86. Valuation
 
    1. Evidence of profits from a business conducted on the property is not admissible.  Dep't. of Highways v. Campbell, 80 Nev. 23, 33, 388 P.2d 733 (1964) (#36)
 
    2. Valuation/Actual Use: "A landowner is entitled to compensation for the highest and best use to which his property may be put, and is not limited by the use actually made of it."  Andrews v. Kingsbury Gen. Improvement, 84 Nev. 88, 90, 436 P.2d 813 (1968) (#41)
 
    3. Valuation/Appeal: Valuation of land taken in eminent domain, supported by substantial evidence, will not be disturbed on appeal.  Dep't of Hwys. v. Wells Cargo, Inc., 82 Nev. 82, 85, 411 P.2d 120 (1966) (#37)
 
    4. Valuation/Benefits: When land is condemned for a railroad after its original construction, the owner is entitled to the actual market value of the property at the time of the taking, without deduction for any appreciation in value caused by the previous location and construction of the road. Virginia and Truckee Railroad Company v. Lovejoy, 8 Nev. 100 (1872) (#5)
 
    5. Valuation/Capitalization: It is proper to capitalize the property's net income (value of an asset capable of producing the known income of the property).  State v. Shaddock, 75 Nev. 392, 399, 344 P.2d 191 (1959) (#29)
 
    6. Valuation/Capitalization: It is proper to use testimony of capitalization of income.  Dep't. of Highways v. Campbell, 80 Nev. 23, 28, 388 P.2d 733 (1964) (#36)
 
    7. Valuation/Capitalization: A certified public accountant may give his opinion on the value of an asset producing the net income realized from the subject property when capitalized at various rates, but may not express his opinion on the market value of the property without foundation testimony establishing such expertise.  Eikelberger v. State ex rel. Dep't Hwys., 83 Nev. 306, 308-310, 429 P.2d 555 (1967) (#39)
 
    8. Valuation/Capitalization: Absent foundation information about the relevant capitalization rate, a capitalization witness should not be permitted to express an opinion on market value by use of the income approach to value. Id. at 309 (#39)
 
    9. Valuation/Capitalization: "Market value is ascertained by the income approach by the mathematical process of dividing the estimated annual income from the highest use of the property by a capitalization rate appropriate to the type of investment risk involved. A slight variation in the capitalization rate profoundly affects the value to be attributed to the property. Accordingly, unless the components of the formula, the annual income and the capitalization rate, are determined with reasonable certainty, the resulting value is speculative, and of little use to the trier of the fact." Id. at 309 (#39)
 
    10. Valuation/Capitalization: "We have doubt about the propriety of the testimony allowed in State v. Shaddock, supra, (#29) since the appropriate capitalization rate to be used in the income approach to market value depends upon the nature of the investment risk. It seems to us that some evidence on that point may be necessary before a witness may capitalize income. However, that question is not presented for decision here." Id. at 308, n.1 (#39)
 
    11. Valuation/Date: "In formal condemnation proceedings, NRS 37.120(1)(b) places the burden on the government to move the case to trial within two years after the action is commenced. If it does not, and the delay is not primarily caused by the actions of the landowner, the government must account for the increased value of the property." This rule applies equally to claims for inverse condemnation! (391)  County of Clark v. Alper, 100 Nev. 382, 391, 685 P.2d 943 (1984) (#68)
 
    12. Valuation/Date: "We hold that the county cannot delay formal eminent domain proceedings on the expectation that the landowner will file an action for inverse condemnation and thereby avoid its obligation to bring the matter to trial within two years." Id. at 391 (#68)
 
    13. Valuation/Discretion: The trial court has discretion to allow testimony of comparable acreage, close and remote, conditions of demand, financial conditions, availability of capital, slack purchase periods, bank loans, etc.  Clark Co. School Dist. v. Mueller, 76 Nev. 11, 17-18, 348 P.2d 164 (1960) (#30)
 
    14. Valuation/Discretion: The court has discretion to allow evidence of sales from 3 years earlier when the market was different. Id. at 19 (#30)
 
