Bern-Shaw Ltd. Partnership v. Mayor & City Council of Baltimore

JAMES R. EYLER, Judge. On October 3, 2000, the Mayor and City Council of Baltimore, appellee, filed a petition for condemnation and a petition for immediate possession and title in the Circuit Court for Baltimore City. The petition was to acquire property known as 324-326 W. Baltimore Street, owned by Bern-Shaw Limited Partnership, appellant. The acquisition was part of the West Side Redevelopment Project in Baltimore City.

Appellee deposited $234,000 with the court, the higher of two appraisal values it had obtained. On December 10-12, 2001, a jury determined the value of the property to be $140,000. Appellant filed a motion for new trial, which was denied. Appellant noted an appeal to this Court.

The property was improved by a five-story building over 100 years old. When taken by appellee, the building was occupied by a photography studio on the first floor, an apartment on the second floor, a storage area on the third floor, and a sewing machine company on the fourth floor. Appellee evicted the tenants and turned off the electricity. At the time of the trial, the building was full of trash, and it was infested with rats.

The jurors viewed the first two floors of the building. Appellee called two expert witnesses to testify as to value. One testified that the value of the property was $225,000, and ³¹⁹ the other testified that the value was $234,000. Appellant called two expert witnesses to testify.

One witness testified that the value was $500,000, and the other testified the value was $513,000. On cross-examination, appellant’s representative testified, over objection, that appellant purchased the property in 1982 for a price of $85,000. During trial, appellee stated that it intended to call a civil engineer as an expert rebuttal witness. Appellant objected that the witness had not been disclosed in a timely manner, but the court ruled that appellant could depose the witness and the witness could then testify.

Questions Presented The questions, as phrased by appellant, are: 1. Was it error to allow into evidence an 18-year-old sale, unadjusted to account for the increase in real estate prices over 18 years? 2. Was it error to allow the jury to view the interior of the property when, as a result of the City’s quick take action, it was filled with trash, the electricity was off, and rats were running around freely inside the property? 3. Was it error to deny a new trial when it was discovered after the trial that, during the view, several members of the jury had been frightened by rats and had fled from the second floor? 4.

Was it error to allow the testimony of an expert whose existence and report were only disclosed on the last day of trial and who testified as to the condition of the building with no analysis as to what effect, if any, the condition had on fair market value? 5. Should the jury verdict have been reversed when there was no evidence to support it, by way of expert testimony of the four appraisers or of any comparable sale, other than the unadjusted 18-year-old sale? 6. Was the owner denied a fair trial when the City’s expert witness removed photographs, introduced into evidence, ³²⁰ from the courtroom, and when the City subsequently discovered where they were but did not notify the court of their location in time for the owner’s witness to use them in his testimony? Discussion 1.

Appellant argues that it was error to allow an eighteen-year-old sale into evidence because it was not relevant to establish the value of the property in this quick-take action. Appellant relies on the Maryland Pattern Jury Instructions (MPJI) and the cases cited therein: State Roads Comm’n v. Adams, 288 Md. 371 , 209 A.2d 247 (1965); Taylor v. State Roads Comm’n, 224 Md. 92 , 167 A.2d 127 (1961); Lustine v. State Roads Comm’n, 217 Md. 274 , 142 A.2d 566 (1958). See Maryland Pattern Jury Instructions, Fourth Edition, MICPEL, MPJI-Cv 13:3(c)(3)(c) (2002). The pattern jury instructions provide that “as a rule of thumb only, sales more than five years prior to the date of taking ... can be excluded.” Id.

(emphasis ours). The cases referred to in the MPJI hold that the trial court should be given ample discretion to determine what sales are comparable to the property in question, making it clear that the five-year rule is simply a general guideline. State Roads Comm’n v. Adams, 238 Md. at 378-79 , 209 A.2d 247 , and Taylor v. State Roads Comm’n, 224 Md. at 94-5 , 167 A.2d 127 , cite Lustine as the leading case in this area. In Lustine, 217 Md. at 277-78 , 142 A.2d 566 , a landowner and tenant both objected to condemnation of part of the subject parcel for use as a highway.

At the trial, the landowner and tenant sought to introduce testimony by an expert relating to comparable properties used for similar purposes. Id. at 280 , 142 A.2d 566 . On appeal, the Lustine Court held that keeping the information relating to those properties out of evidence at the trial was “unduly restrictive.” Id. The Court stated that the settled principle is that there is “considerable latitude in the exercise of discretion by the lower court in determining ³²¹ comparable sales.” Id.

(citing Patterson v. Mayor and City Council of Baltimore, 127 Md. 233, 241 , 96 A. 458 (1915); Williams v. New York, P. & N. R. Company, 153 Md. 102, 108 , 137 A. 506 (1927)). The Lustine Court reasoned that real estate parcels have a degree of uniqueness which make comparability, one with the other, in a strict sense, practically impossible. We think it the better policy, where there are any reasonable elements of comparability, to admit testimony as to the sales, and leave the weight of the comparison for the consideration of the jury, along with such distinguishing features as may be brought out on cross-examination or otherwise. Lustine, 217 Md. at 281 , 142 A.2d 566 .

