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CITY OF NEW ORLEANS                                                      *   NO. 2007-CA-1066
VERSUS                                                                   *
BADINE LAND LIMITED                                                      *
CONSOLIDATED WITH                                                        *   CONSOLIDATED WITH
NORTH PETERS                                                                 NO. 2007-CA-1067
DEVELOPMENT, L.L.C.
VERSUS
CITY OF NEW ORLEANS
CONSOLIDATED WITH                                                            CONSOLIDATED WITH
NORTH PETERS                                                                 NO. 2007-CA-1068
DEVELOPMENT, L.L.C.
VERSUS                                                                       COURT OF APPEAL
CITY OF NEW ORLEANS                                                          FOURTH CIRCUIT
STATE OF LOUISIANA
*
APPEAL FROM
CIVIL DISTRICT COURT, ORLEANS PARISH
NOS. 94-4617, C/W 98-16671, C/W 2000-11079 DIVISION “E-7”
Honorable Madeleine Landrieu, Judge
Judge Dennis R. Bagneris, Sr.
(Court composed of Chief Judge Joan Bernard Armstrong, Judge Dennis R.
Bagneris, Sr., and Judge Max N. Tobias, Jr.)




Penya M. Moses-Fields
City Attorney
Heather M. Valliant
Assistant City Attorney
Evelyn F. Pugh
Chief Deputy City Attorney
Franz L. Zibilich
Deputy City Attorney
Edward Washington III
Deputy City Attorney
1300 Perdido Street
City Hall - Room 5E03
New Orleans, LA   70112
COUNSEL FOR THE CITY OF NEW ORLEANS
James R. Morton
Charles M. Raymond
Cory S. Morton
Donald J. Miester, Jr.
TAGGART MORTON OGDEN STAUB & O'BRIEN, L.L.C.
1100 Poydras Street
2100 Energy Centre
New Orleans, LA   70163-2100
COUNSEL FOR NORTH PETERS DEVELOPMENT, L.L.C.
MAY 21, 2008
AFFIRMED




The Appellant, North Peters Development, L.L.C., appeals the judgment of
the district court dismissing its claims against the City of New Orleans. For the
following reasons, we affirm.
Facts
North  Peters  Development,  L.L.C.,  owns  property  located  at  200  North
Peters  Street  in  New  Orleans.  The  property  is  a  35,655  square  foot  property
bounded by North Peters, Iberville, Bienville and Clay Streets. In 1956 the family
of Vincent Guercio owned and operated a wholesale food company. At that time
there was a warehouse on the property, a section for parking and a small service
station. The structures were later demolished and the premises were used as a
surface parking lot. In 1994 the Guercio family transferred the property to North
Peters Development, L.L.C. In 1997 architect John Williams submitted plans to the
City of New Orleans for a building permit of a retail store. Mr. Williams was hired
by North Peters Development L.L.C.
Badine Land Limited., owned land adjacent to 200 North Peters. In 1994 the
City instituted a lawsuit against Badine over the ownership of certain parcels of
real estate. The lawsuit was settled on March 4, 1999 when the New Orleans City
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Council adopted an ordinance authorizing the mayor to enter into an agreement
with Badine. The agreement revoked the dedication of Clay Street as a public
thoroughfare giving it to Badine. Further, the parties agreed that in return, the City
was to receive four parcels of land claimed to be owned by Badine.   This was
officially done on June 19, 1999 via “Act of Exchange, Revocation of Dedication
and Dedication.” In the Act of Donation, Badine gave North Peters Development,
L.L.C. a twelve-foot wide nonexclusive servitude of passage for deliveries.
Procedural History
North Peters Development L.L.C. sought damages in Civil District Court for
the Parish of Orleans for the City’s inverse condemnation of its property in July
2000. Trial on the matter began on January 8, 2007. On April 10, 2007, the district
court entered a judgment in favor of the City dismissing the suit filed by North
Peters  Development,  L.L.C.  It  is  from  this  judgment  that  North  Peters
Development, L.L.C. timely appeals.