    15. Valuation/Factors: "Every factor which affects the value of the property and which would influence a prudent purchaser should be considered." (Tacchino, #50)  County of Clark v. Alper, 100 Nev. 382, 685 P.2d 943 (1984) (#68)
 
    16. Valuation/General: Just compensation equals actual value in money "to be ascertained by its location, the price at which similar land may be or has been sold in its vicinity, or what it would itself sell at...."  The Virginia and Truckee Railroad Company v. Elliott, 5 Nev. 358, 367 (1870) (#4)
 
    17. Valuation/General: "(G)enerally everything which actually enhances its present worth should be taken into consideration; not, however, the fact that it is necessary or indispensable for the purposes for which it is claimed by the public." Id. at 367 (#4)
 
    18. Valuation/General: "We have previously interpreted 'just compensation' to require that property be valued in light of its highest and best use." quoting Sorenson, #54  Skyland Water v. Tahoe Douglas Dist., 95 Nev. 289, 291, 593 P.2d 1066 (1979) (#60)
 
    19. Valuation/General: "Generally, the value of property taken in condemnation proceedings is its market value, defined as 'the highest price estimated in terms of money which the land would bring if exposed for sale in the open market, with reasonable time allowed in which to find a purchaser, buying with knowledge of all the uses and purposes to which it was adopted (sic) and for which it was capable.'"  City of Elko v. Zillich, 100 Nev. 366, 370, 683 P.2d 5 (1984) (#67)
 
    20. Valuation/General: "The term 'just compensation' requires that the market value of the property should be determined by reference to the highest and best use for which the land is available and for which it is plainly adaptable." (Skyland, #41; Sorenson, #35)  County of Clark v. Alper, 100 Nev. 382, 387, 685 P.2d 943 (1984) (#68)
 
    21. Valuation/General: "It is often appropriate to determine the fair market value of property which has no relevant market by any method of valuation that is just and equitable."  City of Sparks v. Armstrong, 103 Nev. 619, 621-622, 748 P.2d 7 (1987) (#74)
 
    22. Valuation/General: "We have clearly defined the term 'fair market value' that is to be used in condemnation cases." "Generally the value of property taken in condemnation proceedings is its market value, defined as 'the highest price estimated in terms of money which the land would bring if exposed for sale on the open market, with reasonable time allowed in which to find a purchaser, buying with knowledge of all the uses and purposes to which it was adopted (sic) and for which it was capable.'" [quoting Zillich, #67]  Wheeler v. State, Dep't Transportation, 105 Nev. 217, 218, 773 P.2d 728 (1989) (#77)
 
    23. Valuation/General: An appraiser may testify as to "most probable price" where he states that this is equivalent to "the highest price". Id. at 218 (#77)

    24. Valuation/Highest Price:  Change in definition of "value" in NRS 37.009(6), from "highest price" to "most probable price" is constitutional. County of Clark v. Buckwalter, 115 Nev.Adv.Op. 11 (1999).

     "(T)o the extent that NRS 37.009(6) contradicts Wheeler, we explicitly overrule Wheeler on this issue." Id. at 3. "We conclude that these two terms have different meanings, and that the district court committed reversible error by giving the "highest price" instruction because it likely affected the jury's verdict. Id. at 4. The court "will presume a substantial change in the law when a statute is amended to change a definition previously used." Id. at 5. "In the case at bar, the landowners misused and abused the "highest price" instruction in their closing argument to justify the five million-dollar difference in value." Id. at 6. "Ironically, the landowners' closing argument exemplifies the exact type of misuse and abuse of the Wheeler instruction that the legislature was trying to eradicate by changing the law." Id. at 6-7.