The sale objected to by the appellant in the case before us is comparable to the property being valued — they are, in fact, the same property. The eighteen-year-old sale is simply the sale pursuant to which the appellant acquired title. Such conveyances are generally recognized as admissible in condemnation cases. See 5 David Schultz, Nichols on Eminent Domain § 21.01[2] (3d ed.2001).

Any differences in the condition of the building went to the weight of that evidence and were properly before the jury for consideration. Lustine, 217 Md. at 281 , 142 A.2d 566 . The appellant had ample ability to cross-examine the appellee’s experts about the comparison and the property’s value adjusted for time. In fact, on re-direct, appellant’s counsel elicited testimony from appellant’s representative that the sale eighteen years ago was an estate sale of the property “as-is.” Appellant’s representative also testified to extensive repairs made to the property by appellant.

Relying on Colonial Pipeline v. Gimbel, 54 Md.App. 32, 43-44 , 456 A.2d 946 (1983), appellant claims that when appellee offered the previous sale of the property eighteen years ago, it needed to adjust the sales price using the consumer price index or another method that would account for the age of the sale. The burden of proof to establish value, however, falls on neither party. Solko v. State Roads Comm’n, 82 Md.App. 137, 147 , 570 A.2d 373 (1990) (“once the ³²² necessity for the taking has been established, the focus of the fact finder is upon ‘just compensation’ which the State is required to pay for that taking. It matters not who bears the burden of proof as the concept has no place in the inquiry.”) Id. at 147 , 570 A.2d 373 .

See Solko, 82 Md.App. at 147 , 570 A.2d 373 . The party opposing the introduction of a sale for comparison can cross-examine the witness with respect to the age of the sale. See Lustine, 217 Md. at 281 , 142 A.2d 566 ; see also Hance v. State Roads Comm’n, 221 Md. 164, 168 , 156 A.2d 644 (1959). In Colonial Pipeline , this Court addressed the admissibility of the purchase price of property for purposes of valuing it.

Colonial Pipeline, 54 Md.App. at 41 , 456 A.2d 946 . The trial court allowed the owners of the property to elicit testimony from their expert about the purchase, which had occurred eighteen years prior to the trial. Id. at 34 , 456 A.2d 946 . The owner’s expert in that case expressed his opinion as to the value of the eighteen-year-old sale and adjusted the price, using the consumer price index.

Id. at 36 , 456 A.2d 946 . The condemnor’s rebuttal expert stated that adjustments using the consumer price index were not accepted in the trade, and he gave his own valuation of the property. Id. On appeal, this Court indicated that adjustment of the sales price by an expert was evidence to be elicited on cross-examination and weighed by the jury.

Id. at 40 , 456 A.2d 946 . We held that “although ‘[tjhere is no fixed period of time in which the purchase price of property sought to be condemned should be either admitted or excluded from evidence,’ the trial courts are given considerable latitude and discretion in this area.” Id. (citing Mayor and City Council of Baltimore v. Schreiber, 243 Md. 546, 551 , 221 A.2d 663 (1966)); see also Belworth, Inc. v. Baltimore, 256 Md. 369, 374 , 260 A.2d 284 (1970). We stated that the trial judge should consider whether the original purchase price would be helpful to the jury, looking at such factors as changes in the property, changes in the surrounding neighborhood, and economic growth of the area.

Colonial Pipeline, 54 Md.App. at 41 , 456 A.2d 946 . Although the sale in Colonial Pipeline was eighteen years old, it was ³²³ probative of the present value of the property because it had the identical location, nature, and size as the property in the condemnation action. Id. at 42 , 456 A.2d 946 . “The element of time was again a factor for cross-examination, argument and ultimate decision by the jury.” Id. Similarly, in the case before us today, the property conveyed by the sale eighteen years ago was identical in nature, size, and location.

In accord with the holdings in Colonial Pipeline and Lustine , we conclude that the age of the sale went to the weight of the evidence, not its admissibility. The appellant had the opportunity to elicit testimony that highlighted how the property had changed subsequent to appellant’s purchase. Neither party had the burden of proof, and either party could have asked its experts to adjust the sales price to reflect present value. Keeping in mind the trial court’s discretion and appellant’s opportunity to attack the weight of the evidence, we perceive no error. 2.

Appellant contends that the trial court erred by allowing the jury to view the interior of the property. Appellant argues that it was prejudiced because the jurors saw the property in a substantially different condition from that which would have existed prior to a sale on the open market. Appellant relies on the treatise, The Appraisal of Real Property, which defines fair market value as that price obtained “under all conditions requisite to a fair sale.” See The Appraisal Institute, The Appraisal of Real Property (10th Ed.1992). The definition of fair market value in Maryland eminent domain cases, however, is governed by statute.

