As we briefly mentioned in the "National Eminent Domain Update" at the recent ALI-CLE Eminent Domain and Land Valuation Litigation Conference in Nashville, the U.S. Court of Appeals for the Eleventh Circuit in Sabal Trail Transmission, LLC v. 3.921 Acres, No.18-11836 (Jan. 22, 2020), recently held that it isn't an abuse of discretion for a trial court to allow a property owner to testify about value if she meets the standards in Federal Rule of Evidence 701.
Two interesting aspects to this case:
1. The owner's opinion of value was higher than the owner's appraiser's opinion of value.
2. The owner testified about severance damages.
The district court allowed the testimony because the property owner had direct experience with the property and sales of other parcels the company owned, even though she lacked experience with the particular use for which this parcel was taken (a natural gas pipeline). As the court of appeals held:
Sunderman testified that the pipeline had reduced the value of the parcel. When she was asked to opine about how the pipeline had reduced the value, Sabal Trail objected, arguing that the question called for speculation. The court allowed her to answer. Sunderman testified that the pipeline had thwarted her plan to subdivide the parcel into three lots. She explained that if she subdivided the property as planned, the pipeline would run diagonally across the two 10 acre lots. With the pipeline’s presence, she opined, these two lots would be “definitely undesirable” for rural residential development and could be used only for agriculture. Doc. 130 at 100. As agricultural land, she testified, each lot was worth $35,000 or $3,500 per acre, meaning the two lots had decreased in value by more than 80%.She testified the pipeline reduced the value of the third planned lot as well. If she subdivided the property as planned, the pipeline would run across only a small corner of this lot. She opined that it would have been possible to sell this lot for residential development. But given the presence of the pipeline, the land would have to be sold at a reduced price because a buyer would be willing to pay only $70,000 for the lot, meaning that the lot was worth approximately $10,769 per upland acre and its value had decreased by approximately 35% due to the pipeline.
Slip op. at 9-10 (footnote omitted). The Eleventh Circuit concluded:
Although she had no prior experience selling property encumbered by a pipeline, her opinions about what purchasers were looking for were drawn from her experience selling 25 similar lots for rural residential development. Based on her interactions with prospective purchasers, she understood that a purchaser who was buying a rural residential lot wanted to enjoy nature, have privacy, and be free from restrictions governing what she could do with her land. She applied this experience to opine that if she proceeded with the plan to subdivide the parcel into three lots, two of the lots would be unmarketable for residential development. She explained that a purchaser looking to build a house in a rural area would not buy either lot given that the pipeline cut diagonally across each lot, the permanent easement restricted how the landowner could use the area covered by the permanent easement, and Sabal Trail retained the right to enter each lot to access the pipeline. Because Sunderman’s opinion was based on her personal experience and knowledge, we conclude that the district court did not abuse its discretion in allowing her to testify.
Slip op. at 15-16.
Check it out.
We filed an amicus brief in the case (on the attorneys' fees question), an issue the court did not address, concluding instead it was premature and the court lacked appellate jurisdiction (the pipeline appealed after the district court ruled that the owner was entitled to attorneys' fees, but before the district court actually awarded a specific amount of attorneys' fees).
Sabal Trail Transmission, LLC v. 3.921 Acres, No. 18-11836 (11th Cir. Jan. 22, 2020)
