Russell v. Commonwealth

1 printed pages contain little extracted OCR body text; searchable legal-body completeness has not been established for those pages.

OCR transcription for search; preserved printed pages are authoritative

Present: Carrico, C.J., Lacy, Hassell, Keenan, Koontz, and Lemons, JJ., and Whiting, S.J.
JOHNNY C. RUSSELL, ET AL.
OPINION BY
v. Record No. 001558 SENIOR JUSTICE HENRY H. WHITING April 20, 2001
COMMONWEALTH TRANSPORTATION COMMISSIONER OF VIRGINIA
FROM THE CIRCUIT COURT OF LEE COUNTY Ford C. Quillen, Judge
The issue in this case is the admissibility of a prior tax evaluation of property being condemned to impeach the credibility of the property owners' appraiser.
The Commonwealth Transportation Commissioner (the Commonwealth) filed eminent domain proceedings to acquire a 39.125-acre parcel of land owned by Johnny C. and Phyllis Russell (the Russells) in Lee County. At trial, the Russells sought to qualify Ed Stacy, the sole proprietor of a real estate appraisal firm, a certified general real estate appraiser, and tax assessment evaluator, as an expert witness familiar with the value of real estate in Lee County.
In attempting to establish his general knowledge of Lee County real estate values on September 27, 1996, the date of the condemnation, Stacy testified on direct examination that he and members of his firm had been "involved" in the 1996 Lee County tax reassessment. Stacy said that in order to make the reassessment, they conducted a study of all real estate sales in

Lee County during 1995 and the first half of 1996, after which
they valued real property in the county.
Stacy further testified that approximately three years
later, he appraised the Russells' condemned property to
determine its fair market value as of September 27, 1996. 	Stacy
stated that on that date the fair market value of the 39.125-
acre parcel was $12,538 per acre. 	During the Commonwealth's
cross-examination of Stacy, it sought to elicit, as impeachment
evidence, testimony from Stacy concerning his firm's earlier tax
valuation of the 39.125-acre parcel at $1,000 per acre. 	The
Russells objected to this line of questioning, asserting that
evidence concerning tax assessments was not relevant in a
condemnation proceeding.
During argument on this objection, counsel for the Russells
did not disagree with the statements of the trial court and the
Commonwealth's counsel that Lee County real estate tax
appraisals were at the 100 percent rate of fair market value.
Instead, counsel responded that Stacy could explain the
difference in the two appraisals of the 39.125-acre parcel. 	The
trial court overruled the Russells' objection and allowed the
questioning for purposes of impeachment. 	Stacy then explained
that the appraiser in his firm who performed the tax assessment
valuation "had no way of knowing that this piece of property
actually was part of or previously a part of a much larger
2

property that was right across from where this four-lane
[highway] was going into[,] which would significantly [a]ffect
this piece of property." 	Stacy also stated that the appraiser
"most likely . . . had no aware[ness] of this scenic easement
that was placed on the property." 	Stacy further explained that
based on these considerations, "that's where the $1,000.00 an
acre [in the tax evaluation] came from."
At the conclusion of the trial, the commissioners returned
a report valuing the condemned parcel at $5,140 per acre.
Overruling the Russells' exceptions to the commissioners'
report, the trial court entered an order confirming the report.
On appeal, the Russells argue that the trial court abused
its discretion in allowing the Commonwealth to cross-examine
Stacy concerning his firm's valuation of the property for tax
assessment purposes. 	The Russells assert that "[r]eal estate
tax assessments are generated for reasons wholly unrelated to
the criteria which govern eminent domain proceedings" and that
the purpose of this type of valuation, to determine relative
property values, is fundamentally different from the purpose of
an appraisal in a condemnation proceeding, which is to
compensate landowners fully for the loss of their property.
Thus, the Russells contend that evidence of tax valuations was
improper impeachment evidence regarding Stacy's valuation of the
property to determine just compensation.
3