Assignments of Error
North Peters Development,   L.L.C. offers the following two assignments: (1)
the district court erred as a matter of law in finding that North Peters Development,
L.L.C. did not satisfy the second prong of the test in State v. Chambers Inv. Co.,
Inc., 595 So.2d 598 (La. 1992) (discussed infra) and (2) the district court erred as a
matter  of  law  in  neglecting  to  award  North  Peters  Development,  L.L.C.  the
damages caused by the City’s inverse condemnation of its property.   Specifically
North Peters Development,   L.L.C. argues that the City’s revocation of Clay Street
as a public thoroughfare substantially altered access to its property destroying its
ability  to  develop  it  to  its                                                        “highest  and  best”  use.  Further,  North  Peters
Development, L.L.C. avers that the district court erred in neglecting to award it
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North Peters the damages caused by the revocation of Clay Street enabling North
Peters Development, L.L.C. from developing its retail and residential center to the
best capacity.
Standard of Review
The standard of review for the instant matter is manifest error.
The proper standard of review for a Louisiana appellate
court is whether the trial court is manifestly erroneous or
clearly wrong. Rosell v. ESCO, 549 So.2d 840 (La.1989).
While the manifest error standard applies to our review
of facts found below, we are required to examine the
record as well for legal error. Where an error of law
taints the record, we are not bound to affirm the judgment
of the lower court. Id. at 844. Furthermore, when a trial
court makes one or more prejudicial legal errors which
interdict  the  fact-finding  process,  the  manifest  error
standard is no longer applicable, and the appellate court
is obliged to make its own independent, de novo review
of the record if such is complete. Evans v. Lungrin, 97-
0541,  97-0577, p.  7  (La.2/6/98),  708 So.2d  731,  735;
McLean v. Hunter, 495 So.2d 1298, 1303-04 (La.1986).
The Supreme Court stated in Evans:  “Legal errors are
prejudicial when they materially affect the outcome and
deprive a party of substantial rights.” Evans 708 So.2d at
735. However, under Evans, a de novo review should not
be undertaken for every evidentiary exclusion error. De
novo review should be limited to consequential errors,
which  are  those  that  have  prejudiced  or  tainted  the
verdict  rendered.  Wingfield  v.  State  ex.  rel.  Dept.  of
Transportation  and  Development,                                                           2001-2668,   2001-
2669, p. 15 (La.App. 1 Cir. 11/8/02), 835 So.2d 785, 799.
In re Succession of Sporl, 2004-1373, pp 4-5 (La. App. 4/6/05), 900 So.2d
1054, 1058.
Argument
We address both assignments of error together since whether or not the
district  court  erred  in  its  application  of  Chambers  determines  if  North  Peters
Development,  L.L.C.  is  entitled  to  damages  under  the  laws  of  inverse
condemnation.  North  Peters  Development,  L.L.C.  argues  that  when  the  City
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revoked the public dedication of Clay Street, it removed approximately 36% of the
total street access that North Peters previously enjoyed and that such a closure
interferes with its right of access. It further contends that the district court erred in
concluding that North Peters Development, L.L.C.’s plans to build were “highly
speculative.” The Appellants rely on the trial testimony of Dr. Wade R. Ragas who
testified  that  the  best  use  of  the                                                    200  North  Peters  property  was  as  a
retail/residential development.
LSA-Const. Art. I, § 4(B)(1) states:
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. Except as specifically authorized by Article VI,
Section 21 of this Constitution property shall not be taken
or damaged by the state or its political subdivisions: (a)
for predominant use by any private person or entity; or
(b) for transfer of ownership to any private person or
entity.
The Louisiana Constitution, Article I, Section 4 provides for compensation
to a landowner whose property rights are taken or damaged. When a landowner
suffers a taking or damage in the absence of an expropriation proceeding he may
seek compensation through an inverse condemnation action. Constance v. State
Through Dept. of Transp. and Development Office of Hwys., 626 So.2d 1151, 1156
(La. 1993); and Reymond v. State Through Dept. of Highways, 255 La. 425, 447,
231 So.2d 375, 383 (La. 1970). The Louisiana Supreme Court in State, Through
Dept. of Transp. and Development v. Chambers Inv. Co., Inc., 595 So.2d 598 (La.
1992), acknowledged that under the Constitution compensation is required even
though the State has not initiated an expropriation proceeding and physically taken
property from the owner. Id. at 602; also see Reymond, supra. The Chambers court
went  on  to  set  forth  a  three-prong  test  to  assist  in  establishing  whether  a
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constitutional  taking  has  occurred.  The  factors  for  the  court  to  decide  are  as
follows: 1) whether a person’s legal right with respect to a thing or an object has
been affected; 2) whether the property, either a right or a thing, has been taken or
damaged, in a constitutional sense; and 3) whether the taking or damaging was for
a public purpose. Id., 595 So.2d at 603.
