Bern-Shaw Ltd. Partnership v. Mayor of Baltimore

CATHELL, Judge. This case arises out of a “quick-take” condemnation 1 by the Mayor and City Council of Baltimore, respondent, of a proper ²⁸² ty located at 324 West Baltimore Street in Baltimore City then owned by Bern-Shaw Limited Partnership, petitioner. Respondent filed the condemnation on October 3, 2000, and paid into court $234,000.00, which was the higher of two appraisals it had obtained, thereby “taking” the property on that date. 2 On December 10-12, 2001, more than fourteen months after the “taking,” a jury trial was held in the Circuit •Court for Baltimore City to determine the fair market value of the property. The jury found the value of the property to be $140,000.00. 3 After the verdict, petitioner filed a motion for a ²⁸³ new trial, which was denied.

Petitioner then filed an appeal of the final judgment and the denial of the motion for a new trial with the Court of Special Appeals. On December 3, 2002, that court affirmed the trial court’s judgment. Bem-Shaw P’Shp v. Mayor and City Council of Baltimore, 148 Md.App. 313 , 811 A.2d 869 (2002). Petitioner then filed a Petition for Writ of Certiorari with this Court, and, on April 9, 2003, we granted the petition.

Bem-Shaw v. Mayor and City Council of Baltimore, 374 Md. 82 , 821 A.2d 369 (2003). Petitioner presents four questions for our review: “1. Is a remote sale of the condemned property, unadjusted to reflect current value, generally admissible to prove the property’s fair market value as defined in Real Property Article Section 12-105? “2. Where property is acquired by the quick take process, authorized by Article III, Section 40A of the Maryland Constitution, (a) does Rule 5-403 authorize a court to order that the view of the property provided for by Rule 12-207 not take place where prejudicial conditions exist?

(b) Should the court have ordered that the view not take place in this case? (c) Should a new trial have been granted where, ²⁸⁴ during the course of the view, rats frightened jury members, causing the view to be aborted? “3. Does the elaboration of a report by an expert witness at trial authorize the testimony by a rebuttal expert witness whose existence and report were not disclosed during discovery? “4. Should a new trial have been ordered because the only exhibits that depicted the property prior to the date of condemnation were missing from the courtroom at the time of the owner’s testimony?” We answer in the negative the first of petitioner’s questions and hold that the trial court was in error for allowing into evidence the price paid by petitioner in 1982 for the property in question.

Absent an adjustment of the 1982 purchase price to reflect the current value, and considering that twelve comparable sales were entered into evidence by the parties to prove the property’s value at the time of the taking, we hold that the evidence regarding the 1982 purchase price was not relevant to show the fair market value of the property as it existed in October of 2000. We also hold that the trial court was in error for allowing a jury view of the property, over petitioner’s objection, and that, in a “quick-take” condemnation proceeding, a jury view of the property is not mandatory under Maryland Rule 12-207(c) where the view would be unfairly prejudicial to the former owner. Under the specific facts of the case sub judice, the jury view of the property fourteen months after petitioner relinquished control over the premises was unfairly prejudicial. Given our holdings with respect to petitioner’s first two questions necessitating a new trial, it is unnecessary to address petitioner’s third and fourth questions.

Accordingly, we reverse the judgment of the Court of Special Appeals. I. Facts Petitioner owned property at 324 West Baltimore Street consisting of a five-story (with 20-foot ceilings) mixed commercial and residential use building that was more than 100 years old and contained 25,000 square feet of space. On ²⁸⁵ October 3, 2000, respondent instituted a “quick-take” condemnation action for immediate possession and title of the property. At the time of respondent’s “quick-take” acquisition, the property was occupied by a photography studio on the first floor, an apartment on the second floor, storage on the third floor, and a sewing machine company on the fourth floor.

Shortly after taking possession of the five-story building, respondent proceeded to evict the tenants and to turn off the electricity to the building. In the process of moving out, the tenants apparently ripped fixtures from the walls and left trash scattered over the floors. At this point, title, possession, and responsibility for the premises was in respondent. At the time of trial fourteen months later, the building was full of trash and infested with rats.

This was the building’s condition at the time of the jury view on December 11, 2001. The jury view appears to have been the cause of some concern at trial. Petitioner objected to the jury being allowed to view the building’s interior, as it was at the time of trial filled with trash, adequate lighting would not be available because of the lack of electricity, the building was then infested by rats, and the jury would not be able to see all five floors. At trial, petitioner argued: “[Petitioner]: And the problem is really two fold.

