State ex rel. Com'r, Dept. of Transp. v. Veglio

• Decision Date: 16 August 1989
• Docket Number: No. 31,31
• Citation: 786 S.W.2d 944
• Parties: STATE of Tennessee, on Relation of the COMMISSIONER, DEPARTMENT OF TRANSPORTATION, for and on Behalf of Said Department, Petition r-Appellant, v. Margaret VEGLIO, A Resident of Shelby County, Tennessee; and Riley C. Garner, Trustee for Shelby County, Tennessee, Defendants-Appellees.
• Court: Tennessee Court of Appeals

Page 944

786 S.W.2d 944

STATE of Tennessee, on Relation of the COMMISSIONER DEPARTMENT OF TRANSPORTATION, for and on Behalf of Said Department, Petition r-Appellant, v. Margaret VEGLIO, A Resident of Shelby County, Tennessee and Riley C. Garner, Trustee for Shelby County Tennessee, Defendants-Appellees.

No. 31.

Court of Appeals of Tennessee,

Western Section,

at Jackson.

Aug. 16, 1989.

Permission to Appeal Denied by

Supreme Court

Jan. 2, 1990.

Charles W. Burson, Atty. Gen. and Reporter, Larry M. Teague, Asst. Atty. Gen., James W. Thompson, Asst. Atty. Gen., Nashville, for petitioner-appellant.

William H. Fisher, III, Valerie Futris, Memphis, fordefendants-appellees.

HIGHERS, Judge.

The State of Tennessee has appealed a $1.8 million verdict and judgment in the Circuit Court at Shelby County in favor of the defendant, Margaret Veglio, in this condemnation action.

On December 15, 1986, the State filed a petition of condemnation, paying estimated damages of $87,500 into the court. On December 18, the trial court entered an order granting the State possession of 3.493 acres of a 19.065 acre tract owned by Veglio and disbursing the funds to her. Veglio answered and sought compensation for damages resulting from the condemnation.

The property at issue is located in northeast Shelby County in the Cordova community, near the intersection of Interstate 40 (I-40) and Germantown Road. (See attached diagram). Veglio's father acquired the property in 1955 as part of a farm, and it had been given to her by her mother in 1971. Veglio resides there with her family. Prior to the condemnation, Veglio's property had 464 feet of frontage on Germantown Road. The road had been elevated in 1963 to pass over I-40, and Veglio's property lay eight to twenty feet below the elevated road with a driveway rising to intersect with and provide access to the road. Commercial development in the area mandated improved rights of way. Therefore, Germantown Road was being upgraded from a two-lane to a four-lane road with a median, and the Germantown Road/I-40 interchange was being upgraded from a half-diamond (providing access only from eastbound I-40 and only to westbound I-40) to a full-diamond (providing access both to and from both eastbound and westbound I-40). To achieve these improvements, the State found it necessary to take a portion of the Veglio property.

All of Veglio's Germantown Road frontage was taken leaving Veglio's frontage along an access road aptly named "Frontage Road." Germantown Road was further elevated because of a new bridge over the interstate, and as described by defendant's counsel, the ramps, the access road and Germantown Road itself, "tower" above defendant's property "like three great walls of China separated by twin grand canyons." Further, according to defendant's counsel, the erection of chain-link fences, combined with the "huge mountains of earth," result in the property resembling a "Himalayan prison camp."

The jury rendered a verdict in favor of Veglio, awarding her $857,000 as compensation for the 3.493 acres, $722,000 as compensation for the loss of access to Germantown Road, and $22,664 in incidental damages to the remainder of the property involved, for a total of $1,799,664. Motions by the State for a new trial and alternatively for remittitur were overruled, and this appeal followed. The State has raised a number of issues, but basically these may be addressed in four groups: (1) scope of the project issues, (2) appraisal issues, (3) access rights issues, and (4) admissibility issues regarding photographs. We will address the issues in this order.

