Showing posts with label arms' length transaction. Show all posts
Showing posts with label arms' length transaction. Show all posts

Tuesday, March 19, 2013

Summary 2013 WY 34

Summary of Decision March 19, 2013

Chief Justice Kite delivered the opinion for the Court. Affirmed in part. Reversed and remanded in part.

Case Name: BARLOW RANCH, LIMITED PARTNERSHIP v. GREENCORE PIPELINE COMPANY, LLC; GREENCORE PIPELINE COMPANY, LLC v. BARLOW RANCH, LIMITED PARTNERSHIP

Docket Number: S-12-0038; S-12-0039

URL: http://www.courts.state.wy.us/Opinions.aspx

Appeal from the District Court of Campbell County, Honorable Keith G. Kautz, Judge.

Representing Barlow Ranch, Limited Partnership: Dan B. Riggs, Mistee L. Elliott and Amanda K. Roberts of Lonabaugh and Riggs, LLP, Sheridan, Wyoming. Argument by Mr. Riggs and Ms. Elliott

Representing Greencore Pipeline Company, LLC: Jon T. Dyre of Crowley Fleck, PLLP, Billings, Montana; Timothy M. Stubson of Crowley Fleck, PLLP, Casper, Wyoming. Argument by Messrs. Dyre and Stubson.

Date of Decision: March 19, 2013

Facts: 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.

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.

In its appeal, Barlow claimed the district court erred in concluding the easements it relied upon were not valid comparables. Barlow also asserted the district court erred in concluding annual payments for a condemned easement are not permissible under Wyoming law. In its cross appeal, Greencore asserted 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 asserted the district court erred in not granting it the right to abandon the pipeline in place.

Issues: 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?

Holdings: Wyoming law specifically provides for use of comparable sales of easements to determine the fair market value of a condemned easement. The district court, however, applied incorrect legal standards and committed clear error when it concluded none of Barlow’s proposed easement transactions were comparable. The district court did not follow the proper methodology in determining whether the transactions were arms’ length or the other easements were of comparable type, size and location. On remand, the district court should analyze the proffered easements to determine whether they are comparable under the appropriate standards. The analysis may consider the comparables as substantive evidence of fair market value and/or as a basis for Barlow’s appraiser’s calculation of fair market value. In determining the fair market value, the district court will need to address the similarities and differences between the individual comparables and the Greencore easement. As the Court stated in Frangos, fair market value based on comparable sales is determined by “making adjustments for prices of those [comparables] that are more similar or dissimilar to condemned property.” Frangos, 487 P.2d at 807.

The district court also incorrectly concluded, as a matter of law, that an annual payment cannot form part of the just compensation in easement condemnation cases. On remand, the district court must conduct a factual analysis to determine whether annual payments are appropriate in this case. Once the proper analysis is done, the resulting award may be higher or lower than the original award of a one-time lump sum in the amount of the average Greencore paid for its other easements. The district court properly concluded the issue of whether Greencore has to remove the pipeline upon abandonment and termination of the easement is not yet ripe for consideration.

Affirmed in part and reversed and remanded in part for additional proceedings consistent with this opinion.

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. You will also note when you look at the opinion that all of the paragraphs are numbered. When you need to provide a pinpoint citation to a quote the universal portion of the citation will use that paragraph number. The pinpoint citation in the P.3d portion will need to have the reporter page number. If you need assistance in putting together a citation from this, or any future opinion using the Universal Citation form, please contact the Wyoming State Law Library and we will provide any needed assistance]

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