Partial taking for highway project. You know what that means: severance damages. And you also know that often means a "general or special" benefits fight over how the remainder parcel may have been improved by the project, and whether these benefits can reduce the severance owed.
Before-the-project condition: undeveloped land on a frontage road with no nearby connection to the freeway. After-the-project condition: remainder property has direct freeway access, an increase in traffic to the site and easier ability to enter/exit, and curb and sidewalk improvements. The trial court concluded these specially benefited the remainder property, and could be offset against compensation.
In Utah Dep't of Transportation v. Boggess-Draper Co., LLC, No. 20220875 (May 1, 2025), the Utah Court of Appeals disagreed. In accordance with a Utah Supreme Court decision, benefits that may be used to offset compensation must be those which "affect the land itself," and increase "the actual or usable value of the land," and not just the market or saleable value." And general benefits are those which are "enjoyed by the public." Determining which category a benefit to the remainder falls in is discretionary with the trial court.
Here's how the court of appeals treated each benefit:
- Direct interstate access and increased traffic: general benefit because "'merely increased facilities for travel and transportation by the public in general' do not qualify as a special benefit because any increase in value from such improvements 'has no relation to the use of the land as land.'"
- Increase in the number of lanes: general benefit, for the same reason.
- Curb, gutter, and sidewalk improvements: special benefit, because "[t]he improvements 'affect[ed] the land itself directly and proximately' by making 'a
large share or all of the property abutting thereon more accessible and convenient for use.'”
Slip op. at 18-19. The court concluded that this was not harmless error:
Here, we have no trouble concluding that Boggess was harmed by the district court’s error. By classifying all the benefits as special as a matter of law, the court allowed evidence that was legally incorrect and crippling to Boggess’s ability to recover severance damages. Expert testified that the project had “significantly” benefitted the Property because the price per square foot of the Property in the “before condition” ($8.75) was less than the price per square foot in the “after condition” ($12.50). He attributed the nearly four dollar per square foot increase to “the advantage of the interchange, and the traffic exposure,” and concluded that the difference between these figures demonstrated that the Property had received “a special benefit of 2.2 million dollars” from the project. By defining the interstate access increasing traffic as a special benefit, Expert improperly inflated the Property’s after-condition valuation, which created a sizeable $2.2 million offset. Without the inclusion of the general benefits, the offset would have been significantly lower, thereby creating a reasonable likelihood that Boggess would have been awarded severance damages. This error is accordingly reversible.
Slip op. at 21-22.
Utah Dep't of Transportation v. Boggess-Draper Co., LLC, No. 20220875-CA (Utah App. May 1, 2025)
