Burks v. Mississippi Transp. Com'n

• Decision Date: 08 January 2008
• Docket Number: No. 2006-SA-01354-COA.,2006-SA-01354-COA.
• Citation: 990 So.2d 200
• Parties: Bonnie Carter BURKS, Appellant v. MISSISSIPPI TRANSPORTATION COMMISSION, Appellee.
• Court: Mississippi Court of Appeals

990 So.2d 200

Bonnie Carter BURKS, Appellant v. MISSISSIPPI TRANSPORTATION COMMISSION, Appellee.

No. 2006-SA-01354-COA.

Court of Appeals of Mississippi.

January 8, 2008.

Rehearing Denied May 27, 2008.

Certiorari Denied September 11, 2008.

John G. Corlew, Jackson, Katherine A. Smith, Megan Marthine Barber Conner, Jackson, attorneys for appellant.

James T. Metz, Joshua Daniel Freeman, attorneys for appellee.

Before MYERS, P.J., GRIFFIS and CARLTON, JJ.

CARLTON, J., for the Court.

¶ 1. This case comes before the Court from the Special Court of Eminent Domain, Winston County, Mississippi. On January 20, 2000, the Mississippi Transportation Commission (the Commission) filed a complaint to condemn 1.24 acres of land owned by Bonnie Burks in order to widen Highway 25 from two lanes to four. At the conclusion of the trial, Burks was awarded $132,500 as due compensation. Burks appeals. We find error and reverse and remand for a new trial.

FACTS

¶ 2. Prior to the taking at issue, Burks owned 3.34 acres of land situated on Highway 25 in Winston County. Burks lived on the land and for fourteen years operated a convenience store, MawMaw's Kountry Korner. On January 20, 2000, the Mississippi Transportation Commission filed an application to condemn 1.24 acres of Burks's property in order to widen Highway 25 from two lanes to four. The property was taken pursuant to the "quick take" provisions of Mississippi Code Annotated sections 11-27-81 to 11-27-91 (Rev. 2004).

¶ 3. Of the 1.24 acres taken were a gas station/convenience store, a covered porch, and a gravel parking lot with two driveways.¹ The remaining 2.1 acres contained Burks's home, a covered carport, and some sheds. Prior to the taking, Burks's home sat 250 feet from the edge of the pavement on Highway 25. After the take, her house sat 162 feet from the pavement and approximately 100 feet from the right of way. Also, as a result of the taking, sixty-six pine trees, which acted as a buffer zone between Burks's home and the highway, were destroyed.

¶ 4. A jury trial was held to determine the amount of compensation due to Burks for the taking. At trial, the State and Burks offered expert testimony to aid the jury in its determination of just compensation.

¶ 5. The Commission's expert appraiser, Edmond Eslava, testified that the highest and best use of the property before the taking was a combination of highway commercial and residential. He was of the opinion that the highest and best use of the land after the taking was residential with "some potential for highway commercial." Utilizing the cost approach, Eslava valued the property at $161,769 before the taking and at $69,313 after the taking, the difference equaling $92,456 due Burks as just compensation.²

¶ 6. To determine the before value of $161,769, Eslava estimated the value of the 3.4 acres as if vacant or unimproved, and then added the depreciated value of the improvements. To estimate the value of the land, Eslava used four sales of vacant lots in Winston County which he deemed to be comparable to Burks's property. From these sales, Eslava reached the opinion that $4,000 per acre was an appropriate estimate for Burks's land, rendering a value of $13,360, or 3.4 acres at $4,000 per acre. Eslava then added the depreciated value of the improvements, which he estimated to be $148,409.³ The sum of the land as if vacant ($13,360) and the depreciated value of the improvements ($148,409) equals the before value of $161,769.

¶ 7. To determine the after value of $69,313, Eslava estimated the value of the remaining 2.1 acres to be $8,400 (or 2.1 acres at $4,000), and added the value of Burks's home ($60,913). The sum of these two figures equals the after value of $69,313. Eslava found that the project did not adversely impact the value of the remaining 2.1 acres and Burks's home. The difference between Eslava's before value estimate ($161,769) and his after value estimate ($69,313) equals his estimate of $92,456 as just compensation due to Burks for the taking.

¶ 8. Burks's expert appraiser, Robert L. Crook, testified that the highest and best use of the property before the taking was for "highway and rural residence use." Crook testified that the highest and best use of the property after the taking was still for residential use. He was of the opinion that the increased proximity of the Burks's home to the highway made the property less desirable. Crook utilized the income approach, the sales comparison approach, and the cost approach to estimate the compensation due to Burks for the taking. Crook reconciled the before values under each respective approach and arrived at a before value of $400,000.⁴ Crook determined the after value of the property to be $50,000. Accordingly, Crook determined that the total compensation due to Burks was $350,000.

