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South Lafourche Levee District v. Jarreau

Supreme Court of Louisiana

March 31, 2017

SOUTH LAFOURCHE LEVEE DISTRICT
v.
CHAD M. JARREAU, ET AL.

         ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST CIRCUIT, PARISH OF LAFOURCHE

          CLARK, Justice. [*] [**]

         Following Hurricanes Katrina and Rita, the Louisiana legislature in 2006 passed Act 853[1] and Act 567[2], which amended the laws governing compensation for levee servitude appropriations with a particular focus on appropriations for use in hurricane protection projects. We granted certiorari in this res nova matter for three purposes: 1) to interpret specific provisions of the 2006 amendments to La. Const. art. I, § 4, La. Const. art. VI, § 42, and La. R.S. 38:281(3) and (4); 2) to determine the amount of compensation that is due a property owner whose property is appropriated by a levee district pursuant to a permanent levee servitude for use in a hurricane protection project; and 3) to determine whether La. R.S. 38:301(C)(2)(f) or La. R.S. 13:5111 governs an award for attorneys' fees in a levee servitude appropriation dispute.[3]

         For the reasons that follow, we conclude the 2006 amendments to La. Const. art. I, § 4, La. Const. art. VI, § 42 and 38:281(3) and (4) reduced, rather than eliminated, the measure of damages to be paid to a property owner for the taking of, or loss or damage to, property rights for the construction, enlargement, improvement, or modification of hurricane protection projects from "full extent of the loss" to the more restrictive "just compensation" measure required by the Fifth Amendment to the United States Constitution, which is the fair market value of the property at the time of the appropriation, based on the current use of the property, before the proposed appropriated use, and without allowing for any change in value caused by levee construction. We further hold that La. R.S. 38:301(C)(2)(f) governs an award for attorneys' fees in a levee appropriation dispute. Thus, we affirm the court of appeal judgment, in part, reverse, in part, and render.

         FACTS AND PROCEDURAL HISTORY

         On January 10, 2011, the Board of Commissioners of the South Lafourche Levee District ("Levee District') adopted Resolution 11-01 (the "Resolution"), appropriating a permanent levee servitude affecting certain tracts of land located on the west bank of Bayou Lafourche, an area the Levee District had determined was susceptible to storm surge and flooding. The express purpose of the appropriation was to upgrade and increase the size of the existing permanent levee servitude for flood protection in the Larose to Golden Meadow, Louisiana, Hurricane Protection Levee Project area. The Resolution gave the Levee District the right to "construct, operate and maintain levees, berms, drainage or borrow canals or ditches and other flood control works including the right to cut away, dredge or remove soil or earth therefrom and for the deposit of same as may be necessary[.]"

         Landowners that were affected by the appropriation of the permanent servitude were notified by letter dated the same date the Resolution was passed. In the letter, the Levee District advised the landowners that soon it would begin "removing earthen material" from the appropriated property and demanded that they "immediately cease and desist performing any and all activities upon the property as appropriated." The letter further explained that state law required the Levee District to pay each affected landowner the fair market value for the appropriated property.

         Chad M. Jarreau, a Lafourche Parish resident who owns a 17.1 acre tract of land ("Jarreau tract") located partially within the appropriated area, received the letter. Jarreau's home is situated on the front portion of the tract near Highway 3235, and he operates Bayou Construction & Trucking Co., L.L.C. ("Bayou Construction"), a dirt excavation and hauling business, over the remainder of the tract. Only the rear portion of the Jarreau tract, which measures .913 acres and backs up to a canal, was within the Levee District's appropriated permanent servitude.

