Colonial Pipeline Co. v. Weaver

300 S.E.2d 464, 61 N.C. App. 200, 1983 N.C. App. LEXIS 2645
CourtCourt of Appeals of North Carolina
DecidedMarch 15, 1983
DocketNo. 8218SC87
StatusPublished

This text of 300 S.E.2d 464 (Colonial Pipeline Co. v. Weaver) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colonial Pipeline Co. v. Weaver, 300 S.E.2d 464, 61 N.C. App. 200, 1983 N.C. App. LEXIS 2645 (N.C. Ct. App. 1983).

Opinion

JOHNSON, Judge.

This appeal arises out of a condemnation proceeding. The petitioner, Colonial Pipeline Company (Colonial) appeals the award of $80,000 damages to the respondents, H. Michael Weaver and Sonja R. Weaver. Colonial makes ten assignments of error and presents eight questions for review. The issues presented concern whether the court erred in its evidentiary rulings, in its supplemental charge, and in denying petitioner’s motions to set aside the jury’s verdict and for a new trial. Our review of the [202]*202assignments of error and record discloses a number of errors in the trial court’s evidentiary rulings.

Petitioner’s first assignment of error relates to the trial court’s exclusion of evidence of a previous purchase price respondent H. Michael Weaver paid for a one-half undivided interest in the subject property.

On direct examination Weaver testified that in his opinion the property over which the right-of-way had been condemned was worth $4,500,000 prior to the taking. Weaver testified further that he acquired a joint interest in the property with his business partner in 1962 and full interest in the property in September of 1971. On cross-examination, Mr. Weaver was questioned at length about his acquisition of the property across which the right-of-way had been condemned. Colonial’s attorney then asked Mr. Weaver a series of questions regarding the purchase price Mr. Weaver had paid his former business partner for the one-half undivided interest in the subject property approximately eight years prior to the taking. When Colonial’s attorney asked Mr. Weaver if he had not in fact paid his partner $160,000, the Weavers’ attorney objected and moved to strike. The trial court sustained the objection and instructed the jury not to consider the question because the price “paid for this property in 1971 would not be relevant in this case.”

Petitioner Colonial assigns error to the exclusion of evidence of the purchase price paid for the one-half undivided interest in the condemned property. Colonial argues that the excluded evidence would have furnished a fair criterion for determining the value at the time of taking. In addition, Colonial argues that it was entitled to inquire into this matter on cross-examination to test the accuracy of Mr. Weaver’s opinion as to the value of the property.

It is well established that when land is taken in the exercise of eminent domain it is competent, as evidence of market value, to show the price at which it was bought if the sale was voluntary and not too remote in point of time. Highway Commission v. Nuckles, 271 N.C. 1, 155 S.E. 2d 772 (1967); Palmer v. Highway Commission, 195 N.C. 1, 141 S.E. 338 (1928). The reasonableness of the interval of time that has passed is dependent upon the nature of the property, its location, and the surrounding cir[203]*203cumstances, the criterion being whether the evidence fairly points to the value of the property at the time in question. Id.; Highway Commission v. Coggins, 262 N.C. 25, 136 S.E. 2d 265 (1964). Some of the circumstances to be considered are the changes, if any, which have occurred between the time of purchase by the con-demnee and the time of taking by the State, including physical changes in the property taken,, changes in its availability for valuable uses, and changes in the vicinity of the property which might have affected its value. Board of Transportation v. Revis, 40 N.C. App. 182, 252 S.E. 2d 262 (1979).

The record discloses that neither of the tests for admissibility of a previous purchase price as direct evidence — voluntariness or lack of remoteness in time of that purchase — has been met by Colonial in this case. The requirement of voluntariness in order to introduce evidence of the previous purchase price in a condemnation proceeding is designed to ensure that the price previously paid for condemned property represented the fair market value at the time of that purchase. See State Highway Comm. v. Moore, 3 N.C. App. 207, 164 S.E. 2d 385 (1968). Although Mr. Weaver, on cross-examination, responded affirmatively to the question whether he had paid “full price” in his 1971 purchase, the 1971 transaction involved the purchase of a one-half undivided interest in the subject property from Mr. Weaver’s former business partner at a time when the Weavers already owned the other one-half undivided interest in the property.

On cross-examination Mr. Weaver was asked if he recalled how much he paid for the land. Weaver responded:

You did ask me, and I don’t remember. And, of course, I don’t remember — I must have bought the land from him but we dissolved [the corporation], and I acquired his interest, basically a simultaneous transaction.

It may be inferred from the testimony of Mr. Weaver that the 1971 transaction between he and his partner, Mr. Taylor, arose out of the dissolution of their development corporation, which had originally held title to the subject property.

In Redevelopment Comm. v. Panel Co., 273 N.C. 368, 159 S.E. 2d 861 (1968), the Supreme Court affirmed a trial court’s exclusion of testimony concerning the price paid for an industrial site [204]*204“within sight of” the subject industrial property because the transaction did not reflect the fair market value of the property. The court pointed out that while the industrial site was “comparable” to the subject property, the transaction under consideration was one between two corporations that apparently included the sale of an entire business and involved some tax considerations. Id., at 373-74, 159 S.E. 2d at 865. Thus, the Supreme Court has recognized that in certain circumstances the price paid in sales not on the open market cannot be admitted as evidence of the value of comparable properties.

While the exact nature of the transaction is unclear, the circumstances surrounding Mr. Weaver’s purchase of the remaining one-half undivided interest in the subject property from his former business partner indicate that the 1971 transaction was not the type that would yield the same price as an entirely voluntary sale in an arm’s length transaction on the open market.

The other factor to be considered in determining the competency of the price previously paid for property that is the subject of condemnation is the remoteness in time of that purchase. Among the circumstances to be considered are both physical changes in the property itself and changes in the vicinity of the property which might have affected its value. Highway Commission v. Nuckles, supra; Board of Transportation v. Revis, supra. Colonial concedes that there was testimony by the Weavers’ expert that the property is located in an area northwest of Greensboro and that the northwest area is developing faster than other areas around Greensboro, but argues that this evidence fails to render the sale too remote in time because “there is no evidence of substantial changes in the nature of the property in the vicinity of the property subject to the taking.” We do not agree.

The evidence presented by the Weavers was sufficient to demonstrate the remoteness in time of the previous sale with regard to changes in the vicinity of the property which might have affected its value, which is all that need be demonstrated under the test set forth in Highway Commission v. Nuckles, supra and Board of Transportation v. Revis, supra.

In Redevelopment Commission v. Hinkle, 260 N.C. 423, 132 S.E.

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Bluebook (online)
300 S.E.2d 464, 61 N.C. App. 200, 1983 N.C. App. LEXIS 2645, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colonial-pipeline-co-v-weaver-ncctapp-1983.