Bait & Switch? High court considers use of initial appraisal in road condemnation case

By Peter Vieth, Virginia Lawyers Weekly – 3/30/2015

The Supreme Court of Virginia is considering the effect of what one lawyer called a “bait-and-switch tactic” used by the state highway department in road condemnation cases.

The court could decide whether a jury in an eminent domain trial can be told about the state’s “pre-offer statement of value,” an early appraisal of the value of property taken for a road project.

The high court case involves property taken for a Virginia Beach highway project, but a Hanover County judge similarly blocked introduction of an initial property valuation in a separate case recently.

Attorneys for property owners say it’s wrong for the government to throw out a high-dollar estimate and then block the introduction of that estimate at a later trial to determine value for condemned land.

“This is an abusive litigation tactic,” the Virginia Beach landowner’s lawyer argued before the Supreme Court Feb. 23.

In that case, Jim Ramsey of Virginia Beach said the Virginia Department of Transportation originally offered him $248,000 for a piece of his land needed for a highway project.

When he pressed for more, VDOT said a new appraisal showed the land was worth only $90,000. At trial, VDOT lawyers persuaded a judge to block the jury from even hearing about the higher early valuation.

The effect is a “bait-and-switch” tactic, argued L. Steven Emmert, one of Ramsey’s lawyers, and he and other lawyers say it’s often used by VDOT.

“It’s happening again and again by our government to citizens who’ve done nothing wrong – it’s just that their property is in the way,” Emmert told the justices. “That’s what I’m trying to illustrate here, is the danger to our citizens and our commonwealth.”

Under Virginia law, offers and settlement negotiations generally are not admissible at trial, and Emmert spent time before the justices attempting to distinguish between the early appraisal and the state’s initial offer to the landowner.

Landowners, including the Ashland businessman involved in the Hanover County case, argue the initial appraisal is an “admission against interest” by the state, allowing it to come in under the Rules of Evidence on hearsay.

At the Supreme Court hearing, a state lawyer countered that the statute barring admission of the dollar amount in a “certificate of take” is broad enough to make related appraisals also inadmissible.

“The practice and understanding has been for decades, this is what it means,” said Deputy Solicitor General Trevor S. Cox.

The attorney general’s office declined additional comment after the oral arguments.

The Supreme Court could deliver its ruling in April.

That guidance from the high court apparently will come too late to affect the case of Ashland contractor Paul Carey. The builder is battling with VDOT over the value of a slice of his land being claimed for a road widening project.

Trial in Carey’s case is set for March 19.

In a pair of pretrial rulings, Hanover County Circuit Judge J. Overton Harris rejected VDOT’s move to block Carey’s expert witness, but he granted a motion to keep out the state’s “pre-condemnation statement of just compensation.”

The early statement – termed an “offer to purchase” in a VDOT document – was $27,000 higher than the amount VDOT now wants to pay for acquiring the Carey property, Lollar said.

Harris pointed to two Supreme Court of Virginia rulings that early offers are attempts at compromise and thus not admissible at trial.

The VDOT document at issue described itself as an “offer to purchase the needed rights of way,” Harris said.

“Because that document is an offer from Petitioner to purchase Respondent’s property, the relevant statute and case law inform the Court that the information sought is not admissible,” Harris wrote.

Harris ruled that he would allow expert testimony on damages to the Carey property from the taking, however.

VDOT has been moving to exclude similar opinions from the same expert in other cases, said Carey’s lawyer, Charles M. Lollar of Norfolk.

“VDOT is really overreaching in trying to knock the landowner out of court before he gets his day in court,” Lollar said.

Real estate appraiser Dennis W. Gruelle is expected to testify that removing VDOT’s slice of Carey’s property will decrease the value of the remaining land by more than $80,000, according to Harris’ opinion letter.

VDOT argued that, without any figures for comparable sales in the market or contracts to sell the subject property, Gruelle had no evidence of potential income loss to support his opinion. According to the agency, Gruelle was merely reciting changes in features of the property.

Gruelle pointed to easements imposed on three of the business’ parking spaces, creating uncertainty about potential restrictions on their use in the future.

He noted the need to move the business’ advertising sign. The sign no longer would be readily visible to drivers on busy England Street in Ashland, Lollar contended.

Gruelle said the reduction in the size of the Carey property also would decrease the value.

Harris ruled that VDOT’s objections to Gruelle’s testimony go towards the weight of his opinion, not its admissibility. The judge denied VDOT’s motion to bar the testimony.

The Hanover case is Commissioner v. Carey (VLW 015-8-019).

In the Hanover case, VDOT is represented by attorneys at the Richmond firm of Randolph, Boyd, Cherry and Vaughan. F. Adam Cherry III said the firm would have no comment on the pretrial developments.