Countryside Corporation v. Taylor

Present: 	All the Justices
THE COUNTRYSIDE CORPORATION
OPINION BY
v. 	Record No. 010729 	JUSTICE LAWRENCE L. KOONTZ, JR.
April 19, 2002
DAVID H. TAYLOR, ET AL.
FROM THE CIRCUIT COURT OF HENRICO COUNTY
George F. Tidey, Judge
In this appeal, we consider whether the trial court erred in
failing to strike the plaintiff’s evidence of damages for breach
of contract on the ground that the expert opinion as to the
quantum of damages was based on an erroneous factual foundation.
BACKGROUND
The Countryside Corporation (Countryside) owns a residential
property development in Henrico County. 	David H. Taylor and
Carol E. Taylor (the Taylors) own property abutting Countryside’s
development. 	The Taylors plan to subdivide their property for
residential development at some time in the future.
In 1974, the Taylors objected to the anticipated extension
and placement of a road by Countryside, asserting that the road
would encroach upon their land. 	In 1977, the Taylors and
Countryside resolved this dispute by entering into an agreement
(the 1977 agreement). 	Relevant to this appeal, the 1977
agreement provided that if Countryside ever extended the road, it
would be located in such a manner as to provide road access along
the eastern boundary of the Taylors' property.
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In the mid-1990s, when Countryside extended the road to
access new developments close to the Taylors’ property, the road
did not fully abut the Taylors’ property as required by the 1977
agreement. 	The placement of the road left a 0.6616 acre wedge-
shaped strip of land between the road and the southeast portion
of the Taylors’ property. 	Prior to developing the lots accessed
by the extension of the road, Countryside filed a subdivision
plat with the Henrico County Planning Commission that failed to
show the strip of land separating the road from the Taylors’
property. 	Countryside later maintained that this was so because
it had intended to convey the strip of land to the Taylors.
On May 16, 1997, the Taylors filed a motion for judgment
against Countryside to recover damages for breach of the 1977
agreement. 	On June 23, 1997, a deed conveying the strip of land
from Countryside to the Taylors was recorded in the land records
of Henrico County. 	However, Countryside had placed a guardrail,
a concrete headwall, and a concrete drainage channel along the
road. 	Additionally, the strip of land was encumbered with a
“0.2676 acre variable width drainage easement granted to the
County of Henrico, Virginia” by Countryside. 	The Taylors did not
pursue their claim against Countryside at that time as a result
of this conveyance, even though the strip of land was encumbered
with the drainage easement.
On August 6, 1999, the Taylors again filed a motion for
judgment, and subsequently an amended motion for judgment,
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against Countryside alleging, among other things, breach of the
1977 agreement.1 The thrust of the Taylors’ claim was that the
placement of the road by Countryside significantly reduced the
fair market value and marketability of their property if and when
they subdivided it into residential lots.
At trial, the Taylors called Jay B. Call, III, a licensed
real estate appraiser, as an expert witness to offer his opinion
on the quantum of damages sustained by the Taylors as a result of
Countryside’s breach of the 1977 agreement. 	Call's testimony was
based on two development plans, Plan B and Plan E, prepared for
the Taylors by Garrett S. Runey, II, a licensed engineer and land
surveyor. 	Plan B was premised upon the placement of the road in
accordance with the 1977 agreement. 	Plan E was premised upon the
actual placement of the road by Countryside, but did not take
into account the 1997 conveyance to the Taylors of the strip of
land separating the road from their property. 	Each plan, or
development scenario, was intended to demonstrate the highest lot
yield of the Taylors’ property and the lowest development cost.
Plan B indicated 14 lots for development, and Plan E indicated 10
such lots.
Call testified that he performed a “project value analysis”
to determine the loss in gross revenue sustained by the Taylors
as a result of the difference in the associated costs and the
1 Two other defendants named in the motion for judgment were
dismissed from the action by the trial court.
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number of lots that could be achieved under Plan B and Plan E.
He further testified that he was instructed to use May 16, 1997
as the effective date of his evaluations, the date on which he
understood that the Taylors filed their original motion for
judgment against Countryside. 	Call also testified that his
analysis did not include consideration of the strip of land
conveyed to the Taylors by Countryside on June 23, 1997, nor
consideration of any increased market value of the Taylors’
property since 1997. 	Call expressed the opinion that the
Taylors’ damages were $309,060, representing the difference in
the gross revenue projected under Plan B and Plan E.
