In its recent decision in Rodman v. Commonwealth (pdf), the Massachusetts Appeals Court reversed a Superior Court judgment entered after a jury trial almost 10 years ago. That judgment had required the plaintiffs, who sought damages for an eminent domain taking of their land in Foxboro, to repay the Commonwealth about $165,000 – the amount by which the pro tanto award the plaintiffs received exceeded the damages the jury found were caused by the taking. [Disclosure: I was the Assistant Attorney General who represented the Commonwealth at trial.]
The case involved a taking of about 10% of the plaintiffs’ 57.7-acre parcel of land across from Gillette Stadium. Most of the land had never been developed, and most of the taking was from that undeveloped area. A small part of the taking was from a gravel parking lot at one end of the property.
At trial, the parties disputed the admissibility of engineering testimony and development plans offered by the plaintiffs. The plaintiffs claimed that their undeveloped land could have been developed (before the taking) for high-end commercial uses such as a hotel, manufacturing, or a warehouse – all of which would have required a special permit. The plaintiffs acknowledged that they had never taken any steps to get a special permit, and did not know of any instances where special permits had been granted in similar circumstances. The plaintiffs’ expert nevertheless sought to testify that special permits would have been issued because special permits are “generally granted where no waivers, or other zoning relief, are required.” The Commonwealth argued that this evidence should have been excluded because special permits were not legally available in the special zoning overlay district at issue, and because there was no evidence that such permits would have been granted.
The trial judge agreed with the Commonwealth’s position and excluded the plaintiffs’ evidence. As a result, the plaintiffs’ appraiser lowered his estimate of the pre-taking value of the property by almost $500,000, which reduced the plaintiffs’ claimed damages by a corresponding amount, to about $1.6 million. The Commonwealth’s appraiser testified that the plaintiffs’ damages were $600,800, a figure based largely on the taking of part of the gravel parking lot.
At the conclusion of the trial, the jury returned a verdict in the amount of $600,800 – the exact amount to which the Commonwealth’s appraiser testified. Because that amount was below the pro tanto award that the Commonwealth had made to the plaintiffs prior to trial, the court’s judgment required the plaintiffs to repay the difference – about $165,000 – to the Commonwealth.
On appeal, the main issue was how to value land subject to an eminent domain taking where the valuation testimony is based on a theoretical use of the property that differs – sometimes, as here, substantially – from its existing use. The Appeals Court ruled that the trial judge committed reversible error by excluding the plaintiffs’ evidence of the particular uses to which the land could have been put. The court noted, “[i]t is true that with the testimony of its own experts and in cross-examination of the plaintiffs’ experts, the Commonwealth presented evidence that the [undeveloped] property still had the same amount of frontage and could be developed in the same ways before and after the taking.” The court nevertheless opined (without citing any record support) that, “[w]ithout question, the excluded testimony impacted the credibility of the plaintiffs’ engineering and appraisal experts’ testimony.” The court concluded that “[t]he ultimate determination of value was a question of fact for the jury who were entitled to hear all relevant testimony as to how the property could be developed before making that determination.”
In addition to reversing the judgment, the Appeals Court commented on issues that could arise during a retrial. The court stated, “[w]e agree with the Commonwealth that the pro tanto award is in essence a settlement offer and the judge did not err in declining to admit it in evidence.” The court also noted that, “[o]n any retrial, it will be within the discretion of the trial judge whether to admit the plaintiffs’ plans that were created for the sole purpose of demonstrating damages at trial.” The court added, “the trial judge was clearly correct to exclude” the plaintiffs’ appraiser’s use of the “individual lot method of appraisal” and that “the whole subdivision approach with appropriate consideration of the property’s development potential is the proper measure of damages.”
Finally, the Appeals Court, in a footnote, echoed a suggestion made recently by the Supreme Judicial Court: in an eminent domain case, where the admissibility of a potential use is a close question, the preferred course may be to let the evidence in, then present the jury with a special verdict form that allows them to value damages on alternate theories of highest and best use, reserving to the judge the option to later enter a judgment notwithstanding the verdict.
Rodman has been remanded for a new trial. We’ll keep tabs on the case and report back on any significant developments.