¶ 9. At the conclusion of the trial, the jury returned a verdict of $150,000.⁵ Burks filed a motion for a new trial, which was denied by the trial court. After her motion for new trial was denied, Burks timely appealed to this Court. On appeal, Burks argues that the Commission failed to meet its burden of proof in establishing the fair market value of her property by (1) using comparable sales which were not, in fact, comparable to her property, and (2) failing to address damages to the remainder of her property. Finding the first issue dispositive, we do not address the second.

STANDARD OF REVIEW

¶ 10. The denial of a motion for a new trial is reviewed for abuse of discretion. Miss. Transp. Comm'n v. Highland Dev. LLC., 836 So.2d 731, 734(¶ 10) (Miss. 2002). "[I]n eminent domain cases, we must be satisfied that the award was not so excessive as to evince bias, passion, or prejudice and that it is supported by competent facts, not conjecture, supposition, or mere possibilities." Id. (citing Miss. State Highway Comm'n v. Viverette, 529 So.2d 896, 900 (Miss.1988)).

DISCUSSION

1. Whether the Commission failed to present competent evidence to establish fair market value.

¶ 11. Burks argues that the Commission did not present competent evidence of fair market value of Burks's property. She asserts that the Commission's appraiser, Eslava, valued her property using comparable sales which were not, in fact, comparable to her property. Burks also argues that Eslava incorrectly mixed the cost approach with the sales comparison approach.

¶ 12. In eminent domain cases, the condemning authority bears the burden of presenting competent evidence to establish the fair market value of the condemned property. Williamson v. Lowndes County, 723 So.2d 1231, 1232(¶ 3) (Miss.Ct.App.1998) (citing Ellis v. Miss. State Highway Comm'n, 487 So.2d 1339, 1342 (Miss.1986)). Fair market value is established by "careful consideration of not just one but three separate and distinct approaches to value; the income approach, the cost approach and the market data or sales comparison approach." Crocker v. Miss. State Highway Comm'n, 534 So.2d 549, 553 (Miss.1988) (citations omitted); see also Rebelwood, Ltd. v. Hinds County, 544 So.2d 1356, 1360 (Miss.1989) (an estimate of fair market value "is the product of a reconciliation of the indications yielded by the three approaches").

A. Mixing of Approaches

¶ 13. In estimating the fair market value of Burks's property, Eslava relied on the cost approach, and incorporated the sales comparison approach to arrive at a value for land as though vacant. Burks asserts that Eslava impermissibly mixed the cost approach with the sales comparison approach.

¶ 14. Burks cites Potters II v. State Highway Comm'n, 608 So.2d 1227, 1231 (Miss.1992) for the proposition that the three approaches may not be mixed and matched. The court in Potters II stated that "fair market value is an opinion best formed by competent persons pursuing not just one, but three separate and distinct but nevertheless interrelated, approaches to value: the cost approach, the market data or sales comparison approach, and the income approach." Id. Burks contends that the appraisal methods may not be mixed because they are "separate and distinct." We disagree.

¶ 15. We find no authority, in Potters II or otherwise, that supports the proposition that the three appraisal methods may not be mixed. While the approaches are referred to as "separate and distinct," they are also described as "interrelated." Id. Further, we note that, according to established appraisal principles and guidelines, the application of the cost approach necessarily requires the utilization of the sales comparison approach. See American Institute of Real Estate Appraisers, The Appraisal of Real Estate, 318 (10th Ed.1992) (stating that, under the cost approach, "[s]ite value can be estimated using various techniques: sales comparison, allocation, extraction[.] ...") (emphasis added). Therefore, we find no merit in Burks's argument that Eslava impermissibly mixed the two approaches.

B. Comparable sales

¶ 16. Burks argues that, in estimating the value of her property as if vacant, Eslava used comparable sales which were not, in fact, comparable to her property because he used sales of lots located on "side roads" instead of lots located on a regularly traveled highway.

¶ 17. Where the sales comparison approach is applied, the sales used to establish value must be comparable to the property at issue. Howell v. State Highway Comm'n, 573 So.2d 754, 757 (Miss. 1990). The sales need not be comparable in all respects. Miss. Transp. Comm'n v. Fires, 693 So.2d 917, 923 (Miss.1997) (citing Miss. State Highway Comm'n v. Franklin County Timber Co., 488 So.2d 782, 785 (Miss.1986)). To be comparable to the subject land, a sale "must relate to and possess similar qualities to the land involved in the sale." Trowbridge Partners, L.P. v. Miss. Transp. Comm'n, 954 So.2d 935, 940(14) (Miss.2007) (citations omitted).

¶ 18. In Davidson v. Miss. Transp. Comm'n, 816 So.2d 393, 395-97 (7-17) (Miss.Ct.App.2001), we determined that sales of...