See Md.Code Ann., Real Property, § 12-10o(b) (1996 Repl.Vol., 2002 Supp.) [hereinafter (RP)]. The statute defines fair market value as “the price as of the valuation date for the highest and best use of the property which a vendor, willing but not obligated to sell, would accept for the property, and which a purchaser, willing but not obligated to buy, would pay, excluding any increment in value proximately caused by the public project ³²⁴ for which the property condemned is needed.” The statute further provides that fair market value includes “any amount by which the price reflects a diminution in value occurring between the effective date of legislative authority for the acquisition of the property and the date of actual taking, if the trier of facts finds that the diminution in value was proximately caused by the public project for which the property condemned is needed, or by announcements or acts of the plaintiff or its officials concerning the public project, and was beyond the reasonable control of the property owner.” The drafters of this statute contemplated “acts or announcements by the condemnor [which] may have a significant influence on the property concerned [or] might cause property to be vacated or vandalized with a resultant depreciation in value. There may be ... a lapse of years between the initial project announcement and enactment of specific authority for the taking.” See Baltimore v. United Five & Ten Cent Stores, Inc., 250 Md. 361, 364-65 , 243 A.2d 521 (1968) (discussing Senate Bill 8, from the 1963 session, which enacted former Article 33A, § 6, now contained in Real Property § 12-105); see also Stickell v. Mayor of Baltimore, 252 Md. 464, 473 , 250 A.2d 541 (1969) (stating that the later statutory re-codification incorporates the case law discussing the former statutory text). In the case before us, there was no dispute as to the date of the taking, and there is no contention that the jury was not properly instructed with respect to the law of valuation.

Pursuant to Md. Rule 12-207, the jury “shall view the property” unless a waiver is signed by both parties. Although the appellant objects to the jury having viewed the property, neither party signed a waiver. The rule provides that during the view, a representative for each party can “point out the physical features, before and after the taking.” Id. During the view in this case, appellant discussed at great length the condition of the property before and after the taking.

The jury was instructed to consider the property as of October 2000, the time of the taking, and not the date of the viewing. ³²⁵ The jury is permitted to use its view of the property as real evidence and as a guide to determine how much weight to give to the testimony of experts and other witnesses. See Brannon v. State Roads Comm’n, 305 Md. 793, 801 , 506 A.2d 634 (1986). In the case before us, there was testimony from which the jury could determine that some structural conditions they saw during the interior view existed prior to the taking. Appellee’s expert, in discussing structural damage present in the building prior to the taking, stated: “The moisture has reached the first floor so it’s obviously years and years of, of moisture entering the building and working on the wood and actually damaging the wood to the point where it is fatal and it’s collapsing.” On cross-examination, appellee’s expert was questioned about the feasability of using the structure and stated that “the front half has a[sic] moderate damage and can be fixed up.

The back half is already collapsing and is dangerous.” The expert went on to state the floor was unstable for walking. The testimony in this case gave the jury the tools it needed to decide if the condition of the property during the view was proximately caused by appellee or existed before the taking. This evidence, along with the oral remarks made during the view, allowed the jury to consider the appropriate fair market value of the property. Appellant’s reference to State Toll Hwy.

Auth. v. Grand Mandarin, 189 Ill.App.3d 355 , 136 Ill.Dec. 370 , 544 N.E.2d 1145 (1989), is unpersuasive because that case focused on the accuracy of video testimony as a substitute for a jury view. In that case, the jury was unable to view the buildings because they had been razed. Id. at 1147. The damages depicted in the video were caused by the vacating tenants.

Id. at 1148-49. In the case before us, there was ample testimony from which the jury could have concluded that a deteriorated condition existed prior to the taking. We find nothing in the view itself that unduly prejudiced appellant. We reiterate that, absent a waiver, Maryland Rules require the jury to view the property.

See Md. Rule § 12-207. ³²⁶ 3. A decision on a motion for a new trial is reviewed for abuse of discretion, but an appellate court will rarely disturb the ruling. See Buck v. Cam’s Broadloom Rugs, Inc., 328 Md. 51, 57 , 612 A.2d 1294 (1992); see also Owens-Coming Fiberglas Corp. v. Baltimore City, 108 Md.App. 1, 29 , 670 A.2d 986 (1996). We have consistently given trial judges “the broadest range of discretion” when they are asked to consider “the core question of whether justice has been done.” Buck, 328 Md. at 57 , 612 A.2d 1294 .

If the verdict was “seriously distorted by information that should not have been before the jury,” however, the trial judge may have little discretion to deny the motion for new trial. Wernsing v. General Motors Corp., 298 Md. 406, 420 , 470 A.2d 802 (1984). Appellant claims that seeing rats during the view of the property caused fear in the jury, which was not contemplated by either party. Appellant argues that this fear is extraneous matter erroneously injected into the view, which obviously caused prejudice.

We disagree. Fear is not the type of extraneous matter contemplated by the Court of Appeals in Wernsing. Id. at 415 , 470 A.2d 802 (citing Annot., 54 A.L.R.2d 738 (1957), updated by Annot., 31 A.L.R.Jpth 623 (non-legal extraneous matter can be dictionaries, encyclopedias, telephone books, pamphlets, etc.)). In Wernsing , the jury erroneously relied on the definition of “legal cause” it found in a