Indiana & Michigan Elec. Co. v. Pounds

• Decision Date: 15 September 1981
• Docket Number: No. 1-1180A323,1-1180A323
• Citation: 426 N.E.2d 45
• Parties: INDIANA & MICHIGAN ELECTRIC COMPANY, an Indiana corporation, Plaintiff-Appellant, v. Leon A. POUNDS, Juanita S. Pounds, Defendants-Appellees.
• Court: Indiana Appellate Court

Page 45

426 N.E.2d 45

INDIANA & MICHIGAN ELECTRIC COMPANY, an Indiana corporation Plaintiff-Appellant, v. Leon A. POUNDS, Juanita S. Pounds, Defendants-Appellees.

No. 1-1180A323.

Court of Appeals of Indiana, Fourth District.

Sept. 15, 1981.

Thomas W. Yoder, Grant F. Shipley, Livingston, Dildine, Haynie & Yoder, Fort Wayne, for plaintiff-appellant.

Jack R. Robinson, Rockport, John R. Werner, Cannelton, for defendants-appellees.

CHIPMAN, Presiding Judge.

Indiana & Michigan Electric Company (I & M) is appealing an adverse judgment for damages awarded in a Dubois Circuit Court jury trial. Leon and Juanita Pounds received $40,000 plus interest for their six acres of rural property in an eminent domain action. I & M contends it did not receive a fair hearing because the trial court arbitrarily frustrated its attempts to discover and present evidence on the fair market value of the property.

We agree and find the judgment should be reversed and a new trial ordered.

Our finding rests largely on the trial court's manner of disposing with I & M's attempts to obtain and present significant evidence. While we normally give great deference to the trial court's discretion in handling matters of evidence, when in our opinion we find the court's decisions are based on procedures and grounds so inappropriate as to be arbitrary and prejudicial, we must reverse in the interest of substantial fairness.

I. ISSUES

Three issues raised by the parties are of immediate concern. We restate those issues as follows.

1) Whether it was an abuse of discretion for the trial court to refuse to enforce discovery without a showing the information sought would not lead to admissible evidence.

2) Whether it was an abuse of discretion to suppress evidence on the basis of a motion in limine without a showing of prejudice.

3) Whether it was an abuse of discretion to suppress evidence of scientific tests because they did not conform precisely to administrative procedure.

II. DISCOVERY

I & M attempted to depose the Pounds concerning the value of their land condemned effective August 5, 1977, for a power plant's coal storage area. At the deposition the Pounds admitted purchasing the property on October 1, 1973, from Russell Hack but refused to disclose the purchase price or to comply with a subpoena duces tecum for documents related to the sales price. I & M filed a motion to compel discovery. The Pounds, without responding to the motion to compel, filed a motion in limine seeking a protective order to prevent the jury from learning of the earlier sale or sales price. To support its motion in limine, the Pounds submitted an affidavit signed by Hack stating in pertinent part:

"2. That one of the reasons that he sold the real estate to Mr. & Mrs. Pounds was because of rumors and newspaper stories that Indiana & Michigan Electric Company, Inc. was considering building a power plant in the area and he believed that his property, because of these rumors and stories, was decreasing in value and would further decrease in value in the future if a power plant were built."

The trial court denied the motion to compel and granted the motion in limine. I & M filed a motion to reconsider and submitted a counter-affidavit challenging Hack's credibility. The trial court overruled the motion without a hearing and proceeded directly to trial.

As a result, I & M was denied discovery and use of a recent prior purchase price, often the best and most relevant evidence of fair market value. State v. Valley Development Co., (1971) 256 Ind. 278, 268 N.E.2d 73. The use of a motion in limine as a means to exclude prejudicial questions and statements at a jury trial is an established part of Indiana practice. Burrus v. Silhavy, (1973) 155 Ind.App. 558, 293 N.E.2d 794. Its use to block discovery, however, is unusual and misplaced.

