Arkansas State Highway Com'n v. Johnson, 89-236

• Decision Date: 20 November 1989
• Docket Number: No. 89-236,89-236
• Parties: ARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. William H. JOHNSON, et al., Appellees.
• Court: Arkansas Supreme Court

Page 326

780 S.W.2d 326

300 Ark. 454

ARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. William H. JOHNSON, et al., Appellees.

No. 89-236.

Supreme Court of Arkansas.

Nov. 20, 1989.

Robert L. Wilson, Philip N. Gowen, Charles Johnson, Little Rock, for appellant.

Kent J. Rubens, West Memphis, Robert V. Light, Little Rock, for appellees.

NEWBERN, Justice.

This is an appeal by the Arkansas State Highway Commission of a judgment awarding $600,000 to William H. Johnson and other landowners whose property was condemned by the commission to construct a highway interchange. The landowners cross-appeal the trial court's refusal to award attorneys' fees. The commission contends the court erred in permitting the landowners to introduce the testimony of Mr. Sanson, who was not called as a witness by the commission, that he had been hired by the commission to make an appraisal of the land taken and appraised it at $233,600. We agree it was improper to allow Sanson to testify that he formed his opinion at the request of the commission, and thus the decision must be reversed. Because we reverse on this point, we need not address the commission's argument that a court of appeals decision in an earlier appeal of this case is law of the case. We disagree with the commission's second argument that evidence of the amount it determined to be just compensation for the land taken was erroneously admitted. We address that issue in order to guide the trial court upon retrial, and we conclude the evidence was relevant and admissible.

The landowners contend in their cross-appeal that Ark. Const., art. 2., § 22, requires that they be awarded their attorneys' fees because they are to be "made whole." We do not interpret the Constitution as creating a right to attorneys' fees, and thus we affirm on cross-appeal.

At the conclusion of the first trial of this case, the jury returned a verdict awarding nothing to the landowners. Judgment was entered awarding the commission $233,600 which had been deposited by the commission with the court, and disbursed to the land-owners, as the amount the commission determined to be the value of the land at the time of the taking. The landowners had sought additional damages, which they claimed had been caused by the taking, for injury to surrounding remaining land owned by them. In response, the commission had contended that the remaining land was enhanced by the taking.

The landowners sought to introduce evidence that two commission appraisers had concluded that there was neither injury to nor enhancement of the value of the surrounding land. They also sought, by a motion in limine, to exclude evidence of subsequent sales of the remaining land. The trial court denied the motion in limine and refused to allow the landowners to present evidence of commission appraisers' answers to interrogatories. The landowners' motion for new trial was granted because the judge concluded he had erred in making these evidentiary rulings and in not holding a sufficiently detailed hearing. The order granting a new trial was affirmed by the court of appeals, and the case was retried, resulting in this appeal.

1. Sanson's testimony

Jimmy Sanson is a reviewing appraiser, but at the time of the trial he was a staff appraiser, employed by the commission. He appraised the land to be taken as being worth $233,600. The commission did not call Sanson as a witness but presented the testimony of other appraisers who testified the landowners were not damaged by the taking because of enhancement, caused by the taking, of the value of their remaining lands. There is no doubt, and it is not argued, that a witness such as Sanson can be called to give his opinion by the party who did not originally procure the witness's opinion. The issue here is whether it was error to permit Sanson to reveal that his opinion was originally procured by the commission which chose not to present him as a witness.

In Arkansas Highway Commission v. Phillips, 252 Ark. 206, 478 S.W.2d 27 (1972), this court held, with three justices dissenting, that a landowner was permitted to call as a witness a staff appraiser hired by the commission and identified as such to give an opinion, although he was not called as a witness by the commission. In Arkansas State Highway Commission v. Witkowski, 257 Ark. 659, 519 S.W.2d 743 (1975), it was held the trial court did not err in following the Phillips case but that the issue had been decided by a divided court and would be reconsidered. The opinion noted that a majority of jurisdictions would not agree with the Phillips decision.

