Arkansas State Highway Commission v. First Pyramid Life Ins. Co. of America, 80-13

• Decision Date: 23 June 1980
• Docket Number: No. 80-13,80-13
• Citation: Arkansas State Highway Commission v. First Pyramid Life Ins. Co. of America, 602 S.W.2d 609, 269 Ark. 278 (Ark. 1980)
• Parties: ARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. FIRST PYRAMID LIFE INSURANCE COMPANY OF AMERICA, Appellee.
• Court: Arkansas Supreme Court

Page 609

602 S.W.2d 609

269 Ark. 278

ARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. FIRST PYRAMID LIFE INSURANCE COMPANY OF AMERICA, Appellee.

No. 80-13.

Supreme Court of Arkansas.

June 23, 1980.

Rehearing Denied Aug. 25, 1980.

Thomas B. Keys, Kenneth R. Brock, Little Rock, for appellant.

Mitchell, Williams, Gill & Selig by John P. Gill and William L. Owen, Little Rock, for appellee.

FOGLEMAN, Chief Justice.

This is a second appeal from a judgment awarding compensation to appellee First Pyramid Life Insurance Company, for the taking of right-of-way for the "East Belt Freeway" in Pulaski County by appellant Arkansas State Highway Commission. On the first appeal, we reversed the judgment, because testimony was admitted to show that Wesley Adams, a real estate appraiser called by the landowner as a witness, had been employed by the Commission to make an appraisal of the land and because of the exclusion of evidence relevant on the question whether the landowner had, at the time it paid for the land taken, been trying to extricate itself from a transaction which was sick or sham. Arkansas State Highway Com'n v. First Pyramid Life Insurance Co., 265 Ark. 417, 579 S.W.2d 587. On this appeal, appellant relies upon the following points:

I

THE TRIAL COURT ERRED IN ALLOWING CERTAIN TESTIMONY OF THE APPELLEE'S WITNESS, EDWARD G. SMITH, OVER APPELLANT'S OBJECTION.

II

THE TRIAL COURT ERRED IN LIMITING THE CROSS-EXAMINATION OF APPELLEE'S EXPERT WITNESS, JAMES LARRISON.

III

THE TRIAL COURT ERRED IN ITS RULING ON CERTAIN PORTIONS OF WITNESS JACK FARRIS' TESTIMONY.

IV

THE VERDICT OF THE JURY WAS EXCESSIVE AND NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.

V

THE TRIAL COURT ERRED IN NOT GIVING CERTAIN INSTRUCTIONS REQUESTED BY APPELLANT.

VI

THE TRIAL COURT ERRED IN NOT GRANTING A MISTRIAL.

We find no reversible error and affirm.

We will discuss the points stated by appellant separately in the order stated.

I

Edward G. Smith, a consulting engineer, who also testified at the first trial, was called as appellee's first witness. He stated that land development had been a very important part of his engineering experience over the past 25 years and that his office was handling at least 200 projects in various stages of development at the time he testified. He related that he had started in appraisals for flood control reservoirs and that his experience in development of industrial parks has extended over the preceding 25 years. He named several parks, including Galloway Industrial Park, from which the right-of-way for the freeway was taken. The obvious purpose of Smith's testimony was to prove that the highest and best use of the land was for industrial development. He described the location of roads, highways, railroads, industrial plants and other developed property in relation to a tract of some 250 acres in Galloway Industrial Park from which the right-of-way was taken. He testified that he had been employed by William Rector of Rector-Phillips-Morse, a real estate firm, to evaluate this land for an industrial park prior to the time appellee purchased it. He testified, without objection by appellant, that he was asked to evaluate this land for an industrial park in terms of profitability, cost of development, source and cost of utilities and to determine whether it was profitable to develop the land as an industrial park and later to devise a plan for the development of an industrial park. Smith said that the plan had been prepared and that he had discussed it with appellee prior to appellee's purchase of the property. He also testified that he had made an estimate of the cost of developing the property many times. When asked why he had done so, Smith responded that the purpose was to evaluate the development, to see that it is a feasible development and "that it will be profitable to proceed, buy the lands. You don't buy a piece of land until you evaluate the cost and see that it is profitable." Appellant objected to the use of the word profitable on the basis that the witness was not properly qualified to testify as to the profitability of the development. The trial judge overruled the objection, saying that he understood the witness to say that he had been employed to evaluate the land for the purposes of establishing an industrial park, and to see if, in his opinion, it was feasible, and assumed that this was what the witness was talking about. No admonition or limiting or cautionary instruction was requested by appellant.

