Colonial Pipeline Co. v. Weaver
| Decision Date | 10 January 1984 |
| Docket Number | No. 211A83,211A83 |
| Parties | COLONIAL PIPELINE COMPANY, v. H. Michael WEAVER and wife, Sonja R. Weaver. |
| Court | North Carolina Supreme Court |
Adams, Kleemeier, Hagan, Hannah & Fouts by Joseph W. Moss and Larry I. Moore, III, Greensboro, for petitioner-appellee.
Brooks, Pierce, McLendon, Humphrey & Leonard by James T. Williams, Jr. and S. Leigh Rodenbough, IV, Greensboro, for respondents-appellants.
The Court of Appeals remanded this case for a new trial based upon three errors in evidentiary rulings by the trial court having to do with the petitioner's cross-examination of respondent Weaver and his expert witness, James E. Flynt, Jr., regarding the value of the property in question. Pursuant to Rules 14, 16, and 28 of the North Carolina Rules of Appellate Procedure, the petitioner included in its brief to this Court additional questions for review. Upon careful consideration of all the issues, we modify and affirm the decision of the Court of Appeals.
Petitioner's first assignment of error relates to the trial court's exclusion of evidence of the previous purchase price respondent Weaver allegedly paid for a one-half undivided interest in the subject property. On direct examination, Mr. Weaver testified that in his opinion the value of his property immediately before the taking by Colonial Pipeline was $4,500,000. On cross-examination, Weaver was then questioned at length about his acquisition of the subject property. The relevant portion of this cross-examination follows:
CROSS EXAMINATION--Mr. Moss:
Q. Mr. Weaver, I believe you testified that you, and I understood you to say, "I acquired the property in 1962," is that correct?
A. Yes, sir.
Q. You didn't acquire it in your own name, did you?
A. No, sir, I acquired it through a corporation, W.T. Development Company.
....
Q. And you and Mr. Taylor bought this property together under the name of W.T. Corporation, is that what it was?
A. Yes.
Q. At some time later than that, I believe you bought Mr. Taylor's interest from him, did you not?
A. I did.
Q. That was in 1971, wasn't it, Mr. Weaver?
A. Correct.
....
Q. Mr. Weaver, on September 21, 1971, did not W.T. Development Company, Incorporated, convey to John R. Taylor and H. Michael Weaver the property in question by deed recorded in Deed Book 2560, Page 294?
A. I would say so.
Q. And then on September 3, 1971, did not John R. Taylor and wife, Betsy D. Taylor, convey to H. Michael Weaver the same property, one-half undivided interest, by deed recorded in Book 2560 at Page 175?
A. Yes.
Q. And did you or did you not pay Mr. Taylor for his one-half interest in the property, Mr. Weaver?
A. I did pay him.
Q. And did you pay him full value for his one-half interest in the property?
A. Yes.
Q. And did you pay him--do you recall how much you paid him?
A. No, I do not.
Q. Would the tax stamps which were placed on that particular deed have reflected the actual purchase price which was paid for that property, Mr. Weaver?
A. I would think so--at least that much, maybe more.
Q. Did I ask you if you recalled how much you paid for the land?
A. You did ask me, and I don't remember. And, of course, I don't remember--I must have bought the land from him but we dissolved W.T., and I acquired his interest, basically a simultaneous transaction.
Q. Mr. Weaver, I hand you a copy of a document and ask you if you can identify that particular document, please, sir? ...
A. Yes, I do.
Q. And does that particular document reflect a certain amount--does that document contain a Guilford County or State of North Carolina tax stamp on it, Mr. Weaver?
A. Yes, it does.
Q. What is the document, Mr. Weaver?
A. The document is a deed dated September 3, 1971, from John R. Taylor and wife, Betsy D. Taylor, to H. Michael Weaver.
....
Q. Can you ascertain from looking at that tax stamp what it says?
A. No, I cannot. It is not clear.
Petitioner argues that the evidence of the 1971 purchase price was admissible for two purposes: (1) as substantive evidence of the fair market value at the time the property was taken; (2) for impeachment purposes to challenge the accuracy of Mr. Weaver's opinion of the fair market value of the property, as well as to rebut previously submitted evidence concerning the sales price of right-of-way interests in the property conveyed in 1963 and 1964.
