Manning v. Redevelopment Agency of Newport

• Citation: 103 R.I. 371,238 A.2d 378
• Decision Date: 05 February 1968
• Docket Number: No. 164-A,164-A
• Parties: Mary A. MANNING et al. v. The REDEVELOPMENT AGENCY OF NEWPORT, Rhode Island. ppeal.
• Court: United States State Supreme Court of Rhode Island

Page 378

238 A.2d 378

103 R.I. 371

Mary A. MANNING et al. v. The REDEVELOPMENT AGENCY OF NEWPORT, Rhode Island.

No. 164-Appeal.

Supreme Court of Rhode Island.

Feb. 5, 1968.

Moore, Virgadamo, Boyle & Lynch, Francis J. Boyle, Newport, for plaintiffs

Macioci & Morrison, Joseph J. Macioci, Newport, for defendant.

OPINION

JOSLIN, Justice.

This is a petition for the assessment of damages for the taking by the defendant of an improved parcel of real estate for redevelopment purposes in connection with the Long Wharf-Market Square Urban Renewal Project in the city of Newport. A justice of the superior court sitting without a jury assessed the damages at $36,500 together with interest according to law and judgment entered. The defendant appeals and attributes what it claims to be an excessive award to allegedly erroneous rulings by the trial justice excluding evidence relating to the sale of what, plaintiffs argue, was a comparable parcel of real estate.

It is sufficient to refer only to so much of the record as relates to the rulings in issue. It discloses that the real estate experts who appeared for each of the parties based their respective opinions of the condemned parcel's fair market value upon the sale prices of supposedly similar and comparable properties. For plaintiffs, one expert fixed that value at $39,400 and another at $38,300; for defendant, its sole expert valued it at $22,000. The latter, after describing certain comparable properties and the prices which each brought at sale, was asked about the 'Standard Wholesale' property. He located it on the same street and in the same neighborhood as the property in litigation, fixed its sale date as about four months after the condemnation, and stated that he had relied in substantial part upon what it sold for in making his appraisal. He was then questioned generally about those factors which in his opinion made that property comparable, and in addition was asked to give its sale price. The plaintiffs objected, and after an extended colloquy between the court and counsel for both sides, the trial justice sustained, saying:

'Well, I am prepared to rule. In my judgment you can't show, even though it is only a comparable which affects his opinion and not a comparable which directly affects value, you can't show it for two reasons: (1) it is substantially after the taking and, (2) it abuts the area taken and to get into the question of whether or not this property is comparable in value, it enhanced or minimized or cut down the value by the taking is a side issue we can't go into, it would just take too long. I am going to sustatin the objection and note your exception.'

As we construe that ruling, the testimony sought to be elicited was excluded, not on the ground that the 112-day interval between the taking and the sale made it too remote as a matter of law, but because the sale of the Standard Wholesale property occurred subsequent to rather than before the taking, and for the additional reason that it would be too time-consuming to permit inquiry into whether the urban renewal project, which prompted the taking, had introduced a new valuation influence and had thereby materially affected the sale price. We reject any such hard and fast rule.

Our problem arises because in this state the best criterion of what constitutes just compensation for property taken by the exercise of the eminent domain power is its fair market value as evidenced by prices paid at or about the time of the taking at voluntary sales in the open market by willing buyers to willing sellers for parcels substantially similar and comparable to that taken. Hall v. City of Providence, 45 R.I. 167, 121 A. 66; Atlantic Refining Co. v. Director of Public Works, R.I., 233 A.2d 423; Assembly of God Church v. Vallone, 89 R.I. 1, 150 A.2d 11; L'Etoile v. Director of Public Works, 89 R.I. 394, 153 A.2d 173, 77 A.L.R.2d 1174. In reliance on that principle, we have in appropriate circumstances permitted evidence of pre-condemnation sales, but have not as yet decided if testimony of a post-condemnation sale occurring at or about the time of the taking is admissible. The question to be here resolved is whether there is any sound or logical reason which requires us to differentiate between the two.

While the authorities on this question are divided, ¹ Orgel says:

'* * * Generally speaking, the courts make no distinction between sales occurring prior to the taking and sales consummated after the date when title has vested in the condemner. They usually admit the latter type of evidence, sometimes qualifying their ruling by stating that the sale adduced must not be too remote in time or that there must be no drastic change in market conditions.' 1 Orgel, Valuation Under Eminent Domain (2d ed.), § 139, p. 591.

The exclusionary rule is sometimes justified on the ground that a subsequent sale of property located in the vicinity of the property taken is not really comparable because it will necessarily reflect either an enhancement of or a diminution in price which is attributable to the project or improvement for the construction of which the right to acquire by eminent domain was exercised. While, of course, there is no gainsaying that there may many times be a possibility, or even a probability, that the project which occasioned the taking resulted in the value of neighboring property being either inflated or deflated, neither the possibility nor the probability of such a change in price spells its inevitability. And so long as there exists a likelihood, even though in some cases remote, that there was no effect on price and that the two parcels are comparable, the opportunity to present evidence to establish these prerequisites should not be foreclosed by a rule of thumb prohibiting evidence of an after-condemnation sale. While the flexible approach may prolong a trial by introducing the collateral issue of whether property otherwise comparable has been enhanced or diminished in value, that is not too large a price to pay in order to insure that no person's property shall be taken for public use without his being justly compensated, and in order to protect the public against paying more than fair market value. United States v. Featherston, 10 Cir., 325 F.2d 539. Moreover, consideration of the possible existence of an enhancement of or diminution in price is but one of the several factors which in every case will be germane to the determination of whether the two estates are sufficiently similar so that the sale price of one will be of assistance in arriving at the value of the other. 5 Nichols, Eminent Domain (3d ed.), 21.3(1), pp. 429-430.

In each case, therefore, the trial justice, rather than automatically barring evidence of a sale of otherwise comparable property merely because it occurred subsequently, should first decide if the price paid was so materially distorted as to deprive the property sold of its comparability. The resolution of that issue along with others will determine whether the other property was sufficiently similar as to make its sale price relevant in valuing the condemned parcel. These considerations will initially, of course, be within the discretion of the trial justice; and in the exercise of that discretion he may fix reasonable limits so as to prevent the trial from being unduly extended. Hervey v. City of Providence, 47 R.I. 378, 133 A. 618; Jones v. Providence Redevelopment Agency, 92 R.I. 285, 168 A.2d 156.

Our approach avoids a hard and fast exclusionary rule and gives to the trial justice a wide latitude within which to exercise his discretion in passing judgment on whether an after-sale price was in...