One is, it’s a big five story building. I don’t think we can really expect the jury to climb — the elevators are not working. THE COURT: Right. [Petitioner]: To climb to the top. Part of the back of the building, because there’s been a whole [sic] in the roof, the ceiling’s coming down.

I don’t think you want a jury back there. So they really can’t see the whole building. And the other problem is ... as often happens and I’m sure the City didn’t intend this. There were tenants on the first floor and when they moved out the City took the building and you look at the first floor now and you say well, this has been trashed.

It looks terrible. There’s trash thrown around. I went in the building the other day and saw a dead rat. You know, I just think it will be hard and very prejudicial for the ²⁸⁶ jury to be in there and see this.

It wasn’t, this is not the way — it’s been over a year since they took the property so it’s really not, you really can’t see what it was like when they took it. And I, I’m just very concerned about them going in because they can’t see it and because it’s been trashed.” Respondent asked that the jury be allowed to see the interior of the building. Over objection by petitioner, the trial court ordered that the jury view the first two floors of the budding. 4 The resulting jury view was somewhat unusual. Due to the fact that there was no electric lighting in the building, flashlights were distributed to each of the jury members to illuminate the darkened interior.

Because of the assorted refuse left behind • by the evicted tenants, the jurors had to use caution in watching where they stepped. Also, upon reaching the second-floor landing, it appears that some of the jurors came upon the unwelcome sight of several rats and quickly fled down the stairs, unwilling to continue their tour of the premises. At the trial itself, respondent called two expert appraisal witnesses. The first expert testified that the value of the property was $225,000.00 while the second testified that the value was $234,000.00.

Petitioner also called two expert appraisal witnesses. Petitioner’s first expert appraisal witness testified that the value was $500,000.00 and the second testified that the value was $513,000.00. To determine these valuations, all four of the expert appraisal witnesses used comparable sales approximately within five years of October 3, 2000, the day of the “quick-take” acquisition. Several of these comparisons were of buildings within the same block, and all ²⁸⁷ of the expert appraisal witnesses adjusted the sales prices to account for the lapse of time between the date of the comparable sale and the date of the take.

In all, twelve comparable sales were introduced at trial. A representative of petitioner, Harry Shapiro, was also called to testify as to the value of the building in question. It was during the cross-examination of Mr. Shapiro by respondent that Shapiro was asked how much had been paid for the property when petitioner acquired it in 1982, 18 years prior to the condemnation. Petitioner objected on the grounds that an 18 year old sale was too remote in time to be of value to the jury, ie., was irrelevant.

The trial court overruled the objection, and Shapiro testified that the building had been purchased in 1982 for $85,000.00. 5 The deed of conveyance ²⁸⁸ showing this remote purchase price was then moved into evidence. The jury returned a verdict of $140,000.00. This verdict was considerably lower than any of the valuations given by either petitioner’s or respondent’s éxpert appraisal witnesses. The only evidence of any value less than the appraisals was the testimony that the purchase price of the 18-year-old sale had been $85,000.00.

Petitioner moved for a new trial, but the motion was denied. Petitioner then appealed to the Court of Special Appeals. As previously mentioned, the Court of Special Appeals affirmed the trial court’s judgment as to both the jury verdict and the denial of a motion for a new trial.

II

Discussion A. Evidence Regarding the 1982 Sale Price of the Property It is the jury’s task to determine the fair market value of a condemned property, including determinations of value in “quick-take” contested proceedings. In J.L. Matthews, Inc. v. Maryland-National Capital Park & Planning Comm’n, we stated: “Under § 12 — 105(b), ‘fair market value’ is defined 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 rendering its inquisition, the jury may consider a number of elements that ‘influence market value,’ including, ‘improvements on the land,’ the ‘sales of compara ²⁸⁹ ble lands,’ ‘evidence of reasonable probability of rezoning,’ and ‘ “any special features which may enhance [the property’s] marketability J.L. Matthews, 368 Md. at 88-89, 792 A.2d at 298 (quoting Dodson v. Anne Arundel County, 294 Md. 490, 495 , 451 A.2d 317, 320 (1982) (internal citation omitted)). Because real property is unique, the most common method of establishing the value of the property that has been acquired by condemnation is through appraisals of fair market value in which comparable sales are often utilized. The comparable sales method of valuation has long been accepted in Maryland.