Countryside did not object to Call’s testimony regarding
damages on direct examination. 	However, Countryside moved to
strike Call’s testimony at its conclusion, asserting that it was
speculative and based upon the erroneous factual foundation that
the Taylors did not own the strip of land separating their
property from the road.2 The trial court denied the motion to
strike Call’s testimony. 	Countryside renewed its motion
2 While Countryside did not specifically state that their
objection to Call’s testimony was for a “lack of foundation,” we
nevertheless find that they preserved their objection through
their first motion to strike Call’s testimony in which counsel
for Countryside stated, “[O]n the issue of damages, that the
report of Mr. Call is speculative in any event because it's based
upon a fiction. 	It's based on a fiction of two development
scenarios done in such a way as to ignore the strip of land in
question, [and] to ignore any benefit that the Taylors would have
as a result of taking that strip of property."
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following the close of all of the evidence. 	The trial court
again denied this motion.
The trial court then found that the evidence established
breach of contract by Countryside as a matter of law and, thus,
the jury was instructed only on the issue of damages. 	The jury
awarded the Taylors $200,000 in compensatory damages for the
breach.3 Countryside filed a motion, pursuant to Code § 8.01-
430, to set aside the jury’s verdict. 	Countryside asserted that
the damage award was without credible evidence to support it, and
that Call's expert testimony was speculative as a matter of law
because it was based upon an erroneous factual foundation. 	The
trial court overruled this motion and entered judgment for the
Taylors in a final order dated January 8, 2001. 	By order dated
August 2, 2001, we awarded Countryside this appeal.
DISCUSSION
Expert testimony is admissible in civil cases to assist the
trier of fact, if the testimony meets certain fundamental
requirements, including the requirement that it be based on an
adequate factual foundation. 	See Code §§ 8.01-401.1 and -401.3;
Lawson v. Doe, 239 Va. 477, 482-83, 391 S.E.2d 333, 336 (1990);
Clark v. Chapman, 238 Va. 655, 664-65, 385 S.E.2d 885, 891
(1989). 	Expert testimony is inadmissible if it is speculative or
3 The jury also returned a verdict in favor of the Taylors
on a fraud count included in the Taylors’ motion for judgment.
However, the jury fixed their compensatory and punitive damages
at “zero.”
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founded on assumptions that have no basis in fact. 	See Gilbert
v. Summers, 240 Va. 155, 159-60, 393 S.E.2d 213, 215 (1990);
Cassady v. Martin, 220 Va. 1093, 1100, 266 S.E.2d 104, 108
(1980). 	Additionally, expert testimony is inadmissible if the
expert fails to consider all the variables that bear upon the
inferences to be deduced from the facts observed. 	Griffin v. The
Spacemaker Group, Inc., 254 Va. 141, 146, 486 S.E.2d 541, 544
(1997) (citing Tittsworth v. Robinson, 252 Va. 151, 154, 475
S.E.2d 261, 263 (1996)).
In the present case, Call conceded that he had used May 16,
1997 as the effective date of his opinion on the Taylors’ damages
and had not considered the fact that the Taylors had acquired the
strip of land shortly thereafter. 	Thus, when Call made his
evaluations in 1999, he essentially assumed a fiction and based
his opinion of damages on that fiction. 	That the Taylors had
acquired the strip of land was a critical fact in the damages
determination because that parcel provided access to the road in
question from the Taylors’ property. 	Moreover, an expert opinion
based upon an assumption that the Taylors did not own that strip
of land and, thus, did not have access to the road in question is
one clearly founded on an assumption that has no basis in fact.
Accordingly, we hold that Call’s expert testimony was speculative
and unreliable as a matter of law.
While Code §§ 8.01-401.1 and -401.3 have liberalized the
admission of expert testimony, Call’s testimony on damages fails
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to meet the fundamental requirements set out in the cases noted
above. 	Tittsworth, 252 Va. at 155, 475 S.E.2d at 263. 	Without
Call’s testimony, the Taylors have not shown damages from
Countryside’s breach of contract.
CONCLUSION
For these reasons, we will reverse the judgment in favor of
the Taylors and enter final judgment for Countryside.
Reversed and final judgment.
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