    Maupin concurring: Statute is constitutional, but does not repeal Wheeler, since the terms are synonomous. Id. at 7-8. "I take this position because the industry, that is persons in the business of appraising real estate, do not seem to regard the terms "highest price" and "most probable price" as comprising anything other than a distinction without a difference." Id. at 8. "The problem at trial was created by the failure to instruct on the statute and, later, the forensic approach taken during closing argument." Id. "Thus, it was the instruction and the arguments made in connection with the instrtuction that form the need for a second trial below." Id. at 9. "(T)he appraisal industry does not draw such a distinction." Id. "If juries are instructed as I suggest, and if jury arguments are kept consistent with the instructions, just compensation to all parties will be realized. For example, on re-trial, the county will certainly be free to argue that the most probable price for the subject property based upon its highest and best use should not include speculative casino development." Id
 
    25. Valuation/Illusory: "(T)he valuation of property is an illusory matter for which there exists no absolute mathematical formula." "Since the jury awards fall within the range of the expert testimony received, we shall not disturb them."  State ex rel. Dep't Hwys. v. Tacchino, 92 Nev. 286, 549 P.2d 755 (1976) (#52)
 
    26. Valuation/Intent: The owners are not required to offer evidence of their intention to subdivide for single family residence use.  Andrews v. Kingsbury Gen. Improvement, 84 Nev. 88, 90, 436 P.2d 813 (1968) (#41)
 
    27. Valuation/Intent: "(O)ne may not be deprived of his property without just compensation merely because he has chosen to let it lie dormant or perhaps was unaware of the value or the existence of the minerals."  Milchem Inc. v. District Court, 84 Nev. 541, 548, 445 P.2d 148 (1968) (#43)
 
    28. Valuation/Intent: "It has been held that, when there is no evidence in the record that the land in question is suitable or naturally adapted for use, or uses, other than that to which it was applied at the time of the taking, an owner may not present evidence that he intended to put property to some specific use which would have produced a certain amount of income and that as a result of the condemnation, he has been damaged in the amount of the prospective income he allegedly has been deprived; and, under such circumstances, that a jury may not consider, as a basis for awarding damages, the fact that the owner has been prohibited from putting his property to some intended use by reason of its condemnation. See, e.g., Tibbles, 123 N.E.2d 170 (Ind. 1954)."  State ex rel. Dep't Hwys. v. Nev. Aggregates, 92 Nev. 370, 372-373, 551 P.2d 1095 (1976) (#53)
 
    Quite understandably, in the absence of such evidence, such damages are considered too speculative to provide a reasonable guide for the ascertainment of present fair market value. Empire Dist. Electric Co. v. Johnston, 268 S.W.2d 78 (Mo.App. 1954) Cf. Tacchino v. State ex rel. Dep't of Hwys., 89 Nev. 150, 508 P.2d 1212 (1975) (#50)." Id. at 372-373 (#53)
 
    29. Valuation/Intent: "Prior to the commencement of these proceedings, Nevada Aggregates implemented this plan and by August of 1972 (when the complaint was filed) the company was fully engaged in the task of extracting the minerals from the first designated area." Id. at 373 (#53)
 
    30. "There is a significant distinction between the cases referred to by appellant which condemn the practice of considering damages resulting from frustration of intended use and the instant case. ...we are not here concerned with a plan or intended use which had not yet been developed to fruition. Here, the plan was in effect at the time of the condemnation and income was being realized as a result of it...". Id. at 373-374 (#53)
 
    31. "The plan was not a fantasy of the landowner which had not been reduced to tangible returns but was a reality. There was no need to speculate as to the amount of income the plan would produce. Under such circumstances, the rationale behind the rule prohibiting consideration of intended use obviously does not apply." cf. United States ex rel. Tennessee Valley Authority v. Powelson, 138 F.2d 343 (4th Cir. 1943); State v. Goodwyn, 133 So.2d 375 (Ala. 1961); In Re Ford, 263 N.Y.S.2d 831 (Sup.Ct.App.Div. 1965). Id. at 374. (#53)
 
    32. Valuation/Intent (Dissent): "Evidence of what the owner might plan to do with his property is not to be considered by the jury as enhancing its market value."  Tacchino v. State ex rel. Dep't Hwys., 89 Nev. 150, 508 P.2d 1212 (1973) (#50)
 
    33. Valuation/Later Comparable Sales: "Although...'the best evidence...is found in sales of comparable property within a reasonable time before the taking,'" the trial court may properly admit testimony of sales subsequent to the service of summons where the figures are adjusted for differences in the date of sale - affects the weight of the evidence, not its admissibility.  City of Elko v. Zillich, 100 Nev. 366, 369-370, 683 P.2d 5 (1984) (#67)
 
