City of Phoenix v. Wilson, 200 Ariz. 2

Summary

The Supreme Court of Arizona held that, in an eminent domain proceeding, property may be valued as separate hypothetical units when supported by common sense and market data demonstrating different highest and best uses. The court upheld the admission of an appraiser's testimony valuing a five-acre corner portion differently from the remainder of the parcel. It also affirmed the award of severance damages and vacated the court of appeals' opinion.

Holdings

1. Arizona law does not restrict valuation in a partial-taking case to valuing the property taken only as a separate unit or only as a ratable part of the entire parcel. When common sense and market data provide an adequate foundation showing different highest and best uses, the property may be treated in its before-taking condition as divisible into separate hypothetical entities with different market values.
2. The trial court properly submitted severance damages to the jury, and the award was properly affirmed, because the taking could reduce the value of the remaining 3.6-acre corner portion through diminished visibility, reduced access, irregular configuration, and loss of commercial development potential.

Questions Presented

1. Whether eminent-domain valuation evidence may treat a larger parcel, in its before-taking condition, as divisible into hypothetical units with different highest and best uses and corresponding market values.
2. Whether the landowners were entitled to severance damages for diminution in value to the remaining 3.6-acre corner portion after the City condemned 1.4 acres from the corner.
3. Whether the trial court properly admitted the landowners' appraiser's testimony and submitted severance damages to the jury.

Disposition

vacated