State Roads Commission v. 370 Ltd. Partnership

McAULIFFE, Judge. In this condemnation action the State Roads Commission of the State Highway Administration (the State) utilized statutory “quick-take” procedures to freeze an early date of valuation and to permit an immediate taking of land owned by 370 Limited Partnership (the Partnership) and needed by the State to construct Interstate Highway 370 in Montgomery County. As it turned out, however, there was nothing quick about the taking. The State did not file its formal petition for condemnation within one year of its initial filing; it did not occupy or exercise dominion over the property until nearly one and one-half years after the initial filing; it amended the original petition by adding four acres to the property being taken from the Partnership more than two years after the initial filing; and, the case did not come to trial until more than four years after the initial filing.

The principal bone of contention between the parties involves the proper valuation date. The Partnership contends the property was properly valued as of the date of trial. The State argues the proper date should be the date on which it amended the action, some two years before trial. Additionally, the parties disagree whether the Partnership is entitled to prejudgment interest on the difference between the amount originally deposited and the amount of the jury’s verdict, and whether the trial judge erred in refusing to allow the State to call an expert as a rebuttal witness.

I. On 9 October 1985, the State filed two “quick-take” petitions in the Circuit Court for Montgomery County, pursuant to §§ 8-318 to 8-331 of the Transportation Article, Maryland Code (1977, 1991 Cum.Supp.). The petitions des ¹⁰⁰ ignated for taking parts of two unimproved tracts of land owned by or under contract to the Partnership. From the larger tract (the Cornelius tract) the State took 15.93 acres, and from the smaller tract (the PEPCO tract) the State took 7.62 acres. Pursuant to the provisions of § 8-323, the State deposited at the time of the initial filings $3,122,600 for the Cornelius tract and $1,495,000 for the PEPCO tract, representing the State’s estimate of fair compensation for the takings.

The funds were withdrawn by the Partnership soon thereafter. Although this filing and the deposit entitled the State to immediate possession of the property, it did not take actual possession until sometime in March of 1987. Both cases were referred to the county board of property review pursuant to § 8-326, but no action was taken by the board. On 10 October 1986, just over one year after the initial filings, the State filed formal condemnation petitions pursuant to §§ 8-318 to 8-331 of the Transportation Article.

In May 1987, the two cases were consolidated for trial. Trial dates established from time to time were continued at the request of one or the other of the parties. On 6 November 1987, the State filed an “Amended Condemnation Petition” taking an additional 4.095 acres from the PEPCO tract in order to construct a bridge across the interstate highway. The bridge was necessary to provide access to remainder portions of both tracts that would otherwise have been “landlocked” by the taking.

Virtually all of the Partnership’s land was zoned for light industrial development. The initial taking bisected both parcels and cut off all industrial access to the northern portions. Although those portions of the remainder had some value because of residential access that was not disturbed, the State determined that the cost of a bridge would be less than the damage to the portions of the remainder. Concurrent with the filing of the Amended Condemnation Petition, the State deposited an additional $4,346,400 for the benefit of the Partnership, which the Partnership withdrew.

In February of 1988, the State filed a Notice of Amendment, stating that the additional funds deposited in Novem ¹⁰¹ ber of 1987 were intended to be allocated in part to each tract. The State’s amendment explained that only a portion of the funds was for the additional four acres taken and that the remainder reflected the State’s revised estimate of the amount necessary to provide just compensation for the total takings from both tracts. On 26 October 1988, five days before a scheduled trial, the State filed a “Third Amended Condemnation Petition,” characterizing the condemnation action as one generally brought pursuant to Title 8 of the Transportation Article and Title 12 of the Real Property Article and alleging that the money it had deposited exceeded the fair market value of the taking. At this point, there was a disagreement between the parties as to the appropriate valuation date, and the State filed a motion pursuant to Rule 2-502 for a pretrial determination of that point of law.

On 30 June 1989, the circuit court determined that the property should be valued as of the trial date. The State then requested a pretrial ruling that the Partnership would not be entitled to prejudgment interest. The court held that it would not allow prejudgment interest because the trial date valuation gave the Partnership the benefit of the appreciation in value of the land. The State filed an additional pretrial motion, opposed by the Partnership, seeking to permit one of its expert appraisers, Robert W. Williams, Jr., to remain in the courtroom during trial.