In response, the Commonwealth argues that the trial court
properly allowed Stacy to be cross-examined concerning his
earlier valuation of the property, because that valuation was a
prior inconsistent statement made by Stacy and his firm about
the value of the condemned property. 	Thus, we consider whether
the prior valuation of the Russells' land made for tax
assessment purposes presented an inconsistency bearing on the
credibility of Stacy's valuation testimony at trial.
Fundamental principles govern this issue. 	In Virginia,
real property is to be appraised or evaluated at its fair market
value when fixing the amounts to be paid as just compensation in
condemnation cases and when determining what amounts will be
paid as real estate taxes. 	See Lynch v. Commonwealth Trans.
Comm'r, 247 Va. 388, 393, 442 S.E.2d 388, 389, 391 (1994)
(condemnation); Va. Const. art. X, § 2; Code § 58.1-3201 (tax
purposes). 	In certain instances, uniformity considerations
might affect tax assessments because Article X, § 1 of the
Virginia Constitution requires "uniform[ity] upon the same class
of subjects within the territorial limits of the authority
levying the tax." 	Uniformity considerations are usually
involved when multiple or different methods were used by the
taxing jurisdiction to determine the fair market value of
various properties within a class of properties. 	Cross v. City
of Newport News, 217 Va. 202, 206, 228 S.E.2d 113, 116 (1976);
4

Skyline Swannanoa v. Nelson County, 186 Va. 878, 881, 44 S.E.2d
437, 439 (1947).
A second fundamental consideration is that the credibility
of a witness may be impeached by showing that the witness made
statements on a prior occasion that are inconsistent with his
present testimony. 	Breeden v. Roberts, 258 Va. 411, 415-16, 518
S.E.2d 834, 837 (1999). 	And, we said in Spruill v.
Commonwealth, 221 Va. 475, 485, 271 S.E.2d 419, 425 (1980):
[The] determination of the scope of cross-examination
in general, and of the extent of testimonial impeachment in
particular, should be "left largely to the sound discretion
of the trial court; and the rule is well established that
an appellate court will not interfere, unless that
discretion has been plainly abused." (Citation omitted.)
In applying these principles to the facts in this case, we
note that the record does not indicate that the tax evaluations
made by Stacy's firm for the 1996 Lee County reassessments were
based on any other consideration than that of fair market value.
In fact, when Stacy attempted to explain the inconsistency in
the two appraisals, he mentioned only his tax appraiser's
ignorance of two factors that Stacy said would have affected the
appraiser's evaluation of the fair market value of the 39.125-
acre parcel. 	Not only is there no evidence that uniformity
considerations or different methods of evaluation affected the
tax evaluations made by Stacy's group of the 39.125-acre parcel,
but neither Stacy nor the Russells claim that either of these
5

considerations had any effect on Stacy's firm's 1996 Lee County
tax assessments.
Thus, there appeared to be an inconsistency in Stacy's
testimony of the September 25, 1996 value of the 39.125-acre
parcel at $12,538 per acre and his firm's evaluation of the same
property for the tax year 1996 at $1,000 per acre. 	Given (1)
the wide disparity in the appraisals; (2) Stacy's use of his
firm's 1996 sales studies for the tax appraisals to establish
his general knowledge of Lee County real estate; and (3) Stacy's
testimony that these tax sales studies "had a bearing" on his
opinion of the value of the 39.125-acre parcel, we think that
the prior tax evaluation could have been considered by the
condemnation commission to properly assess the weight of Stacy's
expert testimony. 	Hence, we find no abuse of the trial court's
discretion in permitting this impeachment evidence on cross-
examination.
Accordingly, the judgment of the trial court will be
Affirmed.
JUSTICE KEENAN, with whom JUSTICE HASSELL and JUSTICE KOONTZ
join, dissenting.
I respectfully dissent. 	The different purposes and
methodologies inherent in valuations made for tax purposes and
those made for determining just compensation undermine the
validity of using one type of valuation as evidence to impeach
6

an expert witness's testimony regarding the other type of
valuation.
Generally, the credibility of a witness may be impeached by
showing that the witness made statements on a prior occasion
that are inconsistent with his present testimony. 	Breeden v.
Roberts, 258 Va. 411, 415-16, 518 S.E.2d 834, 837 (1999);
Commercial Distributors, Inc. v. Blankenship, 240 Va. 382, 394,
397 S.E.2d 840, 847 (1990); Neblett v. Hunter, 207 Va. 335, 340,
150 S.E.2d 115, 119 (1966). 	Thus, the evidentiary issue before
this Court is whether the prior valuation of the Russells' land
made for tax assessment purposes presented an inconsistency
bearing on the credibility of Stacy's valuation testimony at
trial.
This Court has recognized that the purpose of tax
assessment valuations is to equalize the taxation burden among
landowners. 	Norfolk & W. Ry. Co. v. Commonwealth, 211 Va. 692,
695, 179 S.E.2d 623, 625 (1971); Southern Ry. Co. v.
Commonwealth, 211 Va. 210, 214, 176 S.E.2d 578, 581 (1970). 	We
have enforced this principle by requiring uniformity in the mode
of assessment and in the rate of taxation. 	Id. 	We have stated
that it is not important whether a tax assessment is high or
low, as long as the assessment is uniform and made in accordance
with the methods of valuation adopted in the taxing district as
a whole. 	City of Roanoke v. Gibson, 161 Va. 342, 347, 170 S.E.
7

