Metropolitan Government of Nashville v. Overnite Transportation Co.

919 S.W.2d 598, 1995 Tenn. App. LEXIS 675
CourtCourt of Appeals of Tennessee
DecidedOctober 19, 1995
StatusPublished

This text of 919 S.W.2d 598 (Metropolitan Government of Nashville v. Overnite Transportation Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Metropolitan Government of Nashville v. Overnite Transportation Co., 919 S.W.2d 598, 1995 Tenn. App. LEXIS 675 (Tenn. Ct. App. 1995).

Opinion

OPINION

LEWIS, Judge.

This is an appeal by the petitioners/appellants, Tennessee State Department of Transportation (“TDOT”) and Metropolitan Nashville Airport Authority (“MNAA”), from a jury verdict and judgment valuing four acres of condemned property owned by the respon-denVappellee, Overrate Transportation Company (“Ovemite”), at $1,759,578.10.

ISSUES

The petitioners/appellants raise two issues on appeal:

1) Whether the evidence preponderates against the trial court’s finding that the petitioner’s property, which was condemned as part of the discrete access road connecting Interstate 40 to the new airport terminal complex of the Metropolitan Nashville Airport, was not within the scope of the project?
2) If so, whether the petitioner is entitled to a new trial on the grounds that evidence was introduced to the jury by the [respondent], which included the enhanced value of the property taken for the discrete access road, based upon the relocation of the new terminal complex?

In April 1979, MNAA began the Metropolitan Airport Master Plan Update, a study of the development of a new terminal complex at the Metropolitan Nashville Airport. The Update included five alternatives for the construction of a discrete access road to serve the airport from Interstate 40. Of the alternatives, two required the taking of Overnite’s property and two did not. The fifth alternative did not specifically mention Overnite’s property, but MNAA’s Director of Planning and Programming testified that it did not require the taking of Ovemite’s property. The Update recommended the fifth alternative. MNAA’s Board of Commissioners approved the study and incorporated it into the Board’s resolution verbatim. In December 1980, the Board announced to the public its plans to construct the new terminal.

In August 1981, the original grading plans for the new terminal project showed that MNAA might need a small portion of Over-nite’s property to build the discreet access road. In 1982, the Metropolitan Planning Commission approved MNAA’s plans for the construction of the new terminal, including the construction of the discreet access road. The project required that MNAA obtain a zoning variance. The Metropolitan Board of Zoning Appeals sent hearing notices to all neighboring and affected property owners, including Overnite, and approved the variance in June 1982. Also in 1982, the Department of Public Works issued a letter approving the grading, drainage, and erosion control plans for the entire project. Those plans showed the discrete access road crossing'through Overnite’s property. The trial record, however, is unclear as to whether the grading plans showing the taking of Over-nite’s property became part of the public record through the zoning appeal or through [601]*601the letter issued by the Department of Public Works.

Despite the grading plans, evidence presented at trial indicated that in 1982 and for some years thereafter MNAA had not decided the exact location of the discrete access road. In 1983, TDOT agreed to purchase the right-of-way for the discrete access road in exchange for a conveyance of airport property. MNAA asked TDOT to acquire property for the discrete access road because MNAA did not have the power to exercise eminent domain. Though ultimate design questions had not been answered, by 1986, TDOT was appraising Ovemite’s property so it could make an offer to purchase land for the discrete access road. TDOT based its appraisals of Ovemite’s property on the property’s proximity to the airport and reported that in the rapidly expanding airport commercial area the highest and best use of the property was intense hotel/motel commercial development. TDOT hired another appraiser in 1993 who also considered the location of the new terminal in valuing Ovemite’s property.

In January 1987, TDOT filed a petition for condemnation of 4.267 acres of Ovemite’s land and tendered $741,980.00 to the Davidson County Circuit Court Clerk. This amount represented TDOT’s estimation of Overnite’s damages. The Davidson County Circuit Court entered an order of possession in February 1987. Ovemite filed an answer denying that $741,980.00 represented the fair market value of the property TDOT sought to condemn. In answer to interrogatories from Overnite concerning the valuation of the property, TDOT provided Ovemite with the appraisals conducted in 1986 which valued the property based on its proximity to the new terminal. TDOT never updated its answers to these interrogatories.

The case was originally set for trial on 6 December 1993, but the court continued the case and eventually set it for 20 June 1994. On 6 May 1994, TDOT filed a motion requesting that the court not allow Ovemite to introduce evidence of the value of its property based on its proximity to the new terminal. On 26 May 1994, TDOT filed a notice that its appraisers could present a valuation of the property excluding the effect of the new terminal before trial. TDOT also said that it would submit the valuation and its basis to Ovemite; however, Overnite never received such a submission.

On 4 June 1994, the trial judge denied TDOT’s. motion. The judge found that TDOT’s request to change its legal theory of just compensation came “too late” and that TDOT failed to show that the taking of Over-nite’s property was probably necessary in 1980. Consequently, the judge held that Ov-ernite could offer evidence of the value of its property based on its proximity to the new terminal, and at trial, he issued instructions to the jury reflecting that holding.

Regarding the valuation of the property, the jury returned a verdict of $1,759,578.10. The trial judge entered a judgment to that effect which also provided for the payment of interest on $1,017,778.10, the difference between the jury award and the amount deposited with the court clerk. The trial court denied a motion filed by TDOT requesting a judgment not withstanding the verdict and a new trial. On 28 November 1994, TDOT filed a notice of appeal.

We will address appellants’ issues together by discussing the proper formulation of the scope of the project rule and its application to the case at bar.

(I)

Under the most recent formulation of the scope of the project rule, the state need not compensate condemnees for any enhancement in the value of their property caused by the project which makes condemnation necessary if, at the time the state committed to the project, it was reasonably foreseeable that the government might take the condemnees’ property.

The United States Constitution and the Tennessee Constitution mandate that landowners be paid “just compensation” when their property is taken for public use. U.S. Const. amend. V; Tenn. Const. art. I, § 21. Traditionally, just compensation was the market value of the property to be taken. United States v. Reynolds, 397 U.S. 14, 16-17, 90 S.Ct. 803, 805, 25 L.Ed.2d 12, 16 [602]*602(1970). When the market value of the property rises solely because of governmental demand for the property, however, it is not just to require the public to pay the above normal market value.1 Consequently, courts created the scope of the project rule. Lands situated near public improvement projects tend to increase in value. United States v. Miller, 317 U.S. 369, 376, 63 S.Ct.

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Bluebook (online)
919 S.W.2d 598, 1995 Tenn. App. LEXIS 675, Counsel Stack Legal Research, https://law.counselstack.com/opinion/metropolitan-government-of-nashville-v-overnite-transportation-co-tennctapp-1995.