Brinsfield v. City of Baltimore, 236 Md. 66 , 202 A.2d 335 (1964). See also State Roads Comm’n v. Adams, 238 Md. 371, 378 , 209 A.2d 247, 250 (1965) (“In Maryland it is well settled that evidence of the price for which similar property has been sold in the vicinity may legitimately be used in support of, and as background for, the opinion of an expert testifying as to the value of the property taken in condemnation proceedings.”). It has been held by the intermediate appellate court that, in some unique instances, it may be proper to admit evidence of the prior sale of the property in question, even if the sale occurred several years prior to trial. See Colonial Pipeline v. Gimbel, 54 Md.App. 32 , 456 A.2d 946 (1983) (evidence concerning an 18-year-old sale of property in question admissible where property was unique and no comparable sales existed.) With this in mind, we turn now to the first issue: whether it was permissible for the trial court to allow the jury to hear evidence regarding the price that petitioner paid for the building in question, a sale that was 18 years old at the time of trial.

We hold that, under the circumstances of this case, such a remote sale was not relevant to the fair market value of the property at the time of the take. We further hold that its improper admission unfairly prejudiced the petitioner. As a threshold matter, no evidence that is alleged to relate to the fair market value of a property involved in a condemnation proceeding is properly admissible at trial unless ²⁹⁰ it is actually relevant. As this Court stated as a general evidentiary principle in Lai v. Sagle, 373 Md. 306 , 818 A.2d 237 (2003): “‘Evidence, to be admissible, must be both relevant and material.

Evidence is material if it tends to establish a proposition that has legal significance to the litigation; it is relevant if it is sufficiently probative of a proposition that, if established, would have legal significance to the litigation. Evidence is relevant, therefore, if it has any tendency to make the existence of a material fact more or less probable than it would be without the evidence, and a fact is material if it is of legal consequence to the determination of the issues in the case, which are dependent upon the pleadings and the substantive law. >}: ^ ^ sfc ‘The general rule in this State is that all evidence that is relevant to a material issue is admissible except as otherwise provided by statutes or by rules applicable in Maryland courts. Relevant evidence may be excluded if the trial court [] believes that its probative value is substantially outweighed by the dangers of unfair prejudice.’ ” Id. at 319 , 818 A.2d at 245 (quoting Myers v. Celotex Corp., 88 Md.App. 442, 454 , 594 A.2d 1248, 1254 (1991), cert. denied, Fibreboard Corp. v. Myers, 325 Md. 249 , 600 A.2d 418 (1992)). See also Smallwood v. Bradford, 352 Md. 8, 27 , 720 A.2d 586, 595 (1998) (stating “Rule 5-401 defines relevant as ‘evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.’ ”).

The same has been held in criminal cases. See, e.g., Andrews v. State, 372 Md. 1, 19 , 811 A.2d 282, 292 (2002) (stating that although relevant evidence is generally admissible, it “should be excluded by the trial court, if the probative value of such evidence is determined to be substantially outweighed by the danger of unfair prejudice.”); Merzbacher v. State, 346 Md. 391, 404 , 697 A.2d 432, 439 (1997); Grandison v. State, 341 Md. 175, 206 , 670 A2d 398, 413 (1995), cert. denied, 519 U.S. ²⁹¹ 1027, 117 S.Ct. 581 , 136 L.Ed.2d 512 (1996); State v. Jaynes, 314 Md. 113, 119 , 549 A.2d 380, 383 (1988); Md. Rules 5-401, 5-402, 5-403. Appellate review of a trial court ruling on the admissibility of evidence often is said to be based on the standard that such a ruling is “left to the sound discretion of the trial court,” so that “absent a showing of abuse of that discretion, its ruling[] will not be disturbed on appeal.” Farley v. Allstate Ins. Co., 355 Md. 34, 42 , 733 A.2d 1014, 1018 (1999) (alteration added) (citing White v. State, 324 Md. 626, 636-37 , 598 A.2d 187, 192 (1991)).

Application of that standard, however, depends on whether the trial judge’s ruling under review was based on a discretionary weighing of relevance in relation to other factors or on a pure conclusion of law. When the trial judge’s ruling involves a weighing, we generally apply the more deferential abuse of discretion standard. On the other hand, when the trial judge’s ruling involves a pure legal question, we generally review the trial court’s ruling de novo. See Walter v. Gunter, 367 Md. 386, 392 , 788 A.2d 609, 612 (2002) (“[O]ur Court must determine whether the lower court’s conclusions are ‘legally correct’ under a de novo standard of review.”) (alteration added) (citing In re Mark M., 365 Md. 687, 704-05 , 782 A.2d 332, 342 (2001)); Register of Wills for Balt.