The Court of Appeals upheld the trial court's exclusion of the evidence for substantive purposes but held that the evidence was nevertheless competent for purposes of impeachment to test the accuracy of Mr. Weaver's opinion as to the value of the property. We disagree with this second conclusion. Evidence of the purchase price in this particular 1971 transaction was improper for impeachment as well as valuation purposes.
First, we discuss the competency of the testimony as substantive evidence. In a case such as this, where only a part of a tract is taken, the measure of damages for said taking is the difference between the fair market value of the entire tract immediately prior to said taking and the fair market value of the remainder immediately after said taking. Gallimore v. Highway Comm., 241 N.C. 350, 85 S.E.2d 392 (1955).
The market value of property is the yardstick by which compensation for the taking of land or any interest therein is to be measured and market value of property is the price which it will bring when it is offered for sale by one who desires, but is not obliged to sell it, and is bought by one who is under no necessity of having it. In estimating its value all of the capabilities of the property, and all of the uses to which it may be applied, or for which it is adapted, which affect its value in the market are to be considered, and not merely the condition it is in at the time and the use to which it is then applied by the owner.
Light Co. v. Moss, 220 N.C. 200, 205, 17 S.E.2d 10, 13 (1941). The same factors are to be considered as in the sale of property in the open market between private parties where both the seller and buyer bargain for the sale and purchase of the property. Id. at 212, 17 S.E.2d at 18 (Clarkson, J., concurring).
It follows that the basis for a fair market value determination is an arm's length transaction, negotiated between parties, each acting in his or her own self interest. We find this crucial concept to be determinative of the questions concerning respondents' testimony above.
In determining the admissibility of evidence of the purchase price of property, the following is applicable:
In determining whether such evidence is admissible, the inquiry is whether, under all the circumstances, the purchase price fairly points to the value of the property at the time of the taking.
Shopping Center v. Highway Commission, 265 N.C. 209, 211-12, 143 S.E.2d 244, 245-46 (1965) (citations omitted).
Thus, in cases involving questions of the admissibility of the purchase price of the same or similar property, the law's insistence on an arm's length transaction as the initial basis for any determination of relevance is and has been clear.
Respondent Weaver was asked on cross-examination about his purchase of the remaining one-half undivided interest in the subject property from his former business partner in 1971. It is true that the expiration of eight years from the time of the acquisition of the property until the present condemnation is significant: Respondent presented evidence tending to demonstrate changes in the northwest Greensboro vicinity of the property which might have affected its value and in addition testified that during his term of ownership he had made noteworthy improvements to the property by thinning, treating, and planting trees. This Court, however, need not proceed as far as this second requirement to determine whether evidence of the purchase price was relevant to an inquiry as to the property's market value at the time it was condemned. The determinative factor on this issue is the more basic initial requirement that the prior sale be an arm's length transaction on the open market. This, of course, goes to the nature of the sale as a "voluntary" transaction. Upon the objection being lodged, plaintiff failed to make a showing that the prior sale was an arm's length transaction in the open market. To the contrary, the evidence indicated that the prior sale was only one of several considerations between Weaver and Taylor upon the dissolution of their corporation. While specific details of the negotiations between the respondent and Mr. Taylor are not in the record, we do have responden...
To continue reading
Request your trial
-
State ex rel. Edmisten v. Tucker
...and neutrality in the judge who tries his case.... This right can neither be denied nor abridged." Colonial Pipeline Co. v. Weaver, 310 N.C. 93, 103, 310 S.E.2d 338, 344 (1984). Indeed, it is the duty of the presiding judge under both the statutory and decisional law to excuse himself when ......
-
Lacey v. Kirk
...be given to a remark which will render it unobjectionable, it will not be regarded as prejudicial[,]" Colonial Pipeline Co. v. Weaver, 310 N.C. 93, 104, 310 S.E.2d 338, 345 (1984), with the burden of establishing that the trial judge's remarks were prejudicial resting on Defendant. State v.......
- Henry v. Deen
-
Donavant v. Hudspeth
...311 N.C. 489, 319 S.E.2d 591 (1984), cert. denied, --- U.S. ---, 105 S.Ct. 1232, 84 L.Ed.2d 369 (1985); Colonial Pipeline Co. v. Weaver, 310 N.C. 93, 310 S.E.2d 338 (1984); 1 Brandis on North Carolina Evidence § 27 (Supp.1986) Also, we note that the plaintiff's offer of the telephone conver......