The purpose of the motion in limine is to prevent prejudicial questions and statements in the presence of the jury and we have restricted its use to those situations. Baldwin v. Inter City Contractors Service, Inc., (1973) 156 Ind.App. 497, 297 N.E.2d 831. It is the prejudicial effect of the questions asked or statements made in connection with the offer of the evidence, not the prejudicial effect of the evidence itself, which the motion is intended to reach. Burrus v. Silhavy, supra (quoting with approval from Bridges v. City of Richardson, (1962) 163 Tex. 292, 354 S.W.2d 366). The motion in limine has no place or use in discovery.

Under Trial Rule 26(B) discovery may reach any unprivileged material which is relevant to the subject matter or reasonably calculated to lead to admissible evidence. In this case the only assertion the subject matter was irrelevant came as part of a motion in limine.

In this awkward procedural posture of non-responsive motions, it is impossible for us to devine on what basis the trial court denied discovery. Since a motion in limine is designed to protect the moving party from the possible prejudicial effect of in-court statements before the jury, we cannot assume that by sustaining the motion in limine, the trial court believed the purchase price irrelevant or unlikely to lead to admissible information and consequently beyond the scope of discovery.

Since there is no discernible basis for denying discovery, the trial court by doing so committed an error which gravely handicapped the plaintiff in its pursuit of evidence.

III. MOTION IN LIMINE

Trial Rule 43(E) permits motions to be decided on the basis of affidavits presented by the parties. The rule follows a long-time policy of permitting ex parte affidavits to be received as evidence in interlocutory or preliminary matters, although they would be but hearsay at trial. In Re Hadley, (1921) 191 Ind. 104, 132 N.E. 255; Ohio & M. Ry. Co. v. Levy, (1892) 134 Ind. 343, 32 N.E. 815, aff'd on rehearing, 34 N.E. 20. In preliminary motions, the usual system of evidentiary rules is often ignored, partly because of the subsidiary and provisional nature of the inquiry, but chiefly because there is no jury, and the rules of evidence are, as rules, traditionally associated with a trial by jury. 6 J. Wigmore, Evidence § 4, § 1709 (1976). The courts have not been greatly concerned by this practice because the danger inherent in the lack of an opportunity to cross-examine is molified by the proven good sense of trial judges and by fairly straightforward rules of procedure. However, motions and accompanying affidavits affecting critical issues of a case deserve scrutiny when a decision on a motion may well determine the outcome of the trial.

The motion offered in this case was a motion in limine supported by an affidavit from the original owner, Russell Hack, stating simply he sold the land because of rumors about I & M's plans and his fears that his property value would decrease.

While rumors of the I & M project may have been the catalyst for Hack's decision to sell, the affidavit does not contend I & M's project had any effect whatsoever on the sales price. Hack, significantly, does not allege he was forced to sacrifice the property nor does he indicate he obtained something other than the fair market value. The Pounds likewise remain entirely silent about the price, except to assert it is irrelevant and prejudicial, but the mere assertion is not evidence of the fact, see Irwin v. State, (1942) 220 Ind. 228, 41 N.E.2d 809, nor is an affidavit probative evidence when it fails to address the issue for which it is offered as support.

We agree with the Pounds that an increase or decrease in a property's market value, which is brought about by the project for which the property is being condemned, may not be considered in determining the fair value of the property. State v. Sovich, (1969) 253 Ind. 224, 252 N.E.2d 582. However, the Pounds have attempted here to use the pre-trial motion in limine as a vehicle to suppress the prior sales price as irrelevant. The purpose of the motion in limine is to exclude prejudicial matter, not to exclude irrelevant evidence. Baldwin, supra 156 Ind.App. at 497, 297 N.E.2d at 832. In this case not only do they use the wrong vehicle, but they ask the court to make the exclusion without knowing the substance of what is being excluded and to do so on the strength of an affidavit which does not clearly show any effect on the sales price. The net result has been to eliminate evidence of the highest order without serious argument or factual support for the exclusion. We consider the matter much too important for such cursory treatment.

IV. SCIENTIFIC TESTS

In addition to the pre-trial problems, efforts by I & M to introduce evidence at trial of soil conditions also were uncritically dismissed. I & M offered the results of percolation tests to counter testimony the property's highest and best use was for industrial development. The test results would have shown the property was waterlogged, a factor which could be expected to have a dramatic effect on the property's value. Objection to the admission of those test results was sustained because the test did not correspond to State Board of...