ANALYSIS OF DECEMBER 17, 2020 SUPREME COURT OPINION

(Posted December 18, 2020) I’m a day late in getting to analysis of yesterday’s Supreme Court opinion in Palmyra Associates v. Commissioner of Highways. I have a decent excuse: I spent all day in an actual courtroom with an actual judge hearing actual witnesses. No, really; I did.

Palmyra Associates is an eminent-domain appeal involving an intersection project in Downtown Palmyra, in Fluvanna County. The Commissioner decided to convert the previous conventional intersection into a roundabout. (I always thought that roundabout was a British term for what we Yanks call a traffic circle. But I suppose its appearance in a published SCV opinion means it’s arguably mainstream here now.) Palmyra Associates owned a large tract at the intersection, and the project claimed about a third of an acre from it for the take and two easements.

The landowner designated one of its owners as a trial witness, indicating that he would testify to a figure of $545K for damage to the residue. The Commissioner convinced the trial court to exclude any such testimony in limine, because it was based on the loss of a one-acre pad site for future development.

The owner still got to testify at trial; he opined that the residue was damaged by the coincidental figure of $545K due to a 25% damage to the front 5.5 acres of the land. He valued that land at $2.2 million, and when you do the math, sure enough, that comes out to $545K.

The condemnation commissioners returned a split report. Three of them, those who had been nominated by the landowner, reported take compensation of about $107,000 plus $350,000 in damage to the residue. The two commissioners nominated by the condemnor reported the identical figure for the take, but residue damages of only $125K.

At this point, my mind is screaming at these folks to resolve the $225K difference peacefully. Perhaps they tried, but they failed. The Commissioner filed exceptions, arguing that the property owner’s testimony should have been struck, since it obviously matched his opinion that the trial court had excluded before trial. The court then invited the parties to suggest an appropriate course of action: “confirm the award of the take only, or grant a new trial.” The parties agreed to a final order on the undisputed figure for the take, so the court did so. It then set aside the residue-damage award in its entirety, and entered final judgment. The landowner got a writ.

The justices consider three issues in yesterday’s opinion. First, they rule that the circuit court acted within its discretion in excluding evidence of loss of development of a pad site. The court notes that the plans to develop the property were ten years old and contained several unaddressed conditions, including site-plan approval. Under prior caselaw, site-plan approval is ministerial and development is by right. Site-plan approval thus ordinarily isn’t a roadblock to consideration of development plans. Here, the court nods to that prior caselaw but finds that the lack of a site plan is relevant, though not dispositive.

Second, the Supreme Court affirms the trial court’s decision to strike the owner’s valuation testimony. The court holds that the trial testimony “was necessarily rooted in a lost ‘pad site.’” This was the evidence that the court had excluded before trial; merely dressing it up as an alternative theory didn’t make it admissible.

Finally, the court takes up the landowner’s challenge to the circuit court’s post-trial decision to put the parties on terms to confirm the take compensation only, or order a new trial. The justices find this issue waived for appellate review, because the landowner consented to the procedure. That’s invited error, and appellate courts decline to address assignments like that.

The opinion is noteworthy for a couple of observations in footnotes. The first deals with preservation: The Commissioner argued that the landowner had defaulted the first issue, relating to the exclusion of pad-site evidence, by not including it in post-trial exceptions. The court rejects that contention because this was a pre-trial ruling, and the condemnation commissioners never heard the evidence. The purpose of exceptions is to ask the judge to revisit trial issues; not pretrial rulings.

Next, the court points to a particular dispute among its judicial ancestors in a split 1972 decision. There, one justice had urged that a landowner may not treat land “as divided into lots when in fact it is undeveloped acreage.” More recent opinions have held that the property should be valued considering its current development potential, considering reasonable adaptations to achieve its highest and best use. The approach that the court takes here means that the court need not resolve, and expressly reserves for another day, the question “whether and if so, to what extent, a landowner may offer evidence that the property’s fair market value would be affected by a reasonable probability that land would be divided into lots.”

Yesterday’s decision continues a long dry spell for landowners in condemnation appeals. My quick scan just now indicated that in the past three years, only one landowner in an eminent-domain or inverse-condemnation appeal has prevailed in the Supreme Court: Helmick Family Farm v. Commissioner of Highways from 2019. In every other such appeal decided in that span, the court has ruled in favor of the condemnor.