A landowner is entitled to show every advantage that his property possesses, present and prospective, to have his witnesses state any and every fact concerning the property which he would naturally adduce in order to place it in an advantageous light if he were selling it to a private individual, and to show the availability of this property for any and all purposes for which it is plainly adapted or for which it is likely to have value and induce purchases. Arkansas State Highway Com'n v. Ormond, 247 Ark. 867, 448 S.W.2d 354. In order to do so, it is competent for the landowner to show by a witness, who is an engineer with special knowledge of the special advantages of the lands bearing upon its adaptability or availability for a particular purpose, the facts which show the availability of the particular tract involved for that purpose as an element of value to one who might desire to acquire it for that purpose. Gurdon v. Ft. Smith R. Co. v. Vaught, 97 Ark. 234, 133 S.W. 1019. Every element that can fairly enter into the question of market value and which a business man of ordinary prudence would consider before purchasing the property should be considered by the jury in arriving at the difference between the value of the property before and after the taking or damage to it. Pulaski County v. Horton, 224 Ark. 864, 276 S.W.2d 706. The latitude allowed the parties in bringing out collateral or cumulative facts to support value estimates made by witnesses is left largely to the discretion of the presiding judge. Little Rock Junction Railway v. Woodruff, 49 Ark. 381, 5 S.W. 792, 4 Am.St.Rep. 51. It was proper to allow the introduction of evidence tending to show the highest and best use of the property, independent of, and prior to, testimony as to values of lands taken. Arkansas State Highway Com'n v. Witkowski, 236 Ark. 66, 364 S.W.2d 309; Arkansas State Highway Com'n v. Southern Development Corp., 250 Ark. 1016, 469 S.W.2d 102; Arkansas State Highway Com'n v. Ormond, supra. Evidence is relevant and admissible if it tends to show that the cost of making property available for a use other than that to which it was devoted is consistent with profitability. McCandless v. United States, 298 U.S. 342, 56 S.Ct. 764, 80 L.Ed. 1205 (1936).

Later in his testimony, Smith had been examined about the location of a sewer lift station. In response to a question about how the sewerage was treated, Smith said that he had been told to put the sewerage treatment plant on the property, but that he had told the developers that the plant should be located far off the "site" and not on valuable industrial land, which should not be put to sewerage treatment plant use. That use, he said, is not a valuable use and tends to lower the value of the land around it. Appellant's objection primarily was directed to Smith's relating what he had told someone on the question of location of the plant but concluded with the remark, "If he is going into a lot of valuable land and all this argument business, I don't think it is proper." The trial judge overruled the objection, on the basis that the consulting engineer was saying why he selected the particular location for the plant. The testimony, at most, was addressed to the question of desirability of location of a sewerage treatment plant. Smith never expressed an opinion as to the monetary value of the property and this reference to the reason for the location he specified for a sewerage treatment plant was not improper.

The testimony of Smith was that of one found qualified by knowledge and experience to testify as to specialized knowledge to assist the jury to understand other evidence and to determine the facts in issue and was admissible under Ark.Stat.Ann. § 28-1001, Rule 701 (Repl.1979).

Appellant also contends that there was reversible error in a statement by Smith that there had been prospective purchasers of tracts in the park. The witness had been testifying about the reasons utility lines had not been extended beyond the point they had been located at the time of the taking of the right-of-way and was asked on direct examination if he had anything further to say in that regard. Objection was then made that the witness was starting to talk about potential purchasers in violation of a pretrial order of the court against evidence as to offers for the purchase of real property. After this objection was overruled, appellee's attorney asked, in essence, whether the reason the utilities had not been extended was that there had not been any future development in the area not served and that one would not do that until there is a sale. Smith answered there was more than one prospect to buy and a renewed objection was overruled. Smith then said that there had been more than one prospect to buy large sites that might encompass the rest of the park, or at least the west part of it, in 100-acre tracts, one of whom was from Italy. When appellant commenced to object further, the trial judge ruled that the witness was talking about the nature of developing utilities, not offers to buy. Appellee's attorney then withdrew the question and dropped his pursuit of the matter.

We agree with the trial court that the witness was not violating the pretrial order because he was not talking about offers to buy. He mentioned prospects only and never indicated that there had been an offer to purchase by any of them or the terms of any offer. In none of the cases cited by appellant in...