Trowbridge Partners v. Miss. Transp. Com'n, 2005-CA-02167-SCT.

• Decision Date: 22 March 2007
• Docket Number: No. 2005-CA-02167-SCT.,2005-CA-02167-SCT.
• Citation: 954 So.2d 935
• Parties: TROWBRIDGE PARTNERS, L.P., A Mississippi Limited Partnership; Phil Moore; and Neal Clement v. MISSISSIPPI TRANSPORTATION COMMISSION.
• Court: Mississippi Supreme Court

954 So.2d 935

TROWBRIDGE PARTNERS, L.P., A Mississippi Limited Partnership; Phil Moore; and Neal Clement v. MISSISSIPPI TRANSPORTATION COMMISSION.

No. 2005-CA-02167-SCT.

Supreme Court of Mississippi.

March 22, 2007.

Rehearing Denied May 10, 2007.

W. Whitaker Rayner, Stephen W. Rimmer, Jackson, attorneys for appellants.

Ricky L. Boggan, and Alan M. Purdie, Grenada, attorneys for appellee.

EN BANC.

SMITH, Chief Justice, for the Court.

¶ 1. This appeal arises from an eminent domain proceeding brought by the Mississippi Transportation Commission (hereinafter "the Commission"). On April 22, 2004, the Commission filed a complaint in the Madison County Special Court of Eminent Domain against Trowbridge Partners (hereinafter "Trowbridge") to condemn 5.05 acres of 8.45 acres of undeveloped land in the City of Madison. The purpose of the condemnation was to reconstruct and relocate a segment of State Route 463 from east of Interstate 55 to U.S. 51 in Madison, Mississippi. On November 15, 2004, the Madison County Special Court of Eminent Domain awarded the Commission title and immediate possession of the condemned 5.05 acres. At the trial to establish just compensation, the Commission and Trowbridge submitted differing evidence as to the value of the land taken. The jury returned a verdict of $1,108,941, upon which judgment was entered. Trowbridge appeals the judgment of the trial court.

FACTS AND PROCEDURAL HISTORY

¶ 2. The condemned 5.05 acres are a part of an 8.45-acre tract of undeveloped land owned by Trowbridge Partners, L.P., a Mississippi Limited Partnership, with two limited partners — Phil Moore of Madison, Mississippi and Neal Clement of Jackson, Mississippi. The 5.05 acres that the Commission sought to condemn are located directly in the center of the 8.45-acre tract of land. After the taking, the remainder of the subject property included two smaller parcels of land. The parcel located in the northern corner of the subject property was approximately 1.47 acres fronting Hoy Road. The parcel located in the southern corner of the subject property was approximately 1.93 acres.

¶ 3. The trial commenced on August 9, 2005, to establish the total amount of compensation due to Trowbridge. At trial, the expert appraiser for the Commission, Terry Wells, testified that size is an important factor in determining the value of property and that smaller parcels are worth more per square foot than larger parcels. Wells also testified that the subject property was zoned for C-2 or general commercial development. However, he opined that despite the zoning restrictions, the highest and the best use of the remaining property was for restricted commercial development. During Trowbridge's cross examination of Wells, he explained "that the remaining property would only be developed as restricted commercial [development] for [an] office building or a dentist office or [a] barber shop because it lacks access [to] a heavily-traveled road." Wells opined that the fair market value of the entire 8.45 acres immediately before the taking was $1,582,800, and that the value of the remaining property immediately after the taking was $631,200, for a difference of $951,600 total compensation due to Trowbridge.

¶ 4. At the conclusion of Wells's testimony, Trowbridge moved to strike his testimony regarding the valuation of the subject property on two grounds. First, Trowbridge contended that Wells's testimony regarding the general appraisal guideline that smaller parcels are worth more per square foot improperly enhanced the fair market value of the remainder property. Secondly, Trowbridge asserted that Wells improperly disregarded the zoning restrictions when determining the highest and best use of the remainder property.

¶ 5. The trial court judge denied Trowbridge's motion. The trial court ruled that Wells did not offer any testimony stating that the remaining property would be enhanced by the highway expansion project. The court further concluded that Wells testified only as to the general appraisal rule when determining the value of smaller parcels of land. Lastly, the court concluded that the Commission had no requirement to establish a potential zoning change, because C-1 restricted commercial development is a lesser included use of C-2 general commercial development.

¶ 6. The appraiser for Trowbridge, Hugh Hogue, offered his opinion that, because the remainder property was zoned for C-2 development, the highest and best use of the property was for retail commercial development. Hogue further testified that the fair market value of the 8.45 acres immediately before the taking was $2,208,492 and that the value of the remaining property immediately after the taking was $286,189, for a difference of $1,922,303 total compensation due to Trowbridge.

