties' stipulations. The parties' agreements left unresolved two issues: 1) the amount of compensation due the landowners for the taking, and 2) whether Greencore was required to remove the pipeline or could abandon it in place when it was no longer in use. The district court set those matters for trial. Prior to trial, Greencore and B-K entered into a settlement agreement and the district court dismissed B-K with prejudice pursuant to a stipulated motion.
[¶10] Also prior to trial, Barlow and Maycocks filed a designation of expert witnesses in which they identified Robert Zabel, a certified general real estate appraiser, as one of their expert witnesses. They attached to the designation a summary appraisal report Mr. Zabel prepared in which he calculated a fair market value for the easement. The report indicates Mr. Zabel relied in part on contracts Barlow and Maycocks negotiated for other easements of comparable type, size and location on the same or similar property. He stated that the use of comparable sales was a generally accepted appraisal technique. Mr. Zabel concluded the fair market value of the Greencore easement was an initial payment of $25.00 per rod*fn4 and an annual payment of $3.00 per rod with an annual consumer price index (CPI) adjustment. *fn5
[¶11] Greencore subsequently filed a motion for partial summary judgment asking the district court to rule as a matter of law that the only measure of damages in a condemnation action for the partial taking of property is the difference between the value of the property before and after the taking and that evidence of prices paid for comparable easements was not admissible to show fair market value in the context of partial takings. Alternatively, Greencore asked for a ruling that Barlow and Maycocks were entitled only to a lump sum payment, not annual payments, and the lump sum payment for an easement could not exceed the fair market value of a fee simple interest in the property covered by the easement. Greencore attached to its summary judgment memorandum the affidavit of Neal Hilston, a certified general real estate appraiser, in which he opined that the fair market value for a fee simple interest in the property being acquired for Greencore's pipeline easement was $325 per acre.
[¶12] On the first day of trial, the district court denied Greencore's summary judgment motion, concluding that evidence of comparable sales was admissible but finding that issues of material fact existed as to whether the other transactions were arms' length and/or comparable to the Greencore easement. The trial proceeded, and the district court found the evidence Barlow and Maycock presented concerning other easements did not establish that they were truly arms' length or comparable to the Greencore easement. The district court concluded the evidence Greencore presented showing that it paid an average of $50 per rod to other landowners for its CO2 pipeline easement, including a similarly situated landowner west of the Barlow and Maycock properties, established the value of Greencore's interest. The district court found the difference in value of the Barlow property before and after the taking to be $9,189.00 and concluded the value of the interest Greencore obtained from Barlow computed at $50 per rod was $43,034.00.
[¶13] The district court also held that an annual payment could not form part of the just compensation in a condemnation action because "Wyoming law anticipates a valuation at a specific date, not an unknown valuation dependent on the life of a gas field or pipeline." The court further concluded there was no evidence showing adverse impact from abandonment of the pipeline in place but that removal would result in additional surface disturbance. The court stated no evidence was presented to address the reasonableness of removing the pipeline once it is abandoned and it was unable to rule on that issue until the pipeline is abandoned. The district court entered judgment consistent with its findings and conclusions and ordered Greencore to pay Barlow $43,034.00. Barlow appealed and Greencore cross appealed.
[¶14] The district court conducted a bench trial in this case.
Following a bench trial, this Court reviews a district court's findings and conclusions using a clearly erroneous standard for the factual findings and a de novo standard for the conclusions of law. Piroschak v. Whelan, 2005 WY 26, ¶ 7, 106 P.3d 887, 890 (Wyo.2005)[.]
The factual findings of a judge are not entitled to the limited review afforded a jury verdict. While the findings are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail re-weighing disputed evidence. Findings of fact will not be set aside unless they are clearly erroneous. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.
Piroschak, ¶ 7, 106 P.3d at 890. Findings may not be set aside because we would have reached a different result. Harber v. Jensen, 2004 WY 104, ¶ 7, 97 P.3d 57, 60 (Wyo.2004). Further, we assume that the evidence of the prevailing party below is true and give that party every reasonable inference that can fairly and reasonably be drawn from it. We do not substitute ourselves for the trial court as a finder of facts; instead, we defer to those findings unless they are unsupported by the record or erroneous as a matter of law.
