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July 12th, 2013 — By — In News & Events

Appellate Victory for New Orleans Landowners in Determining Just Compensation Following Expropriation

Last month, a Louisiana appellate court upheld the 2012 decision of an Orleans Parish jury awarding $9,566,640 million in just compensation to the owners of the former Grand Palace Hotel building at 1732 Canal St. in New Orleans.  The jury’s verdict represented more than double the $4.5 million value the state assigned to the property.

Following the 2012 trial, the state filed a motion for new trial and argued that the court should reduce the jury award.  Circuit Court Judge Ethel Simms denied the motion for new trial and Louisiana appealed.  (See our previous post regarding the 2012 trial here.)

On June 19, a three-judge panel of the 4th Circuit Court of Appeal rejected the appeal and upheld the jury verdict.  The state argued on appeal that the jury’s award of $9.5 million was unsupported by the evidence because it was not close to either side’s experts’ values.  The court, however, disagreed and referred to the state’s challenge of the jury’s verdict “absurd.”  (Opinion at p. 8.)  The court’s opinion, penned by Judge Edwin Lombard, with Judges Roland Belsome and Paul Bonin concurring, even went as far as to suggest that the jury’s $9.5 million evaluation may have been too low as the owners’ expert testimony was “more persuasive.”  Nevertheless, the court pointed out that expert testimony is advisory only.  “…[W]hen, as in this case, experts disagree as to valuation of the property, it is within the jury’s discretion to determine the weight to be given to each expert’s opinion based upon various factors including the expert’s qualifications and experience, his or her possible bias in favor of the side for whom he or she testifies, and the expert’s familiarity with the locality of the expropriated property.” Opinion at p. 9.)  Therefore, the court explained, the jury did not have to accept any of the experts’ opinions but rather was entitled to determine its own figure as to the value of the property.

Louisiana expropriated the property in 2010 for a new LSU University Medical Center.  At that time, LSU offered $4.5 million to the owners, who had purchased the property for $3.3 million at a 2008 auction. The owners disagreed with LSU’s offer and requested a jury trial to determine just compensation.  The owners hired expert appraisers Heyward Cantrell and Jimmie Thorns, who valued the property at approximately $21 million with its “highest and best use” as redeveloped for multi-family residential use, commercial use or a mix of both uses.  The state’s expert valued the property at $4.5 million. The new University Medical Center is scheduled to open in 2015.  At this time, LSU has no immediate plans for the property, however, the state acquired the land for possible future expansion of the new medical campus.

OCA Louisiana attorney-member, Randy Smith, represented the property owners at the trial and on appeal. He estimates that the state will now be required to pay a total of approximately $7 million more than the $4.5 million it originally offered. This additional amount represents the jury verdict and includes interest, court costs and attorneys’ fees.

More about the appeal from Nola.com is available here.

LSU v 1732 Canal Street Appellate Opinion 6.19.13