The court ruled that Williams could remain in the courtroom during the testimony of non-expert witnesses, but stated that Williams would be subject to questioning by both sides before he would be eligible to testify as a rebuttal witness. On the last day of trial, the court determined that nothing in Williams’ opinion was derived from the testimony he had heard in the courtroom, that his evidence was cumulative, and that the Partnership had been unfairly deprived of an opportunity to prepare for his testimony. The court therefore declined to permit Williams to testify as a rebuttal witness. ¹⁰² The jury awarded $19,052,580.99 to the Partnership as just compensation for the property taken and damage to the remainder. The State noted an appeal to the Court of Special Appeals, and the Partnership cross-appealed on the issue of prejudgment interest.

The Partnership filed a petition for writ of certiorari, and the State filed a conditional cross-petition. We granted both petitions before the case was considered by the Court of Special Appeals.

II

Valuation Date The first question before this Court concerns the appropriate valuation date of the property taken by the State. The State contends that § 12-103 of the Real Property Article, Maryland Code (1974, 1988 Repl.Vol.) applies. That section provides: Unless an applicable statute specifies a different time as of which the value is to be determined, the value of the property sought to be condemned and of any adjacent property of the defendant claimed to be affected by the taking shall be determined as of the date of the taking, if taking has occurred, or as of the date of trial, if taking has not occurred. The Partnership insists that § 12-103 is inapplicable by its own terms, because “an applicable statute specifies a different time as of which the value is to be determined.” That statute, the Partnership says, is § 8-330 of the Transportation Article, which provides: If, within 1 year after payment is made under § 8-323 of this subtitle, the Commission fails to ascertain the entire amount to be paid for the property and acquire title to it by deed or condemnation or, within that same 1-year period, fails to file timely a petition for condemnation as required by the Maryland Rules, then the fair value of the property shall be the greater of the values determined as of: (1) The date the title to the property is acquired; and (2) The date the payment was made under § 8-323 of this subtitle. ¹⁰³ The trial court ruled that according to the plain language of these statutes, § 8-330 of the Transportation Article was applicable, and the State was not entitled to the earlier valuation date because the formal petition for condemnation was not filed until after the one-year deadline.

The State argues that the legislature did not intend § 8-330 to apply “where the State did not take physical possession of Partnership’s property until long after it initiated condemnation proceedings by making payment under § 8-323.” The purpose of § 8-330, according to the State, is to prevent unreasonable delay between the actual taking of the property and the filing of a formal condemnation action. Thus, the State reasons, where the filing of a formal condemnation petition was not unreasonably delayed beyond the actual taking of the property or where, as here, the filing of the formal petition preceded the actual taking, § 8-330 should not apply. We do not agree. The plain and unequivocal language of § 8-330 makes it clear that if the State elects to use the quick-take procedure established by §§ 8-318 through 8-331 of the Transportation Article it must, within one year after payment is made under § 8-323, either acquire title to the property or file a formal petition for condemnation in order to be entitled to the “time of taking” valuation prescribed by § 12-103 of the Real Property Article.

If the State accomplishes neither of these objectives within the one-year period, the property owner is entitled to have the property valued at the time of trial or at the time of payment under § 8-323, whichever is greater. In State Roads Comm’n v. Orleans, 239 Md. 368 , 211 A.2d 715 (1965), this Court construed the immediate precursor of § 8-330, Art. 89B, § 18 of the Maryland Code (1957, 1964 Repl.Vol.). The State argued in Orleans that the legislature intended the date of actual taking and not the trial date as the alternate valuation date under that section. This Court held that although the wording of the statute was ambiguous, the legislature intended to fix the trial date ¹⁰⁴ as an alternate valuation date when the State missed the one-year deadline.

Id. at 378 , 211 A.2d 715 . We have not departed from this interpretation of the statute. Moreover, as a part of the Code revision process, the language of Art. 89B, § 18 that created the ambiguity was deleted, so that § 8-330 now precisely reflects the interpretation the Court announced in Orleans . The State argues that our holding in Orleans may be distinguished because in that case there was an actual taking soon after the initial filing and deposit.