723, 725 (1933). 	Thus, the essential characteristic of
valuations made to determine tax assessments is the setting of
uniform, rather than exact, values of the properties to be
assessed.
In contrast, when land has been condemned, the purpose of
determining fair market value of the condemned property is to
compensate the landowners fully for the value of what they have
lost. 	It is well settled that "just compensation" is the fair
market value of the property at the time of the taking, based on
the "most advantageous and valuable use" or the "highest and
best use" of the land. 	Lynch v. Commonwealth Transp. Comm'r,
247 Va. 388, 391, 393, 442 S.E.2d 388, 389, 391 (1994);
Appalachian Power Co. v. Anderson, 212 Va. 705, 708, 187 S.E.2d
148, 152 (1972); Appalachian Elec. Power Co. v. Gorman, 191 Va.
344, 354, 61 S.E.2d 33, 38 (1950). 	The landowner is entitled to
compensation that is the "full and perfect equivalent" for the
property. 	Appalachian Power Co. v. Anderson, 212 Va. at 708,
187 S.E.2d at 152; Gorman, 191 Va. at 354, 61 S.E.2d at 38;
Anderson v. Chesapeake Ferry Co., 186 Va. 481, 490, 43 S.E.2d
10, 15 (1947). 	Therefore, the essential characteristic of
valuations made to determine just compensation is the setting of
exact values rather than values that are uniform and
proportional to the values of any other properties.
8

While Article X, Section 2, of the Constitution of Virginia
and Code § 58.1-3201 require that tax assessments be made at
fair market value, this requirement does not render the two
types of valuations analogous. 	Article X, Section 1 of the
Constitution of Virginia provides that all property taxes "shall
be uniform upon the same class of subjects within the
territorial limits of the authority levying the tax." 	The
dominant purpose of Sections 1 and 2, construed together, is to
distribute the burden of taxation evenly and equitably, in so
far as is practical. 	Board of Supervisors v. Telecommunications
Indus., Inc., 246 Va. 472, 477, 436 S.E.2d 442, 445 (1993);
R. Cross, Inc. v. City of Newport News, 217 Va. 202, 207, 228
S.E.2d 113, 117 (1976); Smith v. City of Covington, 205 Va. 104,
108, 135 S.E.2d 220, 222-23 (1964); Skyline Swannanoa v. Nelson
County, 186 Va. 878, 881, 44 S.E.2d 437, 439 (1947). 	If it is
impractical or impossible to enforce both the standard of fair
market value and the standard of uniformity and equality, the
standard of uniformity and equality must be preferred as the
just and ultimate end to be attained. 	Id.
In a condemnation proceeding, however, the standard of fair
market value does not yield to any other principle. 	An expert
appraiser's determination is bound by fixed considerations such
as the availability and suitability of the land for all
legitimate uses, considering the existing business demands of
9

the community or such demands that may reasonably be expected in
the near future. 	See Lynch, 247 Va. at 391, 442 S.E.2d at 389-
90; Anderson, 212 Va. at 708, 187 S.E.2d at 152; Gorman, 191 Va.
at 354, 61 S.E.2d at 38. 	These and other considerations
relating to the fair market value of the property are not
affected by concerns for uniformity and equality.
Therefore, I would conclude that, based on these different
purposes and methodologies, evidence of a valuation made for tax
assessment purposes does not present an inconsistency bearing on
the credibility of an expert witness who valued the property at
a different amount for purposes of determining just compensation
in a condemnation proceeding. 	This conclusion is not altered by
the fact that in the present case the same person made both
valuations. 	The differing nature of the two types of
valuations, not the possibility of different appraisers, creates
the disparity that undermines the validity of using one type of
valuation as impeachment evidence to challenge the credibility
of an expert's testimony concerning the other type of valuation.
Thus, I would hold that in a condemnation proceeding, evidence
of a valuation made to determine a tax assessment is generally
inadmissible to impeach the testimony of an expert witness
regarding his valuation of the property for purposes of
determining just compensation. 	Accordingly, I would conclude
10

that the trial court erred in allowng the disputed i npeachnent

evi dence.

11