    34. Valuation/Legal Restrictions: Legal restrictions on use may be properly considered in determining value.  Skyland Water v. Tahoe Douglas Dist., 95 Nev. 289, 291, 593 P.2d 1066 (1979) (#60)
 
    35. Valuation/Minerals: "In a condemnation action the existence of mineral deposits in or on land is an element to be considered in determining the land's value. Nevertheless, where the property is not taken for the purpose of obtaining the minerals or as an ongoing business it is improper to appraise the mineral deposits separately and add the mineral value to the value of the land." Testimony should be restricted to the effect the presence of the minerals would have on market value.  State, Dep't of Transp. v. Las Vegas Bldg., 104 Nev. 479, 482, 761 P.2d 843 (1988) (#75)
 
    36. Valuation/Precondemnation Activities: Depreciation caused by the prospective taking once the government has announced its commitment to the project is not admissible evidence.  County of Clark v. Alper, 100 Nev. 382, 389, 685 P.2d 943 (1984) (#68)
 
    37. Valuation/Precondemnation Activities: "It would be manifestly unjust to permit a public authority to depreciate property values by a threat of a construction of a government project and then to take advantage of this depression in price when the property is eventually condemned." Id. at 389. Codified in NRS 342.230(3). "The property is to be valued as if the government project that resulted in the taking was neither contemplated nor carried out." Id. at 390 (#68)
 
    38. Valuation/Prospective Use: Evidence that a prospective buyer indicated interest in building specific enterprises, but became disenchanted upon learning of contemplated condemnation, is admissible to show a change in possible use of the property.  Dep't of Hwys. v. Haapanen, 84 Nev. 722, 734, 448 P.2d 703 (1968) (#45)
 
    39. Valuation/Prudent Businessman: "'(E)lements that can fairly enter into the question of value and which an ordinarily prudent business man would consider before forming judgment in making a purchase'" are to be considered. Clark Co. School Dist. v. Mueller, 76 Nev. 11, 19, 348 P.2d 164 (1960) (#30)
 
    40. Valuation/Prudent Businessman: "In determining this value, the finder of fact may consider such factors as would be considered by a prudent businessperson before purchasing such property." [quoting Shaddock, #29]  Skyland Water v. Tahoe Douglas Dist., 95 Nev. 289, 291, 593 P.2d 1066 (1979) (#60)
 
    41. Valuation/Prudent Businessman: "The court and jury may consider 'other elements that can fairly enter into the question of value and which an ordinarily prudent businessman would consider before forming judgment in making a purchase.'" [quoting Tacchino, #50]  City of Elko v. Zillich, 100 Nev. 366, 370, 683 P.2d 5 (1984) (#67)
 
    42. Valuation/Rent: It is proper to consider the actual rent the property produces.  State v. Shaddock, 75 Nev. 392, 398, 344 P.2d 191 (1959) (#29)
 
    43. Valuation/Subdivision: Valuation need not be based on what a willing purchaser will pay for the whole at the time of the taking, where the land is undeveloped and subdivision is imaginary or hypothetical, despite cases to the contrary in other jurisdictions.  Tacchino v. State ex rel. Dep't Hwys., 89 Nev. 150, 153, 508 P.2d 1212 (1973) (#50)
 
    44. Valuation/Subdivision: The possibility of subdivision is a factor a well-informed buyer would use in arriving at a price he would pay for the land. Id. at 153 (#50)
 
    45. Valuation/Subdivision: "The potential income to be derived from the sale of subdivided lots, properly discounted to show present value, is a factor and relevant to a determination of market value, since sophisticated investors make decisions on the basis of income capitalization." Id. at 154 (#50)
 
    46. Valuation/Subdivision (Dissent): Industrial property is not conducive to being subdivided into equal lots because of the varying requirements of prospective industrial purchasers, as admitted in the evidence. (#50)
 
    47. Valuation/Subdivision (Dissent): "[W]here the entire parcel of land is taken as a unit... the proper measure of compensation is what a willing purchaser would be willing to pay for the parcel at the time of the taking, in its then condition and not what a number of purchasers might, in the future, be induced to pay for the land as divided into lots." Id. at 155 (#50)
    [Editor's note: This is not inconsistent with the majority holding. The possibility of subdivision is a proper element, but it would be improper to suggest that the value of the land is the value of the accumulated subdivisions, sold "retail". The dissenters noted there was no dispute below as to adaptability of the land to industrial subdivision, and the evidence was merely cumulative "and could create substantial danger of undue prejudice."]
 