That fact, however, had nothing to do with our holding. We were concerned in Orleans with the date the legislature meant to establish as an alternate valuation date when the one-year limitation was missed. It was not suggested by the State in that case that there was any ambiguity in the meaning of the words selected by the legislature to trigger the running of the one-year period. Indeed, there is no ambiguity or room for interpretation.

The legislature established the beginning of that one-year period in this type of quick-take action as the date “payment is made under § 8-323 of this subtitle.” That language cannot be read to mean the date thereafter when the property was actually taken. This Court is not free to “rewrite a statute merely because of some judicial notion of legislative purpose.” Kaczorowski v. City of Baltimore, 309 Md. 505 , 516 n. 4, 525 A.2d 628 (1987). See also Simpson v. Moore, 323 Md. 215, 223 , 592 A.2d 1090 (1991). The State had a choice of two types of “quick-take” actions when it filed this case.

It could have filed a “quick-take” proceeding pursuant to §§ 8-334 through 8-339 of the Transportation Article (a Part IV proceeding); or, it could have filed, as it did, a “quick-take” proceeding pursuant to §§ 8-318 through 8-331 of the Transportation Article (a Part III proceeding). Had it filed a Part IV proceeding, § 12-103 of the Real Property Article would have applied, and the valuation date would have been the date the State took possession of the property and lawfully appropriated it for a public purpose. See § 12-102 of the Real Property ¹⁰⁵ Article; Hardesty v. State Roads Comm’n, 276 Md. 25, 29-30 , 343 A.2d 884 (1975). 1 By filing pursuant to Part III, the State gains a significant potential advantage. It may “freeze” the value of the property as of the moment it files the plats and informal petition and deposits an amount of money reflecting the estimated value of the land.

See § 8-330 of the Transportation Article; State Roads Comm’n v. Pumphrey, 260 Md. 633, 643-44 , 273 A.2d 81 (1971); State Roads Comm’n v. Orleans, supra, 239 Md. at 372 , 211 A.2d 715 . A Part IV proceeding, although also permitting entry and construction whenever the Commission desires, will not freeze the valuation date until there is an actual appropriation of the property. With the potential advantage inherent in utilizing a Part III proceeding, however, there is also a danger. If the Commission does not, within one year of payment, acquire title to the property or file a formal Petition for Condemnation, the alternate valuation date of § 8-330 will come into play, and the property owner will be entitled to valuation as of the date of trial.

The State here opted for a Part III proceeding. Each initial filing as well as the amendment of 6 November 1987 recited that the proceedings were being brought “under the provisions of Sections 8-318 to 8-331 of the Transportation Article.” The filing fulfilled all the requirements of a Part III proceeding. Compare State Roads Comm’n v. Pumphrey, supra, 260 Md. at 648-50 , 273 A.2d 81 (Commission could not have been proceeding under “quick-take” provisions because filing did not comply with statutory requirements for those procedures). The State argues that it could have abandoned the initial condemnation action and filed new proceedings to avoid valuation at the date of trial.

We need not consider ¹⁰⁶ whether the State might have taken such action and the effect thereof. The short answer is that it did not. Moreover, we point out that it had no right to abandon the proceedings after it had actually taken the property in March of 1987. Maryland Rule U26 c(l).

In this case, the State filed proceedings and actually appropriated property belonging to the Partnership pursuant to the provisions of Part III of Title 8 of the Transportation Article. Accordingly, Section 8-330 applies. The State has a fallback argument. It contends that even if Section 8-330 applies, the trial date valuation should not have been applied to the 4.095 acres taken as a result of the 6 November 1987 amendment.

Had the State taken this position at trial, we would have agreed. It did not. The trial judge broached this question during the hearing of the pretrial motion to establish the valuation date. He specifically suggested that even if the Partnership were correct concerning a trial date valuation for the original takings, the State would probably be entitled to the earlier valuation date for the additional 4.095 acres.

Apparently for tactical reasons, and to bolster its argument that the November 1987 date was the appropriate date of valuation for all the property, the State resisted separate valuation dates. We will not now grant the State relief which it expressly rejected at the trial level.

III

Rebuttal Evidence The State contends that the trial judge erred when he did not allow one of its experts, Robert W. Williams, Jr., to testify as a rebuttal witness. The State