         Despite receiving the letter, Jarreau continued to excavate dirt from the appropriated area to satisfy contractual obligations for Bayou Construction. On May 19, 2011, the Levee District filed a petition to enjoin Jarreau from excavating and removing any more dirt from the appropriated servitude and sought monetary damages for the "wrongful" excavation. Shortly thereafter, Jarreau received a check from the Levee District in the amount of $1, 326.69 as compensation for the full market value of appropriated property; he rejected the tender. In response to the Levee District's petition, Jarreau filed an answer and reconventional demand, seeking compensation for the appropriated land, severance damages to the land, buildings, and improvements; economic and business losses; and general damages for mental anguish, loss of use, inconvenience, and loss of enjoyment; costs and statutory attorney fees. Bayou Construction later intervened in the suit as a plaintiff-in-reconvention, seeking compensation for lost profits, legal interest, and costs arising from the appropriation.

         Jarreau eventually stipulated to the Levee District's request for a permanent injunction, and with his consent, the trial court entered an order prohibiting him from removing dirt "from the property subject to the Levee Servitude appropriated by way of [the Levee District's resolution]." Following a bench trial on the remaining issues, the trial court rendered a judgment awarding the Levee District damages of $16, 956.00 for the dirt excavated from the appropriated property. The trial court awarded Jarreau $11, 869.00 as just compensation for the appropriated tract pursuant to La. R.S. 38:301(C)(1)(a)[4] and Jarreau and Bayou Construction, in globo, $164, 705.40 for economic and business losses, as well as attorneys' fees pursuant to La. R.S. 38:301(C)(2)(f) in the amount of $43, 811.85, expert witness fees of $26, 490.95, costs of $2, 350.00 and interest.

         The Levee District appealed, asserting for the first time that the 2006 amendments that added § 4(G) to La. Const. I and amended art. VI, § 42(A) eliminated a property owner's right to compensation whenever property is taken for hurricane protection projects. Alternatively, the Levee District argued the 2006 amendments prohibited the trial court from including economic and business losses in an award for just compensation for property appropriated for hurricane protection levees. See La. R.S. 38:281(3) and (4). Jarreau and Bayou Construction answered the appeal, seeking reversal of the wrongful excavation award and an increase in attorneys' fees.

         On appeal, the First Circuit, noting the 2006 amendments were never considered at trial, found the lower court erred, as a matter of law, in awarding Jarreau and Bayou Construction economic and business losses. South Lafourche Levee District v. Jarreau, 2015-0328, p. 15 (La.App. 1 Cir. 3/31/16), 192 So.3d 214, 226 & n.4. (2016). It then reviewed the record de novo, in light of the 2006 amendments, and determined the Levee District's use of dirt from the Jarreau tract was a constitutional "taking" that required just compensation at fair market value.[5]Id., 2015-0328 at 14, 192 So.3d at 225. Based on the evidence, the court found the fair market value of the property at the time of appropriation was $11, 869.00. Id., 2015-0328 at 17, 192 So.3d at 228. The court of appeal reversed the portion of the judgment awarding Jarreau and Bayou Construction $164, 705.40 in damages for economic and business losses associated with the appropriation. Id., 2015-0328 at 18, 192 So.3d at 228. The court of appeal also reversed the award of $16, 956.00 to the Levee District for Jarreau's wrongful excavation of the dirt, finding the evidence insufficient to support the loss. [6] Id., 2015-0328 at 23, 192 So.3d at 232.

         Last, the court of appeal found the trial court erred in applying the 25% cap on attorneys' fees award under La. R.S. 38:301(C)(2)(f) rather than awarding reasonable attorneys' fees actually incurred under La. R.S. 13:5111(A). Jarreau, 2015-0328 at 24, 192 So.3d at 232. A majority of the court of appeal held that La. R.S. 13:5111(A) was the more specific statute.[7] Id. Utilizing factors established by this Court, [8] the court of appeal concluded that $142, 551.50 was a reasonable amount for attorney fees actually incurred and added $5, 000 for the appellate work. Id., 2015-0328 at 25-26, 192 So.3d at 233.