Id. (quotation marks omitted) (some citations omitted).
Pennant Serv. Co. v. True Oil Co., LLC, 2011 WY 40, ¶ 7, 249 P.3d 698, 702--03 (Wyo.2011).
BJ Hough, LLC v. City of Cheyenne, 2012 WY 140, ¶ 8, 287 P.3d 761, 764-65 (Wyo. 2012) (some citations omitted). Statutory interpretation presents a question of law which we review de novo. Sinclair v. City of Gillette, 2012 WY 19, ¶ 8, 270 P.3d 644, 646 (Wyo. 2012). An incorrect application of law can lead to errors in findings of ultimate fact. See, e.g., Brown v. Arp and Hammond Hardware Corp., 2006 WY 107, ¶ 40, 141 P.3d 673, 685-86 (Wyo. 2006); Jackson Hole Mountain Resort Corp. v. Alpenhof Lodge Assocs., 2005 WY 46, ¶ 17, 109 P.3d 555, 561 (Wyo. 2005).
1. Admissibility of Evidence of Comparable Easement Transactions
[¶15] We start with Greencore's primary issue-whether, as a matter of law, evidence of the prices paid for comparable easements is properly considered in determining the value of a condemned pipeline easement. A ruling by this Court that evidence of comparable easements is not admissible to establish the fair market value in partial takings cases would also resolve completely Barlow's issue with regard to the comparability of the easements.
[¶16] Eminent domain proceedings are authorized by constitutional and statutory provisions and governed procedurally by W.R.C.P. 71.1. The taking of private property for public or private use without due or just compensation is constitutionally prohibited. Wyo. Const. art. 1, §§ 32-33; U.S. Const. amend. V. The focus of the present case is on how to properly determine due or just compensation.
[¶17] The applicable portions of the Eminent Domain Act state:
§ 1-26-701. Compensation standards.
(a) An owner of property or an interest in property taken by eminent domain is entitled to compensation determined under the standards prescribed by W.S. 1-26-701 through 1-26-713.
(b) Unless otherwise provided by law, the right to compensation accrues upon the date of possession by the condemnor.
(c) Except as specifically provided by W.S. 1-26-701 through 1-26-713, compensation, damages, or other relief to which a person is otherwise entitled under this act or other law are not affected, but duplication of payment is not permitted.
§ 1-26-702. Compensation for taking.
(a) Except as provided in subsection (b) of this section, the measure of compensation for a taking of property is its fair market value determined under W.S. 1-26-704 as of the date of valuation.
(b) If there is a partial taking of property, the measure of compensation is the greater of the value of the property rights taken or the amount by which the fair market value of the entire property immediately before the taking exceeds the fair market value of the remainder immediately after the taking.
§ 1-26-704. Fair market value defined.
(a) Except as provided in subsection (b) of this section:
(i) The fair market value of property for which there is a relevant market is the price which would be agreed to by an informed seller who is willing but not obligated to sell, and an informed buyer who is willing but not obligated to buy;
(ii) The fair market value of property for which there is no relevant market is its value as determined by any method of valuation that is just and equitable;
(iii) The determination of fair market value shall use generally accepted appraisal techniques and may include:
(A) The value determined by appraisal of the property performed by a certified appraiser;
(B) The price paid for other comparable easements or leases of comparable type, size and location on the same or similar property;
(C) Values paid for transactions of comparable type, size and location by other companies in arms length transactions for comparable transactions on the same or similar property.*fn6
[¶18] In determining whether it is proper to consider evidence of comparable easement sales in ascertaining fair market value of a condemned easement under the above provisions, we apply our usual rules of statutory interpretation.