County v. Arrowsmith, 365 Md. 237, 249 , 778 A.2d 364, 371 (2001) (“[A]s is consistent with our review for all questions of law, we review the order and judgment de novo.”). See also In re Mark M., 365 Md. at 704-05, 782 A.2d at 342 (finding that where a “trial court has committed an error of law, [it is] to be reviewed by appellate courts de novo.”) (alteration added). Likewise, if a court’s ruling constitutes a “ ‘conclusion!] of law based upon the facts’ ” of a case, Comptroller of the Treasury v. Gannett Co., Inc., 356 Md. 699, 707 , 741 A.2d 1130, 1134 (1999) (alteration added) (quoting Cassell v. Pfaifer, 243 Md. 447, 453 , 221 A.2d 668, 672 (1966)), the court’s interpretation of the “ ‘law enjoy[s] no presumption of correctness on review’ ” and is “ ‘not entitled to any deference.’ ” Gannett Co., Inc., 356 Md. at 707 , 741 A.2d at 1134 -35 (quoting Rohrbaugh v. Estate of Stern, 305 Md. 443 , 447 n. ²⁹² 2, 505 A.2d 113 , 115 n. 2 (1986) (citation omitted); Oliver v. Hays, 121 Md.App. 292, 306 , 708 A.2d 1140, 1147 (1998)). Here, we hold that the price that was paid in 1982 for the property located at 324 West Baltimore Street was not relevant for the jury, at trial in 2001, to consider in its valuation of the property as of the time of the taking, which was fourteen months earlier.

There was ample evidence at trial of comparable sales. Moreover, the time period of the purchase was simply too remote. See City of Baltimore v. Schreiber, 243 Md. 546, 551 , 221 A.2d 663, 665 (1966) (“The general rule in this country and in this state is that ‘evidence of the price paid for condemned real property on a sale prior to eminent domain proceedings is admissible in the proceedings at least where the sale is voluntary, is not too remote in point of time, or is not otherwise shown to have probative value.’ ”) (emphasis in original) (quoting W.R. Habeeb, Admissibility, in Eminent Domain Proceeding, of Evidence as to Price Paid for Condemned Real Property on Sale Prior to the Proceeding, 55 A.L.R.2d 791 (1957)). While this Court has determined that there is “considerable latitude in the exercise of discretion by the lower court in determining comparable sales,” the 1982 sale was not properly admissible as evidence of a comparable sale.

Lustine v. State Roads Comm’n, 217 Md. 274, 280 , 142 A.2d 566, 569 (1958) (citing Patterson v. Mayor and City Council of Baltimore, 127 Md. 233, 241 , 96 A. 458, 461 (1915); Williams v. New York, P. & N.R. Company, 153 Md. 102, 108 , 137 A. 506, 508 (1927)). As this Court recently stated, “[t]he comparable sales approach estimates market value by looking to recent voluntary sales transactions involving properties similar to the subject property, and adjusts for any differences between each comparable property sold and the subject property.” Washington Suburban Sanitary Comm’n v. Utilities, 365 Md. 1 , 10 n. 5, 775 A.2d 1178 , 1183 n. 5 (2001) (alteration added) (emphasis added). In regard to comparable sales, Maryland has adopted as a “rule of thumb” the “five year— five mile” rule, that is, sales concluded more than five years ²⁹³ prior to the date of the taking and those more than five miles from the property can be excluded. See Taylor v. State Roads Comm’n, 224 Md. 92 , 167 A.2d 127 (1961); State Rds.

Comm’n v. Adams, 238 Md. 371 , 209 A.2d 247 (1965); Maryland Pattern Jury Instructions, MPJI Cv 13:3(c)(3)(c) (4th ed.2002). Testimony based on remote in time sales adjusted for time by use of the consumer price index, however, in very limited circumstances, may sometimes be an acceptable method, absent the availability of alternative, preferable methods. See Colonial Pipeline v. Gimbel, 54 Md.App. 32 , 456 A.2d 946 (1983). Property values can greatly appreciate (or depreciate) over time.

In this instance, petitioner purchased the building in question in 1982 for $85,000.00. At the time of trial, the estimates by expert appraisal witnesses ranged from a low of $225,000.00 to a high of $513,000.00. The original 1982 purchase price, 18 years old at the time of the taking, was simply not, under the circumstances here present, relevant to the jury’s determination of the fair market value of petitioner’s property at the time of the taking. This conclusion is compelled also by the fact that no effort was made to adjust the 1982 purchase price to its 2001 present value.

We are not alone in our assessment of the relevance of “time” in comparable sales. The leading treatise on condemnation also declares that the time of the previous sale is always relevant in determining whether the comparable sale is admissible as evidence. Nichols on Eminent Domain (hereinafter Nichols) states, “[sjales of property must be recent enough in time to provide good evidence of fair market value of condemned land. This is true no matter how similar the properties are in all other respects.” 5 Nichols on Eminent Domain § 21.02, at 21-55 (3d ed.