North Peters Development, L.L.C. argues that its property was  “taken or
damaged in a constitutional sense” and that the district court erroneously applied
the test set out in Chambers, supra.
Our review of the record revels that the transfer of Clay Street may interfere
with 200 North Peters; however, we cannot conclude that the property was “taken”
or                                                                                           “damaged.”  Further,  we  find  that  the  interference  is  minor  and  cannot  be
measured by the possible future plans of North Peters Development, L.L.C. La.
Civil Code Art. 668 reads:
Although one be not at liberty to make any work by
which  his  neighbor's  buildings  may  be  damaged,  yet
every one has the liberty of doing on his own ground
whatsoever he pleases, although it should occasion some
inconvenience to his neighbor.
Thus he who is not subject to any servitude originating
from a particular agreement in that respect, may raise his
house as high as he pleases, although by such elevation
he should darken the lights of his neighbors's [neighbor's]
house, because this act occasions only an inconvenience,
but not a real damage.
The Appellant obtained a permit to build its retail store in 1994. By 1997 the
permit expired and today, there is no retail establishment and no tenants have been
secured  to  support  the  building  of  such  an  establishment.  It  would  be  mere
speculation if this Court, or the district court, were to conclude that access to the
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phantom establishment was obstructed in such a way that the Appellants are due
damages. The district court noted in its Reasons for Judgment:
North  Peters  did  not  lose  any  actual  property  in  this
transaction.  Its  property  at                                                          200  N.  Peters  retained  the
same boundaries and square footage both before and after
Clay Street was transferred to Badine Land. Thus, no
expropriation took place. However, North Peters alleges
that the transfer of Clay Street prohibited it from moving
forward with its plans to develop the retail center.
…
It is difficult to isolate market forces that may make a
good idea impractical or a mediocre idea a huge success.
What is clear, however, is that the North Peters property
had the same boundaries before and after Badine/City
land swap. Access to the property, while changed, was
not destroyed. Its use as a surface parking lot was not
altered and, in fact, revenue after the land swap increased
due to a newly negotiated lease. The right to develop the
property still exists. The fact that North Peters may have
lost a valuable zoning waiver was unrelated to the land
swap. That “asset” was lost when North Peters failed to
act on its application in a timely manner or failed to
reapply for it.
In a recent Fourth Circuit opinion, the State of Louisiana, Department of
Transportation  and  Development  appealed  the  district  court’s  finding  that  the
appellee, SDS, Inc., was entitled to damages after it filed an inverse condemnation
claim. This case is distinguishable in that the Court recognized that “the completed
project resulted in the loss of previously enjoyed property rights. More specifically,
the property could no longer be accessed by 18-wheeler trucks, and therefore could
not be used for its highest and best use as an industrial warehouse.”1 In SDS, Inc. v.
State Dept. of Transp. and Development,  2007-0406,  (La. App.  4 Cir.  2/13/08)
__So.2d. __, 2008 WL 484025, writ denied, 2008-0592 (La. 5/2/08), __So.2d__, at
trial, expert testimony established that the highest and best use of the property was
that of an industrial warehouse that was no longer able to operate. In the case at
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bar, North Peters Development, L.L.C. was not using its property for the retail
establishment it at one time envisioned building and to date, nothing has been
adversely  affected.  Further,  there  is  no  constitutional                            “taking”  because  North
Peters  Development,  L.L.C  did  not  lose  any  actual  property.  The  property  it
possessed remained within the same boundaries after Clay Street was transferred.
La. Civil Code Art. 667 reads in pertinent part:
Although a proprietor may do with his estate whatever he
pleases, still he cannot make any work on it, which may
deprive his neighbor of the liberty of enjoying his own,
or  which  may  be  the  cause  of  any  damage  to  him.
However, if the work he makes on his estate deprives his
neighbor of enjoyment or causes damage to him, he is
answerable for damages only upon a showing that he
knew or, in the exercise of reasonable care, should have
known  that  his  works  would  cause  damage,  that  the
damage could have been prevented by the exercise of
reasonable  care,  and  that  he  failed  to  exercise  such
reasonable care.
North  Peters  Development,  L.L.C.  is  still  in  the  planning  phase  and  a
servitude is in place when it moves forward with its plans once the plans are
perfected.
Decree
For the reasons stated herein, we affirm the findings of the district court.
AFFIRMED
1 Id page 2
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