Tupelo Redevelopment Agency v. Abernathy

• Decision Date: 07 April 2005
• Docket Number: No. 2002-CA-01839-SCT.,No. 2002-CA-01837-SCT.,No. 2002-CA-01838-SCT.,2002-CA-01837-SCT.,2002-CA-01838-SCT.,2002-CA-01839-SCT.
• Parties: TUPELO REDEVELOPMENT AGENCY v. SUE W. ABERNATHY, G.L. WILEMON, JR., JOANN W. WESTMORELAND, DONALD BRETT BETHAY AND BARRY LANE BETHAY.
• Court: Mississippi Supreme Court

913 So.2d 278

TUPELO REDEVELOPMENT AGENCY v. SUE W. ABERNATHY, G.L. WILEMON, JR., JOANN W. WESTMORELAND, DONALD BRETT BETHAY AND BARRY LANE BETHAY.

No. 2002-CA-01837-SCT.

No. 2002-CA-01838-SCT.

No. 2002-CA-01839-SCT.

Supreme Court of Mississippi.

April 7, 2005.

COPYRIGHT MATERIAL OMITTED

Martha Bost Stegall, Guy W. Mitchell, III, Tupelo, Attorneys for Appellant.

Dewitt T. Hicks, Jr., P. Nelson Smith, Jr., Columbus, Attorneys for Appellees.

Before WALLER, P.J., GRAVES and DICKINSON, JJ.

GRAVES, Justice, for the Court:

¶ 1. These consolidated appeals arise from eminent domain actions brought by the Tupelo Redevelopment Agency (hereinafter "TRA") against Sue W. Abernathy, G.L. Wilemon, Jr., Joann W. Westmoreland, Donald B. Bethay and Barry L. Bethay (collectively "Landowners").¹ After reaching an initial settlement, this matter was subsequently brought before the Lee County Special Court of Eminent Domain which ruled that the subject property was to be sold at a price determined by a court-ordered appraisal and that TRA was to pay interest from and after February 1, 2002, until the closing date. It is from these rulings that both sides appeal.

FACTS AND PROCEDURAL HISTORY

¶ 2. TRA is an urban renewal agency of the City of Tupelo, Mississippi, which was created to renew and redevelop a part of downtown Tupelo. Specifically, the part of downtown Tupelo which was slated for renewal was known as the "old fairgrounds area." (hereinafter "redevelopment area"). From 1999 thru 2000, TRA filed five condemnation suits against the Landowners who each owned a separate piece of real property within a redevelopment area. Only three of those lawsuits, involving a 2.0 acre unimproved tract (Parcel No. 17), a 2.7 acre unimproved tract (Parcel No. 14), and a ½ acre improved tract (Parcel No. 14.01) are at issue in this appeal. The Landowners denied that TRA's taking rose to the level of a public necessity. After the cases were removed to the United States District Court, on July 21, 2000, the district court remanded them to state court.

¶ 3. On October 29, 2001, TRA and the Landowners reached a settlement which provided in pertinent part that the purchase price for each tract of land shall be determined by an appraisal to be performed plus twenty percent (20%) of the appraised value for Parcels No. 14 and 17 and plus eighteen percent (18%) of the appraised value for Parcel No. 14.01. Also, the settlement agreement stated that the transaction would "close" on or before November 1, 2001, or on such date as agreed to in writing by the parties.

¶ 4. While the settlement statement contained a November 1, 2001, closing date, the document was not executed by all of the Landowners until dates ranging from November 1 thru 8, 2001. The agreement was subsequently approved by TRA's board on November 8, 2001. On November 20, 2001, Tupelo's City Council approved the agreement.

¶ 5. Prior to the settlement negotiations and execution of the settlement agreement, TRA spent nearly $7 million making improvements to the redevelopment area. These improvements consisted of the construction of a new City Hall and infrastructure improvements, including improvements to streets, sidewalks, curbs, water lines, sewer lines, and underground electrical lines.

¶ 6. Pursuant to the settlement agreement, an appraisal was to be conducted on the three condemned parcels. On November 27, 2001, the first appraisal included the valuation consideration of the improvements made by TRA and valued the three properties together at $925,000 (hereinafter "Appraisal 1"). TRA claimed error and brought this issue to the attention of the appraiser and requested a second appraisal excluding the valuation consideration of the improvements made. TRA informed the appraiser not to take into consideration any sales, listings, pending, or options concerning other real property in the redevelopment area which had previously been acquired by TRA through condemnation or negotiated purchase. The second appraisal, dated January 24, 2002, valued the three properties at $330,000 (hereinafter "Appraisal 2"). On January 17, 2002, some 7 days before receiving Appraisal 2, the Landowners filed a Motion to Enforce seeking to bind TRA to the settlement agreement based upon Appraisal 1. On January 25, 2002, TRA responded to the motion. Following a hearing on this matter, the trial court entered an order denying the Landowners' motion, finding that they "did not expect fair market value as of November 27, 2001 including the value of TRA's improvements." In its order, the court noted that the issue of whether to enforce the settlement based upon Appraisal 2 was not before it and recommended TRA file a Motion to Enforce within twenty days of the court's order. Thus, on July 25, 2002, TRA filed a Motion to Enforce the settlement based upon Appraisal 2. On July 26, 2002, the Landowners filed a Motion for Reconsideration of the denial of its motion to enforce based upon Appraisal 1.