[Our] paramount consideration is to determine the legislature's intent, which must be ascertained initially and primarily from the words used in the statute. We look first to the plain and ordinary meaning of the words to determine if the statute is ambiguous. A statute is clear and unambiguous if its wording is such that reasonable persons are able to agree on its meaning with consistency and predictability. Conversely, a statute is ambiguous if it is found to be vague or uncertain and subject to varying interpretations.
Michael's Constr., Inc. v. Am. Nat'l Bank, 2012 WY 76, ¶ 12, 278 P.3d 701, 705 (Wyo. 2012), quoting Office of State Lands and Invs. v. Mule Shoe Ranch, Inc., 2011 WY 68, ¶ 13, 252 P.3d 951, 954-55 (Wyo. 2011). The determination of whether a statute is clear or ambiguous is a matter of law for the court. Id. When the language is clear, we give effect to the ordinary and obvious meaning of the words employed by the legislature. Id. In ascertaining the meaning of a statutory provision, all statutes relating to the same subject or having the same general purpose must be considered in pari materia and construed in harmony. Id. We do not apply our rules of statutory construction unless a statute is ambiguous. Vogel v. Onyx Acceptance Corp., 2011 WY 163, ¶ 24, 267 P.3d 1057, 1064 (Wyo. 2011).
[¶19] Greencore argues the district court misconstrued the statute when it applied the definition of fair market value in § 1-26-704, which allows consideration of the prices paid for comparable easements, to a partial taking. As reflected above, § 1-26-702(a) provides that the measure of compensation for all takings of property under the Act is fair market value as defined in § 1-26-704, "except as provided in subsection (b)." Subsection
(b) states the measure of compensation for a partial taking is the greater of the value of the property taken or the diminution in value of the remaining property. Greencore reads "except as provided in subsection (b)" to mean § 1-26-704's definition of "fair market value" applies only in cases of complete takings and not in the context of a partial taking.
[¶20] Considering all of the relevant statutes in pari materia as we are required to do, we begin our analysis with § 1-26-701(a) which provides that "an owner of property or an interest in property taken by eminent domain is entitled to compensation determined under the standards prescribed by W.S. 1-26-701 through W.S. 1-26-713." (Emphasis added.) Pursuant to the clear language of that provision, compensation for a taking is determined as prescribed by the entire act including § 1-26-704, which defines fair market value. Nothing in the language of § 1-26-701, or for that matter § 1-26-704, suggests that the definition of fair market value found in the Act applies only in the context of complete takings and not to partial takings.
[¶21] Moving to the next provision, § 1-26-702(a) plainly states that compensation "for a taking of property" is its fair market value as determined under § 1-26-704, "except as provided in subsection (b)." Again, the language of § 1-26-702(a) does not suggest it applies only to complete takings; rather, it plainly refers to "a taking of property." Had the legislature intended subsection (a) to apply only to complete takings, we presume it would have said so. See Morris v. CMS Oil and Gas Co., 2010 WY 37, ¶ 28, 227 P.3d 325, 333 (Wyo. 2010) (stating "the omission of words from a statute is considered to be an intentional act by the legislature and we will not read words into a statute when the legislature has chosen not to include them.").
[¶22] Section 1-26-702(b) provides that if there is a partial taking, the measure of compensation is either the value of the property rights taken or the amount by which the fair market value of the entire property is reduced by the taking, whichever is greater. Nothing in that language suggests the legislature intended the definition of fair market value found in § 1-26-704 to be inapplicable in the case of a partial taking. In fact, the legislature's use of the term "fair market value" in subsection (b) suggests the contrary.
[¶23] What distinguishes partial takings, and thus explains the phrase "except as provided in subsection (b) of this section", is that there are two alternative ways of figuring compensation when there is a partial taking-the value of what is taken or the decreased value of what remains after the taking. As stated in § 1-26-702(b), the greater of those two amounts is the measure of compensation. Reading subsection (a) together with subsection (b) in this way gives both provisions meaning.