    48. Valuation/Unit Price: "Uniformly, the courts have condemned the price-unit formula as a basis for determining fair market value of condemned property."  State ex rel. Dep't Hwys. v. Nev. Aggregates, 92 Nev. 370, 374, 551 P.2d 1095 (1976) (#53)
 
    49. Valuation/Unit Price: "It is recognized that a fair estimation of value cannot be reached simply by multiplying the unit market price of a given mineral by the estimated quantity thereof contained in the condemned land. Many other factors need be considered before fair value can be attached to the mineral bearing property. But, where the product of the price-unit formula is considered only as one of such factors, no prejudicial error results." Id. at 375 (#53)
 
    50. Valuation/Utilities: Valuing a utility is difficult since there is no established market, especially where it is losing money.  Stagecoach Util. v. Stagecoach Gen. Imp. Dist., 102 Nev. 363, 364, 724 P.2d 205 (1986) (#72)
 
    51. Valuation/Utilities: Although normally we determine the value of the property to the condemnee, not the condemnor, where a utility has been relieved of the burden of an unprofitable water system by condemnation, the court should look to the value that the utility has to the condemnor to arrive at a damage amount. Id. at 364. Accordingly, compensation "lies between an amount equal to the salvage value of the water system and an amount equivalent to the reproduction cost of the water system minus depreciation." Id. at 365 Plus interest from date of taking. Id. 366 (#72)
 
    52. Valuation/Zoning: Evidence that the appropriate authority would probably grant a variance if application were made is relevant to severance damage, if offered through a competent witness. Andrews v. Kingsbury Gen. Improvement, 84 Nev. 88, 90, 436 P.2d 813 (1968) (#41)
 
    53. Valuation/Zoning: The trial court erred in relying on present zoning as multiple-residential in determining highest and best use, when "(i)t is clear from the record that the highest and best use of the property is industrial...", as noted in the Las Vegas Master Plan.  Sorenson v. State ex rel. Dep't Hwys., 92 Nev. 445, 446-447, 552 P.2d 487 (1976) (#54)
 
    [Gunderson disqualified himself; no reason apparent here why the court did not defer to the findings of the trial judge. No issue of law involved, only of fact, and substantial evidence in the record. Substantial problem here as to effect of master plans, but no analysis. (c.g.)] (#54)
 
    54. Valuation/Zoning: A transferable grandfathered right to use a parcel in variance with zoning is an element which would be considered by a prospective purchaser and is admissible.  City of Elko v. Zillich, 100 Nev. 366, 370-371, 683 P.2d 5 (1984) (#67)
 
    55. Valuation/Zoning: "As a restriction on land use, an existing zoning ordinance is generally regarded as a proper matter for the jury's consideration."  County of Clark v. Alper, 100 Nev. 382, 387, 685 P.2d 943 (1984) (#68)
 
    56. Valuation/Zoning: "Ordinarily, zoning restrictions permitting a viable economic use of the property may be considered for valuation purposes." Id. at 389 (#68)
 
    57. Valuation/Zoning: "(D)ue consideration should be given to those zoning ordinances that would be taken into account by a prudent and willing buyer," but a reasonable possibility of obtaining a zoning change may also be considered. Id. at 390 n. 6 (#68)

    58. "Fair market value is generally defined as the price which a purchaser, willing but not obliged to buy, would pay an owner willing but not obliged to sell, taking into consideration all the uses to which the property is adapted and might in reason be applied." Unruh v. Streight, 96 Nev. 684, 686, 615 P.2d 247 (1980). [creditor's deficiency judgment case, not eminent domain]

    59. When billboards "cannot be relocated to comparable, income-generating sites" within the market area, the bonus value approach to value does not sufficiently compensate the advertising companies for their leasehold interests, and the income capitalization methodology should be used. Nat'l Adv. Co. v. State, Dep't of Transp., 116 Nev. 107, 113, 993 P.2d 62 (2000).