First, the State asserts that the interchange upgrade was necessitated by and was a part of the widening of Germantown Road, i.e., there was a single project, the widening of Germantown Road, of which the interchange upgrade was a part. The value of property taken through condemnation for purposes of public improvement must be ascertained without considering any enhancement or depreciation which occurred before the taking in anticipation of the improvement. State v. Urban Estates, Inc., 225 Tenn. 193, 201, 465 S.W.2d 357, 360 (1971).

The scope of the project issue affected the trial in three ways. As a preliminary matter, the trial court ruled that the two improvements were distinct. Therefore, the trial court held (1) that evidence of real estate transactions reflecting values enhanced by the widening of Germantown Road were not governed by Memphis Housing Authority v. Newton, 484 S.W.2d 896, 897-8 (Tenn.App.1972), which excludes evidence of values enhanced by project anticipation; (2) that evidence relating to the history of the development of Germantown Road, relevant only to a determination of the scope of the project already determined by the trial court, was excludable under Layne v. Speight, 529 S.W.2d 209, 211 (Tenn.1975); and further, (3) the court instructed the jury that Veglio was entitled to the benefit of any enhancement in value due to the widening of Germantown Road but not due to the construction of the interchange in accordance with Urban Estates, supra. The State asserts that the trial court erred as to the rulings and the jury instruction.

The admissibility of comparable sales in eminent domain cases is largely a discretionary matter for the trial court, and the factors which weigh upon that issue must be considered by the trial court as preliminary matters. Layne, 529 S.W.2d at 211. Tennessee has adopted the rule that scope of the project issues are among those factors that are to be determined prior to the admissibility of evidence relating to comparable sales. Id. The State does not disagree, but asserts that the evidence preponderates against the trial judge's ruling that the two projects were distinct. We have carefully reviewed the evidence before the judge and disagree with the State's assertion. That portion of the Veglio property needed for the widening of Germantown Road was acquired by Shelby County in 1971. The plan pursuant to which Shelby County acquired the property did not involve the upgrade of the interchange. That plan was developed in the early 1960's as part of a comprehensive plan for Shelby County roads. The plans in regard to this section of Germantown Road were completed in 1969 and the property purchased in 1971.

I-40 at Germantown Road was completed in 1963. Plans to upgrade were not approved until 1977. In 1981 a public hearing regarding the upgrade was held, but there was no discussion of the widening of Germantown Road. An environmental impact study required for the interchange upgrade did not include consideration of the widening of the road, and even specifically states the two projects are separate. Germantown Road remained a county road until 1983 when it was acquired by the State.

After acquisition by the State, 1984 environmental impact studies of the road widening did not include the interchange upgrade, and again indicated the two projects were separate. Finally, the widening of Germantown Road is not scheduled for completion until September of 1989. The interchange upgrade was scheduled for September 1988 completion. We therefore find that the evidence does not preponderate against the trial judge's ruling. Comparable sales reflecting enhanced values due to widening of Germantown Road were admissible.

The State asserts next that even if the evidence did not preponderate against the trial court's ruling as to the scope of the project as to the admissibility of comparable sales evidence, the rule in Layne should be limited to the admissibility question, and that as to the ultimate issue of just compensation, scope of the project questions are factual issues for the jury. Therefore, they assert that the evidence of the history of the development should have been presented to the jury. Although the State cites no Tennessee authorities, it does cite two cases from Alabama, Standard Oil Co. v. State of Alabama, 287 Ala. 143, 249 So.2d 804 (1971); Mobile County v. Brantley, 507 So.2d 483 (Ala.1987); and one from Alaska, State v. Alaska Continental Development Corp., 630 P.2d 977 (Alaska 1980). We do not find these authorities persuasive. Alabama has not adopted the Tennessee rule, set forth in Layne, recognizing a preliminary question in determining admissibility of comparable sales. The Alabama rule is apparently that evidence of comparable sales is admissible in all circumstances, with the jury then being instructed to ignore or consider it based on whether they determined the taking was within the scope of the project which enhanced the property values. The Alaska case was a non-jury trial and did not address the issue raised by the State.

The State asks this Court to find that the question is one for the trial court in ruling on the admissibility of evidence of comparable sales but one for the jury in determining...