         The Levee Board and Jarreau and Bayou Construction filed these consolidated writs seeking our review of the court of appeal's judgment. The Levee Board raises two assignments of error: 1) the court of appeal erred by concluding the Levee District owes any compensation for the appropriation of the levee servitude, given the 2006 amendments; and 2) the court of appeal erred in awarding attorney's fees based on La. R.S. 13:5111 rather than La. R.S. 38:301(C)(2)(f). Jarreau and Bayou Construction, on the other hand, argue the court of appeal erred in determining the fair market value of the property and reversing the trial court's award of $164, 705.40 for the value of the appropriated dirt.

         LAW AND DISCUSSION

         "Legislation is the solemn expression of the legislative will; thus, the interpretation of legislation is primarily the search for the legislative intent." Pierce Foundations, Inc. v. JaRoy Construction, Inc., 2015-0785, p. 6 (La. 5/3/16), 190 So.3d 298, 303 (citations omitted). When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the legislative intent. La. Civ. Code art. 9; La. Rev. Stat. 1:4; Succession of Boyter, 99-0761, p. 9 (La. 1/7/00), 756 So.2d 1122, 1128-29. However, when a statute is susceptible of more than one interpretation, the court must apply the one that achieves the legislature's intent and best comports with the principles of reason and justice. Pierce Foundations, 2015-0785 at 7, 190 So.3d at 303; Freechou v. Thomas W. Hooley, Inc., 383 So.2d 337 (La. 1980). "The starting point for interpretation of any statute is the language itself." Pierce Foundations, 2015-0785 at 7, 190 So.3d at 303 (citations omitted). Also, "''all laws pertaining to the same subject matter must be interpreted in pari materia, or in reference to each other.'" Id., quoting State v. Williams, 10-1514 (La. 3/15/11), 60 So.3d 1189, 1191; La. Civ. Code art. 13.

         A helpful guide in ascertaining the intent of the legislature is the legislative history of the statute and related legislation. Theriot v. Midland Risk Ins. Co., 95-2895, p. 4 (La. 5/20/97), 694 So.2d 184, 186. The Legislature is presumed to have enacted a statute in light of the preceding statutes involving the same subject matter and court decisions construing those statutes, and where the new statute is worded differently from the preceding statute, the Legislature is presumed to have intended to change the law. Fontenot v. Reddell Vidrine Water Dist., 2002-0439, 2002-0442, 2002-0478, pp.13-14 (La. 1/14/03), 836 So.2d 14, 24 (citing Folse v. Folse, 98-1976 (La. 6/29/99), 738 So.2d 1040 and New Orleans Rosenbush Claims Service, Inc. v. City of New Orleans, 94-2223 (La. 4/10/95), 653 So.2d 538).

         Furthermore, where two statutes deal with the same subject matter, they should be harmonized if possible, as it is the duty of the courts, in the construction of statutes, to harmonize and reconcile laws. Oubre v. Louisiana Citizens Fair Plan, 2011-0097 (La.12/16/11), 79 So.3d 987, 997, cert. denied, __U.S. __, 133 S.Ct. 30, 183 L.Ed.2d 677 (2012). However, if there is a conflict, the statute specifically directed to the matter at issue must prevail as an exception to the statute more general in character. Id.

         Whether Jarreau is owed compensation for property appropriated for hurricane protection purposes pursuant to La. R.S. 38:301, in light of the 2006 amendments to La. Const. art. I, § 4, La. Const. VI, § 42, and La. R.S. 38:281 (3) and (4), presents only a question of law; therefore, our review is de novo. See Pierce Foundations, 2015-0785 at 7, 190 So.3d at 303.

         We turn now to language of the constitutional and statutory provisions at issue.

         2006 Amendments

         The limitations placed upon governmental takings of property are found in both the federal and state constitutions. The Fifth Amendment of the United States Constitution, made applicable to the states pursuant to the Fourteenth Amendment, provides: "No person shall ... be deprived of life, liberty or property without due process of law; nor shall private property be taken for public use, without just compensation." The definition of "just compensation" required by the Fifth Amendment has repeatedly been held to be measured by "the market value of the property at the time of the taking." Horne v. Department of Agriculture, __U.S.__, __, 135 S.Ct. 2419, 2432, 192 L.Ed.2d 388 (2015) (quoting United States v. 50 Acres of Land, 469 U.S. 24, 29, 105 S.Ct. 451, 454, 83 L.Ed.2d 376 (1984)).