[¶24] Reading the provisions this way also gives recognition to the fact that in some cases a partial taking may not reduce the value of the remaining property, at least according to some generally accepted appraisal techniques. By offering an alternative method for measuring just compensation when there is a partial taking which does not result in a reduction in value of the remaining property, the legislature assured a property owner would at least receive compensation for the value of the land taken. See Uniform Laws Annotated, Eminent Domain Code, § 1002, 13 U.L.A. 89, comment (2002). In either case, however, the legislature provided only one method for determining value and that method is found in §1-26-704.
[¶25] Were we to accept Greencore's argument that § 1-26-704 does not apply to partial takings, the terms "value" and "fair market value" in subsection (b) would be left undefined. If fair market value is determined in accordance with § 1-26-704 only in the case of a complete taking, then how are "value" and "fair market value" determined in the case of a partial taking? Greencore provides no answer and we can conceive of no reason the legislature would provide a method for determining value in one situation and not the other.
[¶26] Greencore also contends the phrase "value of the property rights taken" in § 1-26-702(b) means something other than fair market value. "Value" is defined as "1: a fair return or equivalent in money, goods, or services for something exchanged; 2: the monetary worth of a thing: MARKET PRICE." Merriam-Webster's Dictionary 547 (New Edition 2005). Giving the word "value" its plain and ordinary meaning, we are persuaded the legislature intended it to mean fair market value. Again, ascribing a different meaning to the word "value" as it is used in § 1-26-702(b) would require us to conclude the legislature intended § 1-26-704's definition of fair market value to be used to determine value when an entire parcel is taken, but gave no guidance for determining "value" when only part of a parcel is taken. We will not interpret statutory language to reach an absurd result. Mule Shoe, ¶ 19, 252 P.3d at 956. Interpreting § 1-26-702 as Greencore advocates would do just that.
[¶27] Greencore's interpretation also raises questions concerning the legislature's amendment to § 1-26-704 to add subsections (a)(iii)(A), (B) and (C). The new provisions require the use of generally accepted appraisal techniques in determining fair market value and allow consideration of various factors, including "the price paid for other comparable easements . . . of comparable type, size and location on the same or similar property." Section 1-26-704(a)(iii)(B). Nothing in the language of the amendment suggests that it applies only in the context of complete takings and not to partial takings and we can discern no reason the legislature would have intended the amendment to apply only to complete takings. Why, for example, would it require the use of generally accepted appraisal techniques to determine the value of a property in a complete taking but not a partial taking? If it intended to allow consideration of the price paid for comparable easements in the case of a complete taking, what possible rationale would there be for not allowing consideration of the same evidence when only part of parcel is taken? If the legislature intended the amendment to apply only to complete takings, how did it intend the value to be determined when part of a property is taken? Greencore provides no answers to these questions. We conclude § 1-26-704's definition of fair market value applies to both complete and partial takings.
[¶28] In deciding the legislature intended fair market value to be the measure of compensation whether all or only part of a property is taken, we note that we have found no case, and Greencore has pointed us to none, in which the value of condemned property has been measured other than by market value. Although the terminology varies (the measure is sometimes stated as "fair market value," "cash market value," "fair cash market value," or "reasonable market value"), market value appears to be the most frequently used standard for measuring just compensation, regardless of the label. Coronado Oil Co. v. Grieves, 642 P.2d 423, 433 (Wyo. 1982).
[¶29] Even if we were to conclude the statutory language was ambiguous, we would reach the same conclusion as to the legislature's intent using our accepted rules of statutory construction. Those rules include consideration of the "mischief the statute was intended to cure, the historical setting surrounding its enactment, the public policy of the state, the conclusions of law, and other prior and contemporaneous facts and circumstances." Vogel, ¶ 24, 267 P.3d at 1064.
[¶30] The rationale for adopting the Eminent Domain Act and subsequent amendments has been stated as follows:
Impetus for the extensive changes came from increased use of eminent domain proceedings by public utilities and energy related industries, a void in the Wyoming eminent domain law perceived by landowners as allowing abuse of eminent domain by non-governmental entities, and accelerating market ...