In Arkansas State Highway Commission v. First Pyramid Life Ins. Co. of America, 265 Ark. 417, 579 S.W.2d 587 (1979), the Phillips case was, although not mentioned by name, effectively overruled. It was held, citing the language of the Witkowski decision and the cases cited there, that it was prejudicial error to allow a party to introduce into evidence the original employment of an expert witness over the objection of the party who originally employed the expert. While the only reason given in the First Pyramid decision was that the original employment of the expert was not "pertinent" to the issue of valuation, the other reasons can be found in Justice George Rose Smith's dissenting opinion in the Phillips case. Justice Smith's opinion began as follows:

I would reverse this judgment. In simple fairness a party ought not to be permitted to show, as the appellees did in the trial court, that his adversary has failed to call as a witness an expert whom his adversary employed merely for the purpose of obtaining an opinion. If such testimony has any effect at all, other than its intended purpose to arouse an attitude of passion and prejudice in the jury room, that effect is completely outweighed by the reasons of policy for not admitting such proof and by the weight of authority elsewhere.

The opinion then pointed out, (1) that such testimony is of no direct benefit to the jury in reaching its decision, (2) that there, as here, there was no reason to suspect wrongdoing by the commission, (3) it is unfair to put the commission in the position of having to explain its action in not calling the witness, and (4) the better reasoned cases do not permit it.

The landowners argue that the Witkowski and First Pyramid cases are distinguishable or should be reexamined and overruled. With respect to the argument that the cases are distinguishable, no arguments are made, but the landowners refer to the fact that the trial judge distinguished them. Looking to the trial court's order we find his distinction to have been on the basis that "the appraisals" of the commission were used in this case in making representations to third parties, primarily the federal government in obtaining federal funding for the highway project, and that was not so in the Witkowski and First Pyramid cases.

It was not "the appraisals" that were used to get federal money for the project. It was, rather, the commission's "statement of just compensation" which is required by the federal guidelines stated in the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C.A. §§ 4651 through 4655. The statement of "just compensation" required by § 4651 to be made by the condemning authority to the landowner is clearly a conclusion reached by the agency which shall be no less than "the agency's approved appraisal of the fair market value of such property." The two are obviously separate. The conclusory statement of "just compensation" is like the statement of "just compensation" Ark.Code Ann. § 27-67-312 (1987) requires to be annexed to a declaration of taking made by a condemning authority.

Mr. Sanson's appraisal was in the amount of $233,600. That was also the amount stated in the statement of just compensation in this case. The fact that the amount of Sanson's appraisal is the same as the amount of the just compensation statement makes it somewhat difficult in this case to perceive that the two are separate, but they are. Sanson testified that the commission's procedure in establishing the amount of just compensation for land to be taken begins with an appraisal, such as the one he made, by a staff appraiser. That appraisal is then reviewed by a reviewing appraiser. If the reviewing appraiser agrees with the staff appraiser's appraisal, "as of that point, it becomes the official position of the Arkansas State Highway Department that this is the amount of just compensation that the property owners are entitled to."

The record includes a deposition by Paul Broyles, Chief of the Right-of-Way Division, Arkansas Highway Department. Mr. Broyles stated the procedure used by the department and noted that an appraisal by a staff appraiser would not necessarily become the department's determination of just compensation to be used for negotiations with the landowner or in obtaining federal funding. It first must be approved by the reviewing appraiser, after which it "would normally be sent to the Acquisition Section and utilized in negotiations with the landowner and in application for federal funds...."

While the issue of the admissibility of the statement of just compensation which we address in the next segment of this opinion was not raised in the Witkowski and First Pyramid cases, the issue of the admissibility of the original employment of the appraiser was, and it is the same issue raised here. With respect to that issue, we cannot distinguish those cases from this one.

In asking us to reconsider the Witkowski and First Pyramid cases the landowners cite Levitsky v. Prince George's County, 50 Md.App. 484, 439 A.2d 600 (1982) and Board of Education v. Barton, 617 P.2d 347 (Utah 1982), both of which are clearly contrary to our cases. The Levitsky case recognizes the split of authority on the question of revealing the expert's original employment and notes that the Maryland Court of Appeals has...