         The Louisiana Constitution of 1974 provides for governmental takings of property in both article I, § 4, "Right to Property, " and article VI, § 42, "Compensation for Property Used or Destroyed; Tax." Article I, § 4 provides for the expropriation of private property for public purposes while article VI, § 42 provides specifically for the appropriation of private property necessary for levee or levee drainage purposes. The difference between a Louisiana landowner's protection against "appropriation of property necessary for levee and levee drainage purposes, " which is excepted from the protections of article I, § 4, and expropriation for any lawful purpose, arises from the particular nature of the levee servitude and the way in which it was traditionally exercised by public bodies:

The ownership of the lands used or destroyed for levee purposes remained in the riparian landowner, because the lands were not 'expropriated' but merely 'appropriated' for levee construction and the payment (authorized under the Constitution of 1921) was an indemnity for the public use.

Yiannopoulus, Civil Law Treatise (Property), V. 2, Section 88, P. 190 (3d ed. 1991). Appropriation, as opposed to expropriation, is carried out by a resolution of the appropriating authority, without the need for a judicial proceeding. See Richardson & Bass v. Board of Levee Commissioners, 226 La. 761, 77 So.2d 32 (1954). Furthermore, "[a]ppropriation involves the taking of a servitude, whereas expropriation may involve the taking of ownership." Yiannopoulus, supra, at 190 n. 20. See also Delaune v. City of Kenner, 550 So.2d 1386 (La.App. 5 Cir.1989), writ denied, 553 So.2d 475 (La.1989). While compensation is mandated by the U.S. Fifth Amendment for expropriations, no compensation is required for levee appropriations. See Eldridge v. Trezevant, 160 U.S. 452, 16 S.Ct. 345 (1896).

         Prior to the effective date of the 2006 amendments, article I, § 4(B) provided:

Property shall not be taken or damaged by the state or its political subdivisions except for public purposes and with just compensation paid to the owner or into court for his benefit. … In every expropriation, a party has the right to trial by jury to determine compensation, and the owner shall be compensated to the full extent of his loss." (Emphasis added.)

         The phrase "compensated to the full extent of his loss" was a change in the law when it was added to the 1974 Constitution. It broadened the measure of damages in expropriation cases by requiring that an owner be compensated not only for the fair market value of the property taken and severance damages to the remainder, but also to be placed in an equivalent financial position to that which he enjoyed before the taking. See West Jefferson Levee District, 93-1718, p. 13, 640 So.2d 1258, 1271 n.20. Full compensation pursuant to the 1974 Constitution included things like inconvenience and loss of profits from the takings of business premises so that landowners were compensated for their loss, not merely the loss of their land. Id.

         In 2006, Act 853 amended La. Const. article I, § 4 to add § 4(G) to provide:

(G) Compensation paid for the taking of, or loss or damage to, property rights for the construction, enlargement, improvement, or modification of federal or non-federal hurricane protection projects, including mitigation related thereto, shall not exceed the compensation required by the Fifth Amendment of the Constitution of the United States of America. However, this Paragraph shall not apply to compensation paid for a building or structure that was destroyed or damaged by an event for which a presidential declaration of major disaster or emergency was issued, if the taking occurs within three years of such event. The legislature by law may provide procedures and definitions for the provisions of this Paragraph. (Emphasis added.)

         The addition of § 4(G) to Article I restricts compensation for the taking of, or loss or damage to, property rights necessary for hurricane protection projects to that required by the Fifth Amendment. Thus, an owner of private property taken for use in hurricane protection projects is no longer entitled to just compensation to the full extent of his loss.

         Act 853 also amended La. Const. art. VI, § 42(A), governing the rights and obligations of levee ...


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