from the District Court of Ward County, North Central
Judicial District, the Honorable Gary H. Lee, Judge.
S. Rau, Minot, ND, for plaintiff and appellant.
Randall J. Bakke (argued) and Bradley N. Wiederholt (on
brief), Bismarck, ND, for defendant and appellee.
1] Allen Lenertz appeals from a judgment dismissing his claim
for inverse condemnation against the City of Minot and
awarding the City costs and disbursements. The district court
did not err in ruling Lenertz established only a partial
taking of his property, did not abuse its discretion in
denying his proposed expert witness's testimony and did
not err in granting the City judgment under N.D.R.Civ.P. 50.
The court did abuse its discretion in awarding the City costs
and disbursements. We affirm in part, and reverse in part.
2] Between 2013 and 2014 the City installed a paved street
and upgraded the storm water system adjacent to Lenertz's
commercial property in southwest Minot. Lenertz's
property subsequently suffered three flooding events. In 2016
Lenertz sued the City for inverse condemnation, alleging the
City's actions in constructing the street and storm sewer
system caused past and future flooding of his property and
resulted in a total taking of his property. The City denied a
taking occurred and raised affirmative defenses.
3] In March 2018, the district court held a trial, which
included a jury solely to decide damages. Near the conclusion
of Lenertz's case in chief, but before receiving
testimony from appraiser Daniel Boris, his expert on damages,
the court found the evidence established only a partial
taking of Lenertz's property. Because Boris's
proffered opinion was essentially that the commercial
property's current market value constituted the full
measure of damages to the property, rather than the
property's diminution of value, the court allowed Lenertz
to make an offer of proof on damages before deciding whether
to dismiss under N.D.R.Civ.P. 50.
4] Without the jury present, the district court heard Boris
testify for Lenertz's offer of proof. The court
thereafter concluded Boris's valuation of the property
was contrary to the law and would not assist the jury on
damages. The court granted the City's motion for a
judgment as a matter of law under N.D.R.Civ.P. 50, and
"THE COURT: The law in the State of North Dakota is, and
I think it's the law in the entire nation that no
property shall be taken or damaged for public use without
just compensation. That's Article I, Section 16 of the
North Dakota Constitution. An inverse condemnation occurs
when a public project proximately causes a taking or a
damaging to private property. I think that's pretty much
black letter law. And at this stage, the Rule 50 stage, I
think I mentioned this yesterday, on a prima facie basis I
think Mr. Lenertz has established that an inverse
condemnation may have occurred.
"Now that doesn't mean that I'm finding
it's a final fact. I mean Mr. Bakke hasn't had a
chance to put his defenses in yet. But just at this Rule 50
phase, I think Mr. Rau and Mr. Lenertz have established a
prima facie case for a taking. There was no flooding before
the project, now there is.
"It's going to rain again. We all know that. It
will probably rain two inches again. I mean it's going
to happen probably again, these torrential rains. I mean we
have them once or twice a summer. May go two or three years
without any, but then we may have a year where there's
three or four. This happens. So I think without--you know,
it's probably going to happen again. Whether that's
inevitable or not, again, that would await further defense
of defense. But for a prima facie case, I think you've
established that yes it's going to rain again and it
will probably rain this much.
"The design appears to have been defective. I think
Mr.--from what I understand Mr. Hruby's testimony or
AE2, or whatever it is, that a review of the design
believed that the design had some flaws. Again, so on a
prima facie case, that's more evidence of the
taking--or the inverse condemnation.
"And lastly, the remedial efforts themselves, the fact
that you had to take remedial efforts I think supports the
fact that there was a design flaw, and the remedial efforts
appear not to be working. So on a prima facie basis, again,
I'm not saying this is an absolute because Mr. Bakke
hasn't had a chance to put his defense in yet. But on a
prima facie basis, I believe that Mr. Lenertz has
established that an inverse condemnation may have occurred.
"An inverse condemnation may be a taking of the
entirety, or it may be a partial taking. A taking of the
entirety is in fact a taking of everything. There's
nothing left. So for example, in the usual course if you
have a road project and the road comes through and they
take five acres, the five acres are completely gone and the
damages are the total fair market value of those five
acres. There's nothing left. It's taken from the
owner forever, and the owner has no further interest in the
property. That hasn't occurred here. This is not a
"A partial taking is a short-term, or temporary
interference with the landowners use and enjoyment of the
property. That's what I was able to discern from my
research in that. That a partial taking is a short-term,
temporary interference with the landowners use and
enjoyment of a property. And this sort of intermittent
flooding I think would satisfy that definition. In this
case, I would find as a matter of law that there was a
partial taking only. And I'd let it go to the jury on a
question of a partial taking.
