In Coleman v. Mississippi Transportation Comm'n, No. 2013-CA-01161-SCT, the Mississippi Supreme Court addressed an issue we've been pondering lately, holding that evidence of the condemnor's initial appraisal, its offer, and its deposit, were admissible when its appraiser presented a lower valuation at trial. The appraiser was also subject to cross-examination about why he lowered his valuation.
We've been pondering this issue lately, because the Virginia Supreme Court currently has under submission a case dealing with pretty much the same issue in which we filed an amicus brief, which argues for admissibility of this type of evidence. So naturally we think the Mississippi court came down on the right side of this question.
The court concluded that the property owner was entitled to introduce evidence of the condemnor's initial offer and deposit of $380,300, and to cross-examine the Commission's appraiser about why his trial testimony was that the property was worth nearly $100,000 less, $289,400. The trial court prohibited the jury from learning about the deposit and earlier appraisal, concluding it was part of settlement and compromise and thus excludable under Rule 408. The court also prohibited the property owner's appraiser from testifying that the property was worth $799,000, because he "could not explain his appraisal methods." Slip op. at 5. The court entered a directed verdict for $289,400.
Relying in part on one of our favorite cases, United States v. 320.0 Acres of Land, 605 F.2d 762 (5th Cir. 1979), the Mississippi Supreme Court concluded that the condemnor's initial appraisal -- a valuation required by state statute -- was relevant and admissible, and was not an offer of settlement to be excluded under Rule 408.
First, an appraisal is not an offer of settlement or compromise, it's an appraisal. Second, under Mississippi law, things that happen before a condemnation complaint is filed are not subject to Rule 408 because there's no disputed "claim," as the rule requires. See slip op. at 9-10 ("this Court’s position on the admission of this specific type of offer is clear: offers of compromise, in condemnation proceeds, cannot occur prior to filing of a complaint") (footnote omitted). Eminent domain is different, because the "claim" doesn't arise until the complaint is filed, unlike other civil actions were the "claim" arises when the duty or contract is breached, even if a complaint has not yet been filed.
The court also concluded that the Commission's offer as well as the deposit was admissible, subject to a ruling on whether the jury would be too prejudiced by this evidence:
We find that MTC’s first appraisal, in addition to cross-examination thereon, should have been available to the jury for consideration of MTC’s prima facie demonstration of value and Coleman’s claim to just compensation. Because the appraisal was erroneously excluded under Rule 408, where that rule did not apply, this exclusion was reversible error. We note that the appraisal, like all proffered evidence, is still subject to the Rule 403 considerations discussed earlier.Concerning Coleman’s contention that exclusion of the quick-take deposit and the initial offer also constituted error, we find that, having been excluded subject to Rule 408, such exclusion was erroneous, as neither the offer nor the deposit is the type of “offers of compromise” covered by Rule 408. It may be the case on remand, however, that evidence of the deposit or offer is inadmissable under Rule 403.
Slip op. at 11-12.
Coleman v. Mississippi Transportation Comm'n, No. 2013-CA-01161-SCT (Mar. 19, 2015)
