Virginia Supreme Court Rules in Favor of Landowners in Eminent Domain Case: Condemnor’s Initial Appraisal is an Admission of Value

This morning the Virginia Supreme Court issued its opinion in Ramsey v. Commissioner of Highways, No. 149029, finding that the Virginia Department of Transportation’s (VDOT) initial pre-condemnation appraisal is not a confidential offer of settlement, but rather, an admission of value that should be considered as evidence at trial.

OCA filed an amicus brief in support of the landowners, John and Janet Ramsey, arguing that the most important evidence in an eminent domain trial, the value of the property, should not be withheld from the jury.  More about OCA’s brief is here and our earlier discussion about this case is here.

In this condemnation case, VDOT commissioned an appraisal of the Ramsey property before offering to purchase it in advance of condemnation.  The owners refused the state’s offer and the state filed suit.  The landowners hired Virginia eminent domain law firm Waldo & Lyle to represent them in the proceedings.  (Note: Joe Waldo of Waldo & Lyle is the OCA Virginia representative.)

Prior to trial the state commissioned a second appraisal using a different appraiser who relied, in part, on the initial appraisal report.  Nevertheless, the second appraisal was much lower that the initial appraisal.

The landowners sought to admit the initial appraisal into evidence at trial.  However, the state argued that its pre-take appraisal was offered as an attempt to settled and, therefore, inadmissible.  The trial court agreed and barred its admission, limiting testimony and cross examination to only the minor issue upon which the second appraiser relied (an estimate of value relating to landscaping destroyed by the take).

The jury’s verdict came in below the initial appraisal and $14,675 under the estimate of compensation VDOT deposited into the registry shortly after filing the lawsuit.  A judgment was entered requiring the landowners to refund the $14,675 plus nearly 3 years of interest to the DOT.  The landowners appealed.

The opinion written by Justice Cleo E. Powell states:

The record demonstrates that the landowners were given the Savage appraisal, showing that the value of their entire property was $500,000, prior to the time any offer to purchase was made and/or settlement negotiations were initiated.  The landowners rely on United States v. 320.0 Acres of Land, 605 F.2d 762 (5th Cir. 1979) for the proposition that the Savage appraisal was admissible into evidence as pre-condemnation party admissions by the Commissioner.  In 320.0 Acres of Land, the landowners sought to introduce into evidence the 42 U.S.C.§ 46512 statements of just compensation given to them by the Federal agency seeking to condemn their property.  The Fifth Circuit noted that the § 4651 statements were admissible because “[t]echnically, at the time the statements are provided, there is no disputed claim, and hence no settlement negotiations of a disputed claim.”  320.0 Acres of Land, 605 F.2d at 824-25.  The Fifth Circuit held that “if § 4651 statements of just compensation are provided a prospective condemnee, they are admissible at a subsequent compensation trial as an admission, once it becomes known that at trial the Government is valuing the property at a lower figure.”  Id. at 825.  See also Department of Transp. v. Frankenlust Lutheran Congregation, 711 N.W.2d 453, 462 (Mich. Ct. App. 2006)(“[A] landowner may, if the condemning authority seeks to establish a lower valuation for the property at trial, introduce evidence of the higher, precondemnation valuation for the purpose of rebutting the authority’s lower valuation.”).  We agree with this logic, which is consistent with the language adopted by the General Assembly.

Slip Op at 5 & 6.

The opinion reverses the trial court judgment and remands the case back to the trial court for further proceedings.

With today’s opinion, VDOT’s practice of reducing its statement of just compensation before trial should end with the understanding that “the Government is not completely free to play fast and loose with landowners telling them one thing in the office and something else in the courtroom.” (U.S. v. 320 Acres of Land, 605 F.2d at 825.)

Ramsey v. Commissioner of Highways, Virginia Supreme Court Opinion (April 16, 2015)

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