¶ 7. The Lee County Special Court of Eminent Domain held a hearing on both TRA's Motion to Enforce as to Appraisal 2 and on the Landowners' Motion for Reconsideration of the denial of enforcement as to Appraisal 1. On October 7, 2002, the court set aside both appraisals and ordered that a third appraisal be conducted by TRA with an effective date of November 27, 2001 (the date of the first apprisal)(hereinafter "Appraisal 3").² The court determined that a reasonable closing date would have been February 1, 2002, and ordered TRA to pay interest at a rate of 8% from and after February 1, 2002, until closing on the value determined by the appraisers in the third appraisal, plus the premiums of 18% and 20% as provided in the settlement agreement.

¶ 8. The purchase of the real property in question occurred on December 20, 2002. At the closing TRA paid the court-ordered interest from February 1, 2002, through December 20, 2002, in the amount of $56,350.08. TRA timely appeals and asserts as error the trial court's assessment of interest. The Landowners complain of the following: (i) the trial court's refusal to enforce the agreement based upon Appraisal 1; (ii) the trial court's admission of the testimony of the appraiser as to certain unauthorized acts; and (iii) the trial court's refusal to award attorney's fees to the Landowners for breach of the settlement agreement.

DISCUSSION

I. Whether the trial court erred in refusing to enforce Appraisal 1.

¶ 9. The Landowners argue that Appraisal 1 was the correct and proper appraisal because it was made after a meeting of all parties to the litigation and the parameters for that appraisal were agreed upon by all parties. The Landowners contend that when the amount of $925,000 was given as the result of Appraisal 1, Christopher Rogers, then chairman of TRA, acted unilaterally to have a second appraisal done to greatly reduce the amount contained in Appraisal 1. The Landowners argue that Rogers improperly attempted to modify the settlement agreement but lacked the authority to bind TRA. Further, the Landowners contend that Appraisal 2 should have never occurred and was based on illegal instructions given by Rogers. TRA disagrees and argues that if the trial court had enforced the settlement agreement based upon Appraisal 1, the Landowners would have been given an improper and unintended windfall through increased property value occasioned by TRA's own actions and expenditures. TRA contends that such a windfall was not the essence of it's settlement agreement with the Landowners. Further, TRA urges this Court to consider the rationale of the trial court in denying the Landowners' Motion to Enforce and Motion for Reconsideration based upon Appraisal 1. In its October 2, 2002, order, the trial court ruled:

The evidence is in direct conflict as to whether or not a special assumption to disregard the improvements of TRA should be considered in Appraisal 1. Where the terms of a contract are less than clear, the contract is to be interpreted in a reasonable manner. Lehman-Roberts v. Hwy. Comm. Of Miss., 673 So.2d 742, 744 (Miss.1996). TRA's evidence is, at least, equally compelling that the Landowners did not expect fair market value as of November 27, 2001 including the value of TRA's improvements. The Court takes judicial notice that the law of eminent domain does not allow compensation for benefits of future developments by the governmental agency exercising the power of condemnation.

¶ 10. With regard to the Landowners' allegations that Rogers acted without the authority of the TRA to have Appraisal 2 performed, the trial court ruled:

The Court finds that the actions of Rogers in instructing the appraisers concerning the special assumption to be utilized by them in arriving at the values of the three tracts of property, i.e., not to consider the effect on the value resulting from improvements made by TRA, were authorized by the TRA and ratification of authorization is contained in the minutes of TRA's meeting of June 20, 2004.

¶ 11. Paragraph 8 of the settlement agreement provides:

TRA will pay for an appraisal by appraiser Steve Holcombe and appraiser Jerry Bristow for Parcel No. 14, Parcel No. 14.01 and Parcel No. 17 (Exhibits C through E) and to cause said appraisers to issue a restricted report establishing the value of each one of the three tracts of land in a specific amount. For the purposes of appraising Parcel No. 14, the acreage will be deemed to be 2.7 acres.

¶ 12. In denying the Landowners' Motion to Enforce, the trial court ruled that the terms of the settlement agreement were "less than clear." Where terms of a contract are ambiguous, the contract will be interpreted in a reasonable manner. Lehman-Roberts v. Hwy. Comm. of Miss., 673 So.2d 742, 744 (Miss.1996). We held that it is a question of law for the court to determine whether a contract is ambiguous. Royer Homes of Miss., Inc. v. Chandeleur Homes, Inc. 857 So.2d 748, 751 (Miss.2003) (citing Miss....