    60. "As noted by the district court, the bonus value approach is based on the assumption that the Advertising Companies may keep the benefit of their bargain with the Damontes if they can relocate their billboards under a comparable lease at market value to another comparable site. The evidence in this case, however, clearly establishes that these billboards were in valuable, unique locations, and that the billboards could not be relocated to a comparable site within the market area." (Id. at 7)

    61. "If the billboards cannot be relocated to a comparable site, as is the case here, then the state must compensate the billboard owners for the valuable interests taken, that is, the value of their leasehold interests, taking into account the irreplaceable, lost rental income." (Id. at 7, n. 8)

    62. "In order to determine the value of the leasehold interests...the advertising rental income must be considered under the income capitalization approach, which adjusts the anticipated net income to present value through the capitalization process." (Id. at 7, n. 7)

    63.  "We hold that the eminent domain statutes codified the undivided-fee rule, which requires the court to first determine the value of the property as a whole, and in a subsequent hearing, to apportion the award among the various interests." County of Clark v. Sun State Properties, 119 Nev. 329, 337, 72 P.2d 954 (2003)

    64.  "The undivided-fee rule provides that condemned property is first valued as though it was unencumbered, and in a subsequent hearing, the total award is apportioned among the various interests. ... Under the undivided-fee rule, the condemnor has no interest in the apportionment hearing because it has met its obligation when it pays the court the total award. Furthermore, the undivided-fee fule provides that 'the division of a fee into separate interests cannot increase the amount of compensation that the condemnor has to pay for the taking of the fee.'" (Id. at pp. 9-10) "We decline to follow the Lynbar, Inc. decision and its reasoning." (Id. at 336)

    65. "The landowner is entitled to just compensation for the government's taking of private property [fn to Nev. Const. art. 1, sec. 8] and has the burden of establishing the value of land so taken. [fn to State v. Pinson, 66 Nev. 227, 237-238, 207 P.2d 1105, 1110(1949)] Just compensation is determined by the property's market value 'by reference to the highest and best use for which the land is available and for which it is plainly adaptable.' [fn. to County of Clark v. Alper, 100 Nev. 382, 386-87, 685 P.2d 943, 946 (1984)] However, such use must be reasonably probable. [fn to County of Clark v. Buckwalter, 115 Nev. 58, 63, 974 P.2d 1162, 1165 (1999)] In general, the trier of fact may consider zoning restrictions permitting a viable economic use of the property in determining the property's value. [fn to Alper, 100 Nev. at 389, 685 P.2d at 948] In fact, the district court should give 'due consideration...to those zoning ordinances that would be taken into account by a prudent and willing buyer. [fn: Id. at 390, 685 P.2d at 948] City of Las Vegas v. Bustos, 119 Nev.360, 362, 75 P.3d 351 (2003)
[Ed: City argued that it was required to defer to the general or master plan and that the district court could not reasonably conclude that the city would grant a zoning change in noncompliance with its master plan. The city's own planning supervisor testified that the zoning change would require an amendment to the master plan, but that spot zoning is "fairly common" and that the city council frequently proceeds contrarily. Court held that "the district court's findings of fact will not be disturbed on appeal if they are supported by substantial evidence" and that the district court "determined that a reasonable and prudent buyer would conclude that he or she could likely obtain a zoning change, given the character of the neighborhood, the high volume of traffic on Alta Drive, and the surrounding properties." The district court likely didn't appreciate hearing the city argue for rare adherence to its master plan. This case doesn't say anything new, but does at least keep the condemnor from hiding behind its master plan and is instructive for the practitioner.]

    66. "The trier of fact may consider the effect of future rezoning or variances on the highest and best use of the condemned property when determining its value." City of Las Vegas v. Bustos, 119 Nev. 360, 362, 75 P.3d 351 (2003)