¶ 7. After hearing the evidence and viewing the property, the jury returned a verdict in favor of Trowbridge in the amount of $1,108,941 as just compensation. Trowbridge filed a motion for Judgment Notwithstanding the Verdict (JNOV), with alternative motions for Amendment of Judgment, or a New Trial and Additur. The trial court denied Trowbridge's motions. Trowbridge filed a timely notice of appeal. On appeal, Trowbridge raises two issues: (1) Whether the trial court erred in allowing the Commission's expert appraiser, Wells, in his valuation to consider benefits conferred on the remainder property by the taking; and (2) Whether the trial court erred in allowing Wells to testify that, although the remainder property is zoned for C-2 general commercial development, the lesser included use of C-1 restricted commercial development was the highest and best use of the property.

DISCUSSION

¶ 8. Generally, the admission or exclusion of expert testimony is within the discretion of the trial judge. Terrain Enter. v. Mockbee, 654 So.2d 1122, 1128 (Miss.1995). However, "[w]here a court has exercised its discretionary authority in such a way that it misperceives the correct legal standard for admitting the evidence, the deference customarily afforded trial courts in decisions concerning the admissibility of evidence is precluded, because the error has become one of law." Miss. Transp. Comm'n v. Fires, 693 So.2d 917, 920 (Miss.1997) (citing Bean v. Broussard, 587 So.2d 908, 913 (Miss.1991)). This Court "will reverse for erroneous interpretation or applications of the law." Bank of Miss. v. Hollingsworth, 609 So.2d 422, 424 (Miss.1992). Evidentiary objections which concern the appropriate legal standard to apply when determining the value of property in eminent domain proceedings are questions of law. Fires, 693 So.2d at 920.

I. Whether the Trial Court Erred in Allowing the Commission's Expert Appraiser, Terry Wells, During his Determination of Value, to Consider Benefits Conferred on the Remainder Property by the Taking.

¶ 9. Trowbridge argues that Wells's testimony that smaller parcels of land are worth more per square foot enhanced the value of the two remaining parcels. Trowbridge cites two errors in support of its position. First, Trowbridge alleges that the trial court committed error by allowing Wells to make adjustments to the comparable sales used to determine the value of the property before the taking, when he did not make any adjustments to the comparable sales used to determine the value of the remaining property. The improper adjustments enhanced the per-square-foot value of the two remaining parcels. Second, Trowbridge claims that Wells improperly reduced Trowbridge's award of damages by the alleged enhanced value of the remaining parcels.

¶ 10. In Mississippi State Highway Commission v. Hancock, the Commission condemned the landowners' property on both sides of Highway 49, to widen it to four lanes. Mississippi State Highway Commission v. Hancock, 309 So.2d 867 (Miss.1975). The Commission contended that the highway expansion project enhanced the value of the landowners' remaining property. Id. at 871. After the taking, the landowners' remaining land, although previously classified by the Commission as farmland, was now also suitable and adaptable for residential property. Id. "Thus, [the Commission contended that] the landowners will still have as much residential property as they had before the taking." Id. The Commission sought to set off the value of the enhancement from the value of the land taken. This Court held that:

The rule in this state is that when a part of a larger tract of land is taken for public use, the owners should be awarded the difference between the fair market value of the whole tract immediately before the taking and the fair market value of the remaining property immediately after the taking, without considering the general benefits or injuries to the use of the taken land. This rule leaves no room for a deduction for any enhancement of the remaining land due to the nature of the facility to be built on the land taken. Furthermore, the landowner is entitled to due compensation not only for the value of the property actually taken, but also for the damages, if any, which may result to the landowner as a consequence of the taking without any deduction therefrom on account of any supposed benefits incident to public use for which the application is made.

Hancock, 309 So.2d at 871 (citing Pearl River Water Supply Dist. v. Wood, 252 Miss. 580, 172 So.2d 196 (1965)).

¶ 11. In Mississippi Transportation Commission v. Bridgforth, this Court reiterated its previous holding in Hancock, that expert appraisers may not seek to set off the value of the enhancement from the value of the land taken. Miss. Transp. Comm'n v. Bridgforth, 709 So.2d 430 (Miss.1998). In Bridgforth, the Commission asserted that the landowners' property in the "after" condition was still suitable for high intensity commercial purposes, although less of the land was available for large-scale development. Id. at 440. This Court held that the Commission's argument was essentially the same...