Condemnation Case: Incidental Damages Appropriate Where Taking Affected Separate Tract Owned by Same Persons

In a recent eminent domain case, the Court of Appeals of Tennessee upheld a jury verdict for incidental damages caused to one tract of a dairy farm by the condemnation of part of another, but separate, tract of the dairy farm.  The case is important for condemnation lawyers in Tennessee because the State’s argument that the property owner was not entitled to incidental damages caused to the tract which was not condemned was unsuccessful.

Here are the facts:

  • The Owners owned two separate tracts of land, a northern tract and a southern tract
  • The Owners operated a dairy farm
  • The southern tract was the site of the dairy farm operations and where manure accumulated
  • The northern tract was unimproved and was used for the disposal of a large percentage of the manure which was generated
  • The manure was taken from the southern tract to the northern tract via a tractor
  • The State filed a petition of condemnation to acquire a 16 acre portion of the northern tract to realign a highway
  • The State did not seek to take any of the southern tract
  • As a result of the realignment of the highway, it would no longer be possible to transport the manure from the southern tract to the northern tract via tractor
  • The manure would have to be transported by a “wet system” which would involve a pipe

A jury trial was held to determine the Owners’ damages.  Under Tennessee law, besides being entitled to the value of the land taken by the State, a landowner is also entitled to incidental damages.  Incidental damages in a condemnation or eminent domain case consist of the amount of the diminution of the value of the land because of the taking. Under Tennessee law, incidental damages are the lesser of the reasonable cost of repairing or curing the damage caused by the taking or the difference between the fair market value of the property immediately before and after the taking.

At trial, the Owners’ expert testified that the southern section had been diminished in value by the amount of money it would take to install new fencing along the new portion of the highway;  a new well; as well as the cost of a new manure management system which would permit liquid manure to be pumped from the southern tract to the northern tract via a pipe which would go under the highway separating the southern and northern tracts (a “wet system”).

The jury returned a verdict for the Owners for the value of the land as well as for incidental damages.  The jury awarded what the Owners’ expert witness had testified would be the cost of the fencing and the new well.  The Owners’ expert had testified that the incidental damages resulting from the Owners’ inability to transport the manure by tractor was the cost to install a wet system to transport the manure by pipe.  The expert testified that the cost to install the wet system was $225,000.  The jury awarded the Owners $94,000 for the cost of the system.

On appeal, the State argued that no award was appropriate because what had happened on the northern tract (the taking of land) did not affect the southern tract.  The Court of Appeals of Tennessee affirmed the jury verdict and declined to overrule the trial court’s decision to deny a directed verdict to the State.


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