Rev.2001) (alteration added) (emphasis added). Nichols further states: “Unquestionably, the first issue to be resolved concerning the admissibility or exclusion of a sale or purchase of the property that is subject of a condemnation case is the date of the sale or purchase: is it relevant? For example, among the facts to be shown to render such evidence ²⁹⁴ admissible are that the purchase was very recent and that values have not changed in the area since the purchase.” 7A Nichols on Eminent Domain § 9A.04[1][c][i], at 9A-32 (emphasis added). Other states have interpreted this issue similarly.

See Illinois State Highway Authority v. Grand Mandarin Restaurant, Inc., 189 Ill.App.3d 355 , 136 Ill.Dec. 370 , 544 N.E.2d 1145, 1149 (1989) (“When a parcel of land is condemned, the purchase price paid by the owner is a fact which may be considered in determining its value, provided the sale was recent and a voluntary transaction, with no changes in conditions or marked fluctuations in values having occurred since the sale.”) (emphasis added); Illinois Cent. R. Co. v. Stewart, 265 Ill. 35 , 106 N.E. 512 , 513 (1914) (finding that evidence of the purchase price of property sixteen years before it was condemned was not relevant to its present value); Southern Elec. Generating Co. v. Lance, 269 Ala. 25 , 110 So.2d 627, 632 (1959) (holding that a seventeen-year-old prior sale was too remote to be relevant at trial); Davis v. Pennsylvania R. Co., 215 Pa. 581 , 64 A. 774, 776 (1906) (holding that the trial court properly excluded evidence as to a seventeen-year-old purchase price, the court stating that such evidence would have given the jury no proper estimate of its value “immediately before the taking.”); United States v. A Certain Tract or Parcel of Land, 47 F.Supp. 30, 33 (D.Ga. 1942) (stating that price paid for property sought to be taken is generally admissible as evidence of fair market value, “except where the purchase was so remote in point of time from the condemnation proceedings as to afford no fair criterion of present value or it is otherwise shown to have no probative value.”); Oregon R. & Navigation Co. v. Eastlack, 54 Or. 196 , 102 P. 1011, 1014 (1909) (holding that evidence elicited during cross-examination regarding what the owner had paid for the property 12-15 years prior was too remote and afforded “no proper basis for determining its present value.”). The 1982 sale, unadjusted to present value, was not “recent” enough to have had any measure of probity in this case.

As ²⁹⁵ such, it was not properly admissible under Maryland Rule 5-402. In its decision, the Court of Special Appeals stated that evidence of the 1982 purchase price of the property at 324 West Baltimore Street “went to the weight of the evidence, not its admissibility.” Bern-Shaw, 148 Md.App. at 323 , 811 A.2d at 874 . The intermediate appellate court further stated that “[s]uch conveyances are generally recognized as admissible in condemnation cases.” Id. at 321 , 811 A.2d at 873 (alteration added). To the extent that the Court of Special Appeals held that the purchase price of a property is always relevant, it is expressly overruled.

Respondent argues that the Court of Special Appeals’ holding in Colonial Pipeline, 54 Md.App. 32 , 456 A.2d 946 (1983), should determine the present case, because it also deals with the admission of an 18-year-old sale as evidence of a comparable sale and in that case the decision by the trial court to admit such evidence was upheld. We disagree. Whereas Colonial Pipeline dealt with the condemnation of a unique pipeline right-of-way, for which no expert was able to find a comparable sale, the property at issue here is not so unique in its nature. In fact, the four expert appraisal witnesses called at trial in this present case produced twelve comparable sales that were introduced into evidence.

The intermediate appellate court in Colonial Pipeline opined that “It is, we think, significant that the sale here considered was unique in that neither expert was able to produce a comparable sale other than the one consummated in 1963.... Comparable sales of pipeline rights-of-way are scarce.” Id. at 41-42 , 456 A.2d at 951-52 . With twelve comparable sales introduced by both petitioner and respondent into evidence at trial in the case at bar, there was not a dearth of comparable sales. In this Court’s decision in Taylor v. State Roads Commission, 224 Md. 92 , 167 A.2d 127 (1961), we did uphold a ruling admitting evidence of the five-and-a-half year old sale price of the small farm property there in question, but only where that prior sale was the sole sale of a small farm testified to by any of the appraisal experts.

Colonial Pipeline and Taylor are limited ²⁹⁶ in application to their facts and therefore demonstrate, at