"And it is a partial taking, because Mr. Lenertz still
has the property. He still has it's use, he still is
conducting business there just as before. He still is
generating income. The flooding is temporary, short-term
events. So this is at most, a partial taking.
"Now having made that as a determination, Mr. Lenertz
would be entitled to what's called just compensation
for that partial taking. Just compensation for the taking
of the entirety is the fair market value of everything that
is taken. It's gone. That's what just compensation
for a total taking is. For a partial taking, just
compensation is damages. And the just compensation for a
partial taking is the difference between the fair market
value of the property before the partial taking and the
fair market value of the property after the taking.
It's the diminution in value, which even Mr. Boris
agrees is the proper measure, the diminution in value.
"To support that finding of diminution in value, Mr.
Lenertz has offered Mr. Boris as an expert on the issue of
damages. Now I understand that North Dakota is not a [
Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579,
590 (1993)] state. We're not a [ Daubert ]
state. Our rules of evidence allow for a broad use of
expert testimony. And an expert must have--but there's
two steps to this broad use of the expert testimony.
"Step number one: the expert must have specialized
knowledge or skill in a specific area. I think Mr. Boris
certainly has the requisite credentials. But the second
step of the use of expert testimony in North Dakota, the
second step is: whether the testimony will assist the trier
of fact. And in this case, I don't believe Mr.
Boris' testimony is of any assistance to the trier of
fact. Mr. Boris states that the property--a property that
suffers only intermittent, temporary flooding, which has
not [a]ffected it's use, it's not [a]ffected its
occupancy, it's not [a]ffected the income, that that
property has no value. Hence, his diminution in value, he
states the property is worthless. This is not of any
assistance to the trier of fact.
"And following in on some of Mr. Bakke's comments
on this, he states his diminution in value is derived by
the fact that it would be the difference between the price
of the property and the cost of the cure. I don't think
that's the proper way to determine diminution in value.
The diminution in value is the fair market value before the
property and the fair market value after the property.
It's not what would it cost to repair it and if the
repairs cost more, th[e]n it's worth nothing.
That's not diminution in value.
"That's number one. Number two, by his own
admission he says[, ']I am not an engineer, I am only
guessing that it would cost this much to repair the
property.['] He has no basis for the opinion that the
cost of repair would be more than the value of the
property. So not only is he using an improper measure of
damages, he has no basis for his statements because he
doesn't know. He fully admits.
"I actually wrote this down. His comments were
'what little I know about this', then he says
'my guess you be' [sic]. That was in direct
testimony. That's not a basis for an expert opinion. An
expert has to have some basis of knowledge. So to say that
the cost of repairs would be more than a million dollars,
he has no basis for that. So even in his own opinion he
doesn't have any basis to support that opinion that the
cost--even if you took the idea that the diminution in
value is what the cost of repairs would be, he has no basis
for making that as an estimate.
"But I don't believe that that's even a fair
way to do it. As he said further, he said, and again,
following on Mr. Bakke's comments, I wrote them down.
He said what would have to happen in a sale situation?,
you'd have to disclose the flooding. What happens then?
The buyer walks away, or you have to discount the value in
order to effectuate the sale. That discount in value is the
diminution in value in my mind.
"What is that, is it a percentage? Is it a dollar
amount? What is it. We have nothing. Mr. Boris offers
nothing to give us what that discount would be. That
discount is the diminution in value. Mr. Boris didn't
do this. So his testimony is not useful to the jury. It
does not help the jury come to a determination of just
"It is Mr. Lenertz's burden of proof to show what
the diminution of value would be, and he has offered
nothing. The failure of proof on the diminution in value
requires the Court to dismiss and to grant judgment in
favor of the City.
"Mr. Bakke, you'll prepare the appropriate order
and order for judgment?
5] On April 3, 2018, the district court entered its order for
judgment. An amended judgment was entered on May 23, 2018,
dismissing Lenertz's inverse condemnation action with
prejudice and awarding the City costs and disbursements of
6] Rule 50(a), N.D.R.Civ.P., governs the district court's
decision whether to grant a motion for judgment as a matter
of law and provides: