AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

The Plaintiff, a hotel developer, began constructing a hotel in Albuquerque when its contractor accidentally ruptured a City-owned waterline on the property, causing flooding, construction delays, and additional costs. The City later removed the waterlines, and the Plaintiff sought damages for lost profits and excess construction costs resulting from the temporary taking of its property (paras 1, 3-4).

Procedural History

• District Court: Found the City liable for inverse condemnation and awarded the Plaintiff damages for lost profits, excess construction costs, and expert witness fees (paras 1, 5-6).
• Primetime Hospitality, Inc. v. City of Albuquerque, 2007-NMCA-129: The Court of Appeals reversed the award of lost profits, holding that they constituted impermissible consequential damages, and remanded the case for a determination of rental value. It also vacated the award for the buttress wall, requiring a reasonableness test, and vacated the expert witness fees (paras 1, 7-9).

Parties' Submissions

• Plaintiff: Argued that lost profits and excess construction costs were direct damages resulting from the City’s temporary taking of its property and should be compensable under inverse condemnation law (paras 5, 7, 12).
• Defendant: Contended that lost profits and excess construction costs were consequential damages and not recoverable in an inverse condemnation action. It also challenged the award of expert witness fees (paras 7, 39).

Legal Issues

• Whether lost profits are recoverable as damages in an inverse condemnation proceeding (para 1).
• Whether excess construction costs, including the cost of a buttress wall, are compensable in an inverse condemnation action (para 1).
• Whether the award of expert witness fees was proper (para 11).

Disposition

• The Supreme Court of New Mexico reversed the Court of Appeals and reinstated the district court’s award of damages for lost profits, excess construction costs, and expert witness fees (paras 2, 45).

Reasons

Per Chávez CJ (Serna, Maes, Bosson, and Daniels JJ. concurring):

• Lost Profits: The Court held that lost profits are recoverable in an inverse condemnation proceeding when they are the best measure of the value of the lost use and enjoyment of the property. The district court’s findings established that the lost profits were direct, non-speculative, and the best evidence of the property’s rental value during the 142-day delay. The Court of Appeals erred in remanding for a rental value determination, as the district court’s award already reflected this measure (paras 2, 12-13, 19, 33-36).

• Excess Construction Costs: The Court affirmed the district court’s award of $153,518.45 for excess construction costs, including the cost of the buttress wall. It found that these costs were directly caused by the City’s taking and were reasonable, as evidenced by the reduction in construction delays and associated losses (paras 37-43).

• Expert Witness Fees: The Court reinstated the district court’s award of expert witness fees, finding that the expert testimony was reasonably necessary to establish the damages awarded (para 44).